EXECUTION COPY
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CREDIT AGREEMENT
among
Affiliated Managers Group, Inc.
The Several Lenders
from Time to Time Parties Hereto
NationsBank, N.A.,
as Documentation Agent
and
The Chase Manhattan Bank,
as Administrative Agent
Dated as of December 22, 1997
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TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Other Definitional Provisions . . . . . . . . . . . . . . . . 15
SECTION 2. AMOUNT AND TERMS OF REVOLVING CREDIT COMMITMENTS. . . . . . . 15
2.1 Revolving Credit Commitments. . . . . . . . . . . . . . . . . 15
2.2 Procedure for Borrowing . . . . . . . . . . . . . . . . . . . 15
2.3 Increase of Commitments . . . . . . . . . . . . . . . . . . . 16
2.4 Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . 17
2.5 Termination or Reduction of Commitments . . . . . . . . . . . 17
2.6 Repayment of Loans; Evidence of Debt. . . . . . . . . . . . . 17
SECTION 3. GENERAL PROVISIONS APPLICABLE TO THE LOANS. . . . . . . . . . 18
3.1 Optional Prepayments. . . . . . . . . . . . . . . . . . . . . 18
3.2 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . 18
3.3 Conversion and Continuation Options . . . . . . . . . . . . . 19
3.4 Minimum Amounts and Maximum Number of Tranches. . . . . . . . 19
3.5 Interest Rates and Payment Dates. . . . . . . . . . . . . . . 20
3.6 Computation of Interest and Fees. . . . . . . . . . . . . . . 20
3.7 Inability to Determine Interest Rate. . . . . . . . . . . . . 20
3.8 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . 21
3.9 Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.10 Requirements of Law . . . . . . . . . . . . . . . . . . . . . 22
3.11 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.12 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.13 Change of Lending Office. . . . . . . . . . . . . . . . . . . 25
SECTION 4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . 25
4.1 Financial Condition . . . . . . . . . . . . . . . . . . . . . 25
4.2 No Change . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.3 Corporate Existence; Compliance with Law. . . . . . . . . . . 26
4.4 Corporate Power; Authorization; Enforceable Obligations . . . 26
4.5 No Legal Bar. . . . . . . . . . . . . . . . . . . . . . . . . 27
4.6 No Material Litigation. . . . . . . . . . . . . . . . . . . . 27
4.7 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.8 Ownership of Property; Liens. . . . . . . . . . . . . . . . . 27
4.9 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.10 Federal Regulations . . . . . . . . . . . . . . . . . . . . . 27
4.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
4.12 Investment Company Act. . . . . . . . . . . . . . . . . . . . 28
4.13 Investment Advisory Agreements. . . . . . . . . . . . . . . . 28
4.14 Subsidiaries and Other Ownership Interests. . . . . . . . . . 29
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4.15 Purpose of Loans. . . . . . . . . . . . . . . . . . . . . . . 29
4.16 Accuracy and Completeness of Information. . . . . . . . . . . 29
SECTION 5. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . 29
5.1 Conditions to Initial Loans . . . . . . . . . . . . . . . . . 29
5.2 Conditions to Each Loan . . . . . . . . . . . . . . . . . . . 32
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . 32
6.1 Financial Statements. . . . . . . . . . . . . . . . . . . . . 32
6.2 Certificates; Other Information . . . . . . . . . . . . . . . 33
6.3 Payment of Obligations. . . . . . . . . . . . . . . . . . . . 34
6.4 Conduct of Business and Maintenance of Existence. . . . . . . 34
6.5 Maintenance of Property; Insurance. . . . . . . . . . . . . . 34
6.6 Inspection of Property; Books and Records; Discussions. . . . 35
6.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.8 Stock Pledges . . . . . . . . . . . . . . . . . . . . . . . . 36
6.9 Guarantees. . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . 36
7.1 Financial Condition Covenants . . . . . . . . . . . . . . . . 36
7.2 Limitation on Indebtedness. . . . . . . . . . . . . . . . . . 37
7.3 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . 38
7.4 Limitation on Guarantee Obligations . . . . . . . . . . . . . 39
7.5 Limitation on Fundamental Changes . . . . . . . . . . . . . . 39
7.6 Limitation on Sale of Assets. . . . . . . . . . . . . . . . . 40
7.7 Limitation on Leases. . . . . . . . . . . . . . . . . . . . . 40
7.8 Limitation on Dividends . . . . . . . . . . . . . . . . . . . 40
7.9 Limitation on Capital Expenditures. . . . . . . . . . . . . . 41
7.10 Limitation on Investments, Loans and Advances . . . . . . . . 41
7.11 Limitation on Payments of Subordinated Indebtedness . . . . . 42
7.12 Restriction on Amendments to Revenue Sharing Agreements . . . 42
7.13 Limitation on Transactions with Affiliates. . . . . . . . . . 42
7.14 Limitation on Changes in Fiscal Year. . . . . . . . . . . . . 42
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9. THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . 45
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . 45
9.2 Delegation of Duties. . . . . . . . . . . . . . . . . . . . . 45
9.3 Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . 45
9.4 Reliance by Administrative Agent. . . . . . . . . . . . . . . 46
9.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . 46
9.6 Non-Reliance on Administrative Agent and Other Lenders. . . . 46
9.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 47
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9.8 Administrative Agent in Its Individual Capacity . . . . . . . 47
9.9 Successor Administrative Agent. . . . . . . . . . . . . . . . 47
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 48
10.1 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . 48
10.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
10.3 No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . 49
10.4 Survival of Representations and Warranties. . . . . . . . . . 49
10.5 Payment of Expenses and Taxes . . . . . . . . . . . . . . . . 49
10.6 Successors and Assigns; Participations and Assignments. . . . 50
10.7 Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . 52
10.8 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 53
10.9 Severability. . . . . . . . . . . . . . . . . . . . . . . . . 53
10.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . 53
10.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . 53
10.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . 53
10.13 Acknowledgements. . . . . . . . . . . . . . . . . . . . . . . 54
10.14 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . 54
10.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 54
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ANNEXES
Annex I - Pricing Grid
SCHEDULES
Schedule I - Lender Commitments
Schedule 4.1 - Financial Condition
Schedule 4.2 - Changes in Capital Stock
Schedule 4.9 - Taxes
Schedule 4.10 - Federal Regulations
Schedule 4.14 - Subsidiaries and Other Ownership Interests
Schedule 7.2(g) - Existing Indebtedness
Schedule 7.3(j) - Existing Liens
Schedule 7.10 - Loans to Management
Schedule 7.13 - Transactions with Affiliates
EXHIBITS
Exhibit A - Form of Note
Exhibit B-1 - Form of Stock Pledge Agreement
Exhibit B-2 - Form of Partnership Pledge Agreement
Exhibit B-3 - Form of Limited Liability Company Pledge Agreement
Exhibit B-4 - Form of Subsidiary Pledge Agreement
Exhibit C - Form of Borrowing Certificate
Exhibit D - Form of Opinion of Borrower's Counsel
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Confidentiality Agreement
Exhibit G - Terms and Conditions of Subordinated Indebtedness
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CREDIT AGREEMENT, dated as of December 22, 1997, among Affiliated
Managers Group, Inc., a Delaware corporation (the "BORROWER"), the several banks
and other financial institutions from time to time parties to this Agreement
(the "LENDERS"), NationsBank, N.A., a national banking association, as
documentation agent (in such capacity, the "DOCUMENTATION AGENT") and The Chase
Manhattan Bank, a New York banking corporation, as administrative agent for the
Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
WHEREAS, the Borrower has acquired, and intends to acquire, directly
or indirectly, majority and other equity interests, each an "ACQUISITION") in
investment management companies, each as hereinafter further defined, a
"MANAGEMENT COMPANY"), and such Management Companies intend to acquire, directly
or indirectly, majority and other equity interests (each also an "Acquisition")
in other investment management companies (each also a "MANAGEMENT COMPANY"); and
WHEREAS, the Borrower currently has loans outstanding under the
existing $300,000,000 Credit Agreement, dated as of September 30, 1997 among the
Borrower, the several lenders parties thereto and The Chase Manhattan Bank, as
administrative agent (the "EXISTING FACILITY"); and
WHEREAS, the Borrower has requested loans of up to $285,000,000 (with
such increases as may be permitted hereunder) on a revolving basis to refinance
the Existing Facility, to finance Acquisitions, to pay the related fees and
expenses of the Acquisitions, to finance certain additional costs related to the
Acquisitions and to finance the working capital and business requirements of the
Borrower and its Subsidiaries; and
WHEREAS, the Lenders are willing to make Loans to the Borrower,
subject to the terms and conditions set forth in this Agreement;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ABR": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate in
effect on such day, (b) the Base CD Rate in effect on such day plus 1% and
(c) 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 Administrative Agent as
its prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by
The Chase Manhattan Bank in connection with extensions of credit to
debtors); "BASE CD RATE" shall mean the sum of (a) the product of (i) the
Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the C/D Reserve Percentage
and (b) the C/D
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Assessment Rate; "THREE-MONTH SECONDARY CD RATE" shall mean, for any day,
the secondary market rate for three-month certificates of deposit reported
as being in effect on such day (or, if such day shall not be a Business
Day, the next preceding Business Day) by the Board of Governors of the
Federal Reserve System (the "BOARD") through the public information
telephone line of the Federal Reserve Bank of New York (which rate will,
under the current practices of the Board, be published in Federal Reserve
Statistical Release H.15(519) during the week following such day), or, if
such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for
three-month certificates of deposit of major money center banks in New York
City received at approximately 10:00 A.M., New York City time, on such day
(or, if such day shall not be a Business Day, on the next preceding
Business Day) by the Administrative Agent from three New York City
negotiable certificate of deposit dealers of recognized standing selected
by it; and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, 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 which is a
Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. Any change in the ABR due
to a change in the Prime Rate, the Three-Month Secondary CD 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, the
Three-Month Secondary CD 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.
"ADJUSTED EBITDA": as at the end of any fiscal quarter of the
Borrower, the average of the Consolidated EBITDA of the Borrower and its
Subsidiaries (a) for such fiscal quarter (on an annualized (I.E., times
four) and consolidated basis) and (b) for the preceding four fiscal
quarters, in each case after giving effect on a PRO FORMA basis to
Acquisitions completed during such fiscal period.
"ADJUSTMENT DATE": each date that is the second Business Day
following receipt by the Administrative Agent of the financial statements
required to be delivered pursuant to subsection 6.1.
"ADMINISTRATIVE AGENT": The Chase Manhattan Bank, together with its
affiliates, as the administrative agent for the Lenders under this
Agreement and the other Loan Documents.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary or a Management Company) which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person.
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 of such Person
or (b) direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
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"APPLICABLE MARGIN": with respect to Eurodollar Loans and ABR Loans,
the rate per annum, as adjusted on each Adjustment Date, set forth under
the headings "Applicable Margin for Eurodollar Loans" and "Applicable
Margin for ABR Loans," respectively, on ANNEX I hereto which corresponds to
the ratio of Senior Indebtedness to Adjusted EBITDA of the Borrower,
determined from the financial statements referred to in subsection 6.1 and
with respect to fiscal quarters ended prior to the date hereof, the
financial statements heretofore provided to the Administrative Agent;
PROVIDED that in the event that the financial statements required to be
delivered pursuant to subsection 6.1 are not delivered when due, then
(a) if such financial statements are delivered after the date required
(without giving effect to any applicable cure period) and the Applicable
Margin increases from that previously in effect as a result of the delivery
of such financial statements, then the Applicable Margin during the period
from the date upon which such financial statements were required to be
delivered (without giving effect to any applicable cure period) until the
date upon which they actually are delivered shall be, except as otherwise
provided in clause (c) below, the Applicable Margin as so increased;
(b) if such financial statements are delivered after the date required
and the Applicable Margin decreases from that previously in effect as a
result of the delivery of such financial statements, then such decrease in
the Applicable Margin shall not become applicable until the date upon which
the financial statements actually are delivered; and
(c) if such financial statements are not delivered prior to the
expiration of the applicable cure period, then, effective upon such
expiration, for the period from the date upon which such financial
statements were required to be delivered (after the expiration of the
applicable cure period) until two Business Days following the date upon
which they actually are delivered, the Applicable Margin shall be 2.25%, in
the case of Eurodollar Loans, and 1.25%, in the case of ABR Loans (it being
understood that the foregoing shall not limit the rights of the
Administrative Agent and the Lenders set forth in Section 8).
"ASSET SALE": any sale, issuance, conveyance, transfer, lease or
other disposition, including by way of merger, consolidation or sale and
leaseback transaction (any of the foregoing, a "transfer"), directly or
indirectly, in one or a series of related transactions, of (i) all or
substantially all of the properties and assets (other than marketable
securities, including "margin stock" within the meaning of Regulation U,
liquid investments and other financial instruments) of the Borrower or its
Subsidiaries, or (ii) any other properties or assets of the Borrower or any
Subsidiary, other than in the ordinary course of business, to any Persons
other than the Borrower or any of its Subsidiaries. For the purposes of
this definition, the term "Asset Sale" shall not include (a) any transfer
of properties and assets to the extent that the gross proceeds from the
transfer thereof do not exceed (i) $2,000,000 in any transaction or series
of related transactions, taken as a whole, or (ii) $10,000,000
(irrespective of the size of the individual transactions) in the aggregate
for all such transactions or series of related transactions on or after the
Closing Date, and (b) any transfer of the Capital Stock of any Management
Company or any of the Subsidiaries of the Borrower to a partner, officer,
director, shareholder or member (or any entity owned or controlled by such
Person) of a Management Company which is a Subsidiary of the Borrower or in
which the Borrower or a Subsidiary has an ownership interest (any such
transfer described in this clause (b), a "SHAREHOLDER ASSET SALE"). In
addition, with regard to a Subsidiary of the Borrower, the term "Asset
Sale" shall include only that portion of the gross proceeds to such
Subsidiary from the
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transfer thereof representing the percentage of such proceeds equal to the
percentage of the Borrower's ownership interest in such Subsidiary.
"ASSIGNEE": as defined in subsection 10.6(c).
"AVAILABLE COMMITMENT": as to any Lender at any time, an amount equal
to the excess, if any, of (a) the amount of such Lender's Commitment over
(b) the aggregate principal amount of all Loans made by such Lender then
outstanding.
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified in a notice pursuant to
subsection 2.2 as a date on which the Borrower requests the Lenders to make
Loans hereunder.
"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.
"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 or options to purchase any of the
foregoing.
"C/D ASSESSMENT RATE": for any day as applied to any ABR Loan based
upon the Base CD Rate the annual assessment rate in effect on such day
which is payable by a member of the Bank Insurance Fund maintained by the
Federal Deposit Insurance Corporation (the "FDIC") classified as
well-capitalized and within supervisory subgroup "B" (or a comparable
successor assessment risk classification) within the meaning of 12 C.F.R.
Section 327.4 (or any successor provision) to the FDIC (or any successor)
for the FDIC's (or such successor's) insuring time deposits at offices of
such institution in the United States.
"C/D RESERVE PERCENTAGE": for any day as applied to any ABR Loan
based on the Base CD Rate, that percentage (expressed as a decimal) which
is in effect on such day, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) (the "BOARD"), for determining
the maximum reserve requirement for a Depositary Institution (as defined in
Regulation D of the Board) in respect of new non-personal time deposits in
Dollars having a maturity of 30 days or more.
"CHANGE OF CONTROL": a "Change of Control" shall be deemed to occur
on any date on which any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) other
than TA Associates, Inc. (and entities associated therewith) shall have
acquired beneficial ownership of Capital Stock having 30% or more of the
ordinary voting power in the election of directors of the Borrower.
"CHASE": The Chase Manhattan Bank, a New York banking corporation.
"CLOSING DATE": the date on which the conditions precedent set forth
in subsection 5.1 shall be satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
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"COLLATERAL": as defined in the Stock Pledge Agreement.
"COMMITMENT": as to any Lender, the obligation of such Lender to make
Loans to the Borrower hereunder in an aggregate principal amount at any one
time outstanding not to exceed the amount set forth opposite such Lender's
name on Schedule I under the heading "Commitment", as such amount may be
increased or reduced from time to time in accordance with the provisions of
this Agreement.
"COMMITMENT FEE RATE": the rate per annum, as adjusted on each
Adjustment Date, set forth under the heading "Commitment Fee Rate" on ANNEX
I hereto which corresponds to the ratio of Senior Indebtedness to Adjusted
EBITDA of the Borrower, determined from the financial statements referred
to in subsection 6.1 and with respect to fiscal quarters ended prior to the
date hereof, the financial statements heretofore provided to the
Administrative Agent; PROVIDED that in the event that the financial
statements required to be delivered pursuant to subsection 6.1 are not
delivered when due, then
(a) if such financial statements are delivered after the date required
(without giving effect to any applicable cure period) and the Commitment
Fee Rate increases from that previously in effect as a result of the
delivery of such financial statements, then the Commitment Fee Rate during
the period from the date upon which such financial statements were required
to be delivered (without giving effect to any applicable cure period) until
the date upon which they actually are delivered shall be, except as
otherwise provided in clause (c) below, the Commitment Fee Rate as so
increased;
(b) if such financial statements are delivered after the date required
and the Commitment Fee Rate decreases from that previously in effect as a
result of the delivery of such financial statements, then such decrease in
the Commitment Fee Rate shall not become applicable until the date upon
which the financial statements actually are delivered; and
(c) if such financial statements are not delivered prior to the
expiration of the applicable cure period, then, effective upon such
expiration, for the period from the date upon which such financial
statements were required to be delivered (after the expiration of the
applicable cure period) until two Business Days following the date upon
which they actually are delivered, the Commitment Fee Rate shall be 0.50%
(it being understood that the foregoing shall not limit the rights of the
Administrative Agent and the Lenders set forth in Section 8).
"COMMITMENT PERCENTAGE": as to any Lender at any time, the percentage
which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such
Lender's Loans then outstanding constitutes of the aggregate principal
amount of the Loans then outstanding).
"COMMITMENT PERIOD": the period from and including the date hereof to
but not including the Termination Date or such earlier date on which the
Commitments shall terminate as provided herein.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with the Borrower within the meaning of
Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414 of the Code.
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"CONSOLIDATED EBITDA": for any period the consolidated EBITDA of the
Borrower and its Subsidiaries for such period, in each case after giving
effect on a PRO FORMA basis to Acquisitions completed during such fiscal
period.
"CONSOLIDATED INTEREST EXPENSE": for any period, the amount of
interest expense, both expensed and capitalized, of the Borrower and, to
the extent payable out of Free Cash Flow (and not Operating Cash Flow)
under the relevant Revenue Sharing Agreement, its Subsidiaries on a
consolidated basis, net of the portion thereof attributable to minority
interests, for such period, as determined in accordance with GAAP.
"CONSOLIDATED NET INCOME" (or "CONSOLIDATED NET LOSS"): for any
period, consolidated net income (or loss) by the Borrower and its
Subsidiaries for such fiscal period, determined in accordance with GAAP.
"CONSOLIDATED NET WORTH": as at any date, all amounts included under
shareholders' equity on a consolidated balance sheet of the Borrower and
its Subsidiaries as at such date, as determined on a consolidated basis in
accordance with GAAP and any Subordinated Indebtedness; PROVIDED that such
Subordinated Indebtedness shall have no scheduled payments of interest
prior to December 22, 2002 (other than payments of interest which may, at
the option of the Borrower, be made by increasing the principal and other
than payments of interest with respect to the Subordinated Contingent
Payment Notes in accordance with the terms thereof).
"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.
"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.
"DOLLARS" and "$": dollars in lawful currency of the United States of
America.
"EBITDA": for any Person for any period, the sum (without
duplication) of the amount for such Person for such period of (a) its net
income before taxes, (b) its interest expense (including capitalized
interest expense), (c) its depreciation expense, (d) its amortization
expense and (e) its Non-Cash Based Compensation Costs, in each case as
determined in accordance with GAAP.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on such
day (including, without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Board of Governors of the
Federal Reserve System or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities"
in Regulation D of such Board) maintained by a member bank of such System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the
rate offered by Chase for Dollar deposits at or
7
about 10:00 A.M., New York City time, two Business Days prior to the
beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations in respect of
its Eurodollar Loans are then being conducted for delivery on the first day
of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of its Eurodollar Loan to be outstanding
during such Interest Period.
"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
"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, or any other condition, has been satisfied.
"EXISTING AGREEMENT": the $300,000,000 Credit Agreement, dated as of
September 30, 1997, among the Borrower, the several lenders parties thereto
and The Chase Manhattan Bank, as administrative agent.
"FINANCING LEASE": any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance
with GAAP to be capitalized on a balance sheet of the lessee.
"FREE CASH FLOW": as defined in the relevant Revenue Sharing
Agreement.
"FUNDS": the collective reference to all Investment Companies and
other investment accounts or funds (in whatever form and whether personal
or corporate) for which the Borrower or any of its Subsidiaries or
Management Companies provides advisory, management or administrative
services.
"GAAP": generally accepted accounting principles in the United States
of America in effect from time to time.
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person
(including, without limitation, 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, without limitation, any obligation of the guaranteeing person,
whether or not
8
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, 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 Borrower in good faith.
"INDEBTEDNESS": of any Person at any date and without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices), (b) any other indebtedness of such
Person which is evidenced by a note, bond, debenture or similar instrument,
(c) all obligations of such Person under Financing Leases, (d) all
obligations of such Person in respect of acceptances issued or created for
the account of such Person, (e) all obligations of such Person under
noncompetition agreements reflected as liabilities on a balance sheet of
such Person in accordance with GAAP, (f) all liabilities secured by any
Lien on any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof and (g) all net
obligations of such Person under interest rate, commodity, foreign currency
and financial markets swaps, options, futures and other hedging obligations
(valued, at such date, in accordance with the Borrower's customary
practices, as approved by its independent certified public accountants).
For purposes of the foregoing definition, with regard to a Subsidiary of
the Borrower, the term "Indebtedness" shall include only that portion of
its Indebtedness representing the percentage of its Indebtedness equal to
the percentage of the Borrower's ownership interest in such Subsidiary.
"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.
"INTEREST PAYMENT DATE": (a) as to any ABR Loan, the last day of each
March, June, September and December to occur while such Loan is
outstanding, (b) as to any Eurodollar Loan having an Interest Period of
three months or less, the last day of such Interest Period and (c) as to
any Eurodollar Loan having an Interest Period longer than three months,
each day which is three months or a whole multiple thereof, after the first
day of such Interest Period and the last day of such Interest Period.
"INTEREST PERIOD": with respect to any Eurodollar Loan:
9
(i) 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
(ii) 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 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 the foregoing provisions relating to Interest Periods are
subject to the following:
(1) if any Interest Period pertaining to a Eurodollar Loan 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;
(2) no Interest Period that would otherwise extend beyond the
Termination Date shall be selected by the Borrower; and
(3) any Interest Period pertaining to a Eurodollar Loan 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.
"INVESTMENT ADVISERS ACT": the Investment Advisers Act of 1940, and
the rules and regulations promulgated thereunder, as such may be amended
from time to time.
"INVESTMENT COMPANY": an "investment company" as such term is defined
in the Investment Company Act.
"INVESTMENT COMPANY ACT": the Investment Company Act of 1940, and the
rules and regulations promulgated thereunder, as such may be amended from
time to time.
"LENDERS": as defined in the preamble hereto.
"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,
without limitation, any conditional sale or other title retention agreement
and any Financing Lease having substantially the same economic effect as
any of the foregoing).
"LLC PLEDGE AGREEMENT": the Limited Liability Pledge Agreement to be
executed and delivered by the Borrower, substantially in the form of
Exhibit B-3, as the same may be amended, supplemented or otherwise modified
from time to time (including as supplemented by the execution
10
and delivery of any Pledge Agreement Supplement in the form of Annex I to
said Exhibit B-3 (a "PLEDGE AGREEMENT SUPPLEMENT")).
"LOAN DOCUMENTS": this Agreement, any Notes, and the Pledge
Agreements.
"LOANS": as defined in subsection 2.1(a).
"MANAGEMENT COMPANY": any Subsidiary or other Person engaged,
directly or indirectly, primarily in the business of providing investment
advisory, management, distribution or administrative services to Funds (or
investment accounts or funds which will be included as Funds after the
Borrower acquires an interest in such other Person) and in which the
Borrower, directly or indirectly, has purchased or otherwise acquired, or
has entered into an agreement to purchase or otherwise acquire, Capital
Stock or other interests, entitling the Borrower, directly or indirectly,
to a share of the revenues, earnings or value thereof.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform its obligations under the Loan Documents or (c) the
validity or enforceability of this or any of the other Loan Documents or
the rights or remedies of the Administrative Agent or the Lenders hereunder
or thereunder.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET PROCEEDS": with respect to any Asset Sale or Shareholder Asset
Sale the net amount equal to the aggregate amount received in cash
(including any cash received by way of deferred payment pursuant to a note
receivable, other non-cash consideration or otherwise, but only as and when
such cash is so received) in connection with such Asset Sale or Shareholder
Asset Sale MINUS the sum of (a) the reasonable fees, commissions and other
out-of-pocket expenses incurred by the Borrower or any of its Subsidiaries,
as applicable, in connection with such Asset Sale or Shareholder Asset Sale
(other than amounts payable to Affiliates of the Person making such
disposition) and (b) federal, state and local taxes incurred in connection
with such Asset Sale or Shareholder Asset Sale, whether or not payable at
such time. For purposes of the foregoing definition, with regard to a
Subsidiary of the Borrower, the term "Net Proceeds" shall include only that
portion of its Net Proceeds representing the percentage of its Net Proceeds
equal to the percentage of the Borrower's ownership interest in such
Subsidiary (or, if less in the case of any Asset Sale by a Subsidiary, the
portion to which the Borrower is entitled under any relevant Revenue
Sharing Agreement or other operating agreement with or with respect to such
Subsidiary).
"NON-CASH BASED COMPENSATION COSTS": for any period, the amount of
non-cash expense or costs computed under APB No. 25 and related
interpretations or FAS 123 and related interpretations, which relate to the
issuance of interests in any Subsidiary or Management Company.
"NON-EXCLUDED TAXES": as defined in subsection 3.11.
"NOTE": as defined in subsection 2.6(e).
"OPERATING CASH FLOW": as defined in the relevant Revenue Sharing
Agreement.
11
"PARTICIPANT": as defined in subsection 10.6(b).
"PARTNERSHIP PLEDGE AGREEMENT": the Partnership Pledge Agreement to
be executed and delivered by the Borrower, substantially in the form of
Exhibit B-2, as the same may be amended, supplemented or otherwise modified
from time to time (including as supplemented by the execution and delivery
of any Pledge Agreement Supplement in the form of Annex I to said Exhibit
B-2 (a "PLEDGE AGREEMENT SUPPLEMENT")).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA.
"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 which is
covered by ERISA and in respect of which the Parent 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 "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENTS": the collective reference to the Partnership
Pledge Agreement, the LLC Pledge Agreement, the Stock Pledge Agreement and
the Subsidiary Pledge Agreement.
"PLEDGED COLLATERAL": as defined in the Pledge Agreements other than
the Stock Pledge Agreement.
"PRO FORMA BALANCE SHEET": as defined in subsection 5.1(o).
"REGISTER": as defined in subsection 10.6(d).
"REGULATION U": Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"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 .13, .14, .16, .18, .19 or .20 of PBGC Reg.
Section 2615.
"REQUIRED LENDERS": at any time, Lenders the Commitment Percentages
of which aggregate at least 51%.
"REQUIREMENT OF LAW": as to any Person, 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.
12
"RESPONSIBLE OFFICER": the chief executive officer, the president and
the executive vice president of the Borrower or, with respect to financial
matters, the senior financial officer of the Borrower.
"REVENUE SHARING AGREEMENT": each agreement entered into by the
Borrower or a Subsidiary with a Management Company pursuant to which a
specified percentage of the adjusted gross revenues of the partnership or
limited liability company or other similar entity organized under such
agreement or the Person to which such agreement relates is deemed "Free
Cash Flow" to be distributed among partners, shareholders or members of
such Management Company, PRO RATA, in accordance with such partners',
shareholders' or members' ownership percentages, or any similar other
agreement providing for the distribution of income, revenues or assets of a
Management Company.
"SECURITIES ACTS": The Securities Act of 1933 and the Securities
Exchange Act of 1934, and the rules and regulations promulgated thereunder,
in each case as such may be amended from time to time.
"SENIOR INDEBTEDNESS": at any time, Total Indebtedness minus
Subordinated Indebtedness.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"STOCK PLEDGE AGREEMENT": the Stock Pledge Agreement to be executed
and delivered by the Borrower, substantially in the form of Exhibit B-1, as
the same may be amended, supplemented or otherwise modified from time to
time (including as supplemented by the execution and delivery of any Pledge
Agreement Supplement in the form of Annex I to said Exhibit B-1 (a "PLEDGE
AGREEMENT SUPPLEMENT")).
"SUBORDINATED CONTINGENT PAYMENT NOTES": the collective reference to
(i) the Subordinated Contingent Payment Notes issued by the Borrower
pursuant to the Partnership Interest Purchase Agreement dated March 8, 1995
among the Borrower, Systematic Financial Management, Inc., Cash Flow
Investors, Inc., Systematic Financial Management, L.P. and certain
stockholders of Systematic Financial Management, Inc., (ii) the
Subordinated Deferred Payment Note issued by the Borrower on November 9,
1995 pursuant to the Partnership Interest Purchase Agreement dated August
11,1995 among the Borrower, Renaissance Investment Management, Inc.,
Descartes, Inc., Renaissance Investment Management, the stockholders of
Renaissance Investment Management and certain stockholders of Descartes,
Inc., (iii) the Subordinated Contingent Payment Notes issued by the
Borrower pursuant to the Stock Purchase and Contribution Agreement, dated
October 11, 1996, among the Borrower, The Burridge Group Inc. and the
stockholders of The Burridge Group Inc. and (iv) the Subordinated
Contingent Payment Notes issued by the Borrower pursuant to the Limited
Liability Company Interest Purchase Agreement, dated March 5, 1997, among
the Borrower, Gofen and Glossberg, Inc., Gofen and Glossberg, L.L.C. and
the stockholders of Gofen and Glossberg, Inc.
"SUBORDINATED INDEBTEDNESS": (a) the Indebtedness of the Borrower
under the Subordinated Contingent Payment Notes and (b) any other unsecured
Indebtedness of the Borrower (i) for which the Borrower is directly or
primarily liable and in respect of which none of the Subsidiaries of the
Borrower is contingently or otherwise obligated, (ii) the payment of the
principal of and interest on which and other obligations of the Borrower in
respect of which are subordinated to the prior payment in full of the
principal of and interest (including post-petition interest whether or not
13
allowed as a claim in any proceeding) on the Loans and all other
obligations and liabilities of the Borrower to the Administrative Agent and
the Lenders hereunder, and (iii) which are generally consistent with terms
and conditions set forth in Exhibit G hereof (with any variations to such
terms and conditions being subject to approval by the Administrative Agent)
or otherwise satisfactory in form and substance to the Required Lenders.
"SUBSIDIARY": as to any Person, a corporation, partnership, limited
liability company or other entity of which Capital Stock having ordinary
voting power (other than Capital Stock having such power only by reason of
the happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership, limited
liability company 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 PLEDGE AGREEMENT": the Subsidiary Pledge Agreement to be
executed and delivered by each wholly owned Subsidiary of the Borrower,
substantially in the form of Exhibit B-4, as the same may be amended,
supplemented or otherwise modified from time to time (including as
supplemented by the execution and delivery of any Pledge Agreement
Supplement in the form of Annex I to said Exhibit B-4 (a "PLEDGE AGREEMENT
SUPPLEMENT").
"TERMINATION DATE": the date which is five years after the Closing
Date or such earlier date when the Commitments hereunder are terminated.
"TOTAL INDEBTEDNESS": at any time, the aggregate principal amount
(including capitalized interest) of all Indebtedness of the Borrower and
its Subsidiaries (including without limitation, pursuant to the Loans,
purchase money obligations and amounts payable under noncompetition
agreements) reflected as liabilities on the consolidated balance sheet of
the Borrower and its Subsidiaries.
"TRANCHE": the collective reference to Eurodollar Loans having
Interest Periods that began or will 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).
"TRANSFEREE": as defined in subsection 10.6(f).
"TYPE": as to any Loan, its nature as an ABR Loan or a Eurodollar
Loan.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in any Notes or any certificate or other document made or delivered
pursuant hereto.
(b) As used herein and in any Notes, and any certificate or other
document made or delivered pursuant hereto, accounting terms relating to the
Borrower and its Subsidiaries not defined in subsection 1.1 and accounting terms
partly defined in subsection 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP.
14
(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 provision of this Agreement, and Section, subsection,
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 REVOLVING CREDIT COMMITMENTS
2.1 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Lender severally agrees to make revolving credit loans
("LOANS") (PROVIDED, that any repricing or conversion of an outstanding Loan
shall not be considered a making of a Loan), to the Borrower from time to time
during the Commitment Period in an aggregate principal amount at any one time
outstanding not to exceed the amount of such Lender's Commitment. During the
Commitment Period the Borrower may use the Commitments by borrowing, prepaying
the Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans or (iii) a combination thereof, as determined by the Borrower and notified
to the Administrative Agent in accordance with subsections 2.2 and 3.3; PROVIDED
that no Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Termination Date.
2.2 PROCEDURE FOR BORROWING. The Borrower may borrow under the
Commitments during the 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 10:00 A.M., New York City
time, (a) three Business Days prior to the requested Borrowing Date, if all or
any part of the requested Loans are to be initially Eurodollar Loans or (b) one
Business Day prior to the requested Borrowing Date, if all of the requested
Loans are to be initially ABR Loans), specifying (i) the amount to be borrowed,
(ii) the requested Borrowing Date, (iii) whether the borrowing is to be of
Eurodollar Loans, ABR Loans or a combination thereof and (iv) if the borrowing
is to be entirely or partly of Eurodollar Loans, the respective amounts of each
such Type of Loan and the respective lengths of the initial Interest Periods for
such Eurodollar Loans. Each borrowing under the Commitments shall be in an
amount equal to $1,000,000 or a whole multiple of $100,000 in excess thereof.
Upon receipt of any such notice from the Borrower, the Administrative Agent
shall promptly notify each Lender thereof. Each 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 office of the Administrative Agent specified
in subsection 10.2 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 Lenders and in like funds as received by the
Administrative Agent. The failure of any Lender to make the Loan to be made by
it as part of any borrowing shall not relieve any other Lender of its obligation
to make available its share of such borrowing.
2.3 INCREASE OF COMMITMENTS. (a) The Borrower shall have the right,
not less than 90 days prior to the Termination Date, to request in writing, from
time to time (but not more than five times), that the aggregate amount of the
Commitments then in effect be increased effective upon a specific date (the
15
"INCREASE EFFECTIVE DATE") set forth in such request (the "INCREASE REQUEST");
PROVIDED that no such increase shall be permitted if, after giving effect
thereto the total aggregate Commitments would exceed $400,000,000. Any such
increase shall be in an incremental aggregate amount of not less than, in the
case of the first such increase, $15,000,000 and in the case of any subsequent
increase not less than the lesser of (i) $25,000,000 or (ii) $400,000,000 minus
the amount of the total aggregate Commitments then in effect (the "REQUESTED
AMOUNT") and shall increase permanently the amount of the total aggregate
Commitments then in effect.
(b) If on the date (the "INCREASE RESPONSE DATE") that is 30 days
after the date of any Increase Request any Lenders or prospective Lenders elect
in their sole discretion, to increase their Commitments (each an "INCREASING
LENDER") by an aggregate amount equal to the Requested Amount, then, subject to
the provisions of this subsection 2.3, on the Increase Effective Date therefor,
which shall be five Business Days after the Increase Response Date, the
Commitments of such Increasing Lenders, and correspondingly, the total aggregate
Commitments, shall be increased accordingly. Notwithstanding any provision of
this Agreement to the contrary, any notice by any Lender of its willingness to
increase its Commitment shall be revocable by such Lender in its sole and
absolute discretion at any time prior to the related Increase Effective Date.
(c) Each increase in the Commitment of an Increasing Lender shall be
evidenced by a written instrument executed by such Increasing Lender, the
Borrower and the Administrative Agent, and shall take effect on the related
Increase Effective Date.
(d) Upon the request to the Administrative Agent by any Increasing
Lender, the Borrower shall deliver to each such Increasing Lender, in exchange
for the Note held by such Increasing Lender, a new Note, in the principal amount
of such Increasing Lender's Commitment after giving effect to the adjustments
made pursuant to this subsection 2.3.
(e) If any Lenders or prospective Lenders shall have elected to
increase their Commitments as provided in this subsection 2.3, then as of the
related Increase Effective Date (i) the Commitments of each Increasing Lender
shall take effect and (ii) the Commitments of the Lenders which are not
Increasing Lenders shall remain constant. In the event any Increasing Lender is
not a Lender prior to the related Increase Effective Date, such Increasing
Lender shall be subject to approval by the Borrower and the Administrative Agent
(such approval not to be unreasonably withheld) and such Increasing Lender, the
Borrower and the Administrative Agent shall execute and deliver a joinder
agreement (a "JOINDER AGREEMENT") in form and substance reasonably satisfactory
to the Administrative Agent pursuant to which such Increasing Lender shall
become a party to this Agreement.
(f) From and after any Increase Effective Date, the Borrower and the
Administrative Agent shall cooperate in making conversions of the Eurodollar
Loans from one interest rate basis to another and in selecting Interest Periods
to be applicable thereto in order, during a reasonable period following the
Increase Effective Date, to make the Loans of each Lender ratable (based on
their respective Commitment Percentages after giving effect to the increased
Commitments hereunder) in the various Tranches.
2.4 COMMITMENT FEE. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and
including the first day of the Commitment Period to the Termination Date,
computed at the Commitment Fee Rate on the average daily amount of the Available
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 Termination Date or such earlier date as the
16
Commitments shall terminate as provided herein, commencing on the first of such
dates to occur after the date hereof.
2.5 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower shall have
the right, upon not less than five Business Days' notice to the Administrative
Agent, to terminate the Commitments or, from time to time, to reduce the amount
of the Commitments. Any such reduction shall be in an amount equal to
$5,000,000 or a whole multiple thereof and shall reduce permanently the
Commitments then in effect.
2.6 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan of such Lender on the
Termination Date (or such earlier date on which the Loans become due and payable
pursuant to Section 8). The Borrower hereby further agrees to pay interest on
the unpaid principal amount of the Loans from time to time outstanding from the
date hereof until payment in full thereof at the rates per annum, and on the
dates, set forth in subsection 3.5.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
subsection 10.6(d), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Loan made hereunder, the Type thereof and each
Interest Period applicable with respect to each Eurodollar Loan, (ii) the amount
of any principal or interest due and payable or to become due and payable from
the Borrower to each Lender hereunder and (iii) both the amount of any sum
received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to subsection 2.6(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER that the failure
of any Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Borrower to repay (with applicable interest) the Loans made to such Borrower
by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender a
promissory note of the Borrower evidencing the Loans of such Lender,
substantially in the form of Exhibit A with appropriate insertions as to date
and principal amount (a "NOTE").
SECTION 3. GENERAL PROVISIONS APPLICABLE TO THE LOANS
3.1 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 to the Administrative Agent, at least four Business Days'
prior to the date of prepayment if all or any part of the Loans to be prepaid
are Eurodollar Loans, and at least one Business Day prior to the date of
prepayment if all of the Loans to be prepaid are ABR Loans, specifying the date
and amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable
17
to each. Upon receipt of any such notice, the Administrative Agent shall
promptly notify each 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 any amounts payable pursuant to subsection 3.12. Partial
prepayments shall be in an aggregate principal amount of $1,000,000 or whole
multiples of $100,000 in excess thereof.
3.2 MANDATORY PREPAYMENTS. (a) In the event that the Borrower or any
of its Subsidiaries shall effect (i) an Asset Sale or (ii) a Shareholder Asset
Sale if, after giving effect to such Shareholder Asset Sale, the Borrower does
not continue to hold in excess of a 50% ownership interest in the relevant
Subsidiary or Management Company, the Borrower shall promptly notify the
Administrative Agent thereof and, unless 100% of the Lenders otherwise consent,
as promptly as possible, but in no case later than five Business Days after
receipt of the Net Proceeds of such Asset Sale or Shareholder Asset Sale, as the
case may be, shall apply an amount equal to 100% of the Net Proceeds of such
Asset Sale or Shareholder Asset Sale, as the case may be, to prepay outstanding
Loans, together with accrued interest on the principal being prepaid to the date
of prepayment and, in the case of Eurodollar Loans which are prepaid prior to
the last day of the Interest Period therefor, the amounts required by subsection
3.12. The Borrower shall, to the extent reasonably practicable, give notice to
the Administrative Agent of any prepayment required by this subsection 3.2
(which notice need not be given more than four Business Days prior to the date
of prepayment).
(b) All prepayments of Loans pursuant to this subsection 3.2 shall be
without premium or penalty, other than amounts required by subsection 3.12.
(c) The Borrower shall immediately prepay outstanding Loans, together
with accrued and unpaid interest thereon to the date of prepayment and any
amounts required by subsection 3.12, to the extent that the aggregate amount of
outstanding Loans exceeds the aggregate Commitments of the Lenders then in
effect.
(d) Prepayments of the Loans pursuant to subsection 3.2(a) shall be
applied to the prepayment of the Loans without any accompanying reduction of the
Commitments of the Lenders. Amounts to be applied pursuant to this subsection
3.2(d) to the prepayment of Loans shall be applied, as applicable, first to
reduce outstanding Loans which are ABR Loans. Any amounts remaining after each
such application shall be applied to prepay Loans which are Eurodollar Loans.
3.3 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. Any such notice of conversion to Eurodollar Loans shall
specify the length of the initial Interest Period or Interest Periods therefor.
Upon receipt of any such notice the Administrative Agent shall promptly notify
each affected Lender thereof. All or any part of outstanding Eurodollar Loans
and ABR Loans may be converted as provided herein; PROVIDED that (i) no Loan may
be converted into a Eurodollar Loan when any Event of Default has occurred and
is continuing and the Administrative Agent has or the Required Lenders have
determined that such a conversion is not appropriate and (ii) no Loan may be
converted into a Eurodollar Loan after the date that is one month prior to the
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
notice to the Administrative Agent, in
18
accordance with the applicable provisions of the term "Interest Period" set
forth in subsection 1.1, of the length of the next Interest Period to be
applicable to such Loans; PROVIDED that no Eurodollar Loan may be continued as
such (i) when any Event of Default has occurred and is continuing and the
Administrative Agent has or the Required Lenders have determined that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the Termination Date and PROVIDED, FURTHER that if the Borrower shall fail to
give such notice or if such continuation is not permitted such Eurodollar Loans
shall be automatically converted to ABR Loans on the last day of such then
expiring Interest Period.
3.4 MINIMUM AMOUNTS AND MAXIMUM NUMBER OF TRANCHES. All borrowings,
conversions and continuations of Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or
a whole multiple of $1,000,000 in excess thereof. In no event shall there be
more than eight Eurodollar Tranches outstanding at any time.
3.5 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) If all or a portion of (i) the principal amount of any Loan, (ii)
any interest payable thereon or (iii) 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 which is (x) in the case of overdue principal, the rate that would
otherwise be applicable thereto pursuant to the foregoing provisions of this
subsection plus 2% or (y) in the case of overdue interest, commitment fee or
other amount, the rate described in paragraph (b) of this subsection plus 2%, in
each case 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
subsection shall be payable from time to time on demand.
3.6 COMPUTATION OF INTEREST AND FEES. (a) Whenever it is calculated
on the basis of the Prime Rate, interest shall be calculated on the basis of a
365- (or 366-, as the case may be) day year for the actual days elapsed; and,
otherwise, interest as well as commitment fees shall be calculated on the basis
of a 360-day year for the actual days elapsed. The Administrative Agent shall
as soon as practicable notify the Borrower and the Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from
a change in the ABR, the Eurocurrency Reserve Requirements, the C/D Assessment
Rate or the C/D Reserve Percentage 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 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 subsection 3.5(a).
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3.7 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (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 Chase
that the Eurodollar Rate determined or to be determined for such Interest
Period will not adequately and fairly reflect the cost to the Lenders
generally (as conclusively certified by Chase) 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 affected Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as ABR Loans, (y) any ABR Loans 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
shall be converted, on the first day of such Interest Period, to ABR Loans.
Until such notice has been withdrawn by the Administrative Agent, no further
Eurodollar Loans shall be made or continued as such, nor shall the Borrower have
the right to convert Loans to Eurodollar Loans.
3.8 PRO RATA TREATMENT AND PAYMENTS. (a) Except as provided in
subsection 2.3(f), each borrowing by the Borrower from the Lenders hereunder,
each payment by the Borrower on account of any commitment fee hereunder and any
reduction of the Commitments of the Lenders shall be made PRO RATA according to
the respective Commitment Percentages of the Lenders. Each payment (including
each prepayment) by the Borrower on account of principal of and interest on the
Loans shall be made PRO RATA according to the respective outstanding principal
amounts of the Loans then held by the Lenders. All payments (including
prepayments) to be made by the Borrower hereunder, whether on account of
principal, interest, fees or otherwise, shall be made without set off 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 Administrative Agent's office specified in subsection 10.2, in Dollars and
in immediately available funds. The Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt (and if such payment is received
prior to 12:00 Noon, on the same day) in like funds as received. If any payment
hereunder becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension and such extension of time shall in such
case be included in the computation of payment of interest or fees, as the case
may be.
(b) 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 portion 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 subsection shall be
conclusive in the absence of manifest error. If such Lender's portion of such
borrowing is not made available to the Administrative Agent by such Lender
within three
20
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 hereunder, on demand, from the Borrower.
(c) In the event that a Lender fails to make available after a period
of three Business Days to the Administrative Agent its portion of a borrowing,
the Borrower may, upon not less than five Business Days prior irrevocable
written notice to the Administrative Agent, immediately terminate the Commitment
of such Lender, and designate an acceptable replacement Lender (which may be one
of the other Lenders) to purchase at par all of the Lender's interests in
accordance with the provisions of subsection 10.6(c). Any Lender being so
replaced by the Borrower agrees to transfer its interest in this Agreement and,
if applicable, its Note, to the substitute Lender pursuant to subsection
10.6(c); PROVIDED that concurrently with such transfer, such Lender so
substituted shall be paid all amounts owing to it hereunder and all costs
reasonably determined by it to be attributable to such transfer.
Notwithstanding the foregoing, the Lender being replaced shall not be deemed to
be released from any of its rights or obligations under any Loan Document
(including, without limitation, subsection 9.7) for actions taken or failed to
be taken by it prior to the date of such substitution.
3.9 ILLEGALITY. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert ABR Loans to Eurodollar Loans shall forthwith be cancelled and (b) such
Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted
automatically to ABR Loans on the respective last days of the then current
Interest Periods with respect to such Loans or within such earlier period as
required by law. If any such conversion of a Eurodollar Loan occurs on a day
which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 3.12.
3.10 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 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 Note 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 subsection 3.11 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 which 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 which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, the Borrower shall
promptly pay
21
such Lender such additional amount or amounts as will compensate such Lender for
such increased cost or reduced amount receivable.
(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 to a level below that which such Lender
or such corporation 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, the Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this subsection, 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; PROVIDED that no additional amount shall be payable under this
subsection 3.10 for a period longer than one year prior to such notice to the
Borrower. A certificate as to any additional amounts payable pursuant to this
subsection submitted by such Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
agreements in this subsection shall survive for a period of one year after the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
3.11 TAXES. (a) All payments made by the Borrower under this
Agreement and any Notes 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 Note). If any such
non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Administrative Agent or any Lender hereunder or under any Note,
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) 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 that is not organized under the laws of
the United States of America or a state thereof if such Lender fails to comply
with the requirements of paragraph (b) of this subsection. Whenever any
Non-Excluded 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 such 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 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. The agreements in this subsection shall
22
survive for a period of one year the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent (A) two
duly completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as
the case may be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date that
any such form or certification expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such
forms or certifications as may reasonably be requested by the Borrower or
the Administrative Agent;
unless in any such case an event (including, without limitation, any change in
treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Borrower and the
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to subsection 8.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection; PROVIDED that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
3.12 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense which 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 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 which
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 which 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) which
would have accrued to such Bank on such amount by placing such amount on deposit
for a comparable period with leading banks in the interbank eurodollar market.
This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.
23
3.13 CHANGE OF LENDING OFFICE. Each Lender agrees that if it makes
any demand for payment under subsection 3.10 or 3.11(a), or if any adoption or
change of the type described in subsection 3.9 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
unreasonably disadvantageous to it, as determined in its sole discretion) to
designate a different lending office if the making of such a designation would
reduce or obviate the need for the Borrower to make payments under subsection
3.10 or 3.11(a), or would eliminate or reduce the effect of any adoption or
change described in subsection 3.9.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans, the Borrower hereby represents and warrants to
the Administrative Agent and each Lender that:
4.1 FINANCIAL CONDITION. The Borrower has heretofore furnished to
each Lender copies of (i) the audited consolidated balance sheet of the Borrower
and its consolidated Subsidiaries as at December 31, 1996 and the related
audited consolidated statements of income and of cash flows for the fiscal year
ended on such date, audited by Coopers & Lybrand L.L.P. and (ii) the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as
at September 30, 1997 and the related unaudited consolidated statements of
income and of cash flows for the nine-month period ended on such date, certified
by a Responsible Officer (the "FINANCIAL STATEMENTS"). The Financial Statements
present fairly, in all material respects, the consolidated financial condition
of the Borrower and its consolidated Subsidiaries as at December 31, 1996 and
September 30, 1997 and present fairly, in all material respects, the
consolidated results of their operations and their consolidated cash flows for
the periods then ended (subject to normal year-end audit adjustments and the
absence of footnote disclosure). The Financial Statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the period involved. Except as set forth on
Schedule 4.1, neither the Borrower nor any of its consolidated Subsidiaries had,
at December 31, 1996 or at the date hereof, any material Guarantee Obligation,
material contingent liability or material liability for taxes, or any material
long-term lease or unusual material forward or long-term commitment, including,
without limitation, any interest rate or foreign currency swap or exchange
transaction, which is not reflected in the foregoing statements or in the notes
thereto. Except as set forth on Schedule 4.1, during the period from December
31, 1996 to and including the date hereof there has been no sale, transfer or
other disposition by the Borrower or any of its consolidated Subsidiaries of any
material part of its business or property and no purchase or other acquisition
of any business or property (including any capital stock of any other Person)
material in relation to the consolidated financial condition of the Borrower and
its Subsidiaries as of December 31, 1996.
4.2 NO CHANGE. (a) From December 31, 1996 except as set forth in the
Financial Statements or the Pro Forma Balance Sheet, there has been no
development or event which has had or could have a Material Adverse Effect, and
(b) except as set forth on Schedule 4.2, during the period from December 31,
1996 to and including the date hereof, no dividends or other distributions have
been declared, paid or made upon the Capital Stock of the Borrower nor has any
of the Capital Stock of the Borrower been redeemed, retired, purchased or
otherwise acquired for value by the Borrower or any of its Subsidiaries.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of 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
power and authority, and the legal right, to own and operate its property, to
lease
24
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, partnership
or limited liability company, as applicable, 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 where the failure to
be so qualified or in good standing would not have a Material Adverse Effect and
(d) is in compliance with its certificate of incorporation and by-laws or other
similar organizational or governing documents and with all Requirements of Law,
except to the extent that the failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
Borrower 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 to borrow
hereunder and has taken all necessary corporate action to authorize the
borrowings on the terms and conditions of this Agreement and any Notes and to
authorize the execution, delivery and performance of the Loan Documents to which
it is a party. 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 borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents to which
the Borrower is a party; PROVIDED that the Administrative Agent's rights under
the Pledge Agreements are subject to the terms and provisions thereof. This
Agreement has been, and each other Loan Document to which it is a party will be,
duly executed and delivered on behalf of the Borrower. This Agreement
constitutes, and each other Loan Document to which it is a party when executed
and delivered will constitute, a legal, valid and binding obligation of the
Borrower enforceable against the Borrower in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of the Loan
Documents to which the Borrower is a party, the borrowings hereunder and the use
of the proceeds thereof will not violate any certificate of incorporation and
by-laws or other similar organizational or governing documents, Requirement of
Law or Contractual Obligation of the Borrower or of any of its Subsidiaries,
except for such violations which could not reasonably be expected to have a
Material Adverse Effect, and will not result in, or require, the creation or
imposition of any Lien on any of its or their respective properties or revenues
pursuant to any such organizational or governing document, Requirement of Law or
Contractual Obligation, except pursuant to this Agreement.
4.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower or any
of its Subsidiaries or against any of its or their respective properties or
revenues which in the Borrower's reasonable opinion could reasonably be expected
to have a Material Adverse Effect.
4.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect which could have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its material real
25
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 subsection 7.3.
4.9 TAXES. Each of the Borrower and its Subsidiaries has filed or
caused to be filed all material tax returns which, to the knowledge of the
Borrower, are required to be filed or has timely filed a request for an
extension of such filing and has paid all taxes shown to be due and payable on
said returns or extension requests or on any assessments made against it or any
of its property and except as set forth on Schedule 4.9, 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 which 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 the Borrower
or its Subsidiaries, as the case may be and any which the failure to pay would
not have a Material Adverse Effect); no tax Lien has been filed, and, to the
knowledge of the Borrower, no material claim is being asserted, with respect to
any such tax, fee or other charge.
4.10 FEDERAL REGULATIONS. (a) No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation G or Regulation
U of the Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect. If requested by any Lender or the Administrative
Agent, 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 referred to in said Regulation G or Regulation U, as the case
may be.
(b) The Borrower is not subject to regulation under any Federal or
State statute or regulation (other than Regulation X of the Board of Governors
of the Federal Reserve System) which limits its ability to incur Indebtedness.
4.11 ERISA. No Reportable Event 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. The present value of all
accrued benefits under each Single Employer Plan maintained by the Parent or any
Commonly Controlled Entity (based on those assumptions used to fund the 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. There are no Multiemployer Plans.
Neither the Parent nor any Commonly Controlled Entity has had a complete or
partial withdrawal from any Multiemployer Plan.
4.12 INVESTMENT COMPANY ACT. (a) Neither the Borrower nor any of its
Subsidiaries or other Management Companies is, or, after giving effect to any
Acquisition, will be, an "investment company" within the meaning of the
Investment Company Act.
(b) Each of the Subsidiaries of the Borrower and each of its other
Management Companies is, to the extent required thereby, duly registered as an
investment adviser under the Investment Advisers Act. On the date hereof, the
Borrower is not an "investment adviser" within the meaning of the Investment
Advisers Act. Each Fund which is sponsored by any Subsidiary or other
Management Company and which is required to be registered as an "investment
company" under the Investment Company Act is duly registered as such thereunder.
26
(c) The Borrower is not required to be duly registered as a
broker-dealer under the Securities Acts (and each Subsidiary and other
Management Company required to be so registered is so duly registered).
(d) Each of the Borrower and its Subsidiaries and other Management
Companies is duly registered, licensed or qualified as an investment adviser or
broker-dealer in each State of the United States where the conduct of its
business requires such registration, licensing or qualification and is in
compliance in all material respects with all Federal and State laws requiring
such registration, licensing or qualification, except to the extent where the
failure to be so registered, licensed or qualified or to be in such compliance
will not have, in the case of Federal laws, or could not reasonably be expected
to have, in the case of State laws, a Material Adverse Effect.
4.13 INVESTMENT ADVISORY AGREEMENTS. Each of the investment advisory
agreements, distribution agreements and shareholder or other servicing contracts
to which the Borrower or any of its Subsidiaries or other Management Companies
is a party is a legal, valid and binding obligation of the parties thereto
enforceable against such parties in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law) except for failures
which individually and in the aggregate could not reasonably be expected to have
a Material Adverse Effect; and neither the Borrower nor any of its Subsidiaries
or other Management Companies is in breach or violation of or in default under
any such agreement or contract in any material respect which could individually
or in the aggregate reasonably be expected to have a Material Adverse Effect.
The parties hereto understand that all customers have the right to terminate
such investment advisory agreements at will.
4.14 SUBSIDIARIES AND OTHER OWNERSHIP INTERESTS. The Subsidiaries
listed on Schedule 4.14 hereto constitute the only Subsidiaries of the Borrower
as at the date hereof. The Borrower has as at the date hereof an equity or
other ownership interest in Management Companies of the Borrower and each other
Person listed on Schedule 4.14 and other than as set forth on such schedule, the
Borrower has no such interest in any other Management Company or Person.
4.15 PURPOSE OF LOANS. (a) The proceeds of the Loans shall be used by
the Borrower (i) to refinance loans outstanding under the Existing Agreement,
(ii) for general corporate purposes, (iii) to make Acquisitions and (iv) to pay
fees and expenses to be incurred in connection therewith and in connection with
the execution and delivery of the Loan Documents.
4.16 ACCURACY AND COMPLETENESS OF INFORMATION. To the best of the
Borrower's knowledge, the documents furnished and the statements made in writing
to the Lenders by or on behalf of the Borrower in connection with the
negotiation, preparation or execution of this Agreement or any of the other Loan
Documents, taken as a whole, do not contain any untrue statement of fact
material to the credit worthiness of the Borrower or omit to state any such
material fact necessary in order to make the statements contained therein not
misleading, in either case which has not been corrected, supplemented or
remedied by subsequent documents furnished or statements made in writing to the
Lenders prior to the date hereof.
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SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL LOANS. The agreement of each Lender to make
the initial Loan requested to be made by it is subject to the satisfaction,
immediately prior to or concurrently with the making of such Loan on the Closing
Date, of the following conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have received
(i) this Agreement, executed and delivered by a duly authorized officer of
the Borrower, with a counterpart for each Lender, and (ii) the Pledge
Agreements, each executed and delivered by a duly authorized officer of the
parties thereto, with a counterpart or a conformed copy for each Lender.
(b) RELATED AGREEMENTS. The Administrative Agent shall have received,
true and correct copies, of each of the existing Revenue Sharing Agreements
and any purchase agreements executed in connection with an Acquisition or
proposed Acquisition, and such other documents or instruments as may be
reasonably requested by the Administrative Agent, (including, without
limitation, a copy of any debt instrument, security agreement or other
material contract to which the Borrower or one of its Subsidiaries may be a
party).
(c) NOTES. The Administrative Agent shall have received, for the
account of each Lender that has requested the same, a Note made by the
Borrower conforming to the requirements of this Agreement, and executed by
a duly authorized officer of the Borrower.
(d) BORROWING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, substantially in the form of Exhibit C,
with appropriate insertions and attachments, satisfactory in form and
substance to the Administrative Agent, executed by two Responsible Officers
of the Borrower.
(e) CORPORATE PROCEEDINGS OF THE BORROWER. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of the Borrower authorizing (i) the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party, (ii) the borrowings contemplated
hereunder and (iii) the granting by it of the Liens created pursuant to the
Pledge Agreements, certified by the Secretary or an Assistant Secretary of
the Borrower as of the Closing Date, which certificate shall be in form and
substance satisfactory to the Administrative Agent and shall state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded.
(f) BORROWER INCUMBENCY CERTIFICATE. The Administrative Agent shall
have received, with a counterpart for each Lender, a certificate of the
Borrower, dated the Closing Date, as to the incumbency and signature of the
officers of the Borrower executing any Loan Document satisfactory in form
and substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of the
Borrower.
(g) CORPORATE PROCEEDINGS OF SUBSIDIARIES. The Administrative Agent
shall have received, with a counterpart for each Lender, a copy of the
resolutions, in form and substance satisfactory to the Administrative
Agent, of the Board of Directors of each Subsidiary of the Borrower which
is a party to a Loan Document authorizing (i) the execution, delivery and
performance of the Loan Documents to which it is a party and (ii) the
granting by it of the Liens created pursuant to the Loan
28
Documents to which it is a party, certified by the Secretary or an
Assistant Secretary of each such Subsidiary as of the Closing Date, which
certificate shall be in form and substance satisfactory to the
Administrative Agent and shall state that the resolutions thereby certified
have not been amended, modified, revoked or rescinded.
(h) SUBSIDIARY INCUMBENCY CERTIFICATES. The Administrative Agent
shall have received, with a counterpart for each Lender, a certificate of
each Subsidiary of the Borrower which is a party to a Loan Document, dated
the Closing Date, as to the incumbency and signature of the officers of
such Subsidiaries executing any Loan Document, satisfactory in form and
substance to the Administrative Agent, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of each such
Subsidiary.
(i) CORPORATE DOCUMENTS. The Administrative Agent shall
have received, with a counterpart for each Lender, true and complete copies
of the certificate of incorporation and by-laws of the Borrower and each
Subsidiary of the Borrower which is a party to a Loan Document, certified
as of the Closing Date as complete and correct copies thereof by the
Secretary or an Assistant Secretary of the Borrower or such Subsidiary.
(j) FEES. All fees payable by the Borrower to the Administrative
Agent and any Lender on or prior to the Closing Date pursuant to this
Agreement or pursuant to the Engagement Letter and Fee Letter, each dated
December 1, 1997, among The Chase Manhattan Bank, Chase Securities Inc., as
arranger of the Commitments and the Borrower shall have been paid in full,
in each case in the amounts and on the dates set forth herein or therein.
(k) LEGAL OPINION. The Administrative Agent shall have received, with
a counterpart for each Lender, the executed legal opinion of Goodwin,
Procter & Hoar LLP, counsel to the Borrower, substantially in the form of
Exhibit D. Such legal opinion shall cover such other matters incident to
the transactions contemplated by this Agreement as the Administrative Agent
may reasonably require.
(l) PLEDGED STOCK AND OTHER EQUITY INTERESTS; TRANSFER POWERS. The
Administrative Agent shall have received any certificates representing the
shares of Capital Stock pledged pursuant to the Stock Pledge Agreement and
the Subsidiary Pledge Agreement, together with an undated transfer power,
in form and substance satisfactory to the Administrative Agent, for each
such certificate executed in blank by a duly authorized officer of the
pledgor thereof.
(m) ACTIONS TO PERFECT LIENS. The Administrative Agent shall have
received evidence in form and substance satisfactory to it that all
filings, recordings, registrations and other actions, including, without
limitation, the filing of duly executed financing statements on form UCC-1,
necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Liens created by the Pledge Agreements shall have been
completed.
(n) LIEN SEARCHES. The Administrative Agent shall have received the
results of a recent search by a Person satisfactory to the Administrative
Agent, of the Uniform Commercial Code, judgement and tax lien filings which
may have been filed with respect to personal property of the Borrower, and
the results of such search shall be satisfactory to the Administrative
Agent.
29
(o) PRO FORMA BALANCE SHEET. The Administrative Agent shall have
received a PRO FORMA balance sheet of the Borrower as at September 30, 1997
(the "Pro Forma Balance Sheet"), after giving effect to (i) the
acquisitions of Tweedy, Browne Company L.P. and GeoCapital Corporation,
(ii) the initial public offering of its common stock, (iii) the redemption,
repurchase or prepayment of its senior subordinated bridge facility and
(iv) the conversion of its convertible preferred stock to common stock.
(p) EXISTING FACILITY. The Administrative Agent shall have received
evidence satisfactory to it that all accrued but unpaid fees payable and
all principal of and accrued but unpaid interest on any loans made under
the Existing Facility shall be paid in full from the proceeds of the first
advance hereunder and the Existing Facility shall have been terminated.
5.2 CONDITIONS TO EACH LOAN. The agreement of each Lender to make any
Loan requested to be made by it on any date (including, without limitation, its
initial Loan but excluding any repricing or conversion of any then outstanding
Loan) is subject to the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by the Borrower in or pursuant to the Loan Documents shall
be true and correct in all material respects on and as of such date as if
made on and as of such date; PROVIDED that (i) representations and
warranties made with reference to a specific date shall remain true and
correct as of such date and (ii) representations and warranties shall not
be required to remain true to the extent changes have resulted from actions
permitted hereunder.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the Loans
requested to be made on such date.
(c) NOTICE OF BORROWING. The Administrative Agent shall have
received a notice of borrowing pursuant to subsection 2.2.
(d) USE OF PROCEEDS. A Responsible Officer shall have delivered to
the Administrative Agent a certificate to the effect that the proceeds of
such Loan will be used in accordance with subsection 4.15 and specifying in
reasonable detail the proposed use of the proceeds thereof.
Each borrowing by the Borrower hereunder shall constitute a representation and
warranty by the Borrower as of the date thereof that the conditions contained in
this subsection have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect or any amount is owing to any Lender or the Administrative Agent
hereunder or under any other Loan Document, the Borrower shall and (except in
the case of delivery of financial information, reports and notices) shall cause
each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent (which
shall promptly furnish to the other Lenders):
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(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, copies of the consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at the
end of such year and the related consolidated and consolidating statements
of income and retained earnings and of cash flows for such year, and
setting forth in each case in comparative form the figures for the previous
year and, in the case of the consolidated statements, reported on without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Coopers & Lybrand or other
independent certified public accountants of nationally recognized standing;
and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, copies of the unaudited consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at the
end of such quarter and the related unaudited consolidated and
consolidating statements of income and retained earnings and of cash flows
for such quarter and the portion of the fiscal year through the end of such
quarter, and 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);
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 (subject, in the case of interim financial statements, to year end
adjustments and the absence of footnotes).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent (which shall promptly furnish to the other Lenders):
(a) concurrently with the delivery of the financial statements
referred to in subsection 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 specified in subsection 8(c), except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in subsections 6.1(a) and (b), (i) a certificate of a
Responsible Officer stating that, to the best of such Officer's knowledge,
that such Officer has obtained no knowledge of any Default or Event of
Default except as specified in such certificate and (ii) a listing for each
Management Company of its aggregate assets under management as of the end
of the period covered by such financial statements;
(c) within five days after the same are filed, copies of all
financial statements and reports which the Borrower may make to, or file
with, the Securities and Exchange Commission or any successor or analogous
Governmental Authority;
(d) within five Business Days after the consummation of any
Acquisition, other than an Acquisition of any interest in a Person that is
already a Subsidiary or a Management Company and with respect to which the
Borrower does not borrow additional funds hereunder (A) copies of the most
recent audited (and, if later, or, if audited statements are not available,
unaudited) financial statements of the Management Company which is the
subject of such Acquisition, (B) copies of the purchase agreement or other
acquisition document (including any Revenue Sharing Agreement)
31
executed or to be executed by the Borrower or any of its Subsidiaries in
connection with the Acquisition, (C) an unaudited PRO FORMA consolidated
balance sheet of the Borrower and its Subsidiaries as at a recent date but
prepared as though the closing of such Acquisition had occurred on or prior
to such date and related PRO FORMA calculations, indicating compliance on a
PRO FORMA basis as at such date and for the periods then ended with the
financial covenants set forth in subsection 7.1 and (D) a copy of the most
recent Form ADV, if any, filed under the Investment Advisers Act in respect
to any Management Company which is the subject of such Acquisition; and
(e) promptly, such additional financial and other information and
documents (including a copy of any debt instrument, security agreement or
other material contract to which the Borrower or one of its Subsidiaries
may be party) as any Lender may, through the Administrative Agent, 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 (i) 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 the Borrower or its Subsidiaries, as the case may be and (ii) where the
failure to do so could not have a Material Adverse Effect.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue to
engage in business of the same general type as now conducted and purported to be
conducted by it and preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
registrations, licenses, privileges and franchises necessary or desirable in the
normal conduct of its business (including, without limitation, all such
registrations under the Investment Advisers Act and all material investment
advisory agreements, distribution agreements and shareholding and other
administrative servicing contracts) except as otherwise permitted pursuant to
subsection 7.5 and except for failures which individually and in the aggregate
could not reasonably be expected to have a Material Adverse Effect; comply, and
to the extent reasonably within its control, cause each Management Company and
Fund (which is sponsored by a Management Company) to 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. Keep all property useful and
necessary in its business in good working order and condition, except where the
failure to do so would not have a Material Adverse Effect; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are usually
insured against in the same general area by companies engaged in the same or a
similar business, except where the failure to do so could not have a Material
Adverse Effect; and furnish to the Administrative Agent, upon written request,
full information as to the insurance carried.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep
proper books of records and account in which full, true and correct entries in
all material respects in conformity with GAAP and all Requirements of Law shall
be made of all dealings and transactions in relation to its business and
activities, except where the failure to do so would not have a Material Adverse
Effect; and 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 upon at least
three days prior notice or such lesser period of time as may be acceptable to
the Borrower or the relevant Subsidiary, as the case may be, and to discuss the
business, operations, properties and financial
32
and other condition of the Borrower and its Subsidiaries with officers and
employees of the Borrower and its Subsidiaries and with its independent
certified public accountants.
6.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding which may exist at any time between the
Borrower or any of its Subsidiaries and any Governmental Authority, which
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 the Borrower or any of its
Subsidiaries or any "affiliated person" of the Borrower or any of its
Subsidiaries within the meaning of the Investment Company Act in which the
amount involved is $5,000,000 or more and not covered by insurance or in
which injunctive or similar relief is sought and which could reasonably be
expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any 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 terminating, Reorganization or Insolvency of, any
Plan;
(e) any suspension or termination of the registration of any
Subsidiary or Management Company of the Borrower as an investment adviser
under the Investment Advisers Act, or of any registration as a
broker-dealer under the Securities Acts or under any applicable state
statute which is material to the business thereof, or any cancellation or
expiration without renewal of any investment advisory agreement,
distribution agreement or shareholder or other administrative servicing
contract to which the Borrower or any of its Subsidiaries or Management
Companies is a party the revenues under which have exceeded in the most
recent fiscal year of the Borrower or any such Management Company, as the
case may be, $1,000,000; and
(f) any event which could reasonably be expected to have a Material
Adverse Effect on the Borrower and its Subsidiaries taken as a whole.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto, if
any.
6.8 STOCK PLEDGES. Promptly upon the consummation of the Acquisition
of a Management Company or the formation of any new Subsidiary, execute and
deliver or cause to be executed and delivered to the Administrative Agent a
Pledge Agreement Supplement with respect to the pledge of the Capital Stock of
such Management Company or new Subsidiary, held, directly by the Borrower or by
any wholly owned Subsidiary of the Borrower, in form and substance reasonably
satisfactory to the Administrative Agent, together with
33
evidence in form and substance reasonably satisfactory to the Administrative
Agent that all deliveries, filings, recordings, registrations and other actions,
including, without limitation, the delivery of any certificates representing
such Capital Stock, together, in the case of stock certificates, with an undated
transfer power, in form and substance reasonably satisfactory to the
Administrative Agent, for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof, and the filing of duly executed
financing statements on form UCC-1, necessary or, in the opinion of the
Administrative Agent, desirable to perfect the Liens created by such Pledge
Agreement Supplement shall have been completed.
6.9 GUARANTEES. In the case of any Subsidiary of the Borrower which
at any time is wholly owned, promptly upon the request of the Administrative
Agent, execute and deliver to the Administrative Agent, on behalf of the
Lenders, a guarantee of such Subsidiary, in form and substance satisfactory to
the Administrative Agent, with respect to the performance of the obligations of
the Borrower under this Agreement and the other Loan Documents.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, from and after the Closing Date and
so long as the Commitments remain in effect or any amount is owing to any Lender
or the Administrative Agent hereunder or under any other Loan Document, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) MAINTENANCE OF NET WORTH. Permit Consolidated Net Worth at any
time during any period to be less than the sum of (i) $36,000,000, PLUS
(ii) 85% of the net proceeds of any net issuances by the Borrower of any
Capital Stock and any equity contributions to it and any Subordinated
Indebtedness (to the extent included in Consolidated Net Worth) in each
case after September 30, 1997, PLUS (iii) 50% of the positive Consolidated
Net Income, if any, for each completed fiscal quarter of the Borrower from
September 30, 1997 (or MINUS (iii) the lesser of (A) 100% of any
Consolidated Net Loss, if any, for each such completed fiscal quarter or
(B) the extent of any Consolidated Net Loss resulting from (x) a write-off
in the fourth fiscal quarter of 1997 or the first fiscal quarter of 1998 of
expenses relating to the Existing Agreement, the repayment of the
Borrower's senior subordinated bridge facility and the initial public
offering of the Borrower's common stock and (y) Non-Cash Based Compensation
Costs).
(b) INTEREST COVERAGE RATIO. Permit, for any period of four
consecutive fiscal quarters, the ratio of (i) Consolidated EBITDA to (ii)
Consolidated Interest Expense to be less than 2.00 to 1.00.
(c) LEVERAGE RATIO. Permit at any time the ratio of (i) Senior
Indebtedness to (ii) Adjusted EBITDA at the end of the most recently
completed fiscal quarter to exceed 5.00 to 1.00.
7.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or suffer to
exist any Indebtedness, except:
(a) Indebtedness of the Borrower under this Agreement and the other
Loan Documents;
34
(b) unsecured Indebtedness of any Subsidiary owing to the Borrower or
any other Subsidiary or secured Indebtedness of any Subsidiary owing to the
Borrower;
(c) Indebtedness of the Borrower or any of its Subsidiaries incurred
to finance its working capital (or the working capital of any Subsidiary
of the Borrower) in an aggregate principal amount not exceeding as to the
Borrower or any Subsidiary $1,000,000 at any time outstanding;
(d) Indebtedness of the Borrower or any of its Subsidiaries incurred
to finance its acquisition of fixed or capital assets (whether pursuant to
a deferred purchase arrangement with a vendor, a loan, a Financing Lease or
otherwise) in an aggregate principal amount not exceeding as to the
Borrower or any Subsidiary (other than First Quadrant L.P.) $500,000, and
as to First Quadrant L.P. $1,000,000, at any time outstanding;
(e) Indebtedness of a Person which becomes a Subsidiary after the date
hereof; PROVIDED that (i) such indebtedness existed at the time such Person
became a Subsidiary and was not created in anticipation thereof and (ii)
immediately after giving effect to the acquisition of such Person by the
Borrower no Default or Event of Default shall have occurred and be
continuing;
(f) Indebtedness in respect of (i) the Subordinated Contingent
Payment Notes and (ii) other Subordinated Indebtedness;
(g) Indebtedness of the Borrower and its Subsidiaries existing on the
date hereof, as described on Schedule 7.2(g);
(h) Indebtedness of the type described in clause (g) of the definition
of Indebtedness incurred by the Borrower or any of its Subsidiaries in the
ordinary course of business with reputable financial institutions and not
for speculative purposes;
(i) Indebtedness of the Borrower or any of its Subsidiaries incurred
to the seller of an interest in any Management Company or Subsidiary; and
(j) Indebtedness in the nature of deferred compensation to employees
in an aggregate principal amount not exceeding as to the Borrower and its
Subsidiaries $5,000,000 at any time outstanding.
7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes, assessments and other governmental charges not
yet due or which 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
or other like Liens arising in the ordinary course of business which are
not overdue for a period of more than 60 days or which are being contested
in good faith by appropriate proceedings;
35
(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 which, in the
aggregate, are not substantial in amount and which 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 such Subsidiary;
(f) Liens securing Indebtedness of the Borrower and its Subsidiaries
permitted by subsection 7.2(d) incurred 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, (iii) the amount of
Indebtedness secured thereby is not increased and (iv) the principal amount
of Indebtedness secured by such Lien shall at no time exceed the purchase
price of such property;
(g) Liens on the property or assets of a Person which becomes a
Subsidiary after the date hereof securing Indebtedness permitted by
subsection 7.2(e); PROVIDED that (i) such Liens existed at the time such
Person became a Subsidiary and were not created in anticipation thereof,
(ii) any such Lien is not spread to cover any property or assets of such
Person after the time such Person becomes a Subsidiary, and (iii) the
amount of Indebtedness secured thereby is not increased;
(h) Liens arising by reason of any judgment, decree or order of any
court or other Governmental Authority, (i) if appropriate legal proceedings
which have been initiated for the review of such judgment, decree or order
are being diligently prosecuted and shall not have been finally terminated
or the period within which such proceedings may be initiated shall not have
expired or (ii) if such judgment, decree or order shall have been
discharged, within 45 days of the entry thereof or execution thereof has
been stayed pending appeal;
(i) Liens created pursuant to the Pledge Agreements;
(j) Liens existing, or provided for under arrangements existing, as of
the date hereof as described on Schedule 7.3(j); and
(k) Liens permitted under subsection 4 of each of the Stock Pledge
Agreement and the Subsidiary Pledge Agreement and subsection 3 of each of
the Partnership Pledge Agreement and the LLC Pledge Agreement.
7.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur, assume or
suffer to exist any Guarantee Obligation except guarantees by the Borrower or
any Subsidiary or Management Company of obligations of any of the Subsidiaries,
which obligations are otherwise permitted under this Agreement, and except for
(a) other Guarantee Obligations not exceeding $1,500,000 in the aggregate at any
time, (b) Guarantee Obligations which constitute Indebtedness permitted under
subsection 7.2, (c) Guarantee Obligations of Subsidiaries created pursuant to
the Subsidiary Pledge Agreement or (d) Guarantee
36
Obligations with respect to Indebtedness of any Person which shall be incurred
by such Person in anticipation of a majority interest therein being acquired by
the Borrower or any of its Subsidiaries and which shall be outstanding for no
more than 30 days in an aggregate principal amount for all such Guarantee
Obligations not exceeding $10,000,000 at any one time outstanding.
7.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets (each a "disposition"), or make any material change in its present method
of conducting business; unless, (i) with respect to a merger, consolidation or
amalgamation of a Subsidiary of the Borrower, if prior to such event the
Borrower owned in excess of a 50% ownership interest, the Borrower shall
continue to own in excess of a 50% ownership interest in such Subsidiary or the
surviving Person of such merger, consolidation or amalgamation or, after such
event it shall have no ownership interest, (ii) with respect to the liquidation,
winding up or dissolution of a direct or indirect Subsidiary of the Borrower,
the assets of such Subsidiary shall have been transferred to the Borrower or a
Subsidiary of the Borrower and the other shareholders, partners or members of a
Subsidiary, or another Subsidiary of the Borrower, and (iii) with respect to any
disposition described above, the Net Proceeds thereof shall have been applied as
set forth in subsection 3.2 to the extent required.
7.6 LIMITATION ON SALE OF ASSETS. Convey, sell, lease, assign,
transfer or otherwise dispose (including in connection with sale leaseback
transactions) of any of its property, business or assets (including, without
limitation, receivables and leasehold interests), 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 other than the Borrower or any wholly
owned Subsidiary, except:
(a) the sale or other disposition of obsolete or worn out property in
the ordinary course of business;
(b) the sale or other disposition of any property in the ordinary
course of business;
(c) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the
compromise or collection thereof;
(d) the sale, issuance or other disposition of the Capital Stock or
other ownership interest of any Subsidiary of the Borrower or of a
Management Company in which the Borrower owns an ownership interest to
partners, officers or directors of such Subsidiary or Management Company;
PROVIDED that, if prior to such sale, issuance or disposition, the Borrower
owns in excess of a 50% ownership interest in such Subsidiary or Management
Company, the Borrower shall at all times continue to own in excess of a 50%
ownership interest in such Subsidiary or Management Company or after such
sale, issuance or disposition shall have no ownership interest; and
(e) the sale, contribution or other transfer of (i) all or
substantially all the Capital Stock of a Subsidiary or Management Company
(including both Capital Stock held by the Borrower and its Subsidiaries and
by the other holders of Capital Stock of such Subsidiary or Management
Company), or (ii) all or substantially all the assets of a Subsidiary or
Management Company; PROVIDED that, if prior to such sale, contribution or
transfer, the Borrower owns in excess of a 50% ownership interest in such
Subsidiary or Management Company, the Borrower shall at all times continue
to own in excess of a 50% ownership interest in such Subsidiary or
Management Company or, in
37
the case of clause (ii) above, the Person who is the transferee with
respect to the assets sold, contributed or transferred pursuant to clause
(ii) or after such sale, contribution or transfer shall have no ownership
interest.
7.7 LIMITATION ON LEASES. Permit the amount paid by the Borrower for
lease obligations under operating leases to which the Borrower is a party
(including any such leases entered into in connection with sale leaseback
transactions) for any fiscal year of the Borrower to exceed $750,000 or permit a
Subsidiary of the Borrower to make any such payment in respect of lease
obligations except to the extent that any such payment is made out of that
portion of its revenues designated as Operating Cash Flow (and not Free Cash
Flow) under the relevant Revenue Sharing Agreement.
7.8 LIMITATION ON DIVIDENDS. Declare or pay any dividend (other than
dividends payable solely in common stock of the Borrower) 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 shares of any class of Capital Stock of the Borrower or any warrants or
options to purchase any such Capital Stock, 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 the Borrower or
any Subsidiary in an aggregate amount exceeding as to the Borrower and its
Subsidiaries $500,000; PROVIDED that the Borrower may repurchase shares of its
common stock as long as (i) no Default or Event of Default shall have occurred
and be continuing or would result therefrom, (ii) the ratio of Senior
Indebtedness to Adjusted EBITDA at the end of the most recently completed fiscal
quarter is less than or equal to 3.0 to 1.0 and (iii) the aggregate amount
thereof in any fiscal year, calculated at the date of each such repurchase, does
not exceed 10% of Consolidated Net Income for the most recently completed fiscal
year of the Borrower.
7.9 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make (by
way of the acquisition of securities of a Person or otherwise) any expenditure
in respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except in the case
of the Borrower, for expenditures in the ordinary course of business not
exceeding, in the aggregate for the Borrower during any fiscal year of the
Borrower $2,500,000 and except in the case of a Subsidiary of the Borrower,
expenditures in respect of fixed or capital assets to the extent that such
expenditures are made out of that portion of its revenues designated as
Operating Cash Flow (and not Free Cash Flow) under the relevant Revenue Sharing
Agreement.
7.10 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any advance,
loan, extension of credit or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets constituting a
business unit of, or make any other investment in, any Person, except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in cash equivalents, including any such investment
that may be readily sold or otherwise liquidated in any Fund for which any
Subsidiary or other Management Company provides management, advisory or
administrative services and which principally invests in cash equivalents;
(c) any investment in or loan or advance to a Management Company or a
Subsidiary or in any Person which, after giving effect to such investment,
will become a Subsidiary or a Management Company, if, after giving effect
to such investment, no Default or Event of Default shall have occurred and
be continuing;
38
(d) loans to officers of the Borrower or its Subsidiaries listed on
Schedule 8.10 in aggregate principal amounts outstanding not to exceed the
respective amounts set forth for such officers on said schedule;
(e) (i) loans and advances to employees of the Borrower or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Borrower and its
Subsidiaries not to exceed $150,000 at any one time outstanding (other than
as permitted in subsection 7.10(f)) and (ii) in the case of a Subsidiary of
the Borrower, loans and advances to employees for travel, entertainment and
relocation expenses in the ordinary course of business to the extent that
such loans and advances are made out of that portion of its revenues
designated as Operating Cash Flow (and not Free Cash Flow) under the
relevant Revenue Sharing Agreement;
(f) to the extent made out of the portion of the revenues of a
Subsidiary of the Borrower which is designated as Operating Cash Flow (and
not Free Cash Flow) under the relevant Revenue Sharing Agreements; and
(g) investments in any Fund or financial product for which any
Subsidiary provides management, advisory or administrative services in an
aggregate amount not to exceed $2,000,000 at any one time outstanding.
7.11 LIMITATION ON PAYMENTS OF SUBORDINATED INDEBTEDNESS. Make any
payment (including any cash payment of interest) or prepayment on or redemption,
defeasance or purchase of any Subordinated Indebtedness; PROVIDED, HOWEVER as
long as there is no Default or Event of Default, the Borrower may make payments
due on the Subordinated Contingent Payment Notes as required thereunder and up
to $10,000,000 in the aggregate of payments (including any cash payment of
interest) and prepayments on or redemption, defeasance or purchase of
Subordinated Indebtedness.
7.12 RESTRICTION ON AMENDMENTS TO REVENUE SHARING AGREEMENTS. Amend
or modify the terms of a Revenue Sharing Agreement such that, as a result of
such amendment or modification a Material Adverse Effect would occur.
7.13 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Except as described
on Schedule 7.13, enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate unless such transaction is (a) otherwise expressly permitted
under this Agreement or (b) in the ordinary course of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate;
PROVIDED that (i) transactions between the Borrower and its Subsidiaries and
Management Companies and (ii) transactions between the Borrower or any of its
Subsidiaries or any officer, director, individual stockholder, partner or member
(or an entity wholly owned by such an individual) and any Fund or other
Investment Company sponsored by the Borrower or any Subsidiary or for which the
Borrower or any Subsidiary provides advisory, administrative, supervisory,
management, consulting or similar services, that are otherwise permissible under
the Investment Company Act, the Investment Advisers Act and the applicable
management contracts shall be permitted under this subsection 7.13.
7.14 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal year of
the Borrower to end on a day other than December 31.
39
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 when due
in accordance with the terms thereof or hereof; or the Borrower shall fail
to pay any interest on any Loan, or any other amount payable hereunder,
within five days after any such interest or other amount becomes due in
accordance with the terms thereof or hereof; or
(b) Any representation or warranty made or deemed made by the Borrower
or any of its Subsidiaries herein or in any other Loan Document or which is
contained in any certificate, document or financial or other 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 incorrect in any
material respect on or as of the date made or deemed made; or
(c) The Borrower or any of its Subsidiaries shall default in the
observance or performance of any agreement contained in Section 5 and
Section 6 of each of the Stock Pledge Agreement and the Subsidiary Pledge
Agreement and Section 4 and Section 5 of each of the Partnership Pledge
Agreement and the LLC Pledge Agreement; or
(d) The Borrower or any of its Subsidiaries 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) The Borrower or any of its Subsidiaries shall (i) default in any
payment of principal of or interest on any Indebtedness (other than the
Loans) or in the payment of any Guarantee Obligation, in either case in an
outstanding principal amount in excess of $5,000,000, beyond the period of
grace (not to exceed 30 days), if any, provided in the instrument or
agreement under which such Indebtedness or Guarantee Obligation was
created; or (ii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or Guarantee
Obligation 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 holders of such Indebtedness or beneficiary or
beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf
of such holder or holders or beneficiary or beneficiaries) to cause, with
the giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable; or
(f) (i) 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 the Borrower or any of its Subsidiaries shall make a
general assignment for the benefit of
40
its creditors; or (ii) there shall be commenced against the Borrower or any
of its Subsidiaries any case, proceeding or other action of a nature
referred to in clause (i) above which (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 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 which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) 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) the Borrower
or any of its 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 maintained by the Borrower or any of its Subsidiaries, (ii) any
"accumulated funding deficiency" (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Plan maintained by
the Borrower or any of its Subsidiaries, (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 have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance or indemnification) of $5,000,000
or more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or
(i) (i) Any of the Pledge Agreements shall cease, for any reason, to
be in full force and effect, or the Borrower or any of its Subsidiaries
party thereto shall so assert or (ii) the Lien created by any of the Pledge
Agreements shall cease to be enforceable and of the same effect and
priority purported to be created thereby; or
(j) A Change of Control shall have occurred.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section 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 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 Commitments to be terminated
forthwith, whereupon the Commitments shall
41
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 to be due and payable forthwith, whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 9. THE ADMINISTRATIVE AGENT
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 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.
9.3 EXCULPATORY PROVISIONS. Neither the Administrative Agent nor any
of its 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 for 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 the Borrower 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 the Administrative Agent 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 the Borrower to perform its obligations hereunder
or thereunder. The Administrative Agent 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 the Borrower.
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any Note,
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, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent
42
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 as it deems appropriate or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which 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, 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 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, or, if such notice is received from a
Lender, to the Borrower. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required 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 ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent 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 Borrower 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 the Administrative Agent
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 Borrower. 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 the Borrower which 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 the
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrower and without limiting the obligation of the Borrower to do so),
ratably according to their respective Commitment Percentages in effect on the
date on which indemnification is sought (or, if indemnification is sought after
the date upon which the Commitments
43
shall have terminated and the Loans shall have been paid in full, ratably in
accordance with their Commitment 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 which may at any time (including, without limitation, at any
time following the payment of the Loans) be imposed on, incurred by or asserted
against 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 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, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's gross negligence or willful misconduct. The agreements in this
subsection shall survive the payment of the Loans and all other amounts payable
hereunder.
9.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the agent hereunder and under the other Loan
Documents. With respect to the Loans made by it, 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 the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders. Upon any
such resignation, the Required Lenders shall appoint from among the Lenders a
successor agent for the Lenders, which successor agent shall be approved by the
Borrower; PROVIDED that, in the event such Lenders are unable to agree upon a
successor to a resigning Administrative Agent, a resigning Administrative Agent
shall appoint a successor agent from the existing Lenders. Upon the approval
and acceptance of any appointment as Administrative Agent, 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. 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.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. (a) Neither this Agreement nor any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this subsection. The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (x) enter into with the Borrower
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 Borrower hereunder or thereunder or (y) 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
44
consequences; PROVIDED, HOWEVER that no such waiver and no such amendment,
supplement or modification shall (i) reduce the amount or extend the scheduled
date of final maturity of any Loan, or 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 Commitment, in
each case without the consent of each Lender directly affected thereby, or
(ii) amend, modify or waive any provision of this subsection or reduce the
percentage specified in the definition of Required Lenders, or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement and the other Loan Documents or release all or
substantially all of the Collateral or Pledged Collateral, in each case without
the written consent of all the Lenders or (iii) amend, modify or waive any
provision of Section 9 without the written consent of the then Administrative
Agent. Any such waiver and any such amendment, supplement or modification shall
apply equally to each of the Lenders and shall be binding upon the Borrower, the
Lenders, the Administrative Agent and all future holders of the Loans. In the
case of any waiver, the Borrower, the Lenders and the Administrative Agent shall
be restored to their former positions 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; no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
(b) In addition to amendments effected pursuant to the foregoing
paragraph (a), this Agreement shall be amended to include a prospective Lender
as a party hereto upon the execution and delivery of a Joinder Agreement as
contemplated in subsection 2.3(e).
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or 5 days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in Schedule I in the case of the other
parties hereto, or to such other address as may be hereafter notified by the
respective parties hereto:
The Borrower: Affiliated Managers Group
Two International Place, 23rd Floor
Boston, Massachusetts 02110
Attention: Sean Healey, Executive Vice President
Fax: (617) 346-7115
The Administrative
Agent: The Chase Manhattan Bank
One Chase Manhattan Plaza
8th Floor
New York, New York 10081
Attention: Laura Rebecca
Fax: (212) 552-7490
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to subsection 2.2, 2.5, 3.1, 3.3 or 3.8 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
45
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 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 hereunder through the Termination Date.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent for all its out-of-pocket costs and expenses
incurred in connection with 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,
and the consummation and administration of the transactions contemplated hereby
and thereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent, (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 during the
continuance of an Event of Default, including, without limitation, the fees and
disbursements of 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 other than Non-Excluded Taxes, if any, which 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 and the Administrative Agent harmless from
and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Loan Documents (all
the foregoing in this clause (d), collectively, the "indemnified liabilities");
PROVIDED that the Borrower shall have no obligation hereunder to the
Administrative Agent or any Lender with respect to indemnified liabilities
arising from (i) the gross negligence, bad faith or willful misconduct of the
Administrative Agent or any such Lender or (ii) legal proceedings commenced
against the Administrative Agent or any such Lender by any security holder or
creditor thereof arising out of and based upon rights afforded any such security
holder or creditor solely in its capacity as such. Any statement for reasonable
expenses of counsel to the Administrative Agent and the Lenders payable by the
Borrower pursuant to this subsection 10.5 shall be sent to a Responsible Officer
of the Borrower within six months of the termination of the event giving rise to
such expenses. The agreements in this subsection 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 the Borrower, the
Lenders, the Administrative Agent and their respective 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, in the ordinary course of its commercial banking
business and in accordance with applicable law, and, so long as no Event of
Default has been continuing for a period of 90 days, with the consent of the
Borrower (which consent shall not be unreasonably withheld), at any time sell
46
to one or more banks or other entities ("PARTICIPANTS") 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. The Borrower agrees that if
amounts outstanding under this Agreement 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 subsection 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 subsections 3.10, 3.11, 3.12 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 subsection 3.11, such
Participant shall have complied with the requirements of said subsection and
PROVIDED, FURTHER that no Participant shall be entitled to receive any greater
amount pursuant to any such subsection 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 may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time and from time to
time assign to any Lender or any affiliate thereof or, with the consent of each
of the Administrative Agent and, so long as no Event of Default has been
continuing for a period of 90 days, the Borrower (which in each case shall not
be unreasonably withheld), to an additional bank or financial institution ("an
ASSIGNEE") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit E, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender or
an affiliate thereof, by the Administrative Agent) and delivered to the
Administrative Agent for its acceptance and recording in the Register; PROVIDED
that, in the case of any such assignment to an additional bank or financial
institution (other than an assignment of all the assigning Lender's rights and
obligations with respect to the Commitments), the sum of the aggregate principal
amount of the Loans and the aggregate amount of the unused Commitments being
assigned and, if such assignment is of less than all of the rights and
obligations of the assigning Lender, the sum of the aggregate principal amount
of the Loans and the aggregate amount of the unused Commitments remaining with
the assigning Lender are each not less than $5,000,000 (or such lesser amount as
may be agreed to by the Borrower and the Administrative Agent). 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 as set forth therein, and (y) the assigning Lender 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 or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such assigning Lender shall cease to be a
party hereto).
47
(d) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in subsection
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 Commitments of, and principal amounts 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, the Administrative Agent and the
Lenders may (and, in the case of any Loan or other obligation hereunder not
evidenced by a Note, shall) treat each Person whose name is recorded in the
Register as the owner of a Loan or other obligation hereunder as the owner
thereof for all purposes of this Agreement and the other Loan Documents,
notwithstanding any notice to the contrary. Any assignment of any Loan or other
obligation hereunder not evidenced by a Note shall be effective only upon
appropriate entries with respect thereto being made in the Register. The
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee (and, in the case of an Assignee that is not
then a Lender or an affiliate thereof, by the Administrative Agent with the
approval of the Borrower) together with payment by the Lenders parties thereto
to the Administrative Agent of a registration and processing fee of $3,500, the
Administrative Agent shall (i) promptly accept such Assignment and Acceptance
and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance
and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any Participant
or Assignee (each, a "TRANSFEREE") and any prospective Transferee approved by
the Borrower, which approval shall not be unreasonably withheld, subject to the
provisions of subsection 10.15, any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which has been
delivered to such Lender by or on behalf of the Borrower pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrower in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement; PROVIDED, HOWEVER
that prior to such disclosure each such prospective Transferee shall have
executed a confidentiality agreement substantially in the form of Exhibit F.
(g) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this subsection concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by a Lender of any Loan or Note to any Federal Reserve Bank
in accordance with applicable law.
10.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITTED LENDER")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, 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 subsection 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 such other Lender's Loans, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds 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
48
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 the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by 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 the Borrower. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such set-off and application
made by such Lender; PROVIDED that the failure to give such notice shall not
affect the validity of such set-off 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 (including
by facsimile transmission), and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. 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 which 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 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 HEREUNDER 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. 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 judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America 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;
49
(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 the
Borrower at its address set forth in subsection 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
(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 subsection any special, exemplary, punitive or consequential
damages.
10.13 ACKNOWLEDGEMENTS. 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 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 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 the Borrower and the Lenders.
10.14 WAIVERS OF JURY TRIAL. TO THE EXTENT PERMITTED BY LAW, 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.
10.15 CONFIDENTIALITY. Each Lender agrees to keep confidential any
written or oral information (a) provided to it by or on behalf of the Borrower
or any of its Subsidiaries pursuant to or in connection with this Agreement or
(b) obtained by such Lender based on a review of the books and records of the
Borrower or any of its Subsidiaries; PROVIDED that nothing herein shall prevent
any Lender from disclosing any such information (i) to the Administrative Agent
or any other Lender or to any Person who evaluates, approves, structures or
administers the Loans on behalf of a Lender and who is subject to this
confidentiality provision, (ii) to any Transferee or prospective Transferee
which agrees in writing to comply with the provisions of this subsection, (iii)
to its employees, directors, agents, attorneys, accountants and other
professional advisors who are directly involved in the execution of the
transactions contemplated by this Agreement and have been informed of their
obligations under this subsection 10.15, (iv) upon the request or demand of any
Governmental Authority having jurisdiction over such Lender, (v) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law (notice of which shall be provided
promptly to the Borrower), (vi) which has been publicly disclosed other than in
breach of this Agreement, or (vii) in connection with the exercise of any remedy
hereunder.
50
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.
AFFILIATED MANAGERS GROUP, INC.
By: /s/ Sean M. Healey
------------------------------
Title: Executive Vice President
THE CHASE MANHATTAN BANK, as Administrative
Agent and as a Lender
By: /s/ Bruce Borden
------------------------
Title: Vice President
NATIONSBANK, N.A., as
Documentation Agent and as a Lender
By: /s/ Kenneth Ricciardi
---------------------------
Title: Senior Vice President
FIRST UNION NATIONAL BANK
By: /s/ Gail M. Golightly
---------------------------
Title: Senior Vice President
SOCIETE GENERALE
By: /s/ John H. Padwater
------------------------
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ Sebastian Rocco
--------------------------
Title: First Vice President
CIBC INC.
By: /s/ Gerald Girardi
---------------------------------------
Title: Executive Director
CIBC Oppenheimer Corp., as agent
STATE STREET BANK AND TRUST COMPANY
By: /s/ F. Andrew Beise
------------------------
Title: Vice President
MELLON BANK, N.A.
By: /s/ Susan M. Whitewood
------------------------
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Linda Landuchi
------------------------
Title: Vice President
ANNEX I
PRICING GRID
- ---------------------------------------------------------------------------------------------------
Ratio of Senior
Indebtedness to Adjusted Applicable Margin for Applicable Margin For ABR Commitment Fee
EBITDA Eurodollar Loans Loans Rate
- ---------------------------------------------------------------------------------------------------
greater than/equal to
4.5 to 1.00 2.25% 1.25% 0.50%
- ---------------------------------------------------------------------------------------------------
greater than/equal to
3.75 to 1.00 1.75% 0.75% 0.50%
- ---------------------------------------------------------------------------------------------------
greater than/equal to
3.00 to 1.00 1.25% 0.25% 0.375%
- ---------------------------------------------------------------------------------------------------
greater than/equal to
2.00 to 1.00 0.75% 0.00% 0.25%
- ---------------------------------------------------------------------------------------------------
less than
2.00 to 1.00 0.50% 0.00% 0.20%
- ---------------------------------------------------------------------------------------------------
SCHEDULE I
LENDER COMMITMENTS
A. Commitments
- ------------------------------------------------------------------
Lender Commitment
- ------------------------------------------------------------------
The Chase Manhattan Bank $42,167,000
- ------------------------------------------------------------------
NationsBank, N.A. $52,333,000
- ------------------------------------------------------------------
CIBC Inc. $35,000,000
- ------------------------------------------------------------------
Credit Lyonnais New York Branch $35,000,000
- ------------------------------------------------------------------
Societe Generale $35,000,000
- ------------------------------------------------------------------
Mellon Bank, N.A. $25,000,000
- ------------------------------------------------------------------
State Street Bank and Trust Company $22,500,000
- ------------------------------------------------------------------
Union Bank of California, N.A. $20,000,000
- ------------------------------------------------------------------
First Union National Bank $18,000,000
- ------------------------------------------------------------------
$285,000,000
- ------------------------------------------------------------------
B. Addresses for Notices
THE CHASE MANHATTAN BANK
270 Park Avenue
New York, NY 10017
Attn: Darrell Crate
Telephone: (212) 270-5005
Telecopy: (212) 270-5222
NATIONSBANK, N.A.
600 Peachtree Street, N.E.
21st Floor
Atlanta, GA 30308-2214
Attn: Ronald Blissett
Telephone: (404) 607-4138
Telecopy: (404) 607-6318
CIBC INC.
425 Lexington Avenue, 8th Floor
New York, NY 10017
Attn: Gerald Girardi
Telephone: (212) 856-3649
Telecopy: (212) 856-3558
CREDIT LYONNAIS NEW YORK BRANCH
53 State Street, 27th Floor
Boston, MA 02109
Attn: Lisa Turilli
Telephone: (617) 723-2615
Telecopy: (617) 723-4803
SOCIETE GENERALE
1221 Avenue of the Americas
New York, NY 10020
Attn: John Padwater
Telephone: (212) 278-6263
Telecopy: (212) 278-7569
MELLON BANK, N.A.
One Mellon Bank Center, Room 350
Pittsburgh, PA 15258
Attn: Susan Whitewood
Telephone: (412) 234-7112
Telecopy: (412) 234-8087
STATE STREET BANK AND TRUST COMPANY
235 Franklin Street, 2nd Floor
Boston, MA 02110
Attn: Monica Sheehan
Telephone: (617) 664-4957
Telecopy: (617) 664-6527
UNION BANK OF CALIFORNIA, N.A.
350 California Street
San Francisco, CA 94104
Attn: David Hants
Telephone: (415) 705-7020
Telecopy: (415) 705-7037
FIRST UNION NATIONAL BANK
301 South College Street DC-5
Charlotte, NC 28288-0735
Attn: Robert W. Beatty
Telephone: (704) 374-4176
Telecopy: (704) 383-7611