Exhibit (b)
BANK OF AMERICA, N.A.
BANC OF AMERICA SECURITIES LLC
100 North Tryon Street
Charlotte, North Carolina 28255
August 28, 2003
AMN Healthcare, Inc.
12235 El Camino Real
Suite 200
San Diego, California 92130
Re: Senior Secured Credit Facilities
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of November 16, 2001
by and among AMN Healthcare, Inc. (the "Borrower"), AMN Healthcare Services,
Inc. (the "Parent"), the Subsidiary Guarantors party thereto, the Lenders party
thereto, Bank of America, N.A., as Agent, and General Electric Capital
Corporation, as Syndication Agent, as amended from time to time (the "Existing
Credit Agreement"). Unless otherwise defined herein, capitalized terms shall
have the meanings set forth in the Existing Credit Agreement.
You have advised us that the Parent, intends, subject to obtaining the approval
of the requisite Lenders under the Existing Credit Agreement, to repurchase up
to $180 million of its common stock and options to purchase shares of its common
stock (including the pro rata repurchases of common stock and options owned by
any Sponsor Entity) in one or a series of related transactions (collectively,
the "Stock Repurchase"). You have further advised us that, in order to finance
the Stock Repurchase, you desire to amend the Existing Credit Agreement to (i)
establish a $120 million tranche B term loan facility (the "Tranche B Facility")
and (ii) extend the Maturity Date of the Revolving Commitment and make such
other amendments to the Existing Credit Agreement consistent with the Summary of
Terms and Conditions of Amendment to Existing Credit Agreement attached hereto
(the "Summary of Terms") (collectively, the "Other Amendments").
In connection with the foregoing, Bank of America, N.A. ("Bank of America") is
pleased to commit to act as sole and exclusive administrative agent (in such
capacity, the "Agent") and to provide all of the Tranche B Facility, upon and
subject to the terms and conditions of this letter and the Summary of Terms.
Banc of America Securities LLC ("BAS") is pleased to advise you of its
willingness to act as sole and exclusive book manager and sole and exclusive
lead arranger (in such capacities, the "Lead Arranger") to form a syndicate of
financial institutions reasonably acceptable to you for the Tranche B Facility
and to secure an amendment and/or restatement of the Existing Credit Agreement
(the "Amendment"), on a best efforts basis, pursuant to which,
AMN Healthcare, Inc.
August 28, 2003
Page 2
the Parent would be permitted to consummate the Stock Repurchase and the
Tranche B Facility and the Other Amendments would be implemented.
You hereby agree that, effective upon your acceptance of this Commitment Letter
and continuing through October 31, 2003, you shall not solicit any other bank,
investment bank, financial institution, person or entity to provide, structure,
arrange or syndicate the Tranche B Facility or any other senior financing
similar to or as a replacement of the Tranche B Facility or the Existing Credit
Agreement.
The commitment of Bank of America hereunder and the undertaking of the Lead
Arranger to provide the services described herein are subject to the
satisfaction of each of the following conditions precedent in a manner
acceptable to Bank of America and the Lead Arranger in their sole reasonable
discretion: (a) the accuracy and completeness in all material respects of all
representations that you and your affiliates make to Bank of America and the
Lead Arranger and your compliance in all material respects with the terms of
this Commitment Letter (including the Summary of Terms) and the Fee Letter (as
hereinafter defined); (b) prior to and during the syndication of the Tranche B
Facility there shall be no competing offering, placement or arrangement of any
debt securities or bank financing by or on behalf of the Borrower or any of its
subsidiaries; (c) the negotiation, execution and delivery of definitive
documentation for the Amendment consistent with the Summary of Terms and
otherwise reasonably satisfactory to Bank of America and the Lead Arranger; (d)
no material adverse change in or material disruption of conditions in the market
for syndicated bank credit facilities or the financial, banking or capital
markets generally shall have occurred that, in the judgment of Bank of America
and the Lead Arranger, would materially impair the syndication of the Tranche B
Facility; and (e) no change, occurrence or development that shall have occurred
or become known to Bank of America or the Lead Arranger since December 31, 2002
could reasonably be expected to have a material adverse effect on the business,
assets, liabilities (actual or contingent), operations, condition (financial or
otherwise) or prospects of the Parent and the Consolidated Parties, taken as a
whole.
The Lead Arranger intends to commence syndication efforts promptly upon your
acceptance of this Commitment Letter and the Fee Letter (as hereinafter
defined).
You agree to actively assist the Lead Arranger in achieving a syndication of the
Tranche B Facility that is satisfactory to it. Such assistance shall include (a)
your providing and causing your advisors to provide Bank of America, the Lead
Arranger and the other Lenders upon request with all information reasonably
deemed necessary by Bank of America and the Lead Arranger to complete
syndication; (b) your assistance in the preparation of an Information Memorandum
to be used in connection with the syndication of the Tranche B Facility; (c)
your using commercially reasonable efforts to ensure that the syndication
efforts of the Lead Arranger benefit materially from your existing banking
relationships; and (d) otherwise assisting Bank of America and the Lead Arranger
in their syndication efforts, including by making your senior management and
advisors available from time to time to attend and make presentations regarding
the business and prospects of the Borrower and its subsidiaries, as appropriate,
at one or more meetings of prospective Lenders.
AMN Healthcare, Inc.
August 28, 2003
Page 3
It is understood and agreed that the Lead Arranger will manage and control all
aspects of the syndication, in consultation with you, including decisions as to
the selection of prospective Lenders and any titles offered to proposed Lenders,
when commitments will be accepted and the final allocations of the commitments
among the Lenders. It is understood that no Lender participating in the
Amendment (including, without limitation, the Tranche B Facility) will receive
compensation from you in order to obtain its approval and/or commitment, except
on the terms contained herein, in the Summary of Terms and the Fee Letter (as
hereinafter defined). It is also understood and agreed that the amount and
distribution of the fees among the Lenders will be at the sole discretion of the
Lead Arranger.
You hereby represent, warrant and covenant that (a) all material information,
other than Projections (defined below), which has been or is hereafter made
available to Bank of America, the Lead Arranger or the Lenders by you or any of
your representatives in connection with the transactions contemplated hereby
(the "Information") is and will be complete and correct in all material respects
and does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained therein
not materially misleading, taken as a whole, and (b) all financial projections
concerning the Borrower and its subsidiaries that have been or are hereafter
made available to Bank of America, the Lead Arranger or the Lenders by you or
any of your representatives (the "Projections") have been or will be prepared in
good faith based upon assumptions you believe to be reasonable as of the date
such Projections were prepared. You agree to furnish us with such Information
and Projections as we may reasonably request and to supplement the Information
and the Projections from time to time until the closing date for the Amendment
(the "Closing Date") so that the representation, warranty and covenant in the
preceding sentence is correct, in all material respects, on the Closing Date. In
issuing this commitment and in arranging the Amendment and syndicating the
Tranche B Facility, Bank of America and the Lead Arranger are and will be using
and relying on the Information and the Projections (collectively, the
"Pre-Commitment Information") without independent verification thereof.
By executing this Commitment Letter, you agree to reimburse Bank of America and
the Lead Arranger from time to time on demand for all reasonable out-of-pocket
fees and expenses (including, but not limited to, the reasonable fees,
disbursements and other charges of Moore & Van Allen PLLC, as counsel to the
Lead Arranger and the Agent) incurred in connection with the Amendment and/or
the Tranche B Facility, the syndication thereof, the preparation of the
definitive documentation therefor and the other transactions contemplated
hereby.
You agree to indemnify and hold harmless Bank of America, the Lead Arranger,
each Lender and each of their affiliates and their respective officers,
directors, employees, agents and advisors (each, an "Indemnified Party") from
and against (and will reimburse each Indemnified Party as the same are incurred
for) any and all claims, damages, losses, liabilities and expenses (including,
without limitation, the reasonable fees, disbursements and other charges of
counsel) that may be incurred by or asserted or awarded against any Indemnified
Party, in each case arising out of or in connection with or by reason of
AMN Healthcare, Inc.
August 28, 2003
Page 4
(including, without limitation, in connection with any investigation, litigation
or proceeding or preparation of a defense in connection therewith) (a) any
matters contemplated by this Commitment Letter or any related transaction or (b)
the Amendment and the Existing Credit Agreement or any use made or proposed to
be made with the proceeds thereof, except to the extent such claim, damage,
loss, liability or expense is found in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted primarily from such Indemnified
Party's gross negligence or willful misconduct. In the case of an investigation,
litigation or proceeding to which the indemnity in this paragraph applies, such
indemnity shall be effective whether or not such investigation, litigation or
proceeding is brought by you, your equity holders or creditors or an Indemnified
Party, whether or not an Indemnified Party is otherwise a party thereto and
whether or not the transactions contemplated hereby are consummated. You also
agree that no Indemnified Party shall have any liability (whether direct or
indirect, in contract or tort or otherwise) to you or your subsidiaries or
affiliates or to your or their respective equity holders or creditors arising
out of, related to or in connection with any aspect of the Amendment or the
Existing Credit Agreement, except to the extent of direct, as opposed to
special, indirect, consequential or punitive, damages determined in a final
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct. It is
further agreed that Bank of America shall only have liability to you (as opposed
to any other person), that Bank of America shall be liable solely in respect of
its own commitment to the Tranche B Facility on a several, and not joint, basis
with any other Lender and that such liability shall only arise to the extent
damages have been caused by a breach of Bank of America's obligations hereunder
as determined in a final non-appealable judgment by a court of competent
jurisdiction. Notwithstanding any other provision of this Commitment Letter, no
Indemnified Party shall be liable for any damages arising from the use by others
of information or other materials obtained through electronic telecommunications
or other information transmission systems.
This Commitment Letter and the fee letter among you, Bank of America and the
Lead Arranger of even date herewith (the "Fee Letter") and the contents hereof
and thereof are confidential and, except for disclosure hereof or thereof on a
confidential basis to the Sponsor Entities, the partners of the Sponsor Entities
or the affiliates of the Sponsor Entities, your directors, officers, employees,
accountants, attorneys and other professional advisors retained by you in
connection with the Stock Repurchase, the Amendment and/or the Existing Credit
Agreement or as otherwise required by law or regulation, may not be disclosed in
whole or in part to any person or entity without our prior written consent;
provided, however, it is understood and agreed that you may disclose this
Commitment Letter (including the Summary of Terms) but not the Fee Letter after
your acceptance of this Commitment Letter and the Fee Letter, in filings with
the Securities and Exchange Commission and other applicable regulatory
authorities and stock exchanges. Notwithstanding the foregoing, the Parent, the
Borrower (and each employee, representative or other agent of the Parent or
Borrower) may disclose to any person, without limitation of any kind, the income
tax treatment and income tax structure of the Existing Credit Agreement
(including the Amendment) and the transactions contemplated hereby and thereby
and all materials of any kind (including opinions or other tax analyses) that
are provided to the Borrower relating to such income tax treatment and income
tax
AMN Healthcare, Inc.
August 28, 2003
Page 5
structure; provided, however, that no party shall disclose any information
relating to such income tax treatment or income tax structure to the extent
nondisclosure is necessary in order to comply with applicable securities laws.
For this purpose, income tax treatment and income tax structure shall not
include (i) the identity of, or other information that would identify, any
existing or future party (or any affiliate of such party) to this Commitment
Letter, the Fee Letter or the Existing Credit Agreement or confidential
commercial or strategic information regarding such transaction not related to
such income tax treatment or income tax structure or (ii) any specific market
pricing information, including the amount of any fees, expenses, rates or
payments, arising in connection with the Amendment or the Tranche B Facility or
the transactions contemplated hereby or thereby. Further, Bank of America and
the Lead Arranger shall be permitted to use information related to the
syndication and arrangement of the Amendment and the Tranche B Facility in
connection with marketing, press releases or other transactional announcements
or updates provided to investor or trade publications.
You acknowledge that Bank of America and the Lead Arranger or their affiliates
may be providing financing or other services to parties whose interests may
conflict with yours. Bank of America and the Lead Arranger agree that they will
not furnish confidential information obtained from you to any of their other
customers and that they will treat confidential information relating to you and
your affiliates with the same degree of care as they treat their own
confidential information. Bank of America and the Lead Arranger further advise
you that they will not make available to you confidential information that they
have obtained or may obtain from any other customer. In connection with the
services and transactions contemplated hereby, you agree that Bank of America
and the Lead Arranger are permitted to access, use and share with any of their
bank or non-bank affiliates, agents, advisors (legal or otherwise) or
representatives any information concerning you or any of your affiliates that is
or may come into the possession of Bank of America, the Lead Arranger or any of
their affiliates.
The provisions of the immediately preceding four paragraphs shall remain in full
force and effect regardless of whether any definitive documentation for the
Amendment shall be executed and delivered, and notwithstanding the termination
of this letter or any commitment or undertaking hereunder.
This Commitment Letter and the Fee Letter may be executed in counterparts which,
taken together, shall constitute an original. Delivery of an executed
counterpart of this Commitment Letter or the Fee Letter by telecopier or
facsimile shall be effective as delivery of a manually executed counterpart
thereof.
This Commitment Letter and the Fee Letter shall be governed by, and construed in
accordance with, the laws of the State of New York. Each of you, Bank of America
and the Lead Arranger hereby irrevocably waives any and all right to trial by
jury in any action, proceeding or counterclaim (whether based on contract, tort
or otherwise) arising out of or relating to this Commitment Letter (including,
without limitation, the Summary of Terms), the Fee Letter, the transactions
contemplated hereby and thereby or the actions of Bank of America and the Lead
Arranger in the negotiation, performance or enforcement hereof.
AMN Healthcare, Inc.
August 28, 2003
Page 6
This Commitment Letter, together with the Summary of Terms and the Fee Letter,
embodies the entire agreement and understanding among Bank of America, the Lead
Arranger, you and your affiliates with respect to the Amendment and supercedes
all prior agreements and understandings relating to the specific matters hereof.
However, please note that the terms and conditions of the commitment of Bank of
America hereunder and the undertaking of the Lead Arranger hereunder are not
limited to those set forth herein or in the Summary of Terms. Those matters that
are not covered or made clear herein or in the Summary of Terms or the Fee
Letter are subject to mutual agreement of the parties. No party has been
authorized by Bank of America or the Lead Arranger to make any oral or written
statements that are inconsistent with this Commitment Letter. This Commitment
Letter is not assignable by the Borrower, Bank of America or the Lead Arranger
without the prior written consent of each of the parties hereto and is intended
to be solely for the benefit of the parties hereto and the Indemnified Parties.
This offer will expire at 5:00 p.m. EST time on August 29, 2003 unless you
execute this letter and the Fee Letter and return them to us prior to that time
(which may be by facsimile transmission), whereupon this letter and the Fee
Letter (each of which may be signed in one or more counterparts) shall become
binding agreements. Thereafter, this undertaking and commitment will expire on
October 31, 2003 unless definitive documentation for the Amendment is executed
and delivered prior to such date. In consideration of the time and resources
that BAS and the Lead Arranger will devote to the Tranche B Facility, you agree
that, until such expiration, you will not solicit, initiate, entertain or
permit, or enter into any discussions in respect of, any offering, placement or
arrangement of any competing Tranche B Facility for the Borrower.
[THE BALANCE OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
AMN Healthcare, Inc.
August 28, 2003
Page 7
We are pleased to have the opportunity to work with you in connection with this
important financing.
Very truly yours,
BANK OF AMERICA, N.A.
By: /s/ Kevin R. Wagley
-------------------------------------------------
Name: Kevin R. Wagley
------------------------------------------
Title: Principal
------------------------------------------
BANC OF AMERICA SECURITIES LLC
By: /s/ K. James Pirouz
-------------------------------------------------
Name: K. James Pirouz
------------------------------------------
Title: Vice President
------------------------------------------
ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE WRITTEN:
AMN HEALTHCARE, INC.
By: /s/ Donald R. Myll
-------------------------------------------
Name: Donald R. Myll
------------------------------------
Title: Chief Financial Officer
------------------------------------
AMN HEALTHCARE, INC.
SUMMARY OF TERMS AND CONDITIONS
OF
AMENDMENT TO EXISTING CREDIT AGREEMENT
BORROWER: AMN Healthcare, Inc., a Nevada corporation (the "Borrower").
GUARANTORS: No change to Existing Credit Agreement.
ADMINISTRATIVE
AGENT: No change to Existing Credit Agreement.
SYNDICATION
AGENT: No change to Existing Credit Agreement.
SOLE LEAD
ARRANGER: Banc of America Securities LLC ("BAS").
SOLE BOOK MANAGER: BAS.
LENDERS: Revolving Credit Facility: No change to Existing
Credit Agreement.
Tranche B Facility: A syndicate of financial institutions
(including Bank of America) arranged by the Lead Arranger,
which institutions shall be reasonably acceptable to the
Borrower and the Agent (collectively, the "Tranche B
Lenders").
SENIOR CREDIT
FACILITIES: An aggregate principal amount of $195,000,000 will be
available upon the terms and conditions hereinafter set
forth:
Revolving Credit Facility: Same as Existing Credit Agreement
- $75 million revolving credit facility (the "Revolving
Credit Facility"), with a $10 million sublimit for the
issuance of standby and commercial letters of credit (each a
"Letter of Credit") and a $10 million sublimit for swingline
loans (each a "Swingline Loan").
Tranche B Facility: a $120 million term loan facility, all
of which will be drawn on the Closing Date (the "Tranche B
Facility").
The Revolving Credit Facility and the Tranche B Facility are
collectively referred to herein as the "Senior Credit
Facility".
SWINGLINE OPTION: No change to Existing Credit Agreement.
PURPOSE: The proceeds of the Senior Credit Facility shall be used:
(i) for working capital, capital expenditures, and other
lawful corporate purposes; and (ii) to finance the
repurchase of up to $180 million of its common stock and
options to purchase shares of its common stock (including
the pro rata repurchases of common stock and options owned
by any Sponsor Entity) in one or a series of related
transactions (collectively, the "Stock Repurchase").
CLOSING DATE: The execution of Amendment to occur on or before October 31,
2003 (the "Closing Date"). ------------
INTEREST RATES: As set forth in Addendum I.
MATURITY: The Revolving Credit Facility shall terminate and all
amounts outstanding thereunder shall be due and payable 5
years from the Closing Date.
The Tranche B Facility shall be subject to repayment
according to the Scheduled Amortization (as defined below),
with the final payment of all amounts outstanding, plus
accrued interest, being due 5 years after the Closing Date.
AVAILABILITY/SCHEDULED
AMORTIZATION: Revolving Credit Facility: No change to Existing
Credit Agreement.
Tranche B Facility: The Tranche B Facility will be subject
to quarterly amortization of principal (in equal
installments), with an amount equal to 5% of the initial
aggregate principal amount of the Tranche B Facility loans
to be payable in each of the first 4 years and an amount
equal to 80% of the initial aggregate principal amount of
the Tranche B Facility loans to be payable in the final year
(the "Scheduled Amortization").
MANDATORY PREPAYMENTS
AND COMMITMENT
REDUCTIONS: In addition to the amortization set forth above,
(a) 100% of all net cash proceeds (i) from Asset
Dispositions and Casualty and Condemnation Events of the
Borrower and its subsidiaries (excluding sales of inventory
and services in the ordinary course of business and other
exceptions to be agreed upon in the loan documentation),
(ii) of Extraordinary Receipts (to be defined in the loan
documentation to include tax refunds, indemnity payments,
pension reversions and certain insurance proceeds that would
not be covered as Asset Disposition
2
proceeds, but to exclude cash receipts in the ordinary
course of business) and (iii) from the issuance or
incurrence after the Closing Date of additional debt of the
Borrower or any of its subsidiaries otherwise permitted
under the loan documentation (subject to exceptions to be
agreed upon in the loan documentation), (b) 50% of all net
cash proceeds from the issuance of additional equity
interests in the Borrower or any of its subsidiaries
otherwise permitted under the loan documentation and (c) 50%
of Excess Cash Flow (to be defined in the loan
documentation)of the Borrower and its subsidiaries shall be
applied to the prepayment of the Senior Credit Facility in
the following manner: first, to the Scheduled Amortization
installments of the Tranche B Facility on a pro rata basis
and, second, to the Revolving Credit Facility (without a
corresponding reduction in the Revolving Committed Amount).
OPTIONAL
PREPAYMENTS
AND COMMITMENT
REDUCTIONS: No change to Existing Credit Agreement.
SECURITY: No change to Existing Credit Agreement.
CONDITIONS
PRECEDENT TO
AMENDMENT CLOSING: The Closing (and the initial funding under the Existing
Credit Agreement, as amended) will be subject to
satisfaction of the conditions precedent deemed appropriate
by the Agent and the Lenders including, but not limited to,
the following:
(i) The negotiation of definitive documentation (including,
without limitation, satisfactory legal opinions and
other customary closing documents) for the Amendment
reasonably satisfactory to the Agent, the Lead Arranger
and the Lenders and the receipt by the Agent of
consents to the Amendment from the Lenders (other than
Bank of America).
(ii) There shall not have occurred a material adverse change
(x) in the condition (financial or otherwise),
operations, business, assets, liabilities or prospects
of the Parent and the Consolidated Parties, taken as a
whole, since December 31, 2002 or (y) in the facts and
information regarding such entities as represented to
date.
(iii) The absence of any action, suit, investigation or
proceeding pending or, to the knowledge of the
Borrower, threatened in any court or before any
3
arbitrator or governmental authority that could reasonably
be expected to (x) have a material adverse effect on the
condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Parent and the
Consolidated Parties, taken as a whole, since, (y) have a
material adverse effect on the ability of the Borrower or
any Guarantor to perform its obligations under the loan
documentation or (z) have a material adverse effect on the
rights and remedies of the Agent or the Lenders under the
loan documentation (collectively, a "Material Adverse
Effect").
(iv) The Lenders shall have completed a due diligence
investigation of the Borrower and its subsidiaries in
scope, and with results, satisfactory to the Lenders
and shall have been given such access to the
management, records, books of account, contracts and
properties of the Borrower and its subsidiaries and
shall have received such financial, business and other
information regarding the Borrower and its subsidiaries
as they shall have requested, including, without
limitation, information as to possible contingent
liabilities, tax matters, collective bargaining
agreements and other arrangements with employees, the
most recently completed annual (or other audited)
financial statements of the Borrower and its
subsidiaries, interim financial statements of the
Borrower and its subsidiaries dated the end of the most
recent fiscal quarter for which financial statements
are available (or, in the event the Lenders' due
diligence review reveals material changes since such
financial statements, as of a later date within 45 days
of the Closing Date); All of the Pre-Commitment
Information shall be complete and correct in all
material respects; and no changes or developments shall
have occurred, and no new or additional information,
shall have been received or discovered by the Agent
regarding the Borrower and its subsidiaries or the
transactions contemplated hereby after the date of the
Commitment Letter to which this is attached that could
reasonably be expected to have a Material Adverse
Effect.
(v) The Agent shall have received, in form and substance
reasonably satisfactory to it, evidence that the
Borrower has received senior secured credit ratings of
not less than (i) B2 (stable) from Moody's Investors
Service, Inc. ("Moody's") and B+ (stable) from Standard
& Poor's Ratings Group, a division of The McGraw Hill
4
Companies, Inc. ("S&P") respectively or (ii) B1
(stable) from Moody's and B (stable) from S&P.
AMENDMENTS
GENERALLY: Applicable provisions of the Existing Credit Agreement to be
amended to permit and/or reference the addition of the
Tranche B Facility.
CONDITIONS PRECEDENT
TO ALL LOANS: No change to Existing Credit Agreement.
REPRESENTATIONS
AND WARRANTIES: No change to Existing Credit Agreement.
AFFIRMATIVE
COVENANTS: No change to Existing Credit Agreement.
NEGATIVE COVENANTS: Applicable covenants to be amended to permit the Stock
Repurchase.
FINANCIAL
COVENANTS: No change to Existing Credit Agreement other than:
o Maintenance on a rolling four quarter basis of a
Maximum Leverage Ratio (total funded debt/EBITDA) not
to exceed:
----------------------------------------------------------------------------
Fiscal Year March 31 June 30 September 30 December 31
----------------------------------------------------------------------------
2003 1.50x 1.50x 1.50x 2.50x
----------------------------------------------------------------------------
2004 2.50x 2.75 2.50x 2.25x
----------------------------------------------------------------------------
2005 1.75x 1.75x 1.75x 1.75x
----------------------------------------------------------------------------
2006 and 1.50x 1.50x 1.50x 1.50x
Thereafter
----------------------------------------------------------------------------
o Consolidated EBITDA Adjustment definition will be
amended to reflect a one-time charge for the fourth
quarter of 2003 for "compensation expenses" as a result
of the repurchase of certain options in connection with
the Stock Repurchase.
INTEREST RATE
PROTECTION: The Existing Credit Agreement will be amended to require the
Borrower to obtain interest rate protection in form and with
parties acceptable to the Lenders which shall provide
coverage in a notional amount equal to at least 50% of the
outstanding amount of the Tranche B Facility and for a
duration of at least two years from the Closing Date.
EVENTS OF DEFAULT: No change to Existing Credit Agreement.
5
ASSIGNMENTS AND
PARTICIPATIONS: Revolving Credit Facility Assignments: No change to
Existing Credit Agreement.
Tranche B Facility Assignments: Each Lender will be
permitted to make assignments in respect of the Tranche B
Facility in a minimum amount equal to $1 million to other
financial institutions approved by the Agent (which approval
shall not be unreasonably withheld or delayed); provided,
however, that the approval of the Agent shall not be
required in connection with assignments to other Lenders, to
any affiliate of a Lender or to any Approved Fund.
Assignments Generally: No change to Existing Credit
Agreement.
Participations: No change to Existing Credit Agreement.
WAIVERS AND
AMENDMENTS:
The Existing Credit Agreement will be amended to provide
that amendments and waivers of the provisions of the loan
agreement and other definitive credit documentation will
require the approval of Lenders holding loans and
commitments representing more than 50% of the aggregate
amount of loans and commitments under the Existing Credit
Agreement, as amended by the Amendment, except that the
consent of all the Lenders affected thereby shall be
required with respect to (i) increases in the commitment of
such Lenders, (ii) reductions of principal, interest or
fees, (iii) extensions of scheduled maturities or times for
payment, and (iv) releases of all or substantially all of
the collateral. The Lenders under the Revolving Credit
Facility shall not be required to fund any Revolving Loans,
or issue or renew any Letter of Credit, over the failure of
any condition precedent to such a loan or advance (prior to
any waiver or amendment) unless Lenders holding loans and
commitments representing more than 50% of the aggregate
amount of loans and commitments under the Revolving Credit
Facility approve the waiver or amendment that results in the
satisfaction of such previously unsatisfied condition
precedent.
INDEMNIFICATION: No change to Existing Credit Agreement.
GOVERNING LAW: No change to Existing Credit Agreement.
PRICING/FEES/
EXPENSES: As set forth in Addendum I.
6
ADDENDUM I
PRICING, FEES AND EXPENSES
UNUSED FEE: No change to Existing Credit Agreement.
LETTERS OF
CREDIT FEES: The Borrower will pay a fee (the "Letter of Credit
Fee"), determined in accordance with the Performance Pricing
grid set forth below, on the aggregate stated amount for
each Letter of Credit that is issued and outstanding. The
Letter of Credit Fee is payable quarterly in arrears,
commencing on the Closing Date, and will be shared
proportionately by the Lenders.
INTEREST RATES: Revolving Credit Facility: At the Borrower's option, any
loan (other than Swingline Loans) under the Revolving Credit
Facility that is made to it will bear interest at a rate
equal to the Applicable Margin, as determined in accordance
with the Performance Pricing grid set forth below, plus one
of the following indexes: (i) LIBOR and (ii) the Alternate
Base Rate (to be defined as the higher of (a) the Bank of
America prime rate and (b) the Federal Funds rate plus
.50%); provided, however, that the initial Applicable
Percentages for the Revolving Credit Facility
(including Letter of Credit Fees) shall be based on Pricing
Level V and shall remain at Pricing Level V until the
Calculation Date for the fiscal quarter of the Consolidated
Parties ending on March 31, 2004, on and after which time
the Pricing Level shall be determined by the Leverage Ratio
as of the last day of the most recently ended fiscal quarter
or fiscal year, as the case may be, of the Consolidated
Parties preceding the applicable Calculation Date.
Tranche B Facility: At the Borrower's option, any loan under
the Tranche B Facility that is made to it will bear interest
at a rate equal to the Applicable Margin, as determined in
accordance with the pricing grid set forth immediately below
(based upon the senior secured credit ratings the Borrower
receives from Moody's and S&P prior to the Closing Date (in
the event that the ratings established by Moody's and S&P
shall fall within different categories, the applicable
category shall be based on the lower of the two ratings))
(the "Applicable Tranche B LIBOR Margin" or "Applicable
Tranche B Base Rate Margin", as the case may be), plus one
of the following indexes: (i) LIBOR and (ii) Alternate Base
Rate:
7
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Senior Secured Credit Applicable Margin Applicable Margin
Ratings received from for Tranche B LIBOR Loans for Tranche B Alternate
Moody's and S&P Base Rate Loans
--------------------------------------------------------------------------------
Ba2/BB 325 bps 225 bps
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Ba3/BB- 350 bps 250 bps
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B1/B+ 375 bps 275 bps
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B2/B+ or B1/B 450 bps 350 bps
--------------------------------------------------------------------------------
; provided, in each case that if during the 180 day period
following Closing, any breakage costs, charges or fees are
incurred on account of the syndication of the Tranche B
Facility, the Borrower shall immediately reimburse the Agent
for any such costs, charges or fees. Such right of
reimbursement shall be in addition to and not in limitation
of customary cost and yield protections. Each Swingline Loan
shall bear interest at the Alternate Base Rate.
The Borrower may select interest periods of 1, 2, 3 or 6
months for LIBOR loans, subject to availability. Interest
shall be payable at the end of the selected interest period,
but no less frequently than quarterly.
A default rate shall apply on all obligations in the event
of default under the Senior Credit Facility at a rate per
annum of 2% above the applicable interest rate.
PERFORMANCE
PRICING: The Applicable Margin and Letter of Credit Fee, for any
fiscal quarter, shall be the applicable rate per annum set
forth in the table below opposite the Leverage Ratio
determined as of the last day of the immediately preceding
fiscal quarter.
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Applicable Margin Applicable Margin for Standby Letter Trade Letter of
For LIBOR Loans Alternate Base Rate of Credit Fee Credit Fee
Loans
---------------------------------------------------------------------------------------------------------------------------
Pricing Leverage Ratio Revolving Credit Revolving Credit
Level Facility Facility
----------------------------------------------------------------------------------------------------------------------------
I Less than or equal to 1.75% 0.75% 1.75% .875%
0.75
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Less than or equal to
II 1.25 but greater than 2.00% 1.00% 2.00% 1.00%
0.75
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Less than or equal to
III 1.75 but greater than 2.50% 1.50% 2.50% 1.25%
1.25
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Less than or equal to
IV 2.25 but greater than 3.00% 2.00% 3.00% 1.50%
1.75
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V Greater than 2.25 3.25% 2.25% 3.25% 1.625%
---------------------------------------------------------------------------------------------------------------------------
8
CALCULATION OF
INTEREST AND FEES: No change to Existing Credit Agreement.
COST AND YIELD
PROTECTION: No change to Existing Credit Agreement.
EXPENSES: No change to Existing Credit Agreement.
9