Exhibit 10.14
[Chicago Mercantile Exchange Inc. Logo]
CHICAGO MERCANTILE EXCHANGE INC.
CREDIT AGREEMENT
DATED AS OF OCTOBER 18, 2002
AMONG THE
CHICAGO MERCANTILE EXCHANGE INC.,
EACH OF THE BANKS FROM TIME TO TIME PARTY HERETO
AND
THE BANK OF NEW YORK, AS COLLATERAL AGENT
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.............................................................................................1
ARTICLE II THE CREDIT.............................................................................................9
Section 2.1 Revolving Credit Loans.......................................................................9
Section 2.2 Ratable Loans................................................................................9
Section 2.3 Payment on Last Day of Interest Period.......................................................9
Section 2.4 Reborrowing of Advances......................................................................9
Section 2.5 Optional Principal Payments..................................................................9
Section 2.6 Mandatory Principal Payments.................................................................9
Section 2.7 Adjustments of Commitments..................................................................10
Section 2.8 Commitment Fee..............................................................................10
Section 2.9 Collateral..................................................................................11
ARTICLE III FUNDING THE CREDITS..................................................................................11
Section 3.1 Method of Borrowing.........................................................................11
Section 3.2 Minimum Amount of Each Advance..............................................................12
Section 3.3 Rate Before and After Maturity..............................................................12
Section 3.4 Method of Payment...........................................................................12
Section 3.5 Notes; Telephonic Notices...................................................................12
Section 3.6 Interest Payment Dates; Interest Basis......................................................13
ARTICLE IV BANKS' SERVICING ARRANGEMENT..........................................................................13
Section 4.1 Notice to and Payment by the Banks..........................................................13
Section 4.2 Payment by Banks to Servicing Banks.........................................................13
Section 4.3 Distribution of Payments....................................................................14
Section 4.4 Rescission of Payments by the Company.......................................................14
Section 4.5 Powers Granted to the Servicing Banks.......................................................14
Section 4.6 Resignation or Termination of Servicing Bank................................................15
Section 4.7 Non-Reliance Representation.................................................................15
Section 4.8 Exculpation.................................................................................15
ARTICLE V CONDITIONS PRECEDENT...................................................................................16
Section 5.1 Conditions Precedent........................................................................16
Section 5.2 Each Advance................................................................................17
ARTICLE VI REPRESENTATIONS AND WARRANTIES........................................................................18
Section 6.1 Corporate Existence and Standing............................................................18
Section 6.2 Authorization and Validity..................................................................18
Section 6.3 Compliance with Laws and Contracts..........................................................18
Section 6.4 Financial Statements........................................................................19
Section 6.5 Material Adverse Change.....................................................................19
Section 6.6 Subsidiaries................................................................................19
Section 6.7 Accuracy of Information.....................................................................19
Section 6.8 Margin Regulations..........................................................................19
Section 6.9 Taxes.......................................................................................19
Section 6.10 Litigation..................................................................................19
Section 6.11 ERISA.......................................................................................20
ARTICLE VII COVENANTS............................................................................................20
Section 7.1 Financial Reporting.........................................................................20
Section 7.2 Use of Proceeds.............................................................................21
Section 7.3 Notice of Default...........................................................................21
Section 7.4 Conduct of Business.........................................................................22
Section 7.5 Compliance with Laws........................................................................22
Section 7.6 Inspection..................................................................................22
Section 7.7 Tangible Net Worth..........................................................................22
Section 7.8 Liens.......................................................................................22
Section 7.9 Additional Clearing Members.................................................................22
Section 7.10 CME Rule Changes............................................................................23
Section 7.11 Taxes.......................................................................................23
Section 7.12 Insurance...................................................................................23
ARTICLE VIII DEFAULTS............................................................................................23
Section 8.1 Representations and Warranties..............................................................23
Section 8.2 Payment Defaults............................................................................23
Section 8.3 Certain Covenant Defaults...................................................................23
Section 8.4 Other Covenant Defaults.....................................................................23
Section 8.5 Other Indebtedness..........................................................................24
Section 8.6 Bankruptcy, etc.............................................................................24
Section 8.7 Involuntary Bankruptcy, etc.................................................................24
Section 8.8 Condemnation................................................................................24
Section 8.9 Judgments...................................................................................24
Section 8.10 Security Interest; Validity.................................................................24
Section 8.11 CFTC Designation............................................................................25
ARTICLE IX ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES........................................................25
Section 9.1 Acceleration................................................................................25
Section 9.2 Amendments..................................................................................25
Section 9.3 Preservation of Rights......................................................................26
ARTICLE X COLLATERAL AGENT.......................................................................................26
Section 10.1 Declaration and Acceptance of Appointment; No Fiduciary Duties..............................26
ii
Section 10.2 Reliance by Collateral Agent................................................................26
Section 10.3 Reimbursement and Indemnification...........................................................27
Section 10.4 Collateral Agent in its Individual Capacity.................................................27
Section 10.5 Resignation or Termination of Collateral Agent..............................................27
Section 10.6 Non-Reliance Representation.................................................................28
Section 10.7 Exculpation.................................................................................28
Section 10.8 Collateral Valuation........................................................................28
ARTICLE XI GENERAL PROVISIONS....................................................................................29
Section 11.1 Successors and Assigns......................................................................29
Section 11.2 Survival of Representations.................................................................30
Section 11.3 Governmental Regulation.....................................................................30
Section 11.4 Taxes.......................................................................................30
Section 11.5 Choice of Law; Jurisdiction.................................................................33
Section 11.6 Headings....................................................................................34
Section 11.7 Entire Agreement............................................................................34
Section 11.8 Several Obligations.........................................................................34
Section 11.9 Expenses; Indemnification...................................................................34
Section 11.10 Accounting..................................................................................35
Section 11.11 Severability of Provisions..................................................................36
Section 11.12 Confidentiality.............................................................................36
Section 11.13 WAIVER OF TRIAL BY JURY.....................................................................36
ARTICLE XII SETOFF; RATABLE PAYMENTS.............................................................................36
Section 12.1 Setoff; Ratable Payments....................................................................36
ARTICLE XIII NOTICES.............................................................................................37
Section 13.1 Giving Notice...............................................................................37
Section 13.2 Change of Address...........................................................................37
ARTICLE XIV COUNTERPARTS.........................................................................................38
ARTICLE XV SUBORDINATION.........................................................................................38
iii
CHICAGO MERCANTILE EXCHANGE INC.
CREDIT AGREEMENT
This
Credit Agreement, dated as of October 18, 2002 is among Chicago
Mercantile Exchange Inc., a Delaware corporation (together with its successors
and assigns, "CME" or the "COMPANY") and a wholly owned subsidiary of
Chicago
Mercantile Exchange Holdings Inc. (together with its successors and assigns,
"HOLDINGS") the Banks and The Bank of New York, as Collateral Agent.
In consideration of the mutual agreements herein contained, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
The parties hereto agree as follows:
As used in this Agreement:
"ACCELERATED TERMINATION DATE" has the meaning set forth in SECTION
11.9(d).
"ACCELERATED TERMINATION NOTICE" has the meaning set forth in SECTION
2.7.2.
"ADDITIONAL AMOUNT" has the meaning set forth in SECTION 11.4(a).
"ADVANCE" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made to the Company by the Banks at the same time
and having the same maturity date.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all
the Banks hereunder.
"AGREEMENT" means this
Credit Agreement, as it may be amended,
restated, supplemented or otherwise modified from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted principles
of accounting in effect at the time of the preparation of the financial
statements referred to in SECTION 6.4, applied in a manner consistent with that
used in preparing such statements.
"ARTICLE" means an article of this Agreement unless another document
is specifically referenced.
"ASSIGNMENT AGREEMENT" has the meaning set forth in SECTION 11.1(c).
"BANKS" means the banks and other financial institutions listed on the
signature pages of this Agreement and their respective successors and assigns
and any other financial institution that becomes a party hereto as a Bank in
accordance with SECTION 9.2(b).
"BORROWING BASE" means, at any time, an amount equal to the sum of:
(a) 99.25% of the aggregate market value at such time of all
Security Deposits in the form of United States Treasury Bills, plus
(b) 98% of the aggregate market value at such time of all
Security Deposits in the form of United States Treasury Notes with maturities of
2 years or less, plus
(c) 97% of the aggregate market value at such time of all
Security Deposits that are United States Treasury Notes with maturities greater
than 2 years and all Security Deposits in the form of United States Treasury
Bonds, plus
(d) 96% of the aggregate market value at such time of all
Security Deposits that are United States Agency obligations, plus
(e) 98% of the aggregate market value at such time of all
Security Deposits that are Money Fund Shares,
excluding, however, in each case, any Security Deposits that are not subject to
a first priority perfected Lien in favor of the Collateral Agent, for the
ratable benefit of the Banks, pursuant to the Collateral Documents, free and
clear of any other Lien other than Liens permitted by subsection (a), (b) or (c)
of SECTION 7.8. It is understood and agreed that the market value of all
Security Deposits as of any date shall be determined by the Collateral Agent in
accordance with its usual and customary practices.
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other
day on which commercial banks in Chicago,
Illinois or New York, New York are
authorized or required by law to close.
"CLEARING HOUSE" means the department of the Company through which all
futures and options on futures trades on or subject to the rules of the exchange
are reconciled, settled, adjusted and cleared.
"CLEARING MEMBER" means a firm qualified to clear trades through the
Clearing House.
"CME" has the meaning set forth in the preamble hereto.
"CME RULES" means the rules of the Company as amended and in effect
from time to time and includes any interpretations thereof. "CME RULE" shall
refer to any specifically designated rule.
2
"COLLATERAL" means any and all rights and interests in or to the
Security Deposits, in which a Lien is created or purported to be created
pursuant to the Collateral Documents, all as more particularly described in the
Security and Pledge Agreement.
"COLLATERAL AGENT" means The Bank of New York, in its capacity as
collateral agent for the Banks pursuant to Article X or any successor collateral
agent hereunder, together with their respective successors and assigns.
"COLLATERAL DOCUMENTS" means the Security and Pledge Agreement, the
Control Agreement and each document executed in connection therewith.
"COLLATERAL NOTICE" has the meaning set forth in SECTION 10.8.
"COMMITMENT" means, for each Bank, the obligation of such Bank to make
Loans to the Company in an aggregate amount not exceeding the amount set forth
opposite its signature below, as such amount may be modified from time to time
as provided herein.
"COMPANY" has the meaning set forth in the preamble hereto.
"CONSOLIDATED TANGIBLE NET WORTH" means at any date the consolidated
shareholders' equity of the Company and its consolidated Subsidiaries determined
in accordance with Agreement Accounting Principles, less their consolidated
Intangible Assets, all determined as of such date. For purposes of this
definition "INTANGIBLE ASSETS" means the amount (to the extent reflected in
determining such consolidated shareholders' equity) of (i) all write-ups (other
than write-ups resulting from foreign currency translations and write-ups of
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to December 31, 2000 in the book value
of any asset owned by the Company or a consolidated Subsidiary, (ii) all
investments in unconsolidated Subsidiaries and all equity investments in Persons
which are not Subsidiaries and (iii) all unamortized debt discount and expense,
unamortized deferred charges, goodwill, patents, trademarks, service marks,
trade names, copyrights, organization or developmental expenses and other
intangible items.
"CONTROL AGREEMENT" means that certain Securities Account Control
Agreement, dated as of October 18, 2002, by and among the Clearing Members party
thereto, the Company, The Bank of New York, as Securities Intermediary (as
defined therein) and the Collateral Agent, substantially in the form of Exhibit
H, as the same may be amended, restated, supplemented or otherwise modified from
time to time.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414(b) or 414(c) of the Internal Revenue Code.
"DEFAULT" means an event described in Article VIII.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
3
"EXCESS AVAILABILITY" means, as of any date, the lesser of (a) the
excess, if any, of the Aggregate Commitment minus the aggregate principal of all
Loans outstanding and (b) the excess, if any, of the Borrowing Base minus the
aggregate principal of all Loans outstanding.
"EXCLUDED TAXES" means, with respect to any and all payments to the
Collateral Agent, any Bank or any recipient of any payment to be made by or on
account of any obligation of the Company under the Loan Documents, net income
taxes, branch profits taxes, franchise and excise taxes (to the extent imposed
in lieu of net income taxes), and all interest, penalties and liabilities with
respect thereto, imposed on the Collateral Agent or any Bank.
"FED FUNDS RATE" means for any period, a fluctuating interest rate per
annum for each day during such period equal to (a) 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 preceding Business Day) by the
Federal Reserve Bank of New York in the Composite Closing Quotations for U.S.
Government Securities; or (b) if such rate is not so published for any day which
is a Business Day, the average of the quotations at approximately 10:30 a.m.
(Chicago time) for such day on such transactions received by the Collateral
Agent from three federal funds brokers of recognized standing selected by it.
"FOREIGN BANK" has the meaning set forth in SECTION 11.4 (f).
"GFX(TM)" means that Wholly-Owned Subsidiary of the Company known as
the GFX(TM) Corporation.
"GFX(TM) GUARANTY" means certain Guaranties by the Company issued to
counterparties of GFX(TM) related to over-the-counter foreign exchange
transactions entered into by GFX(TM), or certain Guaranties by the Company
issued to a banking institution that has provided performance bond collateral,
or met performance bond or variation margin obligations on behalf of GFX(TM),
related to transactions in futures.
"GUARANTY" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract and shall include, without
limitation, the contingent liability of such Person in connection with any
application for a letter of credit.
"IEF(TM) GUARANTY" means the guaranty by the Company that a Clearing
Member participating in the IEF(TM) Program shall receive upon redemption one
($1) U.S. dollar for each IEF(TM) unit invested in the IEF(TM) Program. An
IEF(TM) unit (or fraction thereof) represents an equity interest in the CME
Interest Earning Facility for Customer-Segregated Funds, L.L.C. or the CME
Interest Earning Facility for Proprietary Funds, L.L.C. credited to a Clearing
Member for each $1.00 (or fraction thereof) invested by that Clearing Member.
"IEF(TM) PROGRAM" means a program in which performance bond cash
deposited with the CME's Clearing House by Clearing Members participating in the
IEF(TM) Program is
4
pooled and invested in U.S. Government securities and under repurchase and
reverse repurchase agreements. The IEF(TM) Program consists of two limited
liability companies (CME Interest Earning Facility for Customer-Segregated
Funds, L.L.C. and CME Interest Earning Facility for Proprietary Funds, L.L.C.)
of which the CME is the manager.
"INCREASED COST NOTICE" has the meaning set forth in SECTION 11.9(b).
"INDEBTEDNESS" of a Person means such Person's (i) obligations for
borrowed money (other than a daylight overdraft incurred by the Company in the
course of effecting daily settlements with Clearing Members), (ii) obligations
representing the deferred purchase price of property other than accounts payable
arising in the ordinary course of such Person's business on terms customary in
the trade, (iii) obligations, whether or not assumed, secured by Liens or
payable out of the proceeds or production from property (other than futures and
options contracts held in a cross-margin account at the Company) now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced
by notes, acceptances, or other instruments, (v) capitalized lease obligations,
(vi) obligations for which such Person is obligated pursuant to a Guaranty
(other than the guarantee provided by the Clearing House to Clearing Members in
the ordinary course of business for their obligations to one another, or the
GFX(TM) and IEF(TM) Guaranties) and (vii) reimbursement obligations with respect
to letters of credit; provided, however, that "INDEBTEDNESS" shall not include
(a) obligations of the Company to a Cross-Margining Clearing Organization (as
such term is defined in the CME Rules) arising out of the liquidation of one or
more pairs of cross-margin accounts held at the Clearing House and at such
Cross-Margining Clearing Organization and (b) obligations of the Company to a
pledgee arising out of the liquidation of one or more pairs of cross-margin
pledge accounts held at the Clearing House and at a Cross-Margining Clearing
Organization.
"INDEMNIFIED AMOUNTS" has the meaning set forth in SECTION 11.9(a).
"INDEMNIFIED PARTY" has the meaning set forth in SECTION 11.9(a).
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"LIEN" of a Person means any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
under a capitalized lease or analogous instrument, in, of or on any property of
such Person.
"LOAN" means, with respect to a Bank, such Bank's portion of any
Advance.
"LOAN DOCUMENTS" means this Agreement, the Notes and the Collateral
Documents.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on the
Company's financial position or the Company's ability to perform its obligations
in the ordinary course of business as they become due.
"MEMBER ATTORNEY-IN-FACT" means CME in its capacity as
attorney-in-fact for the Clearing Members pursuant to the power of attorney
authorized in CME Rule 816.
5
"MONEY FUND SHARES" has the meaning set forth in the Security and
Pledge Agreement.
"MONEY GRIDLOCK SITUATION" means (1) a disruption in the clearing and
settlement operations of the Clearing House due to temporary problems or delays
in obtaining or making settlement payments due to delays, overuse or other
similar problems with the Fed Wire or similar money transfer systems, (2) the
failure of a Cross-Margining Clearing Organization to approve one or more
withdrawals by the Clearing House from a cross-margining bank account held
either by the Company and such Cross-Margining Clearing Organization jointly, or
by a Clearing Member cross-margining its positions at the Clearing House with
its own or an affiliate's positions at such Cross-Margining Clearing
Organization, or (3) the failure of a Common Banking and Settlement Clearing
Organization (as such term is defined in the CME Rules) to approve one or more
withdrawals by the Clearing House from a common banking and settlement bank
account held either by the Company and such Common Banking and Settlement
Clearing Organization jointly or by a Clearing Member participating in common
banking and settlement with such Common Banking and Settlement Clearing
Organization.
"MULTIEMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company or any member
of the Controlled Group is a party to which more than one employer is obligated
to make contributions.
"NEW LENDING OFFICE" has the meaning set forth in SECTION 11.4 (f).
"NON-TERMINATING BANK" has the meaning set forth in SECTION 2.7.2.
"NOTE" means a promissory note in substantially the form of Exhibit A
hereto, duly executed and delivered to each of the Banks by the Company and
payable to the order of each Bank in the amount of such Bank's Commitment,
including any amendment, modification, renewal or replacement of such promissory
note.
"OBLIGATIONS" means all unpaid principal of, and accrued and unpaid
interest on, the Notes, all accrued and unpaid commitment fees and all other
obligations of the Company to the Collateral Agent or any Bank arising under the
Loan Documents.
"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 Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document.
"PARTICIPANTS" has the meaning set forth in SECTION 11.1(b).
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
"PERSON" means any corporation, natural person, firm, joint venture,
partnership, limited liability company, trust, unincorporated organization,
enterprise, government or any department or agency of any government.
6
"PLAN" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code as to which the Company or any Subsidiary may have
any liability.
"PRINCIPAL BANK" has the meaning set forth in SECTION 4.5.
"PURCHASERS" has the meaning set forth in SECTION 11.1(c).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event (provided that a failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code and of Section 302
of ERISA shall be a reportable event regardless of the issuance of any such
waivers in accordance with Section 412(d) of the Internal Revenue Code).
"REQUIRED BANKS" means the Banks holding at least 75% of the aggregate
unpaid principal amount of the outstanding Advance(s), or, if no Advance(s) are
outstanding, Banks having at least 75% of the Aggregate Commitment.
"RESTRUCTURING" has the meaning set forth in SECTION 11.9(c).
"RESTRUCTURING NOTICE" has the meaning set forth in SECTION 11.9(c).
"REVOLVING CREDIT TERMINATION DATE" means, October 17, 2003 or any
earlier date on which the Aggregate Commitment is terminated pursuant to this
Agreement.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SECURITIES ACCOUNT" has the meaning set forth in the Security and
Pledge Agreement.
"SECURITY AND PLEDGE AGREEMENT" means that certain Security and Pledge
Agreement, dated as of October 18, 2002, by and among the Clearing Members party
thereto, the Company and the Collateral Agent, substantially in the form of
Exhibit I, as the same may be amended, restated, supplemented or otherwise
modified from time to time.
"SECURITY DEPOSITS" means the amounts required to be deposited with
the Clearing House by each Clearing Member as security for its obligations to
the Clearing House pursuant to CME Rule 816.
7
"SERVICING BANK" means each Bank designated as a Servicing Bank in
accordance with SECTION 4.5.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"SUBSIDIARY" means any corporation more than 50% of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries, or any similar business organization which is so owned
or controlled.
"SURPLUS FUNDS" means funds in excess of those needed for normal
operations in the Clearing House Accounts and the General Accounts as referenced
in CME Rule 802.B.
"SURVIVOR" has the meaning set forth in SECTION 11.9(c).
"TAXES" means any and all present or future taxes, levies, imposts,
duties, fees, deductions, charges or withholdings imposed by any governmental
authority.
"TERMINATED COMMITMENT" has the meaning set forth in SECTION 2.7.2.
"TERMINATION NOTICE" has the meaning set forth in SECTION 11.9(c).
"2.7.2 EFFECTIVE DATE" has the meaning set forth in SECTION 2.7.2.
"2.7.2 NOTICE" has the meaning set forth in SECTION 2.7.2.
"UNFUNDED LIABILITIES" means, (i) in the case of Single Employer
Plans, the amount (if any) by which the present value of all vested
nonforfeitable benefits under such Plan exceeds the fair market value of all
Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, and (ii) in the case of Multiemployer
Plans, the withdrawal liability of the Company and Subsidiaries.
"UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"WHOLLY-OWNED SUBSIDIARY" means any Subsidiary all of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Company or one or more Wholly-Owned Subsidiaries, or by the
Company and one or more Wholly-Owned Subsidiaries, or any similar business
organization which is so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
8
ARTICLE II
THE CREDIT
Section 2.1 REVOLVING CREDIT LOANS. Through and including the
Revolving Credit Termination Date, each Bank severally agrees, on the terms and
conditions set forth in this Agreement and in its Note, to make Loans to the
Company from time to time in amounts not to exceed in the aggregate at any one
time outstanding the amount of its Commitment; provided, however, that if any
unmatured Advances are outstanding at the effective date of a change in any
Bank's Commitment pursuant to SECTION 2.7, each Bank instead severally agrees,
on the terms and conditions set forth in this Agreement, to make Loans from time
to time prior to the maturity of such unmatured Advances in amounts not to
exceed in the aggregate for all such Loans of such Bank the amount of such
Bank's ratable share (determined in proportion to its respective Commitment, as
so changed) of the excess of (i) the amount of the Aggregate Commitment, over
(ii) the aggregate principal outstanding amount of all such unmatured Advances
of the Banks (assuming for purposes of this clause (ii) that all other such
Banks' shares of such unmatured Advances were made and have not been
disproportionately prepaid); and provided, further that no Loan shall be made
if, after giving effect thereto, the aggregate outstanding principal of all
Loans would exceed the lesser of (A) the Aggregate Commitment or (B) the
Borrowing Base. Subject to the terms of this Agreement, the Company may borrow,
repay and reborrow at any time through the Revolving Credit Termination Date.
The obligations of any Bank to make Loans hereunder shall cease at 4:01 p.m.
(Chicago time) on the Revolving Credit Termination Date.
Section 2.2 RATABLE LOANS. Each Advance hereunder shall consist of
Loans made from the several Banks, ratably in proportion to the amounts of their
respective Commitments on the date of such Advance.
Section 2.3 PAYMENT ON LAST DAY OF INTEREST PERIOD. Each Advance
and accrued and unpaid interest thereon shall be due and payable 30 days after
such Advance is made.
Section 2.4 REBORROWING OF ADVANCES. No Loans may be made hereunder
to repay Advances without the consent of all of the Banks.
Section 2.5 OPTIONAL PRINCIPAL PAYMENTS. The Company may from time
to time prepay, without premium or penalty, all or a portion of any outstanding
Advance, pro rata among the Banks, in accordance with their respective shares of
such Advance by giving notice of such prepayment by 10:00 a.m. (Chicago time) on
the date of such payment to each Bank. Repayment of principal pursuant to this
SECTION 2.5 shall be applied to prepay the outstanding Loans, pro rata, and
shall be accompanied by accrued and unpaid interest thereon.
Section 2.6 MANDATORY PRINCIPAL PAYMENTS. On any day on which the
aggregate outstanding principal of the Loans exceeds the Borrowing Base or the
Aggregate Commitment, such excess shall be immediately due and payable without
the necessity of any notice or demand. Repayment of such excess amounts shall be
applied to prepay the outstanding Loans, pro rata, and shall be accompanied by
accrued and unpaid interest thereon.
9
Section 2.7 ADJUSTMENTS OF COMMITMENTS.
Section 2.7.1 ADJUSTMENTS BY THE COMPANY. The
Company may permanently reduce the Aggregate Commitment, in whole or in part
ratably among the Banks, in proportion to the amounts of their respective
Commitments in integral multiples of $1,000,000, upon at least ten Business
Days' written notice to the Banks, which shall specify the amount of any such
reduction; provided, however, that, subject to SECTIONS 2.7.2, 11.9(b) and
11.9(c), the amount of the Aggregate Commitment may not be reduced below the
outstanding principal amount of the Advance(s), and provided further that a
reduction by the Company of the Aggregate Commitment to zero shall terminate
this Agreement as of the effective date of such reduction. All accrued and
unpaid commitment fees shall be payable on the effective date of such
termination.
Section 2.7.2 ADJUSTMENTS BY BANKS FOR ACCELERATED
TERMINATION. If the Commitment of a Bank hereunder is terminated pursuant to
SECTION 11.9(b) or 11.9(c), the Company shall immediately notify each remaining
Bank ("NON-TERMINATING BANK"), in writing of such termination ("ACCELERATED
TERMINATION NOTICE") and shall state the amount of such terminating Bank's
Commitment ("TERMINATED COMMITMENT") in the Accelerated Termination Notice. Each
Non-Terminating Bank shall notify the Company, in writing, on or before the 5th
Business Day after the date of the Accelerated Termination Notice, if and by
what amount such Bank is willing to increase its Commitment, which amount shall
be equal to all or some portion of the Terminated Commitment (each, a "2.7.2
NOTICE"). Any Non-Terminating Bank that fails to so notify the Company on or
before such 5th Business Day, shall be deemed to have declined to increase its
Commitment. If offers to increase Commitments are made by two or more
Non-Terminating Banks in an aggregate amount greater than the aggregate amount
of the Terminated Commitment, such Non-Terminating Banks and the Company hereby
agree that such offers shall be allocated as nearly as possible in proportion to
the aggregate amount of such offers, so that the aggregate amount thereof will
not exceed the amount of the Terminated Commitment. On or before the 6th
Business Day after the date of the Accelerated Termination Notice, the Company
shall notify each Non-Terminating Bank of the amount by which each such
Non-Terminating Bank's Commitment has been increased, which amount shall not
exceed the amount of such Non-Terminating Bank's offer to increase its
Commitment in such Bank's 2.7.2 Notice. All increases of Commitments by the
Banks, under this SECTION 2.7.2 shall become effective on the terminating Bank's
Accelerated Termination Date ("2.7.2 EFFECTIVE DATE"). The Company shall
promptly, and in no event later than the 2.7.2 Effective Date, deliver to each
Bank whose Commitment has been increased pursuant to this SECTION 2.7.2 a new
Note reflecting such Bank's new Commitment amount and each such Bank shall
promptly, after repayment of all Advances outstanding on the 2.7.2 Effective
Date, return to the Company such Bank's superseded Note. On the 2.7.2 Effective
Date, the Commitments shall be adjusted to reflect any such increases.
Section 2.8 COMMITMENT FEE. From the date hereof to and including
the Revolving Credit Termination Date, the Company agrees to pay to each Bank a
commitment fee of 7/100 of 1% per annum (on the basis of a year consisting of
360 days and for actual days elapsed) on the daily amount of such Bank's ratable
share (determined in proportion to its respective Commitment) of the excess of
(i) the amount of the Aggregate Commitment over (ii) the aggregate principal
amount of all outstanding Advances of the Banks, payable on the last day
10
of each November, February, May and August hereafter and on the Revolving Credit
Termination Date, commencing on the first of such dates to occur after the date
hereof.
Section 2.9 COLLATERAL.
(a) All Obligations of the Company under this Agreement,
the Notes and all other Loan Documents shall be secured by the Collateral in
accordance with the Collateral Documents.
(b) So long as no Default shall have occurred and be
continuing, the Company may from time to time replace any security credited to
the Securities Account or any Money Fund Shares subject to the Lien of the
Security and Pledge Agreement with another security of a type described in CME
Rule 816 that has a market value equal to or greater than the market value of
the replaced security, determined as of the date of replacement by the
Collateral Agent in accordance with its usual and customary practices.
(c) So long as no Default shall have occurred and be
continuing, the Company may from time to time direct the Collateral Agent to
(and the Collateral Agent shall upon the request of the Company) liquidate any
securities credited to the Securities Account and any Money Fund Shares and
apply the proceeds thereof and any other amounts credited to the Securities
Account to repay any outstanding Loans, provided that after giving effect to
such liquidation and the repayment of such Loans, the aggregate principal amount
of all remaining Loans outstanding as of the date of such removal shall not
exceed the Borrowing Base as of the date of such removal.
(d) Upon any replacement or liquidation of Collateral
pursuant to subsection (b) or (c) above, the Lien of the Collateral Agent on the
replaced or liquidated Collateral, as applicable, shall be deemed released
without further consent of the Collateral Agent or any Bank.
ARTICLE III
FUNDING THE CREDITS
Section 3.1 METHOD OF BORROWING. The Company shall give the
Collateral Agent, each Bank and each Servicing Bank notice not later than 3:15
p.m. (Chicago time) on the Borrowing Date of each Advance, specifying the amount
of such Advance, each Bank's pro rata share thereof and the bank and the account
to which the proceeds of such Advance are to be disbursed. Following such notice
from the Company, the Collateral Agent shall determine the aggregate market
value of the Collateral and the Borrowing Base in accordance with the terms
hereof and promptly, but in any event, not later than 3:45 p.m. (Chicago time),
provide each Bank with a Collateral Notice. Subject to satisfaction of the
applicable conditions precedent set forth in Article V, not later than 4:45 p.m.
(Chicago time) on each Borrowing Date, each Bank severally shall make available
to the Company, its pro rata share of the full amount of each Advance in
immediately available funds, at such Bank's address specified pursuant to
Article XIII. Further, if applicable, not later than 4:45 p.m. (Chicago time) on
each Borrowing Date, each Servicing Bank shall make available to the Company, on
behalf of the Bank or Banks that it
11
services, such serviced Bank's or Banks' pro rata share of the full amount of
each Advance in immediately available funds, at such Servicing Bank's address
specified pursuant to Article XIII.
Section 3.2 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance shall be
in the minimum amount of $10,000,000 (and in integral multiples of $250,000 if
in excess thereof), provided, however, that any Advance may be in the aggregate
amount of the Excess Availability.
Section 3.3 RATE BEFORE AND AFTER MATURITY. Prior to maturity,
Advances shall bear interest at the Fed Funds Rate plus 45/100 of 1% per annum.
Any Advance not paid at maturity, whether by acceleration or otherwise, shall
bear interest until paid in full at a rate per annum equal to the Fed Funds Rate
plus 2.4% per annum. In the event that a change in the Fed Funds Rate is
announced or published at the time a Loan is outstanding, such change shall
become effective at the time it is announced or published.
Section 3.4 METHOD OF PAYMENT. All payments (including prepayments)
of principal, interest, commitment fees and other amounts payable hereunder by
the Company shall be made in immediately available funds to the Banks (or, if
applicable, the related Servicing Banks) at the addresses specified pursuant to
Article XIII. All such payments shall be applied to principal, interest, fees,
expenses and other amounts due and payable hereunder in the following order:
first, to amounts payable hereunder other than principal, interest and
commitment fees; second, to commitment fees (in chronological order in
accordance with the dates such fees became due and payable); and third, to
principal of, and interest on, the Advances (in chronological order in
accordance with the dates such Advances were made; and as to any single Advance,
first to interest thereon and second to principal thereof). Subject to the
provisions of SECTION 4.4 and, except with respect to payments made to a Bank
whose Commitment is terminated (or whose commitment fee is revised) pursuant to
SECTION 11.9(b) or (c), (a) all payments of principal of, and interest on, the
Advances shall be made to the Banks (or, if applicable, the related Servicing
Banks) ratably among the Banks, in proportion to the outstanding principal
amount of their respective Loans constituting part of such Advance and (b) all
payments of commitment fees and other amounts payable hereunder to the Banks
shall be made to the Banks (or, if applicable, the related Servicing Banks on
behalf of the applicable Banks, if applicable) ratably among the Banks, in
proportion to the amounts of their respective Commitments on the date such
payment is made.
Section 3.5 NOTES; TELEPHONIC NOTICES. Each Bank shall maintain in
accordance with its usual and customary practices an account or accounts
evidencing the Loans made by such Bank from time to time, including the amounts
of principal and interest payable and paid to such Bank from time to time under
this Agreement and the Notes; and each Bank is hereby authorized to record the
principal amount of each of its Loans and each repayment on the schedule
attached to its Note or in its books and records; provided, however, that the
failure to so record shall not affect the Company's obligations under such Note.
The records kept by each Bank shall be presumed to be accurate and shall be
binding upon the Company absent manifest error. The Company hereby authorizes
the Banks and the Servicing Banks to extend Advances based on telephonic notices
made by any Persons any such Bank or Servicing Bank in good faith believes to be
acting on behalf of the Company. The Company agrees to deliver promptly to each
Bank and Servicing Bank a written confirmation of each telephonic notice signed
by an authorized signatory. If the written confirmation differs in any material
respect from the action
12
taken by a Bank or Servicing Bank, as applicable, the records of such Bank or
Servicing Bank, as applicable, shall govern absent manifest error.
Section 3.6 INTEREST PAYMENT DATES; INTEREST BASIS. Interest
accrued on each Advance prior to maturity shall be payable to the Banks (or, if
applicable, the related Servicing Banks) on the date on which the Advance is
paid or prepaid, whether due to acceleration or otherwise. Interest accrued on
each Advance after maturity shall be payable on demand. Interest and commitment
fees shall be calculated for actual days elapsed on the basis of a 360-day year.
Interest shall be payable for the day an Advance is made but not for the day of
any payment on the amount paid if payment is received prior to noon (local time
at the place of payment). If any payment of principal of, or interest on, an
Advance shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
ARTICLE IV
BANKS' SERVICING ARRANGEMENT
Section 4.1 NOTICE TO AND PAYMENT BY THE BANKS. Promptly after
receiving notice from the Company of each Advance requested pursuant to SECTION
3.1, the Servicing Banks shall notify each of the applicable Banks by telephone
(which may, at the option of the Servicing Banks, be accompanied by facsimile
transmission), of each Advance, which notice shall state: (a) the dollar amount
of such Advance; (b) each Bank's ratable share of such Advance; (c) the date and
time when such Advance is to be made; and (d) the Servicing Bank to which the
applicable Bank's ratable share of such Advance shall be sent. Except as
hereinafter provided, promptly after receipt of such notice from the applicable
Servicing Bank and, in any event, before the time specified in such notice as
the time when such Advance is to be made to the Company, each applicable Bank
shall transfer its ratable share of such Advance to the appropriate Servicing
Bank by Federal Reserve wire transfer or, in the event of a failure of the
Federal Reserve wire transfer system, in other immediately available funds.
Section 4.2 PAYMENT BY BANKS TO SERVICING BANKS. If a Servicing
Bank fails to receive a transfer from any of the applicable Banks by the time
required pursuant to SECTION 4.1, such Servicing Bank shall advance such amount
for and on behalf of such Bank, provided that, notwithstanding the foregoing,
such Bank shall, in any event, transfer to the Servicing Bank, by the means set
forth in SECTION 4.1, its ratable share of the relevant Advance not later than
10:00 a.m. (Chicago time) the next Business Day after the Servicing Bank
provides such Bank with the notice specified in SECTION 4.1. In the event a
Servicing Bank advances funds overnight to the Company pursuant to the
immediately preceding sentence, the Bank on whose behalf such funds are advanced
shall reimburse the Servicing Bank for the Servicing Bank's cost of overnight
funds, for the period from the time the Servicing Bank advances such funds to
the Company for and on behalf of such Bank to the time of the Servicing Bank's
receipt of such Bank's transfer of its ratable share of the relevant Advance.
Such Servicing Bank shall promptly provide such Bank with notice of the amount
of its cost of overnight funds for such period and such amount shall thereupon
become immediately due and payable from such Bank to such Servicing Bank,
13
and shall be paid by such Bank to such Servicing Bank upon receipt of such
notice without further notice from or demand by such Servicing Bank.
Section 4.3 DISTRIBUTION OF PAYMENTS. Whenever a Servicing Bank
receives from, or on behalf of the Company, or any other person or party, a
payment of principal, interest or commitment fees or other amount payable in
connection with the Loans with respect to any of which the applicable Banks are
entitled to receive a share, such Servicing Bank shall promptly pay to such
Banks, in lawful money of the United States of America and in the kind of funds
so received by such Servicing Bank, the amount due each of such Banks as
determined pursuant to this Agreement; provided, however, that the amount of
such distribution shall be adjusted to the extent that amounts are owed by any
Bank to such Servicing Bank pursuant to SECTION 4.2 or are required to be
returned to such Servicing Bank pursuant to SECTION 4.4. If any payment of
principal, interest or commitment fees or other amount payable in connection
with the Loans is received from or on behalf of the Company by a Servicing Bank
before 10:00 a.m. (Chicago time) on any Business Day, that Servicing Bank shall
use reasonable efforts to wire transfer the appropriate portion of the same to
the applicable Banks that same Business Day, but in any event shall wire the
same to each of such Banks before the end of the next Business Day. In the event
that a Servicing Bank receives any such payment from or on behalf of the Company
before 10:00 a.m. (Chicago time) on any Business Day and does not transfer to
the applicable Banks the appropriate portion of such payment on that day, the
Company shall, promptly upon receipt of notice from any such Bank, pay directly
to such Bank an amount equal to the interest on such portion, at the Fed Funds
Rate or, with respect to any payment of principal on a Loan, at the rate set
forth in SECTION 3.3, for the period commencing on the day such Servicing Bank
receives such payment up to but not including the following Business Day.
Section 4.4 RESCISSION OF PAYMENTS BY THE COMPANY. If all or part
of any payment made by the Company to a Servicing Bank of principal, interest or
commitment fees or other amount payable in connection with the Loans is
rescinded or must otherwise be returned for any reason and if a Servicing Bank
has paid to any of the Banks such Bank's ratable share therein, such Bank shall,
upon telephone notice from such Servicing Bank, forthwith pay to such Servicing
Bank, on the date of such telephone notice (if notice is received by such
Servicing Bank at or prior to 10:00 a.m. Chicago time) or on the next Business
Day (if notice is received by such Servicing Bank after 10:00 a.m. Chicago
time), an amount equal to such Bank's ratable interest in the amount that was
rescinded or that must be so returned by the Servicing Bank. A Servicing Bank
shall promptly return to the Company each such amount (or any lesser amount)
that is received from each Bank. A Servicing Bank shall have no obligation to
the Company for any amount that the Servicing Bank paid to any Bank and that is
not repaid by such Bank, provided that the Servicing Bank did in fact provide
such Bank with the notice described above to the effect that such payment was
rescinded or must be returned.
Section 4.5 POWERS GRANTED TO THE SERVICING BANKS. The Company and
one or more Banks (each a "PRINCIPAL BANK") may, upon mutual agreement, from
time to time request another Bank to act as a Servicing Bank for the purpose of
administering and servicing the Loans of the Principal Banks. Upon the
acceptance of the offer to service by the proposed Servicing Bank (which shall
be in the sole discretion of such proposed Servicing Bank), such Bank shall be a
Servicing Bank hereunder and as administrator of the Loans of the Principal
Banks for which it acts (and not as an agent, employee or fiduciary), shall be
entitled to exercise
14
all such powers as are incidental to the powers to receive and collect funds
from the Principal Banks and the Company as provided for in this Agreement, and
to take such other actions with respect to such Loans as are provided hereby or
as may be from time to time agreed by such Servicing Bank and the Principal
Banks. In acting under this Agreement, each Servicing Bank agrees to exercise
the same degree of care in administering such Loans as it would use in managing
its own loans; provided, however, that this sentence shall not make any
Servicing Bank a fiduciary to any Principal Bank. The Principal Banks and the
Company hereby agree and acknowledge that (i) in performing the duties provided
for in this Agreement, the Servicing Banks are acting solely for the benefit of
the Principal Banks and are in no way to be construed to be acting as agent for
the Company; and (ii) the servicing arrangement provided for herein is not
intended to constitute, and shall not be construed to establish, a partnership
or joint venture between the Servicing Banks and the Principal Banks, or between
the Servicing Banks and the Company.
Section 4.6 RESIGNATION OR TERMINATION OF SERVICING BANK. A
Servicing Bank may resign its position as such at any time upon thirty (30)
day's prior written notice to the Company and the Principal Banks for which it
acts, and the Company and the applicable Principal Banks acting together may
terminate a Servicing Bank's role as such at any time upon thirty (30) day's
prior written notice to such Servicing Bank. Subsequent to the effective date of
such resignation or termination, the resigned or terminated (as applicable)
Servicing Bank shall have no further obligations in that capacity under this
Agreement, and unless and until a successor servicing bank is appointed by the
Company and the applicable Principal Banks acting together, (i) the services
performed by such Servicing Bank hereunder shall be performed by the individual
Principal Banks and the Company, each on its own behalf, and (ii) any payments
or communications made by the Company to such Servicing Bank hereunder shall be
made directly to the applicable individual Principal Banks.
Section 4.7 NON-RELIANCE REPRESENTATION. Each of the Banks
acknowledges and represents that it has, independently of and without reliance
upon the Servicing Banks, and based solely upon its own expertise (and the
expertise of its agents and independent advisors, if any) and upon financial
statements and other information deemed appropriate by it, made its own credit
analysis of the Company and made its own decision to enter into this Agreement.
Each of the Banks further acknowledges and represents that it will,
independently of and without reliance upon the Servicing Banks, and based solely
upon its own expertise (and the expertise of its agents and independent
advisors, if any) and upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis of the Company
and its own decisions with respect to this Agreement.
Section 4.8 EXCULPATION. No Servicing Bank nor any of its
shareholders, directors, officers, employees or agents shall be liable to the
Banks, or any of them individually, for any obligation, undertaking, act or
judgment of the Company or any other Person, or for any error of judgment or any
action taken or omitted to be taken by such Servicing Banks or any other
Servicing Bank (except and to the extent that the same arises from gross
negligence or willful misconduct on the part of such Servicing Bank), or be
bound to ascertain or inquire as to the performance or observance of any term of
any of the Loan Documents. Without limiting the generality of the foregoing, the
Servicing Banks: (a) may consult with legal counsel selected by the Servicing
Banks and shall not be liable for any action taken or omitted to be taken in
good
15
faith by the Servicing Banks in accordance with the advice of such counsel; (b)
makes no warranty or representation and shall not be responsible for any
warranty or representation made in or in connection with any of the Loan
Documents, or for the financial condition of the Company or any other Person, or
for the observance or performance of any obligations of the Company or any other
Person, or for the truth or accuracy of any document provided to the Banks that
the Servicing Banks have initially received from, or that the Servicing Banks
have prepared based upon information received from, the Company or any other
Person; (c) make no warranty or representation and shall not be responsible for
the due execution, validity, enforceability, sufficiency or collectibility of
any of the Loan Documents; (d) shall incur no liability under or in respect of
any such agreement or document by acting upon any notice (by telephone or
otherwise), or writing (including telex and telegraphic communication) believed
by the Servicing Banks in good faith to be genuine and to be signed or sent by
the proper party or Person; and (e) make no warranty or guarantee as to: (i)
future payments by the Company or any other obligor or guarantor of the Loans,
(ii) the Company's future compliance with or performance of any of the terms and
conditions contained in the Loan Documents, or (iii) the collectibility of the
Loans.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 CONDITIONS PRECEDENT.
(a) CONDITIONS TO CLOSING. This Agreement shall become
effective as of the date hereof upon the execution and delivery of a counterpart
hereto by each party hereto.
(b) CONDITIONS TO INITIAL ADVANCE. No Bank shall be
required to make the initial Advance hereunder unless the Company has furnished
to such Bank:
(i) A certificate of good standing with
respect to the Company, certified by the Secretary of State of
Delaware.
(ii) A copy, certified by the Secretary or
Assistant Secretary of the Company, of CME's Board of Directors'
resolutions authorizing the execution of the Loan Documents.
(iii) An incumbency certificate, in
substantially the form of Exhibit G hereto, executed by the Secretary
or Assistant Secretary of the Company, which shall identify by name
and title and bear the signature of the officers of the Company
authorized to sign the Loan Documents and to make borrowings
hereunder, including telephonic borrowings, upon which certificate the
Banks shall be entitled to rely until informed of any change in
writing by the Company.
(iv) A certificate, signed by the president &
CEO, managing director & president of the Clearing House division,
managing director and chief administrative officer, or managing
director
16
& chief financial officer of the Company or his delegate, in
substantially the form of Exhibit B hereto. Such certificate may be
furnished by the Company by any means set forth in SECTION 13.1
hereof, and shall be deemed given to such Bank as provided therein.
(v) A written opinion of the Company's
counsel, addressed to the Banks (or upon which the Banks may rely),
covering the matters set forth in Exhibit C hereto.
(vi) A Note, duly executed and delivered by the
Company and payable to the order of such Bank.
(vii) A copy of the Security and Pledge
Agreement, duly executed and delivered by the Company, for itself and
as Member Attorney-in-Fact on behalf of each grantor named therein and
the Collateral Agent.
(viii) A copy of the Control Agreement, duly
executed and delivered by the Company, for itself and as Member
Attorney-in-Fact on behalf of each grantor named therein, The Bank of
New York, as Securities Intermediary (as defined therein) and the
Collateral Agent.
Section 5.2 EACH ADVANCE. No Bank shall be required to make any
Advance (including the initial Advance), unless on the applicable Borrowing
Date:
(a) There exists no Default or Unmatured Default.
(b) The representations and warranties contained in
Article VI are true and correct in all material respects as of such Borrowing
Date except for changes in the Schedules hereto reflecting transactions
permitted by this Agreement.
(c) The Company has furnished to such Bank a certificate,
substantially in the form of EXHIBIT D, which sets forth in reasonable detail
the intended use of the proceeds of such Advance (which shall comply with
SECTION 7.2 hereof) and confirms that such proceeds will not be used to repay
maturing Advances except as permitted pursuant to SECTION 2.4 hereof. Such
certificate may be furnished by Company by any means set forth in SECTION 13.1
hereof, and shall be deemed delivered to such Bank as provided therein.
(d) The Collateral Agent has furnished to such Bank a
Collateral Notice in accordance with SECTION 3.1 indicating the aggregate market
value of the Collateral on such date.
(e) The aggregate outstanding principal of all Loans, after
giving effect to the Loans to be made on such Borrowing Date, does not exceed
the lesser of (i) the Aggregate Commitment and (ii) the Borrowing Base as of
such date.
17
The Company's receipt of the proceeds of any Loan hereunder shall constitute a
representation and warranty by the Company that the conditions contained in
SECTIONS 5.2(a) and (b) have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks, as of the date of
each Advance, that:
Section 6.1 CORPORATE EXISTENCE AND STANDING. Each of the Company
and the Subsidiaries is a corporation duly incorporated, validly existing and in
good standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted and where the failure to have such authority would
reasonably be expected to have a Material Adverse Effect.
Section 6.2 AUTHORIZATION AND VALIDITY.
(a) The Company has the corporate power and authority and
legal right to execute and deliver the Loan Documents and to perform its
obligations thereunder. The execution and delivery by the Company of the Loan
Documents and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings. The Company has duly executed and
delivered the Loan Documents, and the Loan Documents constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity (whether enforcement is
considered in a proceeding at law or in equity).
(b) The Company has the authority pursuant to CME Rule 816
to execute and deliver, as Member Attorney-in-Fact on behalf of the applicable
Clearing Members, the Collateral Documents and to cause the Security Deposits to
be subject to the Lien of the Collateral Documents to secure the Obligations.
CME Rules 816 and 913.B have been duly adopted and are in full force and effect.
Section 6.3 COMPLIANCE WITH LAWS AND CONTRACTS. Neither the
execution and delivery by the Company of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Company or any Subsidiary
or the Company's or any Subsidiary's articles of incorporation or by-laws or the
provisions of any material indenture, instrument or agreement to which the
Company or any Subsidiary is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder. No
order, consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, that has not been obtained is required
to authorize, or is required in connection with the execution, delivery and
performance of, or the legality, validity, binding effect or enforceability of,
any of the Loan Documents as against the Company.
18
Section 6.4 FINANCIAL STATEMENTS. The most recent annual, audited
consolidated financial statements of Holdings and its subsidiaries (which
include the Company and the Subsidiaries) heretofore delivered to the Banks were
prepared in accordance with generally accepted accounting principles in effect
on the date such statements were prepared and fairly present in all material
respects the consolidated financial condition and operations of Holdings and its
subsidiaries at such date and the consolidated results of their operations for
the period covered thereby.
Section 6.5 MATERIAL ADVERSE CHANGE. No material adverse change in
the business, financial condition, or results of operations of the Company and
the Subsidiaries has occurred since the date of the financial statements
referred to in SECTION 6.4; provided, however, that in the event the Company
utilizes its own funds to repay all or any portion of an Advance, and such
repayment results in such a material adverse change, then such material adverse
change shall not be deemed to have occurred until the thirty-first consecutive
day that such material adverse change continues.
Section 6.6 SUBSIDIARIES. Schedule I contains an accurate list of
all of the presently existing Subsidiaries of the Company, setting forth their
respective jurisdictions of incorporation and the percentage of their respective
capital stock owned by the Company or other Subsidiaries. All of the issued and
outstanding shares of capital stock of such Subsidiaries have been duly
authorized and issued and are fully paid and non-assessable.
Section 6.7 ACCURACY OF INFORMATION. No written information,
exhibit or report furnished by the Company or any Subsidiary to any Bank in
connection with the negotiation of the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not materially misleading in light of
the circumstances existing at the time furnished.
Section 6.8 MARGIN REGULATIONS. Margin Stock (as defined in
Regulation U) constitutes less than 25% of those assets of the Company and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder. No proceeds of any Loans will be used to "purchase" or
"carry" any "margin stock" (each as defined in Regulation U), or for any purpose
that violates the provisions of Regulation T, U or X of the Board of Governors
of the Federal Reserve System as now and from time to time hereafter in effect.
Section 6.9 TAXES. The Company and its Subsidiaries have filed all
United States federal tax returns and all other material tax returns which are
required to be filed by any of them and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by the Company or any such
Subsidiary, except such taxes, if any, as are being contested in good faith. To
the best of the Company's knowledge, no tax liens have been filed and no claims
are being asserted with respect to any such taxes other than those taxes that
are being contested in good faith. The charges, accruals and reserves on the
books of the Company and its Subsidiaries in respect of any taxes or other
governmental charges are adequate.
Section 6.10 LITIGATION. Except as set forth in Schedule II attached
hereto, there is no litigation or proceeding before any governmental authority
pending or, to the knowledge of any of their officers, threatened, against or
affecting the Company or any Subsidiary of the
19
Company which might materially adversely affect the business, financial
condition or results of operations of the Company or the ability of the Company
to perform its obligations under the Loan Documents.
Section 6.11 ERISA. No Plan has Unfunded Liabilities in excess of
$1,000,000. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Company nor any of its Subsidiaries has
withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to terminate any Plan.
ARTICLE VII
COVENANTS
During the term of this Agreement and thereafter as long as any
Advances remain outstanding hereunder, unless the Required Banks shall otherwise
consent in writing:
Section 7.1 FINANCIAL REPORTING. The Company will maintain, for
itself and each Subsidiary, a system of accounting established and administered
in accordance with generally accepted accounting principles, and furnish to the
Banks:
(a) Within 120 days after the close of each of its fiscal
years, an unqualified audit report certified by independent certified public
accountants, acceptable to the Required Banks, prepared in accordance with
Agreement Accounting Principles on a consolidated basis for Holdings and its
subsidiaries (including the Company), including balance sheets as of the end of
such period, and statements of income, changes in shareholders' equity and a
statement of cash flows for the year then ended, accompanied by any management
letter prepared by said accountants and by a certificate of said accountants in
substantially the form of Exhibit E hereto, or if, in the opinion of such
accountants, such certificate is not applicable, a description of any Default or
Unmatured Default relating to accounting matters that in their opinion exists,
stating the nature and status thereof.
(b) Within 120 days after the close of each of its fiscal
years, for the Company and its Subsidiaries, an unaudited consolidated balance
sheet as at the end of such period and unaudited consolidated statements of
income, changes in shareholders' equity and a statement of cash flow for the
year then ended, each prepared in a manner consistent with the preparation of
Holdings' year-end statements and in accordance with Agreement Accounting
Principles (other than the absence of footnotes).
(c) Within 45 days after the close of the first three
quarterly periods of each of its fiscal years, for the Company and its
Subsidiaries, an unaudited consolidated balance sheet as at the close of each
such period and unaudited consolidated statements of income, changes in
shareholders' equity and cash flows from the beginning of such fiscal year to
the end of such quarter, each prepared in a manner consistent with the
preparation of the Company's year-end statements and in accordance with
Agreement Accounting Principles (other than the absence of footnotes and subject
to normal year-end adjustments).
20
(d) Within 45 days after the close of the first three
quarterly periods of each of the Company's fiscal years and within 120 days
after the close of each of the Company's fiscal years, a report of (i) current
Surplus Funds and (ii) the aggregate amount of Security Deposits being held by
the Company including a breakdown of the manner in which Security Deposits are
held (cash, money market mutual funds or treasury securities) and the location
thereof.
(e) Within the time periods set forth herein for the
furnishing of the financial statements required hereunder, a certificate signed
by its managing director & chief financial officer or another managing director,
in substantially the form of Exhibit F hereto, (i) certifying that, to the
knowledge of such officer or director, no Default or Unmatured Default has
occurred during the period covered by such financial statements or (ii) if any
Default or Unmatured Default exists, showing the calculations set forth in
Exhibit F as well as setting forth a description of the nature and status of
such Default or Unmatured Default.
(f) Within 120 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Plan, signed by the managing
director & chief financial officer of the Company or another managing director,
or, in the event there are no Unfunded Liabilities, a certificate signed by its
managing director & chief financial officer or another managing director to that
effect.
(g) As soon as possible and in any event within 10 days
after the Company knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by the managing director & chief financial officer
of the Company or another managing director, describing said Reportable Event
and the action which the Company proposes to take with respect thereto.
(h) Such other information (including non-financial
information) as any Bank may from time to time reasonably request.
Section 7.2 USE OF PROCEEDS. The Company will only use the proceeds
of the Advances to provide temporary liquidity in circumstances where CME is
entitled to use the Security Deposits of its Clearing Members as provided in the
CME Rules and in circumstances where a Money Gridlock Situation exists.
Additionally, the Company may use the proceeds of the Advances to fulfill its
obligations under the GFX(TM) Guaranty, provided, however, that the Company may
use the proceeds for such purposes only up to the amount of Surplus Funds on any
given day. The Company will not, nor will it permit any Subsidiary to, use any
of the proceeds of the Loans to "purchase" or "carry" any "margin stock" (each
as defined in Regulation U) or for any purpose that violates the provisions of
Regulation T, U or X of the Board of the Federal Reserve System as now and from
time to time hereafter in effect.
Section 7.3 NOTICE OF DEFAULT. The Company will, and will cause
each Subsidiary to, give prompt notice in writing to the Banks of the occurrence
of any Default or Unmatured Default and of any other development, financial or
otherwise, which would reasonably be expected to materially adversely affect its
business, properties or affairs or the ability of the Company to repay the
Obligations.
21
Section 7.4 CONDUCT OF BUSINESS. The Company will, and will cause
each Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and where the failure to
have such authority would reasonably be expected to have a Material Adverse
Effect.
Section 7.5 COMPLIANCE WITH LAWS. The Company will, and will cause
each Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to so comply would not reasonably be expected to have a
Material Adverse Effect.
Section 7.6 INSPECTION. The Company will, and will cause each
Subsidiary to, permit the Collateral Agent or its representatives and agents, to
inspect any of the properties, corporate books and financial records of the
Company and each Subsidiary, to examine and make copies of the books of accounts
and other financial records of the Company and each Subsidiary, and to discuss
the affairs, finances and accounts of the Company and each Subsidiary (the
foregoing activities, an "AUDIT") with, and to be advised as to the same by,
their respective officers at such reasonable times and intervals as the
Collateral Agent may designate; provided that so long as no Default has occurred
and is continuing the Company shall only be responsible for the costs and
expenses of one Audit per 12-month period.
Section 7.7 TANGIBLE NET WORTH. The Company will maintain at all
times a Consolidated Tangible Net Worth of not less than $90,000,000.
Section 7.8 LIENS. The Company will not, nor will it permit any
Subsidiary to, create or incur any Lien in, of or on the Collateral, except:
(a) Liens in favor of the Collateral Agent.
(b) Liens in favor of the Company, which Liens are
subordinated to the Liens in favor of the Collateral Agent in accordance with
Article XV hereof.
(c) Liens arising out of repurchase agreements or reverse
repurchase agreements entered into by the Company or any Subsidiary.
(d) Liens arising out of judgments or awards against the
Company or any Subsidiary, in an amount of not more than $5,000,000 in the
aggregate, which judgment or award is vacated, discharged, satisfied or stayed
or bonded pending appeal within 60 days from the entry thereof.
Section 7.9 ADDITIONAL CLEARING MEMBERS. Promptly upon any Person
becoming a Clearing Member of CME, the Company will execute and deliver, as
Member Attorney-in-Fact, a supplement to the Security and Pledge Agreement,
substantially in the form of Exhibit A thereto, joining such Clearing Member as
a party to the Security and Pledge Agreement and a supplement to the Control
Agreement, substantially in the form of Exhibit B thereto, joining such Clearing
Member as a party to the Control Agreement.
22
Section 7.10 CME RULE CHANGES. The Company will not, without the
prior written consent of the Banks, amend, revoke, or rescind any CME Rule in
any manner that would have a materially adverse effect on the Lien granted to
the Collateral Agent in the Collateral or the ability of the Collateral Agent to
enforce any of its rights under the Collateral Documents.
Section 7.11 TAXES. The Company will, and will cause each Subsidiary
to, pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits or property, except those (i) which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside on the books of the Company or such
Subsidiary, as applicable, or (ii) as to which the failure to pay would not
reasonably be expected to have a Material Adverse Effect.
Section 7.12 INSURANCE. The Company will, and will cause each
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their property in such amounts and covering such risks as is
consistent with sound business practice in the industry, and the Company will
furnish to any Bank upon request full information as to the insurance carried.
ARTICLE VIII
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
Section 8.1 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made or deemed made by or on behalf of the Company or any Subsidiary to
the Banks in this Agreement or in any certificate or written information
delivered in connection with this Agreement or any other Loan Document shall be
materially false as of the date on which made or deemed to have been made.
Section 8.2 PAYMENT DEFAULTS. Nonpayment of the principal of any
Note when due, nonpayment of interest upon any Note within five days after the
same becomes due or nonpayment of any commitment fee or other obligation under
any of the Loan Documents within 10 days after the same becomes due.
Section 8.3 CERTAIN COVENANT DEFAULTS. (i) Any breach by the
Company of any of the terms required to be observed by it under Section 7.1,
which continues unremedied for 10 days after the Company receives written notice
of such breach from any Bank; (ii) any breach by the Company of any of the terms
required to be observed by it under Section 7.2, 7.7, 7.8 or 7.10; or (iii) any
material breach by the Company of any of the other terms or provisions required
to be observed by it under Article VII.
Section 8.4 OTHER COVENANT DEFAULTS. The breach by the Company
(other than a breach which constitutes a Default under Section 8.1, 8.2 or 8.3)
of any of the terms or provisions of this Agreement which is not remedied within
five days after written notice from any Bank.
23
Section 8.5 OTHER INDEBTEDNESS. Failure of the Company or any
Subsidiary to pay any Indebtedness in an aggregate amount in excess of
$5,000,000 when due; or the default by the Company or any Subsidiary in the
performance of any term, provision or condition contained in any agreement under
which any such Indebtedness was created or is governed, which results in such
Indebtedness being accelerated or declared to be due and payable or required to
be prepaid (other than by a regularly scheduled repayment or mandatory
prepayment) prior to its stated maturity.
Section 8.6 BANKRUPTCY, ETC. The Company or any Subsidiary shall
(a) have an order for relief entered with respect to it under the federal
bankruptcy code, (b) not pay, or admit in writing its inability to pay, its
debts generally as they become due, (c) make an assignment for the benefit of
creditors, (d) apply for, seek, consent to, or acquiesce in, the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it
or any substantial part of its property, (e) institute any proceeding seeking an
order for relief under the federal bankruptcy code or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (f) take any corporate
action to authorize or effect any of the foregoing actions set forth in this
Section 8.6 or (g) fail to contest in good faith any appointment or proceeding
described in Section 8.7.
Section 8.7 INVOLUNTARY BANKRUPTCY, ETC. Without the application,
approval or consent of the Company or any Subsidiary, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for the Company or
any Subsidiary or any substantial part of its property, or a proceeding
described in Section 8.6(e) shall be instituted against the Company or any
Subsidiary and such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of 45 consecutive days.
Section 8.8 CONDEMNATION. Any court, government or governmental
agency shall condemn, seize or otherwise appropriate, or take custody or control
of all or any substantial portion of the property of the Company or any
Subsidiary.
Section 8.9 JUDGMENTS. The Company or any Subsidiary shall fail to
pay, bond or otherwise discharge, within 30 days of the entry thereof, any
judgment or order for the payment of money in excess of $250,000, which is not
stayed on appeal or otherwise being appropriately contested in good faith.
Section 8.10 SECURITY INTEREST; VALIDITY. The Collateral Agent, for
the ratable benefit of the Banks, shall cease to have a valid and perfected
first priority security interest in the Collateral other than any Money Fund
Shares that have not been included in the Borrowing Base and other than in
connection with any release of Collateral contemplated hereby or by any other
Loan Document; or the Company shall assert the invalidity of any such security
interest or the invalidity or unenforceability of any Collateral Document; or
any Collateral Document shall be terminated without the Collateral Agent's
written consent.
24
Section 8.11 CFTC DESIGNATION. The Commodity Futures Trading
Commission (or its successor) shall revoke or suspend the designation of the
Company as a contract market under the Commodity Exchange Act, as amended for
any futures contract other than for reasons of dormancy or low volume in such
contract or for reasons of disruptions in the underlying market for such
contract.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
Section 9.1 ACCELERATION. If any Default described in SECTION 8.6
or 8.7 occurs, the obligations of the Banks to make Loans hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable without any election or action on the part of any Bank. If any other
Default occurs, the Required Banks may terminate or suspend the Commitments of
the Banks to make Loans hereunder, or declare the Obligations to be due and
payable, or both, whereupon such Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Company hereby expressly waives. In addition, at any time after which
the Obligations have become due and payable and the obligations of the Banks to
make Loans hereunder have terminated in accordance with this SECTION 9.1, the
Collateral Agent may, with the consent of the Required Banks (or shall, upon the
direction of the Required Banks), enforce any and all rights and interest
created under the Collateral Documents or the UCC, including, without
limitation, foreclosing the security interests created pursuant to the
Collateral Documents by any available judicial procedure, and exercise all other
rights and remedies of the Collateral Agent otherwise available under any other
provision of this Agreement, by operation of law, at equity or otherwise, all of
which are hereby expressly preserved and all of which rights shall be
cumulative.
Section 9.2 AMENDMENTS. Subject to the provisions of this SECTION
9.2, the Required Banks and the Company may enter into agreements supplemental
hereto for the purpose of adding or modifying any provisions to the Loan
Documents or changing in any manner the rights of the Banks or the Company
hereunder or waiving any Default hereunder; provided, however, that:
(a) the consent of the Company and all of the Banks shall
be required to (i) reduce the percentage specified in the definition of Required
Banks, (ii) reduce the principal amount of or extend the maturity date for any
Advance or reduce the rate or change the time of payment of interest thereon,
(iii) reduce the rate or change the time of payment of any commitment fee, (iv)
adjust the amount of the Commitment of any Bank except as otherwise permitted
herein, (v) amend SECTION 2.7, 2.8, 5.2 or this SECTION 9.2, (vi) extend the
Revolving Credit Termination Date, (vii) permit the Company to assign its rights
under this Agreement, (viii) amend the definition of "BORROWING BASE" or (ix)
release any of the Collateral from the Lien granted pursuant to the Collateral
Documents other than as permitted by this Agreement or any other Loan Document;
and
(b) the Company may add a new Bank(s) under the terms of
this Agreement, provided, however, that each such new Bank shall agree in
writing to be bound by
25
the terms of this Agreement.
Section 9.3 PRESERVATION OF RIGHTS. No delay or omission of the
Banks to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Company to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Banks required pursuant to SECTION 9.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Banks until the Obligations have been paid in full and the
Commitments have been terminated.
ARTICLE X
COLLATERAL AGENT
Section 10.1 DECLARATION AND ACCEPTANCE OF APPOINTMENT; NO FIDUCIARY
DUTIES. Subject to the terms and conditions hereof, each Bank hereby appoints
and authorizes The Bank of New York to act as its collateral agent hereunder and
under each of the Collateral Documents and other Loan Documents, with such
powers as are expressly delegated to the Collateral Agent by the terms of this
Agreement, the Collateral Documents, and the other Loan Documents, together with
such other powers as are reasonably incidental thereto. The Bank of New York, by
its execution hereof, hereby accepts the appointment made under this SECTION
10.1. The Collateral Agent shall not have any duties or responsibilities except
those expressly set forth in this Agreement, the Collateral Documents and the
other Loan Documents, or be a trustee for, or have any fiduciary obligation to,
any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities on the part of the Collateral Agent shall be read
into this Agreement or any other Loan Document or otherwise exist for the
Collateral Agent. In performing its functions and duties hereunder and under the
other Loan Documents, the Collateral Agent shall act solely as agent for the
Banks and does not assume nor shall be deemed to have assumed any obligation or
relationship of trust or agency with or for the Company or any of its successors
or assigns. The Collateral Agent shall not be required to take any action that
exposes the Collateral Agent to personal liability or that is contrary to this
Agreement, any other Loan Document or applicable law. The appointment and
authority of the Collateral Agent hereunder shall terminate upon the
indefeasible payment in full of all Obligations and the termination of the
Commitments. Each Bank hereby authorizes the Collateral Agent to execute each of
the Collateral Documents on behalf of such Bank (the terms of which shall be
binding on such Bank).
Section 10.2 RELIANCE BY COLLATERAL AGENT. The Collateral Agent
shall in all cases be entitled to rely, and shall be fully protected in relying,
upon any document or
26
conversation believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Company), independent accountants and other experts selected by the Collateral
Agent and acceptable to the Required Banks. The Collateral Agent shall in all
cases be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Company or the Required Banks (or, if required, all of the
Banks), as applicable, as it deems appropriate and it shall first be indemnified
to its satisfaction by the Banks, provided that unless and until the Collateral
Agent shall have received such advice, the Collateral Agent may take or refrain
from taking any action, as the Collateral Agent shall deem advisable and in the
best interests of the Banks. The Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, in accordance with a request
of the Company or the Required Banks or all of the Banks, as applicable, and
such request and any action taken or failure to act pursuant thereto shall be
binding upon all the Banks.
Section 10.3 REIMBURSEMENT AND INDEMNIFICATION. The Banks severally
agree to reimburse and indemnify the Collateral Agent and its officers,
directors, employees, representatives and agents ratably in proportion to the
amounts of their respective Commitments, to the extent not paid or reimbursed by
the Company (i) for any amounts for which the Collateral Agent, acting in its
capacity as Collateral Agent, is entitled to reimbursement by the Company
hereunder or under any other Loan Document and (ii) for any other actual
out-of-pocket expenses incurred by the Collateral Agent, in its capacity as
Collateral Agent and acting on behalf of the Banks, in connection with the
administration and enforcement of this Agreement and the other Loan Documents,
except in each case, for any amounts or expenses that arise as a result of the
gross negligence or willful misconduct of the Collateral Agent.
Section 10.4 COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY. The
Collateral Agent and its affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Company or any affiliate of
the Company as though the Collateral Agent were not the Collateral Agent
hereunder. With respect to the making of Loans pursuant to this Agreement, the
Collateral Agent shall have the same rights and powers under this Agreement in
its individual capacity as any Bank and may exercise the same as though it were
not the Collateral Agent, and the terms "BANK," and "BANKS" shall include the
Collateral Agent in its individual capacity.
Section 10.5 RESIGNATION OR TERMINATION OF COLLATERAL AGENT. The
Collateral Agent may resign its position as such at any time upon ninety (90)
days' prior notice to the Company and the Banks. The Collateral Agent may be
terminated by 100% of the Banks (excluding any Bank then acting as Collateral
Agent) at any time upon thirty (30) days' prior notice to the Company, the
Collateral Agent and the other Banks. The Required Banks, with the consent of
the Company (such consent not to be unreasonably withheld), shall appoint a
successor Collateral Agent to succeed any Collateral Agent that resigns or its
terminated pursuant to this SECTION 10.5. Subsequent to the effective date of
such resignation or termination, the resigning or terminated (as applicable)
Collateral Agent shall have no further obligations in that capacity under this
Agreement. If no successor Collateral Agent shall have been appointed by the
Company and the Required Banks and shall have accepted such appointment prior to
the effective date of the resignation or termination of the then acting
Collateral Agent, the resigning
27
or terminated Collateral Agent may appoint a successor Collateral Agent, which
shall be a bank or trust company organized under the laws of the United States
of America or any State thereof, having a combined capital and surplus of at
least $500,000,000.
Section 10.6 NON-RELIANCE REPRESENTATION. Each of the Banks
acknowledges and represents that it has, independently of and without reliance
upon the Collateral Agent, and based solely upon its own expertise (and the
expertise of its agents and independent advisors, if any) and upon financial
statements and other information deemed appropriate by it, made its own credit
analysis of the Company and made its own decision to enter into this Agreement.
Each of the Banks further acknowledges and represents that it will,
independently of and without reliance upon the Collateral Agent, and based
solely upon its own expertise (and the expertise of its agents and independent
advisors, if any) and upon such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis of the Company
and its own decisions with respect to this Agreement.
Section 10.7 EXCULPATION. Neither the Collateral Agent nor any of
its shareholders, directors, officers, employees or agents shall be liable to
the Banks, or any of them individually, for any obligation, undertaking, act or
judgment of the Company or any other Person, or for any error of judgment or any
action taken or omitted to be taken by the Collateral Agent (except and to the
extent that the same arises from gross negligence or willful misconduct on the
part of the Collateral Agent), or be bound to ascertain or inquire as to the
performance or observance of any term of any of the Loan Documents. Without
limiting the generality of the foregoing, the Collateral Agent: (a) may consult
with legal counsel selected by it and shall not be liable for any action taken
or omitted to be taken in good faith by it in accordance with the advice of such
counsel; (b) makes no warranty or representation and shall not be responsible
for any warranty or representation made in or in connection with any of the Loan
Documents by any Person other than the Collateral Agent, or for the financial
condition of the Company or any other Person, or for the observance or
performance of any obligations of the Company or any other Person other than the
Collateral Agent, or for the truth or accuracy of any document provided to the
Collateral Agent that the Collateral Agent has initially received from, or that
the Collateral Agent has prepared based upon information received from, the
Company or any other Person, except for the Collateral Agent's responsibility
under SECTION 10.8; (c) makes no warranty or representation and shall not be
responsible for the due execution, validity, enforceability, sufficiency or
collectibility of any of the Loan Documents; (d) shall incur no liability under
or in respect of any such agreement or document by acting upon any notice (by
telephone or otherwise), or writing (including telex and telegraphic
communication) believed by it in good faith to be genuine and to be signed or
sent by the proper party or Person; and (e) makes no warranty or guarantee as
to: (i) future payments by the Company or any other obligor or guarantor of the
Loans, (ii) the Company's future compliance with or performance of any of the
terms and conditions contained in the Loan Documents, or (iii) the
collectibility of the Loans.
Section 10.8 COLLATERAL VALUATION. The Collateral Agent shall
monitor the market value of the Collateral. On each Borrowing Date, promptly
after receiving notice from the Company of a proposed borrowing, and on the last
day of each calendar month (or, if such day is not a Business Day, the next
succeeding Business Day), commencing with the first such date to occur after the
date hereof, the Collateral Agent shall determine the aggregate market value of
all Collateral on and as of such date in accordance with its usual and customary
28
practices and shall advise and notify (which may be by telephone) each Bank
thereof (each a, "COLLATERAL NOTICE").
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns, except that the Company may not assign or otherwise transfer any of
its rights under this Agreement.
(b) Any Bank may, in accordance with applicable law, at any
time sell to one or more banks, financial institutions or other entities
("PARTICIPANTS") participating interests in any Loan owing to such Bank, any
Note held by such Bank, any Commitment of such Bank or any other interest of
such Bank hereunder. In the event of any such sale by a Bank of participating
interests to a Participant, such Bank's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Bank shall remain
solely responsible for the performance thereof and the Company and the
Collateral Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement and the
other Loan Documents. In no event shall a Bank that sells a participating
interest be obligated to the Participant to take or refrain from taking any
action hereunder or under any of the other Loan Documents except that such Bank
may agree that it will not, without the consent of such Participant, agree to
(A) reduce the principal of, or interest payable on (or reduce the rate of
interest applicable to), the Loans of such Bank or any fees or other amounts
payable to such Bank hereunder which, in each case, are related to the
participation sold to such Participant or, (B) postpone the date fixed for any
payment of the principal of, or interest on, the Loans of such Bank or other
amounts payable to such Bank hereunder which, in each case, are related to the
participation sold to such Participant.
(c) Any Bank may (or in accordance with SECTION 11.4(h)
shall), in accordance with applicable law, and with the consent of the Company
(such consent not to be unreasonably withheld), at any time sell to any
financial institution (all such purchasers, collectively, "PURCHASERS") all or
any part of its rights and obligations under this Agreement and the Note held by
it pursuant to an assignment agreement (an "ASSIGNMENT AGREEMENT"), executed by
such Purchaser and such Bank and delivered to the Company and the Collateral
Agent; provided that the consent of the Company to any such assignment shall not
be required if (A) an Event of Default has occurred and is continuing, (B) the
assignment is by a Bank to an affiliate of such Bank or another existing Bank or
(C) the assignment (including any pledge) is by any Bank of its Notes and its
rights hereunder with respect thereto to any Federal Reserve Bank. Upon such
execution and delivery of an Assignment Agreement, from and after the effective
date as specified therein, (x) the Purchaser thereunder shall be a party hereto
and shall be bound by the provisions hereto and, to the extent provided in such
Assignment Agreement, shall have the rights and obligations of a Bank hereunder,
with its Commitment as set forth in such Assignment Agreement, and (y) the
transferor Bank thereunder shall, to the extent provided
29
in such Assignment Agreement, be released from its obligations under this
Agreement (and, in the case of an Assignment Agreement covering all or the
remaining portion of a transferor Bank's rights and obligations under this
Agreement, such transferor Bank shall cease to be a party hereto). Upon delivery
of the Assignment Agreement to the Company and the Collateral Agent, the
Company, the Collateral Agent and the Banks may treat the Purchaser as the owner
of the Loans recorded therein for all purposes of this Agreement.
(d) On the effective date specified in any Assignment
Agreement, or as soon as possible thereafter, the Company shall execute and
deliver to the applicable Purchaser, a new Note to the order of such Purchaser
reflecting the Commitment and outstanding Loans obtained by it pursuant to such
Assignment Agreement and, if the transferor Bank has retained a Commitment and
Loans hereunder, a new Note in exchange for the Note held by the transferor Bank
(which existing Note shall be surrendered to the Company) to the order of the
transferor Bank reflecting the Commitment and outstanding Loans retained by it
hereunder. Such new Notes shall be dated the effective date of the Assignment
Agreement as specified therein and shall otherwise be in the form of the Note
replaced thereby. The Note surrendered by the transferor Bank shall be returned
by the transferor Bank to the Company marked "canceled".
(e) The Company authorizes each Bank to disclose to any
Participant or Purchaser and any prospective Participant or Purchaser any and
all financial and other information in such Bank's possession concerning the
Company which has been delivered to such Bank by or on behalf of the Company
pursuant to this Agreement; provided that such Participant or Purchaser or
prospective Participant or Purchaser agrees to be bound by the confidentiality
provisions contained in SECTION 11.12.
(f) If, pursuant to this SECTION 11.1, any interest in this
Agreement or any Note is transferred to any Purchaser which is organized under
the laws of any jurisdiction other than the United States or any state thereof,
such Purchaser, concurrently with the effectiveness of such transfer and
becoming a party to this Agreement pursuant to the applicable Assignment
Agreement shall, (i) represent to the transferor Bank (for the benefit of the
transferor Bank, the Collateral Agent and the Company) that under applicable law
and treaties then in effect no United States federal taxes will be required to
be withheld by the Collateral Agent, the Company or the transferor Bank with
respect to any payments to be made to such Purchaser hereunder, (ii) furnish to
the Company the documentation described in SECTION 11.4(f), (wherein such
Purchaser claims entitlement to complete exemption from U.S. federal withholding
tax on all payments hereunder) and (iii) agree to otherwise comply with the
terms of SECTION 11.4(f).
Section 11.2 SURVIVAL OF REPRESENTATIONS. All representations and
warranties of the Company contained in this Agreement shall survive delivery of
the Notes and the making of the Loans herein contemplated.
Section 11.3 GOVERNMENTAL REGULATION. Anything contained in this
Agreement to the contrary notwithstanding, no Bank shall be obligated to extend
credit to the Company in violation of any limitation or prohibition provided by
any applicable statute or regulation.
Section 11.4 TAXES.
30
(a) All payments to any Bank with respect to the Loans
shall be made free and clear of, and without deduction for any Indemnified Taxes
or Other Taxes; provided that if the Company shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased by the amount (the "ADDITIONAL AMOUNT") necessary so that
after making all required deductions (including deductions applicable to
additional sums described in this paragraph) such Bank receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Company shall make such deductions and (iii) the Company shall pay the full
amount deducted to the relevant governmental authority in accordance with
applicable law. In addition, to the extent not paid in accordance with the
preceding sentence, the Company shall pay any Other Taxes to the relevant
governmental authority in accordance with applicable law.
(b) Subject to subsections (g) and (h) below, the Company
shall indemnify each Bank for Indemnified Taxes and Other Taxes paid by such
Bank, provided, however, that the Company shall not be obligated to make payment
to any Bank in respect of penalties, interest and other similar liabilities
attributable to such Indemnified Taxes or Other Taxes if such penalties,
interest or other similar liabilities are attributable to the gross negligence
or willful misconduct of such Bank.
(c) If a Bank shall become aware that it is entitled to
claim a refund from a governmental authority in respect of Indemnified Taxes or
Other Taxes paid by the Company pursuant to this SECTION 11.4, including
Indemnified Taxes or Other Taxes as to which it has been indemnified by the
Company, or with respect to which the Company has paid Additional Amounts
pursuant hereto, it shall promptly notify the Company of the availability of
such refund claim and, if such Bank determines in good faith that making a claim
for refund will not have a material adverse effect on its taxes or business
operations, shall, within 30 days after receipt of a request by the Company,
make a claim to such governmental authority for such refund at the Company's
expense. If a Bank receives a refund in respect of any Indemnified Taxes or
Other Taxes paid by the Company pursuant hereto, it shall within 30 days from
the date of such receipt pay over such refund to the Company (but only to the
extent of Indemnified Taxes or Other Taxes paid pursuant to hereto, including
indemnity payments made or Additional Amounts paid, by the Company under this
SECTION 11.4 with respect to the Indemnified Taxes or Other Taxes giving rise to
such refund), net of all out of pocket expenses of such Bank and without
interest (other than interest paid by the relevant governmental authority with
respect to such refund).
(d) If any Bank is or becomes eligible under any applicable
law, regulation, treaty or other rule to a reduced rate of taxation, or a
complete exemption from withholding, with respect to Indemnified Taxes or Other
Taxes on payments made to it by the Company, such Bank shall, upon the request,
and at the cost and expense, of the Company, complete and deliver from time to
time any certificate, form or other document requested by the Company, the
completion and delivery of which are a precondition to obtaining the benefit of
such reduced rate or exemption, provided that the taking of such action by such
Bank, would not, in the reasonable judgment of such Bank be disadvantageous or
prejudicial to such Bank or inconsistent with its internal policies or legal or
regulatory restrictions. For any period with respect to which a Bank has failed
to provide any such certificate, form or other document requested by the
Company, such Bank shall not be entitled to any payment under this SECTION
31
11.4 in respect of any Indemnified Taxes or Other Taxes that would not have been
imposed but for such failure.
(e) Each Bank organized under the laws of a jurisdiction in
the United States, any State thereof or the District of Columbia (other than
Banks that are corporations or otherwise exempt from United States backup
withholding Tax) shall (i) deliver to the Company, upon execution hereof (or,
with respect to Persons becoming Banks hereunder by assignment, upon execution
of the relevant assignment agreement), two original copies of United States
Internal Revenue Form W-9 or any successor form, properly completed and duly
executed by such Bank, certifying that such Bank is exempt from United States
backup withholding Tax on payments of interest made under the Loan Documents and
(ii) thereafter, at each time it is so reasonably requested in writing by the
Company, deliver within a reasonable time two original copies of an updated Form
W-9 or any successor form thereto.
(f) Each Bank that is organized under the laws of a
jurisdiction other than the United States, any State thereof or the District of
Columbia (each such Bank, a "FOREIGN BANK") that is entitled to an exemption
from or reduction of withholding Tax under the laws of the jurisdiction in which
the Company is located, or any treaty to which such jurisdiction is a party,
with respect to payments under the Loan Documents shall deliver to the Company,
upon execution hereof (or, with respect to Persons becoming Banks hereunder by
assignment, upon execution of the relevant assignment agreement), such properly
completed and duly executed documentation prescribed by applicable law or
reasonably requested by the Company as will permit such payments to be made
without withholding or at a reduced rate, unless in the good faith opinion of
the Foreign Bank such documentation would expose the Foreign Bank to any
material adverse consequences or risk. Such documentation shall be delivered by
each Foreign Bank on or before the date it becomes a Bank and on or before the
date, if any, such Foreign Bank changes its applicable lending office by
designating a different lending office with respect to its Loans (a "NEW LENDING
OFFICE"). In addition, each Foreign Bank shall deliver such forms promptly upon
the obsolescence or invalidity of any form previously delivered by such Foreign
Bank. Each Bank (and, in the case of a Foreign Bank, its lending office),
represents that on the date hereof, payments made hereunder by the Company to it
would not be subject to United States Federal withholding tax.
(g) Notwithstanding the provisions of subsection (a) and
(b) above, the Company shall not be required to indemnify any Foreign Bank, or
to pay any Additional Amounts to any Foreign Bank, in respect of United States
Federal withholding tax pursuant to subsection (a) or (b) above, (A) to the
extent that the obligation to withhold amounts with respect to United States
Federal withholding tax existed on the date such Foreign Bank became a Bank; (B)
with respect to payments to a New Lending Office with respect to a Loan, but
only to the extent that such withholding tax exceeds any withholding tax that
would have been imposed on such Bank had it not designated such New Lending
Office; (C) with respect to a change by such Foreign Bank of the jurisdiction in
which it is organized, incorporated, controlled or managed, or in which it is
doing business, from the date such Foreign Bank changed such jurisdiction, but
only to the extent that such withholding tax exceeds any withholding tax that
would have been imposed on such Bank had it not changed the jurisdiction in
which it is organized, incorporated, controlled or managed, or in which it is
doing business; or (D) to the extent that the obligation to
32
pay such indemnity payment or Additional Amounts would not have arisen but for a
failure by such Foreign Bank to comply with the provisions of SECTION 11.4(f).
(h) If any Bank requests compensation under this
SECTION 11.4, or if the Company is required to pay any additional amount to any
governmental authority for the account of any Bank pursuant to this SECTION
11.4, then such Bank 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 with the object of avoiding or eliminating the amounts payable
pursuant to this SECTION 11.4, provided that such designation or assignment
shall be on such terms that such Bank and its lending office, in such Bank's
sole judgment, suffer no economic, legal, regulatory or other disadvantage and
would not otherwise be disadvantageous to such Bank. The Company hereby agrees
to pay all reasonable costs and expenses incurred by any Bank in connection with
any such designation or assignment.
If Bank requests compensation under this SECTION 11.4, or if the Company is
required to pay any additional amount to any governmental authority for the
account of any Bank pursuant to this SECTION 11.4, then the Company may, at its
sole expense and effort, upon notice to such Bank, require such Bank to assign
and delegate, without recourse, in accordance with and subject to the
restrictions contained in SECTION 11.1, all of such Bank's interests, rights and
obligations under this Agreement to one or more assignees that shall assume such
obligations (which assignee or assignees may be one or more other Banks);
provided, that (i) such Bank shall have received payment of an amount equal to
the outstanding principal of its Loans, accrued and unpaid interest thereon,
accrued and unpaid 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 Company (in the case of all other amounts) and (ii) such assignment
will result in a reduction in such compensation or payments. A Bank shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Bank or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
A certificate of the relevant Bank setting forth the basis for any amounts (and
the calculation thereof and methodology in calculating, each in reasonable
detail) claimed under this SECTION 11.4 shall be delivered to the Company and
shall be conclusive absent manifest error. Failure or delay on the part of a
Bank to demand compensation of any amount under this Section shall not
constitute a waiver of such Bank's right to demand such compensation; provided
that the Company shall not be required to compensate any such Bank for any
amounts claimed under this Section that are incurred more than 90 days prior to
the date that such Bank notifies the Company of the circumstances giving rise to
such amounts and such Bank's intention to claim compensation therefor; provided,
further, that if the circumstances giving rise to such amounts have retroactive
effect, then the 90-day period referred to above shall be extended to include
the period of retroactive effect thereof.
(i) Any payment required to be made by the Company to any
Bank under this SECTION 11.4 shall be deemed an Obligation and be secured by the
Collateral.
Section 11.5 CHOICE OF LAW; JURISDICTION. The Loan Documents (other
than those containing a contrary express choice of law provision) shall be
construed in accordance with the laws of the State of
Illinois (excluding
choice-of-law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State), but giving
33
effect to federal laws applicable to national banks. The Company and the Banks
hereby irrevocably submit to the non-exclusive jurisdiction of any United States
federal or
Illinois state court sitting in Chicago,
Illinois in any action or
proceedings arising out of or relating to any Loan Documents and the Company and
the Banks hereby irrevocably agree that all claims in respect of such action or
proceeding may be heard and determined in any such court.
Section 11.6 HEADINGS. Section headings in the Loan Documents are
for convenience of reference only, and shall not govern the interpretation of
any of the provisions of the Loan Documents.
Section 11.7 ENTIRE AGREEMENT. The Loan Documents embody the entire
agreement and understanding among the Company and the Banks and supersede all
prior agreements and understandings among the Company and the Banks relating to
the subject matter thereof.
Section 11.8 SEVERAL OBLIGATIONS. The respective obligations of the
Banks hereunder are several and not joint and no Bank shall be the partner or
agent of any other. The failure of any Bank to perform any of its obligations
hereunder shall not relieve any other Bank from any of its obligations
hereunder.
Section 11.9 EXPENSES; INDEMNIFICATION.
(a) The Company shall reimburse the Collateral Agent and
each Bank for any reasonable costs, internal charges and out-of-pocket expenses
(including reasonable attorneys' fees and time charges of attorneys, which
attorneys may be employees of the Collateral Agent or such Bank, as applicable)
paid or incurred by the Collateral Agent or such Bank, as applicable, in
connection with the collection, liquidation and enforcement of the Loan
Documents and/or the Collateral. The Company further agrees to indemnify the
Collateral Agent, each Bank and their respective directors, officers and
employees (each an "INDEMNIFIED PARTY") against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor) which any of them may pay or
incur arising out of or relating to this Agreement, the other Loan Documents,
the transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Loan hereunder (all of the foregoing
being collectively referred to as "INDEMNIFIED AMOUNTS"), excluding, however, in
all of the foregoing instances, Indemnified Amounts arising from the gross
negligence or willful misconduct on the part of the Indemnified Party seeking
indemnification and Indemnified Amounts consisting of taxes imposed on or
measured by the overall net income of the Indemnified Party seeking
indemnification.
(b) If, after the date hereof, any law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) is adopted, or there is any change in the interpretation thereof,
or the compliance of any Bank with such, which, in any case, affects the amount
of capital required or expected to be maintained by such Bank or any corporation
controlling such Bank, and such Bank reasonably determines the amount of capital
required is increased by or based upon the existence of this Agreement or its
Commitment hereunder and such increased capital results in increased costs to
such Bank, then, such Bank shall notify the Company of such fact and shall
provide a reasonably detailed
34
description of such increased costs in the notice ("INCREASED COST NOTICE"),
together with documentation from the relevant regulatory body setting forth such
increased capital requirement, and within 15 days of the Company's receipt of
such Increased Cost Notice, the Company shall, in its sole discretion, determine
whether to terminate such Bank's Commitment and obligation to make Loans
hereunder, or to attempt to negotiate with such Bank a revised commitment fee
(which revision shall not constitute an amendment to SECTION 2.8 hereof for the
purposes of SECTION 9.2) and any other reimbursements provided for hereunder
which reflect such Bank's increased costs. In the event that the Company
determines to terminate such Bank's Commitment and obligation to make Loans
hereunder, the Company shall send written notice to such Bank within 15 days of
the Company's receipt of the Increased Cost Notice specifying a date at least 30
days thereafter on which such Bank's Commitment and obligation to make Loans
hereunder shall be terminated. In the event that the Company determines to
attempt to negotiate with such Bank a revised commitment fee and other
reimbursements, and the Company and such Bank are unable to agree, within 30
days of the date of the Increased Cost Notice, upon such revised fees and other
reimbursements, such Bank may send written notice to the Company, or the Company
may send written notice to such Bank specifying a date at least 30 days
thereafter on which the Bank's Commitment and obligation to make Loans hereunder
shall be terminated. Any payment required to be made by the Company under this
SECTION 11.9(b) shall be deemed an Obligation and be secured by the Collateral.
(c) At least 45 days prior to the proposed consummation
date of any merger or consolidation of the Company with or into any other Person
in which the Company shall not be the surviving entity (such transaction, a
"RESTRUCTURING"), the Company will give written notice thereof to each Bank (a
"RESTRUCTURING NOTICE"), which notice shall set forth the material terms and
conditions of such Restructuring, including the identity of the surviving entity
of such Restructuring (the "SURVIVOR"). Upon receipt of a Restructuring Notice,
a Bank may elect, in its sole discretion, to terminate its Commitment hereunder
by notifying the Company thereof, which may be by telephone (a "TERMINATION
NOTICE") within 15 days of such Bank's receipt of the Restructuring Notice,
which termination shall become effective no sooner than 30 days after the
Company's receipt of the Termination Notice. Any Bank that fails to deliver a
Termination Notice within 15 days after its receipt of a Restructuring Notice
shall be deemed to have elected to terminate its Commitment.
(d) The effective date of any termination of a Bank's
Commitment hereunder pursuant to subsection (b) or (c) above is referred to
herein as such Bank's "ACCELERATED TERMINATION DATE". Any such termination shall
not accelerate the maturity of any Loans outstanding to such Bank; commitment
fees to such Bank shall cease to accrue as of its Accelerated Termination Date;
and the Company shall be responsible for any and all Obligations and accrued and
unpaid costs (including increased costs), fees and expenses incurred with
respect to such Bank prior to its Accelerated Termination Date. The obligations
of the Company under this SECTION 11.9 shall survive the termination of this
Agreement.
Section 11.10 ACCOUNTING. Except as provided to the contrary herein,
all accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
35
Section 11.11 SEVERABILITY OF PROVISIONS. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
Section 11.12 CONFIDENTIALITY. Each of the Banks and the Collateral
Agent agrees to maintain the confidentiality of the Company Information, except
that Company Information may be disclosed (a) to its affiliates, directors,
officers, employees and agents, including accountants, legal counsel and other
advisors who have a need to know such information (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Company Information and agree to keep such Company Information
confidential on terms substantially similar to this SECTION 11.12), (b) to any
governmental agency or representative thereof, provided that prior to such
disclosure, the disclosing party shall, to the extent practicable, promptly
inform the Company of such potential disclosure, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process or to
the extent reasonably required in connection with any litigation relating to
this Agreement or the Collateral to which such Bank or the Collateral Agent, as
applicable, is a party, (d) subject to an agreement containing provisions
substantially the same as those described in this SECTION 11.12, to any
Purchaser or Participant or any prospective Purchaser or Participant, (e) with
the consent of the Company or (f) to the extent such Company Information becomes
publicly available other than as a result of a breach of its confidentiality
obligations as described in this SECTION 11.12.
As used in this Section, "COMPANY INFORMATION" means all information received
from the Company or any of its Subsidiaries or Affiliates relating to Holdings
or any of its subsidiaries (including the Company) or any of their respective
affiliates, or their businesses, other than any such information that is
available to the Collateral Agent or any Bank, as applicable, on a
non-confidential basis prior to disclosure by the Company.
Section 11.13 WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT
OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
ARTICLE XII
SETOFF; RATABLE PAYMENTS
Section 12.1 SETOFF; RATABLE PAYMENTS.
(a) In addition to, and without limitation of, any rights
of the Banks under applicable law, if the Company becomes insolvent, however
evidenced, or any Default occurs and is continuing, any indebtedness from any
Bank to the Company (including all account balances, whether provisional or
final and whether or not collected or available but excluding any accounts
designated as or representing "customer segregated funds" accounts and any
accounts pledged to such Bank to secure an overdraft facility to ensure the
settlement of foreign
36
currency futures and options contracts traded on the Company) may be offset and
applied toward the payment of the Obligations owing to such Bank, whether or not
the Obligations, or any part thereof, shall then be due.
(b) If any Bank, whether by setoff or otherwise, has
payment made to it upon any Loan in a greater proportion than that received by
any other Bank upon any Loan constituting a portion of the same Advance, such
Bank (or, if applicable, such Bank's Servicing Bank) shall distribute to all the
other Banks (or, if applicable, such other Banks' Servicing Banks) an amount
equal to their pro rata share of such payment. Such payment shall be distributed
ratably between the Banks in proportion to each Bank's respective share of the
total Obligations outstanding under this Agreement. Any payment distributed
pursuant to this subsection (b) to a Servicing Bank shall be distributed by the
Servicing Banks to the applicable Banks in accordance with the provisions of
this Agreement.
(c) If any Bank, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for any category of its Obligations or such amounts which may
be subject to setoff, in any case, in excess of its pro rata share thereof, such
Bank agrees, promptly upon demand, to take such action necessary such that all
Banks share in the benefits of such collateral ratably in proportion to their
Obligations of the same category. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
(d) The Company agrees that any holder of a participation
in a Loan may, to the fullest extent permitted by law, exercise all its rights
of payment with respect to such participation as if such holder were the direct
creditor of the Company in the amount of the participation.
ARTICLE XIII
NOTICES
Section 13.1 GIVING NOTICE. Except as otherwise herein provided, any
notice required or permitted to be given under this Agreement shall be in
writing and shall be deemed, given (i) when delivered if sent by an overnight
courier service, or (ii) when sent by facsimile, telex or SWIFT message, in each
case, addressed to the Company and the Banks at the addresses or transmission
numbers indicated below their signatures to the Agreement or otherwise notified
to the Company or the Banks, as applicable.
Section 13.2 CHANGE OF ADDRESS. The Company and any Bank may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
37
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Company and the
Banks.
ARTICLE XV
SUBORDINATION
The Company hereby subordinates its Lien on the Collateral to the Lien
therein granted to the Collateral Agent pursuant to the Collateral Documents,
and, except as permitted by SECTION 2.9, the Company shall not take any action
of any nature whatsoever to enforce its Lien until all of the Obligations have
been paid in full and the Commitments have been terminated.
38
IN WITNESS WHEREOF, the Company and the Banks have executed this
Agreement as of the date first above written.
CHICAGO MERCANTILE EXCHANGE INC.
(A Delaware Corporation)
By: /s/ Xxxxx X. Xxxxxxx
-----------------------
Name: Xxxxx X. XxXxxxx
Title: President & CEO
Date: October 18, 2002
00 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
S.W.I.F.T.: XXXXXX0X
Attention: Managing Director & President,
Clearing House Division
S-1
Commitments
$40,000,000
THE BANK OF NEW YORK,
individually and as Collateral Agent
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Xxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx Xxxxx/Xxxxx Xxxxxxx
References: Chicago Mercantile Exchange
Inc., Borrowings, Payments, Interest, Etc.
S-2
$40,000,000 BANK OF AMERICA, N.A.
By: /s/ Xxxx Xxxxxx
-----------------------
Name: Xxxx Xxxxxx
Title: Managing Director
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxx Xxxx/Xxxx Xxxxxxxx
S-3
$ 20,000,000 XXXXX BROTHERS XXXXXXXX & CO.
By: /s/ Xxxx X. Xxxxxx Xx.
--------------------------
Name: Xxxx X. Xxxxxx, Xx.
Title: Managing Director
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
S.W.I.F.T.: XXXXXX00
Attention: Senior Credit Officer
S-4
$ 40,000,000 JPMORGAN CHASE BANK
By: /s/ Xxxxxxx Xxxxx
----------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
2 Chase Xxxxxxxxx Xxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
S.W.I.F.T.: XXXXXX00
Attention: Commercial Loan Services - Dept
#9420
S-5
$ 40,000,000 BANK ONE, NA
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
0 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxxx
S-6
$ 40,000,000 XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxx X. Haven
-------------------------
Name: Xxxxx X. Haven
Title: Managing Director
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
S.W.I.F.T.: HARTRUS44
Attention: Xxxx Xxxxxx
S-7
$ 40,000,000 THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ Shinichiro Muncchika
---------------------------------
Name: Shinichiro Muncchika
Title: Deputy General Manager
Chicago Branch
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
S.W.I.F.T.: BOTKUS4C
Attention: Loan Administration
S-8
$ 40,000,000 CITIBANK, N.A.
By: /s/ Xxxxxxx Xxxxxxxxxx
-----------------------------
Name: Xxxxxxx Xxxxxxxxxx
Title: Managing Director
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxxx
S-9
$ 25,000,000 HSBC BANK USA
By: /s/ Xxxx Xxxxx
--------------------------------
Name: Xxxx Xxxxx
Title: First Vice President
0 XXXX Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxx & Xxxxx Xxxxxx-Xxxxx
S-10
$ 15,000,000 THE NORTHERN TRUST COMPANY
By: /s/ Xxxxx X. Toulouse
--------------------------
Name: Xxxxx X. Toulouse
Title: Vice President
00 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
S-11
$ 25,000,000 U.S. BANK NATIONAL ASSOCIATION
By: /s/ R. Xxxxxxx Xxxxxx
-----------------------------
Name: R. Xxxxxxx Xxxxxx
Title: Vice President
000 X. Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Mail Loc. MK-WI-TGCB
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxx
S-12
$ 30,000,000 UBS, AG STAMFORD BRANCH
By: /s/ Xxxxxxxx X'Xxxxx
------------------------------
Name: Xxxxxxxx X'Xxxxx
Title: Director
Banking Products Services
By: /s/ Xxxxxxx X. Saint
------------------------------
Name: Xxxxxxx X. Saint
Title: Associate Director
Banking Products Services XX
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx Xxxxxx
X-00
$ 25,000,000 SVENSKA HANDELSBANKEN
By: /s/ X.X. Xxxxx /s/ Niclas Fjalltoft
------------------------------------------
Name: X.X. Xxxxx Niclas Fjalltoft
Title: Vice President Assistant Vice President
000 Xxxx 00xx Xxxxxx - 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
S.W.I.F.T.: HAND US33
Attention: Xxxxxx Xx
S-14
$ 40,000,000 CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Xxxxxxxxx Xxxxx
------------------------------
Name: Xxxxxxxxx Xxxxx
Title: Senior Vice President
0000 0xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxx Xxxxxxxxx
S-15
$ 40,000,000 NATIONAL AUSTRALIA BANK LIMITED,
A.C.N. 004044937
By: /s/ Xxxxxxx Xxxxx
------------------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx/Loan Services
S-16
EXHIBIT A
NOTE
$[AMOUNT]
[MONTH] [DAY], [YEAR]
Chicago Mercantile Exchange Inc., a Delaware corporation (the
"COMPANY"), promises to pay to the order of ___________ (the "BANK") the lesser
of the principal sum of _________________ and 00/100 Dollars or the aggregate
unpaid principal amount of all Loans made by the Bank to the Company pursuant to
SECTION 2.1 of the
Credit Agreement, dated as of October 18, 2002, among the
Company, the Banks party thereto and The Bank of New York, as Collateral Agent
(as amended, restated, supplemented or otherwise modified from time to time, the
"
CREDIT AGREEMENT"), whichever is less, in immediately available funds at the
office of _______________ in [city], [state], together with interest on the
unpaid principal amount hereof until maturity at a rate per annum equal to the
sum of the Fed Funds Rate, plus 45/100 of 1% per annum from time to time in
effect. After maturity and until paid in full, the Loans shall bear interest at
a rate per annum equal to the sum of the Fed Funds Rate, plus 2.4% per annum.
Interest shall be calculated on the basis of a 360 day year for actual number of
days elapsed. The Company shall pay each Loan in full thirty days after such
Loan is made. Interest prior to maturity shall be payable on the date on which
the relevant Loan is paid or prepaid, whether due to acceleration or otherwise.
Interest after maturity shall be payable on demand.
The Bank shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder. The records of the Bank shall be presumed to be accurate and
shall be binding upon the Company absent manifest error.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the
Credit Agreement and the other Loan Documents, to which
Credit Agreement and Loan Documents reference is hereby made for a statement of
the terms and conditions under which this Note may be prepaid or its maturity
date accelerated. Capitalized terms used herein and not otherwise defined herein
are used with the meanings attributed to them in the
Credit Agreement.
CHICAGO MERCANTILE EXCHANGE INC.
(A Delaware corporation)
By
--------------------------------
Title:
----------------------------
A-1
