Filed Pursuant to Rule 424(b)(3)

Registration No. 333-158666

PROSPECTUS SUPPLEMENT NO. 4

(to Prospectus dated July 23, 2009)

KAR HOLDINGS, INC.

$150,000,000 Floating Rate Senior Notes Due 2014

$450,000,000 8 ³/4% Senior Notes Due 2014

$425,000,000 10% Senior Subordinated Notes Due 2015

 

 

Attached hereto and incorporated by reference herein is our Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 28, 2009. You should read this Prospectus Supplement No. 4 in connection with the prospectus, dated July 23, 2009, including the prospectus supplements dated August 12, 2009, September 11, 2009 and October 14, 2009. This Prospectus Supplement No. 4 is qualified by reference to the prospectus, including the prospectus supplements dated August 12, 2009, September 11, 2009 and October 14, 2009, except to the extent that the information in this Prospectus Supplement No. 4 supersedes the information contained therein.

 

 

SEE “RISK FACTORS” BEGINNING ON PAGE 16 OF THE PROSPECTUS AND UNDER ITEM 1A IN THE ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2008 FOR A DISCUSSION OF CERTAIN RISKS YOU SHOULD CONSIDER BEFORE INVESTING IN THE NOTES.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these notes or passed upon the adequacy of this prospectus. Any representation to the contrary is a criminal offense.

This prospectus has been prepared for and may be used by Goldman, Sachs & Co. in connection with offers and sales of the notes related to market-making transactions in the notes effected from time to time. Goldman, Sachs & Co. may act as principal or agent in these transactions. Such sales will be made at prevailing market prices at the time of sale, at prices related thereto or at negotiated prices. We will not receive any proceeds from such sales.

 

 

GOLDMAN, SACHS & CO.

 

 

October 28, 2009

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 28, 2009 (October 23, 2009)

 

 

KAR Holdings, Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware		333-148847		20-8744739
(State of Incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

13085 Hamilton Crossing Boulevard

Carmel, Indiana 46032

(Address of principal executive offices) (Zip Code)

(800) 923-3725

(Registrant’s telephone number, including area code)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 1.01

Entry into a Material Definitive Agreement.

On October 23, 2009, KAR Holdings, Inc. (the “Company”), as borrower, and KAR Holdings II, LLC (the “LLC”), as guarantor, entered into the Second Amendment, dated October 23, 2009 (the “Amendment”), to Credit Agreement, dated April 20, 2007 (as so amended, the “Credit Agreement”), with the several lenders party thereto, Bear Stearns Corporate Lending Inc., as resigning administrative agent, and JPMorgan Chase Bank, N.A., as successor administrative agent. The Amendment also amended the Guarantee and Collateral Agreement, dated April 20, 2007, made by the Company, the LLC and the subsidiary guarantors party thereto in favor of the administrative agent under the Credit Agreement.

The Amendment, among other things, (i) allows KAR Holdings II, LLC to own less than 100% of the outstanding capital stock of the Company, (ii) permits the Company to use a portion of the proceeds from its previously announced proposed initial public offering of common stock (the “Offering”) and any future offering of common stock of the Company plus unrestricted cash on hand at the time of the Offering to repay, redeem, repurchase or defease, or segregate funds with respect to, its unsecured notes, (iii) permits the Company to pay accelerated management fees to its equity sponsors in connection with the termination of the Company’s financial advisory agreements with each of them and (iv) increases the rate of interest on both the term loan and revolving loan borrowings under the Credit Agreement to a rate of LIBOR plus a margin of 2.75%, in each case, after the satisfaction of certain conditions precedent, including the consummation of the Offering and the optional prepayment of $250,000,000 or more of the term loans.

Certain of the lenders and agents and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking, commercial banking and other services for the Company and its affiliates, for which they received or will receive customary fees and expenses.

The above description of the Amendment is not complete and is qualified in its entirety by reference to the full text of the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K (this “Report”) and incorporated herein by reference.

FORWARD-LOOKING STATEMENTS

This Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made in this Report that are not historical facts (including, but not limited to, expectations regarding the Offering) are forward-looking statements. Words such as “will,” “expects,” “intends,” “seeks” and similar expressions identify forward-looking statements. No assurance can be given that the Offering will be consummated. Consummation of the Offering is subject to numerous conditions and factors, many of which are beyond the Company’s control, including conditions prevailing in the capital markets, economic, political and market factors affecting the demand for the Company’s securities, and other factors including those described in “Risk Factors” described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008 and subsequent filings with the Securities and Exchange Commission. Many of these risk factors are outside of the Company’s control, and as such, they involve risks which are not currently known that could cause actual results to differ materially from those discussed or implied herein. The forward-looking statements in this Report are made as of the date on which they are made and the Company does not undertake to update the Company’s forward-looking statements.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit Number		Description
10.1		Second Amendment, dated October 23, 2009, to Credit Agreement, dated April 20, 2007 (the “Credit Agreement”), among KAR Holdings, Inc., as borrower, KAR Holdings II, LLC, as guarantor, the several lenders from time to time parties thereto, and the other parties named therein

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: October 28, 2009		KAR Holdings, Inc.
		/s/    ERIC M. LOUGHMILLER
		Eric M. Loughmiller
		Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX

 

Exhibit Number		Description
10.1		Second Amendment, dated October 23, 2009, to Credit Agreement, dated April 20, 2007 (the “Credit Agreement”), among KAR Holdings, Inc., as borrower, KAR Holdings II, LLC, as guarantor, the several lenders from time to time parties thereto, and the other parties named therein

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Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

Dated as of October 23, 2009

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into between KAR HOLDINGS, INC., a Delaware corporation (the “Borrower”), KAR HOLDINGS II, LLC. (“Holdings”), the Lenders, BEAR STEARNS CORPORATE LENDING INC. (the “Resigning Agent”), JPMORGAN CHASE BANK, N.A. (the “Successor Agent”) and each of the other parties signatory hereto.

PRELIMINARY STATEMENTS

1. Reference is made to the Credit Agreement dated as of April 20, 2007 (as amended by that certain First Amendment to Credit Agreement dated June 10, 2009 between KAR Holdings, Inc., and the Lenders and other parties signatory thereto, the “Credit Agreement”), among the Borrower, the lenders and agents party thereto from time to time, Bear Stearns Corporate Lending Inc. as Administrative Agent (the “Administrative Agent”), and the other parties signatory thereto. Capitalized terms used but not otherwise defined herein are used with the meanings given in the Credit Agreement.

2. The Borrower has requested that the Required Lenders agree to amend the Credit Agreement and the Guarantee and Collateral Agreement as provided for herein.

3. The Required Lenders are willing to agree to such amendments to the Credit Agreement and the Guarantee and Collateral Agreement on the terms and subject to the conditions set forth herein.

Now, therefore, in consideration of the premises and the agreements, other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

AGREEMENT

SECTION 1. Amendments to Credit Agreement. On the terms and subject to the conditions set forth herein:

(a) Section 1.1 of the Credit Agreement is amended

(i) by inserting in such subsection the following definitions in the appropriate alphabetical order:

‘“Second Amendment”: means that certain Second Amendment, dated as of October 23, 2009, by and between the Borrower, and the Lenders and the other parties signatory thereto.

“Second Amendment Effective Date”: means the date of satisfaction of the conditions to effectiveness referred to in Section 3 of the Second Amendment.”

(ii) by deleting each instance of the word “Holdings” in each of the following definitions and substituting the words “the Borrower” therefor: “Capital Expenditures”, “Excluded Redemption Obligation”, “Guarantors”, “Management Advances”, “Management Investors” and “Management Stock Agreements.”

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(iii) by deleting the definition of “Continuing Directors” in its entirety and substituting the following new definition of “Continuing Directors therefore:

“Continuing Directors”: the directors of the Borrower on the Second Amendment Effective Date, after giving effect to the initial registered public offering of voting Capital Stock of the Borrower, and each other director of the Borrower whose nomination for election to the board of directors of the Borrower is recommended by at least a majority of the then Continuing Directors or such other director who receives the vote of the Permitted Investors in his or her election to the board of directors of the Borrower by the shareholders of the Borrower.

(iv) by deleting the words “or such Parent” in the definition of “Management Advances.”

(v) by deleting each instance of the words “or any Parent” in each of the following definitions: “Management Investors” and “Management Stock Agreements.”

(vi) by deleting the words “Holdings, the Borrower and their respective Subsidiaries” in the definition of “Group Members” and substituting the words “the Borrower and its Subsidiaries” therefor.

(vii) by deleting the words “Holdings and” in the definition of “Guarantors.”

(viii) by deleting the definition of “Parent” in its entirety and substituting the following new definition of “Parent” therefor:

“Parent”: any Person of which the Borrower at any time is or becomes a Subsidiary after the Closing Date.

(ix) by (A) deleting the word “or” immediately prior to the words “for Investments under Section 8.8(q)” in the third line of the definition of “Available Retained ECF”, (B) inserting the words “or for redeeming, repurchasing, defeasing or otherwise prepaying Unsecured Notes pursuant to Section 8.9(a) hereof” immediately prior to the words “the difference (if a positive number)” in the third line of the definition of “Available Retained ECF”, (C) deleting the word “or” immediately after the words “for Capital Expenditures under clause (iii) of Section 8.7” in the last line of the definition of “Available Retained ECF” and (D) inserting .the words “or for redeeming, repurchasing, defeasing or otherwise prepaying Unsecured Notes pursuant to Section 8.9(a) hereof” immediately after the words “for Investments under Section 8.8(q)” in the last line of the definition of “Available Retained ECF.”

(x) by deleting the definition of “Applicable Margin” in its entirety and substituting the following new definition of “Applicable Margin” therefor:

“Applicable Margin”: for each Type and class of Loan the rate per annum set forth below opposite the description of such Loan:

 

Eurodollar Initial Term Loans		2.75	%
Eurodollar Revolving Loans		2.75	%
Base Rate Initial Term Loans		1.75	%
Base Rate Revolving Loans and Swingline Loans		1.75	%

 

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(xi) by deleting the words “; provided that on and after the first Adjustment Date occurring after the completion of the first full fiscal quarter of the Borrower after the Closing Date, the Commitment Fee Rate will be determined pursuant to the Pricing Grids” at the end of the definition of “Commitment Fee Rate.”

(xii) by deleting the definitions of “Adjustment Date” and “Pricing Grids” in their entirety.

(b) Section 4.2 of the Credit Agreement is hereby amended as follows:

(i) the words “(other than Holdings)” are deleted in their entirety from clause (a) thereof; and

(ii) the words “; provided, however, that notwithstanding anything to the contrary set forth herein (including in the definition of “Excess Cash Flow”), to the extent the optional prepayment of Term Loans actually made in satisfaction of the condition precedent set forth in Section 3(d) of the Second Amendment is made on or prior to April 15, 2010, such prepayment shall be treated for purposes of the definition of “Excess Cash Flow” as if it were made during the 2009 fiscal year (and not during the 2010 fiscal year)” are inserted immediately following the words “such fiscal year” in clause (c) thereof;

(c) Section 5 of the Credit Agreement is hereby amended by deleting the words “Holdings and the Borrower hereby jointly and severally represent and warrant” in the first paragraph thereof in their entirety and substituting the words “the Borrower hereby represents and warrants” therefor;

(d) Sections 5.6, 5.8, 5.9, 5.12, 5.17(b), 5.17(d) or 5.18 of the Credit Agreement are hereby amended by deleting each instance of the words “Holdings or” in such Sections;

(e) Sections 5.10 and 5.17(e) of the Credit Agreement are hereby amended by deleting each instance of the words “Holdings and” in such Sections;

(f) Section 5.15(b) of the Credit Agreement is hereby amended by (i) deleting the words “other than stock options granted to employees, former employees or directors and directors’ qualifying shares” in the parenthetical in such subsection, and (ii) deleting the words “other than Holdings” in such Section in their entirety and substituting the words “(other than the Borrower)” therefor.

(g) Section 7 of the Credit Agreement is hereby amended by deleting the words “Holdings and the Borrower hereby jointly and severally agree” in the first paragraph thereof in their entirety and substituting the words “The Borrower hereby agrees” therefor;

 

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(h) Section 7.2 of the Credit Agreement is hereby amended by deleting each instance of the words “Holdings,” or “Holdings or” in clause (e) thereof;

(i) Section 7.10 of the Credit Agreement is hereby amended by deleting the words in clause (d) thereof in their entirety and substituting the word “Reserved” therefor;

(j) Section 8 of the Credit Agreement is hereby amended by deleting the words “Holdings and the Borrower hereby jointly and severally agree” the first paragraph thereof in their entirety and substituting the words “The Borrower hereby agrees” therefor;

(k) Section 8.2 of the Credit Agreement is hereby amended by (i) deleting each instance of the word “Holdings” in clauses (i), (j) and (r) thereof and substituting the word “Borrower” therefor, and (ii) deleting the words “or any Parent” in clause (r) thereof;

(l) Section 8.6(b) of the Credit Agreement is hereby deleted in its entirety and the following new Section 8.6(b) is substituted therefor:

“(b) so long as no Event of Default has occurred and is continuing or would result therefrom, the Borrower may (i) purchase the Borrower’s Capital Stock from present or former officers, directors or employees of any Group Member upon the death, disability, retirement or termination of employment or service of such officer, director or employee or otherwise under any stock option or employee stock ownership plan approved by the board of directors of the Borrower, in an aggregate amount (net of any proceeds received by the Borrower in connection with resales of any Capital Stock so purchased) not exceeding $10,000,000 in any fiscal year and (ii) pay accelerated management fees expressly permitted by Section 8.10;”

(m) Section 8.6(c) of the Credit Agreement is hereby deleted in its entirety and the following new Section 8.6(c) is substituted therefor:

“(c) the Borrower may pay dividends or make loans and advances to any Parent to permit any Parent to (i) pay corporate overhead expenses incurred in the ordinary course of business in an aggregate amount not exceeding $5,000,000 in any fiscal year; (ii) pay (A) any taxes, charges or assessments, including but not limited to sales, use, transfer, rental, ad valorem, value-added, stamp, property, consumption, franchise, license, capital, net worth, gross receipts, excise, occupancy, intangibles or similar taxes, charges or assessments (other than federal, state or local taxes measured by income and federal, state or local withholding imposed on payments made by any Parent), required to be paid by any Parent by virtue of its being incorporated or otherwise organized or having Capital Stock outstanding (but not by virtue of owning stock or other equity interests of any corporation or other entity other than the Borrower, any of its Subsidiaries or any Parent), or being a holding company parent of the Borrower, or having guaranteed any obligations of the Borrower or any Subsidiary thereof, or having made any payment in respect of any of the items for which the Borrower is permitted to make payments to any Parent pursuant to the other clauses of this Section 8.6, or (B) for so long as the Borrower is a member of a group filing a consolidated, combined or unitary tax return with any Parent, amounts necessary for the payment of federal, state or local income taxes payable by such Parent and measured by the income of the Borrower and its Subsidiaries which are payable by such Parent; (iii) to pay expenses incurred by any Parent in connection with offerings, registrations, or exchange listings of equity securities and maintenance of same (A) where the net proceeds of such offering are to be

 

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received by or contributed to the Borrower, or (B) in a prorated amount of such expenses in proportion to the amount of such net proceeds intended to be so received or contributed or loaned, or (C) otherwise on an interim basis prior to completion of such offering so long as any Parent shall cause the amount of such expenses to be repaid to the Borrower or the relevant Subsidiary of the Borrower out of the proceeds of such offering promptly if such offering is completed; (iv) to pay audit costs and any costs (including all professional fees and expenses) incurred by any Parent in connection with reporting obligations under or otherwise incurred in connection with compliance with applicable laws, applicable rules or regulations of any governmental, regulatory or self-regulatory body or stock exchange, including in respect of any reports filed with respect to the Securities Act, the Exchange Act or the respective rules and regulations promulgated thereunder; (v) to pay obligations of any Parent under or in respect of director and officer insurance policies or indemnification obligations to directors or officers; (vi) to pay accelerated management fees under the Management Agreement in an aggregate amount not exceeding $10,500,000 contemporaneously with the consummation of the initial registered public offering of voting Capital Stock of the Borrower, so long as no Default under Section 9(a) or 9(f) has occurred and is continuing (it being acknowledged and agreed that no additional management fees under the Management Agreement shall be permitted to be paid thereafter) and (vii) the Borrower may make Restricted Payments the proceeds of which shall be used by any Parent to make cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for Capital Stock of any Parent;”

(n) Section 8.9 of the Credit Agreement is amended by (i) deleting the word “Holdings” in clause (a) thereof and substituting the words “the Borrower” therefor, (ii) inserting the words “in connection with a Permitted Refinancing therefor or” immediately after the words “other than” in the first parenthetical in clause (a) thereof and (iii) inserting the following words at the end of clause (a) thereof: “; provided, that, (i) substantially contemporaneously with consummation of the initial registered public offering of voting Capital Stock of the Borrower and the occurrence of the Second Amendment Effective Date, the Borrower may redeem, repurchase, defease or otherwise prepay Unsecured Notes in an aggregate amount not to exceed (A) the sum of (1) cash and Cash Equivalents that are not classified as “restricted” for financial statement purposes of the Borrower and its Subsidiaries as of the Second Amendment Effective Date plus (2) the Net Cash Proceeds of the initial registered public offering of voting Capital Stock of the Borrower on the Second Amendment Effective Date minus (B) the amount of any optional prepayment of Term Loans made in satisfaction of the condition precedent set forth in Section 3(d) of the Second Amendment; (ii) after the date on which the Borrower has redeemed, repurchased, defeased or otherwise prepaid Unsecured Notes pursuant to clause (i) above, the Borrower may use proceeds of any subsequent offering of its voting Capital Stock otherwise permitted hereunder to redeem, repurchase, defease or otherwise prepay additional Unsecured Notes with proceeds of such subsequent offering solely to the extent that, at the time of such redemption, repurchase, defeasance or prepayment, the Borrower also make an optional prepayment of Term Loans hereunder pursuant to Section 4.1 hereof in an aggregate principal amount equal to not less than the aggregate cash amount actually used to redeem, repurchase, defease, or otherwise prepay the Unsecured Notes pursuant to this clause (ii), and (iii) on any date after the Second Amendment Effective Date, the Borrower may redeem, repurchase, defease or otherwise prepay Unsecured Notes from and counted against Available Retained ECF if and so long as (A) no Default has occurred and is continuing or would result therefrom, (B) both on a historical and on a pro forma basis (giving effect to such payment and all related transactions, including the Incurrence and use of proceeds of all Indebtedness Incurred in connection therewith) the Consolidated Leverage Ratio on the most recent Test Date did not exceed 4.5 to 1.0 and (C) Available Retained ECF would be a positive number if Available Retained ECF is reduced by the amount of Unsecured Notes redeemed, repurchased, defeased or otherwise prepaid.”

 

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(o) Section 8.10 of the Credit Agreement is amended by deleting clause (e) in its entirety and substituting the following new clause (e) therefor: “the Borrower and its Subsidiaries may pay accelerated management fees under the Management Agreement in an aggregate amount not exceeding $10,500,000 contemporaneously with the consummation of the initial registered public offering of voting Capital Stock of the Borrower, so long as no Default under Section 9(a) or (f) has occurred and is continuing (it being acknowledged and agreed that no additional management fees under the Management Agreement shall be permitted to be paid thereafter);”

(p) Section 8.10 of the Credit Agreement is amended by deleting the word “Holdings” in clauses (c), (d), (i) and (j) thereof and substituting the words “the Borrower” therefor;

(q) Section 8.10 of the Credit Agreement is amended by deleting the word “and” at the end of clause (i) thereof, deleting the period at the end of clause (j), inserting the word “;and” at the end of clause (j) hereof and inserting the following new clause (k) at the end thereof: “(k) the execution, delivery and performance of the amendments to the stockholders’ agreements and registration rights agreement of the Borrower entered into in connection with the initial registered public offering of voting Capital Stock of the Borrower in form and substance reasonably acceptable to the Administrative Agent.”

(r) Section 9 of the Credit Agreement is amended by

(i) deleting the words “Holdings and” in clause (c) thereof;

(ii) deleting clause (k) thereof in its entirety and substituting the following new clause (k) therefor:

“(k) (i) (x) the Permitted Investors shall in the aggregate be the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of shares of voting Capital Stock having less than 35% of the total voting power of all outstanding shares of the Borrower, and (y) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than one or more Permitted Investors, shall be the “beneficial owner” of shares of voting Capital Stock having more than 25% of the total voting power of all outstanding shares of the Borrower; (ii) the board of directors of the Borrower shall cease to consist of a majority of Continuing Directors; or (iii) a Specified Change of Control shall occur and the Borrower delivers or is required to deliver a change of control notice to any of the holders or lenders pursuant to any of the Unsecured Notes.”

(iii) deleting the word “;or” at the end of clause (k) thereof and substituting a period (“.”) therefor;

(iv) deleting clause (l) thereof in its entirety.

(s) Section 10.7 of the Credit Agreement is amended by deleting each instance of the words “Holdings or” in their entirety.

 

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(t) Section 11.2(a) of the Credit Agreement is amended by deleting the notice information for the Administrative Agent in its entirety and substituting the following notice information therefor:

 

“The Administrative Agent:		JPMorgan Chase Bank, N.A. 10 South Dearborn, Floor 07 Chicago, IL, 60603-2003 Attention: Mouy Lim Telephone: (312) 732-2024 Facsimile: (312) 385-7103 Email: muoy.lim@jpmchase.com   with a copy to:   Eugene Mazzaro, Esq. Latham & Watkins LLP 885 Third Avenue New York, NY 10022 Telephone: (212) 906-1763 Facsimile: (212) 751-4864 Email: eugene.mazzaro@lw.com”

(u) Section 11.6(a) of the Credit Agreement is amended by (i) deleting each instance of the words “Holdings and” in their entirety and (ii) deleting the words “any of their respective” in clause (i) thereof and substituting the word “its” therefor.

(v) Section 11.7(b) of the Credit Agreement is amended by deleting each instance of the words “Holdings and” and “Holdings or” in their entirety.

(w) The annexes of the Credit Agreement are amended by deleting Annex A in its entirety.

SECTION 2. Amendments to Guarantee and Collateral Agreement. On the terms and subject to the conditions set forth herein,

(a) the preamble of the Guarantee and Collateral Agreement is amended by inserting the words “other than Holdings” immediately after the words “each of the signatories hereto”.

(b) Section 2.2 of the Guarantee and Collateral Agreement is amended by (i) deleting clause (b) thereof in its entirety and substituting the words “Reserved.” therefor and (ii) deleting the words “and from Holdings” in clause (c)(i) thereof.

(c) Section 4.1 of the Guarantee and Collateral Agreement is amended by deleting the words “or Holdings’ knowledge” in their entirety.

(d) Section 5.6 of the Guarantee and Collateral Agreement is amended by inserting the words “(or such shorter period as may be agreed by the Administrative Agent in its sole discretion)” immediately after the words “10 days’ prior written notice to the Administrative Agent” in clause (a)(ii) thereof.

SECTION 3. Conditions to Effectiveness. The amendments contained in Section 1 and Section 2 shall be effective upon satisfaction of each of the following conditions precedent:

(a) The Administrative Agent shall have received original, electronic or facsimile counterparts of this Amendment duly executed and delivered by Lenders constituting the Required Lenders and shall have received counterparts of this Amendment executed by Holdings, the Borrower and counterparts of the Consent appended hereto as Exhibit A (the “Consent”) executed by the Grantors, as defined in the Guarantee and Collateral Agreement (the “Grantors”);

 

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(b) The Administrative Agent shall have received a counterpart to that certain Fee Letter (“Fee Letter”) dated as of even date herewith, by and between the Administrative Agent and the Borrower, executed and delivered by the Borrower, and all fees and expense reimbursements (including, without limitation, fees and expenses of counsel to the Agents and any invoiced fees and expenses payable under the Fee Letter) under the Fee Letter and the Loan Documents shall have been paid;

(c) The Administrative Agent shall have received from the Borrower, for account of each Lender which delivers its original, electronic or facsimile signature page to this Amendment no later than 5:00 p.m. (New York City time) on October 23, 2009 (the “Cutoff Date”), payment of an amendment fee (which shall be fully earned, non-refundable, and payable on Second Amendment Effective Date (under and as defined in the Credit Agreement, after giving effect to this Amendment)) equal to 25 basis points (0.25%) of the aggregate outstanding amount of Term Loans and Revolving Commitments of such Lender as of the Cutoff Date (and, for the avoidance of doubt, prior to giving effect to any optional prepayment made pursuant to Section 4.1(a) of the Credit Agreement as contemplated by this Amendment);

(d) On or after the date hereof, the Borrower shall have made an optional prepayment of a portion of the Term Loans in an aggregate principal amount no less than $250,000,000 pursuant to Section 4.1(a) of the Credit Agreement;

(e) On or after October 23, 2009, the Borrower shall have irrevocably terminated a portion of the Revolving Commitments in an aggregate principal amount equal to not less than $50,000,000 pursuant to Section 3.6 of the Credit Agreement and made any required prepayments on account thereof in accordance with Section 4.2(f) of the Credit Agreement; and

(f) The Borrower shall have consummated the initial registered public offering of voting Capital Stock of the Borrower and shall have received gross proceeds therefrom of not less than $300,000,000.

SECTION 4. Representations and Warranties. The Borrower represents and warrants that:

(a) Authority. The Borrower has the requisite power and authority to execute, deliver and perform its obligations under this Amendment and the Credit Agreement as amended hereby. Each Grantor has the requisite power and authority to execute, deliver and perform its obligations under the Consent and the Loan Documents, as amended hereby. The execution, delivery and performance by the Borrower of this Amendment and by the Grantors of the Consent, and the performance by each Loan Party of each Loan Document (as amended hereby) to which it is a party have been duly approved by all necessary organizational action of such Loan Party.

(b) Enforceability. This Amendment has been duly executed and delivered by the Borrower and the Consent has been duly executed and delivered by each Grantor. When the conditions to effectiveness in Section 3 of this Amendment have been satisfied, each of this Amendment, the Consent and each Loan Document (as amended hereby) is the legal, valid and binding obligation of each Loan Party party thereto, enforceable against such Loan Party in accordance with its terms except as

 

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enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought in proceedings in equity or at law).

(c) Representations and Warranties. The representations and warranties made by any Loan Party in or pursuant to the Loan Documents are true and correct in all material respects on and as of the date hereof as if made on and as of such date, except to the extent that such representations and warranties refer to an earlier date (in which case they are true and correct in all material respects as of such earlier date).

(d) No Default. No Default or Event of Default shall have occurred and be continuing on the date hereof or after giving effect to this Amendment.

SECTION 5. Reference to and Effect on the Loan Documents.

(a) If and when this Amendment becomes effective, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended hereby.

(b) If and when this Amendment becomes effective, each reference in the Guarantee and Collateral Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Guarantee and Collateral Agreement, and each reference in the other Loan Documents to “the Guarantee and Collateral Agreement”, “thereunder”, “thereof” or words of like import referring to the Guarantee and Collateral Agreement, shall mean and be a reference to the Guarantee and Collateral Agreement as amended hereby.

(c) The Credit Agreement and the Guarantee and Collateral Agreement, each as amended hereby and the other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed. Without limiting the generality of the foregoing, the Security Documents and all of the Collateral described therein do and shall continue to secure the payment of all Obligations under and as defined in the Credit Agreement, as amended hereby.

(d) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of any Lender or Agent under any of the Loan Documents or constitute, except as expressly set forth herein, a waiver or amendment of any provision of any of the Loan Documents.

(e) This Amendment is a Loan Document. The provisions of Sections 11.12 and 11.16 of the Credit Agreement shall apply with like effect to this Amendment.

SECTION 6. Releases. The Required Lenders hereby authorize and direct the Administrative Agent to execute the release attached substantially in the form set forth on Exhibit B hereto (the “Release”), releasing Holdings from its respective present and future obligations as a Guarantor under the Guarantee and Collateral Agreement and otherwise under the Credit Agreement and other Loan Documents and releasing the Administrative Agent’s Liens and security interests granted pursuant to the Guarantee and Collateral Agreement over the assets of Holdings (the “Released Collateral”). The release of Liens and delivery of pledged collateral provided for in the Release will not discharge or in any manner affect or impair the enforceability of the Obligations or other Liens of the Administrative Agent in any Collateral other than the Released Collateral.

 

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SECTION 7. Counterparts. This Amendment (including all consents and authorizations relating hereto) and the Consent may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment (or any consent or authorization relating hereto) or the Consent by electronic transmission or facsimile shall be effective and enforceable as delivery of a manually executed counterpart thereof. The Administrative Agent will not have any responsibility for determining whether (and makes no representation as to whether) any such counterpart has been duly authorized, executed or delivered or is enforceable against any party hereto.

SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 9. Resignation of Bear Stearns Corporate Lending Inc. Pursuant to Section 10.9 of the Credit Agreement, the Resigning Agent hereby delivers notice that Resigning Agent intends to resign as Administrative Agent under the Credit Agreement and the Loan Documents. The Borrower and the Required Lenders consent to Successor Agent acting as successor Administrative Agent and appoint Successor Agent as successor to Resigning Agent in its capacity as Administrative Agent, (b) Successor Agent shall succeed to the rights, powers and duties of the Administrative Agent as set forth in the Credit Agreement and the Loan Documents, (c) Resigning Agent shall assign to Successor Agent all its rights and obligations and other interests (collectively, the “Interests”) as Administrative Agent under the Credit Agreement and the Loan Documents and Successor Agent hereby assumes the Interests, (d) all of the Loan Documents shall be amended to delete all instances of the words “Bear Stearns Corporate Lending Inc.” in its entirety, and substitute the words “JPMorgan Chase Bank, N.A.” therefor, (e) Resigning Agent shall be released from all duties and obligations other than as set forth herein, (f) in furtherance of the assignment herein of Resigning Agent’s security interest in the property and assets of the Borrower (the “Collateral”) under the Credit Agreement and the Loan Documents, Resigning Agent and the Borrower hereby agrees to execute and deliver, and the Borrower agrees to cause any applicable Loan Parties to execute and deliver, such other documents, certificates and instruments as Successor Agent shall reasonably request in order to perfect and protect Successor Agent’s interest in such security interests and (g) for such time as any Collateral shall be in the physical possession or effective control of Resigning Agent, in accounts of Resigning Agent, subject to “control agreements” for the benefit of Resigning Agent as secured party, or subject to a financing statement in the name of Resigning Agent , as secured party, Resigning Agent hereby agrees to act as collateral agent and gratuitous bailee for and on behalf of Successor Agent, to hold all of the Collateral for and on behalf of Successor Agent and to take all instructions from Successor Agent regarding the Collateral. The Required Lenders hereby waive any notice period under Section 10.9 required before the resignation by Resigning Agent as Administrative Agent may become effective.

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first written above.

 

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Required Lenders:

 

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SCHEDULE A

HISCOX INSURANCE COMPANY (BERMUDA) LTD

HISCOX SYNDICATE 33

STELLAR PERFORMER GLOBAL SERIES W - GLOBAL CREDIT

UMC BENEFIT BOARD, INC.

WELLINGTON TRUST COMPANY, NATIONAL ASSOCIATION MULTIPLE

COMMON TRUST FUNDS TRUST—OPPORTUNISTIC FIXED INCOME

ALLOCATION PORTFOLIO

WELLINGTON TRUST COMPANY, NATIONAL ASSOCIATION MULTIPLE

COMMON TRUST FUNDS TRUST—OPPORTUNISTIC INVESTMENT PORTFOLIO

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Asset Manager: Nomura Corporate Research and Asset Management Inc.

Sagittarius Fund

By: Nomura Corporate Research and Asset Management Inc. as Investment Advisor

Stichting Pensioenfonds Hoogovens

By: Nomura Corporate Research and Asset Management Inc. as Investment Advisor

The Regents of the University of California - # EB6J

By: Nomura Corporate Research and Asset Management Inc. as Investment Advisor

California Public Employees’ Retirement System, Account - # SW7Y

By: Nomura Corporate Research and Asset Management Inc. as Investment Advisor

GMAM Investment Funds Trust - # 7MS7

By: Nomura Corporate Research and Asset Management Inc. as Investment Advisor

Nomura US Attractive Yield Corporate Bond Fund Mother Fund

By: The Nomura Trust and Banking Co., Ltd as Trustee

By: Nomura Corporate Research and Asset Management Inc., Attorney in Fact

 

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EXHIBIT A

CONSENT

Dated as of October 23, 2009

The undersigned, as Grantors under the Guarantee and Collateral Agreement and, as applicable, as parties to the other Security Documents, hereby consent and agree to the foregoing Second Amendment dated as of October 23, 2009 (the “Second Amendment”), by and between the Borrower and the Lenders party thereto, and hereby confirm and agree that (i) each of the Guarantee and Collateral Agreement and the other Security Documents is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects except that, upon the effectiveness of, and on and after the date of, said Second Amendment, each reference therein to the “Credit Agreement”, “thereunder”, “thereof” and words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement as amended by said Second Amendment and (ii) the Guarantee and Collateral Agreement, the other Security Documents and all of the Collateral described in the foregoing do, and shall continue to, secure the payment and performance of all of the Obligations as defined in the Guarantee and Collateral Agreement, after giving effect to said Second Amendment.

[Signature pages follow]

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