Exhibit 99.K
EXHIBIT K
Loan and Security Agreement
EXECUTION VERSION
LOAN AND SECURITY AGREEMENT
LOAN AND SECURITY AGREEMENT (this "AGREEMENT"), dated as of January
4, 2001, between Salomon Brothers International Limited, a company incorporated
under the laws of England and Wales ("BORROWER"), and Banco Santander Central
Hispano S.A., a company incorporated under the laws of Spain, acting through its
London branch ("LENDER").
WHEREAS, Borrower wishes to borrow from Lender, and Lender is
willing to lend to Borrower, an amount up to the Initial Loan Amount (as defined
below), on the terms and subject to the conditions hereof; and
WHEREAS, to secure its obligations to Lender hereunder, Borrower
intends to pledge certain shares of the Underlying Equity (as defined below)
and/or other assets to Lender.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
(a) The following terms, as used herein, shall have the indicated
meanings:
"BUSINESS DAY" means a day which is a New York Business Day, a
London Banking Day and a Custodial Business Day.
"CALCULATION AGENT" means Lender.
"COLLATERAL" means all Eligible Collateral, distributions, dividends
or income thereon and any proceeds thereof transferred to or otherwise received
by Lender pursuant to this Agreement and not returned to Borrower hereunder.
"CONTROL" has the meaning set forth in Section 8-106 or 9-115(1)(e)
of the UCC.
"CUSTODIAL BUSINESS DAY" means a day which is a "Business Day" under
the Custodial Undertaking.
"CUSTODIAL UNDERTAKING" means the Custodial Undertaking, dated as of
January 4, 2001, among Borrower, Lender and Custodian.
"CUSTODIAN" means The Bank of New York, as custodian under the
Custodial Undertaking, and any successor custodian thereto.
"CROWN CASTLE" means Crown Castle International Corp., a Delaware
corporation.
"DEBT" means, with respect to any person, without duplication, (x)
all of such person's obligations (i) for borrowed money, (ii) evidenced by
bonds, debentures, notes or other similar instruments and (iii) to pay the
deferred purchase price of property or services, except trade accounts payable
arising in the ordinary course of business and (y) all Debt of others secured by
an Encumbrance on an asset of such person, whether or not such Debt is assumed
by such person.
"DELIVERY AMOUNT" has the meaning set forth in Section 7(d).
"DESIGNATED MATURITY" means (i) with respect to an Interest Period
for which interest is based on LIBOR, one, two, three or six months as
determined pursuant to Section 5(a) (or in the case of the first Interest
Period, if interest for such period is based on LIBOR, such period), and (ii)
with respect to a Breakage Period, such period.
"DISBURSEMENT DATE" means January 8, 2001, or such other date as the
parties may agree.
"DISPOSITION AGREEMENT" means the Disposition Agreement, dated as of
May 17, 2000, between Crown Castle, Crown Castle UK Holdings Limited, France
Telecom S.A., Telediffusion de France International S.A., Transmission Future
Networks B.V. and Borrower, as amended and supplemented on June 5, 2000, and
July 5, 2000, and from time to time.
"ELIGIBLE COLLATERAL" means (i) shares of the Underlying Equity,
(ii) U.S. Dollar cash, (iii) negotiable debt securities issued by the United
States Treasury Department, and (iv) negotiable debt securities of issuers (A)
with a rating as of the date of transfer of at least BBB- by Standard & Poor's
Ratings Services and at least Baa3 by Xxxxx'x Investors Service, Inc. and (B)
which securities are, as of the date of transfer, registered securities traded
on a U.S. national securities exchange or in the over-the-counter market and
freely tradable under the U.S. Securities Act of 1933, as amended.
"ENCUMBRANCE" means any pledge, hypothecation, assignment, lien,
restriction, charge, claim, security interest, option, preference, priority or
other preferential arrangement of any kind or nature whatsoever.
"EVENT OF DEFAULT" has the meaning set forth in Section 10(a).
"FEDERAL FUNDS RATE" means, for any date of determination, the rate
per annum equal to (i) the opening overnight federal funds rate quoted by Prebon
Yamane (U.S.A.) Inc. for such date or, if such date is not a New York Business
Day, for the next preceding New York Business Day, or (ii) if such rate is not
so published for any date that is a New York Business Day, the average of the
quotations for such date for opening federal funds transactions received by the
Calculation Agent from three federal funds brokers of recognized standing
selected by the Calculation Agent.
"GUARANTEE" means the Guarantee, dated as of the date hereof,
executed by the Guarantor in favor of Lender with respect to Borrower's
obligations hereunder.
"GUARANTOR" means Xxxxxxx Xxxxx Xxxxxx Holdings Inc., a New York
corporation.
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been organized, present or engaged
in a trade or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or enforced,
this Agreement).
"INDEMNITEES" has the meaning set forth in Section 13.
"INITIAL LOAN AMOUNT" means $175,000,000 or such lesser amount
specified by the Borrower on or prior to the Disbursement Date.
2
"INTEREST PAYMENT DATE" means the last New York Business Day of each
Interest Period.
"INTEREST PERIOD" means (i) if the Interest Rate for such period is
the Federal Funds Rate or LIBOR with a Designated Maturity of one month, the one
calendar month period commencing on and including the calendar day following the
last calendar day of the immediately preceding Interest Period or (ii) if the
Interest Rate for such period is LIBOR with a Designated Maturity of two months,
three months or six months, the two, three, or six calendar month period, as the
case may be, commencing on and including the calendar day following the last
calendar day of the immediately preceding Interest Period; PROVIDED that, in the
case of either (i) or (ii), the initial Interest Period shall commence on and
include the Disbursement Date and end on and include the last calendar day of
the month in which the Disbursement Date occurs, and the final Interest Period
shall end on but exclude the Maturity Date.
"INTEREST RATE" means, for any date of determination in an Interest
Period, (i) if interest for such Interest Period is based on the Federal Funds
Rate, the applicable Federal Funds Rate for such date PLUS 30 basis points per
annum, or (ii) if interest for such Interest Period is based on LIBOR, LIBOR for
such Interest Period PLUS 25 basis points per annum.
"LIBOR" means, for any Interest Period, the rate per annum for U.S.
Dollar LIBOR for the applicable Designated Maturity which appears on the
Telerate Page 3750 (or any successor to such page) as of 11:00 a.m., London
time, on the applicable LIBOR Reset Date; PROVIDED that if a rate for such
Designated Maturity does not appear on such page, the rate will be determined by
the Calculation Agent by interpolating linearly in accordance with market
practice (and rounding to the nearest hundred-thousandth of a percentage point)
between LIBOR for the nearest shorter and nearest longer maturities which appear
on such page, in each case on the applicable LIBOR Reset Date. If such rate is
not available on the Telerate Page 3750 (or such successor page), the rate will
be determined on the basis of the rates at which deposits in U.S. Dollars are
offered by four major banks in the London interbank market selected by the
Calculation Agent (the "REFERENCE BANKS") at approximately 11:00 a.m., London
time, on the applicable LIBOR Reset Date to prime banks in the London interbank
market for such Designated Maturity commencing at the start of such period and
in an amount that is representative for a single transaction in the London
interbank market at that time. The Calculation Agent will request the principal
London office of each of the Reference Banks to provide a quotation of its rate.
If at least two such quotations are provided, the rate for that period will be
the arithmetic mean of the quotations (rounded, if necessary, to the nearest one
hundred-thousandth of a percentage point). If fewer than two quotations are
provided as requested, the rate for that period will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Calculation
Agent, at approximately 11:00 a.m., New York time, on the applicable LIBOR Reset
Date to leading European banks for such Designated Maturity commencing at the
start of such period and in an amount that is representative for a single
transaction in the New York interbank market at that time.
"LIBOR RESET DATE" means, for any Interest Period, the second London
Banking Day prior to the start of such period.
"LONDON BANKING DAY" means a day (other than a Saturday or Sunday)
on which commercial banks generally are open for business in London, England.
"LOAN" means the loan made by Lender to Borrower hereunder.
"MARKET VALUE" means, with respect to any Eligible Collateral or
Collateral, as of any date of determination, (i) in the case of U.S. Dollar
cash, the amount thereof, and (ii) otherwise, the bid price thereof as of the
close of trading on the immediately preceding Custodial Business Day.
3
"MATURITY DATE" means the earlier of (i) the Scheduled Maturity Date
and (ii) the date the Outstanding Principal Amount is reduced to zero.
"MINIMUM TRANSFER AMOUNT" means (i) with respect to transfers by
Lender, $5 million, and (ii) with respect to transfers by Borrower, $5 million.
"NEW YORK BUSINESS DAY" means a day (other than a Saturday or
Sunday) on which commercial banks generally are open for business in New York,
New York.
"OBLIGATIONS" has the meaning set forth in Section 7(a).
"OUTSTANDING PRINCIPAL AMOUNT" means, as of any date of
determination, the Initial Loan Amount MINUS the amount of all repayments of
principal hereunder on or prior to such date pursuant to Section 4.
"PLEDGED SHARES" means any Collateral that is in the form of shares
of the Underlying Equity from time to time.
"PREPAYMENT AMOUNT" has the meaning set forth in Section 4(b).
"PREPAYMENT DATE" has the meaning set forth in Section 4(b).
"REQUIRED COLLATERAL AMOUNT" means, as of any date of determination,
200% MULTIPLIED BY the Outstanding Principal Amount as of such date.
"RETURN AMOUNT" has the meaning set forth in Section 7(e).
"SCHEDULED MATURITY DATE" means the date that is two years following
the Disbursement Date (or, if such date is not a Business Day, the next
following Business Day).
"SUBSTITUTE COLLATERAL" has the meaning set forth in Section 7(n).
"TAXES" has the meaning set forth in Section 6(c).
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"UNDERLYING EQUITY" means the common stock, par value $0.01 per
share, of Crown Castle; PROVIDED that if any new or different security shall be
exchanged for the Underlying Equity by recapitalization, merger, consolidation
or other corporate action, such new or different security shall, effective upon
such exchange, be deemed to become the Underlying Equity, in substitution for
the Underlying Equity for which such exchange is made.
"UNDERLYING EQUITY RESTRICTIONS" has the meaning set forth in
Section 7(m).
"U.S. DOLLARS" or "$" means the lawful currency of the United States
of America.
(b) Definitions contained herein apply equally to the singular and
plural forms of the defined terms. The terms "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole and not to
any particular section, paragraph or subdivision. All references to Sections and
subsections are to Sections and subsections of this Agreement unless otherwise
specified. The section titles in this Agreement are included as a matter of
convenience only and shall not affect the interpretation of this Agreement.
4
2. LOAN; DISBURSEMENT.
On the terms and subject to the conditions hereof, Lender shall, on
the Disbursement Date, make the Loan to Borrower in an amount equal to the
Initial Loan Amount by payment of such amount to Borrower in immediately
available funds to the account designated by Borrower. The Borrower shall not be
entitled under this Agreement to reborrow amounts repaid pursuant to Section 4,
and there shall be only one Disbursement Date in respect of the Loan. Lender
shall record in its books and records the Outstanding Principal Amount of the
Loan from time to time, and such record of the Outstanding Principal Amount
shall constitute prima facie evidence of the Outstanding Principal Amount.
Lender shall inform Borrower, upon request, of the Outstanding Principal Amount
of the Loan as of the date of such request.
3. CONDITIONS PRECEDENT.
Notwithstanding anything to the contrary herein, Lender shall not be
obligated to make the Loan to Borrower unless the following conditions precedent
are satisfied or waived by Lender:
(i) Guarantor has executed and delivered the Guarantee in form and
substance acceptable to the Lender;
(ii) Borrower, Lender and Custodian have executed and delivered the
Custodial Undertaking;
(iii) Borrower has transferred the initial Eligible Collateral to
the Custodian pursuant to Section 7(b);
(iv) Crown Castle has consented to the selection of Lender as a
"Permitted Transferee" under the Disposition Agreement;
(v) the representations and warranties of Borrower set forth in
Section 8 are true and correct in all material respects as of the Disbursement
Date;
(vi) no Event of Default has occurred and is continuing as of the
Disbursement Date; and
(vii) Borrower has delivered any other document or certificate that
Lender may reasonably request.
4. REPAYMENT.
(a) Borrower shall repay to Lender in full the Outstanding Principal
Amount of the Loan on the Scheduled Maturity Date.
(b) Notwithstanding subsection (a), Borrower shall be entitled on
any Business Day to prepay, without premium or penalty except as provided in
Section 5(c), the Outstanding Principal Amount of the Loan in whole or in part
on notice to Lender no later than 5:00 p.m., New York time on the Business Day
preceding the date of such prepayment (the "PREPAYMENT DATE") specifying the
amount of such prepayment (the "PREPAYMENT AMOUNT"). On the Prepayment Date, the
Outstanding Principal Amount of the Loan will be reduced by the applicable
Prepayment Amount, and interest will cease to accrue on such Prepayment Amount.
The Borrower shall not be entitled under this Agreement to reborrow amounts
repaid pursuant to this Section 4(b).
5
5. INTEREST.
(a) Borrower shall be entitled to elect, no later than 11:00 a.m.,
London time, on the second London Banking Day prior to the start of each
Interest Period (or, in the case of the first Interest Period, on the
Disbursement Date), whether interest for such Interest Period shall be
determined on the basis of (i) the Federal Funds Rate or (ii) LIBOR and, in the
case of (ii), whether the Designated Maturity for such Interest Period shall be
one, two, three or six months. If Borrower does not so elect, it will be deemed
to have elected that the Federal Funds Rate shall apply to such Interest Period.
(b) (i) On each Interest Payment Date, Borrower shall pay to
Lender interest on the Loan for the related Interest Period in an amount equal
to the aggregate, for each day in such Interest Period, of the product of (x)
the Outstanding Principal Amount as of the end of such Interest Period, (y) the
Interest Rate for such day, and (z) 1/360.
(ii) On each Prepayment Date, Borrower shall pay to Lender
interest with respect to the Prepayment Amount in an amount equal to the
aggregate, for each day in the period from and including the first day of the
Interest Period in which the Prepayment Date occurs to but excluding such
Prepayment Date, of the product of (x) the Prepayment Amount, (y) the Interest
Rate for such day (determined as for the Interest Period in which the Prepayment
Date occurs), and (z) 1/360.
(c) If a Prepayment Date occurs on a date that is not the last day
of an Interest Period, and interest for the Interest Period in which the
Prepayment Date occurs is determined on the basis of LIBOR, then, upon written
notice from Lender to Borrower, Borrower shall, within three Business Days of
its receipt thereof, pay to Lender such amount as will reimburse Lender for its
reasonable losses or expenses in respect of funding breakage costs (other than
loss of anticipated profits) as a result of the prepayment on such Prepayment
Date.
(d) If any amount payable by Borrower hereunder is not paid when
due, interest shall accrue thereon, without duplication of other amounts payable
hereunder and to the extent permitted by applicable law, on a daily basis,
during the period from and including the due date to but excluding the date of
actual payment, at a rate equal to the applicable Interest Rate plus 2% per
annum. Such interest shall be calculated on the basis of a 360-day year and the
actual number of days elapsed.
6. PAYMENTS.
(a) All payments made by Borrower hereunder shall be made in U.S.
Dollars in immediately available funds to the account or accounts of Lender
specified in writing to Borrower from time to time for such purpose.
(b) So long as no Event of Default has occurred and is continuing,
any payment by Borrower in respect of this Agreement shall be applied to amounts
then due and payable as determined by Lender. If an Event of Default has
occurred and is continuing, payments received from the Borrower in respect of
this Agreement shall be applied to amounts then due and payable in the following
order: (i) to interest amounts due and owing with respect to the Loan, (ii) to
the Outstanding Principal Amount of the Loan and (iii) to all other obligations
to the extent payable hereunder.
(c) (i) Each payment by Borrower hereunder shall be made without any
deduction or withholding for or on account of any taxes, levies, imposts,
duties, charges, assessments or fees of any nature imposed by any governmental
revenue authority ("TAXES"), unless such deduction or withholding is required by
any applicable law, as modified by the practice of any relevant governmental
revenue authority, then in effect. If Borrower is so required to deduct or
withhold, then Borrower will:
6
(A) promptly notify Lender of such requirement;
(B) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by Borrower to Lender
under this Section 6(c)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that such
amount has been assessed against Lender;
(C) promptly forward to Lender an official receipt (or a
certified copy), or other documentation reasonably acceptable to Lender,
evidencing such payment to such authorities; and
(D) if such Tax is an Indemnifiable Tax, pay to Lender, in
addition to the payment to which Lender is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that the net
amount actually received by Lender (free and clear of Indemnifiable Taxes,
whether assessed against Borrower or Lender) will equal the full amount
Lender would have received had no such deduction or withholding been
required. However, Borrower will not be required to pay any additional
amount to Lender to the extent that it would not be required to be paid
but for the failure by Lender to comply with or perform its obligations
under subsection (d) below.
(ii) If:
(A) Borrower is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which Borrower would not be
required to pay an additional amount to Lender under Section 6(c)(i)(D);
(B) Borrower does not so deduct or withhold; and
(C) a liability resulting from such Tax is assessed directly
against Borrower,
then, except to the extent Lender has satisfied or then
satisfies the liability resulting from such Tax, Lender will promptly pay
to Borrower the amount of such liability (including any related liability
for interest, but including any related liability for penalties only if
Lender has failed to comply with or perform its obligations under
subsection (d) below).
(d) Lender agrees that until the Maturity Date, it will, upon
reasonable demand by Borrower, deliver to Borrower or Guarantor, or to such
government or taxing authority as Borrower reasonably directs, any form or
document that may be required or reasonably requested in writing in order to
allow Borrower or Guarantor to make a payment under or with respect to this
Agreement without any deduction or withholding for or on account of any Tax or
with such deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially prejudice
the legal or commercial position of Lender), with any such form or document to
be accurate and completed in a manner reasonably satisfactory to Borrower and to
be executed and to be delivered with any reasonably required certification as
soon as reasonably practicable following such demand.
7. SECURITY.
(a) As security for Borrower's obligations to Lender under this
Agreement now or hereafter arising (the "OBLIGATIONS"), Borrower hereby pledges
to Lender, and grants to Lender a first
7
priority continuing security interest in, lien on and right of setoff against
all Collateral transferred to or otherwise received by Lender hereunder or the
Custodian on behalf of Lender. Upon the return by or on behalf of Lender to
Borrower of any such Collateral, the security interest and lien granted
hereunder on such Collateral will be released immediately and, to the extent
possible, without further action by Lender or Borrower.
(b) On or prior to the Disbursement Date, Borrower shall transfer to
Lender Eligible Collateral with a Market Value as of the Disbursement Date equal
to the Required Collateral Amount (calculated assuming the disbursement of the
Initial Loan Amount).
(c) On each Prepayment Date, against payment of the applicable
Prepayment Amount, together with interest due thereon pursuant to Section
5(b)(ii), and provided that no Event of Default shall have occurred and be
continuing, Lender shall transfer to Borrower Collateral specified by Borrower
having a Market Value as of such date as close as practicable to 200% MULTIPLIED
BY such Prepayment Amount.
(d) If, on any Custodial Business Day other than a Prepayment Date,
the Required Collateral Amount exceeds the Market Value of the Collateral,
Borrower shall, upon demand by Lender, subject to subsection (i) below, transfer
to Lender Eligible Collateral having a Market Value as of the date of transfer
at least equal to the amount of such excess (a "DELIVERY AMOUNT").
(e) If, on any Custodial Business Day other than a Prepayment Date,
the Market Value of the Collateral exceeds the Required Collateral Amount,
Lender shall, upon demand by Borrower, subject to subsection (i) below, transfer
to Borrower Collateral specified by Borrower having a Market Value as of the
date of transfer as close as practicable to the amount of such excess (a "RETURN
AMOUNT").
(f) The transfer of Eligible Collateral or Collateral pursuant to
subsections (d) and (e) shall occur no later than 5:00 p.m., New York time, on
the date of demand, if demand is made by noon, New York time, on such day, or,
if demand is made thereafter, by 5:00 p.m., New York time, on the Custodial
Business Day next following the date of demand.
(g) All Collateral hereunder shall be held by the Custodian, as
agent for Lender, pursuant to the Custodial Undertaking. All transfers of
Eligible Collateral or Collateral required to be made to or by Lender, as
appropriate, hereunder shall be made to or by the Custodian under the Custodial
Undertaking, unless the parties otherwise agree. Borrower acknowledges that
Lender shall have no responsibility or liability to Borrower for Custodian's
failure to promptly and properly discharge Lender's obligation to transfer
Collateral hereunder.
(h) Transfer of Eligible Collateral or Collateral shall be made (i)
in the case of U.S. dollars, by wire transfer of immediately available funds to
an account of the recipient specified in writing prior to such transfer, (ii) in
the case of shares of the Underlying Equity, by delivery in appropriate physical
form to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any other
documents necessary to constitute a legally valid transfer to the recipient, and
(iii) in the case of other securities, by book-entry to an account specified by
the recipient in writing prior to such transfer, or in such other manner as
agreed by the parties.
(i) Notwithstanding subsections (d) or (e), neither party shall be
obligated to transfer a Delivery Amount or a Return Amount unless such amount
exceeds the transferor's Minimum Transfer Amount.
8
(j) Lender shall exercise reasonable care to assure the safe custody
of all Collateral to the extent required by applicable law. Lender shall be
deemed to have exercised reasonable care if it exercises at least the same care
as it would exercise with respect to its own property. Except as provided in the
preceding two sentences, Lender has no duty as to the collection or protection
of the Collateral nor as to the preservation of rights against prior parties or
otherwise pertaining to the Collateral. The powers conferred on the Lender
hereunder are solely to protect its interests in the Collateral and do not
impose on the Lender a duty to exercise these powers. Lender shall only be
accountable for the amounts it receives from the exercise of such powers and
shall not be liable to Borrower for any act or failure to act, except as
otherwise provided in this subsection (j)
(k) If Lender receives income, dividends or other distributions with
respect to any Collateral, it will transfer such income, dividends or
distributions to Borrower in the form received promptly upon receipt, but in no
event later than 5:00 p.m., New York time, on the Business Day following the day
of receipt, to the extent that a Delivery Amount would not be created or
increased by such transfer. Lender shall direct the Custodian to transfer to
Borrower any such income, dividends or distributions with respect to any
Collateral received by the Custodian pursuant to the Custodial Undertaking.
(l) Notwithstanding anything to the contrary herein, except as
provided in, and subject to the conditions of, Section 10(d), Lender shall not
be entitled to sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of any Collateral.
(m) The parties agree that Lender shall have no right to vote or
give any consent with respect to any Pledged Shares. Lender hereby acknowledges
and agrees that all Pledged Shares shall be subject to the restrictions set
forth in Section 4.02 of the Disposition Agreement (the "UNDERLYING EQUITY
RESTRICTIONS") that are in effect from time to time, and Lender agrees that it
will comply with such restrictions as a "Permitted Transferee" under the
Disposition Agreement, including following any Event of Default hereunder. Crown
Castle shall be a third party beneficiary of Lender's agreement in the preceding
sentence.
(n) On any Custodial Business Day, upon notice to Lender specifying
the items of Collateral to be exchanged, Borrower may transfer to Lender
substitute Eligible Collateral ("SUBSTITUTE COLLATERAL"), and Lender shall
transfer to Borrower the items of Collateral specified by Borrower in its notice
upon receipt of the Substitute Collateral; PROVIDED that Lender will only be
required to transfer Collateral with a Market Value as of the date of transfer
equal to the Market Value as of such date of the Substitute Collateral; and
PROVIDED, FURTHER, that no Event of Default shall have occurred and be
continuing.
(o) When no amounts are or thereafter may become payable by Borrower
under this Agreement, Lender shall return to Borrower all Collateral.
8. REPRESENTATIONS AND WARRANTIES.
(a) Borrower hereby represents and warrants to Lender as of the
Disbursement Date that:
(i) Borrower is duly organized and is validly existing as a company
incorporated under the laws of England and Wales, with full power and
authority to conduct its business and perform its obligations under this
Agreement;
9
(ii) The execution and delivery of this Agreement have been duly
authorized by all necessary corporate or other action by Borrower, and
this Agreement has been duly executed and delivered by Borrower and
constitutes the valid, binding and enforceable agreement of Borrower,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and to general principles of equity;
(iii) the execution, delivery and performance by Borrower of this
Agreement do not conflict with, constitute a violation or breach of or
constitute a default or give rise to any right of termination or
acceleration of any right or obligation of Borrower under (A) any
judgment, law, statute, rule or governmental regulation applicable to
Borrower, (B) the constituent documents of Borrower or (C) any contract,
lease, agreement, indenture or other instrument to which Borrower is a
party or which is binding upon Borrower, except in any such case where
such violation, breach, default or right of termination or acceleration
does not and will not have a material adverse effect on Borrower's ability
to perform its obligations hereunder; and
(iv) there is no action, suit or proceeding pending or threatened
against Borrower before any court or arbitrator or any governmental body,
agency or official in which there is a reasonable possibility of an
adverse decision which would have a material adverse effect on the ability
of Borrower to perform any of its obligations under this Agreement.
(b) Borrower represents and warrants to Lender, on each day on which
Borrower transfers Eligible Collateral to Lender, that (i) it owns or otherwise
has the right to transfer such Eligible Collateral free and clear of, and such
transfer will not create, any Encumbrance thereon (other than the Encumbrance
created by this Agreement and, in the case of shares of the Underlying Equity,
the Underlying Equity Restrictions) and (ii) upon such transfer, Lender will
have a first priority perfected security interest therein.
9. COVENANTS.
(a) Borrower shall comply in all material respects with all
applicable laws and regulations to which it may be subject if failure to so
comply would materially impair its ability to perform its obligations under this
Agreement.
(b) Borrower shall provide to Lender written notice of the
occurrence of any Event of Default or event which, with the giving of notice or
the lapse of time or both, would be an Event of Default promptly upon Borrower's
obtaining actual knowledge thereof, which notice shall specify (i) the nature
and extent thereof, and (ii) the action the Borrower intends to take to cure
such Event of Default (if such default is susceptible to being cured).
(c) Borrower shall not permit to exist any lien, charge or
encumbrance with respect to the Collateral (other than the lien created hereby
and, in the case of shares of the Underlying Equity, the Underlying Equity
Restrictions) and shall take any and all action necessary to discharge any such
lien, charge or encumbrance.
(d) Borrower shall preserve and protect Lender's first priority
security interest in the Collateral. Upon Lender's request, Borrower shall take
or arrange for the taking of all steps necessary to preserve, protect or perfect
Lender's first priority security interest, including taking such actions so as
to ensure that Lender has Control of the Collateral. Such actions shall include
the prompt execution and delivery by Borrower of all such documents, stock
powers, assignments, financing and continuation statements and other instruments
or documents as may be reasonably requested by Lender.
10
(e) Borrower from to time shall promptly furnish or cause to be
furnished to Lender any information which Lender may reasonably request
concerning the Collateral.
(f) Borrower hereby assumes full responsibility for taking any and
all necessary steps to preserve all rights with respect to the Collateral
against prior parties and adverse claims, including against persons (other than
Lender) asserting Control over the Collateral.
(g) Borrower hereby appoints Lender, with full power of
substitution, its true and lawful attorney-in-fact for Borrower in its name,
place and stead and for its use and benefit, to sign, execute, certify,
acknowledge, swear to, file and record all documents and instruments necessary
or advisable to accomplish the purposes of Section 7 of this Agreement. The
power of attorney set forth in this subsection is a special power of attorney
coupled with an interest and is irrevocable.
10. EVENTS OF DEFAULT; REMEDIES.
(a) The occurrence of one or more of the following shall constitute
an "EVENT OF DEFAULT" under this Agreement:
(i) Borrower shall commence a voluntary case or other proceeding
involving its liquidation, winding-up, bankruptcy or sequestration or
otherwise seeking reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial
part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in any
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally,
or admit in writing its inability, to pay its debts as they become due, or
shall take any corporate action to authorize any of the foregoing;
(ii) any involuntary case or other proceeding shall be commenced
against Borrower involving its liquidation, winding-up, bankruptcy or
sequestration or otherwise seeking reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of 60
days;
(iii) Borrower shall fail to pay the principal amount of the Loan
when due;
(iv) Borrower shall fail to pay any interest owed with respect to
the Loan or any other fees or payments owed under this Agreement or shall
fail to transfer any Eligible Collateral, in each case when due, if such
failure is not cured within three Business Days after the applicable date
such payment or transfer is due;
(v) Borrower shall fail to perform or observe any covenant or
agreement herein (other than a failure described in clauses (iii) or
(iv)), if such failure is not cured within 30 days after receipt by
Borrower from Lender of notice of such failure;
(vi) Any representation or warranty of Borrower hereunder is or
shall be incorrect in any material respect when made; or
11
(vii) Borrower shall (i) fail to pay any principal or interest,
regardless of amount, due in respect of any outstanding single Debt of
Borrower (but excluding outstanding Debt arising hereunder) in a principal
amount of US$50,000,000 or more, when and as the same shall become due and
payable (after expiration of any applicable grace period specified in any
instrument or agreement evidencing or governing such Debt), or (ii)
default in the observance or performance of any other term, covenant,
condition or agreement contained in any instrument or agreement evidencing
or governing any such Debt, or any such term, covenant, condition or
agreement shall fail to be satisfied, if, as a result of any such default
or failure referred to in this clause (ii), such Debt has become or has
been declared due prior to its stated maturity.
(b) If an Event of Default pursuant to clause (a)(i) or (a)(ii)
above shall occur with respect to Borrower, unless the Loan shall have
previously matured, the unpaid Outstanding Principal Amount, together with
accrued and unpaid interest thereon, shall become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by Borrower; PROVIDED that Lender may, by notice to Borrower,
rescind such acceleration.
(c) If an Event of Default other than an Event of Default subject to
subsection (b) above shall occur and be continuing, Lender shall be entitled, by
notice to Borrower, to declare the Outstanding Principal Amount, together with
accrued and unpaid interest thereon, to be immediately due and payable,
whereupon such amounts shall become immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by Borrower.
(d) If the Outstanding Principal Amount becomes immediately due and
payable pursuant to subsections (b) or (c) above, then unless all Obligations
shall have been paid in full, Lender may (in addition to its other rights or
remedies hereunder or otherwise) exercise one or more of the following remedies:
(i) all rights and remedies available to a secured party under
applicable law with respect to the Collateral;
(ii) the right to transfer into Lender's name, or into the name of
its nominee or nominees or otherwise as Lender directs, all or any portion
of the Collateral, and thereafter receive all cash dividends and other
distributions, payments, substitutions or other consideration paid or
delivered thereon, exercise voting rights with respect thereto, give all
consents, waivers and ratifications in respect thereof and otherwise act
with respect thereto as though it were the outright owner thereof;
(iii) the right to setoff any amounts payable by Borrower hereunder
against any Collateral or the cash equivalent of any Collateral held by
Lender (or any obligation of Lender to return that Collateral); and
(iv) the right to liquidate any Collateral held by Lender through
one or more public or private sales with such notice, if any, as may be
required under applicable law, free from any claim or right of any nature
whatsoever of Borrower, including any equity or right of redemption by
Borrower (with Lender having the right to purchase any or all of the
Collateral to be sold) and to apply the proceeds (or the cash equivalent
thereof) from the liquidation of the Collateral to any amounts payable by
Borrower with respect to any obligations hereunder in such order as Lender
may elect.
12
Notwithstanding anything to the contrary herein, Lender's rights
with respect to any Pledged Shares pursuant to this subsection (d) or
otherwise shall be subject to the Underlying Equity Restrictions, if any,
that are then applicable to such Pledged Shares.
Each party acknowledges and agrees that Collateral in the form of
securities may decline speedily in value and is of a type customarily sold
on a recognized market, and, accordingly, Borrower is not entitled to
prior notice of any sale of that Collateral by Lender, except any notice
that is required under applicable law and cannot be waived. Borrower
acknowledges that a sale of the Collateral on a national securities
exchange, or in the over-the-counter market in whole or in lots, will not
be commercially unreasonable. Borrower waives any and all rights that it
may have to a judicial hearing in advance of the enforcement of any of
Lender's rights in and to the Collateral.
(e) Borrower shall remain liable for any amounts remaining unpaid
hereunder after liquidation, setoff and/or application of Collateral pursuant to
this Section 10.
(f) Lender shall transfer to Borrower any Collateral remaining after
any such liquidation, setoff and/or application after satisfaction in full of
all Obligations.
11. INCREASED COSTS.
If any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any court, central bank, regulator or other governmental authority
affects or would affect the amount of capital required or expected to be
maintained by Lender and Lender determines that the rate of return on its
capital as a consequence of the Loan is reduced to a level below that which
Lender could have achieved but for the occurrence of any such circumstance, then
Borrower shall pay to Lender additional amounts sufficient to compensate Lender
for such reduction in the rate of return within thirty days of the delivery to
Borrower of a certificate of Lender setting forth such additional amounts and
specifying in reasonable detail the basis for such amounts and the method of
computation thereof. Such certificate shall be conclusive and binding absent
manifest error.
12. COSTS AND EXPENSES.
Following the occurrence of an Event of Default, Borrower shall pay
to Lender, on demand, all costs and expenses (including reasonable fees and
expenses of counsel) incurred by Lender in connection with protecting,
preserving or enforcing its rights under or in respect of this Agreement,
including, without limitation, with respect to the Collateral.
13. INDEMNITY.
To the extent permitted by law, but without duplication of other
amounts payable hereunder, Borrower agrees to indemnify and hold harmless Lender
and its directors, officers, employees and agents ("INDEMNITEES") from and
against any and all liabilities, losses, damages, costs and expenses of any kind
or nature (including, without limitation, in respect of or for reasonable fees
and expenses of counsel) incurred or suffered by the Indemnitees, or any of
them, arising out of, in connection with, or relating to the breach by Borrower
of any provision hereunder or the failure of any representation by Borrower
hereunder to have been true and correct when made. Borrower's obligations under
this section shall survive the payment in full of the Loan and the termination
of this Agreement.
14. NOTICES.
13
All communications hereunder will be in writing and effective only
upon receipt and, if sent to Borrower, will be mailed, delivered or telefaxed to
Salomon Brothers International Limited, Victoria Plaza, 111 Buckingham Palace
Road, London SW1W 0SB, England, Attention: Xxxxx Xxxxx, Facsimile:
00-00-0000-0000, with a copy to Guarantor at Xxxxxxx Xxxxx Barney Holdings Inc.,
388 Greenwich Street, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Xxxxxx Xxxxxx,
Attention: Xxxxxx Xxxxxxxxxx, Facsimile: 000-000-0000; or if sent to Lender,
will be mailed, delivered or telefaxed to Banco Santander Central Hispano S.A.,
Santander House, 000 Xxxxxxx Xxxx, Xxxxxx XX0X 0XX, Attention: Xxxxx Xxxxx or
Xxxxx Xxxxxx, Facsimile: 00-00-0000-0000, or in either case to such other
address as to which either party shall notify the other in writing from time to
time.
15. MISCELLANEOUS.
(a) COUNTERPARTS. This Agreement may be executed in multiple
counterparts (including by facsimile transmission), each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument.
(b) APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAW.
(c) SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.
(i) Each party hereby irrevocably submits to the exclusive
jurisdiction of U.S. federal and state courts in the Borough of Manhattan,
New York City, for the purpose of any action, suit or proceeding arising
out of or in connection with this Agreement or any transaction
contemplated hereby ("Proceedings").
(ii) Each party hereby irrevocably waives any objection which
it may have at any time to the laying of venue of any Proceedings in the
courts referred to in clause (i) above, waives any claim that such
Proceedings have been brought in an inconvenient forum and further waives
the right to object with respect to such Proceedings that such courts do
not have jurisdiction over it.
(iii) Each party hereby agrees that process may be served
against it in any Proceeding by sending the same by first class mail,
return receipt requested, or by overnight courier service, to the address
of such party specified pursuant to Section 14.
(d) WAIVER OF JURY TRIAL. EACH PARTY HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED
ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY ACTIONS OF BORROWER OR LENDER IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT HEREOF OR THEREOF.
(e) ASSIGNMENTS. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors. Neither party may
assign or transfer its rights or obligations hereunder, PROVIDED THAT Lender may
assign its rights hereunder to any of its affiliates, subject to any consents
required under the Disposition Agreement.
(f) ENTIRE AGREEMENT. This Agreement together with the Custodial
Undertaking, forms the entire agreement as to the Loan and other matters covered
herein and supersedes all prior
14
agreements and understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement. The provisions of this
Agreement may only be amended if such amendment is in writing and signed by both
parties.
(g) AMENDMENT. No amendment or modification in respect of this
Agreement will be effective unless in writing and executed by each of the
parties.
(h) WAIVERS. No failure or delay by either party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies provided herein shall be cumulative and not exclusive of any rights and
remedies provided by law.
(i) SEVERABILITY. If at any time any provision hereof is or becomes
illegal, invalid or unenforceable under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby.
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
SALOMON BROTHERS INTERNATIONAL
LIMITED, as Borrower
By: /s/ XXXXX XXX
-----------------------------------
Name: Xxxxx Xxx
Title: Senior Vice President
BANCO SANTANDER CENTRAL HISPANO
S.A., as Lender
By: /s/ XXXXXX XXXXXX
-----------------------------------
Name: Xxxxxx Xxxxxx
Title: Senior Manager
By: /s/ XXX INCHES
-----------------------------------
Name: Xxx Inches
Title: Senior Manager
16
