SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
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THE UNION CORPORATION
(NAME OF SUBJECT COMPANY)
OUTSOURCING SOLUTIONS INC.
SHERMAN ACQUISITION CORPORATION
(BIDDERS)
COMMON STOCK, PAR VALUE $0.50 PER SHARE
(TITLE OF CLASS OF SECURITIES)
906072103
(CUSIP NUMBER OF CLASS OF SECURITIES)
TIMOTHY G. BEFFA
OUTSOURCING SOLUTIONS INC.
390 SOUTH WOODS MILL ROAD
SUITE 150
CHESTERFIELD, MO 63017
(314) 576-0022
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
COPY TO:
FRANK L. SCHIFF, ESQ.
<PAGE>
WHITE & CASE LLP
1155 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(212) 819-8200
JANUARY 13, 1998
<PAGE>
This Amendment No. 2 amends and supplements the Tender Offer Statement on
Schedule 14D-1 (the "Schedule 14D-1") and Amendment No. 1 to the Schedule
14D-1 ("Amendment No. 1"), which relate to the offer by Sherman Acquisition
Corporation, a Delaware corporation (the "Purchaser") and a direct wholly-
owned subsidiary of Outsourcing Solutions Inc., a Delaware corporation (the
"Parent"), to purchase all outstanding shares of Common Stock, par value $0.50
per share (the "Shares"), of The Union Corporation, a Delaware corporation
(the "Company"), upon the terms and subject to the conditions set forth in the
Offer to Purchase dated December 24, 1997 (the "Offer to Purchase"), and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer").
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Item 4(b) is hereby amended and supplemented by adding thereto the
following:
On consummation of the Offer, the Parent anticipates entering into an
amended and restated credit agreement (the "Second Amended and Restated Credit
Agreement") with Goldman Sachs Credit Partners L.P. ("GSCP"), The Chase
Manhattan Bank ("Chase"), Chase Securities Inc. ("CSI") and various lenders
providing for (i) syndicated senior secured term loan facilities aggregating
approximately $412.4 million (the "Term Facilities") and (ii) a senior secured
revolving credit facility of up to $58.0 million (the "Revolving Facility,"
and together with the Term Facilities, the "Senior Facilities") on
substantially the same terms as in the form of Second Amended and Restated
Credit Agreement attached hereto as Exhibit (b)(1). In connection with such
financing, it is expected that GSCP and CSI will act as Co-Arrangers, GSCP and
Chase will act as Co-Administrative Agents and SunTrust Bank, Atlanta will act
as Collateral Agent.
The Term Facilities will consist of (i) a Tranche A Term Loan of $62.5
million and, (ii) a Tranche B Term Loan of $124.9 million and (iii) a Tranche
C Term Loan of $225.0 million. The Term Facilities will provide for quarterly
amortization until final maturity. The Tranche A Term Loan will mature on
October 15, 2001, the Tranche B Term Loan will mature on October 15, 2003, and
the Tranche C Loan will mature on October 15, 2004.
Subject to reduction in the event the Parent meets leverage and interest
coverage tests, the Tranche A Term Loan will bear interest, at the Parent's
option, (a) at a base rate equal to the greater of (i) the federal funds rate
plus 0.5% or (ii) Chase's customary base rate, plus 1.5% or (b) at the reserve
adjusted Eurodollar rate plus 2.5%. Subject to reduction in the event the
Parent meets leverage and interest coverage tests, the Tranche B Term Loan and
Tranche C Term Loan will each bear interest, at the Parent's option, (a) at a
base rate equal to the greater of (i) the federal funds rate plus 0.5% or (ii)
Chase's customary base rate, plus 2.0% or (b) at the reserve adjusted
Eurodollar rate plus 3.0%.
Subject to certain conditions, the Parent has the ability to borrow an
additional $58.0 million for working capital, general corporate purposes and
acquisitions under the Revolving Facility.
The Revolving Facility will terminate on October 15, 2001 and is fully
revolving until final maturity. Subject to reduction in the event the Parent
meets certain leverage and interest coverage tests, the Revolving Facility
bears interest, at the Parent's option, (a) at a base rate equal to the
greater of (i) the federal funds rate plus 0.5% or (ii) Chase's customary base
rate, plus 1.5% or (b) at the reserve adjusted Eurodollar rate plus 2.5%.
The foregoing discussion of the Second Amended and Restated Credit
Agreement is qualified in its entirety by reference to the text of the Form of
Second Amended and Restated Credit Agreement, a copy of which has been filed
as an Exhibit to this Amendment No. 2 and is incorporated hereby in its
entirety.
<PAGE>
Item 10 Additional Information
Item 10(c) is hereby amended and supplemented by adding thereto the
following:
On January 13, 1998, the Parent was notified by the Federal Trade
Commission that early termination of the waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended, was granted effective
January 13, 1998.
Exhibit (b)(1) Form of Second Amended and Restated Credit Agreement by and
among Parent, the Lenders listed therein, Goldman Sachs Credit
Partners L.P. and the Chase Manhattan Bank, as Co-
Administrative Agents, Goldman Sachs Credit Partners L.P. and
Chase Securities Inc., as Arranging Agents and SunTrust Bank,
Atlanta as Collateral Agent.
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: January 13, 1998
OUTSOURCING SOLUTIONS INC.
By: /s/ TIMOTHY G. BEFFA
NAME: Timothy G. Beffa
TITLE: President and Chief
Executive Officer
SHERMAN ACQUISITION CORPORATION
By: /s/ TIMOTHY G. BEFFA
NAME: Timothy G. Beffa
TITLE: President
<PAGE>
EXHIBIT
NUMBER DESCRIPTION
Exhibit (b)(1) Form of Second Amended and Restated Credit Agreement by and
among Parent, the Lenders listed therein, Goldman Sachs Credit
Partners L.P. and the Chase Manhattan Bank, as Co-
Administrative Agents, Goldman Sachs Credit Partners L.P. and
Chase Securities Inc., as Arranging Agents and SunTrust Bank,
Atlanta as Collateral Agent.
<PAGE>
OUTSOURCING SOLUTIONS INC.
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED CREDIT AGREEMENT is dated as
of January __, 1998 and entered into by and among OUTSOURCING SOLUTIONS INC.,
a Delaware corporation ("COMPANY"), THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to herein as a "LENDER" and
collectively as "LENDERS"), GOLDMAN SACHS CREDIT PARTNERS L.P. and THE CHASE
MANHATTAN BANK, as co-administrative agents (each, in such capacity, a "CO-
ADMINISTRATIVE AGENT" and, collectively, "CO-ADMINISTRATIVE AGENTS"), GOLDMAN
SACHS CREDIT PARTNERS L.P. and CHASE SECURITIES INC., as arranging agents
(each, in such capacity, an "ARRANGING AGENT" and collectively, "ARRANGING
AGENTS"), and SUNTRUST BANK, ATLANTA, as collateral agent (in such capacity,
"COLLATERAL AGENT").
R E C I T A L S
WHEREAS, Company and certain financial institutions (the
"EXISTING LENDERS") are parties to that certain Amended and Restated Credit
Agreement dated as of October 8, 1997 (as heretofore amended, supplemented or
otherwise modified, the "EXISTING CREDIT AGREEMENT"), pursuant to which the
Existing Lenders (capitalized terms used in these Recitals without definition
shall have the respective meanings assigned in subsection 1.1 hereof) have
extended and agreed to extend certain credit facilities to Company, the
proceeds of which were or will be used (i) together with the proceeds of the
Subordinated Notes and certain other funds, to fund the Payco Acquisition, the
Accelerated Acquisition and the NSA Acquisition and refinance certain
indebtedness of Company, Payco, Accelerated and NSA and pay certain
transaction fees and expenses relating thereto, and (ii) to provide working
capital and financing for certain acquisitions by Company and its
Subsidiaries;
WHEREAS, the domestic Subsidiaries of Company have guarantied
all of the obligations of Company with respect to the credit facilities
provided by Lenders under the Existing Credit Agreement;
WHEREAS, Company has secured all of the Obligations under the
Existing Credit Agreement, and each such Subsidiary of Company has secured its
respective obligations under the Subsidiary Guaranty, by granting to
Collateral Agent, for the benefit of Agents and Lenders, (i) a first priority
Lien on substantially all of their respective real and personal property and
(ii) a first priority pledge of all of the capital stock of their respective
domestic Subsidiaries (65% of the capital stock of their respective foreign
subsidiaries);
WHEREAS, Company has entered into (i) the Accelerated
Acquisition Agreement with Accelerated Bureau of Collections, Inc., a Colorado
corporation ("ACCELERATED"), pursuant to which, among other things, Company
has acquired all or substantially all of the assets (the "ACCELERATED ACQUIRED
ASSETS") of Accelerated, and (ii) the NSA Acquisition Agreement with North
Shore Agency, Inc., a New York corporation ("NSA"), and certain other Persons,
pursuant to which, among other things, Company has acquired all or
substantially all of the assets (the "NSA ACQUIRED ASSETS") of NSA;
<PAGE>
WHEREAS, Company, Sherman Acquisition Corporation ("MERGER
SUB") and The Union Corporation, a Delaware corporation ("UNION") have entered
into the Union Acquisition Agreement pursuant to which (i) Merger Sub will
tender for all of the issued and outstanding capital stock of Union pursuant
to the Tender Offer; (ii) after consummation of the Tender Offer, Merger Sub
will merge (the "UNION MERGER") with and into Union, with Union being the
surviving corporation and thereby becoming a wholly-owned Subsidiary of
Company; and (iii) pursuant to the Union Merger any Union Common Stock not
tendered in the Tender Offer will be canceled in exchange for certain cash
consideration;
WHEREAS, Company desires that Existing Lenders and New Lenders
agree to amend and restate the Existing Credit Agreement in its entirety
(i) to extend additional credit facilities to Company in an aggregate
principal amount of $225,000,000 through the addition of a Tranche C Term Loan
facility, the proceeds of which will be used (a) to finance the purchase of
the capital stock of Union pursuant to the Tender Offer and the payment of
cash consideration to certain shareholders of Union upon consummation of the
Union Merger, (b) to pay Transaction Costs, and (c) to repay outstanding
Revolving Loans, and (ii) to make certain other changes as more fully set
forth herein, which amendment and restatement shall become effective upon
satisfaction of the conditions precedent set forth herein;
WHEREAS, it is the intent of the parties hereto that this
Agreement not constitute a novation of the obligations and liabilities of the
parties under the Existing Credit Agreement or be deemed to evidence or
constitute repayment of all or any portion of such obligations and liabilities
and that this Agreement amend and restate in its entirety the Existing Credit
Agreement and re-evidence the Obligations of Company outstanding thereunder;
and
WHEREAS, it is the intent of Loan Parties to confirm that all
Obligations of Loan Parties under the other Loan Documents shall continue in
full force and effect and that, from and after the Effective Date, all
references to the "CREDIT AGREEMENT" contained therein shall be deemed to
refer to this Agreement:
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, Company, Lenders, Co-
Administrative Agents, Arranging Agents and Collateral Agent agree that on the
Effective Date the Existing Credit Agreement shall be amended and restated in
its entirety as follows:
SECTION 1.
DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the
following meanings:
"ACCELERATED" has the meaning assigned to that term in the
Recitals to this Agreement.
"ACCELERATED ACQUIRED ASSETS" means the assets acquired
pursuant to the Accelerated Acquisition.
"ACCELERATED ACQUISITION" means the transactions contemplated
by the Accelerated Acquisition Agreement.
"ACCELERATED ACQUISITION AGREEMENT" means the Asset Purchase
Agreement by and between Company and Accelerated, in the form delivered to
Arranging Agents on or prior to the Funding Date for the Accelerated
Acquisition Loans and as such agreement may be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
<PAGE>
subsection 7.12A.
"ACCELERATED ACQUISITION LOANS" means Additional Tranche B Term
Loans in an aggregate principal amount of $33,000,000 made to Company on
November 10, 1997.
"ACQUISITION LOANS" means the Accelerated Acquisition Loans and
the NSA Acquisition Loans, collectively.
"ACQUISITION SUB" means Boxer Acquisition Corp., a Delaware
corporation.
"ADDITIONAL TRANCHE B TERM LOANS" means the Loans made by
Lenders to Company pursuant to subsection 2.1A(ii) of the Existing Credit
Agreement.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate
Determination Date, the rate per annum obtained by dividing (i) the London
Interbank offered rate for deposits in U.S. Dollars for maturities comparable
to the Interest Period for which such Adjusted Eurodollar Rate will apply as
of approximately 11:00 A.M. (London time) on such Interest Rate Determination
Date as set forth on Telerate Page 3750 by (ii) a percentage equal to 100%
minus the stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
applicable on such Interest Rate Determination Date to any member bank of the
Federal Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"AFFECTED LENDER" has the meaning assigned to that term in
subsection 2.6C.
"AFFILIATE" means, as applied to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For the purposes of this definition, "control" (including,
with correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise; provided, however, that
"Affiliate" as applied to Company or its Subsidiaries shall not include Chase,
CSI, GSCP, Goldman, Sachs & Co. or CS First Boston Corporation and their
respective Affiliates, except that Goldman, Sachs & Co. and GSCP shall be
considered Affiliates of Company and its Subsidiaries for purposes of
subsection 7.9 hereof to the extent such Persons are acting as agents or
brokers for Company or any of its Subsidiaries in connection with any sales of
receivables portfolios.
"AGENT" means, individually, each of Collateral Agent, Co-
Administrative Agents and Arranging Agents, and "AGENTS" means Collateral
Agent, Co-Administrative Agents and Arranging Agents, collectively.
"AGREEMENT" means this Second Amended and Restated Credit
Agreement dated as of January __, 1998, as it may be amended, restated,
supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" means, with respect to the
applicable Loan set forth below, the corresponding per annum rate set forth
below:
APPLICABLE
LOAN
BASE RATE MARGIN
Tranche A Term Loans 1.50%
Tranche B Term Loans 2.00%
Tranche C Term Loans 2.00%
<PAGE>
Revolving Loans 1.50%
; provided that the Applicable Base Rate Margin set forth above with respect
to Tranche A Term Loans and Revolving Loans shall be reduced by the Pricing
Reduction, if any.
"APPLICABLE EURODOLLAR RATE MARGIN" means, with respect to the
applicable Loan set forth below, the corresponding per annum rate set forth
below:
APPLICABLE EURODOLLAR
LOAN RATE MARGIN
Tranche A Term Loans 2.50%
Tranche B Term Loans 3.00%
Tranche C Term Loans 3.00%
Revolving Loans 2.50%
; provided that the Applicable Eurodollar Rate Margin set forth above with
respect to Tranche A Term Loans and Revolving Loans shall be reduced by the
Pricing Reduction, if any.
"ARRANGING AGENT" and "ARRANGING AGENTS" have the respective
meanings assigned to such terms in the introduction to this Agreement;
provided that after the Effective Date, Arranging Agents shall only mean and
include GSCP.
"ARTICLES OF MERGER" means the Articles of Merger dated as of
November 6, 1996 by and between Acquisition Sub and Payco to be filed with the
Secretary of State of Wisconsin, as in effect on the Closing Date and as such
articles may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time thereafter to the extent
permitted under subsection 7.12A.
"ASSET SALE" means the sale (including in any sale-leaseback
transaction) by Company or any of its Subsidiaries to any Person (other than
Company or any of its Wholly Owned Subsidiaries) of (i) any of the stock of
any of Company's Subsidiaries (other than the sale of stock of Union during
such times as such shares constitute Margin Stock), (ii) all or substantially
all of the assets of any division or line of business of Company or any of its
Subsidiaries, or (iii) any other assets other than sales of assets in the
ordinary course of business and sales of obsolete equipment, excluding any
such other assets to the extent that the aggregate value of such assets sold
in any single transaction or transactions is equal to $250,000 or less in any
one Fiscal Year; provided that in no event shall a sale of all or any portion
of a receivables portfolio be deemed a sale of assets in the ordinary course
of business.
"ASSIGNMENT AGREEMENT" means an assignment agreement in
substantially the form of Exhibit XIII annexed hereto or in such other form as
may be approved by Co-Administrative Agents.
"BANKRUPTCY CODE" means Title 11 of the United States Code
entitled "Bankruptcy", as now and hereafter in effect, or any successor
statute.
"BASE RATE" means, at any time, the higher of (x) the Prime
Rate or (y) the rate which is 1/2 of 1% in excess of the Federal Funds
Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates
determined by reference to the Base Rate as provided in subsection 2.2A.
<PAGE>
"BUSINESS DAY" means (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which is
a legal holiday under the laws of the State of New York or is a day on which
banking institutions located in such state are authorized or required by law
or other governmental action to close, and (ii) with respect to all notices,
determinations, fundings, issuances and payments in connection with the
Adjusted Eurodollar Rate or any Eurodollar Rate Loans, any day that is a
Business Day described in clause (i) above and that is also (a) a day for
trading by and between banks in Dollar deposits in the London interbank market
and (b) a day on which banking institutions are open for business in London.
"CAPITAL LEASE" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee that,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CASH" means money, currency or a credit balance in a Deposit
Account.
"CASH EQUIVALENTS" means (i) marketable securities issued or
directly and unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Rating Service ("S&P") or Moody's
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of
acquisition, having a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof and, at the time of acquisition,
having a rating of at least A-1 from S&P or at least P-1 from Moody's, issued
by any Lender or any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
unimpaired capital and surplus of not less than $250,000,000 (each Lender and
each such commercial bank being herein called a "CASH EQUIVALENT BANK"); and
(v) Eurodollar time deposits having a maturity of less than one year purchased
directly from any Cash Equivalent Bank (provided such deposit is with such
Cash Equivalent Bank or any other Cash Equivalent Bank).
"CASH PROCEEDS" means, with respect to any Asset Sale, Cash
payments (including any Cash received by way of deferred payment pursuant to,
or monetization of, a note receivable or otherwise, but only as and when so
received) received by Company or any of its Subsidiaries from such Asset Sale.
"CERTIFICATE RE NON-BANK STATUS" means a certificate
substantially in the form of Exhibit XV annexed hereto delivered by a Lender
to Chase Co-Administrative Agent pursuant to subsection 2.7B(iii).
"CHASE" means The Chase Manhattan Bank and its successors,
including, without limitation, its successors by merger.
"CHASE CO-ADMINISTRATIVE AGENT" means Chase, in its capacity as
a Co-Administrative Agent, and any successor to Chase in such capacity
appointed pursuant to subsection 9.5A.
"CLOSING DATE" means November 6, 1996.
"CO-ADMINISTRATIVE AGENT" and "CO-ADMINISTRATIVE AGENTS" have
the respective meanings assigned to such terms in the introduction to this
Agreement and also mean and include any successor Co-Administrative Agent
appointed pursuant to subsection 9.5A.
"COLLATERAL" means all of the properties and assets (including
<PAGE>
capital stock) in which Liens are purported to be granted by the Collateral
Documents.
"COLLATERAL ACCOUNT" has the meaning assigned to that term in
the Collateral Account Agreement.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement executed and delivered by Company and Chase Co-Administrative Agent
on the Closing Date, substantially in the form of Exhibit XVI annexed hereto,
pursuant to which Company may pledge cash to Chase Co-Administrative Agent to
secure the obligations of Company to reimburse Issuing Lenders for payments
made under one or more Letters of Credit as such Collateral Account Agreement
may heretofore have been or hereafter may be amended, restated, supplemented
or otherwise modified from time to time.
"COLLATERAL AGENT" means SunTrust, in its capacity as
Collateral Agent, and any successor to SunTrust, in such capacity appointed
pursuant to subsection 9.5A.
"COLLATERAL DOCUMENTS" means the Pledge Agreement, the Security
Agreement, the Limited Partnership Security Agreement, the Trademark Security
Agreement, the Collateral Account Agreement, the Mortgages, the Deeds of
Trust, and any other documents, instruments or agreements delivered by any
Loan Party pursuant to this Agreement or any of the other Loan Documents in
order to grant or perfect liens on any assets of such Loan Party as security
for the Obligations.
"COMMERCIAL LETTER OF CREDIT" means any letter of credit or
similar instrument issued for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or services
by Company or any of its Subsidiaries in the ordinary course of business of
Company or such Subsidiary.
"COMMITMENTS" means (i) with respect to the period prior to the
Effective Date, the commitments of Lenders to make Loans as set forth in
subsection 2.1A of the Existing Credit Agreement, and (ii) thereafter, the
commitments of Lenders to make Loans as set forth in subsection 2.1A of this
Agreement.
"COMPANY COMMON STOCK" means, collectively, Company's
(i) Voting Common Stock, par value $0.01 per share, (ii) Class A Non-Voting
Common Stock, par value $0.01 per share, (iii) Class B Non-Voting Common
Stock, par value $0.01 per share, and (iv) Class C Non-Voting Common Stock,
par value $0.01 per share.
"COMPANY PREFERRED STOCK" means Company's 8.0% Non-Voting
Cumulative Redeemable Exchangeable Preferred Stock outstanding as of the
Closing Date in the approximate amount of $10,800,000, together with any
shares of such preferred stock issued after the Closing Date as dividends
thereon permitted under subsection 7.5 of the Existing Credit Agreement or
under subsection 7.5 of this Agreement.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of Exhibit X annexed hereto delivered to Chase Co-Administrative
Agent by Company pursuant to subsection 6.1(iv).
"CONDEMNATION PROCEEDS" has the meaning assigned to that term
in subsection 2.4B(iii)(d).
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
sum of (i) the aggregate of all expenditures (whether paid in cash or other
consideration or accrued as a liability and including that portion of Capital
Leases which is capitalized on the consolidated balance sheet of Company and
its Subsidiaries) by Company and its Subsidiaries during that period that, in
conformity with GAAP, are included in "purchases of property, plant or
equipment" or comparable items reflected in the consolidated statement of cash
<PAGE>
flows of Company and its Subsidiaries plus (ii) to the extent not covered by
clause (i) of this definition, the aggregate of all expenditures by Company
and its Subsidiaries during that period to acquire (by purchase or otherwise)
the business, property (except inventory, other than any receivables
portfolios, in the ordinary course of business) or fixed assets of any Person,
or stock or other evidence of beneficial ownership of any Person that, as a
result of the acquisition of such stock or other evidence, becomes a
Subsidiary of Company.
"CONSOLIDATED CURRENT ASSETS" means, as at any date of
determination, the total assets of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current assets in
conformity with GAAP, excluding Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP.
"CONSOLIDATED EBITDA" means, for any period, (i) the sum of the
amounts for such period of (a) Consolidated Net Income, (b) Consolidated
Interest Expense, (c) provisions for taxes based on income, (d) total
depreciation expense, (e) total amortization expense, (f) other non-cash items
reducing Consolidated Net Income, (g) to the extent deducted in determining
Consolidated Net Income, charges incurred during 1998 not in excess of
$1,500,000 with respect to the costs of implementing a new computer system at
Payco and duplicative costs of operating the old system concurrently and
(h) to the extent deducted in determining Consolidated Net Income, any non-
recurring charges incurred after the Closing Date in connection with the
resolution of litigation of Company and its Subsidiaries disclosed in that
certain Offering Circular dated October 31, 1996 prepared in connection with
the offering of the Subordinated Notes, less (ii) the sum of the amounts for
such period of (a) other non-cash items increasing Consolidated Net Income and
(b) to the extent not otherwise deducted in determining Consolidated Net
Income, payments made during such period with respect to Earn Out Agreements
permitted hereunder and Management Fees, all of the foregoing as determined on
a consolidated basis for Company and its Subsidiaries in conformity with GAAP.
"CONSOLIDATED EXCESS CASH FLOW" means, for any period, an
amount (if positive) equal to (i) the sum, without duplication, of the amounts
for such period of (a) Consolidated EBITDA and (b) the Consolidated Working
Capital Adjustment minus (ii) the sum, without duplication, of the amounts for
such period of (a) voluntary and scheduled cash repayments of Consolidated
Total Debt (excluding repayments of Revolving Loans except to the extent the
Revolving Loan Commitments are permanently reduced in connection with such
repayments), (b) Consolidated Capital Expenditures (net of any proceeds of any
related financings with respect to such expenditures), (c) Consolidated
Interest Expense, (d) the provision for current taxes based on income of
Company and its Subsidiaries and payable in cash with respect to such period,
and (e) to the extent not otherwise deducted in calculating Consolidated
Excess Cash Flow, cash payments made during such period with respect to non-
recurring charges described in subdivisions (g) and (h) of the definition of
Consolidated EBITDA.
"CONSOLIDATED FIXED CHARGES" means, for any period, an amount
equal to the sum of the amounts for such period of (i) scheduled cash
repayments of principal of all Indebtedness, as reduced by prepayments
previously made, (ii) Consolidated Interest Expense, (iii) Consolidated
Maintenance Capital Expenditures and (iv) the portion of taxes based on income
actually paid in cash.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total
interest expense (including that portion attributable to Capital Leases in
accordance with GAAP) payable in cash of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including, without limitation, all commissions, discounts
<PAGE>
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements, but
excluding, however, any amounts referred to in subsection 2.3 of this
Agreement or subsection 2.3 of the Existing Credit Agreement payable to Agents
and Lenders on or before the Effective Date or the Closing Date, respectively.
"CONSOLIDATED MAINTENANCE CAPITAL EXPENDITURES" means, for any
period, all Consolidated Capital Expenditures for such period other than
Consolidated Capital Expenditures expended to make Permitted Acquisitions or
Permitted Portfolio Acquisitions.
"CONSOLIDATED NET INCOME" means, for any period, the net income
(or loss) of Company and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with GAAP;
provided that there shall be excluded (i) the income (or loss) of any Person
(other than a Subsidiary of Company) in which any other Person (other than
Company or any of its Subsidiaries) has a joint interest, except to the extent
of the amount of dividends or other distributions actually paid to Company or
any of its Subsidiaries by such Person during such period, (ii) the income (or
loss) of any Person accrued prior to the date it becomes a Subsidiary of
Company or is merged into or consolidated with Company or any of its
Subsidiaries or that Person's assets are acquired by Company or any of its
Subsidiaries, (iii) the income of any Subsidiary of Company to the extent that
the declaration or payment of dividends or similar distributions by that
Subsidiary of that income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary,
(iv) any after-tax gains or losses attributable to Asset Sales, and (v) (to
the extent not included in clauses (i) through (iv) above) any net
extraordinary gains or net non-cash extraordinary losses.
"CONSOLIDATED TOTAL DEBT" means, as at any date of
determination, the aggregate stated balance sheet amount of all outstanding
Indebtedness of Company and its Subsidiaries on a consolidated basis as
determined in conformity with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of
determination, the excess of Consolidated Current Assets over Consolidated
Current Liabilities.
"CONSOLIDATED WORKING CAPITAL ADJUSTMENT" means, for any period
on a consolidated basis, the amount (which may be a negative number) by which
Consolidated Working Capital as of the beginning of such period exceeds (or is
less than) Consolidated Working Capital as of the end of such period.
"CONTINGENT OBLIGATION" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of that Person (i) with
respect to any Indebtedness, lease, dividend or other obligation of another if
the primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of
another that such obligation of another will be paid or discharged, or that
any agreements relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss in
respect thereof, (ii) with respect to any letter of credit issued for the
account of that Person or as to which that Person is otherwise liable for
reimbursement of drawings, or (iii) under Interest Rate Agreements.
Contingent Obligations shall include, without limitation, (a) the direct or
indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another, (b) the obligation
to make take-or-pay or similar payments if required regardless of non-
performance by any other party or parties to an agreement, and (c) any
liability of such Person for the obligation of another through any agreement
(contingent or otherwise) (x) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment
or discharge of such obligation (whether in the form of loans, advances, stock
<PAGE>
purchases, capital contributions or otherwise) or (y) to maintain the solvency
or any balance sheet item, level of income or financial condition of another
if, in the case of any agreement described under subclauses (x) or (y) of this
sentence, the primary purpose or intent thereof is as described in the
preceding sentence. The amount of any Contingent Obligation shall be equal to
the amount of the obligation so guaranteed or otherwise supported or, if less,
the amount to which such Contingent Obligation is specifically limited.
"CONTINUING DIRECTOR" shall mean, as of any date of
determination, any member of the Board of Directors of Company who (i) was a
member of such Board of Directors on the Closing Date or (ii) was nominated
for election or elected to such Board of Directors with the affirmative vote
of the MDC Entities.
"CONTRACTUAL OBLIGATION" means, as applied to any Person, any
provision of any Security issued by that Person or of any material indenture,
mortgage, deed of trust, contract, undertaking, agreement or other instrument
to which that Person is a party or by which it or any of its properties is
bound or to which it or any of its properties is subject.
"CORPORATE LOAN PARTY" means any Loan Party which is a
corporation.
"CSI" means Chase Securities Inc. and its successors and
assigns, including, without limitation, its successors by merger.
"CUSTODIAN" means ChaseMellon Shareholder Services, L.C.C.
"DEBT COLLECTION LAWS" means the Fair Debt Collection Practices
Act and any similar state laws relating to the collection of consumer debt.
"DEED OF TRUST" means any deed of trust granted by Company or
any of its Subsidiaries in any interest in real property to secure the
Obligations, as such deed of trust may be amended, restated, supplemented or
otherwise modified from time to time.
"DEFAULTING LENDER" means any Lender with respect to which a
Lender Default is in effect.
"DELAYED-DRAW TERM LOANS" means a portion of the Tranche C Term
Loans, in an aggregate amount equal to the product of (x) $31.50 and (y) those
shares of Union Common Stock not purchased pursuant to the Tender Offer, that
may be borrowed by Company on the Union Merger Date.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or
like account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United
States of America.
"EARN OUT AGREEMENT" shall mean (i) the agreements set forth in
Schedule 7.4(iv)(a) hereto and (ii) any other agreement entered into after the
Closing Date by Company to pay the seller or sellers of any Person or assets
acquired in accordance with the provisions of subsection 7.7(v) at any time
following the consummation of such acquisition by reference to the financial
performance of Company or the Person or assets acquired.
"EFFECTIVE DATE" means the date on or before February 15, 1998
on which the conditions precedent set forth in subsections 4.2 and 4.4 shall
be satisfied or waived in accordance with the terms hereof.
"ELIGIBLE ASSIGNEE" means (i) (a) a commercial bank organized
under the laws of the United States or any state thereof; (b) a commercial
bank organized under the laws of any other country or a political subdivision
<PAGE>
thereof; provided that (x) such bank is acting through a branch or agency
located in the United States or (y) such bank is organized under the laws of a
country that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country; (c) any other entity
which is an "accredited investor" (as defined in Regulation D under the
Securities Act) which extends credit or buys loans as one of its businesses
including, but not limited to, insurance companies, mutual funds and lease
financing companies; and (d) any other financial institution or fund (whether
a corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course
of its business and has combined capital and surplus or net assets of at least
$100,000,000, in each case (under clauses (a) through (d) above) that is
reasonably acceptable to Co-Administrative Agents; and (ii) any Lender and any
Affiliate of any Lender; provided that no Affiliate of Company shall be an
Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as
defined in Section 3(3) of ERISA which is subject to ERISA and which is
maintained or contributed to by Company or any of its ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any written accusation, allegation,
notice of violation, claim, demand, abatement order or other order or
direction (conditional or otherwise) by any governmental authority or any
Person for any damage, including, without limitation, personal injury
(including sickness, disease or death), tangible or intangible property
damage, contribution, indemnity, indirect or consequential damages, damage to
the environment, nuisance, pollution, contamination or other adverse effects
on the environment, or for fines, penalties or restrictions, in each case
relating to, resulting from or in connection with Hazardous Materials and
relating to Company, any of its Subsidiaries, any of their respective
Affiliates that are directly or indirectly controlled by Company, or any
Facility.
"ENVIRONMENTAL LAWS" means all laws, statutes, ordinances,
orders, rules, regulations, plans, policies or decrees and the like relating
to (i) environmental matters, including, without limitation, those relating to
fines, injunctions, penalties, damages, contribution, cost recovery
compensation, losses or injuries resulting from the Release or threatened
Release of Hazardous Materials, (ii) the generation, use, storage, transporta-
tion or disposal of Hazardous Materials, or (iii) occupational safety and
health, public health and safety, industrial hygiene or protection of
wetlands, in any manner applicable to Company or any of its Subsidiaries or
any of their respective properties, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9601 et seq.), the Hazardous Materials Transportation Act (49
U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. Section 6901 et seq.), the Federal Water Pollution Control Act ( 33
U.S.C. Section 1251 et seq.), the Clean Air Act (42 U.S.C. Section 7401 et
seq.), the Toxic Substances Control Act (15 U.S.C. Section 2601 et seq.), the
Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C. Section 136 et
seq.), the Occupational Safety and Health Act (29 U.S.C. Section 651 et seq.)
and the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Section
11001 et seq.), each as amended or supplemented, and any analogous future or
present local, state and federal statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
"EQUITY PROCEEDS" means the cash proceeds (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
from the issuance of any equity Securities of Company after the Effective
Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA AFFILIATE" means, as applied to any Person, (i) any
corporation which is a member of a controlled group of corporations within the
<PAGE>
meaning of Section 414(b) of the Internal Revenue Code of which that Person is
a member; (ii) any trade or business (whether or not incorporated) which is a
member of a group of trades or businesses under common control within the
meaning of Section 414(c) of the Internal Revenue Code of which that Person is
a member; and (iii) solely for purposes of obligations under Section 412 of
the Internal Revenue Code or under the applicable sections set forth in
Section 414(t)(2) of the Internal Revenue Code, any member of an affiliated
service group within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which that Person, any corporation described in clause
(i) above or any trade or business described in clause (ii) above is a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning
of Section 4043(c) of ERISA and the regulations issued thereunder with respect
to any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution
to a Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to
terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Company or any of its ERISA Affiliates from any
Pension Plan with two or more contributing sponsors or the termination of any
such Pension Plan resulting, in either case, in liability pursuant to Section
4063 or 4064 of ERISA, respectively; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan pursuant to Section 4042 of ERISA;
(vi) the imposition of liability on Company or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application
of Section 4212(c) of ERISA; (vii) the withdrawal by Company or any of its
ERISA Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan resulting in
withdrawal liability pursuant to Section 4201 of ERISA, or the receipt by
Company or any of its ERISA Affiliates of written notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has
terminated under Section 4042 of ERISA or under Section 4041A of ERISA if such
termination would result in liability to Company or any of its ERISA
Affiliates; (viii) the imposition on Company or any of its ERISA Affiliates of
fines, penalties or taxes under Chapter 43 of the Internal Revenue Code or
under Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any
Employee Benefit Plan; (ix) the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a) of the
Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify
for exemption from taxation under Section 501(a) of the Internal Revenue Code;
or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of
the Internal Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates
determined by reference to the Adjusted Eurodollar Rate as provided in
subsection 2.2A.
"EVENT OF DEFAULT" means each of the events set forth in
Section 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute.
"EXISTING CREDIT AGREEMENT" has the meaning assigned to that
term in the Recitals to this Agreement.
"EXISTING LENDERS" has the meaning assigned to that term in the
Recitals to this Agreement.
<PAGE>
"EXISTING LETTERS OF CREDIT" has the meaning assigned to that
term in subsection 3.1.
"EXISTING LOAN" or "EXISTING LOANS" means, as the context
requires, one or more of the Existing Tranche A Term Loans, Existing Tranche B
Term Loans or Existing Revolving Loans or any combination thereof.
"EXISTING REVOLVING LOANS" means, with respect to any Existing
Lender, the Revolving Loans under, as defined in, the Existing Credit
Agreement held by such Existing Lender, in the principal amount of such Loans
outstanding immediately prior to the Effective Date.
"EXISTING SELLER NOTE" means that certain 9% Non-Negotiable
Subordinated Note issued by Outsourcing Solutions Incorporated to Alan Miller
in the principal amount of $5,000,000, due July 10, 2001, as in effect on the
Closing Date and as such note may heretofore have been or hereafter may be
amended, restated, supplemented or otherwise modified from time to time
thereafter to the extent permitted under subsection 7.12B.
"EXISTING TRANCHE A TERM LOAN" means, with respect to any
Existing Lender, the Tranche A Term Loan under, as defined in, the Existing
Credit Agreement held by such Existing Lender, in the principal amount of such
Loan outstanding immediately prior to the Effective Date, and "EXISTING
TRANCHE A TERM LOANS" means such Loans of all Existing Lenders, collectively.
"EXISTING TRANCHE B TERM LOAN" means, with respect to any
Existing Lender, the Tranche B Term Loan under, as defined in, the Existing
Credit Agreement held by such Existing Lender, in the principal amount of such
Loan outstanding immediately prior to the Effective Date, and "EXISTING
TRANCHE B TERM LOANS" means such Loans of all Existing Lenders, collectively.
"FACILITIES" means any and all real property (including,
without limitation, all buildings, fixtures or other improvements located
thereon) now, hereafter or heretofore owned, leased, operated or used by
Company or any of its Subsidiaries (but only as to portions of buildings
actually leased or used) or any of their respective predecessors or any of
their respective Affiliates that are directly or indirectly controlled by
Company.
"FAIR DEBT COLLECTION PRACTICES ACT" means the Federal Fair
Debt Collection Practices Act, as amended from time to time, and any successor
statute.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a
fluctuating interest rate equal for each day during such period to 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 for such day (or, if such day is not a Business Day, for the next
preceding 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 such day on such transactions received by Chase Co-
Administrative Agent from three Federal funds brokers of recognized standing
selected by Chase Co-Administrative Agent.
"FIRST AMENDMENT DATE" means October 8, 1997.
"FISCAL QUARTER" means a fiscal quarter of a Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its
Subsidiaries ending on December 31 of each calendar year.
"FORWARD FLOW CONTRACT" shall mean (i) the agreement set forth
in Schedule 7.4(iv)(b) hereto and (ii) any other agreement entered into after
the Closing Date by Company or any of its Subsidiaries to purchase receivables
portfolios from time to time meeting the criteria enumerated therein.
<PAGE>
"FUNDING AND PAYMENT OFFICE" means the office of Chase Co-
Administrative Agent and Swing Line Lender located at 270 Park Avenue, New
York, New York 10017 or such offices of Chase Co-Administrative Agent or any
successor Chase Co-Administrative Agent specified by Chase Co-Administrative
Agent or such successor Chase Co-Administrative Agent in a written notice to
Loan Parties and Lenders).
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means, subject to the limitations on the application
thereof set forth in subsection 1.2, generally accepted accounting principles
set forth in opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination and specifically, terms used
herein applicable to Company and its Subsidiaries defined by reference to GAAP
shall give effect to the subtraction of minority interests.
"GOVERNMENTAL ACTS" has the meaning assigned to that term in
subsection 3.5.
"GOVERNMENTAL AUTHORIZATION" means any permit, license,
authorization, plan, directive, consent order or consent decree of or from any
federal, state or local governmental authority, agency or court.
"GSCP" means Goldman Sachs Credit Partners L.P., a Bermuda
limited partnership.
"GUARANTY" means the Subsidiary Guaranty and any other guaranty
of the Obligations.
"GUARANTORS" means the Subsidiary Guarantors.
"HAZARDOUS MATERIALS" means (i) any chemical, material or
substance defined as or included in the definition of "hazardous substances",
"hazardous wastes", "hazardous materials", "extremely hazardous waste",
"restricted hazardous waste", "infectious waste", "toxic substances" or any
other formulations intended to define, list or classify substances by reason
of deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or "EP
toxicity" or words of similar import under any applicable Environmental Laws;
(ii) any oil, petroleum, petroleum fraction or petroleum derived substance;
(iii) any drilling fluids, produced waters and other wastes associated with
the exploration, development or production of crude oil, natural gas or
geothermal resources; (iv) any flammable substances or explosives; (v) any
radioactive materials; (vi) asbestos in any form; (vii) urea formaldehyde foam
insulation; (viii) electrical equipment which contains any oil or dielectric
fluid containing levels of polychlorinated biphenyls in excess of fifty parts
per million; (ix) pesticides; and (x) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority.
"IMMATERIAL SUBSIDIARIES" means, with respect to any Person,
any Subsidiary or Subsidiaries of such Person the assets of which constitute,
individually or in the aggregate, less than 5% of the total assets of such
Person and its Subsidiaries.
"INDEBTEDNESS" means, as applied to any Person, (i) all
indebtedness for borrowed money, (ii) that portion of obligations with respect
to Capital Leases that is properly classified as a liability on a balance
sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money (other than accounts payable incurred in the ordinary course of
business and accrued expenses incurred in the ordinary course of business),
<PAGE>
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA or
under Earn Out Agreements), which purchase price is (a) due more than six
months from the date of incurrence of the obligation in respect thereof or (b)
evidenced by a note or similar written instrument, and (v) all indebtedness
secured by any Lien on any property or asset owned or held by that Person
regardless of whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person. Obligations
under Interest Rate Agreements, Currency Agreements and Earn Out Agreements
constitute Contingent Obligations and not Indebtedness.
"INDEMNITEE" has the meaning assigned to that term in
subsection 10.3.
"INSURANCE PROCEEDS" has the meaning assigned to that term in
subsection 2.4B(iii)(d).
"INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio of Consolidated EBITDA to Consolidated Interest
Expense, in each case calculated for the 12 consecutive months ending on the
last day of the month preceding such date of determination.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate
Loan, each January 15, April 15, July 15 and October 15 of each year,
commencing on January 15, 1997 and (ii) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period applicable to such Loan; provided
that in the case of each Interest Period of longer than three months,
"Interest Payment Date" shall also include the date that is three months after
the commencement of such Interest Period.
"INTEREST PERIOD" has the meaning assigned to that term in
subsection 2.2B.
"INTEREST RATE AGREEMENT" means any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement or
other similar agreement or arrangement designed to hedge Company or any of its
Subsidiaries against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means each date for
calculating the Adjusted Eurodollar Rate, for purposes of determining the
interest rate in respect of an Interest Period. The Interest Rate
Determination Date in respect of calculating the Adjusted Eurodollar Rate
shall be the second Business Day prior to the first day of the related
Interest Period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of
1986, as amended to the date hereof and from time to time hereafter.
"INVESTMENT" means (i) any direct or indirect purchase or other
acquisition by Company or any of its Subsidiaries of, or of a beneficial
interest in, stock or other Securities of any other Person (other than a
Person that, prior to such purchase or acquisition, was a Wholly Owned
Subsidiary of Company), or (ii) any direct or indirect loan, advance (other
than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business)
or capital contribution by Company or any of its Subsidiaries to any other
Person other than a Wholly Owned Subsidiary of Company, including all
indebtedness and accounts receivable acquired from that other Person that are
not current assets or did not arise from sales to that other Person in the
ordinary course of business; provided, however, that the term "Investment"
shall not include (a) current trade and customer accounts receivable for goods
furnished or services rendered in the ordinary course of business and payable
in accordance with customary trade terms, (b) advances and prepayments to
suppliers for goods and services in the ordinary course of business, (c) stock
or other securities acquired in connection with the satisfaction or
enforcement of Indebtedness or claims due or owing to Company or any of its
<PAGE>
Subsidiaries or as security for any such Indebtedness or claims, (d) Cash held
in Deposit Accounts with banks and trust companies (other than Lenders) not
exceeding $2,000,000 in aggregate amount, (e) Cash held in Deposit Accounts
with banks and trust companies (other than Lenders) in which amounts received
from credit card issuers are concentrated and held to be swept to Company's
operating accounts with a Lender on a daily basis, (f) Cash held in any
Deposit Account with a Lender and (g) shares in a mutual fund that invests
solely in Cash Equivalents. The amount of any Investment shall be the
original cost of such Investment plus the cost of all additions thereto,
without any adjustments for increases or decreases in value, or write-ups,
write-downs or write-offs with respect to such Investment.
"ISSUING LENDER" means, with respect to any Letter of Credit,
the Lender which agrees or is otherwise obligated to issue such Letter of
Credit, determined as provided in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other
similar arrangement, whether in corporate, partnership or other legal form;
provided that in no event shall any corporate Subsidiary of any Person be
considered to be a Joint Venture to which such Person is a party.
"LENDER" and "LENDERS" means the persons identified as
"Lenders" and listed on the signature pages of this Agreement, together with
their successors and permitted assigns pursuant to subsection 10.1, and the
term "Lenders" shall include Swing Line Lender unless the context otherwise
requires provided that the term "Lenders", when used in the context of a
particular Commitment, shall mean Lenders having that Commitment. To the
extent the context so requires, the terms "LENDER" and "LENDERS" shall include
"Lenders" under, and as defined in, the Existing Credit Agreement.
"LENDER DEFAULT" shall mean (i) the refusal (which has not
been retracted) of a Lender to make available its portion of any Loans
(including any Revolving Loans made to pay Refunded Swing Line Loans or to
reimburse drawings under Letters of Credit) in accordance with subsection
2.1A(iii) or its portion of any unreimbursed drawing or payment under a Letter
of Credit in accordance with subsection 3.3C or (ii) a Lender having notified
Company and/or Chase Co-Administrative Agent in writing that it does not
intend to comply with its obligations under subsection 2.1 or subsections
3.1C, 3.3B or 3.3C, in any such case as a result of any takeover of such
Lender by any regulatory authority or agency.
"LENDING OFFICE" means, as to any Lender, the office or offices
of such Lender specified as its "Lending Office" on Schedule 2.1, or such
other office or offices as such Lender may from time to time notify Company
and Chase Co-Administrative Agent.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial
Letters of Credit and Standby Letters of Credit issued or to be issued by
Issuing Lenders for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of
determination, the sum of (i) the maximum aggregate amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding plus (ii) the aggregate amount of all drawings under Letters
of Credit honored by Issuing Lenders and not theretofore reimbursed by Company
(including any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B).
"LEVERAGE RATIO" means, as of any date of determination, the
ratio of Consolidated Total Debt, as of the date of determination, to
Consolidated EBITDA, for the 12 consecutive months ending on the last day of
such month, in each case, calculated for Company and its Subsidiaries on a
consolidated basis in accordance with GAAP and in accordance with the
provisions of subsection 7.6E.
"LIEN" means any lien, mortgage, pledge, assignment, security
<PAGE>
interest, fixed or floating charge or encumbrance of any kind (including any
conditional sale or other title retention agreement, any lease in the nature
thereof, and any agreement to give any security interest) and any option,
trust or other preferential arrangement having the practical effect of any of
the foregoing.
"LIMITED PARTNERSHIP SECURITY AGREEMENT" means the Limited
Partnership Security Agreement entered into by and among Company, certain
Subsidiary Guarantors and Collateral Agent dated as of the Closing Date,
substantially in the form of Exhibit IX-B annexed hereto, as such Limited
Partnership Security Agreement may heretofore have been or hereafter may be
amended, restated, supplemented or otherwise modified from time to time.
"LOAN" or "LOANS" means, as the context requires, one or more
of the Tranche A Term Loans, Tranche B Term Loans, Tranche C Term Loans,
Revolving Loans and Swing Line Loans or any combination thereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters
of Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by Company in favor of an, Issuing Lender
relating to, the Letters of Credit), the Guaranty, the Collateral Documents,
and the Second Acknowledgement and Consent.
"LOAN PARTIES" means Company and each Subsidiary Guarantor.
"MANAGEMENT FEES" means the fees payable by Company pursuant to
the MDC Advisory Services Agreement and the HBR Services Agreement.
"MARGIN STOCK" has the meaning assigned to that term in
Regulation U of the Board of Governors of the Federal Reserve System as in
effect from time to time.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of Company and its Subsidiaries, taken as a whole,
(ii) the material impairment of the ability of any Loan Party to perform the
Obligations and (iii) a material adverse effect upon the legality, validity,
binding effect or enforceability against a Loan Party of a Loan Document to
which it is a party; provided that Company's consummation of the Payco
Acquisition in accordance with the terms of the Payco Acquisition Agreement or
the Union Acquisition in accordance with the terms of the Union Acquisition
Agreement shall not be deemed to have a Material Adverse Effect for purposes
of subsection 5.4.
"MDC ADVISORY SERVICES AGREEMENT" means that certain Advisory
Services Agreement dated as of September 21, 1995, by and between Company and
MDC Management Company III, L.P., as in effect on the Closing Date and as such
agreement may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time thereafter to the extent
permitted under subsection 7.12A.
"MDC ENTITIES" means McCown De Leeuw & Co. III, L.P., a
California limited partnership, McCown De Leeuw & Co. III (Europe), L.P., a
Bermuda limited partnership, McCown De Leeuw & Co. III (Asia), L.P., a Bermuda
limited partnership and Gamma Fund LLC, a California limited liability
company.
"MERGER SUB" has the meaning assigned to that term in the
Recitals to this Agreement.
"MINIMUM UNION SHARES" means 66-2/3% of the outstanding shares
of Union Common Stock, on a fully-diluted basis.
"MORTGAGE" means any mortgage or legal charge granted by
Company or any of its Subsidiaries in any interest in real property to secure
the Obligations, as such mortgage may be amended, restated, supplemented or
<PAGE>
otherwise modified from time to time.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined
in Section 4001(a)(3) of ERISA which is subject to Title IV of ERISA, to which
Company or any of its ERISA Affiliates is contributing or to which Company or
any of its ERISA Affiliates has an obligation to contribute.
"NET CASH PROCEEDS" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including,
without limitation, (i) income taxes reasonably estimated to be actually
payable as a result of such Asset Sale within one year of the date of receipt
of such Cash Proceeds, (ii) transfer, sales, use and other taxes payable in
connection with such Asset Sale, (iii) payment of the outstanding principal
amount of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in question
and that is required to be repaid under the terms thereof as a result of such
Asset Sale, and (iv) broker's commissions and reasonable fees and expenses of
counsel and all other professionals in connection with such Asset Sale.
"NEW LENDER" means any Lender which is a party to this
Agreement as of the Effective Date and which is not an Existing Lender.
"NON-DEFAULTING LENDER" means and includes each Lender other
than a Defaulting Lender.
"NOTES" means one or more of the Term Notes, Revolving Notes or
Swing Line Note or any combination thereof.
"NOTICE OF BORROWING" means (i) with respect to an Existing
Loan, the Notice of Borrowing under the Existing Credit Agreement delivered by
Company with respect to such Existing Loan and (ii) with respect to Loans to
be made under subsection 2.1A(ii), 2.1A(iii) or 2.1A(iv), a notice
substantially in the form of Exhibit I annexed hereto delivered by Company to
Chase Co-Administrative Agent pursuant to subsection 2.1B with respect to a
proposed borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice
substantially in the form of Exhibit II annexed hereto delivered by Company to
Chase Co-Administrative Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for determining
the interest rate with respect to the Loans specified therein.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice in the
form of Exhibit III annexed hereto delivered by Company to Chase Co-
Administrative Agent pursuant to subsection 3.1B(i) with respect to the
proposed issuance of a Letter of Credit.
"NSA" has the meaning assigned to that term in the Recitals to
this Agreement.
"NSA ACQUIRED ASSETS" has the meaning assigned to that term in
the Recitals to this Agreement.
"NSA ACQUISITION" means the transactions contemplated by the
NSA Acquisition Agreement.
"NSA ACQUISITION AGREEMENT" means the Asset Purchase Agreement
by and among Company, NSA, NSA Acquisition Company, certain Subsidiaries of
NSA, certain stockholders of NSA and other parties indicated on the signature
pages thereof, in the form delivered to Arranging Agents on or prior to
November 10, 1997 and as such agreement may be amended, restated, supplemented
or otherwise modified from time to time to the extent permitted under
subsection 7.12A.
"NSA ACQUISITION LOANS" means the Additional Tranche B Term
Loans in an aggregate principal amount of $22,000,000 made to Company on
<PAGE>
October 8, 1997.
"OBLIGATIONS" means all obligations of every nature of each
Loan Party from time to time owed to Agents, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts
drawn under Letters of Credit or payments for early termination of Interest
Rate Agreements, fees, expenses, indemnification or otherwise.
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its chairman of the
board (if an officer), its president, its chief financial officer or a vice
president; provided that every Officer's Certificate with respect to the
compliance with a condition precedent to the making of any Loans hereunder
shall include (i) a statement that the officer making or giving such
Officer's Certificate has read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement
that, in the opinion of the signer he or she has made or has caused to be made
such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such condition has been
complied with, and (iii) a statement as to whether, in the opinion of the
signer, such condition has been complied with.
"OPERATING LEASE" means, as applied to any Person, any lease
(including, without limitation, leases that may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) that is not a
Capital Lease other than any such lease under which that Person is the lessor.
"ORIGINAL CREDIT AGREEMENT" means that certain Credit Agreement
dated as of November 6, 1996 by and among Company, the financial institutions
party thereto from time to time, Goldman Sachs Credit Partners L.P. and The
Chase Manhattan Bank as Co-Administrative Agents, Goldman Sachs Credit
Partners L.P. and Chase Securities Inc., as Arranging Agents and SunTrust
Bank, Atlanta as collateral agent.
"PARTNERSHIP LOAN PARTY" means any Loan Party which is a
limited partnership.
"PAYCO" means Payco American Corporation, a Wisconsin
corporation.
"PAYCO ACQUISITION" means the transactions contemplated by the
Payco Acquisition Agreement.
"PAYCO ACQUISITION AGREEMENT" means that certain Agreement and
Plan of Merger dated as of August 13, 1996, by and among Company, Acquisition
Sub and Payco, as in effect on the Closing Date and as such agreement may
heretofore have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under subsection
7.12A.
"PAYCO MERGER" means the merger of Acquisition Sub with and
into Payco in accordance with the terms of the Payco Acquisition Agreement,
the Articles of Merger and the Certificate of Merger, with Payco being the
surviving corporation in such merger.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA (or any successor thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Title IV of ERISA.
"PERMITTED ACQUISITION" means an acquisition of assets or a
business (other than Permitted Portfolio Acquisitions) effected prior to the
Effective Date or in accordance with the provisions of subsection 7.7(v) or
7.7(vi).
<PAGE>
"PERMITTED ENCUMBRANCES" means the following types of Liens:
(i)Liens for taxes, assessments or governmental charges or
claims the payment of which is not, at the time, required by
subsection 6.3;
(ii)statutory Liens of landlords, statutory Liens of carriers,
warehousemen, mechanics and materialmen and other Liens imposed
by law (other than any such Lien imposed pursuant to Section
401(a)(29) or 412(n) of the Internal Revenue Code or by ERISA)
incurred in the ordinary course of business for sums not yet
delinquent or being contested in good faith, if such reserve or
other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor;
(iii)Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and
appeal bonds, bids, leases, government contracts, trade
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
(iv)any attachment or judgment Lien not constituting an Event
of Default under subsection 8.8;
(v)leases or subleases granted to others not interfering in any
material respect with the ordinary conduct of the business of
Company or any of its Subsidiaries;
(vi)easements, rights-of-way, restrictions, minor defects,
encroachments or irregularities in title and other similar
charges or encumbrances not interfering in any material respect
with the ordinary conduct of the business of Company or any of
its Subsidiaries;
(vii)any (a) interest or title of a lessor or sublessor under
any Capital Lease permitted by subsection 7.1(iii) or any
operating lease not prohibited by this Agreement,
(b) restriction or encumbrance that the interest or title of
such lessor or sublessor may be subject to, or
(c) subordination of the interest of the lessee or sublessee
under such lease to any restriction or encumbrance referred to
in the preceding clause (b);
(viii)Liens arising from filing UCC financing statements
relating solely to leases permitted by this Agreement;
(ix)Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in
connection with the importation of goods;
(x)deposits in the ordinary course of business to secure
liabilities to insurance carriers, lessors, utilities and other
service providers; and
(xi)bankers liens and rights of setoff with respect to
customary depository arrangements entered into in the ordinary
course of business.
"PERMITTED JOINT VENTURE" means an entity engaged in
substantially the same line of business as Company and its Subsidiaries on the
date hereof in which (i) except with respect to an entity the only other
equity holder of which is Goldman, Sachs & Co. or one or more of its
designated affiliates, at least 51% of the outstanding equity interests are
<PAGE>
owned by Company or a Wholly Owned Subsidiary of Company, (ii) any equity
interests (other than Regulatory Shares) not owned by Company or a Wholly
Owned Subsidiary of Company are beneficially owned by non-Affiliates of
Company and (iii) Company or a Wholly Owned Subsidiary, as a general partner
or otherwise, controls the management, operations and policies.
"PERMITTED PORTFOLIO ACQUISITION" means an acquisition of a
receivables portfolio effected in accordance with the provisions of subsection
7.7(v).
"PERMITTED SELLER NOTE" means a promissory note substantially
in the form of Exhibit XIV annexed hereto representing any Indebtedness of
Company incurred in connection with any Permitted Acquisition payable to the
seller in connection therewith, as such note may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
under subsection 7.12B; provided that no Permitted Seller Note shall (i) be
guarantied by any Subsidiary of Company or secured by any property of Company
or any of its Subsidiaries, (ii) bear cash interest at a rate in excess of 12%
per annum; or (iii) provide for any prepayment or repayment of all or any
portion of the principal thereof prior to the date of the final scheduled
installment of principal of any of the Loans; provided that, up to $10,000,000
aggregate principal amount of Permitted Seller Notes may provide for
prepayment or repayment prior to the final scheduled installment of principal
of the Loans but in no event earlier than the fifth anniversary of the
Effective Date.
"PERSON" means and includes natural persons, corporations,
limited partnerships, general partnerships, joint stock companies, Joint
Ventures, associations, companies, trusts, banks, trust companies, land
trusts, business trusts or other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereof.
"PLEDGE AGREEMENT" means that certain Pledge Agreement by and
among Company, the Subsidiary Guarantors and Collateral Agent dated as of the
Closing Date and substantially in the form of Exhibit VIII annexed hereto, as
such Pledge Agreement may heretofore have been or hereafter may be amended,
restated, supplemented or otherwise modified from time to time.
"PORTFOLIO PURCHASE BUSINESS" means assets or operations
generating revenues from collections on acquired or purchased portfolios of
loans, accounts, chattel paper, general intangibles or instruments.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that,
after notice or after any applicable grace period has lapsed, or both, would
constitute an Event of Default.
"PRICING REDUCTION" means, at any time after June 30, 1998, a
pricing reduction determined by reference to the correlative Leverage Ratio
set forth below:
LEVERAGE RATIO PRICING
REDUCTION
Greater than or equal to .25%
2.25:1.0, but less than
2.75:1.0
Less than 2.25:1.0 .50%
The Pricing Reduction shall be determined by reference to the Leverage Ratio
set forth in the most recent financial statements delivered by Company
pursuant to clause (ii) or (iii) of subsection 6.1 (accompanied by a
Compliance Certificate delivered by Company pursuant to clause (iv) of
subsection 6.1). The Pricing Reduction shall be effective on the day
following delivery of the relevant Compliance Certificate to Chase Co-
<PAGE>
Administrative Agent and shall remain in effect through the next scheduled
date for delivery of a Compliance Certificate. It is understood that the
Pricing Reductions set forth in the table above are not cumulative. Notwith-
standing anything herein to the contrary, at any time an Event of Default
shall have occurred and be continuing the Pricing Reduction shall be zero.
"PRIME RATE" means the rate of interest per annum publicly
announced from time to time by Chase as its prime commercial lending rate in
effect at its principal office in New York City. The Prime Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Chase or any other Lender may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PROJECTIONS" has the meaning assigned thereto in
subsection 5.3B.
"PRO RATA SHARE" means (i) with respect to all payments,
computations and other matters relating to the Tranche A Term Loan Commitment
or the Tranche A Term Loan of any Lender, the percentage obtained by dividing
(x) the Tranche A Term Loan Exposure of that Lender by (y) the aggregate
Tranche A Term Loan Exposure of all Lenders; (ii) with respect to all
payments, computations and other matters relating to the Tranche B Term Loan
Commitment or the Tranche B Term Loan of any Lender, the percentage obtained
by dividing (x) the Tranche B Term Loan Exposure of that Lender by (y) the
aggregate Tranche B Term Loan Exposure of all Lenders; (iii) with respect to
all payments, computations and other matters relating to the Tranche C Term
Loan Commitment or the Tranche C Term Loans of any Lender, the percentage
obtained by dividing (x) the Tranche C Term Loan Exposure of that Lender by
(y) the aggregate Tranche C Term Loan Exposure of all Lenders; (iv) with
respect to all payments, computations and other matters relating to the
Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters
of Credit issued by any Lender or any participations purchased by any Lender
therein or in any Swing Line Loans, the percentage obtained by dividing
(x) the Revolving Loan Exposure of that Lender by (y) the aggregate Revolving
Loan Exposure of all Lenders; and (v) for all other purposes with respect to
each Lender, the percentage obtained by dividing (x) the sum of the Tranche A
Term Loan Exposure of that Lender plus the Tranche B Term Loan Exposure of
that Lender plus the Tranche C Term Loan Exposure of that Lender plus the
Revolving Loan Exposure of that Lender by (y) the sum of the aggregate
Tranche A Term Loan Exposure of all Lenders plus the aggregate Tranche B Term
Loan Exposure of all Lenders plus the aggregate Tranche C Term Loan Exposure
of all Lenders plus the aggregate Revolving Loan Exposure of all Lenders; in
any such case as the applicable percentage may be adjusted by assignments
permitted pursuant to subsection 10.1. The initial Pro Rata Share of each
Lender for purposes of each of clauses (i), (ii), (iii), (iv) and (v) of the
preceding sentence is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
"QUALIFIED LOAN PORTFOLIO" means a portfolio of loans,
accounts, chattel paper, general intangibles or instruments acquired or
purchased by Company or one of its Subsidiaries from any Person, where (i) the
portfolio is free and clear of all Liens, except Liens in favor of Collateral
Agent for the benefit of Agents and Lenders under this Agreement; (ii) no
participation or other interest in the portfolio or the collections from the
portfolio exists in favor of any other Person other than a participation or
other interest which does not exceed 50% of the portfolio or collections from
the portfolio and which is on terms approved in advance by Co-Administrative
Agents and Requisite Lenders; and (iii) the portfolio consists of loans,
accounts, chattel paper, general intangibles or instruments similar in type,
characteristics and quality to those owned or previously owned by Company and
its Subsidiaries. Notwithstanding the foregoing, a Qualified Loan Portfolio
may be subject to participations, interests and/or Liens granted to Goldman,
Sachs & Co. or its designated affiliate or affiliates pursuant to arrangements
in effect as of the Effective Date or substantially similar thereto.
<PAGE>
"REFUNDED SWING LINE LOANS" has the meaning assigned to that
term in subsection 2.1A(iv).
"REGISTER" has the meaning assigned to that term in subsection
2.1D.
"REGULATION D" means Regulation D of the Board of Governors of
the Federal Reserve System, as in effect from time to time.
"REGULATORY SHARES" means, with respect to any Person, shares
of such Person required to be issued as qualifying shares to directors or
persons similarly situated or shares issued to Persons other than Company or a
Wholly Owned Subsidiary of Company in response to regulatory requirements of
foreign jurisdictions pursuant to a resolution of the Board of Directors of
such Person, so long as such shares do not exceed one percent of the total
outstanding shares of equity such Person and any owners of such shares
irrevocably covenant with Company to remit to Company or waive any dividends
or distributions paid or payable in respect of such shares.
"REIMBURSEMENT DATE" has the meaning assigned to that term in
subsection 3.3B.
"RELATED AGREEMENTS" means the Subordinated Notes, the
Subordinated Note Indenture, the other Subordinated Note Documents, the Payco
Acquisition Agreement, the Articles of Merger, the Certificate of Merger, the
NSA Acquisition Agreement, the Accelerated Acquisition Agreement and the Union
Acquisition Documents.
"RELEASE" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Materials into the indoor or
outdoor environment (including, without limitation, the abandonment or
disposal of any barrels, containers or other closed receptacles containing any
Hazardous Materials), or into or out of any Facility, including the movement
of any Hazardous Material through the air, soil, surface water, groundwater or
property.
"REQUISITE LENDERS" means Non-Defaulting Lenders having or
holding not less than 51% of the sum of the aggregate Tranche A Term Loan
Exposure of all Non-Defaulting Lenders plus the aggregate Tranche B Term Loan
Exposure of all Non-Defaulting Lenders plus the aggregate Tranche C Term Loan
Exposure of all Non-Defaulting Lenders plus the aggregate Revolving Loan
Exposure of all Non-Defaulting Lenders.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
stock of Company now or hereafter outstanding, except a dividend payable
solely in shares of that class of stock to the holders of that class, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of stock
of Company now or hereafter outstanding, (iii) any payment made to retire, or
to obtain the surrender of, any outstanding warrants, options or other rights
to acquire shares of any class of stock of Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium, if
any, or interest on, or redemption, purchase, retirement, defeasance
(including in-substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to
make Revolving Loans to Company pursuant to subsection 2.1A(iii) and
"REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders in the
aggregate.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means October 15,
2001.
<PAGE>
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as
of any date of determination (i) prior to the termination of the Revolving
Loan Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal amount of the Revolving Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of Credit
Usage in respect of all Letters of Credit issued by that Lender (net of any
participations purchased by other Lenders in such Letters of Credit) plus
(c) the aggregate amount of all participations purchased by that Lender in any
outstanding Letters of Credit or any unreimbursed drawings under any Letters
of Credit plus (d) the aggregate amount of all participations purchased by
that Lender in any outstanding Swing Line Loans plus (e) in the case of Swing
Line Lender, the sum of the aggregate outstanding principal amount of all
Swing Line Loans (in each case net of any participations therein purchased by
other Lenders).
"REVOLVING LOANS" means (i) the Loans made by Lenders to
Company pursuant to subsection 2.1A(iii) of the Original Credit Agreement and
pursuant to subsection 2.1A(iii) of the Existing Credit Agreement and
outstanding after the Effective Date and (ii) any Loans made by Lenders to
Company pursuant to subsection 2.1A(iii) of this Agreement.
"REVOLVING NOTES" means (i) the promissory notes of Company
issued pursuant to the Original Credit Agreement and the Existing Credit
Agreement and (ii) any promissory notes issued by Company pursuant to the last
sentence of subsection 10.1B(i) in connection with assignments of the
Revolving Loan Commitment and Revolving Loans of any Lender, in each case
substantially in the form of Exhibit V annexed hereto, as they may be amended,
restated, supplemented or otherwise modified from time to time.
"SECOND ACKNOWLEDGMENT AND CONSENT" means that certain
Acknowledgement and Consent executed by Company and the Subsidiary Guarantors
dated as of the Effective Date and substantially in the form of Exhibit XII
annexed hereto, as such Acknowledgement and Consent may be amended, restated,
supplemented or otherwise modified from time to time.
"SECURITIES" means any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time, and any successor statute.
"SECURITY AGREEMENT" means the Security Agreement entered into
by and among Company, the Subsidiary Guarantors and Collateral Agent dated as
of the Closing Date and substantially in the form of Exhibit IX annexed
hereto, as such Security Agreement may heretofore have been or hereafter may
be amended, restated, supplemented or otherwise modified from time to time.
"SOLVENT" means, with respect to any Person, that as of the
date of determination both (i) (a) the then fair saleable value of the
property of such Person is (y) greater than the total amount of liabilities
(including contingent liabilities) of such Person and (z) not less than the
amount that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to such
Person; (b) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and (c) such Person
does not intend to incur, or believe (nor should it reasonably believe) that
it will incur, debts beyond its ability to pay such debts as they become due;
and (ii) such Person is "solvent" within the meaning given that term and
<PAGE>
similar terms under applicable laws relating to fraudulent transfers and
conveyances. For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light of all of
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"STANDBY LETTER OF CREDIT" means any standby letter of credit
or similar instrument issued for the purpose of supporting (i) workers'
compensation liabilities of Company or any of its Subsidiaries, (ii) the
obligations of third party insurers of Company or any of its Subsidiaries
arising by virtue of the laws of any jurisdiction requiring third party
insurers, (iii) performance, payment, deposit or surety obligations of Company
or any of its Subsidiaries, in any case if required by law or governmental
rule or regulation or in accordance with custom and practice in the industry,
and (iv) such other obligations of Company and its Subsidiaries as may be
reasonably acceptable to Co-Administrative Agents; provided that Standby
Letters of Credit may not be issued for the purpose of supporting (a) trade
payables or (b) Indebtedness constituting "antecedent debt" (as that term is
used in Section 547 of the Bankruptcy Code).
"STOCKHOLDERS AGREEMENT" means that certain Amended and
Restated Stockholders Agreement dated as of February 16, 1996, by and among
Company and various stockholders of Company, as in effect on the Closing Date
and as such agreement may heretofore have been or hereafter may be amended,
restated, supplemented or otherwise modified from time to time thereafter to
the extent permitted under subsection 7.12A.
"SUBORDINATED INDEBTEDNESS" means (i) the Indebtedness of
Company evidenced by the Subordinated Notes, (ii) the Indebtedness of Company
evidenced by the Existing Seller Note and any Permitted Seller Notes and
(iii) any other Indebtedness of Company or any of its Subsidiaries
subordinated in right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults, remedies,
subordination provisions and other material terms in form and substance
satisfactory to Co-Administrative Agents and Requisite Lenders.
"SUBORDINATED NOTE DOCUMENTS" means the Subordinated Notes, the
Subordinated Note Indenture, the Subordinated Note Guaranty and each other
document executed in connection with the Subordinated Notes, as each such
document may heretofore have been or hereafter may be amended, restated,
supplemented or otherwise modified from time to time to the extent permitted
by subsection 7.12B.
"SUBORDINATED NOTE GUARANTY" means the guaranty of the
Subordinated Notes executed by certain Subsidiaries of Company and contained
in the Subordinated Note Indenture, as such guaranty may heretofore have been
or hereafter may be amended, restated, supplemented or otherwise modified from
time to time (including by any supplemental indenture thereto executed by any
Subsidiary of Company after the Closing Date) to the extent permitted under
subsection 7.12B.
"SUBORDINATED NOTE INDENTURE" means the indenture pursuant to
which the Subordinated Notes are issued, as in effect on the Closing Date and
as such indenture may heretofore have been or hereafter may be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under subsection 7.12B.
"SUBORDINATED NOTES" means the $100,000,000 in aggregate
principal amount of 11% Senior Subordinated Notes due 2006 of Company issued
pursuant to the Subordinated Note Indenture.
"SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business entity
of which more than 50% of the total voting power of shares of stock or other
ownership interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons (whether
<PAGE>
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and
policies thereof is at the time owned or controlled, directly or indirectly,
by that Person or one or more of the other Subsidiaries of that Person or a
combination thereof provided that, prior to the Union Merger Date, neither
Union nor any of its Subsidiaries shall be deemed a Subsidiary of Company for
purposes of Sections 5.16, 7.1, 7.2 or 7.3.
"SUBSIDIARY GUARANTOR" means any Wholly Owned Subsidiary of
Company that is a party to the Subsidiary Guaranty on the Effective Date or at
any time thereafter pursuant to subsection 6.9.
"SUBSIDIARY GUARANTY" means the Subsidiary Guaranty,
substantially in the form of Exhibit VII annexed hereto, dated as of the
Closing Date and delivered by the existing Subsidiary Guarantors on the
Effective Date and any additional Subsidiary Guarantor from time to time
thereafter pursuant to subsection 6.9, as such Subsidiary Guaranty may
heretofore have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time.
"SUNTRUST" means SunTrust Bank, Atlanta and its successors and
assigns, including, without limitation, its successors by merger.
"SWING LINE LENDER" means Chase, or any Person serving as a
successor Chase Co-Administrative Agent hereunder, in its capacity as Swing
Line Lender hereunder.
"SWING LINE LOAN COMMITMENT" means the commitment of Swing Line
Lender to make Swing Line Loans to Company pursuant to subsection 2.1A(iv).
"SWING LINE LOANS" means the Loans made by Swing Line Lender
pursuant to subsection 2.1A(iv).
"SWING LINE NOTE" means (i) the promissory note of Company
issued pursuant to the Existing Credit Agreement and the Original Credit
Agreement and (ii) any promissory note issued by Company to any successor
Chase Co-Administrative Agent and Swing Line Lender pursuant to the last
sentence of subsection 9.5B, in each case substantially in the form of Exhibit
VI annexed hereto, as it may be amended, restated, supplemented or otherwise
modified from time to time.
"TAX" or "TAXES" means any present or future tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature and whatever called,
by whomsoever, on whomsoever and wherever imposed, levied, collected, withheld
or assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person shall
be construed as a reference to a tax imposed by the jurisdiction in which that
Person's principal office (and/or, in the case of a Lender, its relevant
Lending Office) is located or in which that Person is deemed to be doing
business on all or part of the net income, profits or gains of that Person
(whether worldwide, or only insofar as such income, profits or gains are
considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"TENDERED UNION SHARES" means all shares of Union Common Stock
tendered to and purchased by Merger Sub pursuant to the Tender Offer.
"TENDER OFFER" means the offer to purchase for cash all of the
outstanding shares of Union Common Stock by Merger Sub pursuant to the Tender
Offer Materials.
"TENDER OFFER MATERIALS" means the Tender Offer Statement on
Schedule 14D-1 filed by Merger Sub on December 24, 1997 with the Securities
and Exchange Commission pursuant to Section 14(d)(1) of the Exchange Act,
together with all exhibits, supplements and amendments thereto and any other
amendments prior to the date hereof that relate only to any extension of time
during which the offer to purchase remains outstanding or to the results of
<PAGE>
the Tender Offer and other amendments that are approved by Arranging Agents.
"TERM LOANS" means, collectively, the Tranche A Term Loans, the
Tranche B Term Loans and the Tranche C Term Loans.
"TERM NOTES" means, collectively, the Tranche A Term Notes, the
Tranche B Term Notes and the Tranche C Term Notes.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at
any date of determination, the sum of (i) the aggregate principal amount of
all outstanding Revolving Loans (other than Revolving Loans made for the
purpose of repaying any Refunded Swing Line Loans or reimbursing the
applicable Issuing Lender for any amount drawn under any Letter of Credit but
not yet so applied) plus (ii) the aggregate principal amount of all
outstanding Swing Line Loans plus (iii) the Letter of Credit Usage.
"TRADEMARK SECURITY AGREEMENT" means the Trademark Security
Agreement entered into by and among Company, the Subsidiary Guarantors and
Collateral Agent dated as of the Closing Date, substantially in the form of
Exhibit IX-C annexed hereto, as such Trademark Security Agreement may
heretofore have been or hereafter may be amended, restated, supplemented or
otherwise modified from time to time.
"TRANCHE A TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Tranche A Term Loan to Company on the Closing Date pursuant
to subsection 2.1A(i) of the Original Credit Agreement and the Existing Credit
Agreement, and "TRANCHE A TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TRANCHE A TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination, the outstanding principal amount of
the Tranche A Term Loan of that Lender.
"TRANCHE A TERM LOANS" means the Existing Tranche A Term Loans.
"TRANCHE A TERM NOTES" means (i) the promissory notes of
Company issued pursuant to the Original Credit Agreement and the Existing
Credit Agreement and (ii) any promissory notes issued by Company pursuant to
the last sentence of subsection 10.1B(i) in connection with assignments of the
Tranche A Term Loans of any Lenders, in each case substantially in the form of
Exhibit IV-A annexed hereto, as they may be amended, restated, supplemented or
otherwise modified from time to time.
"TRANCHE B TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Tranche B Term Loan to Company on the Closing Date pursuant
to subsection 2.1A(ii) of the Original Credit Agreement and the commitment of
a Lender to make Additional Tranche B Term Loans to Company pursuant to
subsection 2.1A(ii) of the Existing Credit Agreement, and "TRANCHE B TERM LOAN
COMMITMENTS" means such commitments of all Lenders in the aggregate.
"TRANCHE B TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination the outstanding principal amount of the
Tranche B Term Loan of that Lender.
"TRANCHE B TERM LOANS" means the Existing Tranche B Term Loans.
"TRANCHE B TERM NOTE ALLONGE" means the Allonges issued
pursuant to subsection 2.1E of the Existing Credit Agreement on the First
Amendment Date with respect to the Tranche B Term Notes, as they may be
amended, restated, supplemented or otherwise modified from time to time.
"TRANCHE B TERM NOTES" means (i) the promissory notes of
Company issued pursuant to the Original Credit Agreement, in each case as
amended on the First Amendment Date by the Tranche B Term Note Allonges,
(ii) the promissory notes of Company issued pursuant to subsection 2.1E(ii) of
the Existing Credit Agreement on the First Amendment Date, and (iii) any
<PAGE>
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Tranche B Term Loans of any
Lenders, in each case substantially in the form of Exhibit IV-B annexed
hereto, as they may be amended, restated, supplemented or otherwise modified
from time to time.
"TRANCHE C TERM LOAN COMMITMENT" means the commitment of a
Lender to make a Tranche C Term Loan to Company pursuant to subsection
2.1A(ii), and "TRANCHE C TERM LOAN COMMITMENTS" means such commitments of all
Lenders in the aggregate.
"TRANCHE C TERM LOAN EXPOSURE" means, with respect to any
Lender as of any date of determination (i) prior to the funding of the
Tranche C Term Loans, that Lender's Tranche C Term Loan Commitment, (ii) after
the initial funding of the Tranche C Term Loans but before the date (the
"TRANCHE C TERM LOAN COMMITMENT TERMINATION DATE") that is 120 days after the
Effective Date or (if earlier) the date on which the Delayed-Draw Term Loans
are made, the outstanding principal amount of the Tranche C Term Loans of that
Lender plus the unfunded portion of the Tranche C Term Loan Commitment, and
(iii) after the Tranche C Term Loan Commitment Termination Date, the
outstanding principal amount of the Tranche C Term Loans of that Lender.
"TRANCHE C TERM LOANS" means the Loans made by Lenders to
Company pursuant to subsection 2.1A(ii).
"TRANCHE C TERM NOTES" means (i) the promissory notes of
Company issued pursuant to subsection 2.1E on the Effective Date and (ii) any
promissory notes issued by Company pursuant to the last sentence of subsection
10.1B(i) in connection with assignments of the Tranche C Term Loan Commitments
or Tranche C Term Loans of any Lenders, in each case substantially in the form
of Exhibit IV-C annexed hereto, as they may be amended, restated, supplemented
or otherwise modified from time to time.
"TRANSACTION COSTS" means the fees, costs and expenses payable
by Company and its Subsidiaries and in connection with the transactions
contemplated hereby to occur on the Effective Date and the Funding Date for
the Delayed-Draw Term Loan.
"UNFUNDED CURRENT LIABILITY" means, with respect to any Pension
Plan, the amount, if any, by which the actuarial present value of the
accumulated plan benefits under such Pension Plan as of the close of its most
recent plan year exceeds the fair market value of the assets allocable
thereto, each determined in accordance with Statement of Financial Accounting
Standards No. 35, based upon the actuarial assumptions used by such Pension
Plan's actuary in the most recent annual valuation of such Pension Plan.
"UNION" has the meaning assigned to that term in the recitals
to this Agreement.
"UNION ACQUISITION" means the transactions contemplated by the
Union Acquisition Agreement.
"UNION ACQUISITION AGREEMENT" that certain Share Purchase
Agreement and Plan of Merger dated as of December 22, 1997 by and among
Company, Merger Sub and Union.
"UNION ACQUISITION DOCUMENTS" means the Union Acquisition
Agreement, the Tender Offer Materials and the Union Certificate of Merger.
"UNION CERTIFICATE OF MERGER" means the Certificate of Merger
by and between Merger Sub and Union to be filed with the Secretary of State of
Delaware as contemplated by the Union Acquisition Agreement, as such
certificate may be amended, restated, supplemented or otherwise modified from
time to time thereafter to the extent permitted under subsection 7.12A.
"UNION COMMON STOCK" means the common stock of Union, par value
<PAGE>
$.50 per share, issued and outstanding prior to the Union Merger.
"UNION MERGER" means the merger of Merger Sub with and into
Union in accordance with the terms of the Union Acquisition Agreement and the
Union Certificate of Merger, with Union being the surviving corporation.
"UNION MERGER DATE" means the date that the Union Merger
becomes effective in accordance with the terms of the Union Acquisition
Agreement.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, a
Subsidiary of such Person all of the outstanding capital stock or other
ownership interests of which (other than Regulatory Shares) shall at the time
be owned by such Person or by one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF
CALCULATIONS UNDER AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii),
(iii) and (xiii) of subsection 6.1 shall be prepared in accordance with GAAP
(except, with respect to interim financial statements, normal year-end audit
adjustments and the absence of explanatory footnotes) as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in subsection 6.1(v)). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare
the financial statements referred to in subsection 5.3A.
1.3 OTHER DEFINITIONAL PROVISIONS.
References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided. Any of the terms defined in subsection 1.1 may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The words "includes", "including" and similar terms used in any
Loan Document shall be construed as if followed by the words "without
limitation".
SECTION 2.
AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; LOANS.
A.COMMITMENTS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of Loan
Parties set forth herein and in the other Loan Documents, each Lender hereby
severally agrees to make (or maintain, as the case may be) the Loans described
in subsections 2.1A(i), 2.1A(ii) and 2.1A(iii) and Swing Line Lender hereby
agrees to make the Swing Line Loans as described in subsection 2.1A(iv).
(i)Existing Loans. Company acknowledges and confirms that each
Existing Lender holds Existing Loans in the respective
principal amounts outstanding as of the Effective Date set
forth opposite its name on Schedule 2.1 annexed hereto.
Company hereby represents, warrants, agrees, covenants and (1)
reaffirms that it has no (and it permanently and irrevocably
waives and releases Agents and Lenders from any, to the extent
arising on or prior to the Effective Date) defense, set off,
claim or counterclaim against any Agent or Lender in regard to
its Obligations in respect of such Existing Loans and (2)
<PAGE>
reaffirms its obligation to pay such Loans in accordance with
the terms and conditions of this Agreement and the other Loan
Documents. Based on the foregoing, (A) Company and each Lender
agree that (x) the Existing Tranche A Term Loans, (y) the
Existing Tranche B Term Loans and (z) the Existing Revolving
Loans, and any amounts owed (whether or not presently due and
payable, and including all interest accrued to the Effective
Date (which shall be payable on the next Interest Payment Date
with respect to the Loans to which such interest relates)) by
Company to Lenders thereunder or in respect thereof, shall, as
of the Effective Date, be converted to, maintained as, and owed
by Company under or in respect of Tranche A Term Loans,
Tranche B Term Loans and Revolving Loans, respectively,
hereunder. Amounts repaid or prepaid in respect of Tranche A
Term Loans and Tranche B Term Loans may not be reborrowed.
Amounts repaid or prepaid in respect of the foregoing Revolving
Loans may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
(ii)Tranche C Term Loans. Each Lender severally agrees (a) to
lend to Company on the Effective Date (in the case of Tranche C
Term Loans other than Delayed-Draw Term Loans) and (b) to lend
to Company within 120 days after the Effective Date (in the
case of Delayed-Draw Term Loans) an aggregate amount not
exceeding its Pro Rata Share of the aggregate amount of the
Tranche C Term Loan Commitments to be used for the purposes
identified in subsection 2.5B. The amount of each Lender's
Tranche C Term Loan Commitment is set forth opposite its name
on Schedule 2.1 annexed hereto and the aggregate amount of the
Tranche C Term Loan Commitments is $225,000,000; provided that
the Tranche C Term Loan Commitments of Lenders shall be
adjusted to give effect to any assignments of the Tranche C
Term Loan Commitments pursuant to subsection 10.1B. Each
Lender's Tranche C Term Loan Commitment shall expire immedi-
ately and without further action on February 15, 1997 if the
initial Tranche C Term Loans are not made on or before that
date, and each Lender's Tranche C Term Loan Commitment in
respect of the Delayed-Draw Term Loans shall expire immediately
and without further action on the date that is 120 days after
the Effective Date in the event that the Delayed-Draw Term
Loans are not made on or before that date. Company may make
only two borrowings under the Tranche C Term Loan Commitments.
Amounts borrowed under this subsection 2.1A(ii) and
subsequently repaid or prepaid may not be reborrowed.
(iii)Revolving Loans. Each Lender severally agrees, subject to
the limitations set forth below with respect to the maximum
amount of Revolving Loans permitted to be outstanding from time
to time, to lend to Company from time to time during the period
from the Effective Date to but excluding the Revolving Loan
Commitment Termination Date an aggregate amount which, when
aggregated with any outstanding Existing Loans of the Lender
that are Revolving Loans, shall not exceed its Pro Rata Share
of the aggregate amount of the Revolving Loan Commitments, to
be used for the purposes identified in subsection 2.5C. The
original amount of each Lender's Revolving Loan Commitment is
set forth opposite its name on Schedule 2.1 annexed hereto and
the aggregate original amount of the Revolving Loan Commitments
is $58,000,000; provided that the Revolving Loan Commitments of
Lenders shall be adjusted to give effect to any assignments of
the Revolving Loan Commitments pursuant to subsection 10.1B;
provided further that the amount of the Revolving Loan
Commitments shall be reduced from time to time by the amount of
any reductions thereto made pursuant to subsection 2.4B. Each
Lender's Revolving Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Revolving
<PAGE>
Loans and all other amounts owed hereunder with respect to the
Revolving Loans and the Revolving Loan Commitments shall be
paid in full no later than that date. Amounts borrowed under
this subsection 2.1A(iii) as Revolving Loans may be repaid and
reborrowed to but excluding the Revolving Loan Commitment
Termination Date.
Notwithstanding anything contained herein to the contrary, in
no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments
then in effect.
(iv)Swing Line Loans. Swing Line Lender hereby agrees, subject
to the limitations set forth below with respect to the maximum
aggregate amount of all Swing Line Loans outstanding from time
to time, to make a portion of the Revolving Loan Commitments
available to Company from time to time during the period from
the Effective Date to but excluding the Revolving Loan
Commitment Termination Date by making Base Rate Loans as Swing
Line Loans to Company in an aggregate amount not to exceed the
amount of the Swing Line Loan Commitment, to be used for the
purposes identified in subsection 2.5B, notwithstanding the
fact that such Swing Line Loans, when aggregated with the sum
of Swing Line Lender's outstanding Revolving Loans and Swing
Line Lender's Pro Rata Share of the Letter of Credit Usage then
in effect, may exceed Swing Line Lender's Revolving Loan
Commitment. The original amount of the Swing Line Loan
Commitment is $5,000,000; provided that the amounts of the
Swing Line Loan Commitment are subject to reduction as provided
in clause (b) of the next paragraph. The Swing Line Loan
Commitment shall expire on the Revolving Loan Commitment
Termination Date and all Swing Line Loans and all other amounts
owed hereunder with respect to the Swing Line Loans shall be
paid in full no later than that date. Amounts borrowed under
this subsection 2.1A(iv) may be repaid and reborrowed to but
excluding the Revolving Loan Commitment Termination Date.
Notwithstanding anything contained herein to the contrary, the
Swing Line Loans, and the Swing Line Loan Commitment shall be
subject to the following limitations in the amounts indicated:
(a)in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments
then in effect;
(b)any reduction of the Revolving Loan Commitments made
pursuant to subsection 2.4B which reduces the aggregate
Revolving Loan Commitments to an amount less than the then
current sum of the Swing Line Loan Commitment shall result in
an automatic corresponding pro rata reduction of the Swing Line
Loan Commitment such that the sum thereof equals the amount of
the Revolving Loan Commitments, as so reduced, without any
further action on the part of Company, Chase Co-Administrative
Agent or Swing Line Lender.
With respect to any Swing Line Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i),
Swing Line Lender may, at any time in its sole and absolute
discretion, deliver to Chase Co-Administrative Agent (with a
copy to Company), no later than 12:00 Noon (New York time) at
least one Business Day in advance of the proposed Funding Date,
a notice (which shall be deemed to be a Notice of Borrowing
given by Company) requesting Lenders to make Revolving Loans
that are Base Rate Loans to Company on such Funding Date in an
amount equal to the amount of such Swing Line Loans (the
"REFUNDED SWING LINE LOANS") outstanding on the date such
<PAGE>
notice is given which Swing Line Lender requests Lenders to
prepay. Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made
by Lenders other than Swing Line Lender shall be immediately
delivered by Co-Administrative Agents to Swing Line Lender (and
not to Company) and applied to repay a corresponding portion of
the Refunded Swing Line Loans and (ii) on the day such
Revolving Loans are made, Swing Line Lender's Pro Rata Share of
the Refunded Swing Line Loans shall be deemed to be paid with
the proceeds of a Revolving Loan made by Swing Line Lender to
Company, and such portion of the Swing Line Loans deemed to be
so paid shall no longer be outstanding as Swing Line Loans and
shall no longer be due under the Swing Line Note of Swing Line
Lender but shall instead constitute part of Swing Line Lender's
outstanding Revolving Loans to Company and shall be due under
the Revolving Note issued by Company to Swing Line Lender.
Company hereby authorizes each of Chase Co-Administrative Agent
and Swing Line Lender to charge Company's accounts with Chase
Co-Administrative Agent and Swing Line Lender (up to the amount
available in each such account) in order to immediately pay
Swing Line Lender the amount of the Refunded Swing Line Loans
to the extent the proceeds of such Revolving Loans made by
Lenders, including the Revolving Loan deemed to be made by
Swing Line Lender, are not sufficient to repay in full the
Refunded Swing Line Loans. If any portion of any such amount
paid (or deemed to be paid) to Swing Line Lender should be
recovered by or on behalf of Company from Swing Line Lender in
bankruptcy, by assignment for the benefit of creditors or
otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by
subsection 10.5.
If for any reason Revolving Loans are not made pursuant to this
subsection 2.1A(iv) in an amount sufficient to repay any
amounts owed to Swing Line Lender in respect of any outstanding
Swing Line Loans on or before the third Business Day after
demand for payment thereof by Swing Line Lender, each Lender
shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Swing Line Loans, and in an
amount equal to its Pro Rata Share of the applicable unpaid
amount together with accrued interest thereon. Upon one
Business Day's notice from Swing Line Lender, each Lender shall
deliver to Swing Line Lender an amount in equal to its
respective participation in the applicable unpaid amount in
same day funds at the Funding and Payment Office. In order to
evidence such participation each Lender agrees to enter into a
participation agreement at the request of Swing Line Lender in
form and substance satisfactory to Swing Line Lender. In the
event any Lender fails to make available to Swing Line Lender
the amount of such Lender's participation as provided in this
paragraph, Swing Line Lender shall be entitled to recover such
amount on demand from such Lender together with interest
thereon at the rate customarily used by Swing Line Lender for
the correction of errors among banks for three Business Days
and thereafter at the Base Rate, as applicable.
Notwithstanding anything contained herein to the contrary,
(i) each Lender's obligation to make Revolving Loans for the
purpose of repaying any Refunded Swing Line Loans pursuant to
the second preceding paragraph and each Lender's obligation to
purchase a participation in any unpaid Swing Line Loans
pursuant to the immediately preceding paragraph shall be
absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (a) any set-off,
counterclaim, recoupment, defense or other right which such
Lender may have against Swing Line Lender, Company or any other
<PAGE>
Person for any reason whatsoever; (b) the occurrence or
continuation of an Event of Default or a Potential Event of
Default; (c) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Company or any of its Subsidiaries; (d) any breach
of this Agreement or any other Loan Document by any party
thereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing;
provided that no Lender shall have any such obligation unless
(x) Swing Line Lender believed in good faith that all
conditions under Section 4 to the making of the applicable
Refunded Swing Line Loans or other unpaid Swing Line Loans,
were satisfied at the time such Refunded Swing Line Loans or
unpaid Swing Line Loans were made, or (y) such Lender had
actual knowledge, by receipt of any notices required to be
delivered to Lenders pursuant to subsection 6.1(ix) or
otherwise, that any such condition under Section 4 had not been
satisfied and such Lender failed to notify Swing Line Lender
and Chase Co-Administrative Agent in writing that it had no
obligation to make Revolving Loans until such condition was
satisfied (any such notice to be effective as of the date of
receipt thereof by Swing Line Lender and Chase Co-
Administrative Agent), or (z) the satisfaction of any such
condition under Section 4 not satisfied had been waived by
Requisite Lenders prior to or at the time such Refunded Swing
Line Loans or other unpaid Swing Line Loans were made; and
(ii) Swing Line Lender shall not be obligated to make any Swing
Line Loans if it has elected not to do so after the occurrence
and during the continuation of a Potential Event of Default or
Event of Default.
B.BORROWING MECHANICS. Term Loans or Revolving Loans
(including any such Loans made as Eurodollar Rate Loans with a particular
Interest Period) made on any Funding Date (other than Revolving Loans made
pursuant to a request by Swing Line Lender pursuant to subsection 2.1A(iv) for
the purpose of repaying any Refunded Swing Line Loans or Revolving Loans made
pursuant to subsection 3.3B for the purpose of reimbursing any Issuing Lender
for the amount of a drawing or payment under a Letter of Credit issued by it)
shall be in an aggregate minimum amount of $1,000,000 and integral multiples
of $100,000 in excess of that amount. Swing Line Loans made on any Funding
Date shall be in an aggregate minimum amount of $250,000 and integral
multiples of $100,000 in excess of that amount. Whenever Company desires that
Lenders make Term Loans or Revolving Loans it shall deliver to Chase Co-
Administrative Agent on behalf of Company a Notice of Borrowing no later than
12:00 Noon (New York time), at least three Business Days in advance of the
proposed Funding Date in the case of a Eurodollar Rate Loan, or at least one
Business Day in advance of the proposed Funding Date in the case of a Base
Rate Loan. Whenever Company desires that Swing Line Lender make a Swing Line
Loan, it shall deliver to Chase Co-Administrative Agent a Notice of Borrowing
no later than 12:00 Noon (New York time) on the proposed Funding Date. The
Notice of Borrowing shall specify (i) the proposed Funding Date (which shall
be a Business Day), (ii) the amount and type of Loans requested, (iii) in the
case of Swing Line Loans, that such Loans shall be Base Rate Loans, (iv) in
the case of any Loans other than Swing Line Loans, whether such Loans shall be
Base Rate Loans or Eurodollar Rate Loans, and (v) in the case of any Loans
requested to be made as Eurodollar Rate Loans, the initial Interest Period
requested therefor. Term Loans and Revolving Loans may be continued as or
converted into Base Rate Loans and Eurodollar Rate Loans in the manner
provided in subsection 2.2D. In lieu of delivering the above-described Notice
of Borrowing, Company may give Chase Co-Administrative Agent telephonic notice
by the required time of any proposed borrowing under this subsection 2.1B;
provided that such notice shall be promptly confirmed in writing by delivery
of a Notice of Borrowing to Chase Co-Administrative Agent on or before the
applicable Funding Date.
Neither Chase Co-Administrative Agent nor any Lender shall
<PAGE>
incur any liability to Company in acting upon any telephonic notice referred
to above that Chase Co-Administrative Agent believes in good faith to have
been given by a duly authorized officer or other person authorized to borrow
on behalf of Company or for otherwise acting in good faith under this
subsection 2.1B, and upon funding of Loans by Lenders in accordance with this
Agreement pursuant to any such telephonic notice Company shall have effected
Loans hereunder.
Company shall notify Chase Co-Administrative Agent prior to the
funding of any Loans in the event that any of the matters to which Company is
required to certify in the applicable Notice of Borrowing are no longer true
and correct as of the applicable Funding Date, and the acceptance by Company
of the proceeds of any Loans shall constitute a re-certification by Company,
as of the applicable Funding Date, as to the matters to which Company is
required to certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice
in lieu thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in
accordance therewith.
C.DISBURSEMENT OF FUNDS. All Term Loans and all Revolving
Loans under this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood that
no Lender shall be responsible for any default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder nor shall the
Commitment of any Lender to make the particular type of Loan requested be
increased or decreased as a result of a default by any other Lender in that
other Lender's obligation to make a Loan requested hereunder. Promptly after
receipt by Co-Administrative Agents of a Notice of Borrowing pursuant to
subsection 2.1B (or telephonic notice in lieu thereof), Chase Co-
Administrative Agent shall notify each Lender or Swing Line Lender, as the
case may be, of the proposed borrowing and of the amount of such Lender's Pro
Rata Share of the applicable Loans.
Each Lender shall make the amount of its Loan available to
Chase Co-Administrative Agent not later than 12:00 Noon (New York time) on the
applicable Funding Date, and Swing Line Lender shall make the amount of its
Swing Line Loan available to Chase Co-Administrative Agent not later than
12:00 Noon (New York time) on the applicable Funding Date, in each case in
same day funds, at the Funding and Payment Office. Except as provided in
subsection 2.1A(iv) or subsection 3.3B with respect to Revolving Loans used to
repay Refunded Swing Line Loans or to reimburse any Issuing Lender for the
amount of an honored drawing or payment under a Letter of Credit issued by it,
upon satisfaction or waiver of the conditions precedent specified in
subsections 4.2 (in the case of Loans made on the Effective Date), 4.3 (in the
case of the Delayed-Draw Term Loans) and 4.4 (in the case of all Loans), Chase
Co-Administrative Agent shall make the proceeds of such Loans available to
Company on the applicable Funding Date by causing an amount of same day funds
equal to the proceeds of all such Loans received by Chase Co-Administrative
Agent from Lenders or Swing Line Lender, as the case may be, to be credited to
the account of Company at the Funding and Payment Office.
Unless Chase Co-Administrative Agent shall have been notified
by any Lender prior to the Funding Date for any Loans that such Lender does
not intend to make available to Chase Co-Administrative Agent the amount of
such Lender's Loan requested on such Funding Date, Chase Co-Administrative
Agent may assume that such Lender has made such amount available to Chase Co-
Administrative Agent on such Funding Date and Chase Co-Administrative Agent
may, in its sole discretion, but shall not be obligated to, make available to
Company a corresponding amount on such Funding Date. If such corresponding
amount is not in fact made available to Chase Co-Administrative Agent by such
Lender, Chase Co-Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Lender together with interest
thereon, for each day from such Funding Date until the date such amount is
<PAGE>
paid to Chase Co-Administrative Agent, at the customary rate set by Chase Co-
Administrative Agent for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. If such Lender does not pay
such corresponding amount forthwith upon Chase Co-Administrative Agent's
demand therefor, Chase Co-Administrative Agent shall promptly notify Company
and Company shall immediately pay such corresponding amount in the to Chase
Co-Administrative Agent together with interest thereon, for each day from such
Funding Date until the date such amount is paid to Chase Co-Administrative
Agent, at the rate applicable to such Loan. Nothing in this subsection 2.1C
shall be deemed to relieve any Lender from its obligation to fulfill its
Commitments hereunder or to prejudice any rights that Company may have against
any Lender as a result of any default by such Lender hereunder.
D.THE REGISTER.
(i)Chase Co-Administrative Agent shall maintain, at the address
referred to in subsection 10.8, a register for the recordation
of the names and addresses of Lenders and the Commitments and
Loans of each Lender from time to time (the "REGISTER"). The
Register shall be available for inspection by Company or any
Lender at any reasonable time and from time to time upon
reasonable prior notice.
(ii)Chase Co-Administrative Agent shall record in the Register
the Commitments and the outstanding Loans from time to time of
each Lender and each repayment or prepayment in respect of the
principal amount of the outstanding Loans of each Lender. Any
such recordation shall be conclusive and binding on Company and
each Lender, absent manifest error; provided that failure to
make any such recordation, or any error in such recordation,
shall not affect Company's Obligations in respect of the
applicable Loans.
(iii)Each Lender shall record on its internal records
(including, without limitation, the Notes held by such Lender)
the amount of each Loan made by it and each payment in respect
thereof. Any such recordation shall be prima facie evidence of
the amount of such Loans; provided that failure to make any
such recordation, or any error in such recordation, shall not
affect Company's Obligations in respect of the applicable
Loans; and provided, further that in the event of any
inconsistency between the Register and any Lender's records,
the recordations in the Register shall govern.
(iv)Company, Agents and Lenders shall deem and treat the
Persons listed as Lenders in the Register as the holders and
owners of the corresponding Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer
of any Commitment or Loan shall be effective, in each case
unless an until an Assignment Agreement effecting the
assignment or transfer thereof shall have been accepted by
Chase Co-Administrative Agent and recorded in the Register as
provided in subsection 10.1B(ii). Prior to such recordation,
all amounts owed with respect to the applicable Commitment or
Loan shall be owed to the Lender listed in the Register as the
owner thereof, and any request, authority or consent of any
Person who, at the time of making such request or giving such
authority or consent, is listed in the Register as a Lender
shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Commitments or
Loans.
(v)Company hereby designates Chase, and any financial institu-
tion serving as a successor Chase Co-Administrative Agent, to
serve as Company's agent solely for purposes of maintaining the
Register as provided in this subsection 2.1D, and Company
<PAGE>
hereby agrees that, to the extent Chase serves in such
capacity, Chase and its officers, directors, employees, agents
and affiliates shall constitute Indemnitees for all purposes
under subsection 10.3.
E.TRANCHE C TERM NOTES. Company shall execute and deliver on
the Effective Date to each Lender providing a Tranche C Term Loan Commitment
(or to Co-Administrative Agents for that Lender) a Tranche C Term Note,
substantially in the form of Exhibit IV-C annexed hereto, to evidence that
Lender's Tranche C Term Loans in the principal amount of that Lender's
Tranche C Term Loans and with other appropriate insertions. The Notes and the
Obligations evidenced thereby shall be governed by, subject to and benefit
from all of the terms and conditions of this Agreement and the other Loan
Documents and shall be guarantied and/or secured by the Collateral as provided
in the Loan Documents.
2.2 INTEREST ON THE LOANS.
A.RATE OF INTEREST. Subject to the provisions of subsections
2.6 and 2.7, each Term Loan and each Revolving Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base
Rate or the Adjusted Eurodollar Rate, as the case may be. Subject to the
provisions of subsection 2.7, each Swing Line Loan shall bear interest on the
unpaid principal amount thereof from the date made through maturity (whether
by acceleration or otherwise) at a rate determined by reference to the Base
Rate. The applicable basis for determining the rate of interest with respect
to any Loan shall be selected by Company initially at the time a Notice of
Borrowing is given with respect to such Loan pursuant to subsection 2.1B. The
basis for determining the interest rate with respect to any Term Loan or any
Revolving Loan may be changed from time to time pursuant to subsection 2.2D.
If on any day any Term Loan or Revolving Loan is outstanding with respect to
which notice has not been delivered to Co-Administrative Agents in accordance
with the terms of this Agreement specifying the applicable basis for
determining the rate of interest, then for that day that Loan shall bear
interest determined by reference to the Base Rate.
Subject to the provisions of subsections 2.2E and 2.7, the Term
Loans and the Revolving Loans shall bear interest through maturity as follows:
(i)if a Base Rate Loan, then at the sum of the Base Rate plus
the Applicable Base Rate Margin; or
(ii)if a Eurodollar Rate Loan, then at the sum of the Adjusted
Eurodollar Rate plus the Applicable Eurodollar Rate Margin.
Subject to the provisions of subsections 2.2E and 2.7, the
Swing Line Loans shall bear interest through maturity at the sum of the Base
Rate plus the Applicable Base Rate Margin less 0.50% per annum.
B.INTEREST PERIODS. In connection with each Eurodollar Rate
Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of
Conversion/Continuation, as the case may be, select an interest period (each
an "INTEREST PERIOD") to be applicable to such Loan, which Interest Period
shall be, at Company's option, either a one, three or six month period;
provided that:
(i)the initial Interest Period for any Eurodollar Rate Loan
shall commence on the Funding Date in respect of such Loan, in
the case of a Loan initially made as a Eurodollar Rate Loan, or
on the date specified in the applicable Notice of Conversion/
Continuation, in the case of a Loan converted to a Eurodollar
Rate Loan;
(ii)in the case of immediately successive Interest Periods
applicable to a Eurodollar Rate Loan continued as such pursuant
<PAGE>
to a Notice of Conversion/Continuation, each successive
Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(iii)if an Interest Period would otherwise expire on a day that
is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided that, if any Interest
Period would otherwise expire on a day that is not a Business
Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iv)any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such
Interest Period) shall, subject to clause (v) of this
subsection 2.2B, end on the last Business Day of a calendar
month;
(v)no Interest Period with respect to any portion of the
Tranche A Term Loans shall extend beyond October 15, 2001, no
Interest Period with respect to any portion of the Tranche B
Term Loans shall extend beyond October 15, 2003 and no Interest
Period with respect to any portion of the Tranche C Term Loans
shall extend beyond October 15, 2004 and no Interest Period
with respect to any portion of the Revolving Loans shall extend
beyond the Revolving Loan Commitment Termination Date;
(vi)no Interest Period with respect to any portion of the
Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans shall extend beyond a date on which Company is required
to make a scheduled payment of principal of the Tranche A Term
Loans, Tranche B Term Loans or Tranche C Term Loans, as the
case may be, unless the sum of (a) the aggregate principal
amount of Tranche A Term Loans, Tranche B Term Loans or
Tranche C Term Loans, as the case may be, that are Base Rate
Loans plus (b) the aggregate principal amount of Tranche A Term
Loans, Tranche B Term Loans or Tranche C Term Loans, as the
case may be, that are Eurodollar Rate Loans with Interest
Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the Tranche A Term
Loans, Tranche B Term Loans or Tranche C Term Loans, as the
case may be, on such date;
(vii)no Interest Period with respect to any portion of the
Revolving Loans shall extend beyond the date on which a
permanent reduction of the Revolving Loan Commitments is
scheduled to occur unless the sum of (a) the aggregate
principal amount of Revolving Loans that are Base Rate Loans
plus (b) the aggregate principal amount of Revolving Loans that
are Eurodollar Rate Loans with Interest Periods expiring on or
before such date plus (c) the excess of the Revolving Loan
Commitments then in effect over the aggregate principal amount
of Revolving Loans then outstanding equals or exceeds the
permanent reduction of the Revolving Loan Commitments that is
scheduled to occur on such date;
(viii)Company may not select an initial Interest Period of
longer than one month with respect to Tranche C Term Loans made
on the Effective Date.
(ix)there shall be no more than ten (10) Interest Periods
outstanding at any time; and
(x)in the event Company fails to specify an Interest Period for
any Eurodollar Rate Loan in the applicable Notice of Borrowing
<PAGE>
or Notice of Conversion/Continuation, Company shall be deemed
to have selected an Interest Period of one month.
C.INTEREST PAYMENTS. Subject to the provisions of subsection
2.2E, interest on each Loan shall be payable in arrears on and to each
Interest Payment Date applicable to that Loan, upon any prepayment of that
Loan (to the extent accrued on the amount being prepaid) and at maturity
(including final maturity); provided that in the event that any Swing Line
Loans, any Revolving Loans or any Term Loans that are Base Rate Loans are
prepaid pursuant to subsection 2.4B(i), interest accrued on such Swing Line
Loans, Revolving Loans or Term Loans through the date of such prepayment shall
be payable on the next succeeding Interest Payment Date applicable to Base
Rate Loans (or, if earlier, at final maturity).
D.CONVERSION OR CONTINUATION. Subject to the provisions of
subsection 2.6, Company shall have the option (i) to convert at any time all
or any part of its outstanding Term Loans or Revolving Loans equal to
$1,000,000 and integral multiples of $100,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis to Loans
bearing interest at a rate determined by reference to an alternative basis or
(ii) upon the expiration of any Interest Period applicable to a Eurodollar
Rate Loan, to continue all or any portion of such Loan equal to $1,000,000 and
integral multiples of $100,000 in excess of that amount as a Eurodollar Rate
Loan; provided, however, that a Eurodollar Rate Loan may only be converted
into a Base Rate Loan on the expiration date of an Interest Period applicable
thereto.
Company shall deliver a Notice of Conversion/Continuation to
Chase Co-Administrative Agent no later than 12:00 Noon (New York time) at
least one Business Day in advance of the proposed conversion date (in the case
of a conversion to a Base Rate Loan), and at least three Business Days in
advance of the proposed conversion/continuation date (in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan). A Notice of
Conversion/Continuation shall specify (i) the proposed conversion/continuation
date (which shall be a Business Day), (ii) the amount and type of the Loan to
be converted/continued, (iii) the nature of the proposed conversion/
continuation, (iv) in the case of a conversion to, or a continuation of, a
Eurodollar Rate Loan, the requested Interest Period, and (v) in the case of a
conversion to, or a continuation of, a Eurodollar Rate Loan, that no Potential
Event of Default or Event of Default has occurred and is continuing. In lieu
of delivering the above-described Notice of Conversion/Continuation, Company
may give Chase Co-Administrative Agent telephonic notice by the required time
of any proposed conversion/continuation under this subsection 2.2D; provided
that such notice shall be promptly confirmed in writing by delivery of a
Notice of Conversion/Continuation to Chase Co-Administrative Agent on or
before the proposed conversion/continuation date.
Neither Chase Co-Administrative Agent nor any Lender shall
incur any liability to Company in acting upon any telephonic notice referred
to above that Chase Co-Administrative Agent believes in good faith to have
been given by a duly authorized officer or other person authorized to act on
behalf of Company or for otherwise acting in good faith under this subsection
2.2D, and upon conversion or continuation of the applicable basis for
determining the interest rate with respect to any Loans in accordance with
this Agreement pursuant to any such telephonic notice Company shall have
effected a conversion or continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B, 2.6C and
2.6G, a Notice of Conversion/Continuation for conversion to, or continuation
of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and
Company shall be bound to effect a conversion or continuation in accordance
therewith.
E.POST-DEFAULT INTEREST. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
<PAGE>
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code, or other applicable bankruptcy or
insolvency laws) payable upon demand at a rate that is 2% per annum in excess
of the interest rate otherwise payable under this Agreement with respect to
the applicable Loans (or, in the case of any such fees and other amounts, at a
rate which is 2% per annum in excess of the interest rate otherwise payable
under this Agreement for Revolving Loans bearing interest at a rate determined
by reference to the Base Rate); provided that, in the case of Eurodollar Rate
Loans, upon the expiration of the Interest Period in effect at the time any
such increase in interest rate is effective such Eurodollar Rate Loans shall
thereupon become Base Rate Loans and shall thereafter bear interest payable
upon demand at a rate equal to 2% per annum in excess of the interest rate
otherwise payable under this Agreement for Base Rate Loans that are Tranche A
Term Loans, Tranche B Term Loans, Tranche C Term Loans, or Revolving Loans, as
applicable. Payment or acceptance of the increased rates of interest provided
for in this subsection 2.2E is not a permitted alternative to timely payment
and shall not constitute a waiver of any Event of Default or otherwise
prejudice or limit any rights or remedies of any Agent or Lender.
F.COMPUTATION OF INTEREST. Interest on Loans shall be computed
(i) in the case of Base Rate Loans based on the Prime Rate, on the basis of a
365-day or 366-day year, as the case may be, and (ii) in the case of all other
Base Rate Loans and Eurodollar Rate Loans, on the basis of a 360-day year, in
each case for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making of such
Loan or the first day of an Interest Period applicable to such Loan or, with
respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the
date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the
case may be, shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or, with respect
to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of
conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case
may be, shall be excluded; provided that if a Loan is repaid on the same day
on which it is made, one day's interest shall be paid on that Loan.
2.3 FEES.
A.COMMITMENT FEES. Company agrees to pay to Chase Co-
Administrative Agent, for distribution to each Lender in proportion to that
Lender's Pro Rata Share with respect to the Revolving Loan Commitments or the
Tranche C Term Loan Commitments, as applicable, commitment fees for the period
from and including the Closing Date to and excluding the Revolving Loan
Commitment Termination Date equal to (i) the sum of (a) the average of the
daily excess of the Revolving Loan Commitments over the sum of (x) the
aggregate principal amount of Revolving Loans outstanding (but not any Swing
Line Loans outstanding) plus (y) the Letter of Credit Usage, plus (b) the
average daily unfunded portion of the Tranche C Term Loan Commitments,
multiplied by (ii) 1/2 of 1% per annum. All such commitment fees shall be
calculated on the basis of a 360-day year and the actual number of days
elapsed and shall be payable quarterly in arrears on January 15, April 15,
July 15 and October 15 of each year, commencing on January 15, 1997.
B.ANNUAL COLLATERAL AGENT'S FEE. Company agrees to pay to
Collateral Agent an annual Collateral Agent's fee in such amounts as may be
agreed between them from time to time.
C.OTHER FEES. Company agrees to pay to Agents such other fees
in the amounts and at the times separately agreed upon between Company and the
applicable Agents.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN
COMMITMENTS; GENERAL PROVISIONS REGARDING PAYMENTS.
A.SCHEDULED PAYMENTS OF TERM LOANS.
<PAGE>
(i)Scheduled Payments of Tranche A Term Loans. Company shall
make principal payments on the Tranche A Term Loans in
installments on the dates and in the amounts set forth below:
<PAGE>
SCHEDULED REPAYMENT
DATE OF TRANCHE A
TERM LOANS
April 15, 1998 $3,312,500
July 15, 1998 $3,312,500
October 15, 1998 $3,312,500
January 15, 1999 $3,312,500
April 15, 1999 $3,312,500
July 15, 1999 $3,312,500
October 15, 1999 $3,312,500
January 15, 2000 $4,250,000
April 15, 2000 $4,250,000
July 15, 2000 $4,250,000
October 15, 2000 $4,250,000
January 15, 2001 $4,750,000
April 15, 2001 $4,750,000
July 15, 2001 $4,750,000
October 15, 2001 $4,750,000
; provided that the scheduled installments of principal of the
Tranche A Term Loans set forth above shall be reduced in
connection with any voluntary or mandatory prepayments of the
Tranche A Term Loans in accordance with subsection 2.4C; and
provided further, that the Tranche A Term Loans and all other
amounts owed hereunder with respect to the Tranche A Term Loans
shall be paid in full no later than October 15, 2001, and the
final installment payable by Company in respect of the
Tranche A Term Loans on such date shall be in an amount, if
such amount is different from that specified above, sufficient
to repay all amounts owing by Company under this Agreement with
respect to the Tranche A Term Loans.
(ii)Scheduled Payments of Tranche B Term Loans. Company shall
make principal payments on the Tranche B Term Loans in
installments on the dates and in the amounts set forth below:
SCHEDULED REPAYMENT
DATE OF TRANCHE B
TERM LOANS
April 15, 1998 $ 445,730
July 15, 1998 $ 445,730
October 15, 1998 $ 445,730
January 15, 1999 $ 445,730
April 15, 1999 $ 445,730
July 15, 1999 $ 445,730
October 15, 1999 $ 445,730
January 15, 2000 $ 445,730
April 15, 2000 $ 445,730
July 15, 2000 $ 445,730
October 15, 2000 $ 445,730
January 15, 2001 $ 445,730
April 15, 2001 $ 445,730
July 15, 2001 $ 445,730
October 15, 2001 $ 445,730
January 15, 2002 $12,480,427
April 15, 2002 $12,480,427
July 15, 2002 $12,480,427
October 15, 2002 $12,480,427
<PAGE>
January 15, 2003 $16,937,722
April 15, 2003 $16,937,722
July 15, 2003 $16,937,722
October 15, 2003 $17,055,154
; provided that the scheduled installments of principal of the
Tranche B Term Loans set forth above shall be reduced in
connection with any voluntary or mandatory prepayments of the
Tranche B Term Loans in accordance with subsection 2.4C; and
provided, further that the Tranche B Term Loans and all other
amounts owed hereunder with respect to the Tranche B Term Loans
shall be paid in full no later than October 15, 2003, and the
final installment payable by Company in respect of the
Tranche B Term Loans on such date shall be in an amount, if
such amount is different from that specified above, sufficient
to repay all amounts owing by Company under this Agreement with
respect to the Tranche B Term Loans.
(iii)Scheduled Payments of Tranche C Term Loans. Company shall
make principal payments on the Tranche C Term Loans in
installments on the dates and in the amounts set forth below
(it being understood and agreed that (a) the amounts set forth
below reflect the borrowing of the full amount of Tranche C
Term Loans on or prior to April 15, 1998; (b) in the event the
Delayed-Draw Term Loans have not been funded on or prior to
April 15, 1998, the amounts of the scheduled installments of
principal (including the installment due April 15, 1998) set
forth below shall be reduced ratably in an aggregate amount
equal to the amount of unfunded Tranche C Term Loan Commitments
as of April 15, 1998; and (c) in the event that the Funding
Date of the Delayed-Draw Term Loans occurs after April 15,
1998, the amounts of the scheduled installments of principal
set forth below (as adjusted in accordance with clause (b)
above) for the period after April 15, 1998 shall be, as of such
Funding Date, increased ratably in an aggregate amount equal to
the amount of such borrowing of Delayed-Draw Term Loans):
SCHEDULED
REPAYMENT OF
DATE TRANCHE C TERM
LOANS
April 15, 1998 $ 250,000
July 15, 1998 $ 250,000
October 15, 1998 $ 250,000
January 15, 1999 $ 250,000
April 15, 1999 $ 250,000
July 15, 1999 $ 250,000
October 15, 1999 $ 250,000
January 15, 2000 $ 250,000
April 15, 2000 $ 250,000
July 15, 2000 $ 250,000
October 15, 2000 $ 250,000
January 15, 2001 $ 250,000
April 15, 2001 $ 250,000
July 15, 2001 $ 250,000
October 15, 2001 $ 250,000
January 15, 2002 $ 250,000
April 15, 2002 $ 250,000
July 15, 2002 $ 250,000
October 15, 2002 $ 250,000
<PAGE>
January 15, 2003 $ 250,000
April 15, 2003 $ 250,000
July 15, 2003 $ 250,000
October 15, 2003 $ 250,000
January 15, 2004 $ 54,750,000
April 15, 2004 $ 54,750,000
July 15, 2004 $ 54,750,000
October 15, 2004 $ 55,000,000
<PAGE>
; provided that the scheduled installments of principal of the
Tranche C Term Loans set forth above shall be reduced in
connection with any voluntary or mandatory prepayments of the
Tranche C Term Loans in accordance with subsection 2.4C; and
provided further, that the Tranche C Term Loans and all other
amounts owed hereunder with respect to the Tranche C Term Loans
shall be paid in full no later than October 15, 2004, and the
final installment payable by Company in respect of the
Tranche C Term Loans on such date shall be in an amount, if
such amount is different from that specified above, sufficient
to repay all amounts owing by Company under this Agreement with
respect to the Tranche C Term Loans.
B.PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i)Voluntary Prepayments. Company may, upon written or
telephonic notice to Chase Co-Administrative Agent on or prior
to 12:00 Noon (New York time) on the date of prepayment, which
notice, if telephonic, shall be promptly confirmed in writing,
at any time and from time to time prepay, without premium or
penalty, any Swing Line Loan on any Business Day in whole or in
part in an aggregate minimum amount of $250,000 and integral
multiples of $50,000 in excess of that amount. In addition, so
long as no Swing Line Loans are then outstanding, Company may,
upon not less than one Business Day's prior written or
telephonic notice, in the case of Base Rate Loans, and three
Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case confirmed in writing to
Chase Co-Administrative Agent (which notice Chase Co-
Administrative Agent will promptly transmit by telefacsimile or
telephone to each Lender), at any time and from time to time
prepay, without premium or penalty, the Loans other than Swing
Line Loans on any Business Day in whole or in part in an
aggregate minimum amount of $1,000,000 and integral multiples
of $250,000 in excess of that amount; provided, however, that
in the event Company shall prepay a Eurodollar Rate Loan other
than on the expiration of the Interest Period applicable
thereto, Company shall, at the time of such prepayment, also
pay the amount payable under Section 2.6D hereof. Notice of
prepayment having been given as aforesaid, the Loans shall
become due and payable on the prepayment date specified in such
notice and in the aggregate principal amount specified therein.
Any voluntary prepayments pursuant to this subsection 2.4B(i)
shall be applied as specified in subsection 2.4C.
(ii)Voluntary Reductions of Revolving Loan Commitments.
Company may, upon not less than three Business Days' prior
written or telephonic notice confirmed in writing to Chase Co-
Administrative Agent (which notice Chase Co-Administrative
Agent will promptly transmit by telefacsimile or telephone to
each Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or
penalty, (y) the Revolving Loan Commitments in an amount up to
the amount by which the Revolving Loan Commitments exceed the
Total Utilization of Revolving Loan Commitments at the time of
such proposed termination or reduction; provided that any such
partial reduction of the Revolving Loan Commitments shall be in
an aggregate minimum amount of $1,000,000 and integral
multiples of $250,000 in excess of that amount. Company's
notice to Chase Co-Administrative Agent shall designate the
date (which shall be a Business Day) of such termination or
reduction and the amount of any partial reduction, and such
termination or reduction of the Revolving Loan Commitments
shall be effective on the date specified in such notice and
shall reduce the Revolving Loan Commitment, as applicable, of
<PAGE>
each Lender proportionately to its Pro Rata Share. Any such
voluntary reduction of the Revolving Loan Commitments shall be
applied as specified in subsection 2.4C.
(iii)Mandatory Prepayments and Mandatory Reductions of
Revolving Loan Commitments.
The Loans shall be prepaid and the Revolving Loan Commitments
shall be reduced in the manner provided in subsection 2.4C upon
the occurrence of the following circumstances:
(a)Prepayments and Reductions from Asset Sales. No later than
the first Business Day following the date of receipt by Company
or any of its Subsidiaries of the Cash Proceeds of any Asset
Sale (other than any portion of such proceeds that is
reinvested (or scheduled for reinvestment) in a Qualified Loan
Portfolio and/or assets of the general type used in the
business of Company and its Subsidiaries within 270 days from
the date of receipt of such proceeds), Company shall prepay the
Loans (and/or the Revolving Loan Commitments shall be reduced)
in the amount of such proceeds not so reinvested (or scheduled
for such reinvestment); provided, that if the Net Cash Proceeds
of all such Asset Sales in any Fiscal Year exceed $15,000,000,
then in each case the amount of such excess Net Cash Proceeds
may not be reinvested (or scheduled for reinvestment); provided
further, that if the Net Cash Proceeds of Asset Sales of
businesses in any Fiscal Year exceed 10% of Consolidated EBITDA
for the preceding Fiscal Year, then the amount of such excess
Net Cash Proceeds may not be reinvested (or scheduled for
reinvestment); and provided further, that Company may not
reinvest (or schedule for reinvestment) Net Cash Proceeds upon
the occurrence and during the continuation of an Event of
Default. Company shall, no later than 365 days after receipt
of any such Net Cash Proceeds that have not theretofore been
applied to the Obligations, make an additional prepayment of
the Loans (and/or the Revolving Loan Commitments shall be
reduced) in the full amount of all such proceeds that have not
therefore been so reinvested. Concurrently with any prepayment
of the Loans and/or reduction of the Commitments pursuant to
this subsection 2.4B(iii)(a), Company shall deliver to Chase
Co-Administrative Agent an Officer's Certificate demonstrating
the derivation of the Net Cash Proceeds of the correlative
Asset Sale from the gross sales price thereof. In the event
that Company shall, at any time after receipt of Cash Proceeds
of any Asset Sale requiring a prepayment or a reduction of the
Revolving Loan Commitments pursuant to this subsection
2.4B(iii)(a), determine that the prepayments and/or reductions
of the Revolving Loan Commitments previously made in respect of
such Asset Sale were in an aggregate amount less than that
required by the terms of this subsection 2.4B(iii)(a), Company
shall promptly cause to be made an additional prepayment of the
Loans (and/or reduction in the Revolving Loan Commitments) in
an amount equal to the amount of any such deficit, and Company
shall concurrently therewith deliver to Co-Administrative
Agents an Officer's Certificate demonstrating the derivation of
the additional Net Cash Proceeds resulting in such deficit.
(b)Prepayments and Reductions Due to Issuance of Debt. On or
prior to the first Business Day after receipt by Company or any
of its Subsidiaries of any proceeds of any Indebtedness (other
than the Loans and any other Indebtedness permitted by this
Agreement), Company shall prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) in an amount equal
to the amount of such proceeds; provided that payment or
acceptance of the amounts provided for in this subsection
2.4B(iii)(b) shall not constitute a waiver of any Event of
<PAGE>
Default resulting from the incurrence of such Indebtedness or
otherwise prejudice any rights or remedies of Agents or
Lenders.
(c)Prepayments and Reductions Due to Issuance of Equity
Securities. On or prior to the first Business Day after
receipt by Company or any of its Subsidiaries of any Equity
Proceeds, Company shall prepay the Loans (and/or the Revolving
Loan Commitments shall be reduced) in an amount equal to such
Equity Proceeds; provided that such Equity Proceeds shall not
be applied to prepay Loans pursuant to this subsection if (1)
such Equity Proceeds were not derived from a public offering of
Securities and (2) such Equity Proceeds (y) are, upon receipt,
designated for reinvestment in the businesses of Company and
its Subsidiaries and (z) are within 30 days of receipt thereof
by Company or any of its Subsidiaries, reinvested in the
businesses of Company and its Subsidiaries.
(d)Prepayments and Reductions from Insurance and Condemnation
Proceeds. No later than the second Business Day following the
date of receipt by Company or any of its Subsidiaries of any
cash payments under any of the casualty insurance policies
covering damage to or loss of property maintained pursuant to
subsection 6.4 resulting from damage to or loss of all or any
portion of the Collateral or any other tangible asset (net of
actual and documented reasonable costs incurred by Company or
any of its Subsidiaries in connection with adjustment and
settlement thereof, "INSURANCE PROCEEDS") or any proceeds
resulting from the taking of assets by the power of eminent
domain, condemnation or otherwise (net of actual and documented
reasonable costs incurred by Company or any of its Subsidiaries
in connection with adjustment and settlement thereof,
"CONDEMNATION PROCEEDS") (other than any portion of any such
proceeds that is reinvested (or scheduled for reinvestment) in
assets of the general type used in the business of Company and
its Subsidiaries within 270 days from the date of receipt of
such proceeds), Company shall prepay the Loans (and/or the
Revolving Loan Commitments shall be reduced) in the amount of
such proceeds not so reinvested (or scheduled for such
reinvestment). Company shall, no later than 270 days after
receipt of any such Insurance Proceeds or Condemnation Proceeds
that have not theretofore been applied to the Obligations, make
an additional prepayment of the Loans (and/or the Revolving
Loan Commitments shall be reduced) in the full amount of all
such proceeds that have not therefore been reinvested in such
assets.
(e)Prepayments and Reductions from Consolidated Excess Cash
Flow. In the event that there shall be Consolidated Excess
Cash Flow for any Fiscal Year (commencing with the Fiscal Year
ending December 31, 1998), Company shall, no later than 100
days after the end of such Fiscal Year, prepay the Loans
(and/or the Revolving Loan Commitments shall be reduced) in an
aggregate amount equal to 50% of such Consolidated Excess Cash
Flow for such Fiscal Year; provided that, in the event that, as
of the last day of any such Fiscal Year, the Leverage Ratio is
less than 3.0:1.00, then for such Fiscal Year the amount
required to be prepaid pursuant to this subsection 2.4B(iii)(e)
shall be reduced to 25% of Consolidated Excess Cash Flow for
such Fiscal Year.
(f)Prepayments Due to Reductions or Restrictions of Revolving
Loan Commitments. Company shall prepay the Swing Line Loans
and/or the Revolving Loans from time to time to the extent
necessary so that (y) the Total Utilization of Revolving Loan
<PAGE>
Commitments shall not at any time exceed the Revolving Loan
Commitments then in effect, and (z) the aggregate principal
amount of all outstanding Swing Line Loans shall not at any
time exceed the Swing Line Loan Commitment then in effect. All
Swing Line Loans shall be prepaid in full prior to the
prepayment of any Revolving Loans pursuant to this subsection
2.4B(iii)(f).
C.APPLICATION OF PREPAYMENTS AND REDUCTIONS OF REVOLVING LOAN
COMMITMENTS.
(i)Application of Voluntary Prepayments by Type of Loans. Any
voluntary prepayments pursuant to subsection 2.4B(i) shall be
applied: first to repay outstanding Swing Line Loans to the
full extent thereof, second to repay outstanding Revolving
Loans to the full extent thereof, and third, to repay
outstanding Term Loans to the full extent thereof.
(ii)Application of Mandatory Prepayments by Type of Loans. Any
amount (the "APPLIED AMOUNT") required to be applied as a
mandatory prepayment of the Loans and/or a reduction of the
Revolving Loan Commitments pursuant to subsections
2.4B(iii)(a)-(e) shall be applied first to prepay the Term
Loans to the full extent thereof, second, to the extent of any
remaining portion of the Applied Amount, to prepay the Swing
Line Loans to the full extent thereof and to permanently reduce
the Revolving Loan Commitments by the amount of such
prepayment, third, to the extent of any remaining portion of
the Applied Amount, to prepay the Revolving Loans to the full
extent thereof and to further permanently reduce the Revolving
Loan Commitments by the amount of such prepayment, and fourth,
to the extent of any remaining portion of the Applied Amount,
to further permanently reduce the Revolving Loan Commitments to
the full extent thereof.
(iii)Application of Prepayments of Term Loans to Tranche A Term
Loans, Tranche B Term Loans and Tranche C Term Loans and the
Scheduled Installments of Principal Thereof. Any prepayments
of the Term Loans pursuant to subsection 2.4B(i) or 2.4B(iii)
shall be applied to prepay the Tranche A Term Loans, the
Tranche B Term Loans and the Tranche C Term Loans on a pro rata
basis in accordance with the respective outstanding principal
amounts thereof. Any mandatory prepayments applied to the
Tranche A Term Loans, the Tranche B Term Loans or the Tranche C
Term Loans pursuant to this subsection shall be applied on a
pro rata basis (in accordance with the respective outstanding
principal amounts thereof) to each scheduled installment of
principal of the Tranche A Term Loans, the Tranche B Term Loans
or the Tranche C Term Loans, as the case may be, set forth in
subsection 2.4A(i), 2.4A(ii) or 2.4A(iii), respectively, that
is unpaid at the time of such prepayment.
(iv)Application of Prepayments to Base Rate Loans and
Eurodollar Rate Loans. Considering Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans and Revolving Loans
being prepaid separately, any prepayment thereof shall be
applied first to Base Rate Loans to the full extent thereof
before application to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments required to
be made by Company pursuant to subsection 2.6D.
D.
APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER
SUBSIDIARY GUARANTY.
(i)Application of Proceeds of Collateral. Except as provided
<PAGE>
in subsection 2.4B(iii)(a) with respect to prepayments from Net
Asset Sale Proceeds, all proceeds received by Collateral Agent
in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral under any
Collateral Document may, in the discretion of Collateral Agent,
be held by Collateral Agent as Collateral for, and/or (then or
at any time thereafter) applied in full or in part by
Collateral Agent against, the applicable Secured Obligations
(as defined in such Collateral Document) in the following order
of priority:
(a)To the payment of all costs and expenses of such sale,
collection or other realization, including without limitation
reasonable compensation to Collateral Agent and its agents and
counsel, and all other reasonable expenses, liabilities and
advances made or incurred by Collateral Agent in connection
therewith, and all amounts for which Collateral Agent is
entitled to indemnification under such Collateral Document and
all advances made by Collateral Agent thereunder for the
account of the applicable Loan Party, and to the payment of all
reasonable costs and expenses paid or incurred by Collateral
Agent in connection with the exercise of any right or remedy
under such Collateral Document, all in accordance with the
terms of this Agreement and such Collateral Document;
(b)thereafter, to the extent of any excess such proceeds, to
the payment of all other such Secured Obligations for the
ratable benefit of the holders thereof; and
(c)thereafter, to the extent of any excess such proceeds, to
the payment to or upon the order of such Loan Party or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
(ii)Application of Payments Under Subsidiary Guaranty. All
payments received by Collateral Agent under the Subsidiary
Guaranty shall be applied promptly from time to time by
Collateral Agent in the following order of priority:
(a)To the payment of the reasonable costs and expenses of any
collection or other realization under the Subsidiary Guaranty,
including without limitation reasonable compensation to
Collateral Agent and its agents and counsel, and all expenses,
liabilities and advances made or incurred by Collateral Agent
in connection therewith, all in accordance with the terms of
this Agreement and the Subsidiary Guaranty;
(b)thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in
the Subsidiary Guaranty) for the ratable benefit of the holders
thereof; and
(c)thereafter, to the extent of any excess such payments, to
the payment to the applicable Subsidiary Guarantor or to
whosoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.
E.GENERAL PROVISIONS REGARDING PAYMENTS.
(i)Manner and Time of Payment. All payments by Company of
principal, interest, fees and other Obligations hereunder and
under the Notes shall be made in same day funds and without
defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Chase Co-Administrative Agent not
later than 12:00 Noon (New York time) on the date due at the
Funding and Payment Office for the account of Lenders; funds
<PAGE>
received by Chase Co-Administrative Agent after that time on
such due date shall be deemed to have been paid by Company on
the next succeeding Business Day. Company hereby authorizes
Chase Co-Administrative Agent to charge its accounts with such
Chase Co-Administrative Agent in order to cause timely payment
to be made to Chase Co-Administrative Agent of all principal,
interest, fees and expenses due hereunder (subject to
sufficient funds being available in its accounts for that
purpose).
(ii)Application of Payments to Principal and Interest. Except
as provided in subsection 2.2C, all payments in respect of the
principal amount of any Loan shall include payment of accrued
interest on the principal amount being repaid or prepaid, and
all such payments (and in any event any payments made in
respect of any Loan on a date when interest is due and payable
with respect to such Loan) shall be applied to the payment of
interest before application to principal.
(iii)Apportionment of Payments. Aggregate principal and
interest payments shall be apportioned among all outstanding
Loans to which such payments relate, in each case
proportionately to Lenders' respective Pro Rata Shares. Chase
Co-Administrative Agent shall promptly distribute to each
Lender, at its applicable Lending Office specified on Schedule
2.1 or at such other address as such Lender may request, its
Pro Rata Share of all such payments received by Chase Co-
Administrative Agent and the commitment fees of such Lender
when received by Chase Co-Administrative Agent pursuant to
subsection 2.3. Notwithstanding the foregoing provisions of
this subsection 2.4E(iii) if, pursuant to the provisions of
subsection 2.6C, any Notice of Conversion/Continuation is
withdrawn as to any Affected Lender or if any Affected Lender
makes Base Rate Loans in lieu of its Pro Rata Share of any
Eurodollar Rate Loans, Chase Co-Administrative Agent shall give
effect thereto in apportioning payments received thereafter.
(iv)Payments on Business Days. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in
the computation of the payment of interest hereunder or of the
commitment fees hereunder, as the case may be.
(v)Notation of Payment. Each Lender agrees that before
disposing of any Note held by it, or any part thereof (other
than by granting participations therein), that Lender will make
a notation thereon of all Loans evidenced by that Note and all
principal payments previously made thereon and of the date to
which interest thereon has been paid; provided that the failure
to make (or any error in the making of) a notation of any Loan
made under such Note shall not limit or otherwise affect the
obligations of Company hereunder or under such Note with
respect to any Loan or any payments of principal or interest on
such Note.
2.5 USE OF PROCEEDS.
A.TRANCHE A TERM LOANS AND TRANCHE B TERM LOANS. The proceeds
of the Tranche A Term Loans and the Tranche B Term Loans were applied in
accordance with the provisions of the Original Credit Agreement and the
Existing Credit Agreement.
B.TRANCHE C TERM LOANS. The proceeds of the Tranche C Term
Loans shall be applied by Company (a) on the date of the initial funding of
the Tranche C Term Loans (x) to repay Existing Revolving Loans and (y) to make
<PAGE>
capital contributions and/or loans to Merger Sub, which will utilize the
proceeds thereof to pay for Tendered Union Shares and to pay costs and
expenses arising from the Tender Offer and related transactions and (b) in the
case of Delayed-Draw Term Loans, to make cash payments to the holders of Union
Common Stock pursuant to the Union Merger Agreement.
C.REVOLVING LOANS; SWING LINE LOANS. Revolving Loans and Swing
Line Loans in an aggregate amount not to exceed $10,000,000 at any time
outstanding may be used to finance the general corporate purposes of Company
and its Subsidiaries. Revolving Loans and Swing Line Loans in an additional
amount not to exceed $48,000,000 at any time outstanding may be used to
finance expenditures which are included in the definition of Consolidated
Capital Expenditures; provided that Revolving Loans and Swing Line Loans in an
aggregate amount not to exceed $58,000,000 at any time outstanding may be used
to finance such acquisitions if at all times such additional amount of
Revolving Loans is outstanding the sum of (i) unrestricted Cash and Cash
Equivalents on the balance sheet of Company plus (ii) the excess of the
Revolving Loan Commitments over the Total Utilization of Revolving Loan
Commitments equals or exceeds $10,000,000.
D.COMPLIANCE WITH LAWS. Company hereby undertakes that no
portion of the proceeds of any Loans or other extensions of credit under this
Agreement shall be used by any Loan Party in any manner which would be illegal
under, or which would cause the invalidity or unenforceability (in each case
in whole or in part) of any Loan Document under, any applicable law.
E.MARGIN REGULATIONS. Without limiting the generality of
subsection 2.5, no portion of the proceeds of any borrowing under this
Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board
or to violate the Exchange Act, in each case as in effect on the date or dates
of such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement to the
contrary, the following provisions shall govern with respect to Eurodollar
Rate Loans as to the matters covered:
A.DETERMINATION OF APPLICABLE INTEREST RATE. As soon as
practicable after 11:00 A.M. (New York time) on each Interest
Rate Determination Date, Chase Co-Administrative Agent shall
determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) the interest
rate that shall apply to the Eurodollar Rate Loans for which an
interest rate is then being determined for the applicable
Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Company and
each Lender.
B.INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the
event that Chase Co-Administrative Agent shall have reasonably
determined (which determination shall be final and conclusive
and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Eurodollar Rate Loans,
that by reason of circumstances arising after the date of this
Agreement affecting the London interbank market, adequate and
fair means do not exist for ascertaining the interest rate
applicable to such Loans on the basis provided for in the
definition of Adjusted Eurodollar Rate Chase Co-Administrative
Agent shall on such date give notice (by telecopy or by
telephone confirmed in writing) to Company and each Lender of
such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans, until such time as Chase
<PAGE>
Co-Administrative Agent notifies Company and Lenders that the
circumstances giving rise to such notice no longer exist (such
notification not to be unreasonably withheld or delayed) and
(ii) any Notice of Borrowing or Notice of Conversion/
Continuation given by Company with respect to the Loans in
respect of which such determination was made shall be deemed to
be rescinded by Company.
C.ILLEGALITY OR IMPRACTICABILITY OF EURODOLLAR RATE LOANS. In
the event that on any date any Lender shall have reasonably
determined (which determination shall be final and conclusive
and binding upon all parties hereto but shall be made only
after consultation with Company and Chase Co-Administrative
Agent) that the making, maintaining or continuation of its
Eurodollar Rate Loans (i) has become unlawful as a result of
compliance by such Lender in good faith with any law, treaty,
governmental rule, regulation, guideline or order (or would
conflict with any such treaty, governmental rule, regulation,
guideline or order not having the force of law even though the
failure to comply therewith would not be unlawful) or (ii) has
become impracticable, or would cause such Lender material
hardship, as a result of contingencies occurring after the date
of this Agreement which materially and adversely affect the
London interbank market, then, and in any such event, such
Lender shall be an "AFFECTED LENDER" and it shall on that day
give notice (by telecopy or by telephone confirmed in writing)
to Company and Chase Co-Administrative Agent of such
determination (which notice Chase Co-Administrative Agent shall
promptly transmit to each other Lender). Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to
convert Loans to, Eurodollar Rate Loans, shall be suspended
until such notice shall be withdrawn by the Affected Lender,
(b) to the extent such determination by the Affected Lender
relates to a Eurodollar Rate Loan then being requested by
Company pursuant to a Notice of Borrowing or a Notice of
Conversion/Continuation, the Affected Lender shall make such
Loan as (or convert such Loan to, as the case may be) a Base
Rate Loan, (c) the Affected Lender's obligation to maintain its
outstanding Eurodollar Rate Loans, as the case may be (the
"AFFECTED LOANS"), shall be terminated at the earlier to occur
of the expiration of the Interest Period then in effect with
respect to the Affected Loans or when required by law, and
(d) the Affected Loans shall automatically convert into Base
Rate Loans on the date of such termination. Notwithstanding
the foregoing, to the extent a determination by an Affected
Lender as described above relates to a Eurodollar Rate Loan
then being requested by Company pursuant to a Notice of
Borrowing or a Notice of Conversion/Continuation, Company shall
have the option, subject to the provisions of subsection 2.6D,
to rescind such Notice of Borrowing or Notice of Conversion/
Continuation as to all Lenders by giving notice (by telecopy or
by telephone confirmed in writing) to Chase Co-Administrative
Agent of such rescission on the date on which the Affected
Lender gives notice of its determination as described above
(which notice of rescission Chase Co-Administrative Agent shall
promptly transmit to each other Lender). Except as provided in
the immediately preceding sentence, nothing in this subsection
2.6C shall affect the obligation of any Lender other than an
Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of
this Agreement.
D.COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST
PERIODS. Company shall compensate each Lender, upon written
request by that Lender (which request shall set forth the basis
for requesting such amounts), for all reasonable losses,
<PAGE>
expenses and liabilities (including, without limitation, any
interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss,
expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds) which that
Lender may sustain: (i) if for any reason (other than a default
by that Lender) a borrowing of any Eurodollar Rate Loan does
not occur on a date specified therefor in a Notice of Borrowing
or a telephonic request for borrowing, or a conversion to or
continuation of any Eurodollar Rate Loan does not occur on a
date specified therefor in a Notice of Conversion/Continuation
or a telephonic request for conversion or continuation, (ii) if
any prepayment (including without limitation any prepayment
pursuant to subsection 2.4B(i)) or conversion of any of its
Eurodollar Rate Loans occurs on a date that is not the last day
of an Interest Period applicable to that Loan, (iii) if any
prepayment of any of its Eurodollar Rate Loans is not made on
any date specified in a notice of prepayment given by Company,
or (iv) as a consequence of any other default by Company in the
repayment of its Eurodollar Rate Loans when required by the
terms of this Agreement.
E.BOOKING OF EURODOLLAR RATE LOANS. Any Lender may make, carry
or transfer Eurodollar Rate Loans at, to, or for the account of
any of its branch offices or the office of an Affiliate of that
Lender.
F.ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Lender under this
subsection 2.6 and under subsection 2.7A shall be made as
though that Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar
deposit bearing interest at the rate obtained pursuant to
clause (i) of the definition of Adjusted Eurodollar Rate in an
amount equal to the amount of such Eurodollar Rate Loan and
having a maturity comparable to the relevant Interest Period
and through the transfer of such Eurodollar deposit from an
offshore office of that Lender to a domestic office of that
Lender in the United States of America; provided, however, that
each Lender may fund each of its Eurodollar Rate Loans in any
manner it sees fit and the foregoing assumptions shall be
utilized only for the purposes of calculating amounts payable
under this subsection 2.6 and under subsection 2.7A.
G.EURODOLLAR RATE LOANS AFTER DEFAULT. After the occurrence of
and during the continuation of a Potential Event of Default or
an Event of Default, (i) Company may not elect to have a Loan
be made or maintained as, or converted to, a Eurodollar Rate
Loan after the expiration of any Interest Period then in effect
for that Loan and (ii) subject to the provisions of subsection
2.6D, any Notice of Borrowing or Notice of Conversion/
Continuation given by Company with respect to a requested
borrowing or conversion/continuation that has not yet occurred
shall be deemed to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A.COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the
provisions of subsection 2.7B (which shall be controlling with respect to the
matters covered thereby), in the event that any law, treaty or governmental
rule, regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination
of a court or governmental authority, in each case that becomes effective
after the Closing Date, or compliance by such Lender with any guideline,
request or directive issued or made after the Closing Date by any central bank
<PAGE>
or other governmental or quasi-governmental authority (whether or not having
the force of law):
(i)results in a change in the basis of taxation of such Lender
(or its applicable lending office) (other than a change with
respect to any Tax on the overall net income of such Lender)
with respect to this Agreement or any of its obligations
hereunder or any payments to such Lender (or its applicable
lending office) of principal, interest, fees or any other
amount payable hereunder;
(ii)imposes, modifies or holds applicable any reserve
(including, without limitation, any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement against
assets held by, or deposits or other liabilities in or for the
account of, or advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such
Lender (other than any such reserve or other requirements with
respect to Eurodollar Rate Loans that are reflected in the
definition of Adjusted Eurodollar Rate; or
(iii)imposes any other condition (other than with respect to a
Tax matter) on or affecting such Lender (or its applicable
lending office) or its obligations hereunder, or the London
interbank market;
and the result of any of the foregoing is to increase the cost to such Lender
of agreeing to make, making or maintaining Eurodollar Rate Loans hereunder or
to reduce any amount received or receivable by such Lender (or its applicable
lending office) with respect thereto; then, in any such case, Lender shall
promptly notify Company and Chase Co-Administrative Agent thereof and Company
shall promptly pay to such Lender, upon receipt of the statement referred to
in the next sentence, such additional amount or amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Lender shall reasonably determine) as may be necessary to compensate
such Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Lender shall deliver to Company (with a copy to
Chase Co-Administrative Agent) a written statement, setting forth in
reasonable detail the basis for calculating the additional amounts owed to
such Lender under this subsection 2.7A, which statement shall be prima facie
evidence of such additional amounts.
B.WITHHOLDING OF TAXES.
(i)Payments to Be Free and Clear. All sums payable by Company
under this Agreement and the other Loan Documents shall (except
to the extent required by law) be paid free and clear of, and
without any deduction or withholding on account of, any Tax
(other than a Tax on the overall net income of any Lender)
imposed, levied, collected, withheld or assessed by or within
the United States of America or any political subdivision in or
of the United States of America or any other jurisdiction from
which a payment is made by or on behalf of Company.
(ii)Withholding of Taxes. If Company or any other Person is
required by law to make any deduction or withholding on account
of any such Tax from any sum paid or payable by Company to
Chase Co-Administrative Agent or any Lender under any of the
Loan Documents:
(a)Company shall notify Chase Co-Administrative Agent of any
such requirement or any change in any such requirement as soon
as Company becomes aware of it;
(b)Company shall pay any such Tax before the date on which
<PAGE>
penalties attach thereto, such payment to be made (if the
liability to pay is imposed on Company) for its own account or
(if that liability is imposed on Chase Co-Administrative Agent
or such Lender, as the case may be) on behalf of and in the
name of Chase Co-Administrative Agent or such Lender;
(c)the sum payable by Company in respect of which the relevant
deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the
making of that deduction, withholding or payment, Chase Co-
Administrative Agent or such Lender, as the case may be,
receives on the due date a net sum equal to what it would have
received had no such deduction, withholding or payment been
required or made; and
(d)within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and
within 30 days after the due date of payment of any Tax which
it is required by clause (b) above to pay, Company shall
deliver to Chase Co-Administrative Agent evidence of such
deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority;
provided that no such additional amount shall be required to be paid to any
Lender under clause (c) above except to the extent that any change after the
Closing Date (in the case of each Existing Lender), after the Effective Date
(in the case of each New Lender) or after the date of the Assignment Agreement
pursuant to which such Lender became a Lender (in the case of each other
Lender) in any such requirement for a deduction, withholding or payment as is
mentioned therein shall result in an increase in the rate of such deduction,
withholding or payment from that in effect at the date of this Agreement or at
the date of such Assignment Agreement, as the case may be, in respect of
payments to such Lender.
(iii)Evidence of Exemption from U.S. Withholding Tax.
(a)Each Lender that is organized under the laws of any
jurisdiction other than the United States or any state or other
political subdivision thereof (for purposes of this subsection
2.7B(iii), a "NON-U.S. LENDER") shall deliver to Chase Co-
Administrative Agent for transmission to Company, on or prior
to the Closing Date (in the case of each Existing Lender), on
or prior to the Effective Date (in the case of each New Lender)
or on or prior to the date of the Assignment Agreement pursuant
to which it becomes a Lender (in the case of each other
Lender), and at such other times as may be necessary in the
determination of Company or Chase Co-Administrative Agent (each
in the reasonable exercise of its discretion), (1) two original
copies of Internal Revenue Service Form 1001 or 4224 (or any
successor forms), accurately completed and duly executed by
such Lender, together with any other certificate or statement
of exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of principal, interest, fees or other amounts payable under any
of the Loan Documents or (2) if such Lender is not a "bank" or
other Person described in Section 881(c)(3) of the Internal
Revenue Code and cannot deliver either Internal Revenue Service
Form 1001 or 4224 (or any successor forms) pursuant to clause
(1) above, a Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8 (or any
successor form), properly completed and duly executed by such
Lender, together with any other certificate or statement of
exemption required under the Internal Revenue Code or the
regulations issued thereunder to establish that such Lender is
<PAGE>
not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b)Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby
agrees, from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence, whenever
a lapse in time or change in circumstances renders such forms,
certificates or other evidence obsolete or inaccurate in any
material respect, such Lender shall (1) deliver to Chase Co-
Administrative Agent for transmission to Company two new
original copies of Internal Revenue Service Form 1001 or 4224
(or any successor forms), or a Certificate re Non-Bank Status
and two original copies of Internal Revenue Service Form W-8
(or any successor form), as the case may be, accurately
completed and duly executed by such Lender, together with any
other certificate or statement of exemption required in order
to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax
with respect to payments to such Lender under the Loan
Documents or (2) immediately notify Chase Co-Administrative
Agent and Company of its inability to deliver any such forms,
certificates or other evidence.
(c)Company shall not be required to pay any additional amount
to any Non-U.S. Lender under clause (c) of subsection 2.7B(ii)
in respect of deductions or withholdings of United States
federal income taxes if such Lender shall have failed to
satisfy the requirements of subsection 2.7B(iii)(a) or
2.7B(iii)(b); provided that if such Lender shall have satisfied
such requirements on the Closing Date (in the case of each
Existing Lender), on the Effective Date (in the case of each
New Lender) or on the date of the Assignment Agreement pursuant
to which it became a Lender (in the case of each other Lender),
nothing in this subsection 2.7B(iii)(c) shall relieve Company
of its obligation to pay any additional amounts pursuant to
clause (c) of subsection 2.7B(ii) in the event that, as a
result of any change after the Closing Date in any applicable
law, treaty or governmental rule, regulation or order, or any
change in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to
withholding as described in subsection 2.7B(iii)(a) or
2.7B(iii)(b).
C.CAPITAL ADEQUACY ADJUSTMENT. If any Lender shall have
determined that the adoption, effectiveness, phase-in or applicability after
the Closing Date of any law, rule or regulation (or any provision thereof)
regarding capital adequacy, or any change therein or in the interpretation or
administration thereof by the National Association of Insurance Commissioners,
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or its
applicable lending office) with any guideline, request or directive regarding
capital adequacy (whether or not having the force of law) of the National
Association of Insurance Commissioners, any such governmental authority,
central bank or comparable agency, has or would have the effect of reducing
the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of, or with reference to, such
Lender's Loans or Commitments or Letters of Credit or participations therein
or other obligations hereunder with respect to the Loans or the Letters of
Credit to a level below that which such Lender reasonably determines such
Lender or such controlling corporation could have achieved but for such
adoption, effectiveness, phase-in, applicability, change or compliance (taking
<PAGE>
into consideration the policies of such Lender or such controlling corporation
with regard to capital adequacy), then from time to time, within fifteen
Business Days after receipt by Company from such Lender of the statement
referred to in the next sentence, Company shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such
controlling corporation on an after-tax basis for such reduction. Such Lender
shall deliver to Company (with a copy to Chase Co-Administrative Agent) a
written statement, setting forth in reasonable detail the basis of the
calculation of such additional amounts, which statement shall be conclusive
and binding upon all parties hereto absent manifest error.
D.SUBSTITUTE LENDERS. In the event Company is required under
the provisions of this subsection 2.7 to make payments in a material amount to
any Lender or in the event any Lender fails to lend to Company in accordance
with this Agreement, Company may, so long as no Event of Default or Potential
Event of Default shall have occurred and be continuing, elect to terminate
such Lender as a party to this Agreement; provided that, concurrently with
such termination, (i) Company shall pay that Lender all principal, interest
and fees and other amounts (including without limitation amounts, if any, owed
under this subsection 2.7) due to be paid to such Lender with respect to all
periods through such date of termination, (ii) another financial institution
satisfactory to Company and Co-Administrative Agents (or, in the case of a
Co-Administrative Agent that is also the Lender to be terminated, its
successor Co-Administrative Agent) shall agree, as of such date, to become a
Lender for all purposes under this Agreement (whether by assignment or
amendment) and to assume all obligations of the Lender to be terminated as of
such date, and (iii) all documents and supporting materials necessary, in the
judgment of Co-Administrative Agents (or, in the case of a Co-Administrative
Agent that is also the Lender to be terminated, its successor Co-Adminis-
trative Agent) to evidence the substitution of such Lender shall have been
received and approved by Co-Administrative Agents as of such date.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and Issuing Lender agrees that, as promptly as
practicable after the officer of such Lender or Issuing Lender responsible for
administering the Loans or Letters of Credit of such Lender or Issuing Lender,
as the case may be, becomes aware of the occurrence of an event or the
existence of a condition that would cause such Lender to become an Affected
Lender or that would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing Lender and
any applicable legal or regulatory restrictions, use reasonable efforts (i) to
make, issue, fund or maintain the Commitments of such Lender or the affected
Loans or Letters of Credit of such Lender or Issuing Lender through another
lending or letter of credit office of such Lender or Issuing Lender, or
(ii) take such other measures as such Lender or Issuing Lender may deem
reasonable, if as a result thereof the circumstances which would cause such
Lender to be an Affected Lender would cease to exist or the additional amounts
which would otherwise be required to be paid to such Lender or Issuing Lender
pursuant to subsection 2.7 or subsection 3.6 would be materially reduced and
if, as determined by such Lender or Issuing Lender in its sole discretion, the
making, issuing, funding or maintaining of such Commitments or Loans or
Letters of Credit through such other lending or letter of credit office or in
accordance with such other measures, as the case may be, would not otherwise
materially adversely affect such Commitments or Loans or Letters of Credit or
the interests of such Lender or Issuing Lender; provided that such Lender or
Issuing Lender will not be obligated to utilize such other lending or letter
of credit office pursuant to this subsection 2.8 unless Company agrees to pay
all incremental expenses incurred by such Lender or Issuing Lender as a result
of utilizing such other lending or letter of credit office. A certificate as
to the amount of any such expenses payable by Company pursuant to this
subsection 2.8 (setting forth in reasonable detail the basis for requesting
such amount) submitted by such Lender or Issuing Lender to Company (with a
copy to Chase Co-Administrative Agent) shall be conclusive absent manifest
error.
<PAGE>
SECTION 3.
LETTERS OF CREDIT
3.1 ISSUANCE OF LETTERS OF CREDIT AND LENDERS' PURCHASE OF
PARTICIPATIONS THEREIN.
A.LETTERS OF CREDIT. Company acknowledges and confirms that
Schedule 3.1 annexed hereto sets forth each letter of credit issued under the
Existing Credit Agreement (collectively, the "EXISTING LETTERS OF CREDIT") and
outstanding as of the Effective Date. Company hereby represents, warrants,
agrees, covenants and (a) reaffirms that it has no (and it permanently and
irrevocably waives and releases Agents and Lenders from any, to the extent
arising on or prior to the Effective Date) defense, set off, claim or
counterclaim against any Agent or Lender in regard to its Obligations in
respect of such Existing Letters of Credit and (b) reaffirms its obligation to
reimburse the applicable Issuing Lenders for honored drawings under such
Existing Letters of Credit in accordance with the terms and conditions of this
Agreement and the other Loan Documents applicable to Letters of Credit issued
hereunder. Based on the foregoing, each Lender agrees that (1) each Existing
Letter of Credit which is a Standby Letter of Credit shall, as of the
Effective Date, be deemed for all purposes of this Agreement to be a Standby
Letter of Credit issued hereunder, and (2) each Existing Letter of Credit
which is a Commercial Letter of Credit shall, as of the Effective Date, be
deemed for all purposes of this Agreement to be a Commercial Letter of Credit
issued hereunder. Company also acknowledges that set forth on Schedule 3.1
are certain letters of credit (the "UNION LETTERS OF CREDIT") issued by
BankBoston, N.A. for the account of Union and/or its Subsidiaries which are
outstanding as of the Effective Date. Company hereby requests, and the
Lenders hereby agree that, from and after the Union Merger Date such letters
of credit shall be deemed to be Letters of Credit issued and outstanding under
this Agreement from and after the Union Effective Date; provided that, the
Company hereby releases Agents and Lenders to the extent arising prior to the
Union Merger Date, any defense setoff, claim or counterclaim against Agent or
Lender in regard to its Obligations in respect of such Letters of Credit. In
addition to the foregoing and in addition to Company requesting that Lenders
make Revolving Loans pursuant to subsection 2.1A(iii), and that Swing Line
Lender make Swing Line Loans pursuant to subsection 2.1A(iv), Company may
request, in accordance with the provisions of this subsection 3.1, from time
to time during the period from the Effective Date to but excluding the
Revolving Loan Commitment Termination Date, that one or more Lenders issue
Letters of Credit for the account of Company for the purposes specified in the
definitions of Commercial Letters of Credit and Standby Letters of Credit.
Subject to the terms and conditions of this Agreement and in reliance upon the
representations and warranties of Company herein set forth, any one or more
Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be
obligated to, issue such Letters of Credit in accordance with the provisions
of this subsection 3.1; provided that Company shall not request that any
Lender issue (and no Lender shall issue):
(i)any Letter of Credit if, after giving effect to such
issuance, the Total Utilization of Revolving Loan Commitments
would exceed the Revolving Loan Commitments then in effect;
(ii)any Letter of Credit if, after giving effect to such
issuance, the Letter of Credit Usage would exceed $15,000,000;
(iii)any Standby Letter of Credit having an expiration date
later than the earlier of (a) the Revolving Loan Commitment
Termination Date and (b) the date which is one year from the
date of issuance of such Standby Letter of Credit; provided
that the immediately preceding clause (b) shall not prevent any
Issuing Lender from agreeing that a Standby Letter of Credit
will automatically be extended for one or more successive
periods not to exceed one year each unless such Issuing Lender
elects not to extend for any such additional period; provided
<PAGE>
further that, unless Requisite Lenders otherwise consent, such
Issuing Lender shall give notice that it will not extend such
Standby Letter of Credit if it has knowledge that an Event of
Default has occurred and is continuing on the last day on which
such Issuing Lender may give notice to the beneficiary that it
will not extend such Standby Letter of Credit;
(iv)any Commercial Letter of Credit (a) having an expiration
date later than the earlier of (X) 30 days prior to the
Revolving Loan Commitment Termination Date and (Y) the date
which is 180 days from the date of issuance of such Commercial
Letter of Credit or (b) that is otherwise unacceptable to the
applicable Issuing Lender in its reasonable discretion;
(v)any Letter of Credit denominated in a currency other than
Dollars; or
(vi)any Letter of Credit during any period when a Lender
Default exists, unless each Issuing Lender has entered into
arrangements satisfactory to it and Company to eliminate such
Issuing Lender's risk with respect to the Defaulting Lender,
including by cash collateralizing such Defaulting Lender's Pro
Rata Share of the Letter of Credit Usage (after giving effect
to the issuance of the proposed Letter of Credit).
B.MECHANICS OF ISSUANCE.
(i)Notice of Issuance. Whenever Company desires the issuance
of a Letter of Credit, it shall deliver to Chase Co-
Administrative Agent, at the Funding and Payment Office, a
Notice of Issuance of Letter of Credit no later than 12:00 Noon
(New York time) at least five Business Days, or such shorter
period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall
specify (a) the proposed date of issuance (which shall be a
Business Day), (b) the face amount of or maximum aggregate
liability under, as applicable, the Letter of Credit, (c) the
expiration date of the Letter of Credit, (d) the name and
address of the beneficiary, and (e) the verbatim text of the
proposed Letter of Credit or the proposed terms and conditions
thereof, including a precise description of any documents and
the verbatim text of any certificates to be presented by the
beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the
Issuing Lender to make payment under the Letter of Credit;
provided that the Issuing Lender, in its reasonable discretion,
may require changes in the text of the proposed Letter of
Credit or any such documents or certificates; provided further
that no Letter of Credit shall require payment against a
conforming draft or other request for payment to be made
thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to which
such draft or other request for payment is required to be
presented is located) that such draft or other request for
payment is presented if such presentation is made after 10:00
A.M. (in the time zone of such office of the Issuing Lender) on
such business day.
Company shall notify the applicable Issuing Lender (and Chase
Co-Administrative Agent, if Chase Co-Administrative Agent is
not such Issuing Lender) prior to the issuance of any Letter of
Credit in the event that any of the matters to which Company is
required to certify in the applicable Notice of Issuance of
Letter of Credit is no longer true and correct as of the
proposed date of issuance of such Letter of Credit, and upon
<PAGE>
the issuance of any Letter of Credit, Company shall be deemed
to have re-certified, as of the date of such issuance, as to
the matters to which Company is required to certify in the
applicable Notice of Issuance of Letter of Credit.
(ii)Determination of Issuing Lender. Upon receipt by Chase Co-
Administrative Agent of a Notice of Issuance of Letter of
Credit pursuant to subsection 3.1B(i) requesting the issuance
of a Letter of Credit, in the event Chase Co-Administrative
Agent elects to issue such Letter of Credit, Chase Co-
Administrative Agent shall promptly so notify Company, and such
Chase Co-Administrative Agent shall be the Issuing Lender with
respect thereto. In the event that Chase Co-Administrative
Agent, in its sole discretion, elects not to issue such Letter
of Credit, Chase Co-Administrative Agent shall promptly so
notify the Company, whereupon Company may request any other
Lender to issue such Letter of Credit by delivering to such
Lender a copy of the applicable Notice of Issuance of Letter of
Credit. Any Lender so requested to issue such Letter of Credit
shall promptly notify Company and Chase Co-Administrative Agent
whether or not, in its sole discretion, it has elected to issue
such Letter of Credit, and any such Lender which so elects to
issue such Letter of Credit shall be the Issuing Lender with
respect thereto. In the event that all other Lenders shall
have declined to issue such Letter of Credit, notwithstanding
the prior election of Chase Co-Administrative Agent not to
issue such Letter of Credit, Chase Co-Administrative Agent
shall be obligated to issue such Letter of Credit and shall be
the Issuing Lender with respect thereto, notwithstanding the
fact that the sum of the Letter of Credit Usage with respect to
such Letter of Credit and with respect to all other Letters of
Credit issued by Chase Co-Administrative Agent, when aggregated
with Chase Co-Administrative Agent's outstanding Revolving
Loans and Swing Line Loans, may exceed Chase Co-Administrative
Agent's Revolving Loan Commitment then in effect.
(iii)Issuance of Letter of Credit. Upon satisfaction or waiver
(in accordance with subsection 10.6) of the conditions set
forth in subsection 4.5, the Issuing Lender shall issue the
requested Letter of Credit in accordance with the Issuing
Lender's standard operating procedures (any such issuance by
Chase Co-Administrative Agent being effected through the
Funding and Payment Office), and upon its issuance of such
Letter of Credit the Issuing Lender shall promptly notify Chase
Co-Administrative Agent and each Lender of such issuance, which
notice shall be accompanied by a copy of such Letter of Credit.
(iv)Reports to Lenders. Within 30 days after the end of each
calendar quarter ending after the Closing Date, so long as any
Letter of Credit shall have been outstanding during such
calendar quarter, each Issuing Lender shall deliver to Chase
Co-Administrative Agent and Chase Co-Administrative Agent shall
deliver to each Lender a report setting forth for such calendar
quarter the daily maximum amount available to be drawn under
the Letters of Credit that were outstanding during such
calendar quarter.
C.LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT.
Immediately upon the issuance of each Letter of Credit, each Lender having a
Revolving Loan Commitment shall be deemed to, and hereby agrees to, have
irrevocably purchased from the Issuing Lender a participation in such Letter
of Credit and any drawings honored or payments made thereunder in an amount
equal to such Lender's Pro Rata Share (with respect to the Revolving Loan
Commitments) of the maximum amount which is or at any time may become
available to be drawn or required to be paid thereunder.
<PAGE>
3.2 LETTER OF CREDIT FEES.
Company agrees to pay the following amounts to each Issuing
Lender with respect to Letters of Credit issued by it for the account of
Company:
(i)with respect to each Letter of Credit, (a) a fronting fee
equal to 1/4 of 1% per annum of the daily maximum amount
available to be drawn under such Letter of Credit and (b) a
Letter of Credit fee equal to the product of (x) the Applicable
Eurodollar Rate Margin with respect to Revolving Loans and (y)
the daily maximum amount available to be drawn under such
Letter of Credit, in each case payable in arrears on and to
each January 15, April 15, July 15 and October 15 of each year,
and computed on the basis of a 360-day year for the actual
number of days elapsed; and
(ii)with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder (without
duplication of the fees payable under clause (i) above),
documentary and processing charges in accordance with such
Issuing Lender's standard schedule for such charges in effect
at the time of such issuance, amendment, transfer or drawing,
as the case may be.
Promptly upon receipt by such Issuing Lender of any amount described in clause
(i)(b) of this subsection 3.2, such Issuing Lender shall distribute to each
other Lender its Pro Rata Share of such amount.
3.3 DRAWINGS AND PAYMENTS AND REIMBURSEMENT OF AMOUNTS PAID UNDER
LETTERS OF CREDIT.
A.RESPONSIBILITY OF ISSUING LENDER WITH RESPECT TO REQUESTS FOR
DRAWINGS AND PAYMENTS. In determining whether to honor any drawing or request
for payment under any Letter of Credit by the beneficiary thereof, the Issuing
Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.
B.REIMBURSEMENT BY COMPANY OF AMOUNTS PAID UNDER LETTERS OF
CREDIT. In the event an Issuing Lender has determined to honor a drawing or
request for payment under a Letter of Credit issued by it, such Issuing Lender
shall immediately notify Company and Chase Co-Administrative Agent, and
Company shall reimburse such Issuing Lender on or before the Business Day
immediately following the date on which such drawing is honored or such
payment is made (the applicable "REIMBURSEMENT DATE"), in an amount in same
day funds equal to the amount of such drawing; provided that, anything
contained in this Agreement to the contrary notwithstanding, (i) unless
Company shall have notified Chase Co-Administrative Agent and such Issuing
Lender prior to 12:00 Noon (New York time) on the date of such drawing or
request for payment that Company intends to reimburse such Issuing Lender for
the amount of such honored drawing or payment with funds other than the
proceeds of Revolving Loans, Company shall be deemed to have given a timely
Notice of Borrowing to Chase Co-Administrative Agent requesting Lenders to
make Revolving Loans which are Base Rate Loans, on the applicable Reimburse-
ment Date in an amount equal to the amount of such honored drawing or payment
and (ii) subject to satisfaction or waiver of the conditions specified in
subsection 4.4B, Lenders shall, on the applicable Reimbursement Date, make
Revolving Loans and in the amount of such honored drawing or payment, the
proceeds of which shall be applied directly by Chase Co-Administrative Agent
to reimburse such Issuing Lender for the amount of such honored drawing or
payment; provided further that if for any reason proceeds of Revolving Loans
are not received by such Issuing Lender on the applicable Reimbursement Date
in an amount equal to the amount of such honored drawing or payment, Company
shall reimburse such Issuing Lender, on demand, in an amount in Dollars and in
<PAGE>
same day funds equal to the excess of the amount of such honored drawing or
payment over the aggregate amount of such Revolving Loans, if any, which are
so received. Nothing in this subsection 3.3B shall be deemed to relieve any
Lender from its obligation to make Revolving Loans on the terms and conditions
set forth in this Agreement, and Company shall retain any and all rights it
may have against any Lender resulting from the failure of such Lender to make
such Revolving Loans under this subsection 3.3B.
C.PAYMENT BY LENDERS OF UNREIMBURSED PAYMENTS UNDER LETTERS OF
CREDIT.
(i)Payment by Lenders. In the event that Company shall fail
for any reason to reimburse any Issuing Lender as provided in
subsection 3.3B in an amount equal to the amount of any honored
drawing or payment made by such Issuing Lender under a Letter
of Credit issued by it, such Issuing Lender shall promptly
notify each other Lender of the unreimbursed amount of such
honored drawing or payment and of such other Lender's
respective participation therein based on such Lender's Pro
Rata Share of the Revolving Loan Commitments. Each Lender
shall make available to such Issuing Lender an amount equal to
its respective participation, in same day funds, at the office
of such Issuing Lender specified in such notice, not later than
12:00 Noon (New York time) on the first business day (under the
laws of the jurisdiction in which such office of such Issuing
Lender is located) after the date notified by such Issuing
Lender. In the event that any Lender fails to make available
to such Issuing Lender on such business day the amount of such
Lender's participation in such Letter of Credit as provided in
this subsection 3.3C, such Issuing Lender shall be entitled to
recover such amount on demand from such Lender together with
interest thereon at the rate customarily used by such Issuing
Lender for the correction of errors among banks for three
Business Days and thereafter at the Base Rate. Nothing in this
subsection 3.3C shall be deemed to prejudice the right of any
Lender to recover from any Issuing Lender any amounts made
available by such Lender to such Issuing Lender pursuant to
this subsection 3.3C in the event that it is determined by the
final judgment of a court of competent jurisdiction that the
payment with respect to a Letter of Credit by such Issuing
Lender in respect of which payment was made by such Lender
constituted gross negligence or willful misconduct on the part
of such Issuing Lender.
(ii)Distribution to Lenders of Reimbursements Received From
Company. In the event any Issuing Lender shall have been
reimbursed by other Lenders pursuant to subsection 3.3C(i) for
all or any portion of any honored drawing or payment made by
such Issuing Lender under a Letter of Credit issued by it, such
Issuing Lender shall distribute to each other Lender which has
paid all amounts payable by it under subsection 3.3C(i) with
respect to such honored drawing or payment such other Lender's
Pro Rata Share of all payments subsequently received by such
Issuing Lender from Company in reimbursement of such honored
drawing or payment when such payments are received. Any such
distribution shall be made to a Lender at its primary address
set forth below its name on the appropriate signature page
hereof or at such other address as such Lender may request.
D.INTEREST ON AMOUNTS PAID UNDER LETTERS OF CREDIT.
(i)Payment of Interest by Company. Company agrees to pay to
each Issuing Lender, with respect to drawings honored or
payments made under any Letters of Credit issued by it,
interest on the amount paid by such Issuing Lender in respect
of each such drawing or payment from the date such drawing is
<PAGE>
honored or payment is made to but excluding the date such
amount is reimbursed by Company (including any such
reimbursement out of the proceeds of Revolving Loans pursuant
to subsection 3.3B) at a rate equal to (a) for the period from
the date such drawing is honored or payment is made to but
excluding the applicable Reimbursement Date, the Base Rate plus
the Applicable Base Rate Margin with respect to Revolving
Loans, and (b) thereafter, a rate which is 2% per annum in
excess of the rate of interest described in the foregoing
clause (a). Interest payable pursuant to this subsection
3.3D(i) shall be computed on the basis of a 360-day year for
the actual number of days elapsed in the period during which it
accrues and shall be payable on demand or, if no demand is
made, on the date on which the related drawing or payment under
a Letter of Credit is reimbursed in full.
(ii)Distribution of Interest Payments by Issuing Lender.
Promptly upon receipt by any Issuing Lender of any payment of
interest pursuant to subsection 3.3D(i), (a) such Issuing
Lender shall distribute to each other Lender, out of the
interest received by such Issuing Lender in respect of the
period from the date of the applicable honored drawing or
payment under a Letter of Credit issued by such Issuing Lender
to but excluding the date on which such Issuing Lender is
reimbursed for the amount of such drawing or payment (including
any such reimbursement out of the proceeds of Revolving Loans
pursuant to subsection 3.3B), the amount that such other Lender
would have been entitled to receive in respect of the Letter of
Credit fee that would have been payable in respect of such
Letter of Credit for such period pursuant to subsection 3.2 if
no drawing had been honored or payment had been made under such
Letter of Credit, and (b) in the event such Issuing Lender
shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of such drawing or
payment, such Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing or payment such
other Lender's Pro Rata Share of any interest received by such
Issuing Lender in respect of that portion of such drawing or
payment so reimbursed by other Lenders for the period from the
date on which such Issuing Lender was so reimbursed by other
Lenders to and including the date on which such portion of such
drawing or payment is reimbursed by Company. Any such
distribution shall be made to a Lender at its Lending Office
set forth on Schedule 2.1 or at such other address as such
Lender may request.
3.4 OBLIGATIONS ABSOLUTE.
The obligation of Company to reimburse each Issuing Lender for
drawings honored or payments made under the Letters of Credit issued by it and
to repay any Revolving Loans made by Lenders pursuant to subsection 3.3B and
the obligations of Lenders under subsection 3.3C(i) shall be unconditional and
irrevocable and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances including, without limitation, the following
circumstances:
(i)any lack of validity or enforceability of any Letter of
Credit;
(ii)the existence of any claim, set-off, defense or other right
which Company or any Lender may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any
Persons for whom any such transferee may be acting), any
Issuing Lender or other Lender or any other Person or, in the
case of a Lender, against Company whether in connection with
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this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction
between Company or one of its Subsidiaries and the beneficiary
for which any Letter of Credit was procured);
(iii)any draft, demand, certificate or other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(iv)payment by the applicable Issuing Lender under any Letter
of Credit against presentation of a demand, draft or
certificate or other document which does not substantially
comply with the terms of such Letter of Credit;
(v)any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of
Company or any of its Subsidiaries;
(vi)any breach of this Agreement or any other Loan Document by
any party thereto;
(vii)any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing; or
(viii)the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
provided, in each case, that payment by the applicable Issuing Lender under
the applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
3.5 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
A.INDEMNIFICATION. In addition to amounts payable as provided
in subsection 3.6, Company hereby agrees to protect, indemnify, pay and save
harmless each Issuing Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel and allocated costs of
internal counsel) which such Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit
by such Issuing Lender, other than as a result of (a) the gross negligence or
willful misconduct of such Issuing Lender as determined by a final judgment of
a court of competent jurisdiction or (b) subject to the following clause (ii),
the wrongful dishonor by such Issuing Lender of a proper demand for payment
made under any Letter of Credit issued by it or (ii) the failure of such
Issuing Lender to honor a drawing or other request for payment under any such
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENTAL
ACTS").
B.NATURE OF ISSUING LENDERS' DUTIES. As between Company and
any Issuing Lender, Company assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit issued by such Issuing Lender by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, such Issuing Lender shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness or legal effect of
any document submitted by any party in connection with the application for and
issuance of any such Letter of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
<PAGE>
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing or payment under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of such Issuing Lender,
including, without limitation, any Governmental Acts, and none of the above
shall affect or impair, or prevent the vesting of, any of such Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of the
specific provisions set forth in the first paragraph of this subsection 3.5B,
any action taken or omitted by any Issuing Lender under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put such Issuing
Lender under any resulting liability to Company.
Notwithstanding anything to the contrary contained in this
subsection 3.5, Company shall retain any and all rights it may have against
any Issuing Lender for any liability arising solely out of the gross
negligence or willful misconduct of such Issuing Lender, as determined by a
final judgment of a court of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
In the event that any law, treaty or governmental rule,
regulation or order, or any change therein or in the interpretation,
administration or application thereof (including the introduction of any new
law, treaty or governmental rule, regulation or order), or any determination
of a court or governmental authority, in each case that becomes effective
after the Closing Date, or compliance by any Issuing Lender or Lender with any
guideline, request or directive issued or made after the Closing Date by any
central bank or other governmental or quasi-governmental authority (whether or
not having the force of law):
(i)results in any change in the basis of taxation of such
Issuing Lender or Lender (or its applicable lending or letter
of credit office) (other than a change with respect to any Tax
on the overall net income of such Issuing Lender or Lender)
with respect to the issuing or maintaining of any Letters of
Credit or the purchasing or maintaining of any participations
therein or any other obligations under this Section 3, whether
directly or by such being imposed on or suffered by any
particular Issuing Lender;
(ii)imposes, modifies or holds applicable any reserve
(including, without limitation, any marginal, emergency,
supplemental, special or other reserve), special deposit,
compulsory loan, FDIC insurance or similar requirement in
respect of any Letters of Credit issued by any Issuing Lender
or participations therein purchased by any Lender; or
(iii)imposes any other condition on or affecting such Issuing
Lender or Lender (or its applicable lending or letter of credit
office) regarding this Section 3 or any Letter of Credit or any
participation therein;
and the result of any of the foregoing is to increase the cost to such Issuing
Lender or Lender of agreeing to issue, issuing or maintaining any Letter of
Credit or agreeing to purchase, purchasing or maintaining any participation
therein or to reduce any amount received or receivable by such Issuing Lender
or Lender (or its applicable lending or letter of credit office) with respect
<PAGE>
thereto; then, in any case, Company shall promptly pay to such Issuing Lender
or Lender, upon receipt of the statement referred to in the next sentence,
such additional amount or amounts (reasonably determined by such Issuing
Lender or Lender) as may be necessary to compensate such Issuing Lender or
Lender for any such increased cost or reduction in amounts received or
receivable hereunder. Such Issuing Lender or Lender shall deliver to Company
a written statement, setting forth in reasonable detail the basis for
calculating the additional amounts owed to such Issuing Lender or Lender under
this subsection 3.6, which statement shall be prima facie evidence of such
additional amounts.
SECTION 4.
CONDITIONS TO LOANS AND LETTERS OF CREDIT
4.1 CONDITIONS TO EXISTING LOANS AND LETTERS OF CREDIT.
The conditions to the making of the Existing Loans and the
issuance of the Existing Letters of Credit have been satisfied.
4.2 CONDITIONS TO TRANCHE C TERM LOANS.
The obligations of Lenders to make the initial Tranche C Term
Loans are, in addition to the conditions precedent specified in subsection
4.4, subject to prior or concurrent satisfaction of the following conditions:
A.COMPANY DOCUMENTS. On or before the Effective Date, Company
shall deliver or cause to be delivered to Lenders (or to Chase Co-
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following, each,
unless otherwise noted, dated the Effective Date:
(i)Certified copies of its Certificate of Incorporation,
together with a good standing certificate from the Secretary of
State of the State of Delaware and each other state in which it
is qualified as a foreign corporation to do business, each
dated a recent date prior to the Effective Date;
(ii)Copies of its Bylaws, certified as of the Effective Date by
its corporate secretary or an assistant secretary;
(iii)Resolutions of its Board of Directors approving and
authorizing the execution, delivery and performance of this
Agreement, other Loan Documents and the Union Acquisition
Documents to which it is a party and approving and authorizing
the consummation of the Tender Offer and the Union Merger in
the manner contemplated by the Union Acquisition Documents,
certified as of the Effective Date by its corporate secretary
or an assistant secretary as being in full force and effect
without modification or amendment;
(iv)Signature and incumbency certificates of its officers
executing this Agreement and the other Loan Documents;
(v)Executed originals of this Agreement and (to the extent not
previously executed and delivered to Lenders) the other Loan
Documents to which it is a party; and
(vi)Such other documents as Agents may reasonably request.
B.SUBSIDIARY DOCUMENTS. On or before the Effective Date,
Company shall deliver or cause to be delivered to Lenders (or to Chase Co-
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following for such
Subsidiary (other than Union and its Subsidiaries) as specified, each, unless
<PAGE>
otherwise noted, dated the Effective Date:
(i)Certified copies of the Certificate of Incorporation (or
equivalent organizational document) of each domestic corporate
Wholly Owned Subsidiary of Company (or, in lieu thereof, a
certificate of the corporate secretary of such Subsidiary
certifying as of the Effective Date that its Certificate of
Incorporation previously delivered to Existing Lenders is in
full force and effect without modification or amendment),
together with a good standing certificate from the secretary of
state of its jurisdiction of incorporation and each other state
in which it is qualified as a foreign corporation to do
business (except any such other state or states in which
failure to be so qualified could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect) (or, in lieu thereof, a certificate of the secretary of
such Subsidiary certifying as of the Effective Date that such
Subsidiary is in good standing in all such jurisdictions), each
dated a recent date prior to the Effective Date;
(ii)Copies of the Bylaws of each such domestic corporate Wholly
Owned Subsidiary of Company, certified as of the Effective Date
by its corporate secretary, or an assistant secretary (or, in
lieu thereof, a certificate of such secretary certifying as of
the Effective Date that the Bylaws of such Subsidiary
previously delivered to Existing Lenders are in full force and
effect without modification or amendment);
(iii)Resolutions of the Board of Directors of each such
domestic corporate Wholly Owned Subsidiary of Company approving
and authorizing the execution, delivery and performance of the
Subsidiary Guaranty, the Security Agreement, the Pledge
Agreement, the Trademark Security Agreement, the Limited
Partnership Security Agreement (as applicable) and the other
Loan Documents to which such Subsidiary is party and, in the
case of Merger Sub, approving and authorizing the consummation
of the Tender Offer and the Union Merger in the manner
contemplated by the Union Acquisition Documents, certified as
of the Effective Date by its corporate secretary or an
assistant secretary as being in full force and effect without
modification or amendment;
(iv)Conformed copies of the partnership agreement of each
domestic Subsidiary of Company that is a partnership, certified
by each general partner of such partnership Subsidiary as of
the Effective Date as being in full force and effect without
modification or amendment (or, in lieu thereof, a certificate
of such general partner certifying as of the Effective Date
that the partnership agreement of such partnership Subsidiary
delivered on the Closing Date pursuant to subsection 4.2 of the
Existing Credit Agreement is in full force and effect without
modification or amendment);
(v)Certificates of limited partnership or statements of
partnership, as applicable, of each such Subsidiary of Company
that is a partnership, certified by the Secretary of State (or
similar official) of its jurisdiction of formation (or, in lieu
thereof, a certificate of the general partner of such
partnership Subsidiary certifying as of the Effective Date that
the certificate of limited partnership or statement of
partnership of such Subsidiary delivered on the Closing Date
pursuant to subsection 4.2 of the Existing Credit Agreement is
in full force and effect without modification or amendment),
and a certificate of existence or good standing, as the case
may be, from the Secretary of State (or similar official) of
such jurisdiction, together with a certificate or other
<PAGE>
evidence of good standing from the secretary of state of each
other state in which it is authorized as a foreign limited
partnership to do business (except any such other state or
states in which failure to be so qualified could not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect), each dated as of a recent date
prior to the Effective Date;
(vi)All documents executed by the appropriate partners of each
Subsidiary of Company that is a partnership approving or
authorizing the execution, delivery and performance of the
Subsidiary Guaranty, the Security Agreement, the Pledge
Agreement, the Trademark Security Agreement, the Limited
Partnership Security Agreement (as applicable) and the other
Loan Documents to which such Subsidiary is a party, each
certified as of the Effective Date by the general partner of
such partnership Subsidiary or other Loan Party;
(vii)Signature and incumbency certificates of its officers,
partners or other Persons executing the Subsidiary Guaranty,
the Security Agreement, the Pledge Agreement, the Trademark
Security Agreement, the Limited Partnership Security Agreement
(as applicable) and the other Loan Documents to which such
Subsidiary is party;
(viii)Executed originals (to the extent not previously executed
and delivered to Lenders) of the Subsidiary Guaranty, the
Security Agreement, the Pledge Agreement and the other Loan
Documents to which any corporate or partnership Subsidiary of
Company is a party; and
(ix)Such other documents as Agents may reasonably request.
C.UNION DOCUMENTS. On or before the Effective Date, Company
shall, or shall cause Union to, deliver to Lenders (or to Chase Co-
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) the following with respect
to Union, each dated the Effective Date:
(i)Certified copies of the Certificate of Incorporation of
Union, together with a good standing certificate from the
Secretary of State of Delaware and each other state in which
Union is qualified as a foreign corporation to do business and,
to the extent generally available, a certificate or other
evidence of good standing as to payment of any applicable
franchise or similar taxes from the appropriate taxing
authority of each of such jurisdictions, each dated a recent
date prior to the Effective Date;
(ii)Copies of the Bylaws of Union, certified as of the
Effective Date by its corporate secretary or an assistant
secretary;
(iii)Resolutions of the Board of Directors of Union approving
and authorizing the execution, delivery and performance of the
Union Acquisition Agreement, and approving and authorizing the
consummation of the Union Merger in the manner contemplated by
the Union Acquisition Documents, certified as of the Effective
Date by the secretary or an assistant secretary of Union as
being in full force and effect without modification or
amendment; and
(iv)Signature and incumbency certificates of the officers of
Union executing the Union Acquisition Agreement.
D.TENDERED UNION SHARES. There shall have been validly
<PAGE>
tendered to Merger Sub pursuant to the Tender Offer and not withdrawn shares
of Union Common Stock which constitute the Minimum Union Shares at the price
per share specified to be paid pursuant to the Tender Offer Materials; the
shares of Union Common Stock to be purchased shall be free and clear of all
Liens and restrictions to purchase imposed by applicable law or otherwise and
such shares of Union Common Stock shall be available for purchase in
accordance with the terms and conditions set forth in the Tender Offer
Materials. Company shall have delivered to Lenders (or to Chase Co-
Administrative Agent for Lenders with sufficient originally executed copies,
where appropriate, for each Lender and its counsel) (a) a certificate of
Custodian certifying as to the number of tendered shares of Union Common
Stock, and (b) an Officers' Certificate of Company certifying that the
tendered shares of Union Common Stock to be purchased with the proceeds of the
initial Tranche C Term Loans represent, in the aggregate, not less than the
Minimum Union Shares.
E.UNION ACQUISITION DOCUMENTS.
(i)Union Acquisition Documents. Agents shall have received a
fully executed or conformed copy of each Union Acquisition
Document and any other documents executed in connection
therewith, and the Union Acquisition Agreement and the other
Union Acquisition Documents shall be reasonably satisfactory in
form and substance to Arranging Agents and Requisite Lenders.
The Union Acquisition Documents shall each be in full force and
effect and no provision thereof shall have been modified or
waived in any respect determined by Arranging Agents to be
material, in each case without the consent of Arranging Agents
and Requisite Lenders, such consent not to be unreasonably
withheld.
(ii)No Material Litigation. There shall be no material
litigation pending which challenges the Tender Offer or the
Union Merger in any respect.
F.NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, there
shall not have been an adverse change, or any development involving a
prospective adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operation of Company
and its Subsidiaries which is, in the reasonable judgment of Arranging Agents,
Co-Administrative Agents or Requisite Lenders, material. Since June 30, 1997,
there shall not have been an adverse change, or any development involving a
prospective adverse change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operation of Union and
its Subsidiaries which is, in the reasonable judgment of Arranging Agents, Co-
Administrative Agents or Requisite Lenders, material.
G.NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRA-
TION OF WAITING PERIODS, ETC. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Tender Offer and the Union
Merger, the other transactions contemplated by the Loan Documents and the
Related Agreements, and the continued operation of the business conducted by
Union and its Subsidiaries in substantially the same manner as conducted prior
to the consummation of the Tender Offer, and each of the foregoing shall be in
full force and effect and in form and substance satisfactory to Arranging
Agents (except as disclosed to and approved by Arranging Agents). All
applicable waiting periods shall have expired without any action being taken
or threatened by any competent authority which would restrain, prevent or
otherwise impose adverse conditions on the Tender Offer or the Union Merger or
the financing thereof. No action, request for stay, petition for review or
rehearing, reconsideration, or appeal with respect to any of the foregoing
shall be pending, and the time for any applicable agency to take action to set
aside its consent on its own motion shall have expired.
H.OPINIONS OF LOAN PARTIES' COUNSEL. Lenders and their
<PAGE>
respective counsel shall have received originally executed copies of one or
more favorable written opinions of White & Case, counsel for the Loan Parties,
in form and substance reasonably satisfactory to Arranging Agents and their
counsel, dated as of the Effective Date and setting forth substantially the
matters in the opinions designated in Exhibit XI annexed hereto and as to such
other matters as Arranging Agents acting on behalf of Lenders may reasonably
request. Company hereby requests that such counsel deliver such opinions on
the Effective Date to Agents and Lenders.
I.FEES. Company shall have paid to Agents, for distribution
(as appropriate hereunder or under the terms of the Existing Credit Agreement,
as the case may be) to Agents and Lenders, the fees payable on the Effective
Date referred to in subsection 2.3C.
J.ENVIRONMENTAL REPORTS. Lenders shall have received reports
and/or other information reasonably satisfactory to Arranging Agents regarding
environmental matters with respect to Union and its Subsidiaries.
K.CORPORATE STRUCTURE; MANAGEMENT.
(i)Corporate Structure. The corporate organizational
structure, capital structure and ownership of Company and its
Subsidiaries, after giving effect to the Tender Offer and the
Union Merger, shall be as set forth on Schedule 4.2J annexed
hereto.
(ii)Management. The management structure of Company, after
giving effect to the Tender Offer and the Union Merger, shall
be as set forth on Schedule 4.2J annexed hereto.
L.BUSINESS PLAN. Arranging Agents shall have received a
business plan in form, scope and substance reasonably satisfactory to
Arranging Agents submitted by management of Company and its Subsidiaries with
respect to the incorporation of Union and its Subsidiaries into Company's
existing business.
M.REPAYMENT OF SWING LINE LOANS. On the Effective Date,
immediately before and after giving effect to any borrowings hereunder on such
date, no Swing Line Loans shall be outstanding.
N.NO EVENT OF DEFAULT. Company shall have delivered to Chase
Co-Administrative Agent an Officer's Certificate, in form and substance
satisfactory to Chase Co-Administrative Agent, to the effect that immediately
prior to the Effective Date, no event has occurred and is continuing that
would constitute an Event of Default or Potential Event of Default under the
Existing Credit Agreement.
O.COMPLETION OF PROCEEDINGS. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by Arranging Agents, acting on behalf of Requisite Lenders, and
their counsel shall be satisfactory in form and substance to Arranging Agents
and such counsel, and Arranging Agents and such counsel shall have received
all such counterpart originals or certified copies of such documents as
Arranging Agents may reasonably request.
P.FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or before
the Effective Date, Lenders shall have received from Company and be satisfied
with (i) audited financial statements of Union and its Subsidiaries for the
period ending June 30, 1997, consisting of consolidated and consolidating
balance sheets and the related consolidated and consolidating statements of
income, stockholders' equity and cash flows for such period, (ii) unaudited
financial statements of Union and its Subsidiaries for the period from
June 30, 1997 through November 30, 1997, consisting of a consolidated balance
sheet (prepared on a divisional basis) and the related consolidated statements
of income, stockholders' equity and cash flows for the period ending on each
<PAGE>
such date, all in reasonable detail and certified by the chief financial
officer of Union that they fairly present, in all material respects, the
financial condition of Union and its Subsidiaries as at the dates indicated
and the results of their operations and their cash flows for the periods
indicated, subject to changes resulting from audit and normal year-end
adjustments, (iii) audited financial statements of the Company and its
Subsidiaries for the period ending December 31, 1996, consisting of
consolidated and consolidating balance sheets and the related consolidated and
consolidating statements of income, stockholders' equity and cash flows for
such period, (iv) unaudited financial statements of Company and its
Subsidiaries for the period from January 1, 1997 through December 31, 1997,
consisting of a consolidated balance sheet and the related consolidated
statements of income, stockholders' equity and cash flows for the period
ending on each such date, all in reasonable detail and certified by the chief
financial officer of the Company that they fairly present, in all material
respects, the financial condition of the Company and its Subsidiaries as at
the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments, (v) pro forma combined balance sheets of Company and its
Subsidiaries as at November 30, 1997, prepared in accordance with GAAP and
reflecting the consummation of the Merger, the related financings and the
other transactions contemplated by the Loan Documents and the Related
Agreements, which pro forma financial statements shall be in form and
substance satisfactory to Lenders, and (vi) the Projections.
Q.SOLVENCY ASSURANCES. On the Effective Date, Arranging
Agents, Co-Administrative Agents and Lenders shall have received (i) a letter
from Murray Devine & Co. dated the Effective Date and addressed to Arranging
Agents, Co-Administrative Agents and Lenders, in form and substance
satisfactory to Arranging Agents and Lenders and with appropriate attachments
and (ii) a certificate from the chief financial officer of Company, in form,
scope and substance satisfactory to Arranging Agents, with appropriate
attachments, in each case demonstrating that, after giving effect to the
consummation of the Union Acquisition and the making of the Tranche C Term
Loans and the Delayed-Draw Term Loans, Company and its Subsidiaries will be
Solvent.
R.REPAYMENT OF REVOLVING LOANS. On the Effective Date,
Arranging Agents shall have received evidence reasonably satisfactory to them
that after giving effect to the payment of consideration for the Tendered
Union Shares, and the payment of Transaction Costs, the remaining proceeds of
the Tranche C Term Loans (other than the amount of the Delayed-Draw Term
Loans) shall be applied on the Effective Date to repay Revolving Loans.
S.PERFECTION OF SECURITY INTERESTS IN PERSONAL PROPERTY AND
MIXED COLLATERAL. Company shall have taken or caused to be taken such actions
in such a manner so that Collateral Agent has, for the benefit of Agents and
Lenders, a valid and perfected first priority security interest in the entire
personal property and mixed Collateral (subject to Liens permitted by this
Agreement); provided, however, that prior to the Union Merger, (i) Merger Sub
shall only be required to provide a first priority security interest in any
Union Common Stock acquired through the Tender Offer to the extent requested
by Co-Administrative Agents and to the extent such Union Common Stock can be
pledged in compliance with applicable law and (ii) Company shall not be
required to provide a first priority security interest in the assets of Union
or any of its Subsidiaries. Such actions shall include, without limitation:
(i) the delivery pursuant to the applicable Collateral Documents of (a)
certificates (which certificates shall be properly endorsed in blank for
transfer or accompanied by irrevocable undated stock powers duly endorsed in
blank, all in form and substance satisfactory to Chase Co-Administrative
Agent) representing all of the shares of capital stock required to be pledged
pursuant to the Collateral Documents, and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner reasonably
satisfactory to Chase Co-Administrative Agent) evidencing any Collateral;
(ii) delivery to Agents of (a) the results of a recent search, by a Person
satisfactory to Agents, of all effective UCC financing statements and fixture
<PAGE>
filings and all judgment and tax lien filings which may have been made with
respect to any personal or mixed property of Union and its Subsidiaries,
together with copies of all such filings disclosed by such search; (iii) the
delivery to Chase Co-Administrative Agent of UCC financing statements executed
by the applicable Loan Parties as to all such Collateral granted by such Loan
Parties for all jurisdictions as may be necessary or desirable to perfect
Collateral Agent's security interest in such Collateral; and (iv) the delivery
to Chase Co-Administrative Agent of evidence reasonably satisfactory to Chase
Co-Administrative Agent that all other filings (including, without limitation,
UCC termination statements and filings with the United States Patent and
Trademark Office of trademark assignments for all trademarks used by Company
and its Subsidiaries registered in the United States), recordings and other
actions that either Chase Co-Administrative Agent or Collateral Agent deems
necessary or advisable to establish, preserve and perfect the first priority
Liens (subject to Liens consented to in writing by Co-Administrative Agents
and Requisite Lenders or permitted by subsection 7.2 with respect to such
Collateral) granted to Collateral Agent in personal and mixed property shall
have been made.
T.TRANSACTION COSTS. Company shall have delivered to Co-
Administrative Agents and Lenders a schedule, in a form satisfactory to Co-
Administrative Agents, setting forth Company's reasonable best estimate of the
Transaction Costs (other than amounts payable to Agents and Lenders) relating
to the Union Acquisition.
U.REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS.
Company shall have delivered to Chase Co-Administrative Agent an Officer's
Certificate, in form and substance satisfactory to Chase Co-Administrative
Agent, to the effect that the representations and warranties in Section 5
hereof are true and correct in all material respects on and as of the
Effective Date to the same extent as though made on and as of such date and
that Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by them on or before such date, except as otherwise disclosed to and
agreed to in writing by Chase Co-Administrative Agent.
Each Lender, by delivering its signature page to this Agreement
and, in the case of Lenders having Tranche C Term Loan Exposure, funding its
initial Tranche C Term Loans on the Effective Date, shall be deemed to have
acknowledged receipt of, and consented to and approved (as long as
substantially in the form delivered to Lenders including any changed pages
thereto delivered to Lenders), each Loan Document and each other document
required to be approved by Requisite Lenders or Lenders, as applicable.
4.3 CONDITIONS TO DELAYED-DRAW TERM LOANS.
The obligations of Lenders to make the Delayed-Draw Term Loans
are, in addition to the conditions precedent specified in subsection 4.4,
subject to satisfaction of the following conditions:
A.CONSUMMATION OF UNION MERGER.
(i)The Union Merger shall have been consummated pursuant to the
Union Acquisition Agreement and no provision of such thereof
shall have been amended, supplemented, waived or otherwise
modified in any material respect without the prior consent of
the Agents.
(ii)All of the issued and outstanding Union Common Stock shall
be owned by the Company.
(iii)After giving effect to the consummation of the Union
Merger and the payment of any portion of the aggregate
consideration for the Union Common Stock (and any related
transaction fees and expenses) that becomes due and payable
thereupon, the aggregate amount of the consideration paid for
<PAGE>
the Union Common Stock (and all such transaction fees and
expenses) shall not exceed $207,500,000.
(iv)Concurrently with the consummation of the Union Merger, all
existing Indebtedness of Union and its Subsidiaries shall be
repaid in full, except for the Union Letters of Credit.
(v)The execution by Union and each of its Subsidiaries and the
delivery thereof to Chase Co-Administrative Agent and
Collateral Agent of counterparts to the Subsidiary Guaranty.
(vi)Arranging Agents shall have received an Officer's
Certificate of Company to the effect set forth in clauses (i)-
(v) above.
B.PERFECTION OF SECURITY INTERESTS IN UNION PERSONAL PROPERTY
AND MIXED COLLATERAL. Company shall have taken or caused to be taken such
actions in such a manner so that Collateral Agent has, for the benefit of
Agents and Lenders, a valid and perfected first priority security interest in
all of the outstanding capital stock of Union and in the entire personal
property and mixed Collateral (subject to Liens permitted by this Agreement)
of Union and its Subsidiaries. Such actions shall include, without
limitation: (i) the execution by Union and each of its Subsidiaries and the
delivery thereof to Chase Co-Administrative Agent and Collateral Agent of
counterparts to the Pledge Agreement, Security Agreement, Limited Partnership
Security Agreement and the Patent and Trademark Security Agreement; (ii) the
delivery pursuant to the applicable Collateral Documents of (a) certificates
(which certificates shall be properly endorsed in blank for transfer or
accompanied by irrevocable undated stock powers duly endorsed in blank, all in
form and substance satisfactory to Chase Co-Administrative Agent) representing
all of the shares of capital stock required to be pledged pursuant to the
Collateral Documents, and (b) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner reasonably satisfactory to Chase Co-
Administrative Agent) evidencing any Collateral of Union and its Subsidiaries;
(iii) delivery to Agents of (a) the results of a recent search, by a Person
satisfactory to Agents, of all effective UCC financing statements and fixture
filings and all judgment and tax lien filings which may have been made with
respect to any personal or mixed property of any Loan Party, together with
copies of all such filings disclosed by such search; (iv) the delivery to
Chase Co-Administrative Agent of UCC financing statements executed by the
applicable Loan Parties as to all such Collateral granted by such Loan Parties
for all jurisdictions as may be necessary or desirable to perfect Collateral
Agent's security interest in such Collateral; and (v) the delivery to Chase
Co-Administrative Agent of evidence reasonably satisfactory to Chase Co-
Administrative Agent that all other filings (including, without limitation,
UCC termination statements and filings with the United States Patent and
Trademark Office of trademark assignments for all trademarks used by Company
and its Subsidiaries registered in the United States), recordings and other
actions that either Chase Co-Administrative Agent or Collateral Agent deems
necessary or advisable to establish, preserve and perfect the first priority
Liens (subject to Liens consented to in writing by Co-Administrative Agents
and Requisite Lenders or permitted by subsection 7.2 with respect to such
Collateral) granted to Collateral Agent in personal and mixed property shall
have been made.
4.4 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date
are subject to the following further conditions precedent:
A.Chase Co-Administrative Agent shall have received on or
before that Funding Date, in accordance with the provisions of subsection
2.1B, an originally executed Notice of Borrowing, signed by the chief
executive officer, the chief financial officer or the controller of Company or
by any executive officer of Company designated by any of the above-described
officers on behalf of Company in a writing delivered to Chase Co-
<PAGE>
Administrative Agent.
B.As of that Funding Date:
(i)The representations and warranties contained herein and in
the other Loan Documents shall be true and correct in all
material respects on and as of that Funding Date to the same
extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate
to an earlier date, in which case such representations and
warranties shall have been true and correct in all material
respects on and as of such earlier date;
(ii)No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by
such Notice of Borrowing that would constitute an Event of
Default or a Potential Event of Default;
(iii)Each Loan Party shall have performed in all material
respects all agreements and satisfied all conditions which this
Agreement and the other Loan Documents provide shall be
performed or satisfied by it on or before that Funding Date;
(iv)No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any
Lender from making the Loans to be made by it, on that Funding
Date;
(v)The making of the Loans requested on such Funding Date shall
not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X of the
Board of Governors of the Federal Reserve System; and
(vi)There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental
investigation or arbitration against or affecting Company or
any of its Subsidiaries or any property of Company or any of
its Subsidiaries that has not been disclosed by Company in
writing and that is required to be so disclosed pursuant to
subsection 5.6 or 6.1(x) prior to the making of the last
preceding Loans (or, in the case of the initial Tranche C Term
Loans, prior to the execution of this Agreement), and there
shall have occurred no development not so disclosed in any such
action, suit, proceeding, governmental investigation or
arbitration so disclosed that, in either event, in the opinion
of Chase Co-Administrative Agent or of Requisite Lenders, would
be expected to have a Material Adverse Effect; and no
injunction or other restraining order shall have been issued
and no hearing to cause an injunction or other restraining
order to be issued shall be pending or noticed with respect to
any action, suit or proceeding seeking to enjoin or otherwise
prevent the consummation of, or to recover any damages or
obtain relief as a result of, the transactions contemplated by
this Agreement or the making of Loans hereunder.
4.5 CONDITIONS TO LETTERS OF CREDIT.
The issuance of any Letter of Credit hereunder (whether or not
the applicable Issuing Lender is obligated to issue such Letter of Credit) is
subject to the following conditions precedent:
A.On or before the date of issuance of the initial Letter of
Credit pursuant to this Agreement, the initial Loans shall have been made.
B.On or before the date of issuance of such Letter of Credit,
Chase Co-Administrative Agent shall have received, in accordance with the
<PAGE>
provisions of subsection 3.1B(i), an originally executed Notice of Issuance of
Letter of Credit, signed by the chief executive officer, the chief financial
officer or the controller of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Chase Co-Administrative Agent, together with all other
information specified in subsection 3.1B(i) and such other documents or
information as the applicable Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
C.On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.4B shall be satisfied to the
same extent as if the issuance of such Letter of Credit were the making of a
Loan and the date of issuance of such Letter of Credit were a Funding Date.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Agreement and to
make (or maintain, as the case may be) the Loans, to induce Issuing Lender to
issue (or maintain, as the case may be) Letters of Credit and to induce other
Lenders to purchase participations therein, Company represents and warrants to
each Lender, on the date of this Agreement, on the Effective Date, on each
Funding Date, and on the date of issuance of each Letter of Credit, that the
following statements are true and correct:
5.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING, BUSINESS
AND SUBSIDIARIES.
A.ORGANIZATION AND POWERS. Each Corporate Loan Party is a
corporation duly organized, validly existing and in good standing under the
laws of its state of incorporation. Each Partnership Loan Party is a duly
organized and validly existing limited partnership under the laws of its
jurisdiction of formation and is in good standing in such jurisdiction. Each
Loan Party has all requisite corporate or partnership (as applicable) power
and authority to own and operate its properties, to carry on its business as
now conducted and as proposed to be conducted, to enter into the Loan
Documents and to carry out the transactions contemplated thereby. Company has
all requisite corporate power and authority to issue and pay the Notes.
B.QUALIFICATION AND GOOD STANDING. Each Corporate Loan Party
is qualified to do business and in good standing, and each Partnership Loan
Party is authorized as a foreign limited partnership to do business, in every
jurisdiction where its assets are located and wherever necessary to carry out
its business and operations, except in jurisdictions where the failure to be
so qualified, authorized or in good standing has not had and will not have a
Material Adverse Effect.
C.CONDUCT OF BUSINESS. Company and its Subsidiaries are
engaged only in the businesses permitted to be engaged in pursuant to
subsection 7.11.
D.COMPANY AND SUBSIDIARIES. All of the Subsidiaries of Company
as of the Effective Date after giving effect to the Union Acquisition are
identified in Schedule 5.1 annexed hereto. The capital stock of each of the
domestic Subsidiaries of Company identified in Schedule 5.1 annexed hereto
which are corporations is duly authorized, validly issued, fully paid and
nonassessable and, other than the capital stock of Union prior to the Merger,
none of such capital stock constitutes Margin Stock. The limited and general
partnership interests of each of the subsidiaries of Company identified in
Schedule 5.1 annexed hereto which are limited partnerships are duly and
validly issued. Company and each of the domestic Subsidiaries of Company
identified in Schedule 5.1 annexed hereto are duly organized, validly existing
and in good standing under the laws of their respective jurisdictions of
incorporation or formation set forth therein, have full corporate or
partnership (as applicable) power and authority to own their assets and
<PAGE>
properties and to operate their business as presently owned and conducted and
as proposed to be conducted, and are qualified to do business and in good
standing in every jurisdiction where their assets are located and wherever
necessary to carry out their business and operations, in each case except
where failure to be so qualified or in good standing or a lack of such
corporate power and authority has not had and will not have a Material Adverse
Effect. Schedule 5.1 annexed hereto correctly sets forth the ownership
interest of Company in each of its Subsidiaries identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A.AUTHORIZATION OF BORROWING. The execution, delivery and
performance of the Loan Documents and the Related Agreements and the issuance,
delivery and payment of the Notes have been duly authorized by all necessary
corporate and/or partnership (as applicable) action on the part of each of the
Loan Parties thereto.
B.NO CONFLICT. After giving effect to the consummation of the
transactions contemplated hereby to occur on the Effective Date, the
execution, delivery and performance by each of the Loan Parties of the Loan
Document and the Related Agreements to which they are parties, the issuance,
delivery and payment of the Notes and the consummation of the transactions
contemplated by the Loan Documents do not and will not (i) violate any
provision of any law or any governmental rule or regulation applicable to
Company or any of its Subsidiaries, the Certificate or Articles of
Incorporation or Bylaws (or other analogous organizational document) of
Company or any of its Subsidiaries or any order, judgment or decree of any
court or other agency of government binding on Company or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any Contractual
Obligation of Company or any of its Subsidiaries, (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
Company or any of its Subsidiaries (other than any Liens created under any of
the Loan Documents in favor of Chase Co-Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or partners or any
approval or consent of any Person under any Contractual Obligation of Company
or any of its Subsidiaries, except for such approvals or consents which will
be obtained on or before the Effective Date.
C.GOVERNMENTAL CONSENTS. The execution, delivery and
performance by the Loan Parties of the Loan Documents and Related Agreements
to which they are party, the issuance, delivery and payment of the Notes and
the consummation of the transactions contemplated by the Loan Documents do not
and will not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other governmental
authority or regulatory body except for such registrations, consents,
approvals, notices or other actions which will be made, obtained or taken on
or before the Effective Date.
D.BINDING OBLIGATION. Each of the Loan Documents and the
Related Agreements has been duly executed and delivered by each of the Loan
Parties party thereto and is the legally valid and binding obligation of each
such Loan Party, enforceable against such Loan Party in accordance with its
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
E.VALID ISSUANCE OF SUBORDINATED NOTES. The Subordinated Notes
are the legally valid and binding obligations of Company, enforceable against
Company in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability. The subordination provisions of the Subordinated Notes will
be enforceable against the holders thereof and the Loans and all other
monetary Obligations hereunder are and will be within the definition of
"Senior Debt" included in such provisions. The Subordinated Notes, when
<PAGE>
issued and sold, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt therefrom.
5.3 FINANCIAL CONDITION; PROJECTIONS.
A.FINANCIAL STATEMENTS. Company has heretofore delivered to
Lenders, at Lenders' request, the following financial statements and
information: (i) the audited consolidated balance sheets of Company and its
Subsidiaries (or, with respect to years prior to 1995, Account Portfolios,
L.P. (as predecessor of Company) and its Subsidiaries) as at December 31 of
1994, 1995 and 1996, and the related audited consolidated statements of
operations, stockholders' equity and cash flows of Company and its
Subsidiaries for the periods then ended, together with the report on such
consolidated financial statements of Deloitte & Touche LLP setting forth in
each case in comparative form the corresponding figures for the previous
Fiscal Year (other than the Fiscal Year ending December 31, 1992), (ii) the
unaudited consolidated balance sheet of Company and its Subsidiaries as at
September 30, 1997 and the related unaudited consolidated statements of
income, stockholders' equity and cash flows of Company and its Subsidiaries
for the nine months then ended, together with the corresponding figures for
the corresponding periods of the previous Fiscal Year, (iii) the audited
consolidated balance sheet of Payco and its subsidiaries as at December 31 of
1993, 1994 and 1995, and the audited consolidated statement of operations,
stockholders' equity, and cash flows of Payco and its Subsidiaries for the
fiscal year then ended, together with the report on such consolidated
financial statements of Arthur Andersen & Co. setting forth in comparative
form the corresponding figures for the previous fiscal year (other than the
fiscal year ending December 31, 1992), (iv) the unaudited consolidated balance
sheet of Payco and its Subsidiaries as at June 30, 1996 and the related
unaudited consolidated statements of operations, stockholders' equity and cash
flows of Payco and its Subsidiaries for the six months then ended, together
with the corresponding figures for the corresponding period of the previous
fiscal year (other than the fiscal year ending December 31, 1992), (v) the
consolidated balance sheet of Accelerated and its Subsidiaries as at July 31,
1997 and the related consolidated statements of income, stockholders' equity
and cash flows of Accelerated and its Subsidiaries for the seven months then
ended, together with the corresponding figures for the corresponding period
ending on July 31 of the previous year, (vi) the audited consolidated balance
sheet of NSA and its Subsidiaries as at December 31, 1996, and the related
audited consolidated statements of income, stockholders' equity and cash flows
of NSA and its Subsidiaries for the period then ended, together with the
report on such consolidated financial statements of Weisberg, Polansky,
Kulberg, Einhorn & Mole, LLP setting forth in comparative form the
corresponding figures for the previous fiscal year of NSA, (vii) the
consolidated balance sheet of NSA and its Subsidiaries as at December 31,
1995, and the related audited consolidated statements of income, stockholders'
equity and cash flows of NSA and its Subsidiaries for the fiscal year of NSA
then ended, (viii) the consolidated balance sheet of NSA and its Subsidiaries
as at July 31, 1997 and the related consolidated statements of income,
stockholders' equity and cash flows of NSA and its Subsidiaries for the seven
months then ended, together with the corresponding figures for the correspond-
ing period of the previous fiscal year, and (ix) the financial statements
required to be delivered pursuant to subsection 4.2P. All such statements
were prepared in conformity with GAAP and fairly present, in all material
respects, the financial position (on a consolidated basis) of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated basis) of the
entities described therein for each of the periods then ended, subject, in the
case of any such unaudited financial statements, to changes resulting from
audit and normal year-end adjustments and the absence of footnote disclosure
required in accordance with GAAP. Neither Company, Payco, Accelerated nor NSA
has (and did not immediately following the funding of the initial Loans under
the Existing Credit Agreement, have), and Union does not (and will not
immediately following the funding of the Tranche C Term Loans) have, any
Contingent Obligation, contingent liability or liability for taxes, long-term
lease or unusual forward or long-term commitment that is not reflected in the
<PAGE>
most recent financial statements delivered pursuant to subsection 6.1 of the
Existing Credit Agreement, or subsection 4.2P(ii) of this Agreement in the
case of Union, the notes thereto and which in any such case is material in
relation to the business, operations, properties, assets, condition (financial
or otherwise) or prospects of Company and its Subsidiaries taken as a whole.
Notwithstanding the foregoing, Company shall not be deemed to make any
representation hereunder with respect to the financial statements described in
clause (ix) of this subsection prior to consummation of the Union Acquisition.
B.PROJECTIONS. On and as of the Effective Date, the financial
projections of Company and its Subsidiaries for the period from December 31,
1996 through December 31, 2004 (giving effect to the Union Acquisition)
previously delivered to Lenders (the "PROJECTIONS") are based on good faith
estimates and assumptions made by the management of Company, it being
recognized, however, that projections as to future events are not to be viewed
as facts and that the actual results during the period or periods covered by
the Projections may differ from the projected results and that the differences
may be material. Notwithstanding the foregoing, as of the Effective Date,
management of Company believed that the Projections were reasonable and
attainable.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since December 31, 1996, no event or change has occurred that
has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect. Since the Closing Date, neither Company nor any of its
Subsidiaries has directly or indirectly declared, ordered, paid or made, or
set apart any sum or property for, any Restricted Junior Payment or agreed to
do so except as permitted by subsection 7.5.
5.5 TITLE TO PROPERTIES; LIENS.
After giving effect to the transactions contemplated by this
Agreement to occur on the Effective Date, Company and its Subsidiaries have
good, sufficient and legal title to all of their respective properties and
assets reflected in the financial statements referred to in the financial
statements referred to in subsection 5.3 or in the most recent financial
statements delivered pursuant to subsection 6.1 of the Existing Credit
Agreement, except for assets disposed of since the date of such financial
statements in the ordinary course of business or as otherwise permitted under
subsection 7.7. Except as permitted by this Agreement, all such properties
and assets are free and clear of Liens.
5.6 LITIGATION; ADVERSE FACTS.
There is no action, suit, proceeding, arbitration or
governmental investigation (whether or not purportedly on behalf of Company or
any of its Subsidiaries) at law or in equity or before or by any federal,
state, municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, pending or, to the knowledge
of Company, threatened against or affecting Company or any of its Subsidiaries
or any property of Company or any of its Subsidiaries that, either individual-
ly or in the aggregate together with all other such actions, proceedings and
investigations, has had, or could reasonably be expected to result in, a
Material Adverse Effect, it being understood, solely for purposes of this
sentence, that any money judgments or settlements the occurrence of which do
not give rise to an Event of Default under subsection 8.8 shall not be deemed
to have a Material Adverse Effect. Neither Company nor any of its
Subsidiaries is or has been (i) in violation of any applicable law (including
any Debt Collection Laws) that has had, or could reasonably be expected to
result in, a Material Adverse Effect, it being understood for purposes of this
clause (i) that any such violation which results in money judgments or
settlements the occurrence of which do not give rise to an Event of Default
under subsection 8.8 shall not be deemed to have a Material Adverse Effect, or
(ii) subject to or in default with respect to any final judgment, writ,
injunction, decree, rule or regulation of any court or any federal, state,
<PAGE>
municipal or other governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, that has had, or could reasonably be
expected to result in, a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all material
tax returns and reports of Company and its Subsidiaries required to be filed
by any of them have been timely filed, and all material taxes, assessments,
fees and other governmental charges upon Company and its Subsidiaries and upon
their respective properties, assets, income, businesses and franchises which
are due and payable have been paid when due and payable. Company does not
know of any proposed tax assessment against Company or any of its Subsidiaries
other than those which are being actively contested by Company or such
Subsidiary in good faith and by appropriate proceedings and for which reserves
or other appropriate provisions, if any, as may be required in conformity with
GAAP shall have been made or provided therefor.
5.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS.
A.Neither Company nor any of its Subsidiaries is in default in
the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and
no condition exists that, with the giving of notice or the lapse of time or
both, would constitute such a default, except where the consequences, direct
or indirect, of such default or defaults, if any, would not have a Material
Adverse Effect.
B.Neither Company nor any of its Subsidiaries is a party to or
is otherwise subject to any agreement or instrument or any charter or other
internal restriction which has had, or could reasonably be expected (based
upon assumptions that are reasonable at the time made) to result in,
individually or in the aggregate, a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act or the Investment Company Act of 1940
or under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable.
5.10 SECURITIES ACTIVITIES.
Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.
5.11 EMPLOYEE BENEFIT PLANS.
A.Company and each of its ERISA Affiliates are in substantial
compliance with all applicable provisions and requirements of ERISA with
respect to each Employee Benefit Plan, and have substantially performed all
their obligations under each Employee Benefit Plan, except to the extent that
any non-compliance with ERISA or any such failure to perform would not result
in material liability of Company or any of its ERISA Affiliates.
B.No ERISA Event has occurred which has resulted or is
reasonably likely to result in any material liability to the PBGC or to any
other Person.
C.Except to the extent required under Section 4980B of the
Internal Revenue Code and/or Section 601 of ERISA, neither Company nor any of
its Subsidiaries maintains or contributes to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides health or welfare benefits
<PAGE>
(through the purchase of insurance or otherwise) for any retired or former
employees of Company or any of its Subsidiaries, except to the extent that the
provision of such benefits would not have a Material Adverse Effect.
D.No Pension Plan has an Unfunded Current Liability in an
amount that would have a Material Adverse Effect.
5.12 CERTAIN FEES.
No broker's or finder's fee or commission will be payable with
respect to this Agreement or any of the loan transactions contemplated hereby,
and Company hereby indemnifies Lenders against, and agrees that it will hold
Lenders harmless from, any claim, demand or liability for any such broker's or
finder's fees alleged to have been incurred in connection herewith or
therewith and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such claim, demand or
liability.
5.13 ENVIRONMENTAL PROTECTION.
Except as set forth on Schedule 5.13 annexed hereto or as will
not result in a Material Adverse Effect:
(i)the operations of Company and each of its Subsidiaries
(including, without limitation, all operations and conditions
at or in the Facilities) comply in all material respects with
all Environmental Laws;
(ii)Company and each of its Subsidiaries have obtained all
material Governmental Authorizations under Environmental Laws
necessary to their respective operations, and all such
Governmental Authorizations are in good standing, and Company
and each of its Subsidiaries are in compliance with all
material terms and conditions of such Governmental
Authorizations;
(iii)neither Company nor any of its Subsidiaries has received
(a) any notice or claim to the effect that it is or may be
liable to any Person as a result of or in connection with any
Hazardous Materials or (b) any letter or request for
information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42
U.S.C. Section 9604) or comparable state laws, and, to the best
knowledge of Company, none of the operations of Company or any
of its Subsidiaries is the subject of any federal or state
investigation relating to or in connection with any Hazardous
Materials at any Facility or at any other location;
(iv)none of the operations of Company or any of its
Subsidiaries is subject to any judicial or administrative
proceeding alleging the violation of or liability under any
Environmental Laws;
(v)to the knowledge of Company, neither Company nor any of its
Subsidiaries nor any of their respective Facilities or
operations are subject to any outstanding written order or
agreement with any governmental authority or private party
relating to (a) any Environmental Laws or (b) any Environmental
Claims;
(vi)neither Company nor any of its Subsidiaries has any
material contingent liability in connection with any Release of
any Hazardous Materials by Company or any of its Subsidiaries;
(vii)neither Company nor any of its Subsidiaries nor, to the
knowledge of Company, any predecessor of Company or any of its
<PAGE>
Subsidiaries has filed any notice under any Environmental Law
indicating past or present treatment or Release of Hazardous
Materials at any Facility, and none of Company's or any of its
Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any state
equivalent;
(viii) to the knowledge of Company, no Hazardous Materials
exist on or under any Facility in a manner that has a
reasonable possibility of giving rise to an Environmental
Claim, and neither Company nor any of its Subsidiaries has
filed any notice or report of a Release of any Hazardous
Materials that has a reasonable possibility of giving rise to
an Environmental Claim;
(ix)neither Company nor any of its Subsidiaries nor, to the
knowledge of Company, any of their respective predecessors has
disposed of any Hazardous Materials in a manner that has a
reasonable possibility of giving rise to an Environmental
Claim;
(x)to the knowledge of Company, no underground storage tanks or
surface impoundments are on or at any Facility; and
(xi)to the knowledge of Company, no Lien in favor of any Person
relating to or in connection with any Environmental Claim has
been filed or has been attached to any Facility.
5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or threatened
involving Company or any of its Subsidiaries that could reasonably be expected
to have a Material Adverse Effect.
5.15 SOLVENCY.
Each Loan Party is, and Company and its Subsidiaries, taken as
a whole, are, and, upon the incurrence of any Obligations by any Loan Party on
any date on which this representation is made, will be, Solvent.
5.16 MATTERS RELATING TO COLLATERAL.
A.CREATION, PERFECTION AND PRIORITY OF LIENS. The execution
and delivery of the Collateral Documents by Loan Parties, together with
(i) the actions taken on or prior to the date hereof pursuant to subsection
4.2J of the Original Credit Agreement, subsections 4.3H, 4.4H and 6.9 of the
Existing Credit Agreement and subsections 4.2S, 4.3B and 6.9 of this
Agreement, and (ii) the delivery to Collateral Agent of any Pledged Collateral
not delivered to Collateral Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been so
delivered) are effective to create in favor of Collateral Agent for the
benefit of Agents and Lenders, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect of
any Collateral), a valid and perfected first priority Lien on all of the
Collateral, and all filings and other actions necessary or desirable to
perfect and maintain the perfection and first priority status of such Liens
have been duly made or taken and remain in full force and effect, other than
the filing of any UCC financing statements delivered to Collateral Agent for
filing (but not yet filed) and the periodic filing of UCC continuation
statements in respect of UCC financing statements filed by or on behalf of
Collateral Agent.
B.GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority
or regulatory body is required for either (i) the pledge or grant by any Loan
<PAGE>
Party of the Liens purported to be created in favor of Chase Co-Administrative
Agent pursuant to any of the Collateral Documents or (ii) the exercise by
Chase Co-Administrative Agent of any rights or remedies in respect of any
Collateral (whether specifically granted or created pursuant to any of the
Collateral Documents or created or provided for by applicable law), except for
filings or recordings contemplated by subsection 5.16A and except as may be
required, in connection with the disposition of any Pledged Collateral, by
laws generally affecting the offering and sale of securities.
C.ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been
filed in favor of Chase Co-Administrative Agent as contemplated by subsection
5.16A, (i) no effective UCC financing statement, fixture filing or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office and (ii) no effective filing covering
all or any part of the intellectual property Collateral is on file in the
United States Patent and Trademark Office.
D.MARGIN REGULATIONS. The pledge of the Pledged Collateral
pursuant to the Collateral Documents does not violate Regulation G, Regulation
T, Regulation U or Regulation X of the Board of Governors of the Federal
Reserve System.
E.INFORMATION REGARDING COLLATERAL. All information supplied
to any Agent by or on behalf of any Loan Party with respect to any of the
Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects.
5.17 RELATED AGREEMENTS.
A.DELIVERY OF RELATED AGREEMENTS. Company has delivered to
Agents complete and correct copies of each Related Agreement and of all
exhibits and schedules thereto.
B.PAYCO'S WARRANTIES. Except to the extent otherwise set forth
herein or in the schedules hereto, each of the representations and warranties
given by Payco to Company in the Payco Acquisition Agreement was true and
correct in all material respects as of the Closing Date (or as of any earlier
date to which such representation and warranty specifically relates), subject
to the qualifications set forth in the schedules to the Payco Acquisition
Agreement.
C.ACCELERATED'S WARRANTIES AND NSA'S WARRANTIES. Except to the
extent otherwise set forth herein or in the schedules hereto, each of the
representations and warranties given by Accelerated to Company in the
Accelerated Acquisition Agreement and by NSA to Company in the NSA Acquisition
Agreement was true and correct in all material respects as of the First
Amendment Date (or as of any earlier date to which such representation and
warranty specifically relates) in the case of the NSA Acquisition Agreement
and as of November 10, 1997 (or as of any earlier date to which such
representation and warranty specifically relates), in the case of the
Accelerated Acquisition Agreement, in each case subject to the qualifications
set forth in the schedules to the Accelerated Acquisition Agreement or the NSA
Acquisition Agreement, as applicable.
D.UNION'S WARRANTIES. Except to the extent otherwise set forth
herein or in the schedules hereto, each of the representations and warranties
given by Union to Company in the Union Acquisition Agreement and the other
Union Acquisition Documents is true and correct in all material respects as of
the date hereof (or as of any earlier date to which such representation and
warranty specifically relates) and will be true and correct in all material
respects as of the Effective Date (or as of such earlier date, as the case may
be), in each case subject to the qualifications set forth in the schedules to
the Union Acquisition Agreement or the other Union Acquisition Documents, as
applicable. Notwithstanding the foregoing, Company shall not be deemed to
make any representation hereunder with respect to representations and
warranties of Union described in this subsection prior to consummation of the
<PAGE>
Union Acquisition.
E.WARRANTIES OF COMPANY. Subject to the qualifications and the
schedules set forth therein, (i) each of the representations and warranties
given by Company to Payco in the Payco Acquisition Agreement was true and
correct in all material respects as of the Closing Date, (ii) each of the
representations and warranties given by Company to Accelerated and its
Subsidiaries in the Accelerated Acquisition Agreement was true and correct in
all material respects as of the November 10, 1997, (iii) each of the
representations and warranties given by Company to NSA and its Subsidiaries in
the NSA Acquisition Agreement was true and correct in all material respects as
of the First Amendment Date and (iv) each of the representations and
warranties given by Merger Sub to Union in the Union Acquisition Agreement is
true and correct in all material respects as of the date hereof (or its later
date of execution) and will be true and correct in all material respects as of
the Effective Date. Notwithstanding the foregoing, Company shall not be
deemed to make any representation hereunder with respect to representations
and warranties described in clause (iv) of this subsection prior to consumma-
tion of the Union Acquisition.
F.SURVIVAL. Notwithstanding anything in the Payco Acquisition
Agreement, the Accelerated Acquisition Agreement, the NSA Acquisition
Agreement or the Union Acquisition Agreement to the contrary, (i) the
representations and warranties of Company set forth in subsections 5.17B and
5.17E(i) shall, for purposes of this Agreement, survive the Closing Date for
the benefit of Agents and Lenders, (ii) the representations and warranties of
Company set forth in subsections 5.17C, 5.17E(ii) and 5.17E(iii) shall, solely
for purposes of this Agreement, survive the First Amendment Date for the
benefit of Agents and Lenders and (iii) the representations and warranties of
Company set forth in subsections 5.17D and 5.17(E)(iv) shall, solely for
purposes of this Agreement, survive the Effective Date for the benefit of
Agents and Lenders.
5.18 DISCLOSURE.
A.LOAN DOCUMENTS. The representations of Company and its
Subsidiaries contained in the Loan Documents, Related Documents and in any
other document, certificate or written statement furnished to Lenders by or on
behalf of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement, when taken as a whole, do not
contain any untrue statement of a material fact or omit to state a material
fact (known to Company or the applicable Subsidiary, in the case of any
document not furnished by Company or such Subsidiary) necessary in order to
make the statements contained herein or therein not misleading in light of the
circumstances in which the same were made. Any projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by Company to be reasonable at the time
made, it being recognized by Lenders that such projections as to future events
are not to be viewed as facts and that actual results during the period or
periods covered by any such projections may differ from the projected results.
There is no fact known (or which should upon the reasonable exercise of
diligence be known) to Company (other than matters of a general economic
nature) that has had, or could reasonably be expected to result in, a Material
Adverse Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to Lenders for use in
connection with the transactions contemplated hereby.
B.TENDER OFFER MATERIALS. The Tender Offer Materials do not
contain any untrue statement of a material fact or omit to state a material
fact (known to Company or any of its Subsidiaries, in the case of any document
not furnished by it) necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances in which the
same were made.
5.19 SUBORDINATION OF SELLER NOTES.
<PAGE>
The subordination provisions of the Existing Seller Note and
any Permitted Seller Notes are enforceable against the holders thereof, and
the Loans and other monetary Obligations hereunder are and will be within the
definition of "Senior Indebtedness" included in such provisions.
5.20 MARGIN LENDING MATTERS.
At the time of the making of the Delayed-Draw Term Loans and
after giving effect to the Union Merger, not more than 25% of the value of the
assets of the Company, or of the Company and its Subsidiaries on a
consolidated basis, shall constitute Margin Stock. Neither the making of any
Loan hereunder, nor the use of the proceeds thereof, will violate or be
inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System and no part of the proceeds of any
Loan will be used to purchase or carry any Margin Stock in violation of
Regulation G, T, U or X or to extend credit for the purpose of purchasing or
carrying any Margin Stock in violation of Regulation G, T, U or X.
SECTION 6.
AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance
with sound business practices to permit preparation of financial statements in
conformity with GAAP. Company will deliver to Chase Co-Administrative Agent
(and Chase Co-Administrative Agent will, after receipt thereof, deliver to
each Lender):
(i)Monthly Financials: as soon as available and in any event
within (y) 45 days after each of the first two calendar months
ending after the Effective Date, and (z) thereafter within 30
days after the last day of each calendar month other than the
last month of a Fiscal Quarter, (a) the consolidated balance
sheets of Company and its Subsidiaries as at the end of each
fiscal month ending after the Effective Date and the related
consolidated statements of income, stockholders' equity and
cash flows of Company and its Subsidiaries for such month and
for the period from the beginning of the then current Fiscal
Year to the end of such month, setting forth in each case in
comparative form the corresponding figures for the
corresponding periods of the previous fiscal year and the
corresponding figures from the consolidated plan and financial
forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii), all in reasonable detail and certified by
the chief financial officer of Company that they fairly
present, in all material respects, the financial condition of
Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the
periods indicated, subject to changes resulting from audit and
normal year-end adjustments; and (b) a narrative report
describing the operations of Company and its Subsidiaries in
the form prepared for presentation to senior management for
such month and for the period from the beginning of the then
current Fiscal Year to the end of such month;
(ii)Quarterly Financials: as soon as available and in any
<PAGE>
event within 45 days after the end of each Fiscal Quarter,
(a) the consolidated balance sheets of Company and its
Subsidiaries as at the end of such Fiscal Quarter and the
related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for such Fiscal
Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter, setting
forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous fiscal
year and the corresponding figures from the consolidated plan
and financial forecast for the current Fiscal Year delivered
pursuant to subsection 6.1(xiii), all in reasonable detail and
certified by the chief financial officer of Company that they
fairly present, in all material respects, the financial
condition of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments, and (b) a narrative
report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior
management for such Fiscal Quarter and for the period from the
beginning of the then current Fiscal Year to the end of such
Fiscal Quarter;
(iii)Year-End Financials: as soon as available and in any
event within 90 days after the end of each Fiscal Year, (a) the
consolidated and consolidating balance sheets of Company and
its Subsidiaries as at the end of such Fiscal Year and the
related consolidated and consolidating statements of income,
stockholders' equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case
in comparative form the corresponding figures for the previous
fiscal year and the corresponding figures from the consolidated
plan and financial forecast delivered pursuant to subsection
6.1(xiii) for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by the chief
financial officer of Company that they fairly present, in all
material respects, the financial condition of Company and its
Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated,
(b) a narrative report describing the operations of Company and
its Subsidiaries in the form prepared for presentation to
senior management for such Fiscal Year, and (c) in the case of
such consolidated financial statements, a report thereon of
independent certified public accountants of recognized national
standing selected by Company and reasonably satisfactory to
Chase Co-Administrative Agent, which report shall be unquali-
fied as to the ability of Company and its Subsidiaries to
continue as a going concern and as to scope of audit, and shall
state that such consolidated financial statements fairly
present, in all material respects, the consolidated financial
position of Company and its Subsidiaries as at the dates
indicated and the results of their operations and their cash
flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the
examination by such accountants in connection with such
consolidated financial statements has been made in accordance
with generally accepted auditing standards;
(iv)Officer's and Compliance Certificates: together with each
delivery of financial statements of Company and its
Subsidiaries pursuant to subdivisions (ii) and (iii) above, (a)
an Officer's Certificate of Company stating that the signer has
reviewed the terms of this Agreement and have made, or caused
to be made under their supervision, a review in reasonable
<PAGE>
detail of the transactions and condition of Company and its
Subsidiaries during the accounting period covered by such
financial statements and that such review has not disclosed the
existence during or at the end of such accounting period, and
that the signer does not have knowledge of the existence as at
the date of such Officer's Certificate, of any condition or
event that constitutes an Event of Default or Potential Event
of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof
and what action Company has taken, is taking and proposes to
take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the
end of the applicable accounting periods with the restrictions
contained in Section 7;
(v)Reconciliation Statements: if, as a result of any change in
accounting principles and policies from those used in the
preparation of the audited financial statements referred to in
subsection 5.3, the consolidated financial statements of
Company and its Subsidiaries delivered pursuant to subdivisions
(i), (ii), (iii) or (xiii) of this subsection 6.1 will differ
in any material respect from the consolidated financial
statements that would have been delivered pursuant to such
subdivisions had no such change in accounting principles and
policies been made, then (a) together with the first delivery
of financial statements pursuant to subdivision (i), (ii),
(iii) or (xiii) of this subsection 6.1 following such change,
consolidated financial statements of Company and its
Subsidiaries for (y) the current Fiscal Year to the effective
date of such change and (z) the two full Fiscal Years
immediately preceding the Fiscal Year in which such change is
made, in each case prepared on a pro forma basis as if such
change had been in effect during such periods, and (b) together
with each delivery of financial statements pursuant to
subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change, a written statement of the chief
accounting officer or chief financial officer of Company
setting forth the differences which would have resulted if such
financial statements had been prepared without giving effect to
such change;
(vi)Accountants' Certification: together with each delivery of
consolidated financial statements of Company and its
Subsidiaries pursuant to subdivision (iii) above, a written
statement by the independent certified public accountants
giving the report thereon (a) stating that their audit
examination has included a reading of the terms of this
Agreement and the other Loan Documents as they relate to
accounting matters, and (b) stating whether, in connection with
their audit examination, any condition or event, insofar as
such condition or event relates to the covenants set forth in
subsection 7.6 or to accounting matters, that constitutes an
Event of Default or Potential Event of Default has come to
their attention and, if such a condition or event has come to
their attention, specifying the nature and period of existence
thereof; provided that such accountants shall not be liable by
reason of any failure to obtain knowledge of any such Event of
Default or Potential Event of Default that would not be
disclosed in the course of their audit examination;
(vii)Accountants' Reports: promptly upon receipt thereof
(unless restricted by applicable professional standards),
copies of all reports submitted to Company by independent
certified public accountants in connection with each annual,
interim or special audit of the financial statements of Company
and its respective Subsidiaries made by such accountants,
<PAGE>
including, without limitation, any comment letter submitted by
such accountants to management in connection with their annual
audit;
(viii)SEC Filings and Press Releases: promptly upon their
becoming available, copies of (a) all financial statements,
reports, notices and proxy statements sent or made available
generally by Company to its security holders, (b) all regular
and periodic reports and all registration statements (other
than on Form S-8 or a similar form) and prospectuses, if any,
filed by Company or any of its Subsidiaries with any securities
exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority, and (c) all press
releases and other statements made available generally by
Company or any of its Subsidiaries to the public concerning
material developments in the business of Company or any of its
Subsidiaries;
(ix)Events of Default, etc.: promptly upon any officer of
Company obtaining knowledge (a) of any condition or event that
constitutes an Event of Default or Potential Event of Default,
or becoming aware that any Lender has given any notice (other
than to Chase Co-Administrative Agent) or taken any other
action with respect to a claimed Event of Default or Potential
Event of Default, (b) that any Person has given any notice to
Company or any of its Subsidiaries or taken any other action
with respect to a claimed default or event or condition of the
type referred to in subsection 8.2, (c) of any condition or
event that would be required to be disclosed in a current
report filed by Company with the Securities and Exchange
Commission on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as
in effect on the date hereof) if Company were required to file
such reports under the Exchange Act, or (d) of the occurrence
of any event or change that has caused or evidences, either in
any case or in the aggregate, a Material Adverse Effect, an
Officer's Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the
notice given or action taken by any such Person and the nature
of such claimed Event of Default, Potential Event of Default,
default, event or condition, and what action Company has taken,
is taking and proposes to take with respect thereto;
(x)Litigation or Other Proceedings: (a) promptly upon any
officer of Company obtaining knowledge of the institution of,
or non-frivolous threat of, any action, suit, proceeding
(whether administrative, judicial or otherwise), governmental
investigation or arbitration against or affecting Company or
any of its Subsidiaries or any property of Company or any of
its Subsidiaries (collectively, "PROCEEDINGS") not previously
disclosed in writing by Company to Lenders or Chase Co-
Administrative Agent any material development in any Proceeding
that, in any case:
(1)if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2)seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as
may be reasonably available to Company to enable Lenders and
their counsel to evaluate such matters; and (b) within 45 days
after the end of each Fiscal Quarter, a schedule of all
Proceedings involving an alleged liability of, or claims
against or affecting, Company or any of its Subsidiaries equal
<PAGE>
to or greater than $2,000,000 which Company believes will
likely result in damages to Company of such amount, and
promptly after request by either Co-Administrative Agent such
other information as may be reasonably requested by such Co-
Administrative Agent to enable such Co-Administrative Agent and
its counsel to evaluate any of such Proceedings;
(xi)ERISA Events: promptly upon becoming aware of the
occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action Company or any of its ERISA
Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened
by the Internal Revenue Service, the Department of Labor or the
PBGC with respect thereto;
(xii)ERISA Notices: with reasonable promptness, copies of
(a) all written notices received by Company or any of its ERISA
Affiliates from a Multiemployer Plan sponsor concerning an
ERISA Event; and (b) such other documents or governmental
reports or filings relating to any Employee Benefit Plan as
either Co-Chase Co-Administrative Agent shall reasonably
request;
(xiii)Financial Plans: as soon as practicable and in any event
no later than the beginning of each Fiscal Year, a monthly
consolidated and consolidating plan and financial forecast for
the next succeeding Fiscal Year, including, without limitation,
(a) forecasted consolidated and consolidating balance sheets
and forecasted consolidated and consolidating statements of
income and cash flows of Company and its Subsidiaries for such
Fiscal Year, together with a pro forma Compliance Certificate
for such Fiscal Year and an explanation of the assumptions on
which such forecasts are based, and (b) such other information
and projections as either Co-Administrative Agent may
reasonably request;
(xiv)Insurance: as soon as practicable and in any event by the
last day of each Fiscal Year, a report in form and substance
satisfactory to Co-Administrative Agents outlining all material
insurance coverage maintained as of the date of such report by
Company and its Subsidiaries and all material insurance
coverage planned to be maintained by Company and its
Subsidiaries in the immediately succeeding Fiscal Year;
(xv)Environmental Audits and Reports: as soon as practicable
following receipt thereof, copies of all environmental audits
and reports, whether prepared by personnel of Company or any of
its Subsidiaries or by independent consultants, with respect to
significant environmental matters at any Facility or which
relate to an Environmental Claim which could result in a
Material Adverse Effect;
(xvi)Board of Directors: with reasonable promptness, written
notice of any change in the Board of Directors of Company;
(xvii)New Subsidiaries: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with
respect to such Person (a) the date on which such Person became
a Subsidiary of Company and (b) all of the data required to be
set forth in Schedule 5.1 annexed hereto with respect to all
Subsidiaries of Company (it being understood that such written
notice shall be deemed to supplement Schedule 5.1 annexed
hereto for all purposes of this Agreement); and
(xviii)Existing Agreement Financial Covenants: on or before
March 31, 1998, an Officer's Certificate to Lenders evidencing
<PAGE>
compliance with the requirements of subsection 7.6 of the
Existing Credit Agreement as of December 31, 1997; provided
that for purposes of demonstrating such compliance an amount,
not in excess of $7.2 million, representing unrealized cost
savings with respect to which action has been initiated during
1997 shall be added to Consolidated EBITDA.
(xix)Other Information: with reasonable promptness, such other
information and data with respect to Company or any of its
Subsidiaries as from time to time may be reasonably requested
by either Co-Administrative Agent.
For purposes of subsections 4.2P(iii), 4.2P(iv) and 4.2P(v) and
this subsection 6.1, "consolidating" balance sheets and "consolidating"
statements of income, stockholders equity and cash flows refer to financial
statements consolidating the financial position, results of operations and
cash flows of the major operating groups of Company's Subsidiaries, which
operating groups as of the Effective Date consist of (1) A.M. Miller &
Associates, Inc. and its Subsidiaries, (2) Account Portfolios, Inc. and its
Subsidiaries, (3) Continental Credit Services, Inc., Alaska Financial
Services, Inc., Southwest Credit Services, Inc. and their respective
Subsidiaries, (4) Payco and its Subsidiaries, (5) NSA and its Subsidiaries,
(6) Accelerated and its Subsidiaries and (7) Union and its Subsidiaries.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and
will cause each of its Subsidiaries to, at all times preserve and keep in full
force and effect its corporate existence and all rights and franchises
material to the business of Company and its Subsidiaries (on a consolidated
basis). Without limiting the foregoing, Company shall, and shall cause each
of its Subsidiaries to, file and diligently process to completion applications
for all material permits, licenses and other governmental approvals necessary
for the operation of its debt collection business.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A.Company will, and will cause each of its Subsidiaries to, pay
all material taxes and all assessments and other governmental charges imposed
upon it or any of its properties or assets or in respect of any of its income,
businesses or franchises before any penalty accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto; provided that no
such charge or claim need be paid if it is being contested in good faith by
appropriate proceedings timely instituted and diligently conducted and if such
reserve or other appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
B.Company will not, nor will it permit any of its Subsidiaries
to, file or consent to the filing of any consolidated income tax return with
any Person (other than Company and its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
Company will, and will cause each of its Subsidiaries to,
maintain or cause to be maintained in good repair, working order and
condition, ordinary wear and tear excepted, all material properties used or
useful in the business of Company and its Subsidiaries and from time to time
will make or cause to be made all appropriate repairs, renewals and
replacements thereof. Company will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to its
properties and business and the properties and businesses of its Subsidiaries
against loss or damage of the kinds customarily carried or maintained under
similar circumstances by corporations of established reputation engaged in
<PAGE>
similar businesses. Each such policy of casualty insurance covering damage to
or loss of property shall name Chase Co-Administrative Agent for the benefit
of Agent and Lenders as the loss payee thereunder for all losses, subject to
application of proceeds as required by subsection 2.4B(iii)(d), and shall
provide for at least 30 days' prior written notice to Chase Co-Administrative
Agent of any modification or cancellation of such policy.
6.5 INSPECTION; LENDER MEETING.
Company shall, and shall cause each of its Subsidiaries to,
permit any authorized representatives designated by any Agent or Lender to
visit and inspect any of the properties of Company or any of its Subsidiaries,
including its and their financial and accounting records, and to make copies
and take extracts therefrom, and to discuss its and their affairs, finances
and accounts with its and their officers and independent public accountants,
all upon reasonable advance notice and at such reasonable times during normal
business hours and as often as may be reasonably requested. Without in any
way limiting the foregoing, Company will, upon the request of Chase Co-
Administrative Agent, participate in a meeting of Agents and Lenders once
during each Fiscal Year to be held at Company's corporate offices (or such
other location as may be agreed to by Company and Chase Co-Administrative
Agent) at such time as may be agreed to by Company and Chase Co-Administrative
Agent.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall, and shall cause each of its Subsidiaries to,
comply with the requirements of all applicable laws, rules, regulations and
orders of any governmental authority (including all Debt Collection Laws),
noncompliance with which could reasonably be expected to cause a Material
Adverse Effect.
6.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
A.Company shall, and shall cause each of its Subsidiaries to,
exercise all due diligence in order to comply and cause (i) all tenants under
any leases or occupancy agreements affecting any portion of the Facilities and
(ii) all other Persons on or occupying such property, to comply in all
material respects with all Environmental Laws.
B.Company agrees that Chase Co-Administrative Agent may, from
time to time and in its reasonable discretion, retain, at Company's expense,
an independent professional consultant to review any report relating to
Hazardous Materials prepared by or for Company and to conduct its own
investigation of any Facility currently owned, leased, operated or used by
Company or any of its Subsidiaries, and Company agrees to use all reasonable
efforts to obtain permission for Chase Co-Administrative Agent's professional
consultant to conduct its own investigation of any such Facility previously
owned, leased, operated or used by Company or any of its Subsidiaries.
Company shall use its reasonable efforts to obtain for Chase Co-Administrative
Agent and its agents, employees, consultants and contractors the right, upon
reasonable notice to Company, to enter into or on to the Facilities currently
owned, leased, operated or used by Company or any of its Subsidiaries to
perform such tests on such property as are reasonably necessary to conduct
such a review and/or investigation. Any such investigation of any Facility
shall be conducted, unless otherwise agreed to by Company and Chase Co-
Administrative Agent, during normal business hours and, to the extent
reasonably practicable, shall be conducted so as not to interfere with the
ongoing operations at any such Facility or to cause any damage or loss to any
property at such Facility. Company and Chase Co-Administrative Agent hereby
acknowledge and agree that any report of any investigation conducted at the
request of Chase Co-Administrative Agent pursuant to this subsection 6.7B will
be obtained and shall be used by Chase Co-Administrative Agent and Lenders for
the purposes of Lenders' internal credit decisions, to monitor and police the
Loans and to protect Lenders' security interests, if any, created by the Loan
Documents. Chase Co-Administrative Agent agrees to deliver a copy of any such
<PAGE>
report to Company with the understanding that Company acknowledges and agrees
that (i) it will indemnify and hold harmless each Agent and Lender from any
costs, losses or liabilities relating to any Loan Party's use of or reliance
on such report, (ii) no Agent nor any Lender makes any representation or
warranty with respect to such report, and (iii) by delivering such report to
Company, no Agent nor any Lender is requiring or recommending the implementa-
tion of any suggestions or recommendations contained in such report.
C.Company shall promptly advise Chase Co-Administrative Agent
in writing and in reasonable detail of (i) any Release of any Hazardous
Materials required to be reported to any federal, state, local or foreign
governmental or regulatory agency under any applicable Environmental Laws,
(ii) any and all written communications with respect to any Environmental
Claims that have a reasonable possibility of giving rise to a Material Adverse
Effect or with respect to any Release of Hazardous Materials required to be
reported to any federal, state or local governmental or regulatory agency,
(iii) any remedial action taken by Company or any other Person in response to
(x) any Hazardous Materials on, under or about any Facility, the existence of
which has a reasonable possibility of resulting in an Environmental Claim
having a Material Adverse Effect, or (y) any Environmental Claim that could
have a Material Adverse Effect, (iv) Company's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of any Facility
that could cause such Facility or any part thereof to be subject to any
restrictions on the ownership, occupancy, transferability or use thereof under
any Environmental Laws, and (v) any request for information from any
governmental agency that suggests such agency is investigating whether Company
or any of its Subsidiaries may be potentially responsible for a Release of
Hazardous Materials.
D.Company shall promptly notify Chase Co-Administrative Agent
of (i) any proposed acquisition of stock, assets, or property by Company or
any of its Subsidiaries that could reasonably be expected to expose Company or
any of its Subsidiaries to, or result in, Environmental Claims that could have
a Material Adverse Effect or that could reasonably be expected to have a
material adverse effect on any Governmental Authorization then held by Company
or any of its Subsidiaries and (ii) any proposed action to be taken by Company
or any of its Subsidiaries to commence manufacturing, industrial or other
similar operations that could reasonably be expected to subject Company or any
of its Subsidiaries to additional laws, rules or regulations, including,
without limitation, laws, rules and regulations requiring additional
environmental permits or licenses.
E.Company shall, at its own expense, provide copies of such
documents or information as either Co-Administrative Agent may reasonably
request in relation to any matters disclosed pursuant to this subsection 6.7.
6.8 COMPANY'S REMEDIAL ACTION REGARDING HAZARDOUS MATERIALS.
Company shall promptly take, and shall cause each of its
Subsidiaries promptly to take, any and all necessary remedial action in
connection with the presence, storage, use, disposal, transportation or
Release of any Hazardous Materials on or under any Facility in order to comply
with all applicable Environmental Laws and Governmental Authorizations unless
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect. In the event Company or any of its Subsidiaries takes any
remedial action with respect to any Hazardous Materials on or under any
Facility, Company or such Subsidiary shall conduct and complete such remedial
action in material compliance with all applicable Environmental Laws, and in
accordance with the policies, orders and directives of all federal, state and
local governmental authorities except when, and only to the extent that,
Company's or such Subsidiary's liability for such presence, storage, use,
disposal, transportation or Release of any Hazardous Materials is being
contested in good faith by Company or such Subsidiary.
6.9 EXECUTION OF SUBSIDIARY GUARANTY AND SUBSIDIARY SECURITY
AGREEMENTS BY SUBSIDIARIES AND FUTURE SUBSIDIARIES.
<PAGE>
In the event that any Person becomes a wholly-owned domestic
Subsidiary after the date hereof, Company will promptly notify Chase Co-A-
dministrative Agent of that fact and cause such Subsidiary to execute and
deliver to Chase Co-Administrative Agent and Collateral Agent a counterpart of
the Subsidiary Guaranty and the Pledge Agreement, the Security Agreement, the
Limited Partnership Security Agreement and the Trademark Security Agreement
(collectively, the "SUBSIDIARY SECURITY AGREEMENTS"), and to take all such
further actions and execute all such further documents and instruments as may
be required to grant and perfect in favor of Collateral Agent, for the benefit
of Lenders, a first-priority security interest in all of the personal property
assets of such Subsidiary described in the Subsidiary Security Agreements.
Company shall deliver to Chase Co-Administrative Agent and Collateral Agent,
together with such Loan Documents, (i) certified copies of such Subsidiary's
Articles or Certificate of Incorporation (or comparable constituent
documents), together, if applicable, with a good standing certificate from the
Secretary of State of the jurisdiction of its incorporation, each to be dated
a recent date prior to their delivery to Chase Co-Administrative Agent, (ii) a
copy, if applicable, of such Subsidiary's Bylaws, certified by its corporate
secretary or an assistant corporate secretary as of a recent date prior to
their delivery to Chase Co-Administrative Agent and Collateral Agent, (iii) a
certificate executed by the secretary or an assistant secretary of such
Subsidiary as to (a) the incumbency and signatures of the officers of such
Subsidiary executing the Subsidiary Guaranty and to which such Subsidiary is a
party and (b) the fact that the attached resolutions of the Board of Directors
of such Subsidiary authorizing the execution, delivery and performance of the
Subsidiary Guaranty and the Subsidiary Security Agreements to which such
Subsidiary is a party are in full force and effect and have not been modified
or rescinded, and (iv) a favorable opinion of counsel to such Subsidiary, in
form and substance satisfactory to Chase Co-Administrative Agent and its
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization, execution and delivery by such Subsidiary of the
Subsidiary Guaranty and the Subsidiary Security Agreements to which such
Subsidiary is a party, (c) the enforceability of the Subsidiary Guaranty and
the Subsidiary Security Agreements to which such Subsidiary is a party against
such Subsidiary, and (d) such other matters as Chase Co-Administrative Agent
and Collateral Agent may reasonably request, all of the foregoing to be
reasonably satisfactory in form and substance to Chase Co-Administrative Agent
and its counsel and Collateral Agent.
6.10 INTEREST RATE PROTECTION.
Within 180 days after the Effective Date, Company shall enter
into one or more Interest Rate Agreements with respect to the Loans, in an
aggregate notional principal amount of not less than $100,000,000, which
Interest Rate Agreements shall have the effect of establishing a maximum
interest rate of not more than 10% per annum with respect to such notional
principal amount, each such Interest Rate Agreement to be in form and
substance satisfactory to Co-Administrative Agents and with a term of not less
than three years from the Effective Date.
6.11 CONDUCT OF BUSINESS OF MERGER SUB.
Until consummation of the Union Merger, Merger Sub will engage
in only those activities that are necessary or advisable to effect the Tender
Offer upon the terms set forth in the Tender Offer Materials, to effect the
Union Merger and to effect the transactions contemplated by this Agreement.
6.12 CONDUCT OF BUSINESS OF UNION.
Until consummation of the Union Merger, Company and Merger Sub
will cause Union and its Subsidiaries to conduct their respective businesses
in a manner consistent with their past practices, and to comply with the terms
of the Union Acquisition Agreement.
6.13 UNION MERGER.
<PAGE>
Company shall comply with, and cause Union to comply with, all
covenants set forth in the Union Acquisition Agreement that are applicable
prior to the consummation of the Union Merger. Company shall cause the Union
Merger to be consummated in accordance with the terms and conditions of the
Union Acquisition Agreement and the Tender Offer Materials and shall cause
each of the conditions set forth in subsection 4.3 to be fulfilled as soon as
practicable and, in any event, no later than 120 calendar days after the
Effective Date. In the event that the Tendered Union Shares to be purchased
concurrently with receipt of the proceeds of the initial Tranche C Term Loans
on the Effective Date shall represent, in the aggregate, not less than 90% of
the outstanding shares of Union Common Stock and, in any case, the number of
shares of Union Common Stock required to permit Company to cause the Union
Merger to occur in accordance with the terms of the Union Acquisition
Agreement and Section 253 of the Delaware General Corporation Law, Company
shall cause the Union Merger to occur under Section 253 of the Delaware
General Corporation Law on the Effective Date or as soon thereafter as
practicable and in any event within 10 days of the Effective Date.
6.14 FURTHER ASSURANCES.
At any time or from time to time upon the request of either Co-
Administrative Agent, Company will, at its expense, promptly execute,
acknowledge and deliver such further documents and do such other acts and
things as such Co-Administrative Agent may reasonably request in order to
effect fully the purposes of the Loan Documents and to provide for payment of
the Obligations in accordance with the terms of this Agreement, the Notes and
the other Loan Documents. In furtherance and not in limitation of the
foregoing, Company shall take, and cause each of its Subsidiaries to take,
such actions as either Co-Administrative Agent may reasonably request from
time to time (including, without limitation, the execution and delivery of
guaranties, security agreements, pledge agreements, mortgages, deeds of trust,
stock powers, financing statements and other documents, the filing or
recording of any of the foregoing, title insurance with respect to any of the
foregoing that relates to an interest in real property, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that the Obligations are guarantied by
Subsidiary Guarantors and are secured by substantially all of the assets of
Company and its domestic Subsidiaries. In the event that Company or any of
its Subsidiaries creates a new domestic Subsidiary, all of the capital stock
or partnership interests of such new domestic Subsidiary shall be duly and
validly pledged to Collateral Agent for the benefit of Agents and Lenders
pursuant to the Collateral Documents, subject to no other Liens.
SECTION 7.
NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the
Commitments hereunder shall remain in effect and until payment in full of all
of the Loans and other Obligations and the cancellation or expiration of all
Letters of Credit, unless Requisite Lenders shall otherwise give prior written
consent, Company shall perform, and shall cause each of its Subsidiaries to
perform, all covenants in this Section 7.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create, incur, assume or guaranty, or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i)Company may become and remain liable with respect to the
Obligations;
(ii)Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations permitted by subsection
7.4 and, upon any matured obligations actually arising pursuant
<PAGE>
thereto, the Indebtedness corresponding to the Contingent
Obligations so extinguished;
(iii)Company and its Subsidiaries, as applicable, may remain
liable with respect to Indebtedness described in Schedule 7.1
annexed hereto;
(iv)Indebtedness of Company and its Subsidiaries (a) under
Capital Leases capitalized on the consolidated balance sheet of
Company as liabilities, (b) with respect to sale and lease-back
arrangements identified on Schedule 7.8, or (c) secured by
Liens permitted under subsection 7.2A(iii), in an aggregate
amount not exceeding, with respect to Indebtedness incurred
pursuant to clause (a) or (c) of this subsection 7.1,
$15,000,000 at any time outstanding;
(v)Company may become and remain liable with respect to
Indebtedness to any of its domestic Wholly Owned Subsidiaries,
and any domestic Wholly Owned Subsidiary of Company may become
and remain liable with respect to Indebtedness to Company or
any other domestic Wholly Owned Subsidiary of Company provided
that (a) all such intercompany Indebtedness shall be evidenced
by promissory notes, (b) all such intercompany Indebtedness
owed by Company to any of its respective Subsidiaries shall be
subordinated in right of payment to the payment in full of the
Obligations pursuant to the terms of the applicable promissory
notes or an intercompany subordination agreement, in each case
in form and substance satisfactory to Co-Administrative Agents,
and (c) any payment by Company or by any Subsidiary of Company
under any guaranty of the Obligations shall result in a pro
tanto reduction of the amount of any intercompany Indebtedness
owed by Company or by such Subsidiary to Company or to any of
its Subsidiaries for whose benefit such payment is made;
(vi)Company may become and remain liable with respect to the
Subordinated Notes;
(vii)Company may become and remain liable with respect to
Permitted Seller Notes, provided that the aggregate principal
amount of such notes issued shall not exceed $25,000,000; and
(viii)Company and its Subsidiaries may become and remain liable
with respect to other Indebtedness in an aggregate principal
amount not to exceed at any time outstanding $10,000,000.
7.2 LIENS AND RELATED MATTERS.
A.PROHIBITION ON LIENS. Company shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create, incur,
assume or permit to exist any Lien on or with respect to any property or asset
of any kind (including any document or instrument in respect of goods or
accounts receivable) of Company or any of its Subsidiaries, whether now owned
or hereafter acquired, or any income or profits therefrom, or file or permit
the filing of, or permit to remain in effect, any financing statement, or
other similar notice of any Lien with respect to any such property, asset,
income or profits under the Uniform Commercial Code of any state or under any
similar recording or notice statute, except:
(i)Permitted Encumbrances;
(ii)Liens described in Schedule 7.2 annexed hereto;
(iii)Purchase money security interests (including mortgages,
conditional sales, Capital Leases and any other title retention
or deferred purchase devices) in tangible personal property of
Company or any of its Subsidiaries existing or created at the
<PAGE>
time of acquisition thereof or within 30 days thereafter, and
the renewal, extension and refunding of any such security
interest in an amount not exceeding the amount thereof
remaining unpaid immediately prior to such renewal, extension
or refunding; provided, however, that such Indebtedness is
permitted by subsection 7.1(iv) hereof;
(iv)Other Liens on assets of Company and its Subsidiaries
securing Indebtedness in an aggregate amount not to exceed
$5,000,000 at any time outstanding; and
(v)Liens granted pursuant to the Collateral Documents.
Notwithstanding the foregoing, prior to the Union Merger Date, Merger Sub may
directly or indirectly sell, assign, pledge or encumber any shares of Union
Common Stock owned by it for cash and for fair market value so long as the
proceeds thereof are held as Cash or Cash Equivalents.
B.EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any consensual Lien upon any of its
properties or assets, whether now owned or hereafter acquired, other than
Liens excepted by the provisions of subsection 7.2A, it shall make or cause to
be made effective provision whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby
as long as any such Indebtedness shall be so secured; provided that,
notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Lenders to the creation or assumption of any such Lien
not permitted by the provisions of subsection 7.2A.
C.NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither
Company nor any of its Subsidiaries shall enter into any agreement prohibiting
the creation or assumption of any Lien upon any of its properties or assets,
whether now owned or hereafter acquired.
D.NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR
OTHER SUBSIDIARIES. Except as provided herein Company will not, and will not
permit any of its Subsidiaries to, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any such Subsidiary to (i) pay dividends or make any
other distributions on any of such Subsidiary's capital stock owned by Company
or any other Subsidiary of Company, (ii) repay or prepay any Indebtedness owed
by such Subsidiary to Company or any other Subsidiary of Company, (iii) make
loans or advances to Company or any other Subsidiary of Company, or
(iv) transfer any of its property or assets to Company or any other Subsidiary
of Company.
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, make or own any Investment in any Person,
including any Joint Venture, except:
(i)Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii)Company and its Subsidiaries may continue to own the
Investments owned by them as of the Effective Date in any
Subsidiaries of Company and;
(iii)Company and its Subsidiaries may make intercompany loans
to the extent permitted under subsection 7.1(v);
(iv)Payco may continue to own the Joint Ventures owned by it as
of the Effective Date;
<PAGE>
(v)Company and its Subsidiaries may make and own Investments in
Permitted Joint Ventures; provided that (a) at the time of such
Investment, and after giving effect thereto, no Potential Event
of Default or Event of Default shall have occurred and be
continuing, (b) the aggregate amount of all such Investments
made after the Closing Date (other than Investments made in
accordance with the following clause (c)) shall not exceed
$5,000,000, (c) the aggregate amount of Investments made in a
Permitted Joint Venture the only assets of which are Qualified
Loan Portfolios shall not exceed $30,000,000 during any Fiscal
Year and, after giving effect thereto, the aggregate amount of
such Investments do not exceed the limitations set forth in
subsection 7.7(v), and (d) Company and its Subsidiaries shall
pledge all of their respective equity interests in any
Permitted Joint Venture to Collateral Agent to secure the
Obligations under the Loan Documents (except to the extent, and
only to the extent, such pledge of the equity interests in a
Permitted Joint Venture organized under the laws of a foreign
country would result in Company incurring additional
liabilities for taxes);
(vi)Company may make and own Investments consisting of notes
received in connection with any Asset Sale limited to 20% of
the total sale price of the assets sold in such Asset Sale;
provided that the aggregate principal amount of such notes at
any time outstanding shall not exceed $2,000,000;
(vii)Company and its Subsidiaries may make and own Investments
in connection with a Permitted Acquisition or a Permitted
Portfolio Acquisition;
(viii)Company and its Subsidiaries may make Consolidated
Maintenance Capital Expenditures permitted by subsection 7.6;
(ix)Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time
$2,500,000; and
(x)Company may make the Investments permitted under subsection
7.7(vi).
7.4 CONTINGENT OBLIGATIONS.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, create or become or remain liable with respect to
any Contingent Obligation, except:
(i)Company may become and remain liable with respect to
Contingent Obligations in respect of Letters of Credit, as
applicable, and Subsidiaries of Company may become and remain
liable with respect to Contingent Obligations arising under the
Subsidiary Guaranty;
(ii)Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under Interest Rate
Agreements required under subsection 6.10;
(iii)Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations in respect of customary
indemnification and purchase price adjustment obligations
incurred in the ordinary course of business in connection with
Asset Sales or other sales of assets;
(iv)Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the
ordinary course of business of the obligations of suppliers,
<PAGE>
landlords, customers, franchisees and licensees of Company and
its Subsidiaries in an aggregate amount not to exceed at any
time $2,500,000;
(v)Company and its Subsidiaries may become and remain liable
with respect to Contingent Obligations under guarantees in the
ordinary course of business with respect to the performance by
Company or any of its Subsidiaries of obligations under
collection contracts;
(vi)Company may become and remain liable with respect to
Contingent Obligations in respect of Earn Out Agreements in
connection with Permitted Acquisitions and Company and its
Subsidiaries may become and remain liable with respect to
Contingent Obligations in respect of Forward Flow Contracts;
provided that to the extent that purchases of receivables
portfolios from a single seller (together with all Affiliates
of such seller) party to a Forward Flow Contract with Company
or any of its Subsidiaries exceed $1,250,000 in any 12-month
period, any receivables portfolio purchased during such 12-
month period under a Forward Flow Contract with such seller
shall be a Qualified Loan Portfolio;
(vii)Company and its Subsidiaries, as applicable, may remain
liable with respect to Contingent Obligations described in
Schedule 7.4 annexed hereto;
(viii)Subsidiaries of Company may become and remain liable with
respect to the Subordinated Note Guaranty; and
(ix)Company and its Subsidiaries may become and remain liable
with respect to other Contingent Obligations; provided that the
maximum aggregate liability, contingent or otherwise, of
Company and its Subsidiaries in respect of all such Contingent
Obligations shall at no time exceed $2,000,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its respective
Subsidiaries to, directly or indirectly, declare, order, pay, make or set
apart any sum for any Restricted Junior Payment; provided that (i) Company may
make scheduled interest payments in respect of the Subordinated Notes in
accordance with the terms of the Subordinated Note Indenture; (ii) Company may
make scheduled interest and principal payments in respect of the Existing
Seller Note and any Permitted Seller Notes permitted by subsection 7.1(vii) in
accordance with the terms of the Existing Seller Note and such Permitted
Seller Notes; (iii) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall be caused thereby,
Company may make payments in an aggregate amount not to exceed $2,500,000 in
any Fiscal Year to the extent necessary to repurchase shares of Company Common
Stock from officers, directors or employees of Company or any of its
Subsidiaries following termination of employment of any such officer, director
or employee by reason of death, disability, retirement or resignation or
following other events customarily requiring or permitting such repurchase, in
each case in accordance with the terms of customary terms of management and/or
employee stock plans, stock subscription agreements or shareholder agreements
entered into with officers, directors or employees of Company or any of its
Subsidiaries; (iv) so long as no Event of Default or Potential Event of
Default shall have occurred and be continuing or shall be caused thereby,
Company may repurchase Company Preferred Stock and make payments of accrued
and unpaid dividends to the holders of Company Preferred Stock, provided that
in no event may Company pay any dividend on or repurchase Company Preferred
Stock unless both (x) the Leverage Ratio for the most recently ended four-
Fiscal Quarter period is less than 2.0:1.0 and (y) at least 50% of the initial
aggregate principal amount of the Term Loans has been repaid; and (v) Company
and its Subsidiaries may consummate the transactions contemplated by the Union
<PAGE>
Acquisition Documents.
7.6 FINANCIAL COVENANTS.
A.MINIMUM INTEREST COVERAGE RATIO. The ratio of
(i) Consolidated EBITDA to (ii) Consolidated Interest Expense for any four-
Fiscal Quarter period (each such four-Fiscal Quarter period being a
"CALCULATION PERIOD") ending June 30, 1998 or thereafter during any of the
periods set forth below shall not be less than the correlative ratio
indicated:
PERIOD DURING MINIMUM
WHICH CALCULATION PERIOD INTEREST COVERAGE RATIO
ENDS
06/30/98 - 12/30/99 2.00:1.00
12/31/99 - 06/29/00 2.25:1.00
06/30/00 - 12/30/00 2.50:1.00
12/31/00 - 6/29/01 2.75:1.00
Thereafter 3.00:1.00
B.MAXIMUM LEVERAGE RATIO. The ratio of (i) Consolidated Total
Debt as of June 30, 1998 or the last day (any such day being a "CALCULATION
DATE") of any Fiscal Quarter ending during any of the periods set forth below
to (ii) Consolidated EBITDA for the Calculation Period ending on such
Calculation Date shall not exceed the correlative ratio indicated:
PERIOD DURING MAXIMUM
WHICH CALCULATION DATE LEVERAGE
OCCURS RATIO
06/30/98 - 06/29/99 5.00:1.00
06/30/99 - 12/30/99 4.75:1.00
12/31/99 - 06/29/00 4.50:1.00
06/30/00 - 12/30/00 4.25:1.00
12/31/00 - 06/29/01 4.00:1.00
06/30/01 - 12/30/01 3.75:1.00
12/31/01 - 06/29/02 3.50:1.00
06/30/02 - 12/30/02 3.25:1.00
12/31/02 - 06/29/03 3.00:1.00
Thereafter 2.75:1.00
C.MINIMUM FIXED CHARGE COVERAGE RATIO. The ratio of
(i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for any Calculation
Period ending after the Closing Date shall not be less than 1.05:1.00.
D.CONSOLIDATED MAINTENANCE CAPITAL EXPENDITURES. Company shall
not, and shall not permit its Subsidiaries to, make or incur in any Fiscal
Year Consolidated Maintenance Capital Expenditures in an aggregate amount in
excess of $18,000,000 (the "MAXIMUM CONSOLIDATED MAINTENANCE CAPITAL
EXPENDITURES AMOUNT"); provided that the Maximum Consolidated Maintenance
Capital Expenditures Amount for any Fiscal Year other than Fiscal Year 1998
shall be increased by an amount equal to the excess, if any (but in no event
more than 25% of the Maximum Consolidated Maintenance Capital Expenditures
Amount for the previous Fiscal Year), of the Maximum Consolidated Maintenance
Capital Expenditures Amount for the previous Fiscal Year over the actual
amount of Consolidated Maintenance Capital Expenditures for such previous
Fiscal Year; and provided further, that immediately following any acquisition
permitted under subsection 7.7(v) or 7.7(vi), the Maximum Consolidated Mainte-
nance Capital Expenditures Amount for the Fiscal Year during which such
acquisition occurs, and for each Fiscal Year thereafter shall be increased, in
each case, by an amount equal to the product of (i) the Maximum Consolidated
Maintenance Capital Expenditures Amount in effect immediately prior to such
acquisition multiplied by (ii) the ratio of (a) Consolidated EBITDA
attributable to the business or assets so acquired but not attributable to any
<PAGE>
Portfolio Purchase Business so acquired to (b) Consolidated EBITDA not
attributable to the Portfolio Purchase Business of Company and its
Subsidiaries without giving effect to such acquisition, determined in the case
of clauses (a) and (b) for the four-Fiscal Quarter period most recently ended
prior to such acquisition.
E.CERTAIN CALCULATIONS. (i) Notwithstanding any provision of
this Agreement to the contrary, (x) for purposes of calculating Consolidated
EBITDA for any period including the third and/or fourth Fiscal Quarters of
1997, Consolidated EBITDA shall be deemed to be $29,100,000 for the third
Fiscal Quarter of 1997 and $24,600,000 for the fourth Fiscal Quarter of 1997,
(y) subject to the provisions of the preceding clause (x), for purposes of
calculations under subsection 7.6, calculations shall be made as if the Union
Merger and related transactions (including, without limitation, borrowings of
all the Tranche C Term Loans) had been consummated as of January 1, 1998, and
(z), Consolidated Interest Expense and Consolidated Fixed Charges shall be
calculated prior to the first anniversary of the Effective Date in accordance
with Schedule 7.6E.
(ii)With respect to any period during which new Subsidiaries,
assets or businesses are acquired pursuant to subsection 7.7(v)
or 7.7(vi), for purposes of determining compliance with the
financial covenants set forth in this subsection 7.6, Consoli-
dated EBITDA and Consolidated Interest Expense shall be
calculated with respect to such periods and such Subsidiaries,
assets or businesses on a pro forma basis (including, except
with respect to the Union Acquisition, pro forma adjustments
arising out of events which are directly attributable to a
specific transaction, are factually supportable and are
expected to have a continuing impact, in each case determined
on a basis consistent with Article 11 of Regulation S-X
promulgated under the Securities Act and as interpreted by the
staff of the Securities and Exchange Commission prior to
December 1996, which would include cost savings resulting from
head count reduction, closure of facilities and similar
restructuring charges, which pro forma adjustments shall be
certified by the chief financial officer of Company) using the
historical financial statements of all entities or assets so
acquired or to be acquired and the consolidated financial
statements of Company and its Subsidiaries which shall be
reformulated (i) as if such acquisition, and any acquisitions
which have been consummated during such period, and any
Indebtedness or other liabilities incurred in connection with
any such acquisition had been consummated or incurred at the
beginning of such period (and assuming that such Indebtedness
bears interest during any portion of the applicable measurement
period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans
during such period), and (ii) otherwise in conformity with
certain procedures to be agreed upon between Co-Administrative
Agents and Company, all such calculations to be in form and
substance satisfactory to Co-Administrative Agents.
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES.
Company shall not, and shall not permit any of its Subsidiaries
to, alter the corporate, capital or legal structure of Company or any of its
Subsidiaries, create any new Subsidiaries or enter into any transaction of
merger or consolidation, or liquidate, wind-up or dissolve itself (or suffer
any liquidation or dissolution), or convey, sell, lease, sub-lease, transfer
or otherwise dispose of, in one transaction or a series of transactions, all
or any substantial part of its business, property or fixed assets, whether now
owned or hereafter acquired, or acquire by purchase or otherwise any part of
the business, property or fixed assets of, or stock or other evidence of
beneficial ownership of, any Person, except:
<PAGE>
(i)any Subsidiary of Company may be merged with or into Company
or any domestic Wholly Owned Subsidiary of Company, or be
liquidated, wound up or dissolved, or all or any substantial
part of its business, property or assets may be conveyed, sold,
leased, transferred or otherwise disposed of, in one
transaction or a series of transactions, to Company or any
domestic Wholly Owned Subsidiary of Company; provided that, in
the case of such a merger, Company or such Wholly Owned
Subsidiary shall be the continuing or surviving corporation;
(ii)Company and its Subsidiaries may acquire inventory (other
than receivables portfolios), equipment and other assets in the
ordinary course of business;
(iii)Company and its Subsidiaries may sell or otherwise dispose
of assets in transactions that do not constitute Asset Sales;
provided that the consideration received for such assets shall
be in an amount at least equal to the fair market value thereof
(determined in good faith by the board of directors of
Company);
(iv)Company and its Subsidiaries may make any Asset Sale of
assets that have, in the aggregate, a fair market value
(determined in good faith by the board of directors of Company)
not in excess of 20% of Consolidated EBITDA for the four-Fiscal
Quarter period most recently ended prior to such Asset Sale;
provided that (x) the consideration received for such assets
shall be in an amount at least equal to the fair market value
thereof (determined in good faith by the board of directors of
Company); (y) not less than 80% of the consideration received
therefor shall be cash; and (z) the proceeds of such Asset
Sales shall be applied as required by subsection 2.4B(iii)(a);
(v)Company may make acquisitions of receivables portfolios and
other assets and businesses (including acquisitions of the
capital stock of another Person), provided that:
(a)in the event that the aggregate amount of all such
acquisitions in any Fiscal Year would exceed $5,000,000 after
giving effect to any such proposed acquisition, (x) the
Interest Coverage Ratio (calculated on a pro forma basis giving
effect to the proposed acquisition) shall not be less than the
ratio set forth in subsection 7.6A applicable at the time of
such acquisition and (y) the Leverage Ratio (calculated on a
pro forma basis giving effect to the proposed acquisition)
shall not be greater than the ratio set forth in subsection
7.6B applicable at the time of such acquisition;
(b)the aggregate amount expended for Permitted Acquisitions
(other than pursuant to subsection 7.7(vi)) after the Effective
Date shall not exceed $60,000,000;
(c)any receivables portfolio acquired shall be a Qualified Loan
Portfolio;
(d)the aggregate amount expended for Permitted Portfolio
Acquisitions during any Fiscal Year together with the aggregate
amount of all Investments made pursuant to subsection 7.3(v)(c)
during such Fiscal Year shall not exceed $60,000,000;
(e)that portion of Consolidated EBITDA attributable to any
<PAGE>
assets so acquired in any single acquisition or series of
related acquisitions, as projected by Company for the twelve-
month period immediately following the date of such acquisition
or the date of the first of such series of related
acquisitions, as the case may be, shall not exceed 20% of
Consolidated EBITDA for the four Fiscal Quarter period most
recently ended prior to the date of such acquisition, and
Company shall have delivered an Officer's Certificate to Co-
Administrative Agents (together with supporting information
therefor) to the foregoing effect; and
(f)no Event of Default or Potential Event of Default shall have
occurred and be continuing at the time of such acquisition or
shall be caused thereby; and
(vi)Company may consummate the Tender Offer on the Effective
Date and the Union Merger on the Delayed-Draw Term Loan Funding
Date.
Notwithstanding the foregoing, prior to the Union Merger Date, Merger Sub may
directly or indirectly sell, assign, pledge or encumber any shares of Union
Common Stock owned by it for cash and for fair market value so long as the
proceeds thereof are held as Cash or Cash Equivalents.
7.8 SALES AND LEASE-BACKS.
Except as set forth in Schedule 7.8, Company shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, become or
remain liable as lessee or as a guarantor or other surety with respect to any
lease, whether an Operating Lease or a Capital Lease, of any property (whether
real, personal or mixed), whether now owned or hereafter acquired, (i) which
Company or any of its Subsidiaries has sold or transferred or is to sell or
transfer to any other Person (other than Company or any of its Subsidiaries)
or (ii) which Company or any of its Subsidiaries intends to use for
substantially the same purpose as any other property which has been or is to
be sold or transferred by Company or any of its Subsidiaries to any Person
(other than Company or any of its Subsidiaries) in connection with such lease.
7.9 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity Securities of Company or with any Affiliate of Company or of
any such holder, on terms that are less favorable to Company or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the
foregoing restriction shall not apply to (i) any transaction between Company
and any of its Wholly Owned Subsidiaries or between any of its Wholly Owned
Subsidiaries, (ii) reasonable and customary fees paid to members of the boards
of directors of Company and its Subsidiaries, (iii) fees, expenses and other
amounts payable to the MDC Entities on the Closing Date, the First Amendment
Date and/or the Effective Date, and (iv) the Management Fees.
7.10 DISPOSAL OF SUBSIDIARY STOCK.
Company shall not:
(i)directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other
equity Securities of any of its Subsidiaries, except as
permitted under this Agreement or the Collateral Documents or
to qualify directors if required by applicable law; or
<PAGE>
(ii)permit any of its Subsidiaries directly or indirectly to
sell, assign, pledge or otherwise encumber or dispose of any
shares of capital stock or other equity Securities of any of
its Subsidiaries (including such Subsidiary), except as
permitted under this Agreement or the Collateral Documents or
to Company, another wholly-owned Subsidiary of Company, or to
qualify directors if required by applicable law.
Notwithstanding the foregoing, prior to the Union Merger Date, Merger Sub may
directly or indirectly sell, assign, pledge or encumber shares of Union Common
Stock owned by it for cash and for fair market value.
7.11 CONDUCT OF BUSINESS.
Company shall not, and shall not permit any of its Subsidiaries
to, engage in any business other than (i) the businesses engaged in by Company
and its Subsidiaries on the Effective Date (after giving effect to the Union
Acquisition) and similar or related businesses and (ii) such other lines of
business as may be consented to by Co-Administrative Agents and Requisite
Lenders.
7.12 AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS; AMENDMENTS
OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS; DESIGNATION
OF "DESIGNATED SENIOR DEBT"; PREFERRED STOCK.
A.AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Neither
Company nor any of its Subsidiaries will agree to any material amendment to,
or waive any of its material rights under, any Related Agreement (other than
any Related Agreement evidencing or governing any Subordinated Indebtedness),
the MDC Advisory Services Agreement or the Stockholders Agreement after the
Effective Date if such amendment or waiver would be adverse to Lenders without
in each case obtaining the prior written consent of Requisite Lenders to such
amendment or waiver; provided, however, that if certain performance criteria
determined by the Board of Directors of Company are met from time to time,
Company may amend the MDC Advisory Services Agreement without the consent of
Lenders to provide for an increase or increases in the annual Management Fee
payable thereunder, provided that such Management Fee shall not exceed
$1,000,000 annually.
B.AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED
INDEBTEDNESS. Company shall not, and shall not permit any of its Subsidiaries
to, amend or otherwise change the terms of any Subordinated Indebtedness or
Subordinated Note Document, or make any payment consistent with an amendment
thereof or change thereto, if the effect of such amendment or change is to
increase the interest rate on such Subordinated Indebtedness, change (to
earlier dates) any dates upon which payments of principal or interest are due
thereon, change any event of default or condition to an event of default with
respect thereto (other than to eliminate any such event of default or increase
any grace period related thereto), change the redemption, prepayment or
defeasance provisions thereof, change the subordination provisions thereof (or
of any guaranty thereof), or change any collateral therefor (other than to
release such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase materially
the obligations of the obligor thereunder or to confer any additional rights
on the holders of such Subordinated Indebtedness (or trustee or other
representative on their behalf) which would be adverse to Company or Lenders.
C.DESIGNATION OF "DESIGNATED SENIOR DEBT". Company shall not
designate any Indebtedness as "Designated Senior Debt" (as defined in the
Subordinated Note Indenture) for purposes of the Subordinated Note Indenture
without the prior written consent of Requisite Lenders.
D.PREFERRED STOCK. Without the prior written approval of
Requisite Lenders, Company shall not amend, restate, supplement or otherwise
modify its Articles of Incorporation if the effect of such amendment,
restatement, supplement or modification is to (i) increase the dividend rate
<PAGE>
payable on, or change the redemption provisions of, the Company Preferred
Stock, (ii) together with all other amendments or changes made, increase
materially the obligations of Company to the holders of the Company Preferred
Stock, (iii) confer any additional rights on the holders of the Company
Preferred Stock which would be adverse to Company or Lenders, or (iv) provide
for the issuance of any preferred stock of Company in addition to the Company
Preferred Stock or the filing or amendment of any certificate of designation
with respect thereto.
7.13 FISCAL YEAR.
Company shall not change its Fiscal Year-end from December 31.
SECTION 8.
EVENTS OF DEFAULT
IF any of the following conditions or events ("EVENTS OF
DEFAULT") shall occur:
8.1 FAILURE TO MAKE PAYMENTS WHEN DUE.
Failure by Company to pay any installment of principal of any
Loan when due, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise; failure by Company to pay when due any amount payable
to an Issuing Lender in reimbursement of any drawing honored or payment made
under a Letter of Credit; or failure by Company to pay any interest on any
Loan or any fee or any other amount due under this Agreement within five days
after the date due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when
due (a) any principal of or interest on any Indebtedness (other than
Indebtedness referred to in subsection 8.1) in an individual principal amount
of $2,500,000 or more or any items of Indebtedness with an aggregate principal
amount of $5,000,000 or more or (b) any Contingent Obligation in an individual
principal amount of $2,500,000 or more or any Contingent Obligations with an
aggregate principal amount of $5,000,000 or more, in each case beyond the end
of any grace period provided therefor; or (ii) breach or default by Company or
any of its Subsidiaries with respect to any other material term of (a) any
evidence of any Indebtedness in an individual principal amount of $2,500,000
or more or any items of Indebtedness with an aggregate principal amount of
$5,000,000 or more or any Contingent Obligation in an individual principal
amount of $2,500,000 or more or any Contingent Obligations with an aggregate
principal amount of $5,000,000 or more or (b) any loan agreement, mortgage,
indenture or other agreement relating to such Indebtedness or Contingent
Obligation(s), if in any case under this clause (ii) the effect of such breach
or default is to cause, or to permit the holder or holders of that Indebted-
ness or Contingent Obligation(s) (or a trustee on behalf of such holder or
holders) to cause, that Indebtedness or Contingent Obligation(s) to become or
be declared due and payable prior to its stated maturity or the stated
maturity of any underlying obligation, as the case may be (upon the giving or
receiving of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or
condition contained in subsection 2.4, 2.5 or 6.2 or Section 7 of this
Agreement; or
8.4 BREACH OF WARRANTY.
Any material representation, warranty, certification or other
statement made by Company or any of its Subsidiaries in any Loan Document or
in any statement or certificate at any time given by Company or any of its
<PAGE>
Subsidiaries in writing pursuant hereto or thereto or in connection herewith
or therewith shall be false in any material respect on the date as of which
made; or
8.5 OTHER DEFAULTS UNDER LOAN DOCUMENTS.
Any Loan Party shall default in the performance of or
compliance with any term contained in this Agreement or any of the other Loan
Documents, other than any such term referred to in any other subsection of
this Section 8, and such default shall not have been remedied or waived within
30 days after the earlier of (i) an officer of Company becoming aware of such
default or (ii) receipt by Company of notice from any Agent or Lender of such
default; or
8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its Subsidiaries
(other than Immaterial Subsidiaries) in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect, which decree or order is not stayed;
or any other similar relief shall be granted under any applicable federal or
state law; or (ii) an involuntary case shall be commenced against Company or
any of its Subsidiaries (other than Immaterial Subsidiaries) under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over
Company or any of its Subsidiaries (other than Immaterial Subsidiaries), or
over all or a substantial part of its property, shall have been entered; or
there shall have occurred the involuntary appointment of an interim receiver,
trustee or other custodian of Company or any of its Subsidiaries (other than
Immaterial Subsidiaries) for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been issued
against any substantial part of the property of Company or any of its
Subsidiaries (other than Immaterial Subsidiaries), and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect,
or shall consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) shall make any assignment for the benefit of creditors; or
(ii) Company or any of its Subsidiaries (other than Immaterial Subsidiaries)
shall be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of
Directors of Company or any of its Subsidiaries (other than Immaterial
Subsidiaries) (or any committee thereof) shall adopt any resolution or
otherwise authorize any action to approve any of the actions referred to in
clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
(i) Any money judgment, writ or warrant of attachment or
similar process involving (a) in any individual case an amount in excess of
$2,500,000 or (b) in the aggregate at any time an amount in excess of
$5,000,000 (in either case not adequately covered by insurance as to which a
solvent and unaffiliated insurance company has acknowledged coverage) shall be
<PAGE>
entered or filed against Company or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or
unstayed for a period of 60 days (or in any event later than five days prior
to the date of any proposed sale thereunder); or (ii) any money judgment shall
be rendered against Company or any of its Subsidiaries or any of their
respective assets, or any settlement shall require payment by, Company or any
of its Subsidiaries in any individual case in an amount in excess of
$12,000,000; (iii) any of the following shall occur twice or both of the
following shall occur: (a) a money judgment in excess of $5,000,000 in an
individual case shall be rendered against Company or any of its Subsidiaries
or any of their respective assets, or (b) a settlement shall require payment
by Company or any of its Subsidiaries in excess of $5,000,000 in an individual
case; provided, however, that the amount of any money judgment or required
settlement under the preceding clauses (ii) and (iii) shall not include for
the purposes of such clauses any portion thereof which has been paid for by
insurance or which is adequately covered by insurance as to which a solvent
and unaffiliated insurance company has acknowledged coverage; provided further
that for purposes of calculating payments of amounts under this subsection
8.8, no payment shall be deemed to have been made hereunder to the extent that
such payment represents an amount reflected as a reserve in the Company's
Projections for potential liabilities incurred prior to the Effective Date; or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company
or any of its Subsidiaries decreeing the dissolution or split up of Company or
that Subsidiary and such order shall remain undischarged or unstayed for a
period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually
or in the aggregate results in a Material Adverse Effect; or there shall exist
an Unfunded Current Liability, individually or in the aggregate for all
Pension Plans (excluding for purposes of such computation any Pension Plans
with respect to which there is no Unfunded Current Liability), which would
have a Material Adverse Effect; or
8.11 CHANGE IN CONTROL.
(i) Prior to the consummation of any initial public offering of
Company Common Stock, (a) the MDC Entities shall at any time not own, in the
aggregate, at least 51% of the combined voting power of Company voting
Securities; or (b) any Person (other than the MDC Entities), including a
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange
Act) which includes such Person, shall purchase or otherwise acquire, directly
or indirectly, beneficial ownership of Securities of Company and, as a result
of such purchase or acquisition, any Person (together with its associates and
Affiliates), shall directly or indirectly beneficially own in the aggregate
Securities representing more than 35% of the combined voting power of Company
voting Securities; or (ii) at any time thereafter, (a) the MDC Entities
together shall own, directly or indirectly, in the aggregate, a lesser
percentage of the combined voting power of Company voting Securities than any
other holder, including a "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) which includes such holder, of such voting
Securities; (b) a majority of the members of the Board of Directors of Company
shall not be Continuing Directors; or (c) any Person (other than the MDC
Entities), including a "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Exchange Act) which includes such Person, shall purchase or
otherwise acquire, directly or indirectly, beneficial ownership of Securities
of Company and, as a result of such purchase or acquisition, any Person
(together with its associates and Affiliates), shall directly or indirectly
beneficially own in the aggregate Securities representing more than 25% of the
combined voting power of Company voting Securities; or
8.12 INVALIDITY OF GUARANTIES.
<PAGE>
At any time after the execution and delivery thereof, any
Guaranty of the Obligations of Company, for any reason other than the
satisfaction in full of all Obligations, ceases to be in full force and effect
or is declared to be null and void (except with respect to the obligations
thereunder of Immaterial Subsidiaries of Company) or any Loan Party (other
than Immaterial Subsidiaries of Company) denies in writing that it has any
further liability, including, without limitation, with respect to future
advances by Lenders, under any Loan Document to which it is a party; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in full
force and effect (other than by reason of a release of Collateral thereunder
in accordance with the terms hereof or thereof, the satisfaction in full of
the Obligations or any other termination of such Collateral Document in
accordance with the terms hereof or thereof) or shall be declared null and
void; or the validity or enforceability thereof shall be contested in writing
by any Loan Party; or Agent shall not have or shall cease to have a valid
security interest in any Collateral purported to be covered thereby, perfected
and with the priority required by the relevant Collateral Document, for any
reason other than the failure of Agents or any Lender to take any action
within its control, subject only to Liens permitted under the applicable
Collateral Documents; or
8.14 FAILURE TO CONSUMMATE ACQUISITIONS.
The Union Acquisition shall not be consummated in accordance
with this Agreement and the applicable Related Agreements concurrently with
the making of the Tranche C Term Loans, or the Union Merger shall not be
consummated within 120 days following the Effective Date in accordance with
this Agreement and the applicable Related Agreements concurrently with the
making of the Delayed-Draw Term Loans, or the Payco Acquisition, the
Accelerated Acquisition, the NSA Acquisition, the Union Acquisition or the
Union Merger shall be unwound, reversed or otherwise rescinded in whole or in
part for any reason;
8.15 DEFAULT UNDER SUBORDINATION PROVISIONS.
Company or any guarantor of Subordinated Indebtedness shall
fail to comply with the subordination provisions contained in the Subordinated
Note Indenture or any other instrument, indenture or agreement pursuant to
which such Subordinated Indebtedness is issued;
THEN (i) upon the occurrence of any Event of Default described in subsection
8.6 or 8.7, each of (a) the unpaid principal amount of and accrued interest on
the Loans, (b) an amount equal to the maximum amount that may at any time be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any such Letter of Credit shall have presented, or shall be
entitled at such time to present, the drafts or other documents or
certificates required to draw under such Letter of Credit) and (c) all other
Obligations shall automatically become immediately due and payable, without
presentment, demand, protest or other requirements of any kind, all of which
are hereby expressly waived by Company, and the obligation of each Lender to
make any Loan, the obligation of Chase Co-Administrative Agent to issue any
Letter of Credit and the right of any Lender to issue any Letter of Credit
hereunder shall thereupon terminate, and (ii) upon the occurrence and during
the continuation of any other Event of Default, Chase Co-Administrative Agent
shall, upon the written request of Requisite Lenders, by written notice to
Company, declare all or any portion of the amounts described in clauses (a)
through (c) above to be, and the same shall forthwith become, immediately due
and payable, and the obligation of each Lender to make any Loan, the
obligation of Chase Co-Administrative Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall
thereupon terminate; provided that the foregoing shall not affect in any way
the obligations of Lenders under subsection 3.3C(i) or the obligations of
Lenders to purchase participations in any unpaid Swing Line Loans as provided
<PAGE>
in subsection 2.1A(iv).
Any amounts described in clause (b) above, when received by
Chase Co-Administrative Agent, shall be held by Chase Co-Administrative Agent
pursuant to the terms of the Collateral Account Agreement and shall be applied
as therein provided.
Notwithstanding anything contained in the second preceding
paragraph, if at any time within 60 days after an acceleration of the Loans
pursuant to such paragraph Company shall pay all arrears of interest and all
payments on account of principal which shall have become due otherwise than as
a result of such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of Default (other
than non-payment of the principal of and accrued interest on the Loans, in
each case which is due and payable solely by virtue of acceleration) shall be
remedied or waived pursuant to subsection 10.6, then Requisite Lenders, by
written notice to Company, may at their option rescind and annul such
acceleration and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon. The provisions of this paragraph are intended merely to
bind Lenders to a decision which may be made at the election of Requisite
Lenders and are not intended to benefit Company and do not grant Company the
right to require Lenders to rescind or annul any acceleration hereunder or
preclude Agents or Lenders from exercising any of the rights or remedies
available to them under any of the Loan Documents, even if the conditions set
forth in this paragraph are met.
SECTION 9.
AGENTS
9.1 APPOINTMENT.
A.Each of GSCP and Chase is hereby appointed a Co-
Administrative Agent hereunder and under the other Loan Documents and each
Lender hereby authorizes each Co-Administrative Agent to act as its agent in
accordance with the terms of this Agreement and the other Loan Documents.
Each of GSCP and CSI is hereby appointed an Arranging Agent hereunder and
under the other Loan Documents and each Lender hereby authorizes each
Arranging Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. SunTrust is hereby appointed
Collateral Agent hereunder and under the other Loan Documents and each Lender
hereby authorizes Collateral Agent to act as its agent in accordance with the
terms of this Agreement and the other Loan Documents. Each Agent agrees to
act upon the express conditions contained in this Agreement and the other Loan
Documents, as applicable. The provisions of this Section 9 are solely for the
benefit of Agents and Lenders and Company shall have no rights as a third
party beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, each Agent shall act solely as an
agent of Lenders and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for Company
or any of its Subsidiaries. Upon the Effective Date, all obligations of
Arranging Agents hereunder shall terminate.
B.APPOINTMENT OF SUPPLEMENTAL COLLATERAL AGENTS. It is the
purpose of this Agreement and the other Loan Documents that there shall be no
violation of any law of any jurisdiction denying or restricting the right of
banking corporations or associations to transact business as agent or trustee
in such jurisdiction. It is recognized that in case of litigation under this
Agreement or any of the other Loan Documents, and in particular in case of the
enforcement of any of the Loan Documents, or in case Chase Co-Administrative
Agent deems that by reason of any present or future law of any jurisdiction
Collateral Agent may not exercise any of the rights, powers or remedies
granted herein or in any of the other Loan Documents or take any other action
which may be desirable or necessary in connection therewith, it may be
<PAGE>
necessary that Chase Co-Administrative Agent appoint an additional individual
or institution as a separate trustee, co-trustee, collateral agent or
collateral co-agent (any such additional individual or institution being
referred to herein individually as a "SUPPLEMENTAL COLLATERAL AGENT" and
collectively as "SUPPLEMENTAL COLLATERAL AGENTS").
In the event that Chase Co-Administrative Agent appoints a
Supplemental Collateral Agent with respect to any Collateral, (i) each and
every right, power, privilege or duty expressed or intended by this Agreement
or any of the other Loan Documents to be exercised by or vested in or conveyed
to Chase Co-Administrative Agent with respect to such Collateral shall be
exercisable by and vest in such Supplemental Collateral Agent to the extent,
and only to the extent, necessary to enable such Supplemental Collateral Agent
to exercise such rights, powers and privileges with respect to such Collateral
and to perform such duties with respect to such Collateral, and every covenant
and obligation contained in the Loan Documents and necessary to the exercise
or performance thereof by such Supplemental Collateral Agent shall run to and
be enforceable by either Agent or such Supplemental Collateral Agent, and
(ii) the provisions of this Section 9 and of subsections 10.2 and 10.3 that
refer to Collateral Agent shall inure to the benefit of such Supplemental
Collateral Agent and all references therein to Collateral Agent shall be
deemed to be references to Collateral Agent and/or such Supplemental
Collateral Agent, as the context may require.
Should any instrument in writing from Company or any other Loan
Party be required by any Supplemental Collateral Agent so appointed by Chase
Co-Administrative Agent for more fully and certainly vesting in and confirming
to him or it such rights, powers, privileges and duties, Company shall, or
shall cause such Loan Party to, execute, acknowledge and deliver any and all
such instruments promptly upon request by Chase Co-Administrative Agent. In
case any Supplemental Collateral Agent, or a successor thereto, shall die,
become incapable of acting, resign or be removed, all the rights, powers,
privileges and duties of such Supplemental Collateral Agent, to the extent
permitted by law, shall vest in and be exercised by Collateral Agent until the
appointment of a new Supplemental Collateral Agent.
9.2 POWERS; GENERAL IMMUNITY.
A.DUTIES SPECIFIED. Each Lender irrevocably authorizes each
Agent to take such action on such Lender's behalf and to exercise such powers
hereunder and under the other Loan Documents as are specifically delegated to
such Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. Each Agent shall have only those duties and
responsibilities that are expressly specified in this Agreement and the other
Loan Documents, and it may perform such duties by or through its agents or
employees. No Agent shall have, by reason of this Agreement or any of the
other Loan Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents, expressed or
implied, is intended to or shall be so construed as to impose upon any Agent
any obligations in respect of this Agreement or any of the other Loan
Documents except as expressly set forth herein or therein.
B.NO RESPONSIBILITY FOR CERTAIN MATTERS. No Agent shall be
responsible to any Lender for the execution, effectiveness, genuineness,
validity, enforceability, collectibility or sufficiency of this Agreement or
any other Loan Document or for any representations, warranties, recitals or
statements made herein or therein or made in any written or oral statement or
in any financial or other statements, instruments, reports or certificates or
any other documents furnished by any Agent to Lenders or by or on behalf of
Company and/or its Subsidiaries to any Agent or any Lender in connection with
the Loan Documents and the transactions contemplated thereby or for the
financial condition or business affairs of Company or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Loan
Documents or as to the use of the proceeds of the Loans or the use of the
<PAGE>
Letters of Credit or as to the existence or possible existence of any Event of
Default or Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, neither Co-Administrative Agent shall have
any liability arising from confirmations of the amount of outstanding Loans or
the Total Utilization of Revolving Loan Commitments or the component amounts
thereof.
C.EXCULPATORY PROVISIONS. Neither any Agent nor any of such
Agent's respective officers, directors, employees or agents shall be liable to
Lenders for any action taken or omitted by such Agent under or in connection
with any of the Loan Documents except to the extent caused by such Agent's
gross negligence or willful misconduct. If any Agent shall request
instructions from Lenders with respect to any act or action (including the
failure to take an action) in connection with this Agreement or any of the
other Loan Documents, such Agent shall be entitled to refrain from such act or
taking such action unless and until such Agent shall have received
instructions from Requisite Lenders (or such other Lenders as may be required
to give such instructions under subsection 10.6). Without prejudice to the
generality of the foregoing, (i) such Agent shall be entitled to rely, and
shall be fully protected in relying, upon any communication, instrument or
document believed by it to be genuine and correct and to have been signed or
sent by the proper person or persons, and shall be entitled to rely and shall
be protected in relying on opinions and judgments of attorneys (who may be
attorneys for Company and its Subsidiaries), accountants, experts and other
professional advisors selected by it; and (ii) no Lender shall have any right
of action whatsoever against such Agent as a result of such Agent acting or
(where so instructed) refraining from acting under this Agreement or any of
the other Loan Documents in accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6). Such Agent shall be entitled to refrain from
exercising any power, discretion or authority vested in it under this
Agreement or any of the other Loan Documents unless and until it has obtained
the instructions of Requisite Lenders (or such other Lenders as may be
required to give such instructions under subsection 10.6).
D.AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created
shall in no way impair or affect any of the rights and powers of, or impose
any duties or obligations upon, any Agent in its individual capacity as a
Lender hereunder. With respect to its participation in the Loans and the
Letters of Credit, each Agent shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not performing
the duties and functions delegated to it hereunder, and the term "Lender" or
"Lenders" or any similar term shall, unless the context clearly otherwise
indicates, include such Agent in its individual capacity. Each Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of banking, trust, financial advisory or other business with Company or
any of its Affiliates as if it were not performing the duties specified
herein, and may accept fees and other consideration from Company and/or its
Subsidiaries for services in connection with this Agreement and otherwise
without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL
OF CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company
and its Subsidiaries in connection with the making of the Loans and the
issuance of Letters of Credit hereunder and that it has made and shall
continue to make its own appraisal of the creditworthiness of Company and its
Subsidiaries. No Agent shall have any duty or responsibility, either
initially or on a continuing basis, to make any such investigation or any such
appraisal on behalf of Lenders or to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter, and no
Agent shall have any responsibility with respect to the accuracy of or the
completeness of any information provided to Lenders.
<PAGE>
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally
agrees to indemnify each Agent, to the extent that such Agent shall not have
been reimbursed by Company, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against such Agent in performing its duties hereunder
or under the other Loan Documents or otherwise in its capacity as such Agent
in any way relating to or arising out of this Agreement or the other Loan
Documents; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from such Agent's gross
negligence or willful misconduct.
9.5 SUCCESSOR AGENTS AND SWING LINE LENDER.
A.SUCCESSOR AGENTS. Any Agent may resign at any time by giving
30 days' prior written notice thereof to the other Agents, Lenders and
Company, and any Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to Company and Co-
Administrative Agents and signed by Requisite Lenders. Upon any such notice
of resignation or any such removal, Requisite Lenders shall have the right,
upon five Business Days' notice to Company, to appoint a successor Agent.
Upon the acceptance of any appointment as Agent hereunder by a successor
Agent, that successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or removed Agent
and the retiring or removed Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Agent's
resignation or removal hereunder as 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 Agent under this Agreement.
B.SUCCESSOR SWING LINE LENDER. Any resignation or removal of
Chase Co-Administrative Agent pursuant to subsection 9.5A shall also
constitute the resignation or removal of Chase or its successor as Swing Line
Lender, and any successor Chase Co-Administrative Agent appointed pursuant to
subsection 9.5A shall, upon its acceptance of such appointment, become the
successor Swing Line Lender for all purposes hereunder. In such event
(i) Company shall prepay any outstanding Swing Line Loans made by the retiring
or removed Chase Co-Administrative Agent in its capacity as Swing Line Lender,
(ii) upon such prepayment, the retiring or removed Chase Co-Administrative
Agent and Swing Line Lender shall surrender the Swing Line Note held by it to
Company for cancellation, and (iii) Company shall issue a new Swing Line Note
to the successor Chase Co-Administrative Agent and Swing Line Lender
substantially in the form of Exhibit VI annexed hereto, in the principal
amount of the Swing Line Loan Commitment then in effect and with other
appropriate insertions.
9.6 COLLATERAL DOCUMENTS.
Each Lender and Agent hereby further authorizes Collateral
Agent to enter into each Collateral Document as secured party on behalf of and
for the benefit of Agents and Lenders and agrees to be bound by the terms of
each Collateral Document; provided that Collateral Agent shall not enter into
or consent to any amendment, modification, termination or waiver of any
provision contained in any Collateral Document without the prior consent of
Requisite Lenders (or, if required pursuant to subsection 10.6, all Lenders);
provided further, however, that, without further written consent or
authorization from Requisite Lenders, Collateral Agent may execute any
documents or instruments necessary to effect the release of any asset
constituting Collateral from the Lien of the applicable Collateral Document in
the event that such asset is sold or otherwise disposed of in a transaction
effected in accordance with subsection 7.7. Anything contained in any of the
Loan Documents to the contrary notwithstanding, each Lender agrees that no
<PAGE>
Lender shall have any right individually to realize upon any of the Collateral
under any Collateral Document (including, without limitation, through the
exercise of a right of set-off against call deposits of such Lender in which
any funds on deposit in the Collateral Account may from time to time be
invested), it being understood and agreed that all rights and remedies under
the Collateral Documents may be exercised solely by Collateral Agent for the
benefit of Lenders in accordance with the terms thereof.
SECTION 10.
MISCELLANEOUS
10.1 ASSIGNMENTS AND PARTICIPATIONS IN LOANS, LETTERS OF CREDIT.
A.GENERAL. Subject to subsection 10.1B, each Lender shall have
the right at any time to (i) sell, assign, transfer or negotiate to any
Eligible Assignee, or (ii) sell participations to any Person in, all or any
part of its Commitments (together with its Letters of Credit or participations
therein made or arising pursuant to its Revolving Loan Commitment) or any
Loan or Loans made by it or any other interest herein or in any other
Obligations owed to it; provided that no such sale, assignment, transfer or
participation shall, without the consent of Company, require Company to file a
registration statement with the Securities and Exchange Commission or apply to
qualify such sale, assignment, transfer or participation under the securities
laws of any state; provided further, that no such sale, assignment or transfer
described in clause (i) above shall be effective unless and until an
Assignment Agreement effecting such sale, assignment or transfer shall have
been accepted by Chase Co-Administrative Agent and recorded in the Register as
provided in subsection 10.1B(ii); provided, further that no such sale,
assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loan Commitment
and the Revolving Loans of the Lender effecting such sale, assignment,
transfer or participation; and provided further that, anything contained
herein to the contrary notwithstanding, the Swing Line Loan Commitment and the
Swing Line Loans of Swing Line Lender may not be sold, assigned or transferred
as described in clause (i) above to any Person other than a successor Chase
Co-Administrative Agent and Swing Line Lender to the extent contemplated by
subsection 9.5. Except as otherwise provided in this subsection 10.1, no
Lender shall, as between Company and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment, transfer or
negotiation of, or any granting of participations in, all or any part of its
Commitments or the Loans, the Letters of Credit or participations therein or
the other Obligations owed to such Lender.
B.ASSIGNMENTS.
(i)Amounts and Terms of Assignments. Each Commitment, Loan,
Letter of Credit, or participation therein or other Obligation
may (a) be assigned in any amount to another Lender who is a
Non-Defaulting Lender, or to an Affiliate of the assigning
Lender or another Lender who, in either such case, is a Non-
Defaulting Lender, with the consent of Co-Administrative Agents
(which consent shall not be unreasonably withheld) and the
giving of notice to Company; provided that, after giving effect
to a proposed assignment to another Lender, the assigning
Lender shall have an aggregate Commitment of at least
$5,000,000 unless the proposed assignment constitutes the
aggregate amount of the Commitments, Loans, Letters of Credit,
and participations therein and other Obligations of the
assigning Lender, or (b) be assigned in an aggregate amount of
not less than $5,000,000 (or such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans,
Letters of Credit, and participations therein and other
Obligations of the assigning Lender) to any other Eligible
Assignee with the consent of Co-Administrative Agents (which
<PAGE>
consent shall not be unreasonably withheld) and the giving of
notice to Company. To the extent of any such assignment in
accordance with either clause (a) or (b) above, the assigning
Lender shall be relieved of its obligations with respect to its
Commitments, Loans, Letters of Credit, or participations
therein or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute
and deliver to Chase Co-Administrative Agent, for its
acceptance and recording in the Register, an Assignment
Agreement, together with a processing fee of $3,000 payable by
the assigning Lender and such certificates, documents or other
evidence, if any, with respect to United States federal income
tax withholding matters as the assignee under such Assignment
Agreement may be required to deliver to Chase Co-Administrative
Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after
the effective date specified in such Assignment Agreement,
(y) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender hereunder and (z) the
assigning Lender thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to
such Assignment Agreement, relinquish its rights (other than
any rights which survive the termination of this Agreement
under subsection 10.9B) and be released from its obligations
under this Agreement (and, in the case of an Assignment
Agreement covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such
Lender shall cease to be a party hereto; provided that,
anything contained in any of the Loan Documents to the contrary
notwithstanding, if such Lender is the Issuing Lender with
respect to any outstanding Letters of Credit such Lender shall
continue to have all rights and obligations of an Issuing
Lender with respect to such Letters of Credit until the
cancellation or expiration of such Letters of Credit and the
reimbursement of any amounts drawn thereunder). The
Commitments hereunder shall be modified to reflect the
Commitments of such assignee and any remaining Commitments of
such assigning Lender and, if any such assignment occurs after
the issuance of the Notes hereunder, the assigning Lender shall
surrender its applicable Notes and, upon such surrender, new
Notes shall be issued to the assignee and, if applicable, to
the assigning Lender, substantially in the form of Exhibit IV-
A, Exhibit IV-B, Exhibit IV-C, Exhibit V or Exhibit VI annexed
hereto, as the case may be, with appropriate insertions, to
reflect the new Commitments and/or outstanding Term Loans of
the assignee and the assigning Lender.
(ii)Acceptance by Chase Co-Administrative Agent; Recordation in
Register. Upon its receipt of an Assignment Agreement executed
by an assigning Lender and an assignee representing that it is
an Eligible Assignee, together with the processing fee referred
to in subsection 10.1B(i) and any certificates, documents or
other evidence with respect to United States federal income tax
withholding matters that such assignee may be required to
deliver to Chase Co-Administrative Agent pursuant to subsection
2.7B(iii)(a), Chase Co-Administrative Agent shall, if such
Assignment Agreement has been completed and is in substantially
the form of Exhibit XIII hereto and if Co-Administrative Agents
have consented to the assignment evidenced thereby (to the
extent such consent is required pursuant to subsection
10.1B(i)), (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Chase Co-Administrative Agent
to such assignment), (b) record the information contained
<PAGE>
therein in the Register, and (c) give prompt notice thereof to
Company. Chase Co-Administrative Agent shall maintain a copy
of each Assignment Agreement delivered to and accepted by it as
provided in this subsection 10.1B(ii).
C.PARTICIPATIONS. The holder of any participation, other than
an Affiliate of the Lender granting such participation, shall not be entitled
to require such Lender to take or omit to take any action hereunder except
action (i) effecting the extension of the final maturity of the Loan allocated
to such participation, (ii) effecting a reduction of the principal amount of
or affecting the rate of interest payable on any Loan allocated to such
participation, (iii) releasing all or substantially all of the Collateral, or
(iv) releasing all of the Guarantors from their obligations under the
Guaranties, and all amounts payable by Company hereunder (including, without
limitation, amounts payable to such Lender pursuant to subsections 2.6D, 2.7
and 3.6) shall be determined as if such Lender had not sold such
participation. Company and each Lender hereby acknowledge and agree that,
solely for purposes of subsections 10.4 and 10.5, (a) any participation will
give rise to a direct obligation of Company to the participant and (b) the
participant shall be considered to be a "Lender".
D.ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of
this subsection 10.1, any Lender may assign and pledge all or any portion of
its Loans, the other Obligations owed to such Lender and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A of the
Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided that (i) no Lender shall, as
between Company and such Lender, be relieved of any of its obligations
hereunder as a result of any such assignment and pledge and (ii) in no event
shall such Federal Reserve Bank be considered to be a "Lender" or be entitled
to require the assigning Lender to take or omit to take any action hereunder.
E.INFORMATION. Each Lender may furnish any information
concerning Company and its Subsidiaries in the possession of that Lender from
time to time to assignees and participants (including prospective assignees
and participants), subject to subsection 10.20.
F.LIMITATION. No assignee, participant or other transferee or
any Lender's rights shall be entitled to receive any greater payment under
subsection 2.7 than such Lender would have been entitled to receive with
respect to the rights transferred, unless such transfer is made with Company's
prior written consent or at a time when the circumstances giving rise to such
greater payment did not exist.
G.REPRESENTATIONS OF LENDERS. Each Lender listed on the
signature pages hereof hereby represents and warrants (i) that it is an
Eligible Assignee described in clause (i) of the definition thereof; (ii) that
it has experience and expertise in the making of loans such as the Loans; and
(iii) that it will make its Loans for its own account in the ordinary course
of its business and without a view to distribution of such Loans within the
meaning of the Securities Act or the Exchange Act or other federal securities
laws (it being understood that, subject to the provisions of this subsection
10.1, the disposition of such Loans or any interests therein shall at all
times remain within its exclusive control). Each Lender that becomes a party
hereto pursuant to an Assignment Agreement shall be deemed to agree that the
representations and warranties of such Lender contained in Section 2(c) of
such Assignment Agreement are incorporated herein by this reference.
10.2 EXPENSES.
Whether or not the transactions contemplated hereby shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and out of pocket expenses of Co-Administrative Agents in connection
with the preparation of the Loan Documents; (ii) all the actual and reasonable
costs of furnishing all opinions by counsel for Company (including, without
<PAGE>
limitation, any opinions requested by Lenders as to any legal matters arising
hereunder) and of Company's performance of and compliance with all agreements
and conditions on its part to be performed or complied with under this
Agreement and the other Loan Documents including, without limitation, with
respect to confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements of counsel
to Agents (including allocated costs of internal counsel) in connection with
the negotiation, preparation, execution and administration of the Loan
Documents and the Loans and any consents, amendments, waivers or other
modifications hereto or thereto and any other documents or matters requested
by Company; (iv) all other actual and reasonable costs and expenses incurred
by Agents in connection with the negotiation, preparation and execution of the
Loan Documents and the transactions contemplated hereby and thereby; and
(v) after the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Agents and Lenders in enforcing
any Obligations of or in collecting any payments due from Company hereunder or
under the other Loan Documents by reason of such Event of Default or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings.
10.3 INDEMNITY.
In addition to the payment of expenses pursuant to subsection
10.2, whether or not the transactions contemplated hereby shall be
consummated, Company agrees to defend, indemnify, pay and hold harmless Agents
and Lenders, and the officers, directors, trustees, partners, employees,
agents, attorneys and affiliates of any of Agents and Lenders (collectively
called the "INDEMNITEES") from and against any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not any such
Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including, without
limitation, securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Loan Documents or the transactions contemplated hereby or thereby
(including, without limitation, Lenders' agreement to make the Loans hereunder
or the use or intended use of the proceeds of any of the Loans or the issuance
of Letters of Credit hereunder or the use or intended use of any of the
Letters of Credit) (collectively called the "INDEMNIFIED LIABILITIES");
provided that Company shall not have any obligation to any Indemnitee
hereunder with respect to any Indemnified Liabilities to the extent, and only
to the extent, of any particular liability, obligation, loss, damage, penalty,
claim, cost, expense or disbursement that arose from the gross negligence or
willful misconduct of that Indemnitee as determined by a final judgment of a
court of competent jurisdiction. To the extent that the undertaking to
defend, indemnify, pay and hold harmless set forth in the preceding sentence
may be unenforceable because it is violative of any law or public policy,
Company shall contribute the maximum portion that it is permitted to pay and
satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnitees or any of them.
10.4 SET-OFF; SECURITY INTEREST IN DEPOSIT ACCOUNTS.
In addition to any rights now or hereafter granted under
applicable law and not by way of limitation of any such rights, upon the
occurrence and during the continuance of any Event of Default each Lender is
hereby authorized by Company at any time or from time to time, without notice
to Company or to any other Person, any such notice being hereby expressly
<PAGE>
waived, to set off and to appropriate and to apply any and all deposits
(general or special, including, but not limited to, Indebtedness evidenced by
certificates of deposit, whether matured or unmatured, but not including trust
accounts) and any other Indebtedness at any time held or owing by that Lender
(at any office of that Lender wherever located) to or for the credit or the
account of Company against and on account of the obligations and liabilities
of Company to that Lender under this Agreement, the Notes, the Letters of
Credit and participations therein, including, but not limited to, all claims
of any nature or description arising out of or connected with this Agreement,
the Notes, the Letters of Credit and participations therein or any other Loan
Document, irrespective of whether or not (i) that Lender shall have made any
demand hereunder or (ii) the principal of or the interest on the Loans or any
amounts in respect of the Letters of Credit or any other amounts due hereunder
shall have become due and payable pursuant to Section 8 and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
Company hereby further grants to each Agent and Lender a security interest in
all deposits and accounts maintained with such Agent or Lender as security for
the Obligations.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them
shall, whether by voluntary payment (other than a voluntary prepayment of
Loans made and applied in accordance with the terms of this Agreement), by
realization upon security, through the exercise of any right of set-off or
banker's lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment
or reduction of a proportion of the aggregate amount of principal, interest,
amounts payable in respect of Letters of Credit, fees and other amounts then
due and owing to that Lender hereunder or under the other Loan Documents
(collectively, the "AGGREGATE AMOUNTS DUE" to such Lender) which is greater
than the proportion received by any other Lender in respect of the Aggregate
Amounts Due to such other Lender, then the Lender receiving such
proportionately greater payment shall (i) notify Chase Co-Administrative Agent
and each other Lender of the receipt of such payment and (ii) apply a portion
of such payment to purchase participations (which it shall be deemed to have
purchased from each seller of a participation simultaneously upon the receipt
by such seller of its portion of such payment) in the Aggregate Amounts Due to
the other Lenders so that all such recoveries of Aggregate Amounts Due shall
be shared by all Lenders in proportion to the Aggregate Amounts Due to them;
provided that if all or part of such proportionately greater payment received
by such purchasing Lender is thereafter recovered from such Lender upon the
bankruptcy, reorganization or insolvency proceeding of Company or otherwise,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the
extent of such recovery, but without interest. Company expressly consents to
the foregoing arrangement and agrees that any holder of a participation so
purchased may exercise any and all rights of banker's lien, set-off or
counterclaim with respect to any and all monies owing by Company to that
holder with respect thereto as fully as if that holder were owed the amount of
the participation held by that holder.
10.6 AMENDMENTS AND WAIVERS.
A.No amendment, modification, termination or waiver of any
provision of this Agreement or of the Notes, or consent to any departure by
Company or any other Loan Party therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders; provided that any such
amendment, modification, termination, waiver or consent which: reduces the
principal amount of any of the Loans; reduces the percentage specified in the
definition of "Requisite Lenders" (it being understood that, with the consent
of Requisite Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of "Requisite Lenders" on
substantially the same basis as the Tranche A Term Loan Commitments, Tranche A
Term Loans, Tranche B Term Loan Commitments, Tranche B Term Loans, Tranche C
<PAGE>
Term Loan Commitments, Tranche C Term Loans, Revolving Loan Commitments and
Revolving Loans are included on the Effective Date); changes in any manner any
provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of all Lenders; postpones the scheduled final maturity
date of any of the Loans; postpones the date or reduces the amount of any
scheduled payment (but not prepayment) of principal of any of the Loans;
postpones the date on which any interest or any fees are payable; decreases
the interest rate borne by any of the Loans (other than any waiver of any
increase in the interest rate applicable to any of the Loans pursuant to
subsection 2.2E) or the amount of any fees payable hereunder; increases the
maximum duration of Interest Periods permitted hereunder; releases all or
substantially all of the Collateral; releases all of the Guarantors from their
obligations under the Guaranties; reduces the amount or postpones the due date
of any amount payable in respect of, or extends the required expiration date
of, any Letter of Credit; changes the obligations of Lenders relating to the
purchase of participations in Letters of Credit in any manner that could be
adverse to any Issuing Lender; or changes in any manner the provisions
contained in subsection 8.1 or this subsection 10.6; shall be effective only
if evidenced by a writing signed by or on behalf of all Lenders to whom are
owed Obligations being directly affected by such amendment, modification,
termination, waiver or consent. In addition, (i) any amendment, modification,
termination or waiver of any of the provisions contained in Section 4 shall be
effective only if evidenced by a writing signed by or on behalf of Co-
Administrative Agents and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note,
(iii) no amendment, modification, termination or waiver of any provision of
this Agreement which disproportionately and adversely affects the obligation
of any Loan Party to make payments (including without limitation mandatory
prepayments) to the holders of the Tranche A Term Loans, the holders of the
Tranche B Term Loans, the holders of the Tranche C Loans or the holders of the
Revolving Loans and Revolving Loan Commitments, shall be effective without the
written concurrence of the holders of 51% in principal amount of the class
(i.e., Tranche A Term Loans, Tranche B Term Loans, Tranche C Loans or
Revolving Loans and Revolving Loan Commitments each being a "class" of Loans)
of Loans so disproportionately and adversely affected; (iv) no increase in the
Commitments of any Lender over the amount thereof then in effect shall be
effective without the written concurrence of that Lender, it being understood
and agreed that in no event shall waivers or modifications of conditions
precedent, covenants, Events of Default, Potential Events of Default or of a
mandatory prepayment or a reduction of any or all of the Commitments be deemed
to constitute an increase of the Commitment of any Lender and that an increase
in the available portion of any Commitment of any Lender shall not be deemed
to constitute an increase in the Commitment of such Lender, (v) no amendment,
modification, termination or waiver of any provision of subsection 2.1A(iv) or
any other provision of this Agreement relating to the Swing Line Loan
Commitment or the Swing Line Loans shall be effective without the written
concurrence of Swing Line Lender, (vi) no amendment, modification, termination
or waiver of any provision of Section 3 relating to the rights or obligations
of any or all Issuing Lenders shall be effective without the written
concurrence of Chase Co-Administrative Agent and each Lender who is an Issuing
Lender with respect to any Letter of Credit then outstanding, and (vii) no
amendment, modification, termination or waiver of any provision of Section 9
or of any other provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of Chase Co-Administrative Agent or Co-
Administrative Agent shall be effective without the written concurrence of
Chase Co-Administrative Agent or Co-Administrative Agent, as the case may be,
Chase Co-Administrative Agent may, but shall have no obligation to, with the
concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective
only in the specific instance and for the specific purpose for which it was
given. No notice to or demand on Company in any case shall entitle Company to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this subsection 10.6 shall be binding upon each Lender at the time
outstanding, each future Lender and, if signed by Company, on Company.
<PAGE>
B.If, in connection with any proposed change, waiver, discharge
or termination to any of the provision of this Agreement as contemplated by
the proviso in the first sentence of this subsection 10.6, the consent of
Requisite Lenders is obtained but consent of one or more of such other Lenders
whose consent is required is not obtained, then Company may, so long as all
non-consenting Lenders are so treated, elect to terminate such Lender as a
party to this Agreement; provided that, concurrently with such termination,
(i) Company shall pay that Lender all principal, interest and fees and other
amounts due to be paid to such Lender with respect to all periods through such
date of termination, (ii) another financial institution satisfactory to
Company and Co-Administrative Agents (or if either Co-Administrative Agent is
also a Lender to be terminated, the successor Co-Administrative Agent and the
Co-Administrative Agent not so terminated) shall agree, as of such date, to
become a Lender for all purposes under this Agreement (whether by assignment
or amendment) and to assume all obligations of the Lender to be terminated as
of such date, and (iii) all documents and supporting materials necessary, in
the judgment of Co-Administrative Agents (or if either Co-Administrative Agent
is also a Lender to be terminated, the successor Co-Administrative Agent and
the Co-Administrative Agent not so terminated) to evidence the substitution of
such Lender shall have been received and approved by Co-Administrative Agents
as of such date.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so
that if a particular action or condition is not permitted by any of such
covenants, the fact that it would be permitted by an exception to, or would
otherwise be within the limitations of, another covenant shall not avoid the
occurrence of an Event of Default or Potential Event of Default if such action
is taken or condition exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or
other communication herein required or permitted to be given shall be in
writing and may be personally served, telecopied, telexed or sent by United
States mail or courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of telecopy or telex,
or four Business Days after depositing it in the United States mail,
registered or certified, with postage prepaid and properly addressed; provided
that notices to Chase Co-Administrative Agent shall not be effective until
received. For the purposes hereof, the address of each party hereto shall be
as set forth under such party's name on the signature pages hereof or (i) as
to Company and Chase Co-Administrative Agent, such other address as shall be
designated by such Person in a written notice delivered to the other parties
hereto and (ii) as to each other party, such other address as shall be
designated by such party in a written notice delivered to Chase Co-
Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A.All representations, warranties and agreements made herein
shall survive the execution and delivery of this Agreement and the making of
the Loans and the issuance of the Letters of Credit hereunder.
B.Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of Company set forth in subsections 2.6D, 2.7,
3.5A, 3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in
subsections 9.2C, 9.4, 10.4, 10.5 and 10.20 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn or paid thereunder, and the termination of
this Agreement.
10.10 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of Chase Co-Administrative
<PAGE>
Agent, Collateral Agent or any Lender in the exercise of any power, right or
privilege hereunder or under any other Loan Document shall impair such power,
right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege. All rights and remedies existing under this
Agreement and the other Loan Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
Neither Chase Co-Administrative Agent nor any Lender shall be
under any obligation to marshal any assets in favor of Company or any other
party or against or in payment of any or all of the Obligations. To the
extent that Company makes a payment or payments to Chase Co-Administrative
Agent, Collateral Agent or Lenders (or to Chase Co-Administrative Agent or
Collateral Agent for the benefit of Lenders), or Chase Co-Administrative
Agent, Collateral Agent or Lenders enforce any security interests or exercise
their rights of setoff, and such payment or payments or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, any
other state or federal law, common law or any equitable cause, then, to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, rights and remedies therefor or related thereto,
shall be revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or setoff had not occurred.
10.12 SEVERABILITY.
In case any provision in or obligation under this Agreement or
the Notes shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction,
shall not in any way be affected or impaired thereby.
10.13 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF LENDERS' RIGHTS.
The obligations of Lenders hereunder are several and no Lender
shall be responsible for the obligations or Commitments of any other Lender
hereunder. Nothing contained herein or in any other Loan Document, and no
action taken by Lenders pursuant hereto or thereto, shall be deemed to
constitute Lenders as a partnership, an association, a joint venture or any
other kind of entity. The amounts payable at any time hereunder to each Lender
shall be a separate and independent debt, and each Lender shall be entitled to
protect and enforce its rights arising out of this Agreement and it shall not
be necessary for any other Lender to be joined as an additional party in any
proceeding for such purpose.
10.14 HEADINGS.
Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
10.15 APPLICABLE LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORD-
ANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and
<PAGE>
their respective successors and assigns and shall inure to the benefit of the
parties hereto and the successors and assigns of Lenders (it being understood
that Lenders' rights of assignment are subject to subsection 10.1). Company's
rights or obligations hereunder nor any interest therein may not be assigned
or delegated by Company without the prior written consent of all Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I)ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II)WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
(III)AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SUBSECTION 10.8;
(IV)AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY
SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES
EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT;
(V)AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST
COMPANY IN THE COURTS OF ANY OTHER JURISDICTION; AND
(VI)AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17
RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND
ENFORCEABLE TO THE FULLEST EXTENT PERMISSIBLE UNDER NEW YORK
GENERAL OBLIGATIONS LAW SECTION 5-1402 OR OTHERWISE.
10.18 WAIVER OF JURY TRIAL.
EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE
ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER RELATIONSHIP THAT IS BEING ESTABLISHED.
The scope of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject matter
of this transaction, including, without limitation, contract claims, tort
claims, breach of duty claims and all other common law and statutory claims.
Each party hereto acknowledges that this waiver is a material inducement to
enter into a business relationship, that each has already relied on this
waiver in entering into this Agreement, and that each will continue to rely on
this waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its legal
counsel and that it knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY
A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SUBSECTION 10.18 AND
EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY OTHER DOCUMENTS OR
AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER. In the event of litigation,
this Agreement may be filed as a written consent to a trial by the court.
10.19 CONFIDENTIALITY.
<PAGE>
Each Lender shall hold all non-public information obtained
pursuant to the requirements of this Agreement which has been identified as
confidential by Company in accordance with such Lender's customary procedures
for handling confidential information of this nature, it being understood and
agreed by Company that in any event a Lender may make disclosures reasonably
required by any bona fide assignee, transferee or participant in connection
with the contemplated assignment or transfer by such Lender of any Loans or
any participation therein or as required or requested by any governmental
agency or representative thereof or pursuant to legal process or by the
National Association of Insurance Commissioners or in connection with the
exercise of any remedy under the Loan Documents; provided that, unless
specifically prohibited by applicable law or court order, each Lender shall
notify Company of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition of such Lender by such governmental agency) for disclosure
of any such non-public information prior to disclosure of such information;
and provided, further that in no event shall any Lender be obligated or
required to return any materials furnished by Company or any of its
Subsidiaries.
10.20 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or
supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are physically
attached to the same document.
It is the intention of each of the parties hereto that the
Existing Credit Agreement be amended and restated so as to preserve the
perfection and priority of all security interests securing indebtedness and
obligations under the Existing Credit Agreement and the other Loan Documents
and that all indebtedness and obligations of Company and its Subsidiaries
hereunder and thereunder shall be secured by the Collateral Documents and that
this Agreement shall not constitute a novation of the obligations and
liabilities existing under the Existing Credit Agreement or be deemed to
evidence or constitute repayment of all or any portion of any such obligations
or liabilities. The parties hereto further acknowledge and agree that this
Agreement constitutes an amendment of the Existing Credit Agreement made under
the terms of subsection 10.6 thereof.
The Agreement shall become effective upon the execution of a
counterpart hereof by Company, Co-Administrative Agents, Requisite Lenders (as
such term is defined in the Existing Credit Agreement) and the New Lenders and
receipt by Company and Chase Co-Administrative Agent of written or telephonic
notification of such execution and authorization of delivery thereof; provided
that, unless and until all of the conditions set forth in subsections 4.2 and
4.4 have been satisfied or waived in accordance with subsection 10.6 of the
Existing Credit Agreement, the Existing Credit Agreement shall remain in full
force and effect without giving effect to the amendments set forth herein, all
as if this Agreement had never been executed and delivered.
[Remainder of page intentionally left blank]
<PAGE>
O'M&M LLP
DRAFT
01/09/98
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JANUARY __, 1998
AMONG
OUTSOURCING SOLUTIONS INC.,
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
GOLDMAN SACHS CREDIT PARTNERS L.P.
AND
THE CHASE MANHATTAN BANK,
AS CO-ADMINISTRATIVE AGENTS,
GOLDMAN SACHS CREDIT PARTNERS L.P.
AND
CHASE SECURITIES INC.,
AS ARRANGING AGENTS,
AND
SUNTRUST BANK, ATLANTA,
AS COLLATERAL AGENT
OUTSOURCING SOLUTIONS INC.
CREDIT AGREEMENT
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . 3
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Accounting Terms; Utilization of GAAP
for Purposes of Calculations Under Agreement . . . . . . . . . . 35
1.3 Other Definitional Provisions . . . . . . . . . . . . . . . . . . . 36
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS . . . . . . . . . 36
2.1 Commitments; Loans . . . . . . . . . . . . . . . . . . . . . . . . 36
2.2 Interest on the Loans. . . . . . . . . . . . . . . . . . . . . . . 44
2.3 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.4 Repayments, Prepayments and Reductions in
Revolving Loan Commitments; General Provisions
Regarding Payments. . . . . . . . . . . . . . . . . . . . . . . . 49
2.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 59
2.6 Special Provisions Governing Eurodollar Rate Loans. . . . . . . . . 59
2.7 Increased Costs; Taxes; Capital Adequacy. . . . . . . . . . . . . . 62
2.8 Obligation of Lenders and Issuing Lenders to
Mitigate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . 67
3.1 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein. . . . . . . . . . . . . . . . 67
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . 71
3.3 Drawings and Payments and Reimbursement of
Amounts Paid Under Letters of Credit. . . . . . . . . . . . . . . 71
3.4 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . 74
3.5 Indemnification; Nature of Issuing Lender's Duties . . . . . . . . 75
3.6 Increased Costs and Taxes Relating to
Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . 77
4.1 Conditions to Existing Loans and Letters of
Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
4.2 Conditions to Tranche C Term Loans. . . . . . . . . . . . . . . . . 77
4.3 Conditions to Delayed-Draw Term Loans. . . . . . . . . . . . . . . 85
4.4 Conditions to All Loans. . . . . . . . . . . . . . . . . . . . . . 87
4.5 Conditions to Letters of Credit. . . . . . . . . . . . . . . . . . 88
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . 89
5.1 Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries. . . . . . . . . . . . . . . 89
5.2 Authorization of Borrowing, etc. . . . . . . . . . . . . . . . . . 90
5.3 Financial Condition; Projections. . . . . . . . . . . . . . . . . . 91
5.4 No Material Adverse Change; No Restricted
Junior Payments. . . . . . . . . . . . . . . . . . . . . . . . . 93
5.5 Title to Properties; Liens. . . . . . . . . . . . . . . . . . . . . 93
5.6 Litigation; Adverse Facts. . . . . . . . . . . . . . . . . . . . . 93
5.7 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . 94
5.8 Performance of Agreements; Materially
Adverse Agreements. . . . . . . . . . . . . . . . . . . . . . . . 94
5.9 Governmental Regulation. . . . . . . . . . . . . . . . . . . . . . 94
5.10 Securities Activities. . . . . . . . . . . . . . . . . . . . . . . 94
5.11 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . 94
5.12 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
5.13 Environmental Protection. . . . . . . . . . . . . . . . . . . . . . 95
5.14 Employee Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 97
5.15 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
5.16 Matters Relating to Collateral . . . . . . . . . . . . . . . . . . 97
5.17 Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . 98
5.18 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.19 Subordination of Seller Notes. . . . . . . . . . . . . . . . . . . 100
<PAGE>
5.20 Margin Lending Matters. . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 6. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . 100
6.1 Financial Statements and Other Reports. . . . . . . . . . . . . . . 100
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . . . . . 106
6.3 Payment of Taxes and Claims; Tax Consolidation. . . . . . . . . . . 106
6.4 Maintenance of Properties; Insurance. . . . . . . . . . . . . . . . 107
6.5 Inspection; Lender Meeting. . . . . . . . . . . . . . . . . . . . . 107
6.6 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . 107
6.7 Environmental Disclosure and Inspection. . . . . . . . . . . . . . 108
6.8 Company's Remedial Action Regarding
Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . . 109
6.9 Execution of Subsidiary Guaranty and Subsidiary
Security Agreements by Subsidiaries and Future
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . 109
6.10 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . 110
6.11 Conduct of Business of Merger Sub. . . . . . . . . . . . . . . . . 110
6.12 Conduct of Business of Union. . . . . . . . . . . . . . . . . . . . 111
6.13 Union Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
6.14 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . 111
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . 112
7.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
7.2 Liens and Related Matters. . . . . . . . . . . . . . . . . . . . . 113
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . . . . . 114
7.4 Contingent Obligations. . . . . . . . . . . . . . . . . . . . . . . 115
7.5 Restricted Junior Payments . . . . . . . . . . . . . . . . . . . . 117
7.6 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . 117
7.7 Restriction on Fundamental Changes; Asset Sales. . . . . . . . . . 120
7.8 Sales and Lease-Backs. . . . . . . . . . . . . . . . . . . . . . . 122
7.9 Transactions with Shareholders and Affiliates. . . . . . . . . . . 122
7.10 Disposal of Subsidiary Stock. . . . . . . . . . . . . . . . . . . . 122
7.11 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . 123
7.12 Amendments or Waivers of Certain Related
Agreements; Amendments of Documents Relating
to Subordinated Indebtedness; Designation
of "Designated Senior Debt"; Preferred
Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
7.13 Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . . . . 124
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . 124
8.1 Failure to Make Payments When Due. . . . . . . . . . . . . . . . . 124
8.2 Default in Other Agreements. . . . . . . . . . . . . . . . . . . . 124
8.3 Breach of Certain Covenants. . . . . . . . . . . . . . . . . . . . 125
8.4 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . . . . . 125
8.5 Other Defaults Under Loan Documents. . . . . . . . . . . . . . . . 125
8.6 Involuntary Bankruptcy; Appointment of
Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 125
8.7 Voluntary Bankruptcy; Appointment of
Receiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 126
8.8 Judgments and Attachments. . . . . . . . . . . . . . . . . . . . . 126
8.9 Dissolution. . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
8.10 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . 127
8.11 Change in Control. . . . . . . . . . . . . . . . . . . . . . . . . 127
8.12 Invalidity of Guaranties. . . . . . . . . . . . . . . . . . . . . . 128
8.13 Failure of Security. . . . . . . . . . . . . . . . . . . . . . . . 128
8.14 Failure to Consummate Acquisitions. . . . . . . . . . . . . . . . . 128
8.15 Default Under Subordination Provisions. . . . . . . . . . . . . . . 128
SECTION 9. AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 130
9.2 Powers; General Immunity. . . . . . . . . . . . . . . . . . . . . . 131
9.3 Representations and Warranties; No Responsibility
For Appraisal of Creditworthiness. . . . . . . . . . . . . . . . 133
9.4 Right to Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 133
9.5 Successor Agents and Swing Line Lender. . . . . . . . . . . . . . . 133
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9.6 Collateral Documents. . . . . . . . . . . . . . . . . . . . . . . . 134
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 134
10.1 Assignments and Participations in Loans,
Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . 134
10.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
10.3 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138
10.4 Set-Off; Security Interest in Deposit Accounts. . . . . . . . . . . 139
10.5 Ratable Sharing. . . . . . . . . . . . . . . . . . . . . . . . . . 139
10.6 Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . . 140
10.7 Independence of Covenants. . . . . . . . . . . . . . . . . . . . . 142
10.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
10.9 Survival of Representations, Warranties and
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
10.10 Failure or Indulgence Not Waiver; Remedies
Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
10.11 Marshalling; Payments Set Aside. . . . . . . . . . . . . . . . . . 143
10.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
10.13 Obligations Several; Independent Nature of
Lenders' Rights. . . . . . . . . . . . . . . . . . . . . . . . . 144
10.14 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144
10.15 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 144
10.16 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . 144
10.17 Consent to Jurisdiction and Service of Process . . . . . . . . . . 144
10.18 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 145
10.19 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . . . 146
10.20 Counterparts; Effectiveness. . . . . . . . . . . . . . . . . . . . 146
Signature pages . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV-A FORM OF TRANCHE A TERM NOTE
IV-B FORM OF TRANCHE B TERM NOTE
IV-C FORM OF TRANCHE C TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF SUBSIDIARY GUARANTY
VIII FORM OF PLEDGE AGREEMENT
IX-A FORM OF SECURITY AGREEMENT
IX-B FORM OF LIMITED PARTNERSHIP SECURITY AGREEMENT
IX-C FORM OF TRADEMARK SECURITY AGREEMENT
X FORM OF COMPLIANCE CERTIFICATE
XI FORM OF OPINION OF LOAN PARTIES' COUNSEL
XII FORM OF SECOND ACKNOWLEDGEMENT AND CONSENT
XIII FORM OF ASSIGNMENT AGREEMENT
XIV FORM OF PERMITTED SELLER NOTE
XV FORM OF CERTIFICATE RE NON-BANK STATUS
XVI FORM OF COLLATERAL ACCOUNT AGREEMENT
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SCHEDULES
2.1 LENDERS' COMMITMENTS, EXISTING LOANS AND PRO RATA SHARES; LENDING
OFFICES
3.1 EXISTING LETTERS OF CREDIT
4.2J CORPORATE AND CAPITAL STRUCTURE; MANAGEMENT
5.1 SUBSIDIARIES OF COMPANY
5.13 CERTAIN ENVIRONMENTAL MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
7.4(iv)(a) CERTAIN EXISTING EARN OUT AGREEMENTS
7.4(iv)(b) CERTAIN EXISTING FORWARD FLOW CONTRACTS
7.6E CERTAIN FINANCIAL CALCULATIONS
7.8 CERTAIN PERMITTED SALES AND LEASE-BACKS
