CREDIT AGREEMENT, dated as of August 17, 1999, among CONCENTRA
MANAGED CARE, INC., a Delaware corporation ("HOLDINGS"), CONCENTRA OPERATING
CORPORATION, a Nevada corporation (the "BORROWER"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "LENDERS"), THE CHASE MANHATTAN BANK ("CHASE"), as administrative agent,
CREDIT SUISSE FIRST BOSTON ("CSFB") and FLEET NATIONAL BANK ("FLEET"), as
co-documentation agents, and DLJ CAPITAL FUNDING, INC. ("DLJ"), as syndication
agent.
RECITALS
A. WHEREAS, Welsh, Carson, Anderson & Stowe VIII, L.P., together
with its Affiliates (collectively, the "SPONSOR"), proposes to acquire and
effect the recapitalization (the "ACQUISITION") of Holdings through a
wholly-owned subsidiary, Yankee Acquisition Corp. ("NEWCO"). The acquisition and
recapitalization will be effected by a merger of Newco with and into Holdings,
as a result of which the Sponsor, together with Chase Capital Partners,
affiliates of Donaldson, Lufkin & Jenrette Securities Corporation, and certain
members of management of Holdings (collectively, the "OTHER INVESTORS") will own
approximately 93% of the common stock of Holdings and Ferrer Freeman Thompson &
Co., LLC, together with its affiliates ("AFFT") will own approximately 7% of
such common stock. The existing stockholders of Holdings, other than the
Sponsor, the Other Investors and FFT will receive cash consideration in exchange
for their common stock in Holdings.
B. WHEREAS, in order to finance a portion of the purchase price
of, and to pay and reimburse certain costs and expenses incurred in connection
with, the acquisition and recapitalization of Holdings, and to provide for
certain ongoing working capital needs of the Borrower and its Subsidiaries,
Holdings and the Borrower desire to obtain financing through (i) the issuance of
senior discount debentures by Holdings for an aggregate principal amount of not
more than $110,000,000, (ii) the issuance of senior subordinated notes by the
Borrower for an aggregate principal amount of not more than $190,000,000 and
(iii) the incurrence of senior secured Indebtedness of an aggregate principal
amount of not more than $475,000,000 by entering into this Agreement with the
Lenders hereto.
C. NOW, THEREFORE, in consideration of the mutual provisions,
covenants and agreements herein contained, the parties hereto hereby agree as
follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ABR": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall mean the rate of
interest per annum publicly announced from time to time by the Reference Lender
as its prime rate in effect at its principal office in New York City (the Prime
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Rate not being intended to be the lowest rate of interest charged by the
Reference Lender in connection with extensions of credit to debtors). Any change
in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective as of the opening of business on the effective day of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"ABR LOANS": Loans the rate of interest applicable to which is
based upon the ABR.
"ACQUISITION": as defined in the Recitals hereto.
"ACQUISITION AGREEMENT": the Agreement and Plan of Merger, dated
as of March 2, 1999, as amended, by and between Newco and Holdings (prior to the
Acquisition).
"ACQUISITION CAPITAL EXPENDITURES": for any period, with respect
to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition of fixed or capital assets in Permitted
Acquisitions that should be capitalized under GAAP on a consolidated balance
sheet of such Person and its Subsidiaries.
"ACQUISITION DOCUMENTATION": collectively, the Acquisition
Agreement and all schedules, exhibits and annexes thereto and all side letters
and agreements affecting the terms thereof or entered into in connection
therewith, in each case as amended, supplemented or otherwise modified from time
to time in accordance with Section 7.16.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": Chase, together with its affiliates as
the administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its permitted successors hereunder.
"AFFILIATE": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person, other than any Professional Association and, until any Development
Corporation has become a Subsidiary of the Borrower, such Development
Corporation. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGENTS": the collective reference to the Syndication Agent, the
Co-Documentation Agents and the Administrative Agent.
"AGGREGATE EXPOSURE": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the
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Revolving Commitments have been terminated, the amount of such Lender's
Revolving Extensions of Credit then outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the Aggregate Exposure of all Lenders at such time.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"APPLICABLE MARGIN": for each Type of Loan, the rate per annum
set forth under the relevant column heading below:
Abr Loans Eurodollar Loans
--------- ----------------
Revolving Loans 1.75% 2.75%
Tranche B Term Loans 2.25% 3.25%
Tranche C Term Loans 2.50% 3.50%
; provided, that on and after the first Adjustment Date occurring after the
completion of four full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Loans will be determined
pursuant to the Pricing Grid.
"APPLICATION": an application, in such form as the Issuing Lender
may specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"ASSET SALE": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c) or (d) of Section 7.5).
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance,
substantially in the form of Exhibit D.
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE REVOLVING COMMITMENT": as to any Revolving Lender at
any time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect OVER (b) such Lender's Revolving Extensions of Credit
then outstanding.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"BORROWER": as defined in the preamble hereto.
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"BORROWING DATE": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close, PROVIDED, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"CAPITAL EXPENDITURES": for any period, with respect to any
Person, the sum of all Maintenance Capital Expenditures and Acquisition Capital
Expenditures by such Person and its Subsidiaries.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued by,
or unconditionally guaranteed by, the United States government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of acquisition
issued by any Lender or by any commercial bank organized under the laws of the
United States or any state thereof having combined capital and surplus of not
less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Ratings Services ("S&P") or P-1 by Moody's Investors Service,
Inc. ("MOODY'S"), or carrying an equivalent rating by a nationally recognized
rating agency, if both of the two named rating agencies cease publishing ratings
of commercial paper issuers generally, and maturing within one year from the
date of acquisition; (d) repurchase obligations of any Lender or of any
commercial bank satisfying the requirements of clause (b) of this definition,
having a term of not more than 90 days, with respect to securities issued or
fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, commonwealth or territory of the United States, by any
political subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or foreign
government (as the case may be) are rated at least A by S&P or A by Moody's; (f)
securities with
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maturities of one year or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; or (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"CHASE": as defined in the preamble hereto.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied, which date is August 17, 1999.
"CODE": the Internal Revenue Code of 1986, as amended from time
to time.
"CO-DOCUMENTATION AGENTS": CSFB and Fleet, together with their
respective affiliates, as co-documentation agents under this Agreement and the
other Loan Documents, together with any of their respective successors.
"CO-LEAD ARRANGERS": Chase Securities Inc. and DLJ, together with
their respective affiliates, as co-lead arrangers and joint book managers for
the Facilities, together with any of their respective successors.
"COLLATERAL": all of the property of the Loan Parties, now owned
or hereafter acquired (including, without limitation, any amount deposited in
the Escrow Account), upon which a Lien is purported to be created by any
Security Document.
"COMMITMENT": as to any Lender, the sum of the Tranche B Term
Commitment, the Tranche C Term Commitment and the Revolving Commitment of such
Lender.
"COMMITMENT FEE RATE": 2 of 1% per annum, provided, that on and
after the first Adjustment Date occurring after the completion of four full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group that includes the Borrower and
that is treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential
Information Memorandum dated April 1999 and furnished to the Lenders.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts (other
than cash and Cash Equivalents) that would, in conformity with GAAP, be set
forth opposite the caption "total
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current assets" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date.
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption A total
current liabilities" (or any like caption) on a consolidated balance sheet of
the Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Funded Debt of the Borrower and its Subsidiaries and (b) without
duplication of clause (a) above, all Indebtedness consisting of Revolving Loans
to the extent otherwise included therein.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income
for such period PLUS, without duplication and to the extent reflected as a
charge in the statement of such Consolidated Net Income for such period, the sum
of (a) income tax expense, (b) interest expense, amortization or writeoff of
debt discount and debt issuance costs and commissions, discounts and other fees
and charges associated with Indebtedness (including the Loans), (c) depreciation
and amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring non-cash expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, non-cash losses on sales of assets outside of the ordinary
course of business), (f) fees and expenses and other costs and charges incurred
or reserved, and any other charges required by the SEC to be taken, in
connection with the consummation of the Acquisition, (g) cash charges incurred
or reserved during the fourth fiscal quarter of 1998 in connection with the
closing of facilities and payment of severance to employees and other related
items in an aggregate amount of up to $14,000,000, (h) losses attributable to
the Development Corporations set forth on Schedule 1.1B upon acquisition thereof
by the Borrower or any of its Subsidiaries, (i) cash dividends or similar
distributions paid to owners (other than the Borrower and its Subsidiaries) of
Permitted Joint Ventures in an aggregate amount not to exceed $3,000,000 in each
fiscal year, and (j) any other non-cash charges, and MINUS, to the extent
included in the statement of such Consolidated Net Income for such period, the
sum of (a) interest income, (b) any extraordinary, unusual or non-recurring
income or gains (including, whether or not otherwise includable as a separate
item in the statement of such Consolidated Net Income for such period, gains on
the sales of assets outside of the ordinary course of business) and (c) any
other non-cash income, all as determined on a consolidated basis. For the
purposes of calculating Consolidated EBITDA for any period of four consecutive
fiscal quarters (each, a "Reference Period") pursuant to any determination of
the Consolidated Leverage Ratio, (i) if at any time during such Reference Period
the Borrower or any Subsidiary shall have made any Material Disposition, the
Consolidated EBITDA for such Reference Period shall be reduced by an amount
equal to the Consolidated EBITDA (if positive) attributable to the property that
is the subject of such Material Disposition for such Reference Period or
increased by an amount equal to the Consolidated EBITDA (if negative)
attributable thereto for such Reference Period and (ii) if during such Reference
Period the Borrower or any Subsidiary shall have made a Material Acquisition
(other than the acquisition of any of the Development Corporations listed on
Schedule 1.1B), Consolidated EBITDA for such Reference Period shall be
calculated after giving PRO FORMA effect thereto as if such Material Acquisition
occurred on the first day of such Reference Period. As used in this definition,
"Material Acquisition" means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets
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comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (b)
involves the payment of consideration by the Borrower and its Subsidiaries in
excess of $3,000,000; and AMaterial Disposition" means any Disposition of
property or series of related Dispositions of property that (x) constitutes
assets comprising all or substantially all of an operating unit of a business or
constitutes all or substantially all of the common stock of a Person and (y)
yields gross proceeds to the Borrower or any of its Subsidiaries in excess of
$3,000,000.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the
ratio of (a) the sum of Consolidated EBITDA for such period and Consolidated
Lease Expense for such period to (b) Consolidated Fixed Charges for such period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b)
Consolidated Lease Expense for such period, (c) scheduled payments made during
such period on account of principal of Indebtedness of the Borrower or any of
its Subsidiaries (including scheduled principal payments in respect of the Term
Loans and payments of Revolving Loans accompanying scheduled reductions of the
Revolving Commitments), (d) Maintenance Capital Expenditures for such period not
financed by Indebtedness permitted pursuant to Section 7.2(e) or (i) and (e) the
aggregate amount of income taxes for which provision is made by the Borrower and
its Subsidiaries for such period.
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Interest Expense
for such period.
"CONSOLIDATED INTEREST EXPENSE": for any period, total cash
interest expense (including that attributable to Capital Lease Obligations), net
of cash interest income, of the Borrower and its Subsidiaries for such period
with respect to all outstanding Indebtedness of the Borrower and its
Subsidiaries (including all commissions, discounts and other fees and charges
owed with respect to letters of credit and bankers' acceptance financing and net
costs under Hedge Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP but excluding net
payments received under Hedge Agreements).
"CONSOLIDATED LEASE EXPENSE": for any period, the aggregate
amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries for such period with respect to leases of real and personal
property, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO": as at the last day of any period,
the ratio of (a) Consolidated Total Debt on such day to (b) Consolidated EBITDA
for such period.
"CONSOLIDATED NET INCOME": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a
8
Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries has
an ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar
distributions and (c) the undistributed earnings of any Subsidiary of the
Borrower to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any Contractual Obligation (other than under any Loan Document) or Requirement
of Law applicable to such Subsidiary.
"CONSOLIDATED TOTAL DEBT": at any date, the aggregate principal
amount of all Indebtedness of the Borrower and its Subsidiaries at such date,
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL": at any date, the excess of
Consolidated Current Assets on such date OVER Consolidated Current Liabilities
on such date.
"CONTINUING DIRECTORS": the directors of Holdings on the Closing
Date, after giving effect to the Transactions and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of Holdings is
recommended by at least a majority of the then Continuing Directors (PROVIDED,
that the act or vote of a majority of the directors is sufficient to constitute
such act or vote as that of the board of directors of Holdings, otherwise, such
nomination for election of directors of Holdings shall be by at least the
requisite number of the then Continuing Directors as is required therefor) or
such other director receives the vote of the Permitted Investors in his or her
election by the shareholders of Holdings.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"CONTRIBUTION": as defined in Section 5.1(b).
"CONTROL INVESTMENT AFFILIATE": as to any Person, any other
Person that (a) directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person and (b) is organized by such Person
primarily for the purpose of making equity or debt investments in one or more
companies. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"CONVERTIBLE SUBORDINATED NOTES": (a) 6% Convertible Subordinated
Notes, in an aggregate principal amount of $97,750,000, due 2001 issued by
Occusystems Inc. (and subsequently assumed by Holdings) on December 24, 1996 and
(b) 4.5% Convertible Subordinated Notes, in an aggregate principal amount of
$230,000,000, due 2003 issued by Holdings on March 16, 1998.
"CSFB": as defined in the preamble hereto.
9
"DEFAULT": any of the events specified in Section 8, whether or
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DESIGNATED LENDER": as defined in Section 5.1(a).
"DEVELOPMENT CORPORATION": any corporation, association, limited
liability company or other business (other than a partnership) listed on
Schedule 1.1B, managed by the Borrower, but owned by a Person (who is not the
Borrower or an Affiliate or a Subsidiary of the Borrower), and engaged in the
development of occupational health centers.
"DISPOSITION": with respect to any property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms "Dispose" and "DISPOSED OF" shall have correlative meanings.
"DLJ": as defined in the preamble hereto.
"DOLLARS" and "$": dollars in lawful currency of the United
States.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower organized
under the laws of any jurisdiction within the United States.
"ECF PERCENTAGE": 50%.
"ENVIRONMENTAL LAWS": any and all foreign, Federal, state, local
or municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment or of human health
as affected by the environment as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ESCROW ACCOUNT": as defined in Section 5.1(c).
"ESCROW AGENT": Chase, as the escrow agent under the Escrow
Agreement.
"ESCROW AGREEMENT": the Escrow Agreement to be executed and
delivered by Holdings, the Borrower and the Escrow Agent, substantially in the
form of Exhibit E, as the same may be amended, supplemented or otherwise
modified from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having
10
jurisdiction with respect thereto) dealing with reserve requirements prescribed
for eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE": with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, the rate per annum determined
on the basis of the rate for deposits in Dollars for a period equal to such
Interest Period commencing on the first day of such Interest Period appearing on
Page 3750 of the Dow Jones Markets screen as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that
such rate does not appear on Page 3750 of the Dow Jones Markets screen (or
otherwise on such screen), the "EURODOLLAR BASE RATE" shall be determined by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the
absence of such availability, by reference to the rate at which the
Administrative Agent is offered Dollar deposits at or about 11:00 A.M., New York
City time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of
such Interest Period for the number of days comprised therein.
"EURODOLLAR LOANS": Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
EURODOLLAR BASE RATE
----------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar
Loans the then current Interest Periods with respect to all of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"EXCESS CASH FLOW": for any fiscal year of the Borrower, the
excess, if any, of (a) the sum, without duplication, of (i) Consolidated Net
Income for such fiscal year, (ii) an amount equal to the amount of all non-cash
charges (including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) decreases in Consolidated Working Capital for
such fiscal year, and (iv) an amount equal to the aggregate net non-cash loss on
the Disposition of property by the Borrower and its Subsidiaries during such
fiscal year (other than sales of inventory in the ordinary course of business),
to the extent deducted in arriving at such Consolidated Net Income OVER (b) the
sum, without duplication, of (i) an amount equal to the amount of all non-cash
credits included in arriving at such Consolidated Net Income, (ii) the aggregate
amount actually paid by the Borrower and its Subsidiaries in cash during such
fiscal
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year on account of Maintenance Capital Expenditures, Acquisition Capital
Expenditures and, without duplication, Permitted Acquisitions (excluding the
principal amount of Indebtedness incurred to finance any such expenditures or
any such expenditures financed with the proceeds of any Reinvestment Deferred
Amount, any Asset Sale retained by the Borrower or any of its Subsidiaries
pursuant to Section 2.9(b) or any issuance of Capital Stock by the Borrower or
its Subsidiaries), (iii) the aggregate amount of all prepayments of Revolving
Loans during such fiscal year to the extent accompanying permanent optional
reductions of the Revolving Commitments and all optional prepayments of the Term
Loans during such fiscal year, (iv) the aggregate amount of all regularly
scheduled principal payments of Funded Debt (including the Term Loans) of the
Borrower and its Subsidiaries made during such fiscal year (other than in
respect of any revolving credit facility to the extent there is not an
equivalent permanent reduction in commitments thereunder), (v) increases in
Consolidated Working Capital for such fiscal year, (vi) an amount equal to the
aggregate net non-cash gain on the Disposition of property by the Borrower and
its Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, and (vii) without duplication, an amount equal to the
amount of all Restricted Payments actually paid by the Borrower or its
Subsidiaries pursuant to Section 7.6 during such fiscal year, including, without
limitation, management fees paid by the Borrower or its Subsidiaries as set
forth in Section 7.6(b).
"EXCESS CASH FLOW APPLICATION DATE": as defined in Section
2.9(c).
"EXCHANGE ACT": as defined in Section 8(k).
"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in respect
of which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.
"FACILITY": each of (a) the Tranche B Term Commitments and the
Tranche B Term Loans made thereunder (the "TRANCHE B TERM FACILITY"), (b) the
Tranche C Term Commitments and the Tranche C Term Loans made thereunder (the
"TRANCHE C TERM FACILITY") and (c) the Revolving Commitments and the extensions
of credit made thereunder (the "REVOLVING Facility").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"FFT": as defined in the Recitals hereto.
"FLEET": as defined in the preamble hereto.
12
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is not
a Domestic Subsidiary.
"FUNDED DEBT": as to any Person, all Indebtedness of such Person
that matures more than one year from the date of its creation or matures within
one year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of the Borrower, Indebtedness in respect of the
Loans.
"FUNDING OFFICE": the office of the Administrative Agent
specified in Section 10.2 or such other office as may be specified from time to
time by the Administrative Agent as its funding office by written notice to the
Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United
States as in effect from time to time, except that for purposes of Section 7.1,
GAAP shall be determined on the basis of such principles in effect on the date
hereof and consistent with those used in the preparation of the most recent
audited financial statements delivered pursuant to Section 4.1(b). In the event
that any "Accounting Change" (as defined below) shall occur and such change
results in a change in the method of calculation of financial covenants,
standards or terms in this Agreement, then the Borrower and the Administrative
Agent agree to enter into negotiations in order to amend such provisions of this
Agreement so as to equitably reflect such Accounting Changes with the desired
result that the criteria for evaluating the Borrower's financial condition shall
be the same after such Accounting Changes as if such Accounting Changes had not
been made. Until such time as such an amendment shall have been executed and
delivered by the Borrower, the Administrative Agent and the Required Lenders,
all financial covenants, standards and terms in this Agreement shall continue to
be calculated or construed as if such Accounting Changes had not occurred.
"Accounting Changes" refers to changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants or, if applicable, the SEC.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"GRANTING BANK": as defined in Section 10.6(d).
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and
Collateral Agreement to be executed and delivered by Holdings, the Borrower and
each Subsidiary Guarantor, substantially in the form of Exhibit A, as the same
may be amended, supplemented or otherwise modified from time to time.
13
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another Person
(including any bank under any letter of credit) to induce the creation of which
the guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY OBLIGATIONS")
of any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (1) for the purchase or payment of any such primary obligation or
(2) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the owner of any such primary obligation against loss in respect
thereof; PROVIDED, HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable (or is limited
to certain property or the value thereof), in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the board of directors
of the Borrower in good faith or, with respect to any property, the fair market
value of such property or, if such fair market value is not readily
determinable, the maximum value of such property as determined by the board of
directors of the Borrower in good faith.
"GUARANTORS": the collective reference to Holdings and the
Subsidiary Guarantors.
"HEDGE AGREEMENTS": all interest rate swaps, caps or collar
agreements or similar arrangements providing for protection against fluctuations
in interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"HOLDINGS": as defined in the preamble hereto.
"INDEBTEDNESS": of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such
14
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations of such Person, (f) all obligations
of such Person, contingent or otherwise, as an account party under acceptance,
letter of credit or similar facilities, (g) the liquidation value of all
mandatorily redeemable preferred Capital Stock of such Person, (h) all Guarantee
Obligations of such Person in respect of obligations of the kind referred to in
clauses (a) through (g) above; (i) all obligations of the kind referred to in
clauses (a) through (h) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be secured by) any
Lien on property (including accounts and contract rights) owned by such Person,
whether or not such Person has assumed or become liable for the payment of such
obligation; and (j) for the purposes of Section 8(e) only, all obligations of
such Person in respect of Hedge Agreements. With respect to any obligations for
which recourse is limited to certain property or the value thereof, the amount
of such Person's Indebtedness shall be the fair market value of such property
or, if such fair market value is not readily determinable, the maximum value of
such property as determined by the board of directors of the Borrower in good
faith. In calculating Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis for any purpose herein, any Guarantee Obligation of the
Borrower or any Subsidiary in respect of any other Indebtedness of the Borrower
or any Subsidiary shall be disregarded.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to sue at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, quarterly in
arrears on the last day of each quarter following the Closing Date while such
Loan is outstanding and the final maturity date of such Loan, (b) as to any
Eurodollar Loan having an Interest Period of three months or less, the last day
of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day of such
Interest Period and (d) as to any Loan (other than any Revolving Loan that is an
ABR Loan), the date of any repayment or prepayment made in respect thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as
15
selected by the Borrower by irrevocable notice to the Administrative Agent not
less than three Business Days prior to the last day of the then current Interest
Period with respect thereto; PROVIDED that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately preceding
Business Day;
(ii) the Borrower may not select an Interest Period under
a particular Facility that would extend beyond the Scheduled Revolving
Termination Date or beyond the date final payment is due on the Tranche
B Term Loans or the Tranche C Term Loans, as the case may be;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not
to require a payment or prepayment of any Eurodollar Loan during an
Interest Period for such Loan.
"INVESTMENTS": as defined in Section 7.8.
"IPO": the issuance by Holdings of shares of its common stock to
the public pursuant to a bona fide underwritten public offering, resulting in at
least 15% of Holdings of outstanding shares of common stock having been issued
to the public by Holdings.
"ISSUING LENDER": Chase, in its capacity as issuer of any Letter
of Credit.
"L/C COMMITMENT": $25,000,000.
"L/C FEE PAYMENT DATE": the last day of each quarter following
the Closing Date and the last day of the Revolving Commitment Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a)
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Revolving
Lenders other than the Issuing Lender.
"LENDERS": as defined in the preamble hereto.
16
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents and the
Notes, if any.
"LOAN PARTIES": Holdings, the Borrower and each Subsidiary of the
Borrower that is a party to a Loan Document.
"MAINTENANCE CAPITAL EXPENDITURES": for any period, with respect
to any Person, the aggregate of all expenditures by such Person and its
Subsidiaries for the acquisition or leasing (pursuant to a capital lease) of
fixed or capital assets (other than fixed or capital assets acquired in
Permitted Acquisitions) or additions to, and development of, equipment, computer
system, hardware and software (including replacements, capitalized repairs and
improvements during such period) that should be capitalized as fixed or capital
assets under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
"MAJORITY FACILITY LENDERS": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Facility,
prior to any termination of the Revolving Commitments, the holders of more than
50% of the Total Revolving Commitments).
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
Acquisition and the other Transactions, (b) the business, property, operations,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole or (c) the validity or enforceability of this
Agreement or any of the other Loan Documents.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation, and any other substance the presence of or
exposure to which could reasonably be expected to result in liability under any
applicable Environmental Law.
"MORTGAGES": each of the mortgages and deeds of trust which shall
be made by any Loan Party in favor of, or for the benefit of, the Administrative
Agent for the benefit of the
17
Lenders, upon acquisition of any real property by Holdings, the Borrower or any
of its Subsidiaries after the Closing Date pursuant to Section 6.10(b).
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, other consultants' fees in connection therewith not already set forth
herein and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements), amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset that is the subject of such Asset Sale or Recovery Event (other than
any Lien pursuant to a Security Document) including amounts paid as penalties or
premiums on the repayment of such Indebtedness, amounts of any reserves
reasonably estimated to be paid out within eighteen months from the date of the
occurrence of such Asset Sale or Recovery Event that are directly attributable
to such event and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, other consultants' fees in
connection therewith not already set forth herein, underwriting discounts and
commissions, and other customary fees and expenses actually incurred in
connection therewith.
"NEWCO": as defined in the Recitals hereto.
"NON-EXCLUDED TAXES": as defined in Section 2.17(a).
"NON-EXECUTING PERSONS": as defined in Section 5.1(a).
"NON-U.S. LENDER": as defined in Section 2.17(d).
"NOTES": the collective reference to any promissory note
evidencing Loans.
"OBLIGATIONS": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding) the Loans and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender (or, in
the case of Hedge Agreements, any affiliate of any Lender), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Hedge Agreement
entered into with any Lender or any affiliate of any Lender or any other
document
18
made, delivered or given in connection herewith or therewith, whether on account
of principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including all reasonable fees, charges and disbursements of counsel to
the Administrative Agent or to any Lender that are required to be paid by the
Borrower pursuant hereto) or otherwise.
"OTHER REPRESENTATIVES": the collective reference to the
Syndication Agent, the Co-Documentation Agents and the Co-Lead Arrangers.
"OTHER INVESTORS": as defined in the Recitals hereto.
"OTHER TAXES": 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 hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARTICIPANT": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITTED ACQUISITION": any acquisition by the Borrower or a
Subsidiary of all or substantially all of the assets of, or all the Capital
Stock of, a Person or division or line of business of a Person if, immediately
after giving effect thereto, (a) no Default or Event of Default has occurred and
is continuing or would result therefrom, (b) all transactions related thereto
are consummated in accordance with applicable laws, except where any
non-compliance could not, singly or in the aggregate, reasonably be expected to
have a Material Adverse Effect, (c) all of the Capital Stock in each Subsidiary
formed for the purpose of or resulting from such acquisition shall be owned
directly by the Borrower or a Subsidiary of the Borrower and all actions
required to be taken with respect to such acquired or newly created Subsidiary
under Section 6.10 have been taken, (d) the Borrower and its Subsidiaries are in
compliance, on a pro forma basis as at the end of the last fiscal quarter of the
Borrower for which financial statements are available after giving effect to
such acquisition, with the covenants contained in Section 7.1 calculated as at
the last day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such acquisition (and any related
incurrence or repayment of Indebtedness, with any new Indebtedness being deemed
amortized over the applicable testing period in accordance with its terms, and
with any Revolving Loans borrowed in connection with such acquisition being
deemed to be repaid with excess cash balances as available) had occurred on the
first day of each relevant period for testing such compliance and (e) the
Borrower has delivered to the Administrative Agent an officers' certificate to
the effect set forth in clauses (a), (b), (c) and (d) above, together with all
relevant financial information for the Person or assets to be acquired.
"PERMITTED INVESTORS": the collective reference to the Sponsor
and its Control Investment Affiliates.
19
"PERMITTED JOINT VENTURE": with respect to the Borrower and any
one or more of its Subsidiaries (a) any corporation, association, limited
liability company or other business entity (other than a partnership) (i) of
which 50% or more of the total voting power of shares of Capital Stock entitled
(without regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time of determination owned or
controlled, directly or indirectly, by the Borrower or any one or more of its
Subsidiary Guarantors or a combination thereof and (ii) which is either managed
or controlled by the Borrower or any one or more of its Subsidiary Guarantors
and (b) any partnership of which (i) 50% or more of the general or limited
partnership interests are owned or controlled, directly or indirectly, by the
Borrower or any one or more of its Subsidiary Guarantors or a combination
thereof and (ii) which is either managed or controlled by the borrower or any
one or more of its Subsidiary Guarantors, and which in the case of each of
clauses (a) and (b), (i) is engaged in a business in which the Borrower and its
Subsidiaries are permitted to be engaged pursuant to Section 7.15 of this
Agreement (after giving effect to the Acquisition) or that are reasonably
related thereto, (ii) only incurs Indebtedness from the Borrower, (iii) cannot
enter into any Guarantee Obligation, and (iv) distributes all cash at least
annually (other than cash required to be reserved on its balance sheet in
accordance with GAAP consistent with past practice).
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an Aemployer" as defined in Section 3(5) of
ERISA.
"PRICING GRID": the pricing grid attached hereto as Annex A.
"PROFESSIONAL ASSOCIATION": any professional association or
professional corporation which employs physicians or other professionals to
provide health care services for the Borrower's and its Subsidiaries' and other
Affiliates' occupational and health services centers.
"PRO FORMA BALANCE SHEETS": as defined in Section 4.1(a).
"PROJECTIONS": as defined in Section 6.2(c).
"PROPERTIES": as defined in Section 4.17(a).
"PROXY STATEMENT": The proxy statement, dated July 16, 1999,
filed by Holdings with the SEC in connection with the Transactions.
"RECOVERY EVENT": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of Holdings, the Borrower or any of its Subsidiaries.
20
"REFERENCE LENDER": Chase.
"REFINANCING": as defined in Section 5.1(b).
"REGISTER": as defined in Section 10.6(e).
"REGULATION U": Regulation U of the Board as in effect from time
to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by Holdings, the Borrower or any
of their respective Subsidiaries in connection therewith that are not applied to
prepay the Term Loans or reduce the Revolving Commitments pursuant to Section
2.9(b) as a result of the delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Recovery Event in respect of which the
Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer stating that no Default or Event of Default has occurred and is
continuing and that the Borrower (directly or indirectly through a Subsidiary)
intends and expects to use all or a specified portion of the Net Cash Proceeds
of a Recovery Event to acquire, repair or replace assets useful in its business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended prior to the relevant Reinvestment Prepayment Date to acquire,
repair or replace assets useful in the Borrower's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such Reinvestment
Event and (b) the date on which the Borrower shall have determined not to, or
shall have otherwise ceased to, acquire, repair or replace assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"RELATED FUND": with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
21
"REPORTABLE EVENT": any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. 4043.
"REPURCHASE OFFER": as defined in Section 5.1(c).
"REPURCHASE PRICE": as defined in Section 5.1(c).
"REQUIRED LENDERS": at any time, the holders of more than 50% of
(a) until the Closing Date, the Commitments then in effect and (b) thereafter,
the sum of (i) the aggregate unpaid principal amount of the Term Loans then
outstanding and (ii) the Total Revolving Commitments then in effect or, if the
Revolving Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president or
chief financial officer of the Borrower or Holdings, as applicable, but in any
event, with respect to financial matters, the chief financial officer of the
Borrower or Holdings, as applicable.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING COMMITMENT": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and Letters of Credit in an aggregate
principal and/or face amount not to exceed the amount set forth under the
heading ARevolving Commitment" opposite such Lender's name on Schedule 1.1A or
in the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original amount of the Total Revolving Commitments is $100,000,000.
"REVOLVING COMMITMENT PERIOD": the period from and including the
Closing Date to the Scheduled Revolving Termination Date.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding and (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding.
"REVOLVING LENDER": each Lender that has a Revolving Commitment
or that holds Revolving Loans.
"REVOLVING LOANS": as defined in Section 2.4(a).
22
"REVOLVING PERCENTAGE": as to any Revolving Lender at any time,
the percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding).
"SCHEDULED REVOLVING TERMINATION DATE": August 17, 2005.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"SECURITY DOCUMENTS": the collective reference to the Guarantee
and Collateral Agreement, Mortgages, if applicable, and all other security
documents hereafter delivered to the Administrative Agent granting a Lien on any
property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document.
"SENIOR DISCOUNT DEBENTURES": the $110,000,000 14% Senior
Discount Debentures due 2010 issued by Holdings on the Closing Date to various
purchasers arranged by the Sponsor, together with warrants to purchase Capital
Stock of Holdings.
"SENIOR DISCOUNT DEBENTURE INDENTURE": the indenture entered into
by Holdings in connection with the issuance of the Senior Discount Debentures,
together with all instruments and other agreements entered into by Holdings in
connection therewith, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with Section 7.9.
"SENIOR DISCOUNT DEBENTURE PURCHASE AGREEMENT": the agreement
entered into by Holdings in connection with the issuance of the Senior Discount
Debentures, together with all instruments and other agreements entered into by
Holdings in connection therewith, as the same may be amended, supplemented or
otherwise modified from time to time in accordance with Section 7.9.
"SENIOR DISCOUNT DEBENTURE REFINANCING": as defined in Section
7.2(g).
"SENIOR SUBORDINATED NOTE INDENTURE": the indenture entered into
by the Borrower, the Subsidiary Guarantors and United States Trust Company, as
trustee thereunder, in connection with the issuance of the Senior Subordinated
Notes, together with all instruments and other agreements entered into by the
Borrower and the Subsidiary Guarantors in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with Section 7.9.
"SENIOR SUBORDINATED NOTES": the $190,000,000 13% Series A Senior
Subordinated Notes due 2009 (the ASERIES A SENIOR SUBORDINATED NOTES") issued by
the Borrower on the Closing Date pursuant to the Senior Subordinated Note
Indenture, and upon the exchange of the Series A Senior Subordinated Notes for
$190,000,000 13% Series B Senior Subordinated Notes due 2009 (the "SERIES B
SENIOR SUBORDINATED NOTES"), such Series B Senior
23
Subordinated Notes. For the avoidance of doubt, notwithstanding anything to the
contrary herein, the exchange of the Series A Senior Subordinated Notes for the
Series B Senior Subordinated Notes is permitted herein.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as
of any date of determination, (a) the amount of the Apresent fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all Aliabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"SPC": as defined in Section 10.6(d).
"SPECIFIED CHANGE OF CONTROL": a AChange of Control" as defined
in the Senior Subordinated Note Indenture, the Senior Discount Debenture
Purchase Agreement, the Senior Discount Debenture Indenture or the documentation
for any Senior Discount Debenture Refinancing.
"SPONSOR": as defined in the Recitals hereto.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company, trust or other entity (other than, except for
purposes of Sections 6.1 and 7.1, a Permitted Joint Venture) of which shares of
stock or other ownership interests having ordinary voting power (other than
stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors, other
managers or trustees of such corporation, partnership, limited liability
company, trust or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower other
than any Excluded Foreign Subsidiary.
24
"SYNDICATION AGENT": DLJ, together with its affiliates as the
syndication agent under this Agreement and the other Loan Documents, together
with any of its successors.
"TERM LENDERS": the collective reference to the Tranche B Term
Lenders and the Tranche C Term Lenders.
"TERM LOANS": the collective reference to the Tranche B Term
Loans and Tranche C Term Loans.
"TOTAL REVOLVING COMMITMENTS": at any time, the aggregate amount
of the Revolving Commitments then in effect.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"TRANCHE B TERM COMMITMENT": as to any Lender, the obligation of
such Lender, if any, to make a Tranche B Term Loan to the Borrower hereunder in
a principal amount not to exceed the amount set forth under the heading "Tranche
B Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche B Term Commitments is $250,000,000.
"TRANCHE B TERM LENDER": each Lender that has a Tranche B Term
Commitment or that holds a Tranche B Term Loan.
"TRANCHE B TERM LOAN": as defined in Section 2.1.
"TRANCHE B TERM PERCENTAGE": as to any Tranche B Term Lender at
any time, the percentage which such Lender's Tranche B Term Commitment then
constitutes of the aggregate Tranche B Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"TRANCHE C TERM COMMITMENT": as to any Lender, the obligation of
such Lender, if any, to make a Tranche C Term Loan to the Borrower hereunder in
a principal amount not to exceed the amount set forth under the heading "Tranche
C Term Commitment" opposite such Lender's name on Schedule 1.1A. The original
aggregate amount of the Tranche C Term Commitments is $125,000,000.
"TRANCHE C TERM LENDER": each Lender that has a Tranche C Term
Commitment or that holds a Tranche C Term Loan.
"TRANCHE C TERM LOAN": as defined in Section 2.1.
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"TRANCHE C TERM PERCENTAGE": as to any Tranche C Term Lender at
any time, the percentage which such Lender's Tranche C Term Commitment then
constitutes of the aggregate Tranche C Term Commitments (or, at any time after
the Closing Date, the percentage which the aggregate principal amount of such
Lender's Tranche C Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche C Term Loans then outstanding).
"TRANSACTIONS": as defined in Section 5.1(b).
"TRANSFEREE": any Assignee, Participant or SPC.
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
"UNITED STATES": the United States of America.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person all
of the Capital Stock of which (other than directors' qualifying shares required
by law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.
"WHOLLY OWNED SUBSIDIARY GUARANTOR": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to Holdings, the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them under
GAAP, (ii) the words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation", (iii) the word "incur" shall be
construed to mean incur, create, issue, assume, become liable in respect of or
suffer to exist (and the words "incurred" and "incurrence" shall have
correlative meanings), (iv) the words "Asset" and "property" shall be construed
to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, Capital Stock, securities,
revenues, accounts, leasehold interests and contract rights, and (v) Holdings,
the Borrower, any of their respective Subsidiaries or any Loan Party shall be
deemed to have "knowledge" or "know" of a particular matter, or such matter
shall be deemed "known" to any of them if any of their respective directors,
chief executive officer, president, chief financial officer, treasurer,
controller, general counsel, corporate secretary or other senior officers shall
have actual knowledge or actually know of such matter or such matter is actually
known to any of them.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular
26
provision of this Agreement, and Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM COMMITMENTS. Subject to the terms and conditions hereof,
(a) each Tranche B Term Lender severally agrees to make a term loan (a "TRANCHE
B TERM LOAN") to the Borrower on the Closing Date in an amount not to exceed the
amount of the Tranche B Term Commitment of such Lender and (b) each Tranche C
Term Lender severally agrees to make a term loan (a "TRANCHE C TERM LOAN") to
the Borrower on the Closing Date in an amount not to exceed the amount of the
Tranche C Term Commitment of such Lender. The Term Loans may from time to time
be Eurodollar Loans or ABR Loans, as determined by the Borrower and notified to
the Administrative Agent in accordance with Sections 2.2 and 2.10.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 12:00 Noon, New York City time, three Business
Days prior to the Closing Date, in the case of Eurodollar Loans, or prior to
10:00 A.M., New York City time, on the Closing Date, in the case of ABR Loans)
requesting that the Term Lenders make the Term Loans on the Closing Date and
specifying (i) the amount and Type of Term Loans to be borrowed and (ii) in the
case of Eurodollar Loans, the respective amounts of each such Type of Loan and
the respective lengths of the initial Interest Period therefor. Upon receipt of
such notice the Administrative Agent shall promptly notify each Term Lender
thereof. Not later than 12:00 Noon, New York City time, on the Closing Date each
Term Lender shall make available to the Administrative Agent at the Funding
Office an amount in immediately available funds equal to the Term Loan or Term
Loans to be made by such Lender. The Administrative Agent shall credit the
account of the Borrower on the books of such office of the Administrative Agent
with the aggregate of the amounts made available to the Administrative Agent by
the Term Lenders in immediately available funds.
2.3 REPAYMENT OF TERM LOANS. (a) The Tranche B Term Loan of each
Tranche B Lender shall mature in twenty-eight (28) consecutive quarterly
installments, commencing on September 30, 1999, each of which shall be in an
amount equal to such Lender's Tranche B Term Percentage multiplied by the amount
set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
September 30, 1999 $625,000
December 31, 1999 $625,000
March 31, 2000 $625,000
June 30, 2000 $625,000
September 30, 2000 $625,000
December 31, 2000 $625,000
27
March 31, 2001 $625,000
June 30, 2001 $625,000
September 30, 2001 $625,000
December 31, 2001 $625,000
March 31, 2002 $625,000
June 30, 2002 $625,000
September 30, 2002 $625,000
December 31, 2002 $625,000
March 31, 2003 $625,000
June 30, 2003 $625,000
September 30, 2003 $625,000
December 31, 2003 $625,000
March 31, 2004 $625,000
June 30, 2004 $625,000
September 30, 2004 $625,000
December 31, 2004 $625,000
March 31, 2005 $625,000
June 30, 2005 $625,000
September 30, 2005 $58,750,000
December 31, 2005 $58,750,000
March 31, 2006 $58,750,000
June 30, 2006 $58,750,000
(b) The Tranche C Term Loan of each Tranche C Lender shall mature
in thirty-two (32) consecutive quarterly installments, commencing on September
30, 1999, each of which shall be in an amount equal to such Lender's Tranche C
Term Percentage multiplied by the amount set forth below opposite such
installment:
Installment Principal Amount
----------- ----------------
September 30, 1999 $312,500
December 31, 1999 $312,500
March 31, 2000 $312,500
June 30, 2000 $312,500
September 30, 2000 $312,500
December 31, 2000 $312,500
March 31, 2001 $312,500
June 30, 2001 $312,500
September 30, 2001 $312,500
December 31, 2001 $312,500
March 31, 2002 $312,500
June 30, 2002 $312,500
September 30, 2002 $312,500
December 31, 2002 $312,500
March 31, 2003 $312,500
June 30, 2003 $312,500
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September 30, 2003 $312,500
December 31, 2003 $312,500
March 31, 2004 $312,500
June 30, 2004 $312,500
September 30, 2004 $312,500
December 31, 2004 $312,500
March 31, 2005 $312,500
June 30, 2005 $312,500
September 30, 2005 $312,500
December 31, 2005 $312,500
March 31, 2006 $312,500
June 30, 2006 $312,500
September 30, 2006 $29,062,500
December 31, 2006 $29,062,500
March 31, 2007 $29,062,500
June 30, 2007 $29,062,500
2.4 REVOLVING COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("REVOLVING LOANS") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the L/C
Obligations then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period the Borrower may
use the Revolving Commitments by borrowing, prepaying the Revolving Loans in
whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or ABR Loans, as determined by the Borrower and notified to the Administrative
Agent in accordance with Sections 2.5 and 2.10.
(b) The Borrower shall repay all outstanding Revolving Loans on
the Scheduled Revolving Termination Date.
2.5 PROCEDURE FOR REVOLVING LOAN BORROWING. The Borrower may
borrow under the Revolving Commitments during the Revolving Commitment Period on
any Business Day, PROVIDED that the Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or prior to 9:00
A.M., New York City time, on the requested Borrowing Date, in the case of ABR
Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. No Revolving Loans shall be made on the
Closing Date. Each borrowing under the Revolving Commitments shall be in an
amount equal to (x) in the case of ABR Loans, $1,000,000 or a multiple of
$500,000 in excess thereof (or, if the then aggregate Available Revolving
Commitments are less than $1,000,000, such lesser amount) and (y) in the case of
Eurodollar Loans, $2,500,000 or a whole multiple of $500,000 in excess thereof.
Upon receipt of any such notice from the Borrower, the Administrative Agent
shall promptly notify each Revolving Lender thereof. Each
29
Revolving Lender will make the amount of its PRO RATA share of each borrowing
available to the Administrative Agent for the account of the Borrower at the
Funding Office prior to 12:00 Noon, New York City time, on the Borrowing Date
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the Administrative
Agent by the Revolving Lenders and in like funds as received by the
Administrative Agent.
2.6 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Scheduled Revolving
Termination Date, commencing on the first of such dates to occur after the date
hereof.
(b The Borrower agrees to pay to the Administrative Agent and the
Other Representatives the fees in the amounts and on the dates previously agreed
to in writing by the Borrower and the Administrative Agent and the other
Representatives, as the case may be.
2.7 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. The
Borrower shall have the right, upon not less than three Business Days' notice to
the Administrative Agent, to terminate the Revolving Commitments or, from time
to time, to reduce the amount of the Revolving Commitments; PROVIDED that no
such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans made
on the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Commitments. Any such reduction shall be in an amount
equal to $1,000,000, or a whole multiple thereof, and shall reduce permanently
the Revolving Commitments then in effect.
2.8 OPTIONAL PREPAYMENTS. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent at least three
Business Days prior thereto in the case of Eurodollar Loans and at least one
Business Day prior thereto in the case of ABR Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or ABR Loans; PROVIDED, that if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.18. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with (except in the
case of Revolving Loans that are ABR Loans) accrued interest to such date on the
amount prepaid. Partial prepayments of Term Loans and Revolving Loans shall be
in an aggregate principal amount of $2,500,000 or a whole multiple thereof and
shall be applied as set forth in Sections 2.15(b) or (c), as the case may be.
30
2.9 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) If any
Capital Stock shall be issued by Holdings, the Borrower or any of its
Subsidiaries (other than the Capital Stock issued to (i) directors and employees
of Holdings, the Borrower or any of its Subsidiaries under employee benefit
plans, (ii) sellers as consideration in acquisitions of equity or ownership
interests in, or assets of, other Persons, or (iii) existing stockholders of
Holdings or other investors in private placements of the Capital Stock organized
by the Sponsor in connection with the financing of Permitted Acquisitions) an
amount equal to 50% of the Net Cash Proceeds from the issuance of such Capital
Stock shall be applied on the date of such issuance toward the prepayment of the
Term Loans and the reduction of the Revolving Commitments as set forth in
Section 2.9(d). If any Indebtedness shall be incurred by Holdings, the Borrower
or any of its Subsidiaries (other than the Senior Discount Debentures, the
Senior Subordinated Notes, the Senior Discount Debenture Refinancing and other
Indebtedness permitted in accordance with Section 7.2 as in effect on the date
hereof) an amount equal to 100% of the Net Cash Proceeds from the incurrence of
such Indebtedness shall be applied on the date of such issuance or incurrence
toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments as set forth in Section 2.9(d).
(b If on any date Holdings, the Borrower or any of its
Subsidiaries shall receive Net Cash Proceeds from any Asset Sale or Recovery
Event then, unless a Reinvestment Notice in respect of any Recovery Event shall
be delivered in respect thereof, such Net Cash Proceeds shall be applied on such
date toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments as set forth in Section 2.9(d); PROVIDED, that, notwithstanding the
foregoing, (i) an aggregate amount not to exceed $5,000,000 of Net Cash Proceeds
from Asset Sales in any fiscal year of the Borrower may be retained by Holdings,
the Borrower or any of its Subsidiaries, as the case may be, and (ii) on each
Reinvestment Prepayment Date, an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event shall be applied toward
the prepayment of the Term Loans and the reduction of the Revolving Commitments
as set forth in Section 2.9(d).
(c) If, for any fiscal year of the Borrower commencing with the
fiscal year ending December 31, 2000, there shall be Excess Cash Flow, the
Borrower shall, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans and
the reduction of the Revolving Commitments as set forth in Section 2.9(d). Each
such prepayment and commitment reduction shall be made on a date (an "EXCESS
CASH FLOW APPLICATION DATE") no later than five days after the earlier of (i)
the date on which the financial statements of the Borrower referred to in
Section 6.1(a), for the fiscal year with respect to which such prepayment is
made, are required to be delivered to the Lenders and (ii) the date such
financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.9 shall be applied, FIRST,
to the prepayment of the Term Loans and, SECOND, to reduce permanently the
Revolving Commitments. Any such reduction of the Revolving Commitments shall be
accompanied by prepayment of the Revolving Loans to the extent, if any, that the
Total Revolving Extensions of Credit exceed the amount of the Total Revolving
Commitments as so reduced, PROVIDED that if the aggregate principal amount of
Revolving Loans then outstanding is less than the amount of such excess (because
L/C
31
Obligations constitute a portion thereof), the Borrower shall, to the extent
of the balance of such excess, replace outstanding Letters of Credit and/or
deposit an amount in cash in a cash collateral account established with the
Administrative Agent for the benefit of the Lenders on terms and conditions
satisfactory to the Administrative Agent.
The application of any prepayment pursuant to this Section 2.9
shall be made, first, to ABR Loans and, second, to Eurodollar Loans and shall be
applied as set forth in Sections 2.15(b) or (c), as the case may be. Each
prepayment of the Loans under this Section 2.9 (except in the case of Revolving
Loans that are ABR Loans) shall be accompanied by accrued interest to the date
of such prepayment on the amount prepaid.
2.10 CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may
elect from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least two Business Days' prior irrevocable notice of
such election, PROVIDED that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower
may elect from time to time to convert ABR Loans to Eurodollar Loans by giving
the Administrative Agent at least three Business Days' prior irrevocable notice
of such election (which notice shall specify the length of the initial Interest
Period therefor), PROVIDED that no ABR Loan under a particular Facility may be
converted into a Eurodollar Loan when any Event of Default has occurred and is
continuing and, so long as any Event of Default has occurred and is continuing,
the Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
conversions. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, PROVIDED that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has occurred and is continuing and,
so long as any Event of Default has occurred and is continuing, the
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and PROVIDED, FURTHER, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of such then expiring
Interest Period. Upon receipt of any such notice the Administrative Agent shall
promptly notify each relevant Lender thereof.
2.11 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding anything
to the contrary in this Agreement, all borrowings, conversions and continuations
of Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $2,500,000 or a whole
multiple of $500,000 in excess thereof and (b) no more than eight Eurodollar
Tranches shall be outstanding at any one time.
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2.12 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such day
plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal
to the ABR plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan
or Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), all outstanding Loans and Reimbursement
Obligations (whether or not overdue) shall bear interest at a rate per annum
equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section PLUS 2%
or (y) in the case of Reimbursement Obligations, the rate applicable to ABR
Loans under the Revolving Facility PLUS 2%, and (ii) if all or a portion of any
interest payable on any Loan or Reimbursement Obligation or any commitment fee
or other amount payable hereunder shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans
under the relevant Facility PLUS 2% (or, in the case of any such other amounts
that do not relate to a particular Facility, the rate then applicable to ABR
Loans under the Revolving Facility PLUS 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such amount
is paid in full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.13 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees
payable pursuant hereto shall be calculated on the basis of a 360-day year for
the actual days elapsed, except that, with respect to ABR Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from a
change in the ABR or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.12(a).
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2.14 INABILITY TO DETERMINE INTEREST RATE. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined in good faith
(which determination shall be conclusive and binding upon the Borrower)
that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as ABR Loans,
(y) any Loans under the relevant Facility that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans under the relevant Facility
shall be converted, on the last day of the then-current Interest Period, to ABR
Loans. Until such notice has been withdrawn by the Administrative Agent, no
further Eurodollar Loans under the relevant Facility shall be made or continued
as such, nor shall the Borrower have the right to convert Loans under the
relevant Facility to Eurodollar Loans.
2.15 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made PRO RATA according to the respective Tranche B Term Percentages, Tranche C
Term Percentages or Revolving Percentages, as the case may be, of the relevant
Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Tranche B Term Loans or the Tranche
C Term Loans shall be made PRO RATA according to the respective outstanding
principal amounts of the Tranche B Term Loans or the Tranche C Term Loans, as
the case may be, then held by the Term Lenders. Prepayments of the Term Loans
shall be made PRO RATA according to the respective outstanding principal amounts
thereof. The amount of each such principal prepayment shall be applied to reduce
the then remaining installments of the Tranche B Term Loans and Tranche C Term
Loans, as the case may be, PRO RATA. Amounts prepaid on account of the Term
Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made PRO
RATA according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
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(d) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the Lenders, at the Funding Office, in Dollars and in
immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder (other than payments on the Eurodollar Loans) becomes due and
payable on a day other than a Business Day, such payment shall be extended to
the next succeeding Business Day. If any payment on a Eurodollar Loan becomes
due and payable on a day other than a Business Day, the maturity thereof shall
be extended to the next succeeding Business Day unless the result of such
extension would be to extend such payment into another calendar month, in which
event such payment shall be made on the immediately preceding Business Day. In
the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate
during such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
of such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
ABR Loans under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective PRO RATA shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.16 REQUIREMENTS OF LAW. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender
35
with any request or directive (whether or not having the force of law) from any
central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 2.17 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans
or other extensions of credit by, or any other acquisition of funds by,
any office of such Lender that is not otherwise included in the
determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition; and the
result of any of the foregoing is to increase the cost to such Lender, by an
amount that such Lender deems in good faith to be material, of making,
converting into, continuing or maintaining Eurodollar Loans or issuing or
participating in Letters of Credit, or to reduce any amount receivable hereunder
in respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes entitled to claim any additional amounts pursuant to this paragraph, it
shall promptly notify the Borrower (with a copy to the Administrative Agent) of
the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or
any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation reasonably
believes it could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction; PROVIDED that the Borrower shall not be required
to compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and PROVIDED FURTHER that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.
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(c) A certificate as to any additional amounts payable pursuant
to this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise taxes (imposed in lieu of
net income taxes) imposed on the Administrative Agent or any Lender as a result
of a present or former connection between the Administrative Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to the Administrative Agent or any Lender hereunder,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any
such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, PROVIDED, HOWEVER, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the time
the Lender becomes a party to this Agreement, except to the extent that such
Lender's assignor (if any) was entitled, at the time of assignment, to receive
additional amounts from the Borrower with respect to such Non-Excluded Taxes
pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by
the Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or resident
of the United States of America, a corporation, partnership or other entity
created or organized in or under the
37
laws of the United States of America (or any jurisdiction thereof), or any
estate or trust that is subject to federal income taxation regardless of the
source of its income (a "NON-U.S. LENDER") shall deliver to the Borrower and the
Administrative Agent (or, in the case of a Participant or an SPC, to the Lender
from which the related participation shall have been purchased or from which the
related option to make Loans shall have been received) two copies of either U.S.
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest", a
statement substantially in the form of Exhibit G and a Form W-8, or any
subsequent versions thereof or successors thereto, properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant or SPC, on or before the date such Participant
purchases the related participation or the date such SPC is granted the option
to provide the Loans obligated to be made hereunder by the Granting Bank (as
hereinafter defined)). In addition, each Non-U.S. Lender shall deliver such
forms promptly upon the obsolescence or invalidity of any form previously
delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall promptly notify
the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the U.S. taxing authorities for such purpose).
Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall
not be required to deliver any form pursuant to this paragraph that such
Non-U.S. Lender is not legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction
of non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and
executed documentation prescribed by applicable law as will permit such payments
to be made without withholding or at a reduced rate, PROVIDED that such Lender
is legally entitled to complete, execute and deliver such documentation and in
such Lender's good faith judgment such completion, execution or submission would
not materially prejudice the legal position of such Lender.
(f) If the Administrative Agent or any Lender receives a refund
in respect of Non-Excluded Taxes or Other Taxes paid by the Borrower, which in
the sole judgment of such Lender is allocable to such payment, it shall promptly
pay such refund, together with any other amounts paid by the Borrower in
connection with such refunded Taxes or Other Taxes, to the Borrower, net of all
out-of-pocket expenses of such Lender incurred in obtaining such refund,
PROVIDED, HOWEVER, that such Borrower agrees to promptly return such refund to
the Administrative Agent or the applicable Lender, as the case may be, if it
receives notice from the Administrative Agent or applicable Lender that such
Administrative Agent or Lender is required to repay such refund.
(g) The agreements in this Section shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
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2.18 INDEMNITY. The Borrower agrees to indemnify each Lender and
to hold each Lender harmless from any loss or expense that such Lender may
sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of, conversion into or continuation of Eurodollar Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (b) default by the Borrower in making any
prepayment of or conversion from Eurodollar Loans after the Borrower has given a
notice thereof in accordance with the provisions of this Agreement or (c) the
making of a prepayment of Eurodollar Loans on a day that is not the last day of
an Interest Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest that would
have accrued on the amount so prepaid, or not so borrowed, converted or
continued, for the period from the date of such prepayment or of such failure to
borrow, convert or continue to the last day of such Interest Period (or, in the
case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate
of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) OVER (ii) the amount of interest (as
reasonably determined by such Lender) that would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any
amounts payable pursuant to this Section submitted to the Borrower by any Lender
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
2.19 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.16 or 2.17(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; PROVIDED, that such
designation is made on terms that, in the sole good faith judgment of such
Lender, cause such Lender and its lending office(s) to suffer no economic, legal
or regulatory disadvantage, and PROVIDED, FURTHER, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights of
any Lender pursuant to Section 2.16 or 2.17(a).
2.20 REPLACEMENT OF LENDERS. The Borrower shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 2.16 or 2.17(a) or (b) defaults in its obligation to make Loans
hereunder, with a replacement financial institution; PROVIDED that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) prior to any such replacement, such Lender shall have taken no action
under Section 2.19 so as to eliminate the continued need for payment of amounts
owing pursuant to Section 2.16 or 2.17(a), (iv) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (v) the Borrower shall
be liable to such replaced Lender under Section 2.18 if any Eurodollar Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (vi) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Administrative Agent, which determination shall not be unreasonably delayed,
(vii) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions
39
of Section 10.6 (provided that the Borrower shall be obligated to pay the
registration and processing fee referred to therein), (viii) until such time as
such replacement shall be consummated, the Borrower shall pay all additional
amounts (if any) required pursuant to Section 2.16 or 2.17(a), as the case may
be, and (ix) any such replacement shall not be deemed to be a waiver of any
rights that the Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Revolving
Lenders set forth in Section 3.4(a), agrees to issue letters of credit ("LETTERS
OF CREDIT") for the account of the Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
the Issuing Lender; PROVIDED that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments would be less than zero. Each Letter of Credit
shall (i) be denominated in Dollars and (ii) have a term until expiry (or, if
such Letter of Credit contemplates time drafts, a term through the maximum time
draft period) ending no later than the earlier of (x) the first anniversary of
its date of issuance (except with the consent of the Majority Facility Lenders
in respect of the Revolving Facility) and (y) the date that is five Business
Days prior to the Scheduled Revolving Termination Date, PROVIDED that any Letter
of Credit may provide for the renewal thereof, with or without notice from the
Issuing Lender, for successive periods of up to one year each (which shall in no
event extend beyond the date referred to in clause (y) above).
(b) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed by,
any applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may reasonably request. Upon receipt of any Application,
the Issuing Lender will promptly process such Application and the certificates,
documents and other papers and information delivered to it in connection
therewith in accordance with its customary procedures and shall promptly issue
the Letter of Credit requested thereby (but in no event shall the Issuing Lender
be required to issue any Letter of Credit earlier than three Business Days after
its receipt of the Application therefor and all such other certificates,
documents and other papers and information relating thereto) by issuing the
original of such Letter of Credit to the beneficiary thereof or as otherwise may
be agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall
furnish a copy of such Letter of Credit to the Borrower promptly following the
issuance thereof. The Issuing Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
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3.3 FEES AND OTHER CHARGES. (a) The Borrower will pay a fee on
all outstanding Letters of Credit at a per annum rate equal to the Applicable
Margin then in effect with respect to Eurodollar Loans under the Revolving
Facility, shared ratably among the Revolving Lenders and payable quarterly in
arrears on each L/C Fee Payment Date after the issuance date. In addition, the
Borrower shall pay to the Issuing Lender for its own account a fronting fee of
1/8 of 1% per annum on the average daily undrawn and unexpired amount of each
Letter of Credit, payable quarterly in arrears on each L/C Fee Payment Date
after the Issuance Date.
(b) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees
to grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement (or, if reimbursed, is
required to be returned to the Borrower), such L/C Participant shall pay to the
Issuing Lender upon demand at the Issuing Lender's address for notices specified
herein an amount equal to such L/C Participant's Revolving Percentage of the
amount of such draft, or any part thereof, that is not so reimbursed (or, if
reimbursed, is required to be returned to the Borrower).
(b) If any amount required to be paid by any L/C Participant to
the Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit is
paid to the Issuing Lender within three Business Days after the date such
payment is due, such L/C Participant shall pay to the Issuing Lender on demand
an amount equal to the product of (i) such amount, times (ii) the daily average
Federal Funds Effective Rate during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
Section 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to ABR Loans under the Revolving Facility. A
certificate of the Issuing Lender submitted to any L/C Participant with respect
to any amounts owing under this Section shall be conclusive in the absence of
manifest error.
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(c) Whenever, at any time after the Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
PRO RATA share of such payment in accordance with Section 3.4(a), the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, including proceeds of collateral applied thereto
by the Issuing Lender), or any payment of interest on account thereof, the
Issuing Lender will distribute to such L/C Participant its PRO RATA share
thereof; PROVIDED, HOWEVER, that in the event that any such payment received by
the Issuing Lender shall be required to be returned by the Issuing Lender, such
L/C Participant shall return to the Issuing Lender the portion thereof
previously distributed by the Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees
to reimburse the Issuing Lender on the Business Day immediately following the
date on which the Issuing Lender notifies the Borrower of the date and amount of
a draft presented under any Letter of Credit and paid by the Issuing Lender for
the amount of (a) such draft so paid and (b) any taxes, fees, charges or other
costs or expenses incurred by the Issuing Lender in connection with such
payment. Each such payment shall be made to the Issuing Lender at its address
for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Section from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise) until
payment in full at the rate set forth in (i) until the second Business Day
following the date of the applicable drawing, Section 2.12(b) and (ii)
thereafter, Section 2.12(c).
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions resulting from the gross negligence or willful misconduct of the
Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any Letter of Credit, the Issuing Lender shall promptly notify
the Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment
42
obligation expressly provided for in such Letter of Credit, be limited to
determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into
this Agreement and to make the Loans and issue or participate in the Letters of
Credit, Holdings and the Borrower hereby jointly and severally represent and
warrant to the Administrative Agent and each Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA consolidated
balance sheets of Holdings and its consolidated Subsidiaries and the Borrower
and its consolidated Subsidiaries, respectively, as at March 31, 1999 (including
the notes thereto) (the "PRO FORMA BALANCE SHEETS"), copies of which have
heretofore been furnished to each Lender, have been prepared giving effect (as
if such events had occurred on such date) to (i) the consummation of the
Transactions (as hereinafter defined), (ii) the Loans to be made hereunder and
the Senior Discount Debentures and the Senior Subordinated Notes to be issued on
the Closing Date and the use of proceeds thereof and (iii) the payment of fees
and expenses in connection with the foregoing. The Pro Forma Balance Sheets have
been prepared based on the best information available to Holdings or the
Borrower as of the date of delivery thereof, and present fairly on a PRO FORMA
basis the estimated financial position of Holdings and its consolidated
Subsidiaries and the Borrower and its consolidated Subsidiaries, respectively,
as at March 31, 1999, assuming that the events specified in the preceding
sentence had actually occurred at such date.
(b) The audited consolidated balance sheets of Holdings as at
December 31, 1998, and the related consolidated statements of income and of cash
flows for the fiscal year ended on such date, reported on by and accompanied by
an unqualified report from Arthur Andersen LLP, present fairly the consolidated
financial condition of Holdings as at such date, and the consolidated results of
its operations and its consolidated cash flows for the fiscal year then ended.
The unaudited consolidating statements of income for the fiscal year ending
December 31, 1998 and for the three-month period ending March 31, 1999, as the
case may be, present fairly the financial condition of each business unit of
Holdings. The unaudited consolidated balance sheets of Holdings as at March 31,
1999, and the related unaudited consolidated statements of income and of cash
flows for the three-month period ended on such date, present fairly the
consolidated financial condition of Holdings as at such date, and the
consolidated results of its operations and its consolidated cash flows for the
three-month period then ended (subject to normal year-end audit adjustments).
The unaudited monthly consolidated balance sheets of Holdings as at the end of
each month following March 31, 1999 up to the Closing Date, and the related
unaudited monthly consolidated statements of income and of cash flows for the
respective one-month periods ended on such dates, to the extent such monthly
financial statements are available, present fairly the consolidated financial
condition of Holdings
43
as at such dates, and the consolidated results of its operations and its
consolidated cash flows for the respective one-month periods then ended (subject
to normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as approved by
the aforementioned firm of accountants and disclosed therein) and comply as to
form in all material respects with the published rules and regulations of the
SEC with respect thereto. Holdings and its Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or any
long-term leases or unusual forward or long-term commitments, including any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most recent
financial statements referred to in this paragraph. During the period from March
31, 1999 to and including the date hereof there has been no Disposition by
Holdings of any material part of its business or property.
4.2 NO CHANGE. Since December 31, 1998 there has been no
development or event that has had or is reasonably expected to have a Material
Adverse Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of Holdings,
the Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to qualify as
a foreign corporation or be in good standing could not reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the corporate power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate action to authorize the execution, delivery and performance of the
Loan Documents to which it is a party and, in the case of the Borrower, to
authorize the borrowings on the terms and conditions of this Agreement. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the Acquisition and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect and (ii) the
filings referred to in Section 4.19. Each Loan Document has been duly executed
and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party party thereto,
enforceable against each such Loan Party in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
44
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate or
conflict with any Requirement of Law or any material Contractual Obligation of
Holdings, the Borrower or any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such
Contractual Obligation (other than the Liens created by the Security Documents).
4.6 LITIGATION. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of Holdings or the Borrower, threatened by or against Holdings, the Borrower or
any of its Subsidiaries or against any of their respective properties or
revenues (a) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby, or (b) that is reasonably expected
to have a Material Adverse Effect.
4.7 NO DEFAULT. Neither Holdings, the Borrower nor its respective
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect that is reasonably expected to have a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of Holdings, the Borrower
and its Subsidiaries has title in fee simple to, or a valid leasehold interest
in, all its real property, and good title to, or a valid leasehold interest in,
all its other material property, and none of such property is subject to any
Lien except as permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. Each of Holdings, the Borrower and
each of its Subsidiaries owns, or is licensed to use, all Intellectual Property
material in the conduct of its business as currently conducted. No material
claim has been asserted and is pending by any Person challenging or questioning
the use of any Intellectual Property or the validity or effectiveness of any
Intellectual Property, nor does Holdings or the Borrower know of any valid basis
for any such claim. The use of Intellectual Property by Holdings, the Borrower
and its Subsidiaries does not, to Borrower's knowledge, infringe on the rights
of any Person in any material respect.
4.10 TAXES. Each of Holdings, the Borrower and each of its
Subsidiaries has filed or caused to be filed all Federal, state and other
material tax returns that are required to be filed and has paid all taxes shown
to be due and payable on said returns or on any assessments made against it or
any of its property and all other taxes, fees or other charges imposed on it or
any of its property by any Governmental Authority (other than any the amount or
validity of that are currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of Holdings, the Borrower or its Subsidiaries, as the case
may be); no tax Lien has been filed, and, to the knowledge of Holdings or the
Borrower, no claim is being asserted, with respect to any such tax, fee or other
45
charge. Such tax returns accurately reflect in all material respects all
liability for taxes of Holdings, the Borrower and its Subsidiaries for the
periods covered thereby.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U in any manner that
violates the provisions of the Regulations of the Board. On the Closing Date,
the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.
4.12 LABOR MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against Holdings, the Borrower or any of its
Subsidiaries pending or, to the knowledge of Holdings or the Borrower,
threatened; (b) hours worked by and payment made to employees of Holdings, the
Borrower or any of its Subsidiaries have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from Holdings, the Borrower or any of its
Subsidiaries on account of employee health and welfare insurance have been paid
or accrued as a liability on the books of Holdings, the Borrower or the relevant
Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "Accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date on which this representation is
made or deemed made, exceed the value of the assets of such Plan allocable to
such accrued benefits by a material amount. Neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result
in a material liability under ERISA, and neither the Borrower nor any Commonly
Controlled Entity would become subject to any material liability under ERISA if
the Borrower or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is
an "investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Except as disclosed to the Administrative
Agent by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 4.15 sets forth the name and jurisdiction of incorporation of each
Subsidiary and, as to each such Subsidiary, the
46
percentage of each class of Capital Stock owned by any Loan Party and (b) there
are no outstanding subscriptions, options, warrants, calls, rights or other
agreements or commitments (other than stock options granted to employees or
directors and directors' qualifying shares) of any nature relating to any
Capital Stock of the Borrower or any Subsidiary, except as created by the Loan
Documents.
4.16 USE OF PROCEEDS. The proceeds of the Term Loans shall be
used to finance a portion of the Transactions and to pay related fees and
expenses. The proceeds of the Revolving Loans, and the Letters of Credit, shall
be used for general corporate purposes, including to finance the working capital
needs of the Borrower and its Subsidiaries and, subject to Section 7.8, their
acquisitions of Capital Stock or ownership interests of, and investments in,
other Persons.
4.17 ENVIRONMENTAL MATTERS. Except as, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by
Holdings, the Borrower or any of its Subsidiaries (the "PROPERTIES") do
not contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could
reasonably be expected to give rise to liability under, any
Environmental Law;
(b) neither Holdings, the Borrower nor any of its Subsidiaries
has received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any of the
Properties or the business operated by Holdings, the Borrower or any of
its Subsidiaries (the "BUSINESS"), nor does Holdings or the Borrower
have knowledge or reason to believe that any such notice will be
received or is being threatened;
(c) Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or to
a location that could reasonably be expected to give rise to liability
under, any Environmental Law, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on or under
any of the Properties in violation of, or in a manner that could give
rise to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative
action is pending or, to the knowledge of Holdings or the Borrower,
threatened, under any Environmental Law to which Holdings, the Borrower
or any Subsidiary is or will be named as a party, nor are there any
consent decrees or other decrees, consent orders, administrative orders
or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties
or the Business;
(e) there has been no release or threat of release of Materials
of Environmental Concern at or from the Properties, or arising from or
related to the operations of Holdings, the Borrower or any Subsidiary in
connection with the Properties or otherwise
47
in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under
or about the Properties or violation of any Environmental Law with
respect to the Properties or the Business; and
(g) neither Holdings, the Borrower nor any of its Subsidiaries
has retained or assumed any liability of any other Person under
Environmental Laws.
4.18 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or written statement
furnished by or on behalf of any Loan Party to the Administrative Agent or the
Lenders, or any of them (including, without limitation, the Proxy Statement),
for use in connection with the transactions contemplated by this Agreement or
the other Loan Documents, contained as of the date such statement, information,
document or certificate was so furnished (or, in the case of the Confidential
Information Memorandum and the Proxy Statement, as of the date of this
Agreement), any untrue statement of a material fact or omitted to state a
material fact necessary to make the statements contained herein or therein not
misleading, PROVIDED, that with respect to any statement or information
furnished on behalf of any Loan Party by any other Person that is not a Loan
Party, the representation and warranty set forth in this Section 4.18 is limited
to the such Loan Party's best knowledge. The projections and PRO FORMA financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of Holdings and the
Borrower to be reasonable at the time made, it being recognized by the Lenders
that such financial information as it relates to future events is not to be
viewed as fact and that actual results during the period or periods covered by
such financial information may differ from the projected results set forth
therein by a material amount. As of the date hereof, the representations and
warranties contained in the Acquisition Documentation and the Proxy Statement
are true and correct in all material respects. There is no fact known to any
Loan Party that is reasonably expected to have a Material Adverse Effect that
has not been expressly disclosed herein, in the other Loan Documents, in the
Confidential Information Memorandum or in any other documents, certificates and
statements furnished to the Administrative Agent and the Lenders (including,
without limitation, the Proxy Statement) for use in connection with the
transactions contemplated hereby and by the other Loan Documents.
4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Lenders, a legal, valid and enforceable security interest in the
Collateral described therein, all rights, title or interest thereto and proceeds
thereof. In the case of the Pledged Stock described in the Guarantee and
Collateral Agreement, when stock certificates representing such Pledged Stock
are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when financing
statements and other filings specified on Schedule 4.19 in appropriate form are
filed in the offices specified on Schedule 4.19, the Guarantee and Collateral
Agreement shall constitute a fully perfected Lien on, and security interest in,
all right,
48
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3).
(b) Schedule 4.19(b) lists each of the real properties in the
United States owned in fee simple by the Borrower or any of its Subsidiaries on
the Closing Date. No Liens or Mortgages shall be created under this Agreement
on, and no Lenders shall have any security interests in, the real property owned
on the Closing Date by the Borrower or any of its Subsidiaries.
4.20 SOLVENCY. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 SENIOR INDEBTEDNESS. The Obligations constitute "Senior
Indebtedness" of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the Guarantee
and Collateral Agreement constitute "Guarantor Senior Indebtedness" of such
Subsidiary Guarantor under and as defined in the Senior Subordinated Note
Indenture.
4.22 YEAR 2000 MATTERS. Any reprogramming required to permit the
proper functioning (but only to the extent that such proper functioning would
otherwise be impaired by the occurrence of the year 2000) in and following the
year 2000 of computer systems and other equipment containing embedded
microchips, in either case owned or operated by Holdings, the Borrower or any of
its Subsidiaries or used or relied upon in the conduct of and material to their
business (including any such systems and other equipment supplied by others or
with which the computer systems of Holdings, the Borrower or any of its
Subsidiaries interface), and the testing of all such systems and other equipment
as so reprogrammed, will be completed by October 31, 1999. The costs to
Holdings, the Borrower and its Subsidiaries that have not been incurred as of
the date hereof for such reprogramming and testing and for the other reasonably
foreseeable consequences to them of any improper functioning of other material
computer systems and equipment containing embedded microchips due to the
occurrence of the year 2000 could not reasonably be expected to result in a
Default or Event of Default or to have a Material Adverse Effect. Except for any
reprogramming referred to above, the computer systems of Holdings, the Borrower
and its Subsidiaries material to each of their respective businesses are and,
with ordinary course upgrading and maintenance, will continue for the term of
this Agreement to be, sufficient for the conduct of their business as currently
conducted.
4.23 INSURANCE. The insurance maintained by or reserved against
on the books of Holdings, the Borrower and its Subsidiaries is sufficient to
protect Holdings, the Borrower and its Subsidiaries against such risks as are
usually insured against in the same general area by companies engaged in the
same or similar business. None of the Loan Parties or any of their Subsidiaries
is in default under any provisions of any such policy of insurance the result of
which could reasonably be expected to cause a cancellation of such policy of
insurance or to limit or delay the entitlement to any payment thereunder or has
received notice of cancellation of any
49
such insurance (other than in connection with the replacement of any such
policy). None of the Loan Parties or any of their Subsidiaries has made any
material claims under any policy of insurance with respect to which the
insurance carrier has denied liability.
4.24 CERTAIN DOCUMENTS. The Borrower has delivered to the
Administrative Agent a complete and correct copy of each Acquisition
Documentation, the Senior Subordinated Note Indenture, the Senior Discount
Debenture Purchase Agreement, the Senior Discount Debenture Indenture, the Proxy
Statement and all other documents reasonably requested by the Administrative
Agent, including any amendments, supplements or modifications with respect to
any of the foregoing.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of
each Lender to make the initial extension of credit requested to be made by it
is subject to the satisfaction, prior to or concurrently with the making of such
extension of credit on the Closing Date, of the following conditions precedent:
(a) CREDIT AGREEMENT; GUARANTEE AND COLLATERAL AGREEMENT. The
Administrative Agent shall have received (i) this Agreement, executed
and delivered by the Administrative Agent, Holdings, the Borrower and
each Person listed on Schedule 1.1A, (ii) each Note requested by a
Lender, the Guarantee and Collateral Agreement, executed and delivered
by Holdings, the Borrower and each Subsidiary Guarantor, (iii) an
Acknowledgment and Consent in the form attached to the Guarantee and
Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party, and (iv) in the
circumstances referred to in Section 5.1(c)(ii), the Escrow Agreement,
executed and delivered by the Borrower and the Administrative Agent.
In the event that this Agreement has not been duly
executed and delivered by each Person listed on Schedule 1.1A on the
date scheduled to be the Closing Date, the condition referred to in
clause (i) above shall nevertheless be deemed satisfied if on such date
the Borrower and the Administrative Agent shall have designated one or
more Persons (the "DESIGNATED LENDERS") to assume, in the aggregate, all
of the Commitments that would have been held by the Persons listed on
Schedule 1.1A (the "NON-EXECUTING PERSONS") which have not so executed
and delivered this Agreement (subject to each such Designated Lender's
consent and its execution and delivery of this Agreement). Schedule 1.1A
shall automatically be deemed to be amended to reflect the respective
Commitments of the Designated Lenders and the omission of the
Non-Executing Persons as Lenders hereunder.
(b) ACQUISITION, ETC. The following transactions shall have been
consummated, in each case on terms and conditions reasonably
satisfactory to the Lenders:
(i) The transactions contemplated by the Acquisition
Documentation shall have been consummated in substantially the
manner set forth therein, and the Administrative Agent shall have
received true and correct copies, certified as to
50
authenticity by Holdings and the Borrower, of each item of the
Acquisition Documentation;
(ii) (A) The Borrower shall have been organized as a
direct wholly-owned subsidiary of Holdings into which Holdings,
immediately after the Acquisition, shall have transferred all of
its assets, including, without limitation, the stock of its
Subsidiaries, as consideration for all of the Borrower's Capital
Stock (the "CONTRIBUTION"), and (B) the Administrative Agent
shall have received a true and correct copy, certified as to
authenticity by Holdings and the Borrower, of the documentation
evidencing such Contribution;
(iii) Newco shall have received from (A) the Sponsor at
least $370,100,000 (in cash and in value as a rollover of
existing equity interests in Holdings prior to the Acquisition)
and (B) the Other Investors at least $23,000,000 (in cash and in
value as a rollover of existing equity interests in Holdings
prior to the Acquisition) from the proceeds of equity issued by
it;
(iv) the Borrower shall have received at least
$190,000,000 in gross cash proceeds from the issuance of the
Senior Subordinated Notes and shall have used all such proceeds
to consummate the Transactions;
(v) Holdings shall have received at least $110,000,000 in
gross cash proceeds from the issuance of the Senior Discount
Debentures, the terms of which shall not require any payment of
interest for at least five years from the Closing Date, and shall
have used all such proceeds to consummate the Transactions;
(vi) FFT shall own approximately seven percent (7%) of the
Capital Stock of Holdings after the Acquisition with an aggregate
value of approximately $30,600,000;
(vii) the Administrative Agent shall have received
satisfactory evidence that the fees and expenses to be incurred
in connection with the Acquisition and the financing thereof
shall not exceed $45,000,000 in the aggregate; and
(viii) The Administrative Agent shall have received
satisfactory evidence that (A) the $100,000,000 Amended and
Restated Credit Agreement, dated as of February 20, 1998, among
Holdings, the lenders therein, First Union National Bank, as
administrative agent thereunder, and Fleet National Bank, as
documentation agent thereunder, and (B) all other Indebtedness of
Holdings and its Subsidiaries (other than amounts outstanding
under the Convertible Subordinated Notes as permitted hereunder)
shall have been repaid, redeemed, repurchased or terminated and
all amounts payable in connection therewith shall have been
indefeasibly paid in full (the "REFINANCING", together with the
Acquisition and the Contribution, collectively, the
"TRANSACTIONS"), and satisfactory arrangements shall have been
made for the termination of all Liens granted in connection
therewith.
51
Immediately after the Closing Date, neither Holdings nor the Borrower
nor any of their respective Subsidiaries shall have any Indebtedness
other than (A) the remaining Indebtedness outstanding under the
Convertible Subordinated Notes after the consummation of the Repurchase
Offer as set forth herein, (B) the Senior Subordinated Notes, (C) the
Senior Discount Debentures and (D) the Term Loans.
(c) CONVERTIBLE SUBORDINATED NOTES. (i) The Lenders shall have
received satisfactory evidence that (A) Holdings shall have commenced an
offer to repurchase each of the Convertible Subordinated Notes from the
holders thereof (the "REPURCHASE OFFER") at a cash price of
approximately equal to 100% of the principal amount of the respective
Convertible Subordinated Notes (the "REPURCHASE PRICE"), (B) Holdings
shall have accepted, or shall have confirmed to the Administrative
Agent, to its reasonable satisfaction, for the benefit of the Lenders,
its intention to accept, the tender of the Convertible Subordinated
Notes by the selling holders of such Convertible Subordinated Notes on
the Closing Date, and (C) simultaneously with the making of the Term
Loans by the Lenders on the Closing Date, the Administrative Agent shall
have received instructions from the Borrower to transfer a portion of
the proceeds of the Loans made on the Closing Date equal to the amount
of the maximum possible Repurchase Price, either (x) directly to the
applicable depositary agent to pay for the Convertible Subordinated
Notes tendered pursuant to the Repurchase Offer (and, to the extent such
portion is not used by such depositary agent for such purpose and to the
extent further contemplated by clause (ii) below, for transfer by such
depositary agent to the Escrow Account (as defined below)) or (y) to the
Escrow Account.
(ii) In the event the aggregate principal amount of the
Convertible Subordinated Notes not tendered and accepted in the
Repurchase Offer on the Closing Date exceeds $5,000,000, the Borrower
shall have given instructions to the depositary agent referred to above,
in a manner satisfactory to the Administrative Agent, or to the
Administrative Agent, to deposit into a cash collateral account (the
"ESCROW ACCOUNT") established with the Escrow Agent and governed by the
Escrow Agreement, substantially in the form of Exhibit E, a portion of
the proceeds of the Loans made on the Closing Date equal to such
aggregate principal amount, which amount may be used as provided in the
Escrow Agreement to pay interest due and payable under each of the
Convertible Subordinated Notes and for the repurchase of any Convertible
Subordinated Notes outstanding in the Repurchase Offer and in an offer
made upon a "Change of Control" of Holdings (as defined in the
respective indenture for the Convertible Subordinated Notes) or
otherwise.
(d) PRO FORMA BALANCE SHEETS; FINANCIAL STATEMENTS. The Lenders
shall have received satisfactory (i) Pro Forma Balance Sheets, (ii)
audited consolidated balance sheets of Holdings as at December 31, 1998,
and the related consolidated statements of income and of cash flows for
the fiscal year ended on such date, reported on by and accompanied by an
unqualified report from Arthur Andersen LLP, (iii) unaudited
consolidating statements of income of Holdings (calculated on a business
unit basis) for the fiscal year ended on December 31, 1998, (iv)
unaudited consolidated balance sheets of Holdings as at March 31, 1999,
and the related unaudited consolidated statements of
52
income and of cash flows for the three-month period ended on such date,
(v) unaudited consolidating statements of income of Holdings (calculated
on a business unit basis) for the three-month period ended on March 31,
1999, and (vi) unaudited monthly consolidated balance sheets of Holdings
as at the end of each month following March 31, 1999 up to the Closing
Date, and the related unaudited monthly consolidated statements of
income and of cash flows for the respective one-month periods ended on
such dates, to the extent such monthly financial statements are
available.
(e) APPROVALS. All governmental and third party approvals
necessary or in the reasonable judgment of the Administrative Agent,
advisable in connection with the Transactions, the continuing operations
of Holdings, the Borrower and its Subsidiaries and the financings and
transactions contemplated hereby shall have been obtained and be in full
force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority
that would restrain, prevent or otherwise impose materially adverse
conditions on the Transactions or the financings and transactions
contemplated hereby.
(f) LIEN SEARCHES. The Administrative Agent shall have received
the results of a recent lien search in each of the jurisdictions listed
for each of the Loan Parties on Schedule 4.19, and such search shall
reveal no liens on any of the assets of Holdings, the Borrower or its
Subsidiaries except for liens permitted by Section 7.3 or discharged on
or prior to the Closing Date pursuant to documentation satisfactory to
the Administrative Agent.
(g) FEES. The Lenders, the Administrative Agent and the Other
Representatives shall have received all fees required to be paid, and
all expenses required to be reimbursed and for which invoices have been
presented (including the reasonable fees and expenses of legal counsel),
on or before the Closing Date. All such amounts will be paid with
proceeds of Loans made on the Closing Date and will be reflected in the
funding instructions given by the Borrower to the Administrative Agent
on or before the Closing Date.
(h) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments.
(i) LEGAL OPINIONS. The Administrative Agent shall have received
the following executed legal opinions:
(i) the legal opinion of Reboul, MacMurray, Hewitt,
Maynard & Kristol, counsel to Holdings, the Borrower and its
Subsidiaries, substantially in the form of Exhibit F-1;
(ii) the legal opinion of Richard A. Parr, general counsel
of Holdings, the Borrower and its Subsidiaries, substantially in
the form of Exhibit F-2;
53
(iii) each legal opinion, if any, delivered in connection
with the Acquisition Agreement (including, without limitation,
the legal opinion delivered to Newco by counsel to Holdings),
each accompanied by, to the extent reasonably available, a
reliance letter in favor of the Lenders;
(iv) the legal opinion of Schreck Morris, local counsel to
Holdings, the Borrower and its Subsidiaries, substantially in the
form of Exhibit F-3; and
(v) the legal opinion of Ropes & Gray, Massachusetts
counsel to Holdings, the Borrower and its Subsidiaries,
substantially in the form of Exhibit F-4, and of such other
special and local counsel as may be reasonably required by the
Administrative Agent.
Each such legal opinion, reports and other documents shall cover such
other matters incident to the transactions contemplated by this
Agreement as the Administrative Agent may reasonably require.
(j) PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES. The
Administrative Agent shall have received (i) the certificates
representing the shares of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer
of the pledgor thereof and (ii) each promissory note (if any) pledged to
the Administrative Agent pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank) by the pledgor thereof.
(k) FILINGS, REGISTRATIONS AND RECORDINGS. Each document
(including any Uniform Commercial Code financing statement) required by
the Security Documents or reasonably requested by the Administrative
Agent to be filed, registered or recorded in order to create in favor of
the Administrative Agent, for the benefit of the Lenders, a perfected
Lien on the Collateral described therein, prior and superior in right to
any other Person (other than with respect to Liens expressly permitted
by Section 7.3), shall be in proper form for filing, registration or
recordation.
(l) SOLVENCY OPINION. The Administrative Agent shall have
received a solvency opinion from Valuation Research Corporation, in
substantially the form of the draft thereof dated August 17, 1999, as to
the solvency of Holdings and the Borrower (on a consolidated basis)
after giving effect to the Transactions and the financings and
transactions contemplated herein.
(m) INSURANCE. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.2(b) of
the Guarantee and Collateral Agreement, which insurance (applicable
before and after the Closing Date) shall be reasonably satisfactory to
the Administrative Agent.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
54
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct on and as of such date as if made on
and as of such date, except to the extent that such representation and
warranty is expressly limited by its terms to an earlier date.
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding (unless cash in an amount equal to the aggregate amount of the L/C
Obligations outstanding has been deposited in a cash collateral account
established by the Administrative Agent) or any Loan or other amount is owing to
any Lender or the Administrative Agent hereunder, each of Holdings and the
Borrower shall and shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 95 days after
the end of each fiscal year:
(i) of the Borrower, copies of (A) the audited consolidated
balance sheets of the Borrower and its consolidated Subsidiaries
as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting
forth in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or
exception, or qualification arising out of the scope of the
audit, by independent certified public accountants of nationally
recognized standing, and (B) the unaudited consolidating
statements of income of the Borrower for such year (calculated on
a business unit basis), setting forth in comparative form the
figures for the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to
normal year-end audit adjustments and the absence of notes
thereto); and
(ii) of Holdings, copies of unaudited consolidated balance sheets
of Holdings and its consolidated Subsidiaries as at the end of
such year and the related unaudited consolidated statements of
income and of cash flows for such year, setting forth in
comparative form the figures for the previous year, certified by
a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the
absence of notes thereto); and
55
(b) as soon as available, but in any event not later than 50 days
after the end of each of the first three quarterly periods of each
fiscal year:
(i) of the Borrower, a copy of (A) the unaudited consolidated
balance sheets of the Borrower and its consolidated Subsidiaries
as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such
quarter and the portion of the fiscal year through the end of
such quarter, and (B) the unaudited consolidating statements of
income of the Borrower for such quarter and the portion of the
fiscal year through the end of such quarter (calculated on a
business unit basis), setting forth in each case in comparative
form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments and the
absence of notes thereto); and
(ii) of Holdings, a copy of the unaudited consolidated balance
sheets of Holdings and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated
statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter,
setting forth in comparative form the figures for the previous
year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit
adjustments and the absence of notes thereto).
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein and, with respect to unaudited financial statements as set
forth in this Section 6.1, subject, where appropriate, to normal year-end audit
adjustments and the absence of notes thereto).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the
Administrative Agent and each Lender (or, in the case of clause (g), to the
relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer
stating that, to the best of each such Responsible Officer's knowledge,
each Loan Party during such period has observed or performed all of its
covenants and other agreements, and satisfied every condition, contained
in this Agreement and the other Loan Documents to which it is a party to
be observed, performed or satisfied by it, and that such Responsible
Officer has obtained no knowledge of any Default or Event of Default
except as specified in such certificate and
56
(ii) in the case of quarterly or annual financial statements, (x) a
Compliance Certificate containing all information and calculations
necessary for determining compliance by Holdings, the Borrower and its
Subsidiaries with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the
Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any county or
state within the United States where any Loan Party keeps inventory or
equipment (PROVIDED, HOWEVER, that the Administrative Agent and each
Lender acknowledge that any equipment, including, without limitation,
any portable computer, which by its nature is expressly designed and
intended to be moved around may be temporarily moved to a location
other than as set forth in such listing) and of any Intellectual
Property acquired by any Loan Party since the date of the most recent
list delivered pursuant to this clause (y) (or, in the case of the
first such list so delivered, since the Closing Date);
(c) as soon as available, and in any event within 60 days after
the beginning of each fiscal year of the Borrower, a detailed
consolidated budget for the following fiscal year (including a projected
consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated
statements of projected cash flow and projected income and a description
of the underlying assumptions applicable thereto), and, as soon as
available, significant revisions, if any, of such budget and
projections, which revisions, in the reasonable judgment of the
Borrower, are necessary to make the information contained in such budget
and projections not materially misleading or inaccurate, with respect to
such fiscal year (collectively, the "PROJECTIONS"), which Projections
shall in each case be accompanied by a certificate of a Responsible
Officer stating that such Projections are based on reasonable estimates,
information and assumptions and that such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading in
any material respect;
(d) within 50 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then current
fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable
periods of the previous year, to the extent filings with the SEC by or
on behalf of the Borrower in which such narrative discussion and
analysis are presented shall no longer be required or made;
(e) no later than five Business Days prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Senior
Subordinated Note Indenture, the Senior Discount Debenture Purchase
Agreement, the Senior Discount Debenture Indenture, the documentation
for any Senior Discount Debenture Refinancing or the Acquisition
Documentation;
(f) within 10 days after the same are sent, copies of all
financial statements and reports that Holdings or the Borrower sends to
the holders of any class of its debt securities or public equity
securities and, within 10 days after the same are filed, copies of
57
all financial statements and reports that Holdings or the Borrower may
make to, or file with, the SEC; and
(g) promptly, such additional financial and other information as
any Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy
at or before maturity or before they become delinquent, as the case may be, all
its obligations of whatever nature, except where the amount or validity thereof
is currently being contested in good faith by appropriate proceedings and
reserves in conformity with GAAP with respect thereto have been provided on the
books of Holdings, the Borrower or its Subsidiaries, as the case may be, and
except where the failure to pay, discharge or satisfy the obligations could not
reasonably be expected to have a Material Adverse Effect.
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a) (i) Preserve, renew
and keep in full force and effect its corporate existence and business and (ii)
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business, except, in each
case, as otherwise permitted by Section 7.4 and except, in the case of clause
(ii) above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
material and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually insured
against in the same general area by companies engaged in the same or a similar
business.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of records and account in which entries in conformity with
GAAP and all Requirements of Law shall be made of all dealings and transactions
in relation to its business and activities and (b) permit representatives of any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of Holdings, the Borrower and its Subsidiaries
with officers and employees of Holdings, the Borrower and its Subsidiaries and
with its independent certified public accountants. In the event multiple Lenders
separately request such a visit, inspection or discussion in substantially the
same time period, such Lenders shall comply with reasonable requests by the
Borrower to coordinate the same.
6.7 NOTICES. Promptly after Holdings, the Borrower or any
Subsidiary, has obtained knowledge thereof, give notice to the Administrative
Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
58
(b) any (i) default or event of default under any Contractual
Obligation of Holdings, the Borrower or any of its Subsidiaries or (ii)
litigation, investigation or proceeding that may exist at any time
between Holdings, the Borrower or any of its Subsidiaries and any
Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected
to have a Material Adverse Effect;
(c) any litigation or proceeding affecting Holdings, the Borrower
or any of its Subsidiaries in which the amount involved is $2,000,000 or
more and not covered by insurance or in which injunctive or similar
relief (the result of which could reasonably be expected to have a
Material Adverse Effect) is sought;
(d) any of the following events that could reasonably be expected
to create or be a material liability, as soon as possible and in any
event within 30 days after the Borrower knows or has reason to know
thereof: (i) the occurrence of any Reportable Event with respect to any
Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC or a Plan or any withdrawal
from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of,
any Plan; and
(e) any other development or event that has had or could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Holdings, the Borrower or the relevant
Subsidiary proposes to take with respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects with,
and use all reasonable efforts to ensure compliance in all material respects by
all tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply in all material respects with and maintain, and use all
reasonable efforts to ensure that all tenants and subtenants obtain and comply
in all material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws.
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws.
6.9 INTEREST RATE PROTECTION. In the case of the Borrower, within
90 days after the Closing Date, enter into Hedge Agreements to the extent
necessary to provide that at least 50% of Consolidated Total Debt is subject to
either a fixed interest rate or interest rate protection for a
59
period of not less than three years, which Hedge Agreements shall have terms and
conditions reasonably satisfactory to the Administrative Agent.
6.10 ADDITIONAL COLLATERAL, ETC. (a) With respect to any property
acquired after the Closing Date by Holdings, the Borrower or any of its
Subsidiaries (other than (x) any property described in paragraph (b), (c) or (d)
below, (y) any property subject to a Lien expressly permitted by Section 7.3(g)
and (z) property acquired by any Excluded Foreign Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected
Lien, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as
the Administrative Agent deems necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a security interest in
such property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a perfected first priority
security interest in such property, including the filing of Uniform Commercial
Code financing statements in such jurisdictions as may be required by the
Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent. Notwithstanding the foregoing, neither Holdings nor the
Borrower shall be required, and the Borrower shall not be required to cause each
of its Subsidiaries, to take any actions or accept any contract terms which
could reasonably be expected to have a Material Adverse Effect or cause undue
hardship or excessive costs to Holdings, the Borrower or such Subsidiary, as the
case may be, in order to obtain the necessary consents to an assignment of its
rights, title and interest in the Collateral.
(b) With respect to any fee interest in any real property having
a value (together with improvements thereof) of at least $2,000,000 acquired
after the Closing Date by Holdings, the Borrower or any of its Subsidiaries
(other than (x) any such real property subject to a Lien expressly permitted by
Section 7.3(g) and (y) real property acquired by any Excluded Foreign
Subsidiary), promptly (i) execute and deliver a first priority Mortgage, in
favor of the Administrative Agent, for the benefit of the Lenders, covering such
real property, (ii) if requested by the Administrative Agent, provide the
Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real property
(or such other amount as shall be reasonably specified by the Administrative
Agent) as well as a current ALTA survey thereof, together with a surveyor's
certificate and (y) any consents or estoppels (which may be obtained without
undue hardship or excessive costs) reasonably deemed necessary or advisable by
the Administrative Agent in connection with such mortgage or deed of trust, each
of the foregoing in form and substance reasonably satisfactory to the
Administrative Agent and (iii) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by Holdings
(which, for the purposes of this paragraph (c), shall include any existing
Subsidiary that ceases to be an Excluded Foreign Subsidiary), the Borrower or
any of its Subsidiaries, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Lenders, a perfected first priority security
interest in the Capital Stock of such new
60
Subsidiary that is owned by Holdings, the Borrower or any of its Subsidiaries,
(ii) deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of Holdings, the Borrower or such
Subsidiary, as the case may be, (iii) cause such new Subsidiary (A) to become a
party to the Guarantee and Collateral Agreement, (B) to take such actions
necessary or advisable to grant to the Administrative Agent for the benefit of
the Lenders a perfected first priority security interest in the Collateral
described in the Guarantee and Collateral Agreement with respect to such new
Subsidiary, including the filing of Uniform Commercial Code financing statements
in such jurisdictions as may be required by the Guarantee and Collateral
Agreement or by law or as may be requested by the Administrative Agent and (C)
to deliver to the Administrative Agent a certificate of such Subsidiary,
substantially in the form of Exhibit C, with appropriate insertions and
attachments, and (iv) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent.
(d) With respect to any new Excluded Foreign Subsidiary created
or acquired after the Closing Date by Holdings, the Borrower or any of its
Subsidiaries, promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Capital Stock of such new Subsidiary that is owned by Holdings, the Borrower or
any of its Subsidiaries (provided that in no event shall more than 65% of the
total outstanding Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing
such Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of Holdings, the Borrower or such
Subsidiary, as the case may be, and take such other action as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable to perfect
the Administrative Agent's security interest therein, and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(e) With respect to any new Permitted Joint Venture created or
acquired by the Borrower or any of one or more of its Subsidiaries after the
Closing Date, use reasonable efforts in good faith to cause the joint venture or
similar agreement with respect thereto to permit the ownership interests of the
Borrower and such Subsidiaries therein to be included as Collateral under the
Security Documents.
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SECTION 7. NEGATIVE COVENANTS
Holdings and the Borrower hereby jointly and severally agree
that, so long as the Commitments remain in effect, any Letter of Credit remains
outstanding (unless cash in an amount equal to the aggregate amount of the L/C
Obligations outstanding has been deposited in a cash collateral account
established by the Administrative Agent) or any Loan or other amount is owing to
any Lender or the Administrative Agent hereunder, each of Holdings and the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly (and with respect to Permitted Joint Ventures, the Borrower shall not
permit any Permitted Joint Venture to, directly or indirectly, do or take the
actions set forth in Section 7.18):
7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio as at the last day of any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to exceed the ratio
set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
------------------ --------------
September 30, 1999 6.00 to 1.00
December 31, 1999 5.50 to 1.00
March 31, 2000 5.25 to 1.00
June 30, 2000 5.00 to 1.00
September 30, 2000 4.75 to 1.00
December 31, 2000 4.50 to 1.00
March 31, 2001 4.25 to 1.00
June 30, 2001 4.25 to 1.00
September 30, 2001 4.00 to 1.00
December 31, 2001 3.75 to 1.00
March 31, 2002 3.50 to 1.00
June 30, 2002 3.50 to 1.00
September 30, 2002 3.25 to 1.00
December 31, 2002 3.25 to 1.00
Each Quarter thereafter
2003-2008 3.00 to 1.00
; provided, that for the purposes of determining the ratio described above as at
the last day of any of the fiscal quarters of the Borrower ending September 30,
1999, December 31, 1999 and March 31, 2000, such ratio shall be calculated on a
pro forma basis as if the Transactions had occurred on the first day of the
four-quarter period then ended for testing such compliance.
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
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Consolidated Interest
Fiscal Quarter Coverage Ratio
----------------- ---------------------
September 30, 1999 1.50 to 1.00
December 31, 1999 1.75 to 1.00
March 31, 2000 2.00 to 1.00
June 30, 2000 2.00 to 1.00
September 30, 2000 2.25 to 1.00
December 31, 2000 2.25 to 1.00
March 31, 2001 2.50 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.75 to 1.00
December 31, 2001 2.75 to 1.00
March 31, 2002 3.00 to 1.00
June 30, 2002 3.00 to 1.00
September 30, 2002 3.25 to 1.00
December 31, 2002 3.25 to 1.00
March 31, 2003 3.50 to 1.00
June 30, 2003 3.50 to 1.00
Each Quarter thereafter
2003-2008 4.00 to 1.00
; provided, that for the purposes of determining the ratio described above as at
the last day of any of the fiscal quarters of the Borrower ending September 30,
1999, December 31, 1999 and March 31, 2000, such ratio shall be calculated on a
pro forma basis as if the Transactions had occurred on the first day of the
four-quarter period then ended for testing such compliance.
(c) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the
Consolidated Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters of the Borrower ending with any fiscal quarter set forth below
to be less than the ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Charge Coverage Ratio
-------------- ---------------------
September 30, 1999 1.00 to 1.00
December 31, 1999 1.00 to 1.00
Each Quarter thereafter
2000 to 2008 1.00 to 1.00
; provided, that for the purposes of determining the ratio described above as at
the last day of any of the fiscal quarters of the Borrower ending September 30,
1999, December 31, 1999 and March 31, 2000, such ratio shall be calculated on a
pro forma basis as if the Transactions had occurred on the first day of the
four-quarter period then ended for testing such compliance.
63
7.2 INDEBTEDNESS. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Wholly Owned Subsidiary Guarantor to the Borrower or any other
Subsidiary, PROVIDED, however that:
(i) if the Borrower or any Wholly Owned Subsidiary
Guarantor is the obligor under such Indebtedness, such
Indebtedness must be expressly subordinated to the prior
payment in full of all Obligations hereunder; and
(ii) (A) any subsequent issuance or transfer of Capital
Stock or ownership interests that results in any such
Indebtedness being held by a Person other than the
Borrower or a Wholly Owned Subsidiary Guarantor and (B)
any sale or other transfer of any such Indebtedness to a
Person that is not either the Borrower or a Wholly Owned
Subsidiary Guarantor shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the
Borrower or such Wholly Owned Subsidiary Guarantor, as the
case may be, that is not permitted by this Section 7.2(b);
(c) Guarantee Obligations incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries of obligations of
any Wholly Owned Subsidiary Guarantor;
(d) Indebtedness outstanding on the date hereof and listed on
Schedule 7.2(d) and any refinancings, refundings, renewals or extensions
thereof (without increasing, or shortening the maturity of, the
principal amount thereof and which shall not be adverse to the Borrower
or shall have a negative impact on the Lenders);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) of the Borrower and its Subsidiaries secured by Liens
permitted by Section 7.3(g) in an aggregate principal amount not to
exceed $15,000,000 at any one time outstanding;
(f) (i) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed
$190,000,000 and (ii) Guarantee Obligations of any Subsidiary Guarantor
in respect of such Indebtedness, PROVIDED that such Guarantee
Obligations are subordinated to the same extent as the obligations of
the Borrower in respect of the Senior Subordinated Notes;
(g) Indebtedness of Holdings in respect of the Senior Discount
Debentures in an aggregate principal amount not to exceed $110,000,000,
PROVIDED, that Holdings may refinance the Senior Discount Debentures
with, and/or exchange the Senior Discount Debentures for, other
Indebtedness of Holdings the terms of which shall be reasonably
acceptable to the Administrative Agent and no less favorable to the
Lenders than the terms contained in the Senior Discount Debenture
Indenture or Senior Discount
64
Debenture Purchase Agreement including, without limitation, that (A)
the maturity of such Indebtedness shall occur no earlier than the
maturity of the Senior Discount Debentures and (B) interest payments
in cash shall not be required to be payable until on or after the date
which is the fifth anniversary of the Senior Discount Debentures (such
other Indebtedness, the "SENIOR DISCOUNT DEBENTURE REFINANCING");
(h) Indebtedness incurred or assumed in connection with, or
resulting from, Permitted Acquisitions, PROVIDED, that the aggregate
principal amount of Indebtedness permitted by this Section 7.2(h) shall
be subject to the limitations set forth in Section 7.8(g); and
(i) additional Indebtedness of the Borrower or any of its
Subsidiaries in an aggregate principal amount (for the Borrower and all
Subsidiaries) not to exceed $10,000,000 at any one time outstanding.
7.3 LIENS. Create, incur, assume or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in
good faith by appropriate proceedings, PROVIDED that adequate reserves
with respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary
course of business that are not overdue for a period of more than 30
days or that are being contested in good faith by appropriate
proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule
7.3(f), securing Indebtedness permitted by Section 7.2(d), PROVIDED that
no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
65
(g) Liens securing Indebtedness of the Borrower or any of its
Subsidiaries incurred pursuant to Section 7.2(e) to finance the
acquisition of fixed or capital assets, PROVIDED that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness and (iii) the amount of Indebtedness secured thereby is not
increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased; and
(j) Liens not otherwise permitted by this Section so long as
neither (i) the aggregate outstanding principal amount of the
obligations secured thereby nor (ii) the aggregate fair market value
(determined as of the date such Lien is incurred) of the assets subject
thereto exceeds (as to the Borrower and its Subsidiaries) $5,000,000 at
any one time.
Notwithstanding any of the foregoing provisions, no real property of the
Borrower or its Subsidiaries owned on the Closing Date shall be subject to any
Liens permitted under Section 7.3 (f), (g) or (j).
7.4 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned
Subsidiary Guarantor (PROVIDED that the Wholly Owned Subsidiary
Guarantor shall be the continuing or surviving corporation) or with or
into any other Subsidiary which wholly owns or is wholly owned by such
Subsidiary; and
(b) any Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to the Borrower or
any Wholly Owned Subsidiary Guarantor or any other Subsidiary which
wholly owns or is wholly owned by such Subsidiary.
7.5 DISPOSITION OF PROPERTY. Dispose of any of its property,
whether now owned or hereafter acquired, or, in the case of any Subsidiary,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
66
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 7.4(b);
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any other Subsidiary; and
(e) the Disposition of other property having a fair market value
not to exceed $10,000,000 in the aggregate for any fiscal year of the
Borrower.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of Holdings, the Borrower or any Subsidiary,
whether now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of Holdings, the Borrower or any Subsidiary (collectively,
"RESTRICTED PAYMENTS"), except that:
(a) any Subsidiary may make Restricted Payments to the Borrower
or any other Subsidiary;
(b) so long as no Default or Event of Default shall have occurred
and be continuing, the Borrower may pay dividends to Holdings to permit
Holdings to (i) purchase Holdings' common stock or common stock options
from present or former officers or employees of Holdings, the Borrower
or any Subsidiary upon the death, disability or termination of
employment of such officer or employee, PROVIDED, that the aggregate
amount of payments under this clause after the date hereof (net of any
proceeds received by Holdings and contributed to the Borrower after the
date hereof in connection with resales of any common stock or common
stock options so purchased) shall not exceed $5,000,000, and (ii) pay
management fees expressly permitted by the last sentence of Section
7.10;
(c) the Borrower may pay dividends to Holdings to permit Holdings
to (i) pay corporate overhead expenses incurred in the ordinary course
of business not to exceed $1,000,000 in any fiscal year, (ii) pay
interest and other amounts due and payable to holders of Convertible
Subordinated Notes, including any amount required for the repurchase of
any Convertible Subordinated Notes, in each case, from amounts deposited
in the Escrow Account or otherwise, PROVIDED, that at any time such
payments are to be made, (A) no Default or Event of Default shall have
occurred and be continuing or would result therefrom and (B) the
Borrower and its Subsidiaries shall be in compliance, on a pro forma
basis as at the end of the last fiscal quarter of the Borrower for which
financial statements are available after giving effect to such payment,
with the covenants contained in Section 7.1 calculated as at the last
day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such payment had occurred on
the last day of each relevant period for testing such compliance and as
if the
67
Convertible Subordinated Notes were Indebtedness of the Borrower,
and (iii) pay any taxes that are due and payable by Holdings and the
Borrower as part of a consolidated group; and
(d) the Borrower may pay dividends or make other distributions to
Holdings to permit Holdings to pay interest and/or "original issue
discount" (within the meaning of Section 1273(a) of the Code) accrued
and accruing on the Senior Discount Debentures on or after the fifth
anniversary of the Closing Date, PROVIDED, that any time any such
dividends or distributions are to made, (i) no Default or Event of
Default shall have occurred and be continuing or would result therefrom
and (ii) the Borrower and its Subsidiaries shall be in compliance, on a
pro forma basis as at the end of the last fiscal quarter of the Borrower
for which financial statements are available after giving effect to such
payment, with the covenants contained in Section 7.1 calculated as at
the last day of the most recently ended fiscal quarter of the Borrower
for which financial statements are available, as if such payment had
occurred on the last day of each relevant period for testing such
compliance.
7.7 CAPITAL EXPENDITURES. Make or commit to make any Capital
Expenditure, except (a) Maintenance Capital Expenditures of the Borrower and its
Subsidiaries not exceeding the amount set forth opposite each of the fiscal
years set forth below:
Maintenance
Fiscal Year Capital Expenditures
----------- --------------------
1999 $50,000,000
2000 $50,000,000
2001 $55,000,000
2002 $55,000,000
2003 $60,000,000
2004 $60,000,000
2005 $70,000,000
2006 $70,000,000
2007 $80,000,000
2008 $90,000,000
; PROVIDED, that up to 50% of each such amount set forth above, if not expended
in the fiscal year for which it is permitted, may be carried over for
expenditure in the next succeeding fiscal year, and (b) Acquisition Capital
Expenditures of the Borrower and its Subsidiaries as permitted pursuant to
Section 7.8A.
7.8 INVESTMENTS. Make any advance, loan, extension of credit (by
way of guaranty or otherwise) or capital contribution to, or purchase any
Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, any
Person (all of the foregoing, "INVESTMENTS"), except:
(a) extensions of trade credit in the ordinary course of
business;
68
(b) investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of Holdings, the Borrower or
any Subsidiary of the Borrower in the ordinary course of business
(including for travel, entertainment and relocation expenses) in an
aggregate amount for Holdings, the Borrower or any Subsidiary of the
Borrower not to exceed $2,500,000 at any one time outstanding;
(e) the Acquisition and the other Transactions;
(f) Investments by Holdings, the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such
investment, is a Wholly Owned Subsidiary Guarantor;
(g) Permitted Acquisitions and investments in Permitted Joint
Ventures as permitted by Section 7.8A; and
(h) advances, loans or extensions of credit to, or the taking of
notes from, members of management of the Borrower in connection with the
issuance and sale of the Capital Stock of the Borrower to such members
in an amount not to exceed $4,000,000 at any one time outstanding.
7.8A ACQUISITIONS. Make or commit to make any Acquisition Capital
Expenditures or purchase any assets constituting a business unit of, or the
Capital Stock of, any Person, or make any investment in or loan or advance to
any Permitted Joint Venture except for Acquisition Capital Expenditures,
Permitted Acquisitions and investments in Permitted Joint Ventures involving the
expenditure (including the principal amount of any Indebtedness incurred or
assumed in connection with the same, the continuing Indebtedness of any acquired
Person outstanding at any time of its Permitted Acquisition and the fair market
value of any other non-cash consideration, but excluding common stock issued by
Holdings) in an aggregate amount not to exceed $20,000,000 during the period
from the Closing Date to and including December 31, 1999, and $30,000,000 in
each fiscal year thereafter, (which amount shall include a maximum of up to
$10,000,000 during the period from the Closing date to and including December
31, 1999 and $10,000,000 in each fiscal year thereafter, and which amount may be
used for investments in new Permitted Joint Ventures formed or acquired after
the Closing Date or the contribution of cash to existing Permitted Joint
Ventures); PROVIDED, HOWEVER, that immediately after giving effect to any such
Acquisition Capital Expenditure, Permitted Acquisition or investments in a
Permitted Joint Venture, (a) no Default or Event of Default shall have occurred
and be continuing, and (b) the Borrower and its Subsidiaries shall be in
compliance, on a pro forma basis as at the end of the last fiscal quarter of the
Borrower for which financial statements are available after giving effect
thereto, with the covenants contained in Section 7.1 calculated as at the last
day of the most recently ended fiscal quarter of the Borrower for which
financial statements are available, as if such transaction (and any related
incurrence or repayment of Indebtedness, with any new Indebtedness being deemed
amortized over the applicable testing
69
period in accordance with its terms, and with any Revolving Loans borrowed in
connection with such acquisition being deemed to be repaid with excess cash
balances as available) had occurred on the first day of each relevant period for
testing such compliance. With respect to any such amount as set forth above
(including the amount allocated to investments in Permitted Joint Ventures),
which is not expended in the period or fiscal year, as the case may be, for
which it is permitted, up to 50% of each such amount may be carried over for
expenditure in the next succeeding fiscal year.
7.9 OPTIONAL PAYMENTS AND MODIFICATIONS OF CERTAIN DEBT
INSTRUMENTS. (a) Make or offer to make any optional or voluntary payment,
prepayment, repurchase or redemption of or otherwise optionally or voluntarily
defease or segregate funds with respect to the Senior Subordinated Notes or the
Senior Discount Debentures (other than such a payment, prepayment, repurchase or
redemption of the Senior Discount Debentures with the proceeds of any Senior
Discount Debenture Refinancing), (b) amend, modify, waive or otherwise change,
or consent or agree to any amendment, modification, waiver or other change to,
any of the terms of the Senior Subordinated Notes, the Senior Discount
Debentures or any Senior Discount Debenture Refinancing (other than any such
amendment, modification, waiver or other change that (i) would extend the
maturity or reduce the amount of any payment of principal thereof or reduce the
rate or extend any date for payment of interest thereon and (ii) does not
involve the payment of a material consent fee), or (c) designate any
Indebtedness (other than obligations of the Loan Parties pursuant to the Loan
Documents) as "Designated Senior Indebtedness" for the purposes of the Senior
Subordinated Note Indenture.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than Holdings, the Borrower or any Subsidiary), Permitted Joint
Venture, Professional Association or Development Corporation unless such
transaction is (a) otherwise permitted under this Agreement, (b) in the ordinary
course of business of Holdings, the Borrower or such Subsidiary, as the case may
be, and (c) upon fair and reasonable terms no less favorable to Holdings, the
Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person that is not an Affiliate.
Notwithstanding the foregoing, Holdings, the Borrower and its Subsidiaries may
pay to the Sponsor and its Control Investment Affiliates fees and expenses
pursuant to a management agreement approved by the board of directors of
Holdings or the Borrower, as the case may be, in an aggregate amount not to
exceed $1,000,000 in any fiscal year of the Borrower, PROVIDED, that (x) such
management agreement may not be amended in any manner the result of which shall
be to increase the aggregate amount of fees and expenses payable thereunder to
the Sponsor and its Control Investment Affiliates and (y) at any time such fees
and expenses are to be paid, no Default or Event of Default shall have occurred
and be continuing.
7.11 SALES AND LEASEBACKS. Enter into any arrangement with any
Person providing for the leasing by Holdings, the Borrower or any Subsidiary of
real or personal property that has been or is to be sold or transferred by
Holdings, the Borrower or such Subsidiary to such Person or to any other Person
to whom funds have been or are to be advanced
70
by such Person on the security of such property or rental obligations of
Holdings, the Borrower or such Subsidiary.
7.12 CHANGES IN FISCAL PERIODS. Permit the fiscal year of the
Borrower to end on a day other than December 31 or change the Borrower's method
of determining fiscal quarters.
7.13 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or
become effective any agreement that prohibits or limits the ability of Holdings,
the Borrower or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property or revenues, whether now owned or
hereafter acquired, to secure its obligations under the Loan Documents to which
it is a party other than (a) this Agreement and the other Loan Documents and (b)
any agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
7.14 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents, (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary and
(iii) any restrictions imposed by any agreement related to secured Indebtedness
permitted by this Agreement if such restrictions apply only to the property or
assets securing such Indebtedness.
7.15 LINES OF BUSINESS. Enter into any business, either directly
or through any Subsidiary, except for those businesses in which the Borrower and
its Subsidiaries are engaged on the date of this Agreement (after giving effect
to the Acquisition) or that are reasonably related or ancillary thereto.
7.16 AMENDMENTS TO ACQUISITION DOCUMENTATION. (a) Amend,
supplement or otherwise modify (pursuant to a waiver or otherwise) the terms and
conditions of the indemnities and licenses furnished to the Borrower or any of
its Subsidiaries pursuant to the Acquisition Documentation or any other document
delivered by Holdings or any of its Affiliates in connection therewith such that
after giving effect thereto such indemnities or licenses shall be materially
less favorable to the interests of the Loan Parties or the Lenders with respect
thereto or (b) otherwise amend, supplement or otherwise modify the terms and
conditions of the Acquisition Documentation or any such other documents except
for any such amendment, supplement or modification that (i) becomes effective
after the Closing Date, and (ii) could not reasonably be expected to have a
Material Adverse Effect or a negative impact on the Lenders.
7.17 LIMITATION OF ACTIVITIES OF HOLDINGS. In the case of
Holdings, notwithstanding anything to the contrary in this Agreement or any
other Loan Document,
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(a) conduct, transact or otherwise engage in, or commit to conduct, transact or
otherwise engage in, any business or operations other than those incidental to
its ownership of the Capital Stock of the Borrower, (b) incur, create, assume or
suffer to exist any Indebtedness or other liabilities or financial obligations,
except (i) nonconsensual obligations imposed by operation of law, (ii) pursuant
to the Loan Documents to which it is a party, the Senior Discount Debenture
Purchase Agreement and the Senior Discount Debenture Indenture or the
documentation for any Senior Discount Debenture Refinancing and (iii)
obligations with respect to its Capital Stock, or (c) own, lease, manage or
otherwise operate any properties or assets (including cash (other than cash
received in connection with dividends made by the Borrower in accordance with
Section 7.6 pending application in the manner contemplated by said Section) and
cash equivalents) other than the ownership of shares of Capital Stock of the
Borrower.
7.18 LIMITATION OF PERMITTED JOINT VENTURES. Permit any Permitted
Joint Venture, to (a) create, issue, incur, assume, become liable in respect of
or suffer to exist any Indebtedness, except Indebtedness to the Borrower
permitted to be advanced by the Borrower pursuant to Section 7.8A, (b) enter
into any Guarantee Obligation, (c) enter into any business, either directly or
through any of their affiliates, except for those businesses in which the
Borrower and its Subsidiaries are permitted to engage pursuant to Section 7.15
(after giving effect to the Acquisition) or that are reasonably related thereto,
or (d) retain any cash remaining at the end of any fiscal year (other than cash
required to be reserved on its balance sheets in accordance with GAAP consistent
with past practice).
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof;
or the Borrower shall fail to pay any interest on any Loan or
Reimbursement Obligation, or any other amount payable hereunder or under
any other Loan Document, within three days after any such interest or
other amount becomes due in accordance with the terms hereof; or
(b) any representation or warranty made or, pursuant to the last
sentence of Section 5.2, deemed made by any Loan Party herein or in any
other Loan Document or that is contained in any certificate, document or
financial or other written statement furnished by it at any time under
or in connection with this Agreement or any such other Loan Document
shall prove to have been inaccurate in any material respect on or as of
the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or
performance of any agreement contained in clause (i) or (ii) of Section
6.4(a) (with respect to Holdings and the Borrower only), Section 6.7(a)
or Section 7 of this Agreement or Sections 5.5 and 5.7(b) of the
Guarantee and Collateral Agreement or (ii) an "Event of Default" under
and as defined in any Mortgage, if applicable, shall have occurred and
be continuing; or
72
(d) any Loan Party shall default in the observance or performance
of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this
Section), and such default shall continue unremedied for a period of 30
days; or
(e) Holdings, the Borrower or any of its Subsidiaries shall (i)
default in making any payment of any principal of any Indebtedness
(including any Guarantee Obligation, but excluding the Loans) on the
scheduled or original due date with respect thereto; or (ii) default in
making any payment of any interest on any such Indebtedness beyond the
period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iii) default in the observance
or performance of any other agreement or condition relating to any such
Indebtedness or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition
is to cause, or to permit the holder or beneficiary of such Indebtedness
(or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to
become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable;
PROVIDED, that a default, event or condition described in clause (i),
(ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to
Indebtedness the outstanding principal amount of which exceeds in the
aggregate $10,000,000; or
(f) (i) Holdings, the Borrower or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Holdings, the Borrower or any of its Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Holdings, the Borrower or any of its
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Borrower or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets that results in the entry of
an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 45 days from the
entry thereof; or (iv) Holdings, the Borrower or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) Holdings, the Borrower or any of its
73
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Borrower or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with
respect to a Plan; and in each case in clauses (i) through (vi) above,
such event or condition, together with all other such events or
conditions, if any, could, in the sole judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against
Holdings, the Borrower or any of its Subsidiaries involving in the
aggregate a liability (not paid or fully covered by insurance as to
which the relevant insurance company has acknowledged coverage) of
$5,000,000 or more, and all such judgments or decrees shall not have
been vacated, discharged, stayed or bonded pending appeal within 45 days
from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to
be in full force and effect, or any Loan Party or any Affiliate of any
Loan Party shall so assert, or any Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force
and effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k) (i) prior to an IPO, (a) the Permitted Investors shall cease
collectively to own, of record and beneficially, shares of the common
stock of Holdings equal to at least 51% of all of the issued and
outstanding shares of the common stock of Holdings on a fully diluted
basis and (B) the Permitted Investors shall cease to have the power to
vote or direct the voting of securities having a majority of the
aggregate ordinary voting power for the election of directors of
Holdings (determined on a fully diluted basis); (ii) after an IPO, (X)
the Permitted Investors shall cease collectively to own, of record and
beneficially, shares of the common stock of Holdings equal to at least
35% of all of the
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issued and outstanding shares of the common stock of Holdings on a
fully diluted basis, (Y) the Permitted Investors shall cease to have
the power to vote or direct the voting of securities having at least
35% of the aggregate ordinary voting power for the election of
directors of Holdings (determined on a fully diluted basis) and (Z)
any "person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")), excluding the Permitted Investors, shall become, or
obtain rights (whether by means or warrants, options or otherwise) to
become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than
15% of the outstanding common stock of Holdings; (iii) the board of
directors of Holdings shall cease to consist of a majority of
Continuing Directors; (iv) Holdings shall cease to own and control, of
record and beneficially, directly, 100% of each class of outstanding
Capital Stock of the Borrower free and clear of all Liens (except
Liens created by the Guarantee and Collateral Agreement); or (v) a
Specified Change of Control shall occur; or
(l) Holdings shall (i) conduct, transact or otherwise engage in,
or commit to conduct, transact or otherwise engage in, any business or
operations other than those incidental to its ownership of the Capital
Stock of the Borrower, (ii) incur, create, assume or suffer to exist any
Indebtedness or other liabilities or financial obligations, except (w)
the Senior Discount Debentures or any Senior Discount Debenture
Refinancing, (x) nonconsensual obligations imposed by operation of law,
(y) pursuant to the Loan Documents to which it is a party and (z)
obligations with respect to its Capital Stock, or (iii) own, lease,
manage or otherwise operate any properties or assets (including cash
(other than cash received in connection with dividends made by the
Borrower in accordance with Section 7.6 pending application in the
manner contemplated by said Section) and cash equivalents) other than
the ownership of shares of Capital Stock of the Borrower; or
(m) the Senior Subordinated Notes or the guarantees thereof shall
cease, for any reason, to be validly subordinated to the Obligations or
the obligations of the Subsidiary Guarantors under the Guarantee and
Collateral Agreement, as the case may be, as provided in the Senior
Subordinated Note Indenture, or any Loan Party, any Affiliate of any
Loan Party, the trustee in respect of the Senior Subordinated Notes or
the holders of at least 25% in aggregate principal amount of the Senior
Subordinated Notes shall so assert;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower
declare the Revolving Commitments to be terminated forthwith, whereupon the
Revolving
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Commitments shall immediately terminate; and (ii) with the consent of the
Required Lenders, the Administrative Agent may, or upon the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the other Loan Documents (including all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrower shall at such time deposit
in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrower hereunder and under the other Loan Documents
PROVIDED, HOWEVER, that in the event any and all Events of Default shall have
been waived or cured prior to the application of all amounts held in such cash
collateral account to the payment of drafts drawn under such Letters of Credit
or the repayment of other obligations of the Borrower hereunder and under the
other Loan Documents, such remaining amounts in such cash collateral account
shall be paid back to the Borrower. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower (or such other Person
as may be lawfully entitled thereto). Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein or in the other Loan Documents, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute
any of its duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agents or attorneys
in-fact selected by it with reasonable care.
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9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any Co-Lead
Arranger nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement or any other Loan Document (except to the extent that any of the
foregoing are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
any Loan Party or any officer thereof contained in this Agreement or any other
Loan Document or in any certificate, report, statement or other document
referred to or provided for in, or received by any of the Agents or the Co-Lead
Arrangers under or in connection with, this Agreement or any other Loan Document
or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Loan Party a party thereto to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it 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 counsel to Holdings or the Borrower),
independent accountants and other experts selected by the Administrative Agent.
The Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Administrative Agent. The
Administrative Agent shall 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 Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders), and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from a
Lender, Holdings or the Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed
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by the Required Lenders (or, if so specified by this Agreement, all Lenders);
PROVIDED that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interests of the
Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS. Each Lender
expressly acknowledges that neither the Agents nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereinafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by any Agent to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon any Agent, Co-Lead Arranger or
any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon any Agent, Co-Lead Arranger or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Loan Parties and their affiliates. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, the Administrative Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of any Loan Party or any
affiliate of a Loan Party that may come into the possession of the
Administrative Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each of the
Other Representatives and the Administrative Agent in its capacity as such (to
the extent not reimbursed by Holdings or the Borrower and without limiting the
obligation of Holdings or the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Other Representative or the Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Other Representative or the Administrative Agent under or in
connection with any of the foregoing; PROVIDED that no Lender shall be liable
for the payment of any portion of such liabilities, obligations, losses,
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damages, penalties, actions, judgments, suits, costs, expenses or disbursements
that are found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from such Other Representative's or the
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each of the Other
Representatives, the Administrative Agent and their respective affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with any Loan Party as though such Other Representative or the Administrative
Agent was not an Other Representative or the Administrative Agent, respectively.
With respect to the Loans made or renewed by any of them and with respect to any
Letter of Credit issued or participated in by any of them, each of the Other
Representatives or the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Other Representative or the
Administrative Agent, and the terms "Lender" and "Lenders" shall include each of
the Other Representative or the Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
9.10 OTHER REPRESENTATIVES. None of the Other Representatives
shall have any duties or responsibilities hereunder in its capacity as such.
SECTION 10. MISCELLANEOUS
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10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) forgive or reduce the principal amount or
extend the final scheduled date of maturity of any Loan or Reimbursement
Obligation, extend the scheduled date of any amortization payment in respect of
any Term Loan, reduce the stated rate of any interest or fee payable hereunder
or extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Commitment, in each case
without the consent of each Lender directly affected thereby; (ii) eliminate or
reduce any voting rights under this Section 10.1, reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents, release all or substantially all of the
Collateral or release any Subsidiary Guarantor (the release of which could
reasonably be expected to have a Material Adverse Effect) from its obligations
under the Guarantee and Collateral Agreement, in each case without the consent
of all Lenders; (iii) amend, modify or waive any condition precedent to any
extension of credit under the Revolving Facility set forth in Section 5.2
(including in connection with any waiver of an existing Default or Event of
Default) without the written consent of the Majority Facility Lenders in respect
of the Revolving Facility; (iv) amend, modify or waive any provision of Section
2.15 without the consent of each Lender; (v) reduce the amount of Net Cash
Proceeds or Excess Cash Flow required to be applied to prepay Loans under this
Agreement without the consent of the Majority Facility Lenders under each
Facility; (vi) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the consent of all Lenders
under such Facility; (vii) amend, modify or waive any provision of Section 9
without the consent of the Administrative Agent; or (viii) amend, modify or
waive any provision of Section 3 without the consent of the Issuing Lender. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
electronic transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three Business Days
after being deposited in the mail, postage prepaid, or, in the
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case of electronic transmission notice, when received, addressed as follows in
the case of Holdings, the Borrower and the Administrative Agent, and as set
forth in an administrative questionnaire delivered to the Administrative Agent
in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto:
Holdings and the Borrower: Concentra Managed Care, Inc.
312 Union Wharf
Boston, Massachusetts 02109
Attention: Chief Financial Officer
Telecopy: 617-367-8519
Telephone: 617-367-2163
E-Mail Address: Tom_Kiraly@Concentramc.com
with a copy to: Concentra Managed Care, Inc.
5080 Spectrum Drive
Suite 400, West Tower
Addison, Texas 75001
Attention: General Counsel
Telecopy: 972-387-1938
Telephone: 972-364-8043
E-Mail Address: Richard_Parr@Concentramc.com
The Administrative Agent: The Chase Manhattan Bank
1 Chase Manhattan Plaza, 8th Floor
New York, New York 10081
Attention: Janet Belden
Telecopy: 212-552-5658
Telephone: 212-552-7277
E-Mail Address: janet.belden@chase.com
with a copy to: The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Stephen Rochford
Telecopy: 212-270-5135
Telephone: 212-270-7275
E-Mail Address: stephen.rochford@chase.com
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the Administrative Agent or any Lender,
any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
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privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse each of the Other Representatives and the Administrative Agent
for all their respective out-of-pocket costs and expenses incurred in connection
with the syndication and financing of the Facilities and the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, the syndication of the Facilities and the
consummation and administration of the transactions contemplated hereby and
thereby, including the reasonable fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with statements
with respect to the foregoing to be submitted to the Borrower prior to the
Closing Date (in the case of amounts to be paid on the Closing Date) and from
time to time thereafter on a quarterly basis or such other periodic basis as the
Administrative Agent shall deem appropriate, (b) to pay or reimburse each Lender
and the Administrative Agent for all its costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
reasonable fees and disbursements of counsel (including the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to the
Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Other Representatives, the
Administrative Agent and their respective officers, directors, employees,
affiliates, agents and controlling persons (each, an "INDEMNITEE") harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits of any kind or nature whatsoever with
respect to the syndication and financing of the Facilities, and the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including any of the
foregoing relating to the use of proceeds of the Loans or the violation of,
noncompliance with or liability under, any Environmental Law applicable to the
operations of Holdings, the Borrower any of its Subsidiaries or any of the
Properties and the reasonable fees and expenses of legal counsel in connection
with claims, actions or proceedings by any Indemnitee against any Loan Party
under any Loan Document (all the foregoing in this clause (d), collectively, the
"INDEMNIFIED LIABILITIES"), PROVIDED, that the Borrower shall have no obligation
hereunder to any Indemnitee with respect to Indemnified Liabilities to the
extent such Indemnified Liabilities are found by a final and nonappealable
decision of a court of competent jurisdiction to have resulted from the gross
negligence or willful misconduct of such Indemnitee. Without limiting the
foregoing, and
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to the extent permitted by applicable law, the Borrower agrees not to assert and
to cause its Subsidiaries not to assert, and hereby waives and agrees to cause
its Subsidiaries to so waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 10.5 shall
be payable not later than 10 days after written demand therefor. Statements
payable by the Borrower pursuant to this Section 10.5 shall be submitted to
Chief Financial Officer (Telephone No. 617-367-2163) (Telecopy No.
617-367-8519), at the address of the Borrower set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a
written notice to the Administrative Agent. The agreements in this Section 10.5
shall survive repayment of the Loans and all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a)
This Agreement shall be binding upon and inure to the benefit of Holdings, the
Borrower, the Lenders, the Administrative Agent, all future holders of the Loans
and their respective permitted successors and assigns, except that the Borrower
may not assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower or the
Administrative Agent, in accordance with applicable law, at any time sell to one
or more banks, financial institutions or other entities (each, a "PARTICIPANT")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event shall
any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or postpone the date of the final maturity of the
Loans, in each case to the extent subject to such participation. The Borrower
agrees that if amounts outstanding under this Agreement and the Loans are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 10.7(a) as
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17 and 2.18
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it was a Lender; PROVIDED that, in the case of Section
2.17, such Participant shall have
83
complied with the requirements of said Section and PROVIDED, FURTHER, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender (an "ASSIGNOR") may, in accordance with applicable
law, at any time and from time to time assign to any Lender or any Affiliate
thereof or a Related Fund of any Lender or, with the consent of the Borrower and
the Administrative Agent (which, in each case, shall not be unreasonably
withheld or delayed), to an additional bank, financial institution or other
entity (an "ASSIGNEE") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, executed by such Assignee,
such Assignor and any other Person whose consent is required pursuant to this
paragraph, and delivered to the Administrative Agent for its acceptance and
recording in the Register; PROVIDED that no such assignment to an Assignee
(other than any Lender or any affiliate thereof or any Related Fund) shall be in
an aggregate principal amount of less than $5,000,000 (other than in the case of
an assignment of all of a Lender's interests under this Agreement), unless
otherwise agreed by the Borrower and the Administrative Agent. Any such
assignment need not be ratable as among the Facilities. Upon such execution,
delivery, acceptance and recording, from and after the effective date determined
pursuant to such Assignment and Acceptance, (x) the Assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment and/or
Loans as set forth therein, and (y) the Assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of an Assignor's rights and obligations under this Agreement, such Assignor
shall cease to be a party hereto). Notwithstanding any provision of this Section
10.6, the consent of the Borrower shall not be required for any assignment that
occurs when an Event of Default pursuant to Section 8(f) shall have occurred and
be continuing with respect to the Borrower.
(d) Notwithstanding anything to the contrary contained herein,
any Lender which is a bank (a "GRANTING BANK") may grant to a special purpose
funding vehicle (an "SPC"), identified as such in writing from time to time by
the Granting Bank to the Administrative Agent and the Borrower, the option to
provide to the Borrower all or any part of any Loan which such Granting Bank
would otherwise be obligated to make to the Borrower pursuant to this Agreement;
PROVIDED, THAT (i) nothing herein shall constitute a commitment by any SPC to
make any Loan, (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Bank shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Bank to the
same extent, and as if, such Loan were made by such Granting Bank. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation hereunder (all liability for which shall remain with the
Granting Bank). In furtherance of the foregoing, each party hereto agrees (which
agreement shall survive termination of this Agreement) that in the event of any
such grant by a Granting Bank to an SPC of the option to provide to the Borrower
all or any part of its Loan, (i) such Granting Bank's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged and such
Granting Bank shall remain solely responsible for the performance of such
obligations under this
84
Agreement and the other Loan Documents, (ii) such Granting Bank shall remain the
holder of such Loan for all purposes under this Agreement and the other Loan
Documents and nothing contained in this Section 10.6(d) is intended to excuse
the Granting Bank from the full performance of its obligations hereunder and
thereunder or otherwise diminish the duties and liabilities of the Granting Bank
under this Agreement or the other Loan Documents (other than it being understood
that any payment obligation on the part of such Granting Bank to make a Loan
hereunder shall, if such Loan is made by any SPC, be deemed to have been
satisfied upon the making of such Loan by such SPC), (iii) the Borrower and the
Administrative Agent shall continue to deal solely and directly with such
Granting Bank in connection with such Granting Bank's rights and obligations
under this Agreement and the other Loan Documents, (iv) in no event shall any
SPC have any right to approve any amendment or waiver of any provision of any
Loan Document, or any consent to any departure by any Loan Party therefrom, or
be included in any determination of the Required Lenders or the Majority
Facility Lenders hereunder for any purpose, (v) prior to the date that is one
year and one day after the payment in full of all outstanding commercial paper
or other senior Indebtedness of any SPC, it will not institute against, or join
any other Person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any State thereof. In addition, notwithstanding
anything to the contrary contained in this Section 10.6(d), any SPC may (X) with
notice to, but without prior written consent of, the Borrower and the
Administrative Agent (subject, however, to the approval of the financial
institution as set forth below), assign all or a portion of its interests in any
Loan to the Granting Bank or to a financial institution (previously approved in
writing by the Borrower and the Administrative Agent) providing liquidity and/or
credit support to or for the account of such SPC to support the funding or
maintenance of the Loans and (Y) subject to Section 10.15 hereof, disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency as specifically provided for in Section 10.15 hereof. This Section
10.6 may not be amended without the prior written consent of the SPC, the
Borrower and the Administrative Agent.
(e) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not evidenced
by a Note, shall be effective only upon appropriate entries with respect thereto
being made in the Register (and each Note, if any, shall expressly so provide).
Any assignment or transfer of all or part of a Loan evidenced by a Note shall be
registered on the Register only upon surrender for registration of assignment or
transfer of the Note evidencing such Loan, accompanied by a duly executed
Assignment and Acceptance, and thereupon one or more new Notes, upon request,
shall be issued to the designated Assignee.
(f) Upon its receipt of an Assignment and Acceptance executed by
an Assignor, an Assignee and any other Person whose consent is required by
Section 10.6(c), together with payment to the Administrative Agent of a
registration and processing fee of $4,000, the
85
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) record the information contained therein in the Register on the
effective date determined pursuant thereto.
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section 10.6 concerning assignments of
Loans and Notes, if any, relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests, including
any pledge or assignment by a Lender of any Loan or Note, if any, to any Federal
Reserve Bank or trustee (or similar entity) of a Lender in accordance with
applicable law.
(h) The Borrower, upon receipt of written notice from the
relevant Lender, agrees to issue Notes to any Lender requiring Notes to
facilitate transactions of the type described in paragraph (g) above.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "BENEFITTED
LENDER") shall, at any time after the Loans and other amounts payable hereunder
shall immediately become due and payable pursuant to Section 8, receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 8(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of the Obligations owing to
each such other Lender, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefitted Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; PROVIDED, HOWEVER, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to
Holdings or the Borrower, any such notice being expressly waived by Holdings and
the Borrower to the extent permitted by applicable law, upon any amount becoming
due and payable by Holdings or the Borrower hereunder (whether at the stated
maturity, by acceleration or otherwise), to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of Holdings or
the Borrower, as the case may be. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, PROVIDED that the failure to give such notice shall not affect
the validity of such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more
of the parties to this Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument. Delivery of an
86
executed signature page of this Agreement by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of Holdings, the Borrower, the Administrative Agent and
the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of Holdings and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to
which it is a party, or for recognition and enforcement of any judgment
in respect thereof, to the non-exclusive general jurisdiction of the
courts of the State of New York, the courts of the United States for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have
to the venue of any such action or proceeding in any such court or that
such action or proceeding was brought in an inconvenient court and
agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to Holdings or the Borrower, as the case may be at its address
set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction; and
87
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding
referred to in this Section any special, exemplary, punitive or
consequential damages.
10.13 ACKNOWLEDGMENTS. Each of Holdings and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to Holdings or the Borrower arising
out of or in connection with this Agreement or any of the other Loan
Documents, and the relationship between Administrative Agent and
Lenders, on one hand, and Holdings and the Borrower, on the other hand,
in connection herewith or therewith is solely that of debtor and
creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated
hereby among the Lenders or among Holdings, the Borrower and the
Lenders.
10.14 RELEASES OF GUARANTEES AND LIENS. (a) Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Lender (without
requirement of notice to or consent of any Lender except as expressly required
by Section 10.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent necessary
to permit consummation of any transaction not prohibited by any Loan Document or
that has been consented to in accordance with Section 10.1 or (ii) under the
circumstances described in paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations and
the other obligations under the Loan Documents (other than obligations under or
in respect of Hedge Agreements) shall have been paid in full, the Commitments
have been terminated and no Letters of Credit shall be outstanding, the
Collateral shall be released from the Liens created by the Security Documents,
and the Security Documents and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Loan
Party under the Security Documents shall terminate, all without delivery of any
instrument or performance of any act by any Person and at such time, the
Administrative Agent agrees to promptly take such action and execute and deliver
such instruments and documents as shall be necessary to release the Liens and
security interests created by the Security Documents, including, without
limitation, any Uniform Commercial Code release or termination statements.
10.15 CONFIDENTIALITY. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement that is designated by such Loan Party
as confidential; PROVIDED that nothing herein shall prevent the Administrative
Agent or any Lender from disclosing any such information (a) to the
Administrative Agent, any other Lender or any affiliate of any Lender, (b) to
any Transferee
88
or prospective Transferee that agrees to comply with the provisions of this
Section, (c) to its employees, directors, agents, attorneys, accountants and
other professional advisors or those of any of its affiliates, (d) to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty's professional advisor (so long as such contractual counterparty or
professional advisor to such contractual counterparty agrees to be bound by the
provisions of this Section 10.15, (e) upon the request or demand of any
Governmental Authority, (f) in response to any order of any court or other
Governmental Authority or as may otherwise be required pursuant to any
Requirement of Law, (g) if requested or required to do so in connection with any
litigation or similar proceeding, (h) that has been publicly disclosed without
violation of this Section 10.15, (i) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about a Lender's investment portfolio
in connection with ratings issued with respect to such Lender, or (j) in
connection with the exercise of any remedy hereunder or under any other Loan
Document. Each of the Administrative Agent and each Lender agrees that in the
event it is requested, required or demanded to disclose such non-public
information pursuant to clause (e), (f) or (g) above, it shall, to the extent
permitted by law, promptly notify the applicable Loan Party thereof, to enable
such Loan Party to obtain a protective order with respect to such information.
10.16 WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
CONCENTRA MANAGED CARE, INC.
By:/s/ Richard A. Parr
------------------------------------
Title: Executive Vice President
CONCENTRA OPERATING CORPORATION
By:/s/ Richard A. Parr
------------------------------------
Title: Executive Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent and a Lender
By:/s/Deborah Davey
---------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON, as
Co-Documentation Agent and a Lender
By:/s/ William S. Lutkins
---------------------
Title: Vice President
By:/s/ Thomas G. Muoio
---------------------
Title: Vice President
FLEET NATIONAL BANK, as Co-Documentation
Agent and a Lender
By:/s/ Maryann S. Smith
---------------------
Title: Vice President
DLJ CAPITAL FUNDING, INC., as Syndication
Agent and a Lender
By:/s/ James L. Paradise
----------------------
Title: Senior Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:/s/ Farboud Tavangar
-----------------------
Title: Senior Vice President
PARIBAS
By:/s/ David I. Canavan
---------------------
Title: Managing Director
By:/s/ Brett I. Mehlma
---------------------
Title: Vice President
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By:/s/ John G. Taylor
---------------------
Title: Vice President
By:/s/ Robert M. Biringer
---------------------
Title: Executive Vice President
SCOTIABANC INC.
By:/s/ Carolyn A. Calloway
---------------------
Title: Relationship Manager
BHF (USA) CAPITAL CORP.
By:/s/ STEVEN ALEXANDER
---------------------
Title: Associate
By: /s/ GORDON MUESSEL
---------------------
Title: Vice President
PROVIDENT BANK OF MARYLAND
By:/s/ FRIEDA M.A. MCWILLIAMS
---------------------
Title: Vice President
BANKERS TRUST COMPANY
By:/s/ JAMES REILLY
---------------------
Title: Vice President
SOCIETE GENERALE
By:/s/ Migdalia Lagoa
---------------------
Title: Managing Director
KZH SOLEIL - 2 LLC
By:/s/ Peter Chin
---------------------
Title: Authorized Agent
KZH STERLING LLC
By:/s/ Peter Chin
---------------------
Title: Authorized Agent
MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY
By:/s/ Clifford M. Noreen
---------------------
Title: Vice President
MASSMUTUAL HIGH YIELD
PARTNERS II LLC
By: HYP Management Inc. as managing member
By:/s/ Clifford M. Noreen
---------------------
Title: Vice President
STEIN ROE FLOATING RATE LIMITED
LIABILITY COMPANY
By:/s/ Brian Good
---------------------
Title: Vice President
SRF TRADING, INC.
By:/s/ Kelly C. Walker
---------------------
Title: Vice President
BANK OF AMERICA, NA
By:/s/ Edward Harmon
---------------------
Title: Assistant Vice President
BALANCED HIGH YIELD FUND II, LTD.
By: BHF (USA) Capital Corp. as
attorney-in-fact
By:/s/ Stephen Alexander
---------------------
Title: Associate
By:/s/ Gordon Muessel
---------------------
Title: Vice President
KZH SHOSHONE, LLC
By:/s/ Peter Chin
---------------------
Title: Authorized Agent
JACKSON NATIONAL LIFE INSURANCE COMPANY
BY: PPM America, Inc., as attorney in
fact, on behalf of Jackson National
Life Insurance Company
By:/s/ John Walding
---------------------
Title: Managing Director
METROPOLITAN LIFE INSURANCE COMPANY
By:/s/ James R. Dingler
---------------------
Title: Director
TYLER TRADING, INC.
By:/s/ Johnny E. Graves
---------------------
Title: President
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc. as its
investment manager
BY:/s/ Jeffrey A. Bakalar
----------------------------
Title: Vice President
ANNEX A
PRICING GRID FOR REVOLVING CREDIT LOANS AND COMMITMENT FEES
- ---------------------------------------------------------------------------------------------
Consolidated Leverage Ratio Applicable Margin Applicable Margin Commitment Fee
for Eurodollar for ABR Loans Rate
Loans
- ---------------------------------------------------------------------------------------------
>4.5 to 1.0 2.75% 1.75% 0.50%
- ---------------------------------------------------------------------------------------------
< 4.5 to 1.0 and > 4.0 to 1.0 2.50% 1.50% 0.50%
- ---------------------------------------------------------------------------------------------
< 4.0 to 1.0 and > 3.5 to 1.0 2.25% 1.25% 0.50%
- ---------------------------------------------------------------------------------------------
< 3.5 to 1.0 2.00% 1.00% 0.375%
- ---------------------------------------------------------------------------------------------
Changes in the Applicable Margin with respect to the Revolving Loans resulting
from changes in the Consolidated Leverage Ratio shall become effective on the
date (the "ADJUSTMENT DATE") on which financial statements are delivered to the
Lenders pursuant to Section 6.1 and shall remain in effect until the next change
to be effected pursuant to this paragraph. If any financial statements referred
to above are not delivered within the time periods specified above, then, until
such financial statements are delivered, the Consolidated Leverage Ratio as at
the end of the fiscal period that would have been covered thereby shall for the
purposes of this definition be deemed to be greater than 4.5 to 1.0. In
addition, at all times while an Event of Default shall have occurred and be
continuing, the Consolidated Leverage Ratio shall for the purposes of this
definition be deemed to be greater than 4.5 to 1.0. Each determination of the
Consolidated Leverage Ratio pursuant to this pricing grid shall be made with
respect to (or, in the case of Consolidated Total Debt, as at the end of) the
period of four consecutive fiscal quarters of the Borrower ending at the end of
the period covered by the relevant financial statements.
CONFORMED COPY
===============================================================================
$475,000,000
CREDIT AGREEMENT
among
CONCENTRA MANAGED CARE, INC.,
as Holdings,
CONCENTRA OPERATING CORPORATION,
as Borrower,
The Several Lenders
from Time to Time Parties Hereto,
THE CHASE MANHATTAN BANK,
as Administrative Agent,
CREDIT SUISSE FIRST BOSTON
and
FLEET NATIONAL BANK,
as Co-Documentation Agents,
and
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent,
Dated as of August 17, 1999
===============================================================================
CHASE SECURITIES INC.
and
DLJ CAPITAL FUNDING, INC.,
as Co-Lead Arrangers and Joint Book Managers
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................1
1.1 DEFINED TERMS.....................................................1
1.2 OTHER DEFINITIONAL PROVISIONS....................................25
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS...................................26
2.1 TERM COMMITMENTS.................................................26
2.2 PROCEDURE FOR TERM LOAN BORROWING................................26
2.3 REPAYMENT OF TERM LOANS..........................................26
2.4 REVOLVING COMMITMENTS............................................28
2.5 PROCEDURE FOR REVOLVING LOAN BORROWING...........................29
2.6 COMMITMENT FEES, ETC.............................................29
2.7 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS................29
2.8 OPTIONAL PREPAYMENTS.............................................29
2.9 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS..................30
2.10 CONVERSION AND CONTINUATION OPTIONS.............................31
2.11 LIMITATIONS ON EURODOLLAR TRANCHES..............................31
2.12 INTEREST RATES AND PAYMENT DATES................................32
2.13 COMPUTATION OF INTEREST AND FEES................................32
2.14 INABILITY TO DETERMINE INTEREST RATE............................33
2.15 PRO RATA TREATMENT AND PAYMENTS.................................33
2.16 REQUIREMENTS OF LAW.............................................34
2.17 TAXES...........................................................36
2.18 INDEMNITY.......................................................38
2.19 CHANGE OF LENDING OFFICE........................................38
2.20 REPLACEMENT OF LENDERS..........................................38
SECTION 3. LETTERS OF CREDIT.................................................39
3.1 L/C COMMITMENT...................................................39
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT.......................39
3.3 FEES AND OTHER CHARGES...........................................40
3.4 L/C PARTICIPATIONS...............................................40
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER.........................41
3.6 OBLIGATIONS ABSOLUTE.............................................41
3.7 LETTER OF CREDIT PAYMENTS........................................41
3.8 APPLICATIONS.....................................................42
SECTION 4. REPRESENTATIONS AND WARRANTIES....................................42
4.1 FINANCIAL CONDITION..............................................42
4.2 NO CHANGE........................................................43
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.........................43
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS..........43
4.5 NO LEGAL BAR.....................................................44
4.6 LITIGATION.......................................................44
4.7 NO DEFAULT.......................................................44
4.8 OWNERSHIP OF PROPERTY; LIENS.....................................44
4.9 INTELLECTUAL PROPERTY............................................44
4.10 TAXES...........................................................44
4.11 FEDERAL REGULATIONS.............................................45
4.12 LABOR MATTERS...................................................45
4.13 ERISA...........................................................45
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS.......................45
4.15 SUBSIDIARIES....................................................45
4.16 USE OF PROCEEDS.................................................46
4.17 ENVIRONMENTAL MATTERS...........................................46
4.18 ACCURACY OF INFORMATION, ETC....................................47
4.19 SECURITY DOCUMENTS..............................................47
4.20 SOLVENCY........................................................48
4.21 SENIOR INDEBTEDNESS.............................................48
4.22 YEAR 2000 MATTERS...............................................48
4.23 INSURANCE.......................................................48
4.24 CERTAIN DOCUMENTS...............................................49
SECTION 5. CONDITIONS PRECEDENT..............................................49
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT........................49
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT...........................53
SECTION 6. AFFIRMATIVE COVENANTS.............................................54
6.1 FINANCIAL STATEMENTS.............................................54
6.2 CERTIFICATES; OTHER INFORMATION..................................55
6.3 PAYMENT OF OBLIGATIONS...........................................57
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE.............................57
6.5 MAINTENANCE OF PROPERTY; INSURANCE...............................57
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS...........57
6.7 NOTICES..........................................................57
6.8 ENVIRONMENTAL LAWS...............................................58
6.9 INTEREST RATE PROTECTION.........................................58
6.10 ADDITIONAL COLLATERAL, ETC......................................59
SECTION 7. NEGATIVE COVENANTS................................................61
7.1 FINANCIAL CONDITION COVENANTS....................................61
7.2 INDEBTEDNESS.....................................................63
7.3 LIENS............................................................64
7.4 FUNDAMENTAL CHANGES..............................................65
7.5 DISPOSITION OF PROPERTY..........................................65
7.6 RESTRICTED PAYMENTS..............................................66
7.7 CAPITAL EXPENDITURES.............................................67
7.8 INVESTMENTS......................................................67
7.8A ACQUISITIONS. ..............................................68
7.9 OPTIONAL PAYMENTS AND MODIFICATIONS OF CERTAIN DEBT INSTRUMENTS.69
7.10 TRANSACTIONS WITH AFFILIATES....................................69
7.11 SALES AND LEASEBACKS............................................69
7.12 CHANGES IN FISCAL PERIODS.......................................70
7.13 NEGATIVE PLEDGE CLAUSES.........................................70
7.14 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS....................70
7.15 LINES OF BUSINESS...............................................70
7.16 AMENDMENTS TO ACQUISITION DOCUMENTATION.........................70
7.17 LIMITATION OF ACTIVITIES OF HOLDINGS............................70
7.18 LIMITATION OF PERMITTED JOINT VENTURES..........................71
SECTION 8. EVENTS OF DEFAULT.................................................71
SECTION 9. THE AGENTS........................................................75
9.1 APPOINTMENT......................................................75
9.2 DELEGATION OF DUTIES.............................................75
9.3 EXCULPATORY PROVISIONS...........................................76
9.4 RELIANCE BY ADMINISTRATIVE AGENT.................................76
9.5 NOTICE OF DEFAULT................................................76
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.........................77
9.7 INDEMNIFICATION..................................................77
9.8 AGENT IN ITS INDIVIDUAL CAPACITY.................................78
9.9 SUCCESSOR ADMINISTRATIVE AGENT...................................78
9.10 OTHER REPRESENTATIVES...........................................78
SECTION 10. MISCELLANEOUS....................................................78
10.1 AMENDMENTS AND WAIVERS..........................................79
10.2 NOTICES.........................................................79
10.3 NO WAIVER; CUMULATIVE REMEDIES..................................80
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES......................81
10.5 PAYMENT OF EXPENSES AND TAXES...................................81
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS..........82
10.7 ADJUSTMENTS; SET-OFF............................................85
10.8 COUNTERPARTS....................................................85
10.9 SEVERABILITY....................................................86
10.10 INTEGRATION....................................................86
10.11 GOVERNING LAW..................................................86
10.12 SUBMISSION TO JURISDICTION; WAIVERS............................86
10.13 ACKNOWLEDGMENTS................................................87
10.14 RELEASES OF GUARANTEES AND LIENS...............................87
10.15 CONFIDENTIALITY................................................87
10.16 WAIVERS OF JURY TRIAL..........................................89
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Development Corporations
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19 UCC Filing Jurisdictions
4.19(b) Real Property
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D Form of Assignment and Acceptance
E Form of Escrow Agreement
F-1 Form of Legal Opinion of Reboul, MacMurray, Hewitt, Maynard & Kristol,
counsel to Holdings, the Borrower and its Subsidiaries
F-2 Form of Legal Opinion of Richard A. Parr, general counsel to Holdings,
the Borrower and its Subsidiaries
F-3 Form of Legal Opinion of Schreck Morris, local counsel to Holdings, the
Borrower and its Subsidiaries
F-4 Form of Legal Opinion of Ropes & Gray, Massachusetts counsel to
Holdings, the Borrower and its Subsidiaries
G Form of Exemption Certificate
vi