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SENIOR SUBORDINATED LOAN AGREEMENT
among
V.S.M. ACQUISITION CORP.,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
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Dated as of December 6, 2000
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$40,000,000
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DEUTSCHE BANK SECURITIES INC.
LEAD ARRANGER AND BOOK MANAGER
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TABLE OF CONTENTS
PAGE
SECTION 1. Amount and Terms of Credit.......................................1
1.01 The Commitments..................................................1
1.02 Minimum Amount of Each Borrowing.................................1
1.03 Notice of Borrowing..............................................1
1.04 Disbursement of Funds............................................2
1.05 Notes............................................................2
1.06 Conversions......................................................3
1.07 Pro Rata Borrowings..............................................3
1.08 Interest.........................................................3
1.09 Interest Periods.................................................4
1.10 Increased Costs, Illegality, etc.................................5
1.11 Compensation.....................................................7
1.12 Change of Lending Office.........................................8
1.13 Replacement of Banks.............................................8
1.14 Limitations on Additional Amounts, etc...........................9
SECTION 2. Reductions of Commitment.........................................9
2.01 Mandatory Reduction of Commitments...............................9
SECTION 3. Prepayments; Payments; Taxes.....................................9
3.01 Voluntary Prepayments............................................9
3.02 Mandatory Repayments............................................10
3.03 Method and Place of Payment.....................................10
3.04 Net Payments; Taxes.............................................10
SECTION 4. Conditions Precedent............................................12
4.01 Execution of Agreement; Notes...................................12
4.02 No Default; Representations and Warranties......................13
4.03 Officer's Certificate...........................................13
4.04 Opinions of Counsel.............................................13
4.05 Corporate Documents; Proceedings................................13
4.06 Shareholders' Agreements; Management Agreements;
Employment Agreements; Contracts................................14
4.07 Consummation of the Transaction.................................14
4.08 Vestar Guaranty.................................................15
4.09 Material Adverse Change, etc....................................15
4.10 Litigation......................................................16
(i)
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PAGE
4.11 Fees, etc.......................................................16
4.12 Approvals.......................................................16
4.13 Financial Statements; Projections; Management Letter
Reports.........................................................16
4.14 Notice of Borrowing.............................................17
4.15 ERISA Opinion...................................................17
SECTION 5. Representations and Warranties..................................17
5.01 Status..........................................................17
5.02 Power and Authority.............................................17
5.03 No Violation....................................................18
5.04 Governmental Approvals..........................................18
5.05 Financial Statements; Financial Condition; Undisclosed
Liabilities.....................................................18
5.06 Litigation......................................................19
5.07 True and Complete Disclosure....................................19
5.08 Use of Proceeds; Margin Regulations.............................20
5.09 Tax Returns and Payments........................................20
5.10 ERISA...........................................................21
5.11 Properties......................................................22
5.12 Capitalization..................................................22
5.13 Subsidiaries....................................................22
5.14 Compliance with Statutes, etc...................................22
5.15 Investment Company Act..........................................23
5.16 Public Utility Holding Company Act..............................23
5.17 Environmental Matters...........................................23
5.18 Labor Relations.................................................24
5.19 Intellectual Property...........................................24
5.20 Indebtedness....................................................24
5.21 Transaction.....................................................24
5.22 Representations and Warranties in Documents.....................24
5.23 Special Purpose Corporation.....................................25
5.24 Insurance.......................................................25
SECTION 6. Affirmative Covenants...........................................25
6.01 Information Covenants...........................................25
6.02 Books, Records and Inspections..................................28
6.03 Maintenance of Property; Insurance..............................28
6.04 Franchises, etc.................................................28
6.05 Compliance with Statutes, etc...................................28
6.06 Compliance with Environmental Laws..............................28
6.07 ERISA...........................................................29
6.08 End of Fiscal Years; Fiscal Quarters............................31
6.09 Performance of Obligations......................................31
6.10 Payment of Taxes................................................31
6.11 Ownership of Subsidiaries.......................................31
(ii)
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PAGE
6.12 Consummation of the Merger......................................32
6.13 Permitted Acquisitions..........................................33
SECTION 7. Negative Covenants..............................................33
7.01 Liens...........................................................33
7.02 Consolidation, Merger, Sale of Assets, etc......................36
7.03 Dividends.......................................................37
7.04 Indebtedness....................................................39
7.05 Advances, Investments, Loans, Purchase of Assets................40
7.06 Transactions with Affiliates....................................42
7.07 Modifications of Certificate of Incorporation, By-Laws
and Certain Agreements; etc.....................................43
7.08 Limitation on Certain Restrictions on Subsidiaries..............43
7.09 Limitation on Issuance of Equity................................44
7.10 Business........................................................44
7.11 Limitation on the Creation of Subsidiaries......................45
SECTION 8. Events of Default...............................................45
8.01 Payments........................................................45
8.02 Representations, etc............................................45
8.03 Covenants.......................................................45
8.04 Default Under Other Agreements..................................45
8.05 Bankruptcy, etc.................................................46
8.06 ERISA...........................................................46
8.07 Vestar Guaranty.................................................47
8.08 Judgments.......................................................47
8.09 Change of Control...............................................47
SECTION 9. Definitions and Accounting Terms................................47
9.01 Defined Terms...................................................47
SECTION 10. The Administrative Agent.......................................63
10.01 Appointment....................................................63
10.02 Nature of Duties...............................................64
10.03 Lack of Reliance on the Administrative Agent...................64
10.04 Certain Rights of the Administrative Agent.....................64
10.05 Reliance.......................................................65
10.06 Indemnification................................................65
10.07 The Administrative Agent in its Individual Capacity............65
10.08 Holders........................................................65
10.09 Resignation by the Administrative Agent........................66
SECTION 11. Subordination..................................................66
(iii)
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PAGE
11.01 Definitions....................................................66
11.02 Subordination..................................................67
11.03 Subordination Upon Distribution of Assets......................68
11.04 Prohibitions and Limitations on Payment........................68
11.05 Limitation on Remedies.........................................69
11.06 Payments and Distributions Received............................69
11.07 Proofs of Claim................................................70
11.08 Subrogation....................................................70
11.09 Relative Rights................................................70
11.10 Subordination Not Impaired; Benefit of Subordination...........70
11.11 Covenants of the Banks.........................................71
11.12 Modification of Section 11.....................................71
11.13 Miscellaneous..................................................71
11.14 Vestar Guaranty................................................72
SECTION 12. Miscellaneous..................................................72
12.01 Payment of Expenses, etc.......................................72
12.02 Right of Setoff................................................73
12.03 Notices........................................................74
12.04 Benefit of Agreement...........................................74
12.05 No Waiver; Remedies Cumulative.................................76
12.06 Payments Pro Rata..............................................76
12.07 Calculations; Computations.....................................76
12.08 Governing Law; Submission to Jurisdiction; Venue; Waiver
of Jury Trial................................................77
12.09 Counterparts...................................................77
12.10 Effectiveness..................................................78
12.11 Headings Descriptive...........................................78
12.12 Amendment or Waiver............................................78
12.13 Confidentiality................................................79
12.14 Register.......................................................79
(iv)
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SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Transaction Litigation
SCHEDULE IV ERISA
SCHEDULE V Convertible Securities, Options or Rights
SCHEDULE VI Subsidiaries
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
SCHEDULE XI Permitted Affiliate Transactions
SCHEDULE XII Foreign Restructuring
SCHEDULE XIII Restructuring Transactions
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B Form of Note
EXHIBIT C Form of Section 3.04(b)(ii) Certificate
EXHIBIT D-1 Form of Opinion of Simpson Thacher & Bartlett
(Tender Offer)
EXHIBIT D-2 Form of Opinion of Steven Jaye, Esq. (Tender Offer)
EXHIBIT D-3 Form of Opinion of White & Case LLP (Tender Offer)
EXHIBIT D-4 Form of Opinion of Simpson Thacher & Bartlett
(Merger)
EXHIBIT D-5 Form of Opinion of Steven Jaye, Esq. (Merger)
EXHIBIT E Form of Borrower Acknowledgment and Assumption
EXHIBIT F Form of Officer's Certificate
EXHIBIT G Form of Solvency Certificate
EXHIBIT H Form of Assignment and Assumption Agreement
EXHIBIT I Form of Permitted Seller Note
EXHIBIT J Form of Shareholder Subordinated Note
(v)
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SENIOR SUBORDINATED LOAN AGREEMENT, dated as of December 6, 2000
among V.S.M. ACQUISITION CORP., a Delaware corporation ("Newco"), the Banks
party hereto from time to time and BANKERS TRUST COMPANY, as Administrative
Agent (all capitalized terms used herein and defined in Section 9 are used
herein as therein defined).
W I T N E S S E T H:
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the credit
facility provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 THE COMMITMENTS. Subject to and upon the terms and conditions
set forth herein, each Bank severally agrees to make on the Closing Date a term
loan (each a "Loan" and, collectively, the "Loans") to the Borrower, which Loans
shall (i) at the option of the Borrower, be incurred and maintained as, and/or
converted into, Base Rate Loans or one or more Borrowings of Eurodollar Loans
having such Interest Periods as are selected by the Borrower pursuant to Section
1.09, (ii) be made and maintained in Dollars, and (iii) not exceed for any Bank,
in initial aggregate principal amount, that amount which equals the Commitment
of such Bank at the time of incurrence thereof (before giving effect to any
reductions thereto on such date pursuant to Section 2.01(b)). Once repaid, Loans
incurred hereunder may not be reborrowed.
1.02 MINIMUM AMOUNT OF EACH BORROWING. The aggregate principal
amount of each Borrowing shall not be less than the Minimum Borrowing Amount.
More than one Borrowing may occur on the same date, but at no time shall there
be outstanding more than three Borrowings of Eurodollar Loans hereunder.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to incur
Loans hereunder, it shall give the Administrative Agent at its Notice Office
same day written notice (or telephonic notice promptly confirmed in writing) of
each Base Rate Loan, and at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of each Eurodollar Loan,
PROVIDED that any such notice shall be deemed to have been given on a certain
day only if given before 10:00 A.M. (New York time) on such day. Each such
written notice or written confirmation of telephonic notice (each a "Notice of
Borrowing"), shall be irrevocable and shall be given by the Borrower in the form
of Exhibit A, appropriately completed to specify (i) the Closing Date (which
shall be a Business Day), (ii) the aggregate principal amount of the Loans to be
made, (iii) whether such Loans being made are to be initially maintained as Base
Rate Loans or Eurodollar Loans and (iv) in the case of Eurodollar Loans, the
initial Interest Period to be applicable thereto. The Administrative Agent shall
promptly (and in any event within one Business Day after its receipt of a Notice
of Borrowing) give each Bank notice of
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such proposed incurrence, of such Bank's proportionate share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of any incurrence of Loans, the
Administrative Agent may act without liability upon the basis of telephonic
notice, believed by the Administrative Agent in good faith to be from an
Authorized Officer of the Borrower prior to receipt of written confirmation. In
each such case, the Borrower hereby waives the right to dispute the
Administrative Agent's record of the terms of such telephonic notice absent
manifest error.
1.04 DISBURSEMENT OF FUNDS. No later than 11:00 A.M. (New York time)
on the Closing Date, each Bank will make available its PRO RATA portion of the
Borrowing of Loans requested to be made on such date, in immediately available
funds at the Payment Office of the Administrative Agent. The Administrative
Agent will make available to the Borrower at the Payment Office in immediately
available funds, the aggregate of the amounts so made available by the Banks
prior to 11:00 A.M. (New York time) on such day, to the extent of funds actually
received by the Administrative Agent. Unless the Administrative Agent shall have
been notified by any Bank prior to the date of Borrowing that such Bank does not
intend to make available to the Administrative Agent such Bank's portion of any
Borrowing to be made on such date, the Administrative Agent may assume that such
Bank has made such amount available to the Administrative Agent on such date of
Borrowing and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Bank,
the Administrative Agent shall be entitled to recover such corresponding amount
on demand from such Bank. If such Bank does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand from such Bank or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Bank, the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make a Loan hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result of
any failure by such Bank to make a Loan hereunder.
1.05 NOTES. (a) At the request of any Bank, the Borrower's
obligation to pay the principal of, and interest on, the Loans made by such Bank
to the Borrower shall be evidenced by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B with blanks
appropriately completed in conformity herewith (each a "Note" and, collectively,
the "Notes").
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(b) The Note issued by the Borrower to any Bank that has a
Commitment or outstanding Loans shall (i) be executed by the Borrower, (ii) be
payable to the order of such Bank and be dated the date of issuance, (iii) be in
a stated principal amount equal to the Commitment of such Bank on the Closing
Date (or, if issued after the Closing Date, the outstanding Loan of such Bank at
such time), (iv) mature on the Maturity Date, (v) bear interest as provided in
the appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 3.01 and mandatory repayment as
provided in Section 3.02 and (vii) be entitled to the benefits of this Agreement
and the Vestar Guaranty.
(c) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert on
any Business Day all or a portion equal to at least the applicable Minimum
Borrowing Amount of the outstanding principal amount of the Loans made to the
Borrower pursuant to one or more Borrowings of one or more Types of Loans into a
Borrowing or Borrowings of another Type of Loan, PROVIDED that (i) no partial
conversion of Eurodollar Loans shall reduce the outstanding principal amount of
such Eurodollar Loans made pursuant to a single Borrowing to less than the
applicable Minimum Borrowing Amount, (ii) Base Rate Loans may not be converted
into Eurodollar Loans if any Event of Default is in existence on the date of the
conversion if the Administrative Agent or the Required Banks have previously
advised the Borrower that conversions will not be permitted while such Event of
Default remains in existence and (iii) no conversion pursuant to this Section
1.06 shall result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 1.02. Each such conversion (other than automatic
conversions pursuant to the last paragraph of Section 1.09) shall be effected by
the Borrower's giving the Administrative Agent at its Notice Office prior to
12:00 Noon (New York time) at least three Business Days' prior written notice
(each a "Notice of Conversion") specifying the Loans to be so converted, the
Borrowing or Borrowings pursuant to which such Loans were made, the date of such
conversion (which shall be a Business Day) and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans.
1.07 PRO RATA BORROWINGS. All Borrowings of Loans under this
Agreement shall be incurred from the Banks PRO RATA on the basis of their
Commitments (and after the termination thereof, Loans). It is understood that no
Bank shall be responsible for any default by any other Bank of its obligation to
make Loans hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any other Bank
to make its Loans hereunder.
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1.08 INTEREST. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the conversion or maturity
(whether by acceleration or otherwise) of such Base Rate Loan, at a rate per
annum which shall be equal to the sum of the Applicable Margin plus the Base
Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the conversion or maturity (whether by
acceleration or otherwise) of such Eurodollar Loan, at a rate per annum which
shall, during each Interest Period applicable thereto, be equal to the sum of
the Applicable Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the rate which
is 2% in excess of the rate then borne by such Loans (or in the case of overdue
amounts other than Loans, an amount equal to the sum of (i) the Base Rate in
effect from time to time, (ii) the Applicable Margin in respect of Base Rate
Loans and (iii) 2%), in each case with such interest to be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the respective interest rate for each Interest Period applicable
to the Eurodollar Loans for which such determination is being made and shall
promptly notify the Borrower and the Banks thereof. Each such determination
shall, absent manifest error, be final and conclusive and binding on all parties
hereto.
(f) Notwithstanding anything to the contrary contained in this
Section 1.08, at any time (x) all of the Loans are held by VCP IV (or an
Affiliate of VCP IV) or (y) VCP IV shall have a right of subrogation against the
Borrower in respect of payments made to the Banks and such payments have
resulted in the termination of the Vestar Guaranty, interest shall be payable in
respect of each Loan at the rate of 12.75% per annum, and shall be paid
quarterly in arrears on each Quarterly Payment Date.
1.09 INTEREST PERIODS. At the time it gives any Notice of Borrowing
in respect of the making of any Eurodollar Loan, or any Notice of Conversion in
respect of the conversion of any Eurodollar Loan (in the case of the initial
Interest Period applicable thereto) or on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the case
of any subsequent Interest Period), the Borrower shall have the right to elect,
by giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable
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to such Eurodollar Loan, which Interest Period shall, at the option of the
Borrower, be a one, two, three or six-month period, or with the consent of each
Bank making such Eurodollar Loan, a nine or twelve-month period; PROVIDED that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar Loans
shall commence on the date of such Borrowing (including the date of any
conversion thereto from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Eurodollar Loans shall
commence on the day on which the next preceding Interest Period applicable
thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, HOWEVER, that if any Interest Period
would otherwise expire on a day which 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;
(v) no Interest Period may be selected at any time when an Event of
Default is then in existence if the Administrative Agent or the Required
Banks have previously advised the Borrower that conversions will not be
permitted while such Event of Default remains in existence; and
(vi) no Interest Period shall be selected which extends beyond the
Maturity Date.
Prior to the termination of any Interest Period applicable to any
Loans, the Borrower may, at its option, designate that the respective Borrowing
subject thereto be split into more than one Borrowing (for purposes of electing
multiple Interest Periods to be applicable thereto upon the expiration of such
Interest Period), so long as each such Borrowing resulting from the action taken
pursuant to this sentence meets the Minimum Borrowing Amount. If upon the
expiration of any Interest Period applicable to a Borrowing of Eurodollar Loans,
the Borrower has failed to elect, or is not permitted to elect, a new Interest
Period to be applicable to such Eurodollar Loans as provided above, the Borrower
shall be deemed to have elected to convert such Eurodollar Loans into Base Rate
Loans effective as of the expiration date of such current Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that any
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clauses (i) and (iii)(z) below, may be made only by the Administrative Agent):
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(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the relevant interbank
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate;
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan which such Bank deems to be material because of any
change since the date of this Agreement in any applicable law or
governmental rule, regulation, order, guideline or request (whether or not
having the force of law) or in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, and including
the introduction of any new law or governmental rule, regulation, order,
guideline or request (a "Change in Law"), which (A) changes the basis of
taxation of payment to any Bank of the principal of or interest on such
Eurodollar Loan or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net income or
profits of such Bank, pursuant to the laws of the jurisdiction in which
such Bank is organized or in which such Bank's principal office or
applicable lending office is located or any subdivision thereof or therein
and Taxes for which a payment is required pursuant to Section 3.04(a)),
(B) changes official reserve requirements (but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate) and/or (C) imposes any other condition
affecting such Bank or the relevant interbank market or the position of
such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any Change in Law, (y) impossible by
compliance by any Bank in good faith with any governmental request made
after the date of this Agreement (whether or not having force of law) or
(z) impracticable as a result of a Change in Law which materially and
adversely affects the relevant interbank market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) or (iii)(z) above) shall promptly give notice (by telephone
confirmed in writing) to the Borrower and, except in the case of clauses (i) and
(iii)(z) above, to the Administrative Agent of such determination (which notice
the Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Banks that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its reasonable discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof,
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based on averaging and attribution methods among customers which are reasonable,
submitted to the Borrower by such Bank in good faith shall, absent manifest
error, be final and conclusive and binding on all the parties hereto) and (z) in
the case of clause (iii) above, the Borrower shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event, within
the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel the respective
Borrowing by giving the Administrative Agent written notice on the same date
that the Borrower was notified by the affected Bank or the Administrative Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days' written notice to the
Administrative Agent and the affected Bank, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan; PROVIDED that if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If any Bank shall have determined that, after the date hereof,
the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Bank or any corporation controlling such Bank
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's or such
other corporation's capital or assets as a consequence of such Bank's Commitment
or Loans hereunder or its obligations hereunder to a level below that which such
Bank or such other corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Bank's or
such other corporation's policies with respect to capital adequacy), then from
time to time, upon written demand by such Bank (with a copy to the
Administrative Agent), accompanied by the notice referred to in the penultimate
sentence of this clause (c), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank or such other corporation for
such reduction. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use reasonable averaging and attribution
methods. Each Bank, upon determining that any additional amounts will be payable
pursuant to this Section 1.10(c), will give prompt written notice thereof to the
Borrower (a copy of which shall be sent by such Bank to the Administrative
Agent), which notice shall set forth in reasonable detail the basis of the
calculation of such additional amounts, although the failure to give any such
notice shall not release or diminish the Borrower's obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt
of such notice. A Bank's reasonable good faith determination of compensation
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto.
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1.11 COMPENSATION. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by such Bank to
fund its Eurodollar Loans, but excluding loss of anticipated profit) which such
Bank may sustain: (i) if for any reason (other than a default by such Bank or
the Administrative Agent) a Borrowing of, or conversion from or into, Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower); (ii) if any
repayment (including any repayment made pursuant to Section 3.01 or 3.02 or a
result of an acceleration of the Loans pursuant to Section 8 or as a result of
the replacement of a Bank pursuant to Section 1.13 or 12.12(b)) or conversion of
any Eurodollar Loans occurs on a date which is not the last day of an Interest
Period with respect thereto; (iii) if any prepayment of any Eurodollar Loans is
not made on any date specified in a notice of prepayment given by the Borrower;
or (iv) as a consequence of (x) any other default by the Borrower to repay its
Loans when required by the terms of this Agreement or any Note held by such Bank
or (y) any election made pursuant to Section 1.10(b).
1.12 CHANGE OF LENDING OFFICE. (a) Each Bank may transfer and carry
its Loans and/or Commitments at, to or for the account of any branch office,
subsidiary or affiliate of such Bank; PROVIDED, that the Borrower shall not be
responsible for costs arising under Section 1.10, 1.11 or 3.04 resulting from
any such transfer (other than a transfer pursuant to Section 1.12(b)) to the
extent such costs would not otherwise be applicable to such Bank in the absence
of such transfer.
(b) Each Bank agrees that on the occurrence of any event giving rise
to the operation of Section 1.10(a)(ii) or (iii), Section 1.10(c) or Section
3.04 with respect to such Bank, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Bank) to
designate another lending office for any Loans affected by such event, PROVIDED
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Sections 1.10
and 3.04.
1.13 REPLACEMENT OF BANKS. (a) (i) If any Bank defaults in its
obligations to make Loans, (ii) if any Bank refuses to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
12.12(b) or (iii) upon the occurrence of any event giving rise to the operation
of Section 1.10(a)(ii) or (iii), Section 1.10(c) or Section 3.04 with respect to
any Bank which results in such Bank charging to the Borrower increased costs,
the Borrower shall have the right, in accordance with the requirements of
Section 12.04(b), if no Event of Default will exist after giving effect to such
replacement, to replace such Bank (the "Replaced Bank") with an Eligible
Transferee or Eligible Transferees (collectively, the "Replacement Bank"),
reasonably acceptable to the Administrative Agent, PROVIDED that (i) at the time
of any replacement pursuant to this Section 1.13, the Replacement Bank shall
enter into one or more Assignment and
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Assumption Agreements pursuant to Section 12.04(b) (and with the assignment fee
payable pursuant to said Section 12.04(b) to be paid by the Replacement Bank)
pursuant to which the Replacement Bank shall acquire all of the Commitment or
the outstanding Loans of the Replaced Bank and, in connection therewith, shall
pay to the Replaced Bank in respect thereof an amount equal to the sum of the
principal of, and all accrued interest on, all outstanding Loans of the Replaced
Bank and (ii) all obligations of the Borrower owing to the Replaced Bank (other
than those specifically described in clause (i) above in respect of which the
assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Bank concurrently with such replacement.
(b) Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts referred to in clauses (i) and (ii) of the
proviso contained in Section 1.13(a) and, if so requested by the Replacement
Bank, delivery to the Replacement Bank of the appropriate Note executed by the
Borrower, the Replacement Bank shall become a Bank hereunder and the Replaced
Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions applicable to the Replaced Bank under this Agreement
(including, without limitation, Sections 1.10, 1.11, 3.04, 12.01 and 12.06),
which shall survive as to such Replaced Bank.
1.14 LIMITATIONS ON ADDITIONAL AMOUNTS, ETC. Notwithstanding
anything to the contrary contained in Section 1.10, 1.11 or 3.04 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under the respective Section within 180 days after the date such
Bank incurs the respective increased costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital,
then such Bank shall only be entitled to be compensated for such amount by the
Borrower pursuant to said Section 1.10, 1.11 or 3.04, as the case may be, to the
extent the costs, Taxes, loss, expense or liability, reduction in amounts
received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs 180 days prior to such Bank giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11 or 3.04, as the case may be; PROVIDED that
if the circumstances giving rise to such claims have a retroactive effect, then
such 180-day period shall be extended to include the period of such retroactive
effect. Notwithstanding anything to the contrary in this Agreement, this Section
1.14 shall have no applicability to any Section of this Agreement other than
said Sections 1.10, 1.11 and 3.04.
SECTION 2. REDUCTIONS OF COMMITMENT.
2.01 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment
(and the Commitment of each Bank) shall terminate in its entirety on January 31,
2001 unless the Closing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 2.01, the Total Commitment (and the Commitment of each
Bank) shall be terminated on the Closing Date, in each case after giving effect
to the incurrence of Loans on such date.
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SECTION 3. PREPAYMENTS; PAYMENTS; TAXES.
3.01 VOLUNTARY PREPAYMENTS. The Borrower shall have the right to
prepay Loans, without premium or penalty, in whole or in part from time to time
on the following terms and conditions:
(i) the Borrower shall give the Administrative Agent at its Notice
Office (x) written notice prior to 12:00 Noon (New York time) at least
three Business Days prior to the date of such prepayment in the case of
Eurodollar Loans and (y) written notice prior to 12:00 Noon (New York
time) at least one Business Day prior to the date of such prepayment in
the case of Base Rate Loans of its intent to prepay the Loans, the amount
of such prepayment and the Types of Loans to be prepaid, and, in the case
of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to
which made, which notice the Administrative Agent shall promptly transmit
to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount of at
least the applicable Minimum Borrowing Amount; PROVIDED that no partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce
the outstanding Loans made pursuant to such Borrowing to an amount less
than the applicable Minimum Borrowing Amount; and
(iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied PRO RATA among such Loans.
3.02 MANDATORY REPAYMENTS. (a) The Borrower shall, subject to the
provisions contained in Section 11, repay the Loans in full, (A) upon the
occurrence of a Change of Control, (B) if the Merger shall not have been
consummated substantially in accordance with the terms of the Merger Agreement
and the requirements of all applicable laws on or before the earlier of the 90th
day following the Closing Date and May 1, 2001, (C) if, on the Merger Date, the
Borrower has not complied with each of the requirements set forth in Section
6.12 in a manner reasonably satisfactory to the Administrative Agent, (D) if, on
the Merger Date, the aggregate amount paid or payable by the Borrower under the
Merger Agreement in respect of options to purchase shares of Sunrise Common
Stock exceeds $15,750,000.
(b) All outstanding Loans shall be repaid in full on the Maturity
Date.
3.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative Agent for the account of the Bank or Banks entitled thereto
no later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
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3.04 NET PAYMENTS; TAXES. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 3.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding, except as provided in the second succeeding sentence, any tax
imposed on or measured by the net income or net profits of a Bank pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Bank is located
or any political subdivision or taxing authority thereof or therein) and all
interest, penalties or similar liabilities with respect thereto (collectively,
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. If any amounts are payable
in respect of Taxes pursuant to the preceding sentence, the Borrower agrees to
reimburse each Bank, upon the written request of such Bank, for taxes imposed on
or measured by the net income of such Bank pursuant to the laws of the
jurisdiction or any political subdivision or taxing authority thereof or therein
in which the principal office or applicable lending office of such Bank is
located as such Bank shall determine are payable by such Bank in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to this
sentence. The Borrower will furnish to the Administrative Agent within 45 days
after the date of the payment of any Taxes is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by the Borrower.
Without duplication of amounts payable pursuant to the foregoing provisions of
this Section 3.04(a), the Borrower agrees to indemnify and hold harmless each
Bank, and reimburse such Bank upon its written request, for the amount of any
Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Administrative Agent on or prior to the Effective Date, or in the case
of a Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 12.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with
respect to a complete exemption under an income tax treaty) (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note or (ii) if the Bank is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code and cannot deliver either Internal Revenue Service Form
W-8ECI or Form W-8BEN (with respect to a complete exemption under an income tax
treaty) pursuant to clause (i) above, (x) a certificate substantially in the
form of Exhibit C (any such certificate, a "Section 3.04(b)(ii) Certificate")
and (y) two accurate and complete original signed copies of Internal Revenue
Service Form W-8BEN (with respect to the portfolio interest exemption) (or
successor form) certifying to such Bank's entitlement to a complete exemption
from
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United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. Each other Bank agrees to deliver
to the Borrower and the Administrative Agent on or prior to the Closing Date, or
in the case of a Bank that is an assignee or transferee of an interest under
this Agreement pursuant to Section 1.13 or 12.04 (unless the respective Bank was
already a Bank hereunder immediately prior to such assignment or transfer), on
the date of such assignment or transfer to such Bank, one or more accurate and
complete original signed copies (as the Borrower or Administrative Agent may
reasonably request) of United States Internal Revenue Service Form W-9 or
successor applicable form (if required by law), as the case may be, providing
the employer identification number for such Bank. In addition, each Bank agrees
that from time to time after the Effective Date, when a lapse in time or change
in circumstances renders the previous certification obsolete or inaccurate in
any material respect, it will deliver to the Borrower and the Administrative
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or Form W-8BEN (with respect to the benefit of any income
tax treaty), or Form W-8BEN (with respect to the portfolio interest exemption)
and a Section 3.04(b)(ii) Certificate or Form W-9 (or any successor forms), as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate,
in which case such Bank shall not be required to deliver any such form of
certificate pursuant to this Section 3.04(b). Notwithstanding anything to the
contrary contained in Section 3.04(a), but subject to the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank to the extent that such Bank has not provided to the Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such deduction or
withholding and (y) the Borrower shall not be obligated pursuant to Section
3.04(a) hereof to gross-up payments to be made to a Bank in respect of income or
similar taxes imposed by the United States if (I) such Bank has not provided to
the Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 3.04(b) or (II) in the case of a payment,
other than interest, to a Bank described in clause (ii) above, to the extent
that such forms do not establish a complete exemption from withholding of such
taxes. Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 3.04, the Borrower agrees to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
3.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such income or similar Taxes.
(c) If the Borrower pays any additional amount under this Section
3.04 to a Bank and such Bank determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
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Bank shall pay the Borrower an amount that the Bank shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was obtained
by such Bank in such year as a consequence of such Tax Benefit; provided,
however, that (i) any Bank may determine in its sole discretion consistent with
the policies of such Bank whether to seek a Tax Benefit; (ii) any Taxes that are
imposed on a Bank as a result of a disallowance or reduction (including through
the expiration of any tax carryover or carryback of such Bank that otherwise
would not have expired) of any Tax Benefit with respect to which such Bank has
made a payment to the Borrower pursuant to this Section 3.04(c) shall be treated
as a Tax for which the Borrower is obligated to indemnify such Bank pursuant to
this Section 3.04 without any exclusions or defenses; and (iii) nothing in this
Section 3.04(c) shall require a Bank to disclose any confidential information to
the Borrower (including, without limitation, its tax returns).
SECTION 4. CONDITIONS PRECEDENT. The obligation of each Bank to make
Loans hereunder is subject, at the time of the making of such Loans, to the
satisfaction of the following conditions:
4.01 EXECUTION OF AGREEMENT; NOTES. On or prior to the Closing Date
(i) this Agreement shall have been executed and delivered as provided in Section
12.10 and (ii) there shall have been delivered to the Administrative Agent for
the account of each of the Banks requesting them the appropriate Notes executed
by the Borrower, in each case in the amount, maturity and as otherwise provided
herein.
4.02 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of
making such Loans and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Loans (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
4.03 OFFICER'S CERTIFICATE. On the Closing Date, the Administrative
Agent shall have received a certificate dated such date signed by the President
or any Vice President of the Borrower stating that all of the applicable
conditions set forth in Section 4.02, 4.07, 4.10 and 4.12 have been met.
4.04 OPINIONS OF COUNSEL. On the Closing Date, the Administrative
Agent shall have received from (i) Simpson Thacher & Bartlett, special counsel
to the Borrower, an opinion addressed to the Administrative Agent and each of
the Banks and dated the Closing Date covering the matters set forth in Exhibit
D-1, (ii) Steven Jaye, Esq., the General Counsel of Sunrise, an opinion
addressed to the Administrative Agent and each of the Banks and dated the
Closing Date covering the matters set forth in Exhibit D-2, (iii) White & Case
LLP, counsel to the Administrative Agent, an opinion addressed to the
Administrative Agent and each of the Banks and dated the Closing Date covering
the matters set forth in Exhibit D-3, and (iv) unless otherwise agreed by the
Administrative Agent, counsel rendering such opinions, reliance letters
addressed to the Administrative Agent and each of the Banks dated the Closing
Date with respect
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to all legal opinions (if any) delivered in connection with the Transaction,
which reliance letters shall be in form and substance reasonably satisfactory to
the Administrative Agent.
4.05 CORPORATE DOCUMENTS; PROCEEDINGS. (a) On the Closing Date, the
Administrative Agent shall have received certificates, dated the Closing Date,
signed by an Authorized Officer of each of the Borrower and VCP IV and attested
to by a second Authorized Officer of such Person, substantially in the form of
Exhibit E with appropriate insertions, together with copies of the Certificate
of Incorporation and By-Laws (or their equivalents) of such Person and the
resolutions of such Person referred to in such certificate, and the foregoing
shall be reasonably acceptable to the Administrative Agent.
(b) On the Closing Date, all corporate and legal proceedings and all
instruments and agreements relating to the transactions contemplated by this
Agreement and the other Documents shall be reasonably satisfactory in form and
substance to the Administrative Agent, and the Administrative Agent shall have
received all information and copies of all documents and papers, including
records of corporate proceedings, governmental approvals, good standing
certificates and bring-down telegrams, if any, which the Administrative Agent
may have reasonably requested in connection therewith, such documents and papers
where appropriate to be certified by proper corporate or governmental
authorities.
4.06 SHAREHOLDERS' AGREEMENTS; MANAGEMENT AGREEMENTS; EMPLOYMENT
AGREEMENTS; CONTRACTS. On or prior to the Closing Date, there shall have been
delivered to the Administrative Agent a list or schedule of all of the documents
listed below, which list or schedule shall be certified as true and complete by
an appropriate officer of the Borrower (and copies of each of the documents set
forth on such list or schedule shall have been made available to the
Administrative Agent):
(i) all material agreements entered into (or to be entered into) by
Holdings or Sunrise or any Subsidiary of Holdings or Sunrise as of the
Closing Date governing the terms and relative rights of its capital stock
(collectively, the "Shareholders' Agreements");
(ii) all material agreements with members of, or with respect to the,
management of Holdings or Sunrise or any Subsidiary of Holdings or Sunrise
in effect as of the Closing Date (or to come into effect as of the Merger
Date), other than Employment Agreements (collectively, the "Management
Agreements");
(iii) any material employment agreements entered into (or to be entered
into) by Holdings or Sunrise or any Subsidiary of Holdings or Sunrise as
of the Closing Date (collectively, the "Employment Agreements"); and
(iv) all material contracts, agreements or understandings entered into
(or to be entered into) between Holdings or Sunrise or any of their
Subsidiaries on the one hand, and any Person (other than Holdings and
Sunrise and their Subsidiaries) who is an Affiliate of Holdings or
Sunrise, on the other hand (collectively, the "Affiliate Contracts").
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4.07 CONSUMMATION OF THE TRANSACTION. (a) The Transaction, including
all of the terms and conditions thereof, shall have been duly approved by the
board of directors and (if required by applicable law) the shareholders or
members of the parties thereto, and all Transaction Documents shall have been
duly executed and delivered by the parties thereto and shall be in full force
and effect. The Transaction (other than the Merger, the Refinancing and the
payment of fees and expenses) shall have been consummated in accordance with all
applicable law and the respective Transaction Documents.
(b) On or prior to the Closing Date, (i) VCP IV and PAEP, together
with other investors and/or lenders reasonably satisfactory to the Required
Banks, shall have made a capital contribution and/or loans to the Parent of at
least $144,000,000 in cash (and, in the case of such Persons making capital
contributions, in exchange for all the outstanding limited liability company
units of the Parent) (the "Equity Financing") (and all of the proceeds from the
Equity Financing shall have been concurrently contributed as equity (the terms
and conditions of which shall be reasonably satisfactory to the Administrative
Agent) by the Parent to the Intermediate Parent, by the Intermediate Parent to
Holdings and by Holdings to Newco) and (ii) Newco shall have used all of the
proceeds from the Equity Financing to purchase shares of Sunrise Common Stock
tendered pursuant to the Tender Offer.
(c) On or prior to the Closing Date, Holdings and Newco shall have
entered into the Senior Credit Facility, which shall provide for one or more
term loan facilities of at least $165,000,000, and a revolving credit facility
of at least $50,000,000, and the conditions to the initial borrowing thereunder
shall have occurred concurrently or shortly thereafter.
(d) On the Closing Date, (i) each of the conditions to purchase
contained in the Tender Offer Documents shall have been satisfied in all
material respects (and not waived) to the reasonable satisfaction of the
Administrative Agent and (ii) all shares of Sunrise Common Stock to be purchased
on such date shall have been tendered to Newco, and such shares shall not have
been validly withdrawn and shall be available for purchase in accordance with
the terms and conditions of the Tender Offer Documents.
(e) On the Closing Date, the Net Debt of Sunrise and its
Subsidiaries shall not exceed the Net Debt Maximum.
(f) On or prior to the Closing Date, there shall have been delivered
to the Banks true and correct copies of all Documents entered into in connection
with the Transaction (including, without limitation, the Tender Offer Documents,
the documents governing the Equity Financing, the Senior Loan Documents, the
documents governing the Refinancing and the Merger Documents then in existence),
and, to the extent different from the Tender Offer Documents or any of the
exhibits thereto, all of the material terms and conditions of such Documents
shall be in form and substance reasonably satisfactory to the Administrative
Agent.
(g) On the Closing Date after giving effect to the Transaction, the
ownership and capital structure (including, without limitation, the terms of any
equity interests, options, warrants or other securities issued or to be issued
by Holdings or Sunrise or any of their Subsidiaries) as of the Closing Date and
management of Holdings and Sunrise and their
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Subsidiaries shall be as disclosed to the Administrative Agent prior to the
Effective Date or otherwise in form and substance reasonably satisfactory to the
Administrative Agent.
(h) On or prior to the Closing Date, all material conditions
precedent to the consummation of the Transaction (other than the Merger and the
Refinancing) as is set forth in the documentation related thereto shall have
been satisfied in all material respects and not waived.
4.08 VESTAR GUARANTY. On the Closing Date, VCP IV shall have duly
authorized, executed and delivered the Vestar Guaranty, and the Vestar Guaranty
shall be in full force and effect.
4.09 MATERIAL ADVERSE CHANGE, ETC. On or prior to the Closing Date,
since June 30, 2000, nothing shall have occurred (and the Banks shall have
become aware of no facts or conditions not previously known) which the
Administrative Agent or the Required Banks shall reasonably determine (a) could
reasonably be expected to have a material adverse effect on the rights or
remedies of the Banks or the Administrative Agent, or on the ability of the
Borrower to perform its obligations to the Administrative Agent and the Banks
under this Agreement or (b) could reasonably be expected to have a materially
adverse effect on the business, assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of Sunrise and its Subsidiaries
taken as a whole (it being understood and agreed that the consummation of the
Restructuring in and of itself shall be deemed not to have had such effect so
long as (i) such Restructuring is completed within 30 months following the
Closing Date, (ii) the Capital Expenditures made in connection therewith do not
exceed $17,000,000 and (iii) the operating expenses incurred in connection
therewith do not exceed $34,400,000).
4.10 LITIGATION. On the Closing Date, no litigation by any entity
(private or governmental) shall be pending or threatened with respect to this
Agreement, any other Document, the Transaction, or any documentation executed in
connection herewith or with respect to the transactions contemplated hereby (in
the case of the foregoing, except as described on Schedule III), or which the
Administrative Agent or Required Banks shall reasonably determine could
reasonably be expected to have a materially adverse effect on the Transaction or
on the business, assets, liabilities, operations, properties, condition
(financial or otherwise) or prospects of Sunrise and its Subsidiaries taken as a
whole.
4.11 FEES, ETC. On the Closing Date, the Borrower shall have paid in
full to the Administrative Agent and the Banks all costs, fees and expenses
(including, without limitation, all reasonable out-of-pocket legal fees and
expenses) payable to the Administrative Agent and the Banks to the extent then
due pursuant hereto or as otherwise agreed between Holdings and the
Administrative Agent.
4.12 APPROVALS. All necessary governmental and material third party
approvals in connection with the Transaction and the other transactions
contemplated by the Documents (other than the Merger and the Refinancing) and
otherwise referred to herein or therein (including, but not limited to, those
approvals required in respect of existing permits and transfers of contract
rights) shall have been obtained and remain in effect, and all applicable
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waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes, in the reasonable
judgment of the Administrative Agent or the Required Banks, materially adverse
conditions upon the consummation of the Transaction or the other transactions
contemplated by the Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction, the transactions
contemplated by the Documents or the making of the Loans.
4.13 FINANCIAL STATEMENTS; PROJECTIONS; MANAGEMENT LETTER REPORTS.
On or prior to the Closing Date, the Administrative Agent shall have received:
(i) the consolidated balance sheet of Sunrise and its Subsidiaries as
at June 30, 2000 and September 30, 2000, and the related statements of
income, retained earnings and cash flows for the fiscal year or
three-month period, respectively, ended as such dates, which, in the case
of the annual statement, has been examined or reviewed by independent
certified public accountants, who delivered an unqualified opinion in
respect thereof; and
(ii) the pro forma (after giving effect to the Transaction and the
related financing thereof, as if same had occurred on such date)
consolidated balance sheet of Holdings as at September 30, 2000;
all of which financial statements in clause (i) shall be prepared in accordance
with generally accepted accounting principles consistent with past practices and
which pro forma balance sheet shall be in form and substance reasonably
satisfactory to the Administrative Agent.
4.14 NOTICE OF BORROWING. Prior to the making of the Loans, the
Administrative Agent shall have received a Notice of Borrowing meeting the
requirements of Section 1.03.
4.15 ERISA OPINION. On or prior to the Closing Date, the
Administrative Agent shall have received from the Borrower a copy of the ERISA
opinion previously issued by ERISA counsel to the Guarantor pursuant to the
Partnership Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES. In order to induce the
Banks to enter into this Agreement and to make the Loans, the Borrower makes the
following representations and warranties, on behalf of itself and its
Subsidiaries, in each case after giving effect to the Transaction consummated on
the Closing Date, with the making of each Loan on the Closing Date being deemed
to constitute a representation and warranty that the matters specified in this
Section 5 are true and correct in all material respects on and as of the Closing
Date (it being understood and agreed that any representation or warranty which
by its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date):
5.01 STATUS. Each of the Borrower and its Subsidiaries (i) is a duly
organized and validly existing corporation or other entity in good standing
under the laws of the jurisdiction of
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its organization, except where the failure to be in good standing or, in the
case of any Subsidiary, so organized or existing, could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (ii) has the corporate or other
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualifications
except for failures to be so qualified, have such authority or be in good
standing, which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole.
5.02 POWER AND AUTHORITY. Each of the Borrower and VCP IV has the
corporate or other power and authority to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate or other action to authorize the execution, delivery and
performance by it of each such Document. Each of the Borrower and VCP IV has
duly executed and delivered each of the Documents to which it is party, and each
such Document constitutes the legal, valid and binding obligation of such Person
enforceable in accordance with its terms, subject to the effects of bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (regardless of whether considered in proceedings in equity or at law)
and an implied covenant of good faith and fair dealing.
5.03 NO VIOLATION. Neither the execution, delivery or performance by
any of the Borrower and VCP IV of the Documents to which it is a party, nor
compliance by it with the terms and provisions thereof, (i) will contravene any
provision of any applicable law, statute, rule or regulation or any applicable
order, writ, injunction or decree of any court or governmental instrumentality,
(ii) will conflict with, or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the properties or assets of the Borrower or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other material agreement, contract or
instrument, to which the Borrower or any of its Subsidiaries is a party or by
which it or any of its property or assets is bound or to which it may be subject
or (iii) will violate any provision of the certificate of incorporation or
by-laws or other organizational documents, as applicable, of the Borrower or any
of its Subsidiaries.
5.04 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required (i) to authorize, or is required in connection with, the
execution, delivery and performance of any Document by any of the Borrower and
VCP IV or (ii) to ensure the legality, validity, binding effect or
enforceability of any such Document with respect to any of the Borrower and VCP
IV, except (A) those which have been obtained or made prior to the Closing Date
or (B) those the absence of which, either individually or in the aggregate,
could not reasonably be expected to have a material adverse
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effect on either (x) the business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole or (y) the rights or remedies of the Banks or the Administrative Agent
or on the ability of the Borrower or any of its Subsidiaries to perform their
respective obligations hereunder and under the other Documents to which they
are, or will be, a party.
5.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES. (a) The consolidated statements of financial condition of Sunrise
and its Subsidiaries at June 30, 2000 and at September 30, 2000 and the related
consolidated statements of income and cash flows of Sunrise and its Subsidiaries
for the fiscal year or three-month period, as the case may be, ended on such
date, and furnished to the Banks prior to the Closing Date, present fairly
(subject to normal year-end adjustments in the case of the September 30, 2000
financial statements) the consolidated financial condition of Sunrise and its
Subsidiaries at the date of such consolidated statements of financial condition
and the consolidated results of the operations of Sunrise and its Subsidiaries
for the respective fiscal year or three-month period, as the case may be. All
such consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and practices consistently applied. The
pro forma consolidated balance sheet of the Borrower as of September 30, 2000, a
copy of which has heretofore been furnished to each Bank, presents a good faith
estimate of the consolidated pro forma financial condition of the Borrower after
giving effect to the Transaction at the date thereof. Since June 30, 2000, there
has been no material adverse change in the business, operations, property,
assets, liabilities or condition (financial or otherwise) of the Borrower and
its Subsidiaries taken as a whole (it being understood and agreed that the
consummation of the Restructuring in and of itself shall be deemed not to
constitute such a change so long as (i) such Restructuring is completed within
30 months following the Closing Date, (ii) the Capital Expenditures made in
connection therewith do not exceed $17,000,000 and (iii) the operating expenses
incurred in connection therewith do not exceed $34,400,000).
(b) On and as of the Closing Date, on a pro forma basis after giving
effect to the Transaction and to all Indebtedness (including the Loans) being
incurred or assumed on such date and Liens created by the Borrower and its
Subsidiaries in connection therewith, (x) the sum of the assets, at a fair
valuation, of the Borrower and its Subsidiaries (on a consolidated basis) and of
the Borrower (on a stand-alone basis) will exceed their respective debts, (y)
each of the Borrower and its Subsidiaries (on a consolidated basis) and the
Borrower (on a stand-alone basis) have not incurred and do not intend to incur,
and do not believe that they will incur, debts beyond their ability to pay such
debts as such debts mature and (z) each of the Borrower and its Subsidiaries (on
a consolidated basis) and the Borrower (on a stand-alone basis) has sufficient
capital with which to conduct its business. For purposes of this Section 5.05(b)
"debt" means any liability on a claim, and "claim" means (i) right to payment
whether or not such a right is reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (ii) right to an equitable remedy for breach of
performance if such breach gives rise to a payment, whether or not such right to
an equitable remedy is reduced to judgment, fixed, contingent, matured,
unmatured, disputed, undisputed, secured or unsecured.
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(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 5.05(a), there were as of the Closing Date no liabilities or
obligations with respect to the Borrower or Sunrise or any of their Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, could reasonably
be expected to be materially adverse to the Borrower and Sunrise and their
Subsidiaries taken as a whole.
5.06 LITIGATION. There are no actions, suits or proceedings pending
or, to the best knowledge of the Borrower, threatened (i) with respect to the
Transaction, the Credit Documents, or any other Document (except as described on
Schedule III and any other actions, suits or proceedings relating to or arising
from a similar cause of action) or (ii) that could reasonably be expected to
materially and adversely affect the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and Sunrise
and their Subsidiaries taken as a whole.
5.07 TRUE AND COMPLETE DISCLOSURE. Except to the extent set forth in
the immediately succeeding sentence, all factual information (taken as a whole)
furnished by or on behalf of the Borrower or any of its Subsidiaries in writing
to the Administrative Agent or any Bank (including, without limitation, all
information contained in the Credit Documents) for purposes of or in connection
with this Agreement, the other Credit Documents or any transaction contemplated
herein or therein is true and accurate in all material respects on the date as
of which such information is dated or certified and not incomplete by omitting
to state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided. The financial projections and other
pro forma financial information contained therein are based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Administrative Agent and the Banks that
projections as to future events are not to be viewed as facts or factual
information and that actual results during the period or periods covered thereby
may differ from the projected results.
5.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) All proceeds of the
Loans shall be used by the Borrower (i) to effect the Transaction and (ii) to
pay fees and expenses related to the Transaction; PROVIDED that any proceeds of
Loans which are not utilized on the Closing Date shall be deposited into the
escrow account created under the Escrow Agreement (as defined in the Senior
Credit Facility) and shall be subject to the terms thereof.
(b) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock; PROVIDED that the Borrower may use the proceeds of
Loans to purchase Margin Stock pursuant to the Tender Offer in compliance with
Regulations T, U and X. Neither the making of any Loan nor the use of the
proceeds thereof will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
5.09 TAX RETURNS AND PAYMENTS. Each of the Borrower and Sunrise and
each of their Subsidiaries has timely filed or caused to be timely filed
(including pursuant to any valid
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extensions of time for filing) thereof or with the appropriate taxing authority,
all material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of each of the Borrower and Sunrise and their Subsidiaries, as the case may be.
The Returns accurately reflect in all material respects all liability for taxes
of the Borrower and Sunrise and their Subsidiaries as a whole for the periods
covered thereby. Each of the Borrower and Sunrise and their Subsidiaries have
paid all material taxes payable by them which have become due other than those
contested in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles. As of the Closing
Date, there is no action, suit, proceeding, investigation, audit, or claim now
pending or, to the best knowledge of the Borrower or Sunrise or any of their
Subsidiaries, threatened in writing by any authority regarding any taxes
relating to the Borrower or Sunrise or any of their Subsidiaries. As of the
Closing Date, none of the Borrower or Sunrise or any of their Subsidiaries has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of any material taxes of the Borrower or Sunrise or any of their
Subsidiaries. None of the Borrower or Sunrise or any of their Subsidiaries has
provided, with respect to it or property held by it, any consent under Section
341 of the Code. None of the Borrower or Sunrise or any of their Subsidiaries
has incurred, or will incur, any material tax liability in connection with the
Transaction or any other transactions contemplated hereby (excluding any future
tax liabilities of the Borrower or Sunrise or any of their Subsidiaries arising
as a result of the operation of their businesses in the ordinary course of
business).
5.10 ERISA. (a) Schedule IV sets forth each Plan under which
Holdings, the Borrower or any of their Subsidiaries have, or are reasonably
expected to have, a material liability. Each Plan (and each related trust,
insurance contract or fund) other than any Foreign Pension Plan is in
substantial compliance with its terms and with all applicable laws, including,
without limitation, ERISA and the Code; each Plan (and each related trust, if
any) which is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to the effect
that it meets the requirements of Sections 401(a) and 501(a) of the Code except
where failure to be so qualified could not reasonably be expected to give rise
to a material liability; no Reportable Event has occurred with respect to any
Plan, other than a Foreign Pension Plan, that is reasonably likely to give rise
to a material liability; no Multiemployer Plan is insolvent or in
reorganization; no Plan (other than a Foreign Pension Plan) has an Unfunded
Current Liability which, when added to the aggregate amount of Unfunded Current
Liabilities with respect to all other Plans, would result or reasonably be
expected to result in a material liability; no Plan which is subject to Section
412 of the Code or Section 302 of ERISA has an accumulated funding deficiency,
within the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; all contributions required to be made with respect to a
Plan (other than a Foreign Pension Plan) and each Multiemployer Plan have been
timely made except to the extent that any failure to make such contribution will
not result in a material liability; neither the Borrower or any of their
Subsidiaries nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account of
a Plan or Multiemployer Plan pursuant to Section 409, 502(i), 502(l), 515, 4062,
4063, 4064, 4069, 4201,
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4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects
to incur any such material liability under any of the foregoing sections with
respect to any Plan or Multiemployer Plan; no condition exists which presents a
material risk to the Borrower or any of its Subsidiaries or any ERISA Affiliate
of incurring a material liability to or on account of a Plan or Multiemployer
Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings
have been instituted to terminate or appoint a trustee to administer any Plan
which is subject to Title IV of ERISA; no action, suit, proceeding, hearing,
audit or, to the knowledge of the Borrower, investigation with respect to the
administration, operation or the investment of assets of any Plan (other than a
Foreign Pension Plan) (other than routine claims for benefits) is pending,
expected or threatened other than any such event that could not reasonably be
expected to result in a material liability; using actuarial assumptions and
computation methods consistent with Part 1 of subtitle E of Title IV of ERISA,
the aggregate liabilities of Borrower or any of its Subsidiaries and its ERISA
Affiliates to all Multiemployer Plans in the event of a complete withdrawal
therefrom, as of the close of the most recent fiscal year of each such Plan
ended prior to the date hereof, would not result or reasonably be expected to
result in a material liability; each group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered
employees or former employees of the Borrower or any of its Subsidiaries, or any
ERISA Affiliate has at all times been operated in compliance with the provisions
of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the Code, to
the extent required, except to the extent that any such noncompliance will not
result in or reasonably be expected to result in a material liability; no lien
imposed under the Code or ERISA on the assets of the Borrower or any of their
Subsidiaries or any ERISA Affiliate exists or is likely to arise on account of
any Plan or Multiemployer Plan; and the Borrower and its Subsidiaries do not
maintain or contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any Plan
(other than a Foreign Pension Plan) the obligations with respect to which could
reasonably be expected to have a material adverse effect on the ability of the
Borrower to perform their obligations under this Agreement.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither the Borrower nor any of their Subsidiaries has
incurred any obligation in connection with the termination of, or withdrawal
from, any Foreign Pension Plan. Except as set forth on Schedule IV, the present
value of the accrued benefit liabilities (whether or not vested) under each
Foreign Pension Plan, determined as of the end of the Borrower's most recently
ended fiscal year on the basis of the actuarial assumptions set forth in the
most recent actuarial report for such plan, did not exceed the aggregate of (i)
the current value of the assets of such Foreign Pension Plan allocable to such
benefit liabilities and (ii) the amount then reserved on the Borrowers'
consolidated balance sheet in respect of such liabilities (and such amount
reserved on Borrowers' consolidated balance sheet is not likely to have a
material adverse effect on the business, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole).
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5.11 PROPERTIES. Each of the Borrower and each of its Subsidiaries
has good and marketable title to all material properties owned by them,
including all material property reflected in the consolidated balance sheets of
the Borrower referred to in Section 5.05(a) (except as sold or otherwise
disposed of since the date of such balance sheets as permitted by this Agreement
or the Documents) clear of all Liens, other than (i) as referred to in the
balance sheet or in the notes thereto or in the pro forma balance sheet or (ii)
Permitted Liens.
5.12 CAPITALIZATION. On the Closing Date, except as set forth on
Schedule V (and other than any applicable statutory preemptive rights), neither
Holdings nor any Subsidiary of Holdings has outstanding any securities
convertible into or exchangeable for its stock or membership interests or
outstanding any rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its stock or membership interests.
5.13 SUBSIDIARIES. Schedule VI lists each Subsidiary of the
Borrower, and the direct and indirect ownership interest of the Borrower
therein, in each case as of the Closing Date and after giving effect to the
Transaction.
5.14 COMPLIANCE WITH STATUTES, ETC. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such noncompliance as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole.
5.15 INVESTMENT COMPANY ACT. None of the Borrower or any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
5.16 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Borrower or any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
5.17 ENVIRONMENTAL MATTERS. (a) Each of the Borrower and each of its
Subsidiaries has complied and is in compliance with all applicable Environmental
Laws and the requirements of any permits issued under such Environmental Laws.
There are no past, pending or, to the best knowledge of the Borrower or any of
its Subsidiaries, threatened Environmental Claims against the Borrower or any of
its Subsidiaries or any Real Property currently or, to the best knowledge of the
Borrower or any of its Subsidiaries, previously owned or operated by the
Borrower or any of its Subsidiaries. There are no facts, circumstances,
conditions or occurrences on any Real Property currently owned or operated by
the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower or any of its Subsidiaries, on any formerly owned or operated Real
Property or any property adjoining or in the vicinity of any currently owned or
operated Real Property that could reasonably be expected (i) to form the basis
of an
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Environmental Claim against the Borrower or any of its Subsidiaries or any
currently owned or operated Real Property or (ii) to cause any such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property by the Borrower or any of its Subsidiaries
under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, or Released on or from, any
Real Property owned or operated by the Borrower or any of its Subsidiaries
except in compliance with all Environmental Laws and reasonably required in
connection with the operation, use and maintenance of any such Real Property by
the Borrower's or such Subsidiary's business. There are not now any underground
storage tanks owned or operated by the Borrower or of its Subsidiaries located
on any Real Property owned or operated by the Borrower or any of its
Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 5.17,
the representations made in this Section 5.17 shall only be untrue if the effect
of the failures, noncompliance and other circumstances of the types described
above, either individually or in the aggregate, could reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
5.18 LABOR RELATIONS. None of the Borrower or any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against any of them, before
the National Labor Relations Board, and no significant grievance or significant
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against the Borrower or any of its Subsidiaries or, to
the best knowledge of the Borrower, threatened against any of them, (ii) no
strike, labor dispute, slowdown or stoppage pending against the Borrower or any
of its Subsidiaries or, to the best knowledge of the Borrower, threatened
against the Borrower or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of Holdings or any
of its Subsidiaries, except (with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole.
5.19 INTELLECTUAL PROPERTY. Each of the Borrower and each of its
Subsidiaries owns or possesses valid licenses or other legal rights to use all
patents, trademarks, service marks, trade names, copyrights, trade secrets and
other proprietary intellectual property rights necessary for the present and
proposed conduct of its business, without any known conflict with the rights of
others except, with respect to any matter specified in this Section 5.19, as
could not reasonably be expected to result in a material adverse effect on the
business, operations, property, assets, liabilities or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole.
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5.20 INDEBTEDNESS. Schedule VII sets forth a true and complete list
of all Indebtedness of the Borrower and its Subsidiaries as of the Closing Date
and which is to remain outstanding after giving effect to the consummation of
the Transaction (excluding Indebtedness permitted under Section 7.04, other than
clause (ii) thereof, all such non-excluded Indebtedness, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such debt.
5.21 TRANSACTION. At the time of consummation thereof, each element
of the Transaction shall have been consummated in accordance in all material
respects with the terms of the relevant Documents therefor and all applicable
laws.
5.22 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS. All
representations and warranties of the Borrower and VCP IV set forth in the
Documents were true and correct in all material respects as of the time such
representations and warranties were made and shall be true and correct in all
material respects as of the Closing Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
5.23 SPECIAL PURPOSE CORPORATION. Each of the Parent, Intermediate
Parent, Holdings and Newco was formed solely to effect the Transaction and/or
the Dynavox Restructuring and, except in connection therewith (and as
contemplated by the Documents), has no significant assets or liabilities (other
than (i) Sunrise Common Stock acquired by Newco pursuant to the Tender Offer and
(ii) under this Agreement and the other Documents to which it is party) and has
engaged in no substantial business activities.
5.24 INSURANCE. Set forth on Schedule VIII hereto is a true, correct
and complete list of all material insurance carried by the Borrower on and as of
the Closing Date.
SECTION 6. AFFIRMATIVE COVENANTS. The Borrower hereby covenants and
agrees for itself and each of its Subsidiaries that on and after the Closing
Date and thereafter for so long as this Agreement is in effect and until the
Total Commitment has terminated and the Loans and Notes, together with all
accrued but unpaid interest and other Obligations, are paid in full:
6.01 INFORMATION COVENANTS. The Borrower will furnish to the
Administrative Agent (which shall promptly distribute a copy to each Bank):
(a) MONTHLY FINANCIAL STATEMENTS. As soon as practicable, and in any
event within 45 days after the close of each monthly accounting period of each
fiscal year (other than the last monthly accounting period in any fiscal quarter
and fiscal year), commencing with the later of the period ending February 2,
2001 and the monthly accounting period following the month in which the Merger
Date occurs, the consolidated balance sheet of Holdings and its Subsidiaries as
at the end of each such monthly accounting period and the related consolidated
statement of income and the related consolidated statement of cash flows for
each such monthly accounting period and for the elapsed portion of the fiscal
year ended with the last day of each
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such monthly accounting period, setting forth comparative figures for the
corresponding monthly accounting period in the prior fiscal year.
(b) QUARTERLY FINANCIAL STATEMENTS. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of Holdings,
commencing with the later of the period ending on or about March 31, 2001 and
the quarterly accounting period in which the Merger Date occurs, the
consolidated balance sheet of Holdings and its Subsidiaries as at the end of
each such quarterly accounting period and the related consolidated statement of
income and the related consolidated statement of cash flows for each such
quarterly accounting period and for the elapsed portion of the fiscal year ended
with the last day of each such quarterly accounting period (other than the
fourth quarterly accounting period), setting forth comparative figures for the
related periods in the prior fiscal year, all of which shall be in reasonable
detail and certified by the chief financial officer or treasurer of Holdings
that they fairly present in all material respects the financial condition of
Holdings and its Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated, subject to
normal year-end audit adjustments and shall be accompanied by a management
narrative of the results of operations and financial condition with respect to
such period.
(c) ANNUAL FINANCIAL STATEMENTS. Within 90 days after the close of
each fiscal year of Holdings, the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such fiscal year and the related consolidated
statement of income and the related consolidated statement of cash flows for
such fiscal year setting forth comparative figures for the preceding fiscal year
and certified by any of the "big five" independent certified public accountants
or such other independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent, together with a
report of such accounting firm stating that such audit was conducted in
accordance with generally accepted auditing standards.
(d) BUDGETS. No later than 60 days after the first day of each
fiscal year of Holdings, a budget in form reasonably satisfactory to the
Administrative Agent (including budgeted statements of income and cash flows and
balance sheets) prepared by Holdings for (x) each quarterly accounting period in
such fiscal year prepared in detail and (y) such fiscal year prepared in summary
form, in each case, of Holdings and its Subsidiaries on a consolidated basis,
accompanied by the statement of the chief financial officer or treasurer of
Holdings to the effect that, to the best of such officer's knowledge, the budget
is a reasonable good faith estimate of the period covered thereby. Additionally,
within 60 days after the consummation of each Permitted Acquisition, a budget in
the form described above for the business, division or Person acquired pursuant
to such Permitted Acquisition.
(e) OFFICERS' CERTIFICATES. At the time of the delivery of the
financial statements provided for in Section 6.01(b) and (c), a certificate of
the chief financial officer or treasurer of the Borrower to the effect that no
Default or Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall set forth the calculations required to
establish whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections 7.03, 7.04 and 7.05 at the end of such fiscal quarter or
year, as the case may be.
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(f) MANAGEMENT LETTERS. Promptly after Holdings' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" received by
Holdings, or such Subsidiary from its certified public accountants and the
management's responses thereto.
(g) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within five Business Days after an officer of the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of any
event which constitutes a Default or an Event of Default (PROVIDED such Default
or Event of Default is continuing) and (ii) any litigation or governmental
investigation or proceeding pending or threatened (x) against the Borrower or
any of its Subsidiaries which could reasonably be expected to materially and
adversely affect the business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole or (y) with respect to any Credit Document.
(h) OTHER REPORTS AND FILINGS. Promptly, copies of all financial
information, proxy materials and other information and reports, if any, which
the Borrower or any of its Subsidiaries shall file with the Securities and
Exchange Commission or any successor thereto (the "SEC") or deliver to holders
of its Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, administrative agent or other representative
therefor) (but excluding administrative and other immaterial notices pursuant to
such Indebtedness documentation) and not otherwise required to be delivered
hereunder.
(i) ENVIRONMENTAL MATTERS. Promptly upon, and in any event within 30
Business Days after, an executive, financial or compliance officer of the
Borrower or any of its Subsidiaries obtains knowledge thereof, notice of one or
more of the following environmental matters, unless such environmental matters
could not, individually or when aggregated with all other such environmental
matters, be reasonably expected to materially and adversely affect the business,
operations, property, assets, liabilities or condition (financial or otherwise)
of the Borrower and its Subsidiaries taken as a whole, PROVIDED that in any
event the Borrower and its Subsidiaries shall deliver to the Banks all material
notices relating to such matters received by the Borrower or any of its
Subsidiaries from any government or governmental agency under, or pursuant to,
CERCLA:
(i) any pending or threatened (in writing) Environmental Claim
against the Borrower or any of its Subsidiaries or any Real Property owned
or operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on, or arising from, any Real
Property owned or operated by the Borrower or any of its Subsidiaries that
(a) results in noncompliance by the Borrower or any of its Subsidiaries
with any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against the Borrower or any of
its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that could reasonably
be expected to cause such Real Property to be subject to any restrictions
on the ownership, occupancy, use or transfer-
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ability by the Borrower or any of its Subsidiaries of such Real Property
under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by the Borrower or any of its Subsidiaries as required
by any Environmental Law or any governmental or other administrative
agency.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
Borrower's, or such Subsidiary's response thereto.
(j) ANNUAL MEETINGS WITH BANKS. At the request of the Administrative
Agent, the Borrower shall, once during each fiscal year, hold a meeting (at a
mutually agreeable location and time) with all of the Banks at which meeting the
financial results of the previous fiscal year and the financial condition of the
Borrower and its Subsidiaries and the budgets presented for the current fiscal
year shall be reviewed, PROVIDED that, so long as the Borrower represents more
than 80% of the assets of Holdings, the Borrower may, at its option, hold such
meeting concurrently with any equivalent meeting required to be held by Holdings
under the terms of the Senior Credit Facility.
(k) OTHER INFORMATION. From time to time, such other information or
documents (financial or otherwise) with respect to the Borrower or any of its
Subsidiaries as the Administrative Agent or any Bank may reasonably request in
writing.
6.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
accounting principles (or the comparable foreign equivalent thereof) and all
requirements of law shall be made of all material dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
of its Subsidiaries to, permit officers and designated representatives of the
Administrative Agent or any Bank to visit and inspect, during regular business
hours and under guidance of officers of the Borrower or such Subsidiary, any of
the properties of the Borrower or any of its Subsidiaries, and, subject to the
foregoing requirements, to examine the books of account of the Borrower and any
of its Subsidiaries and discuss the affairs, finances and accounts of the
Borrower and any of its Subsidiaries with, and be advised as to the same by, its
and their officers and independent accountants, all at such reasonable times and
intervals, upon such reasonable notice and to such reasonable extent as the
Administrative Agent or such Bank may request.
6.03 MAINTENANCE OF PROPERTY; INSURANCE. The Borrower will, and will
cause each of its Subsidiaries to, (i) keep all material property necessary and
useful in its business in good working order and condition, (ii) maintain
insurance on its property with reputable and solvent insurance companies in at
least such amounts and against at least such risks as is consistent and in
accordance with industry practice and (iii) furnish to each Bank, upon written
request, full information as to the insurance carried.
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6.04 FRANCHISES, ETC. The Borrower will, and will cause each of its
Subsidiaries to, do or cause to be done all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises
and licenses; PROVIDED, HOWEVER, that nothing in this Section 6.04 shall prevent
(i) transactions permitted by Section 7.02 or (ii) the withdrawal by the
Borrower or any of its Subsidiaries of qualification as a foreign corporation in
any jurisdiction where such withdrawal could not reasonably be expected to have
a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
6.05 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliance as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole.
6.06 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) (i) The Borrower will
comply, and will use its best efforts to cause each of its Subsidiaries to
comply, with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by the Borrower or any of its
Subsidiaries, will promptly pay or cause to be paid all costs and expenses
incurred in connection with such compliance, and will keep or cause to be kept
all such Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws and (ii) neither the Borrower nor any of its Subsidiaries
will generate, use, treat, store, release or dispose of, or permit the
generation, use, treatment, storage, release or disposal of Hazardous Materials
on any Real Property now or hereafter owned or operated by the Borrower or any
of its Subsidiaries, or transport or permit the transportation of Hazardous
Materials to or from any such Real Property, except to the extent that the
failure to comply with the requirements specified in clause (i) or (ii) above,
either individually or in the aggregate, could not reasonably be expected to
result in liability under Environmental Laws that could have a material adverse
effect on the business, operations, property, assets, liabilities or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole.
If required to do so under any applicable legally binding directive or order of
any governmental agency, the Borrower agrees to undertake, and cause its
Subsidiaries to undertake, to the extent required under applicable Environmental
Laws, any clean up, removal, remedial or other action necessary to remove and
clean up any Hazardous Materials from any Real Property owned or operated by the
Borrower or any of its Subsidiaries in accordance with the requirements of all
applicable Environmental Laws and in accordance with such legally binding orders
and directives of all governmental authorities, except to the extent that (x)
the Borrower or such Subsidiary is contesting such order or directive in good
faith and by appropriate proceedings and for which adequate reserves have been
established to the extent required by generally accepted accounting principles
or (y) the failure to take any such action could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities or condition (financial or otherwise) of the Borrower and its
Subsidiaries taken as a whole.
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(b) At the written request of the Administrative Agent or the
Required Banks, at any time and from time to time as is reasonable after (i) the
Obligations have become due and payable pursuant to Section 8 or (ii) the Banks
receive notice under Section 6.01(i) for any event for which notice is required
to be delivered with respect to conditions at any Real Property, the Borrower
will provide, at their sole cost and expense, an environmental site assessment
report of reasonable scope and expense concerning any relevant Real Property now
or hereafter owned or operated by the Borrower or any of its Subsidiaries,
prepared by an environmental consulting firm approved by the Administrative
Agent in its reasonable discretion, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property. If the Borrower
fails to provide the same within 45 days after such request was made, the
Administrative Agent may order the same, and the Borrower, to the extent the
Borrower has the authority to do so, shall grant and hereby grants, to the
Administrative Agent and the Banks and their Administrative Agents, access to
such Real Property and specifically grants the Administrative Agent and the
Banks an irrevocable non-exclusive license, subject to the rights of tenants, to
undertake such an assessment, all at the Borrowers' expense.
6.07 ERISA. As soon as possible and, in any event, within 15 days
after the Borrower or any of its Subsidiaries or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, and provided that
any such occurrence could reasonably be expected to result in a material
liability to Holdings, the Borrower or any of their Subsidiaries, the Borrower
will deliver to each of the Banks a certificate of the chief financial officer
of the Borrower setting forth the full details as to such occurrence and the
action, if any, that the Borrower or any such Subsidiary or such ERISA Affiliate
is required or proposes to take, together with any notices required or proposed
to be given or filed by the Borrower, such Subsidiary, the Plan administrator or
such ERISA Affiliate to or with the PBGC or any other government agency, or a
Plan or Multiemployer Plan participant and any notices received by the Borrower,
such Subsidiary or ERISA Affiliate from the PBGC or any other government agency,
or a Plan or Multiemployer Plan participant with respect thereto: that a
Reportable Event has occurred (except to the extent that the Borrower or any of
its Subsidiaries has previously delivered to the Banks a certificate and notices
(if any) concerning such event pursuant to the next clause hereof); that a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA is subject to the advance reporting requirement of
PBGC Regulation Section 4043.61 (without regard to subparagraph (b)(1) thereof),
and an event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA, has been
incurred or an application is reasonably expected to be or has been made for a
waiver or modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under Section
412 of the Code or Section 303 or 304 of ERISA with respect to a Plan or
Multiemployer Plan; that any contribution required to be made with respect to a
Plan, Multiemployer Plan or Foreign Pension Plan has not been timely made; that
a Plan or Multiemployer Plan has been or is reasonably expected to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan or Multiemployer Plan has an Unfunded Current Liability; that
proceedings are reasonably expected
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to be or have been instituted to terminate or appoint a trustee to administer a
Plan which is subject to Title IV of ERISA; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent contribution
to a Multiemployer Plan; that the Borrower, any of its Subsidiaries or any ERISA
Affiliate will or are reasonably expected to incur any material liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan or Multiemployer Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan
under Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i)
or 502(l) of ERISA or with respect to a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; or that the Borrower or any of its Subsidiaries are reasonably expected to
incur any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any
Plan or any Foreign Pension Plan. The Borrower will deliver to each of the Banks
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. At the
request of the Administrative Agent, the Borrower will also deliver to the
Administrative Agent, which request may only be made for those filings (as set
forth hereinbelow) in the year in which such filings are due or for the prior
years, a complete copy of the annual report (on Internal Revenue Service Form
5500-series) of each Plan, other than a Multiemployer Plan (including, to the
extent required, the related financial and actuarial statements and opinions and
other supporting statements, certifications, schedules and information) required
to be filed with the Internal Revenue Service. In addition to any certificates
or notices delivered to the Banks pursuant to the first sentence hereof, copies
of annual reports and any records, documents or other information required to be
furnished to the PBGC (other than PBGC Form 1) or any other government agency,
and any material notices received by the Borrower, any of its Subsidiaries or
any ERISA Affiliate with respect to any Plan or Foreign Pension Plan or received
from any government agency or plan administrator or sponsor or trustee with
respect to any Multiemployer Plan, shall be delivered to the Banks no later than
ten (10) days after the date such records, documents and/or information has been
furnished to the PBGC or any other government agency or such notice has been
received by the Borrower, any of its Subsidiaries or the ERISA Affiliate, as
applicable. The Borrower and each of its applicable Subsidiaries shall ensure
that all Foreign Pension Plans administered by it or into which it makes
payments obtains or retains (as applicable) registered status under and as
required by applicable law and is administered in a timely manner in all
respects in compliance with all applicable laws except where the failure to do
any of the foregoing would not be reasonably likely to result in a material
adverse effect upon the business, operations, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries, taken as a whole.
6.08 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower will cause
(i) each of its, and each of its material Subsidiaries', fiscal years to end on
the Friday closest to June 30 of each year and (ii) each of such Person's fiscal
quarters to be consistent with such a fiscal year.
6.09 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, deed of trust, indenture, loan agreement or credit agreement and
each other material agreement, contract or
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instrument by which it is bound, except such non-performances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken as
a whole; PROVIDED that the failure to pay any Indebtedness shall not constitute
a breach of this Section 6.09 unless it shall give rise to an Event of Default
under Section 8.04.
6.10 PAYMENT OF TAXES. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon the Borrower or its
Subsidiaries or upon the income or profits of the Borrower or its Subsidiaries,
or upon any properties belonging to it, prior to the date on which penalties
would otherwise attach thereto, and all lawful claims which, if unpaid, might
become a lien or charge not otherwise permitted under Section 7.01(i) upon any
properties of the Borrower or any such Subsidiary; PROVIDED that none of the
Borrower, or any such Subsidiary shall be required to pay any such material tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings so long as the Borrower or any such Subsidiary maintains
adequate reserves with respect thereto in accordance with generally accepted
accounting principles.
6.11 OWNERSHIP OF SUBSIDIARIES. The Borrower will at all times
ensure that each of its Subsidiaries (other than Dynavox LLC) remains as a
Wholly-Owned Subsidiary except (i) prior to the Merger Date, (ii) to the extent
that any such Subsidiary is merged, consolidated or liquidated in a transaction
permitted by Section 7.02(v) or (vi) and (iii) for non-Wholly-Owned Subsidiaries
acquired after the Closing Date pursuant to Section 7.05(xviii).
6.12 CONSUMMATION OF THE MERGER. No later than the earlier of (x) 90
days following the Closing Date and (y) May 1, 2001, (i) the Borrower shall
cause the Merger to be consummated, and (ii) all conditions precedent to the
consummation of the Merger as set forth in the Merger Documents shall have been
satisfied, and not waived in any material respect unless consented to by the
Administrative Agent. On the date of the consummation thereof, the Merger shall
have been consummated in accordance in all material respects with the terms and
conditions of the Merger Documents and all applicable laws. On the Merger Date,
the following actions shall have been taken and the following conditions and
requirements shall have been satisfied:
(a) Sunrise shall have duly authorized, executed and delivered to
the Administrative Agent an Acknowledgment and Assumption substantially in the
form of Exhibit E hereto (the "Borrower Acknowledgment and Assumption").
(b) The Administrative Agent shall have received from (i) Simpson
Thacher & Bartlett, special counsel to Sunrise, an opinion addressed to the
Administrative Agent and each of the Banks and dated the Merger Date covering
the matters set forth in Exhibit D-4 and (ii) Steven Jaye, Esq., General Counsel
of Sunrise, an opinion addressed to the Administrative Agent and the Banks and
dated the Merger Date covering the matters set forth in Exhibit D-5.
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(c) The Administrative Agent shall have received a certificate,
dated the Merger Date, signed by an Authorized Officer of Sunrise and attested
to by a second Authorized Officer of Sunrise, substantially in the form of
Exhibit F with appropriate insertions, together with copies of the Certificate
of Incorporation and By-Laws (or their equivalents) of Sunrise and the
resolutions of Sunrise, and the foregoing shall be reasonably acceptable to the
Administrative Agent.
(d) All corporate and legal proceedings and all instruments and
agreements relating to the transactions contemplated by this Agreement and the
other Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Administrative Agent may have reasonably
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
(e) The total commitments in respect of the Indebtedness to be
Refinanced shall have been terminated, and all loans with respect thereto shall
have been repaid in full (or, in the event that the Merger is consummated
pursuant to the "short-form" merger provisions of Section 253 of the Delaware
General Corporation Law, in the case of any Indebtedness to be Refinanced
referred to in clause (ii) of the definition thereof, unconditional and
irrevocable prepayment arrangements reasonably satisfactory to the
Administrative Agent shall have been entered into by the Borrower providing for
the prepayment of such Indebtedness to be Refinanced within 30 days of the
Merger Date), together with interest thereon, all letters of credit issued
thereunder shall have been terminated (or either incorporated into the Senior
Credit Facility as a letter of credit thereunder or supported with a letter of
credit issued thereunder) and all other amounts due and owing pursuant to the
Indebtedness to be Refinanced shall have been repaid in full and all documents
in respect of the Indebtedness to be Refinanced and all guarantees with respect
thereto shall have been terminated (except as to (x) indemnification provisions,
which may survive, and (y) to the extent necessary to permit any prepayment
during such 30-day period) and be of no further force or effect.
(f) The limited liability company agreement in respect of Dynavox
LLC (and any contribution agreement in respect thereof) shall be reasonably
satisfactory to the Administrative Agent.
(g) The Borrower shall have caused to be delivered to the
Administrative Agent and the Banks a solvency certificate substantially in the
form of Exhibit G, executed by the Chief Financial Officer of the Borrower,
which certificate shall be addressed to the Administrative Agent and each of the
Banks, be dated the Merger Date and set forth the conclusion that, after giving
effect to the Transaction, each of the Borrower and its Subsidiaries (on a
consolidated basis), and the Borrower (on a stand-alone basis) are not insolvent
and will not be rendered insolvent by the Indebtedness incurred in connection
herewith, will not be left with unreasonably small capital with which to engage
in their respective business and will not have incurred debts beyond their
ability to pay such debts as they mature and become due.
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6.13 PERMITTED ACQUISITIONS. Subject to the provisions of this
Section 6.13 and the requirements contained in the definition of Permitted
Acquisition, the Borrower and its Subsidiaries may from time to time after the
Merger Date effect Permitted Acquisitions, so long as (i) the Borrower shall
have given the Administrative Agent and the Banks at least 15 Business Days'
prior written notice of any Permitted Acquisition, (ii) no Default or Event of
Default is in existence at the time of entering into a legally binding agreement
to consummate such Permitted Acquisition or would result immediately after
giving effect thereto and all representations and warranties contained herein or
in the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties were made on
and as of the date of entering into a legally binding obligation to consummate
such Permitted Acquisition (both before and after giving effect thereto), unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date, and (iii) the Borrower shall have delivered to the Administrative
Agent an officer's certificate executed by an Authorized Officer of the
Borrower, certifying to the best of his knowledge, compliance with the
requirements of preceding clauses (i) and (ii).
SECTION 7. NEGATIVE COVENANTS. The Borrower hereby covenants and
agrees for itself and each of its Subsidiaries that on and after the Closing
Date and until the Total Commitment is terminated and the Loans and Notes,
together with all accrued but unpaid interest and other Obligations, are paid in
full:
7.01 LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income, provided that the
provisions of this Section 7.01 shall not prevent the creation, incurrence,
assumption or existence of the following (Liens described below are herein
referred to as "Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or levies
not yet due and payable or Liens for taxes, assessments or governmental
charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established to the
extent required by generally accepted accounting principles;
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness, such as carriers',
warehousemen's, materialmen's and mechanics' liens and other similar Liens
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of the Borrower's or such
Subsidiary's property or assets or materially impair the use thereof in
the operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in
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good faith by appropriate proceedings, which proceedings have the effect
of preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Closing Date which are listed, and the
property subject thereto described, in Schedule IX, and any renewals or
extensions of such Liens, PROVIDED that (x) the aggregate principal amount
of the Indebtedness, if any, secured by such Liens does not increase from
that amount outstanding at the time of any such renewal or extension and
(y) any such renewal or extension does not encumber any additional assets
or properties of the Borrower or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens securing Senior Indebtedness;
(vi) leases or subleases granted to other Persons in the ordinary
course of business not materially interfering with the conduct of the
business of the Borrower or any of its Subsidiaries;
(vii) Liens upon assets subject to Capitalized Lease Obligations to the
extent permitted by Section 7.04(iii) or (xiii), provided that (x) such
Liens only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation and (y) the Lien encumbering the asset giving
rise to the Capitalized Lease Obligation does not encumber any other asset
of the Borrower or any of its Subsidiaries;
(viii) Liens placed upon assets at the time of acquisition thereof by
the Borrower or any of its Subsidiaries or within 90 days thereafter to
secure Indebtedness incurred to pay all or a portion of the purchase price
thereof, provided that, in either case, (x) the aggregate outstanding
principal amount of all Indebtedness secured by Liens permitted by this
clause (viii) shall not at any time exceed the amount permitted under
Section 7.04(iii) or (xiii) and (y) in all events, the Lien encumbering
the assets so acquired does not encumber any other asset of the Borrower
or any of its Subsidiaries;
(ix) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any of its Subsidiaries or existing
on any property or asset of any Person that becomes a Subsidiary of the
Borrower after the date hereof prior to the time such Person becomes a
Subsidiary of the Borrower; PROVIDED that (i) such Lien was not created in
contemplation of or in connection with such acquisition or such Person
becoming a Subsidiary of the Borrower, (ii) such Lien shall not apply to
any other property or assets of the Borrower or any of its Subsidiaries
and (iii) such Lien shall secure only those obligations which it secures
on the date of such acquisition or the date such Person becomes a
Subsidiary of the Borrower;
(x) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each
case not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
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(xi) Liens arising from precautionary UCC financing statement filings
or similar filings regarding operating leases;
(xii) statutory and common law landlords' liens under leases to which
the Borrower or any of its Subsidiaries is a party;
(xiii) 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, utilities, performance and return-of-money bonds,
contracts, Other Hedging Agreements and other similar obligations incurred
in the ordinary course of business (exclusive of contracts and obligations
in respect of the payment for borrowed money);
(xiv) Liens in favor of customers and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xv) normal and customary rights of set-off upon deposits of cash in
favor of banks and other depository institutions, and pledges of cash and
marketable securities pursuant to the general business conditions of
German banks;
(xvi) the Borrower and its Subsidiaries may sell or assign overdue
accounts receivable in connection with the collection thereof in the
ordinary course of business;
(xvii) Foreign Subsidiaries may grant Liens on their assets to secure
Indebtedness outstanding under Section 7.04(ix) or (xiii) or Section 7.05
(viii) or (ix);
(xviii) Liens on assets subject to sale-leaseback transactions permitted
under Section 7.02(xiii);
(xix) Liens related to sales of installment sale contracts and/or
receivables owned or formerly owned by SunMed Finance;
(xx) any agreement not otherwise prohibited by this Agreement not
intended to create a Lien but containing language permitting
recharacterization if such intention is disregarded; and
(xxi) Liens not otherwise permitted pursuant to this Section 7.01 which
secure obligations permitted under this Agreement not exceeding
$10,000,000 in the aggregate at any one time outstanding.
7.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC. The Borrower will
not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any sale-leaseback transactions, except that:
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(i) the Borrower and its Subsidiaries may make sales of inventory,
equipment and other assets, including sales to other Subsidiaries of the
Borrower, in the ordinary course of business;
(ii) the Borrower and its Subsidiaries may make sales of assets,
PROVIDED that (x) each such sale results in consideration at least 70% of
which (taking into account the amount of cash and the principal amount of
any promissory notes received as consideration) shall be in the form of
cash (provided that in lieu of cash the Borrower or such Subsidiary may
receive, as consideration, assets which the Borrower or such Subsidiary
would have been permitted to reinvest in under the terms of the Senior
Credit Facility if the Borrower or such Subsidiary had received cash
consideration) and (y) the aggregate sale proceeds from all assets subject
to such sales shall not exceed $5,000,000 in any fiscal year of the
Borrower;
(iii) so long as no Event of Default has occurred and is continuing,
the Borrower and its Subsidiaries may make sales of assets, PROVIDED that
(x) each such sale is made for fair market value (as determined in good
faith by the Borrower) and (y) each such sale results in consideration at
least 70% of which (taking into account the amount of cash and the
principal amount of any promissory notes received as consideration) shall
be in the form of cash (provided that in lieu of cash the Borrower or such
Subsidiary may receive, as consideration, assets which the Borrower or
such Subsidiary would have been permitted to reinvest in under the terms
of the Senior Credit Facility if the Borrower or such Subsidiary had
received cash consideration);
(iv) the Borrower and its Subsidiaries may lease (as lessor) or
sublease real or personal property in the ordinary course of business;
(v) any Foreign Subsidiary of the Borrower may be merged with and
into, or be dissolved or liquidated into, or sell or otherwise transfer
any of its assets to (x) the Borrower or (y) any Wholly-Owned Subsidiary
of the Borrower;
(vi) any Domestic Subsidiary of the Borrower may be merged with and
into, or be dissolved or liquidated into, or transfer any of its assets to
(x) the Borrower or (y) any Wholly-Owned Domestic Subsidiary of the
Borrower; PROVIDED that, in the case of any transfer of any assets to
Dynavox LLC, (I) the Borrower shall cause Dynavox LLC to provide an
appraisal in respect of the fair market value of the assets to be
transferred from an independent appraisal expert addressed to the
Administrative Agent and in form and substance reasonably satisfactory to
the Administrative Agent and (II) Dynavox LLC shall attribute to such
assets the fair market value determined by such appraisal expert; PROVIDED
further that, such appraisal shall only be required to be delivered in
respect of any such transfer of assets if the aggregate fair market value
of the assets transferred to Dynavox LLC exceeds $100,000 during the
fiscal year in which such asset transfer is to be effected;
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(vii) the Borrower and its Subsidiaries may sell or discount accounts
receivable in the ordinary course of business, but only in connection with
the collection or compromise thereof;
(viii) the Borrower and its Subsidiaries may, in the ordinary course of
business, license patents, trademarks, copyrights and know-how to third
Persons or to the Borrower or any of its Subsidiaries, so long as each
such license does not prohibit the granting of a Lien to the Borrower or
such Subsidiary in the intellectual property covered by such license;
(ix) the Transaction, the Restructuring and the Foreign Restructuring
shall be permitted;
(x) the Corona Disposition shall be permitted;
(xi) the CCG Transaction shall be permitted;
(xii) transactions permitted under Section 7.05 shall be permitted
(including, without limitation, the purchase and sale of Cash
Equivalents);
(xiii) the Borrower and its Subsidiaries may enter into sale-leaseback
transactions in addition to those permitted under clause (ix) above so
long as the assets sold pursuant to this clause (xiii) do not have a fair
market value in excess of $25,000,000;
(xiv) the Dynavox Restructuring shall be permitted; and
(xv) sales of installment sale contracts and/or receivables owned or
formerly owned (individually or jointly) by SunMed Finance shall be
permitted.
7.03 DIVIDENDS. The Borrower will not, and will not permit any of
its Subsidiaries to, authorize, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to (x) the
Borrower or (y) any Wholly-Owned Subsidiary of the Borrower;
(ii) the Borrower may pay cash Dividends to Holdings in the amounts
and at the times of any payment by Holdings in respect of taxes so long as
any refunds received by Holdings shall promptly be returned by Holdings to
the Borrower;
(iii) (a) the Borrower may pay cash Dividends to Holdings in an amount
not to exceed $4,500,000 in any fiscal year so long as the proceeds
thereof are promptly used by Holdings to pay expenses in the ordinary
course of business or to pay cash dividends to the Intermediate Parent in
an amount not to exceed $2,500,000 in any fiscal year so long as the
proceeds thereof are promptly used by the Intermediate Parent to pay cash
dividends to the Parent and such proceeds are promptly used by the Parent
to pay fees and
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expenses incurred by the Parent in the ordinary course of business in
connection with its role as the indirect parent of Holdings;
(iv) so long as no Default or Event of Default then exists or would
result therefrom, the Borrower may pay cash Dividends to Holdings so long
as Holdings promptly uses such proceeds (or forwards such proceeds,
directly or indirectly, to Parent which uses such proceeds) to redeem or
purchase shares of its capital stock or other equity interests (or options
to purchase its capital stock or other equity interests) held by
management of Holdings or any of its Subsidiaries or employees following
the termination of their employment (by death, disability, termination,
resignation or retirement) or following a determination by management of
Holdings in good faith that a hardship exists as to any member of
management or any employee, PROVIDED that (x) the only consideration paid
by Holdings in respect of such redemptions and/or purchases shall be cash
and Shareholder Subordinated Notes and (y) the sum of (A) the aggregate
amount paid by Holdings in cash in respect of all such redemptions and/or
purchases plus (B) the aggregate amount of all principal and interest
payments made on Shareholder Subordinated Notes, shall not exceed
$8,000,000 in any fiscal year of Holdings (plus the amount available to be
used pursuant to this clause (iv)(a)(y) in prior fiscal years and not so
used, but in no event more than $30,000,000 in the aggregate after the
Effective Date), PROVIDED that all such amounts shall be increased by (I)
an amount equal to the net cash proceeds received by Holdings after the
Effective Date from the sale or issuance of its equity interests (to the
extent not used to effect a Permitted Acquisition) and (II) an amount
equal to key man life insurance proceeds received by Holdings and its
Subsidiaries after the Effective Date;
(v) the Transaction shall be permitted (and the Borrower may pay cash
Dividends to Holdings to enable Holdings to consummate the Transaction);
(vi) the Borrower may pay Dividends to Holdings to enable Holdings or
the Parent to make payments of the type referred to in Section 7.06(v),
(ix) and (x);
(vii) the Borrower may pay Dividends to Holdings to enable Holdings or
the Parent to make loans of the type referred to in Section 7.05(iii);
(viii) the Borrower may pay Dividends to Holdings to enable Holdings or
the Parent to make required payments on any Permitted Earn-Out Debt and
Permitted Earn-Out Preferred Equity in accordance with the terms thereof;
(ix) non-Wholly-Owned Subsidiaries of Holdings (other than Dynavox
LLC) acquired pursuant to Section 7.05(xviii) may pay Dividends, so long
as any such Dividends are paid pro rata to all equity holdings of such
Subsidiaries;
(x) the CCG Transaction shall be permitted (to the extent same is
considered a Dividend); and
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(xi) Dynavox LLC may pay Dividends to its members to allow such
members to timely pay their taxes arising from the allocation to them of
income of Dynavox LLC, with such taxes being calculated at an assumed tax
rate equal to the highest federal, New York State and New York City
individual tax rate applicable to the income of Dynavox LLC; provided,
however, that all ordinary income from operations of Dynavox LLC will be
allocated to the Borrower and/or its Subsidiaries through the fiscal year
ending on or about June 30, 2002.
7.04 INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the Notes;
(ii) Existing Indebtedness to the extent the same is listed on
Schedule VII, and any refinancing or renewals thereof, provided that any
such refinancing and renewals shall not exceed the principal amount of,
and shall not mature before such Existing Indebtedness outstanding at the
time of the refinancing or renewal thereof;
(iii) Indebtedness evidenced by Capitalized Lease Obligations and
purchase money Indebtedness of the Borrower and its Subsidiaries,
including any Indebtedness assumed in connection with the acquisition of
assets, provided that in no event shall the aggregate principal amount of
Capitalized Lease Obligations, and the principal amount of all such
Indebtedness incurred or assumed in each case after the Closing Date,
permitted by this clause (iii) exceed $20,000,000 at any time outstanding;
(iv) intercompany Indebtedness among Holdings and its Subsidiaries to
the extent permitted by Section 7.05;
(v) Indebtedness of the Borrower under Interest Rate Protection
Agreements required under the terms of the Senior Credit Facility or
entered into to protect the Borrower against fluctuations in interest
rates in respect of the Obligations so long as management of the Borrower
has determined that the entering into of such Interest Rate Protection
Agreements are bona fide hedging activities;
(vi) Indebtedness of the Borrower and its Subsidiaries under Other
Hedging Agreements providing protection against fluctuations in currency
or commodity values in connection with the Borrower or any of its
Subsidiaries' operations so long as management of the Borrower or such
Subsidiary, as the case may be, has determined that the entering into of
such Other Hedging Agreements are bona fide hedging activities;
(vii) the Borrower and its Subsidiaries may become liable as a
guarantor with respect to obligations of the Borrower and any
Subsidiaries, which obligations are otherwise permitted under this
Agreement;
(viii) Indebtedness in respect of those accounts receivable permitted to
be sold or discounted pursuant to Section 7.02(vii);
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(ix) Indebtedness of Foreign Subsidiaries in respect of local lines of
credit, letters of credit, bank guarantees and similar extensions of
credit in an aggregate outstanding principal amount not to exceed
$30,000,000 at any time;
(x) Indebtedness of the Borrower under the Senior Credit Facility in
an aggregate principal amount not to exceed $250,000,000;
(xi) Indebtedness of the Borrower and its Subsidiaries under unsecured
overdraft lines with commercial banks in the ordinary course of business
and consistent with past practices, in an aggregate principal amount not
to exceed $15,000,000 at any time;
(xii) Contingent Obligations arising under shared loss agreements
relating to vendor financing provided to customers in the ordinary course
of business and consistent with past practices; and
(xiii) additional Indebtedness of the Borrower and its Subsidiaries not
otherwise permitted under this Section 7.04 not to exceed $20,000,000 in
aggregate principal amount at any one time outstanding.
7.05 ADVANCES, INVESTMENTS, LOANS, PURCHASE OF ASSETS. The Borrower
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, (w) lend money or credit or make advances to any Person, (x)
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets of any Person (including, without limitation, any
stock, obligations or securities of, or any other interest in, any other Person,
but excluding purchases or other acquisitions of inventory, materials, equipment
and other tangible and intangible assets in the ordinary course of business),
(y) make any capital contribution to any other Person or (z) purchase or own a
futures contract or otherwise become liable for the purchase or sale of currency
or other commodities at a future date in the nature of a futures contract,
except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents and Foreign Subsidiaries may make and own similar
investments customary for countries in which they conduct business;
(iii) the Borrower and its Subsidiaries may (x) make loans and advances
in the ordinary course of business to their respective employees so long
as the aggregate principal amount thereof at any time outstanding
(determined without regard to any write-downs or write-offs of such loans
and advances) shall not exceed $10,000,000, (y) make loans and advances to
their respective employees for the purpose of enabling such employees to
pay tax liabilities arising as a result of (I) the vesting or acceleration
of restricted stock or membership interests in Holdings, the Intermediate
Parent or the Parent, (II) the exercise of options or warrants to purchase
Holdings Common Stock or
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membership interests in the Intermediate Parent or the Parent and (III)
the acquisition of restricted membership interests in the Intermediate
Parent or the Parent, so long as the aggregate principal amount thereof at
any time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $5,000,000, and
(z) make loans to members of management to fund their purchase of equity
interests of Holdings or the Parent so long as no cash is paid by Holdings
or any of its Subsidiaries in connection therewith (or any cash so paid is
promptly (and in any event within one Business Day) returned to Holdings
or such Subsidiary);
(iv) the Borrower may enter into Interest Rate Protection Agreements
to the extent permitted by Section 7.04(v);
(v) the Borrower and its Subsidiaries may enter into Other Hedging
Agreements to the extent permitted by Section 7.04(vi);
(vi) investments in existence on the Closing Date in Subsidiaries of
the Borrower or listed on Schedule X shall be permitted, without giving
effect to any additions thereto or replacements thereof;
(vii) the Borrower may make intercompany loans to or other investments
in any Domestic Subsidiary, any Subsidiary of the Borrower may make
intercompany loans to or other investments in the Borrower or any Domestic
Subsidiary, and any Domestic Subsidiary may make intercompany loans to or
other investments in any other Domestic Subsidiary (any such intercompany
loans, collectively, "Intercompany Loans");
(viii) any Foreign Subsidiary may make intercompany loans to or other
investments in any other Foreign Subsidiary;
(ix) the Borrower or any Domestic Subsidiary may make intercompany
loans to, or investments in, any Foreign Subsidiary (any such intercompany
loans, collectively, "Foreign Subsidiary Loans"), PROVIDED that (x) such
Foreign Subsidiary Loans and investments (excluding Foreign Subsidiary
Loans and investments made in connection with the Foreign Restructuring)
shall not exceed $40,000,000 at any time outstanding and (y) such Foreign
Subsidiary Loans and investments made in connection with the Foreign
Restructuring shall not exceed $40,000,000 at any time outstanding prior
to the first anniversary of the incurrence of the first such Foreign
Subsidiary Loan made in connection with the Foreign Restructuring and
after such first anniversary shall not be permitted;
(x) the Borrower and its Subsidiaries shall be permitted to make
Capital Expenditures;
(xi) the Borrower and its Subsidiaries may enter into transactions
permitted under Section 7.02;
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(xii) the Borrower and its Subsidiaries may enter into guarantees to
the extent permitted by Section 7.04;
(xiii) the Borrower and any Subsidiary of the Borrower may make
Permitted Acquisitions in accordance with the definition thereof and the
other provisions of this Agreement;
(xiv) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(xv) investments of any Person existing at the time such Person
becomes a Subsidiary of the Borrower or at the time such Person merges or
consolidates with the Borrower or any of its Subsidiaries, in either case,
as the result of a Permitted Acquisition in compliance with the terms of
this Agreement, provided that such investments were not made by such
Person in connection with, or in anticipation or contemplation of, such
Person becoming a Subsidiary of the Borrower or such merger or
consolidation;
(xvi) contingent payment rights received in sales of installment
contracts in the ordinary course of business and consistent with past
practices and sales of discount installment sales contracts and/or
receivables formerly owned by SunMed Finance;
(xvii) dealer financing arrangements entered into by the Borrower and
its Subsidiaries in the ordinary course of business and consistent with
past practices, so long as the aggregate principal amount outstanding
under all such arrangements shall not exceed $20,000,000 at any time; and
(xviii) the Borrower and its Subsidiaries may make additional advances,
investments and loans after the Closing Date to the extent not otherwise
permitted under this Section 7.05 (including, without limitation, joint
venture investments) so long as the Unrecovered Amount of such advances,
investments and loans does not exceed $22,500,000 in the aggregate (plus
the proceeds of any equity issuance, to the extent such proceeds are not
required to be applied to repay any loans outstanding under the Senior
Credit Facility, not applied to make a Permitted Acquisition and not
applied to make Capital Expenditures.
7.06 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than on terms
and conditions substantially as favorable to the Borrower or such Subsidiary as
would reasonably be obtained by the Borrower or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except that:
(i) the Transaction shall be permitted;
(ii) Dividends may be paid to the extent provided in Section 7.03;
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(iii) transactions permitted under Section 7.02 shall be permitted;
(iv) loans may be made and other transactions may be entered into by
Holdings, the Borrower and its Subsidiaries to the extent permitted by
Section 7.05;
(v) the Borrower may make payments under the Management Agreement;
(vi) the Borrower may make payments under other agreements listed on
Schedule XI (in each case as in effect on the Closing Date);
(vii) other transactions between or among the Intermediate Parent,
Holdings, the Borrower and its Subsidiaries not involving any other
Affiliate and not otherwise prohibited under this Agreement shall be
permitted;
(viii) customary fees may be paid to members of the Board of Directors
of Holdings, the Borrower and its Subsidiaries for their services as
directors not in excess of fees paid to directors who are not Affiliates;
(ix) the Borrower may pay fees to VCP IV in accordance with the terms
of the Vestar Guaranty, as long as such fees are permitted to be paid
pursuant to the subordination provisions of the Vestar Guaranty;
(x) the Borrower may make payments on or about the Closing Date to
VCP IV and PAEP for investment banking fees in an aggregate amount not to
exceed $5,000,000 plus expenses incurred by VCP IV and PAEP in connection
with the Transaction; and
(xi) to the extent that VCP IV (or an Affiliate of VCP IV) purchases
the Loans pursuant to the Vestar Guaranty or otherwise has a right of
subrogation against the Borrower, payments of principal, interest and fees
in connection therewith.
7.07 MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND
CERTAIN AGREEMENTS; ETC. The Borrower will not, and will not permit any of its
Subsidiaries to, amend, modify or change its certificate of incorporation or
limited liability company agreement or by-laws (if any), or any agreement
entered into by it, with respect to its capital stock or other equity interests,
or enter into any new agreement with respect to its capital stock or other
equity interests, other than any amendments, modifications or changes, or any
such new agreements which are not adverse in any material respect to the
interests of the Banks.
7.08 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any such Subsidiary to (a) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by the Borrower or any of its
Subsidiaries, or pay any Indebtedness owed to the Borrower or any of its
Subsidiaries, (b) make loans or advances to the Borrower or any of its
Subsidiaries, or (c) transfer any of its properties or assets to the Borrower or
any of its Subsidiaries, except for such encumbrances or restrictions existing
under
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or by reason of (i) applicable law, (ii) the Senior Credit Facility, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of Holdings or any of its Subsidiaries, (iv) customary
provisions restricting assignment of any agreement entered into by the Borrower
or any Subsidiary of the Borrower in the ordinary course of business, (v)
customary provisions restricting the transfer of assets subject to Liens
permitted under Section 7.01(iii), (vii), (viii) and (ix), (vi) any restrictions
contained in contracts for the sale of assets permitted in accordance with
Section 7.02 solely in respect of the assets to be sold pursuant to such
contract, (vii) any restrictions or conditions imposed by any agreement relating
to secured Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness and
(viii) this Agreement.
7.09 LIMITATION ON ISSUANCE OF EQUITY. (a) The Borrower will not
permit any of its Subsidiaries to issue any capital stock or other equity
interests (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock or other
equity interests, except (i) for transfers and replacements of then outstanding
shares of capital stock or other equity interests, (ii) for stock splits, stock
dividends and similar issuances which do not decrease the percentage ownership
of the Borrower or any of its Subsidiaries in any class of the capital stock or
other equity interests of such Subsidiary, (iii) for issuances to the Borrower
or any of its Wholly-Owned Subsidiaries in connection with the creation of new
Wholly-Owned Subsidiaries permitted under Section 7.11 or in connection with
transactions permitted under Section 7.05, (iv) for issuances by Dynavox LLC,
(v) for issuances by Subsidiaries which are joint ventures created or acquired
in accordance with Section 7.05(xviii) or (vi) to qualify directors to the
extent required by applicable law.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, issue after the Effective Date (i) any class of preferred
equity (provided that (A) Subsidiaries of the Borrower may issue preferred
equity to the Borrower or any Wholly-Owned Subsidiary of the Borrower (or
otherwise, to the extent such Subsidiary is a joint venture created or acquired
in accordance with Section 7.05(xviii) and (B) Dynavox LLC may issue preferred
units pursuant to the Dynavox Restructuring) or (ii) any class of redeemable
(except at the sole option of the Borrower or such Subsidiary) common equity.
7.10 BUSINESS. (a) The Borrower will not, and will not permit any of
its Subsidiaries to, engage (directly or indirectly) in any business other than
any of the lines of business conducted by the Borrower and its Subsidiaries
(including without limitation Sunrise and its Subsidiaries) on the Closing Date
and any business similar, ancillary or related thereto or which constitutes a
reasonable extension or expansion thereof, including in connection with the
Borrower's existing and future technology, trademarks and patents.
(b) Notwithstanding anything to the contrary contained in this
Agreement, prior to the Merger Date, Newco will not engage in any business
activities and will not have any significant assets or liabilities other than
its ownership of Sunrise Common Stock acquired pursuant to the Tender Offer, the
making of other investments permitted by Section 7.05, liabilities imposed by
law, activities in connection with the Transaction, and its obligations with
respect to this Agreement and the other Documents to which it is a party.
Without limiting the
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generality of the foregoing, prior to the Merger Date, Newco will not incur or
suffer to exist any Liens other than those created under the Documents, acquire
any assets (other than Sunrise Common Stock acquired pursuant to the Tender
Offer), sell any assets, or incur or suffer to exist any Indebtedness (other
than pursuant to the Documents).
7.11 LIMITATION ON THE CREATION OF SUBSIDIARIES. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire any
Subsidiary; PROVIDED that (a) the Borrower and its Subsidiaries shall be
permitted to establish or create Wholly-Owned Subsidiaries (or, to the extent
pursuant an investment made under Section 7.05(xviii), non-Wholly-Owned
Subsidiaries), and (b) the Dynavox LLC may be created pursuant to the Dynavox
Restructuring.
SECTION 8. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
8.01 PAYMENTS. (a) The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for three or more days, in the payment when
due of any interest on any Loan or Note, or any other amounts owing hereunder or
under any other Credit Document or (b) VCP IV shall default in the payment of
any amount, in respect of any payment of the type described in clause (a)(ii)
above pursuant to the Vestar Guaranty, and such default shall continue
unremedied for three or more days beyond the period of grace, if any, provided
in the Vestar Guaranty; or
8.02 REPRESENTATIONS, ETC. Any representation, warranty or statement
made by the Borrower herein or in any other Credit Document or in any
certificate delivered pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made; or
8.03 COVENANTS. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 6.01(g)(i), Section 6.13 or Section 7 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than as provided in Section 8.01) and such
default shall continue unremedied for a period of 30 days after written notice
to the defaulting party by the Administrative Agent or the Required Banks; or
8.04 DEFAULT UNDER OTHER AGREEMENTS. (i) The Borrower or any of its
Subsidiaries shall (x) default in any payment at final maturity of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause any such Indebtedness to become due prior to its stated
maturity, or (ii) any such Indebtedness of Holdings or any of its Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than by
a regularly scheduled prepayment or required prepayment (other than pursuant to
a "due-on-sale" clause in a mortgage or similar security agreement) (unless such
required prepayment results
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from a default thereunder or an event of the type that constitutes an Event of
Default), prior to the stated maturity thereof, provided that it shall not be a
Default or an Event of Default under this Section 8.04 unless the aggregate
outstanding principal amount of all Indebtedness as described in preceding
clauses (i) and (ii) is at least $20,000,000; or
8.05 BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of the Borrower or any of
its Subsidiaries, or the Borrower or any of its Subsidiaries commences (or is
required by law to commence) any other proceeding, or is deemed insolvent, under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any of its
Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 60
days; or the Borrower or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
8.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is reasonably likely to have a
trustee appointed to administer such Plan, any Plan or Multiemployer Plan which
is subject to Title IV of ERISA is, shall have been or is reasonably likely to
be terminated or to be the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, a contribution required to be
made with respect to a Plan, Multiemployer Plan or a Foreign Pension Plan has
not been timely made, the Borrower or any of its Subsidiaries or any ERISA
Affiliate has incurred or is reasonably likely to incur any liability to or on
account of a Plan or Multiemployer Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or on account of a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code, or the Borrower or any of its Subsidiaries has incurred or is likely to
incur liabilities
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pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans or Foreign
Pension Plans, a "default," within the meaning of Section 4219(c)(5) of ERISA,
shall occur with respect to any Multiemployer Plan; any applicable law, rule or
regulation is adopted, changed or interpreted, or the interpretation or
administration thereof is changed, in each case after the date hereof, by any
governmental authority or agency or by any court (a "Change in Law"), or, as a
result of a Change in Law, an event occurs following a Change in Law, with
respect to or otherwise affecting any Plan or Multiemployer Plan; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, has had, or could reasonably be expected to have, a
material adverse effect upon the business, operations or condition (financial or
otherwise) of the Borrower and its Subsidiaries taken as a whole; or
8.07 VESTAR GUARANTY. (a) The Vestar Guaranty or any provision
thereof shall cease to be in full force or effect as to VCP IV, or VCP IV or any
Person acting by or on behalf of VCP IV shall deny or disaffirm VCP IV's
obligations under the Vestar Guaranty, or (b) except as otherwise provided in
Section 8.01(b), VCP IV shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to the Vestar Guaranty; PROVIDED that, with respect to defaults under Section 16
of the Vestar Guaranty which relate to covenants in Section 6 of this Agreement
for which a grace period is applicable under Section 8.03(ii), VCP IV shall have
the benefit of the grace period set forth in Section 8.03(ii), or (c) a
Guarantor Event of Default shall have occurred; or
8.08 JUDGMENTS. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the aggregate for
the Borrower and its Subsidiaries a liability of $20,000,000 or more (not paid
or fully covered by a reputable and solvent insurance company) and such
judgments or decrees shall not have been vacated, discharged or stayed or bonded
pending appeal within 60 days from the entry thereof; or
8.09 CHANGE OF CONTROL. A Change of Control shall have occurred;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrower, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Bank or the holder of any Note to enforce its claims against any of
the Borrower and VCP IV (PROVIDED that, if an Event of Default specified in
Section 8.05 shall occur with respect to the Borrower, the result which would
occur upon the giving of written notice by the Administrative Agent to the
Borrower as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately; and (ii) declare the principal of and any accrued interest in
respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower.
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SECTION 9. DEFINITIONS AND ACCOUNTING TERMS.
9.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Administrative Agent" shall mean BTCo (and/or any Lending Affiliate
of BTCo performing obligations or functions on its behalf and reasonably
acceptable to the Borrower), in its capacity as Administrative Agent for the
Banks hereunder, and shall include any successor to the Administrative Agent
appointed pursuant to Section 10.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(i) directly or indirectly controlling (including, but not limited to, all
directors, officers and partners of such Person) controlled by, or under direct
or indirect common control with, such Person or (ii) that directly or indirectly
owns more than 10% of any class of the voting securities or capital stock of or
equity interests in such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" shall mean this Senior Subordinated Loan Agreement, as
modified, supplemented, amended, restated, extended, renewed, refinanced or
replaced from time to time.
"Applicable Margin" shall mean a percentage per annum equal to (i)
in the case of Base Rate Loans, 0% and (ii) in the case of Eurodollar Loans, 1%.
"Approved Bank" shall have the meaning provided in the definition
of "Cash Equivalents."
"Assignment and Assumption Agreement" shall mean an Assignment and
Assumption Agreement substantially in the form of Exhibit H (appropriately
completed).
"Authorized Officer" of any of the Borrower and VCP IV shall mean
any of the Chief Executive Officer, President, the Chief Financial Officer, the
Treasurer, the Controller, any Managing Director, any Assistant Treasurer, any
Vice President, the Secretary or the General Counsel of such Person or any other
officer of such Person which is designated in writing to the Administrative
Agent by any of the foregoing officers of such Person as being authorized to
give such notices under this Agreement.
"Bank" shall mean each financial institution listed on Schedule II,
as well as any Person which becomes a "Bank" hereunder pursuant to 12.04(b).
"Bankruptcy Code" shall have the meaning provided in Section 8.05.
"Base Rate" at any time shall mean the higher of (i) the rate which
is 1/2 of 1% in excess of the overnight Federal Funds Rate and (ii) the Prime
Lending Rate.
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"Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Borrower" shall mean (i) prior to the Merger Date, Newco, and (ii)
on and after the Merger Date, Sunrise as the surviving corporation of the
Merger.
"Borrower Acknowledgment and Assumption" shall have the meaning
provided in Section 6.12(a).
"Borrowing" shall mean a borrowing of Loans of a single Type by the
Borrower from all the Banks on a given date (or resulting from a conversion or
conversions on such date) and, in the case of Eurodollar Loans, having the same
Interest Period, PROVIDED that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual capacity,
and any successor thereto by merger.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the London interbank Eurodollar market and is not a legal holiday or a
day on which banking institutions are authorized or required by law or other
government action to close.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which would be required to be capitalized in
accordance with generally accepted accounting principles, including all such
expenditures with respect to fixed or capital assets (including, without
limitation, expenditures for maintenance and repairs which should be capitalized
in accordance with generally accepted accounting principles) and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.
"Capitalized Lease Obligations" shall mean, with respect to any
Person, all rental obligations which, under generally accepted accounting
principles, are or will be required to be capitalized on the books of such
Person, in each case taken at the amount thereof accounted for as indebtedness
in accordance with such principles.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (PROVIDED that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than one year from the date of acquisition, (ii) U.S. dollar denominated time
deposits, certificates of deposit and bankers acceptances of (x) any Bank and
(y) any bank which has, or whose parent company has, a short-term commercial
paper rating from S&P of at least A-1 or the equivalent thereof or from Moody's
of at least P-1 or the
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equivalent thereof (any such bank or Bank, an "Approved Bank"), in each case
with maturities of not more than one year from the date of acquisition, (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any company with
a short-term commercial paper rating of at least A-1 or the equivalent thereof
by S&P or at least P-1 or the equivalent thereof by Moody's, or guaranteed by
any company with a long term unsecured debt rating of at least A or A2, or the
equivalent of each thereof, from S&P or Moody's, as the case may be, and in each
case maturing within six months after the date of acquisition, (iv) 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 one of the two highest ratings obtainable from either S&P
or Moody's and (v) investments in money market funds substantially all the
assets of which are comprised of securities of the types described in clauses
(i) through (iv) above.
"CCG" shall mean the Continuing Care Group of Sunrise and its
Subsidiaries.
"CCG Transaction" shall mean the acquisition by Parent of CCG for an
aggregate purchase price of at least $19.5 million (in cash (if consummated on
or prior to the Merger Date) or in exchange for a promissory note issued by
Parent for such amount (if consummated after the Merger Date)) to Holdings
and/or the Borrower.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. ss. 9601 eT SEq., and any successor thereto.
"Change in Law" shall have the meaning provided in Section 1.10.
"Change of Control" shall mean (i) Holdings shall cease to own
(directly or indirectly) 100% of the outstanding equity interests of the
Borrower, (ii) prior to a Holdings IPO, (x) the Permitted Holders shall cease to
own (directly or indirectly) a majority of the voting capital stock or other
voting equity interests of Holdings on a fully diluted basis or (y) at any time
after the Merger Date, VCP IV and its Affiliates shall own (directly or
indirectly) on a fully diluted basis less than 45% of the number of shares of
voting capital stock of Holdings owned by it and its Affiliates on the Merger
Date after giving effect to the Merger (calculated on a fully-diluted basis and
without giving effect to any stock-split, spin-off, split-up, reclassification,
combination of shares, or similar rearrangement), (iii) following a Holdings
IPO, (A) any "Person" or "group" (as such terms are used in Sections 13(d) and
14(d) of the Exchange Act), excluding Permitted Holders, is or shall become the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of a percentage (the "Third Party Stock
Percentage") greater than 30% on a fully diluted basis (assuming for such
purpose that each Permitted Holder has exercised all warrants and options it has
for any such voting capital stock or other equity interests) of the voting and
economic equity interests of Holdings and (B) the percentage of the voting and
economic equity interests of Holdings owned (directly or indirectly) by the
Permitted Holders (determined on a fully diluted basis) is less than such
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Third Party Stock Percentage, or (iv) the Board of Directors of Holdings shall
cease to consist of a majority of Continuing Directors.
"Claims" shall have the meaning provided in the definition of
"Environmental Claims."
"Closing Date" shall mean the date on which the Loans are made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect on the date of this
Agreement, and to any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean, with respect to each Bank, the amount set
forth opposite such Bank's name on Schedule I directly below the column entitled
"Commitment", as the same may be reduced or terminated pursuant to Section 2.01
and/or Section 8.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; PROVIDED, HOWEVER,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the members of the Board of
Directors of Holdings on the Closing Date and each other member, if such
member's nomination for election to the Board of Directors of Holdings is
recommended by a majority of the then Continuing Directors or if such member has
been designated by a Permitted Holder.
"Corona Disposition" shall mean the sale of stock or assets of
Sunrise Medical S.A., Sunrise's French bed and furniture business, to a third
party.
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"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note and the Vestar Guaranty (together with any side letter executed in
connection therewith).
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Dividends" with respect to any Person shall mean that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders, members or other equity owners or authorized or made any other
distribution, payment or delivery of property or cash (other than equity
interests in such person or rights therefor) to its stockholders, members or
other equity owners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for consideration (other than equity interests
in such person or rights therefor) any shares of any class of its capital stock
or other equity securities outstanding on or after the Closing Date (or any
options or warrants issued by such Person with respect to its capital stock or
other equity securities), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for consideration any shares of any class of the capital stock
or other equity securities of such Person outstanding on or after the Closing
Date (or any options or warrants issued by such Person with respect to its
capital stock or other equity securities). "Dividends" with respect to any
Person shall not include payments made or required to be made by such Person
with respect to any management or employee stock or equity appreciation rights,
plans, equity incentive or achievement plans or any similar plans or setting
aside of any funds for the foregoing purposes.
"Documents" shall mean and include the Transaction Documents and the
Credit Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean (i) each Subsidiary of the Borrower
that is incorporated or organized in the United States or any State or territory
thereof and (ii) each Subsidiary of the Borrower that is incorporated or
organized outside the United States or any State or territory thereof but which
is, or has elected to be, treated as a partnership or disregarded entity
pursuant to the provisions of Treasury Regulations Section 301.7701.3.
"Dynavox LLC" shall have the meaning provided in the definition of
Dynavox Restructuring.
"Dynavox Restructuring" shall mean the transfer on or prior to the
Merger Date by Dynavox Systems Inc. (a Wholly-Owned Subsidiary of Sunrise) of
all or substantially all of its assets to a newly-formed limited liability
company (the "Dynavox LLC") in exchange for a portion of the common units and
all of the preferred units of Dynavox LLC (with the remaining common units to be
held by the Intermediate Parent).
"Effective Date" shall have the meaning provided in Section 12.10.
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"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings arising
under any Environmental Law (hereafter "Claims") or any permit issued under any
such law, including, without limitation, (a) any and all Claims by governmental
or regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
(b) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief resulting from
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Law" shall mean any applicable Federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
legally binding guideline or written policy and rule of common law now or
hereafter in effect and in each case as amended, and any legally binding
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C. ss.
2601 et SEq.; the Clean Air Act, 42 U.S.C. ss. 7401 ET seq.; the Safe Drinking
Water Act, 42 U.S.C. ss. 3803 eT SEq.; the Oil Pollution Act of 1990, 33 U.S.C.
ss. 2701 et SEq.; the Emergency Planning and the Community Right-to-Know Act of
1986, 42 U.S.C. ss. 11001 eT SEq.; the Hazardous Material Transportation Act, 49
U.S.C. ss. 1801 eT SEq.; the Occupational Safety and Health Act, 29 U.S.C. ss.
651 eT SEq.; and any state and local or foreign counterparts or equivalents, in
each case as amended from time to time.
"Equity Financing" shall have the meaning provided in Section
4.07(b).
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect on the
date of this Agreement and any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or any of its Subsidiaries would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) or (o) of the Code or (ii) as a result of the Borrower or any of its
Subsidiaries being or having been a general partner of such person, provided,
however, that solely for the purpose of Section 5.10, "ERISA Affiliate" shall
mean Holdings, the Borrower and each of the Borrower's Subsidiaries..
"Eurodollar Loan" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan
for any Interest Period, (a) the rate appearing on Page 3750 of the Dow Jones
Telerate Screen (or on any successor or substitute page of such Screen, or any
successor to or substitute for such Screen,
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providing rate quotations comparable to those currently provided on such page of
such Screen, as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the interbank Eurodollar market) at approximately 11:00 A.M., New York time,
two Business Days prior to the commencement of such Interest Period, as the rate
for Dollar deposits with a maturity comparable to such Interest Period, PROVIDED
that in the event that such rate is not available at such time for any reason,
then this component of the "Eurodollar Rate" with respect to such Eurodollar
Loan for such Interest Period shall be the offered quotation to first-class
banks in the interbank Eurodollar market by BTCo for Dollar deposits of amounts
in immediately available funds comparable to the outstanding principal amount of
the Eurodollar Loan of BTCo with maturities comparable to the Interest Period
applicable to such Eurodollar Loan commencing two Business Days thereafter as of
11:00 A.M. (New York time) on the date which is two Business Days prior to the
commencement of such Interest Period; divided (and rounded off to the nearest
1/16 of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate
of all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable law)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 8.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Credit Agreement" shall mean the Credit Agreement, dated
as of September 8, 2000 (and as amended, modified or otherwise supplemented from
time to time), among Sunrise, the lenders party thereto and BTCo, as agent.
"Existing Indebtedness" shall have the meaning provided in Section
5.20.
"Federal Funds Rate" shall mean 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 the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any of its
Subsidiaries primarily for the benefit of employees of the Borrower or any of
its Subsidiaries residing outside the United States of America, which plan, fund
or other similar program provides, or results in, retirement income, a deferral
of income in contemplation of retirement or payments to be made upon termination
of employment, and which plan is not subject to ERISA or the Code.
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"Foreign Restructuring" shall mean the reorganization of the
European holding company structure of Sunrise and its Subsidiaries pursuant to
transactions and other events substantially as described in Schedule XII hereto
with such changes in the form or order of such transactions and other events
designed to achieve the same result with no material increase in costs.
"Foreign Subsidiary" shall mean each Subsidiary of Holdings that is
not a Domestic Subsidiary.
"Guarantor Event of Default" shall have the meaning provided in the
Vestar Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is friable, urea
formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
and (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous materials,"
"restricted hazardous materials," "extremely hazardous materials," "restrictive
hazardous wastes," "toxic substances," "toxic pollutants," "contaminants" or
"pollutants," or words of similar meaning and regulatory effect under any
applicable Environmental Law.
"Holdings" shall mean V.S.M. Holdings, Inc., a Delaware corporation.
"Holdings Common Stock" shall mean the outstanding common stock of
Holdings.
"Holdings IPO" shall mean a primary issuance by Holdings of Holdings
Common Stock pursuant to a registered initial public offering.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, (ii) the maximum amount available to be
drawn under all letters of credit issued for the account of such Person and all
unpaid drawings in respect of such letters of credit, (iii) all Indebtedness of
the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person, (iv) the aggregate amount
required to be capitalized under leases under which such Person is the lessee,
(v) all obligations of such person to pay a specified purchase price for goods
or services, whether or not delivered or accepted, I.E., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person in respect of
Indebtedness of a type described in clauses (i), (ii), (iii), (iv) or (vii), and
(vii) all net obligations or exposure under any Interest Rate Protection
Agreement or Other Hedging Agreement or under any similar type of agreement or
arrangement, provided that Indebtedness shall not include trade payables and
accrued expenses, in each case arising in the ordinary course of business.
"Indebtedness to be Refinanced" shall mean (i) the Existing Credit
Agreement, and (ii) the 7.09% Series A Senior Notes due October 28, 2004 in an
initial aggregate principal
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amount of $50,000,000 and the 7.25% Series B Senior Notes due October 28, 2007
in an initial aggregate principal amount of $50,000,000, in each case issued by
Sunrise pursuant to the respective Note Purchase Agreements dated as of October
1, 1997 among Sunrise, various subsidiary guarantors and the various purchasers
listed on Schedule A thereto.
"Intercompany Loans" shall have the meaning provided in Section
7.05(vii).
"Intermediate Parent" shall mean V.S.M. Holdings, LLC, a Delaware
limited liability company and a Subsidiary of the Parent.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement, interest
rate hedging agreement, interest rate floor agreement or other similar agreement
or arrangement.
"Leaseholds" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Lending Affiliate" shall mean, with respect to any Person, any
other Person (i) directly or indirectly controlling (including, but not limited
to, all directors, officers and partners of such Person), controlled by, or
under direct or indirect common control with, such Person or (ii) that directly
or indirectly owns more than 50% of any class of the voting securities or
capital stock of or equity interests in such Person. A Person shall be deemed to
control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other) or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any lease having substantially the same effect as any of the
foregoing).
"Loan" shall have the meaning provided in Section 1.01.
"Management Agreement" shall mean the Management Agreement, to be
entered into at or prior to the consummation of the Merger substantially in the
form previously furnished to the Administrative Agent between Sunrise, Holdings,
the Parent, Vestar Capital Partners and Park Avenue Equity Management, LLC.
"Margin Stock" shall have the meaning provided in Regulation U.
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"Maturity Date" shall mean the eighth anniversary of the Closing
Date.
"Merger" shall mean the merger and related transactions between
Parent, Holdings, Newco and Sunrise as described in the Merger Agreement,
whereby Newco will merge into Sunrise, with Sunrise being the surviving
corporation.
"Merger Agreement" shall mean the Agreement and Plan of Merger,
dated as of October 16, 2000, by and among Parent, Holdings, Newco and Sunrise.
"Merger Date" shall mean the date of the consummation of the Merger.
"Merger Documents" shall mean the Merger Agreement, and all material
documentation related to the Merger.
"Minimum Borrowing Amount" shall mean $5,000,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean any multiemployer plan as defined in
Section 4001(a)(3) of ERISA, which is maintained or contributed to by (or to
which there is an obligation to contribute of) the Borrower or any of its
Subsidiaries or an ERISA Affiliate, and each such plan for the five year period
immediately following the latest date on which the Borrower or any of its
Subsidiaries or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan, other than any Foreign Pension Plan.
"Net Debt" shall mean the aggregate amount outstanding under the
Existing Credit Agreement, net of cash and Cash Equivalents on hand at Sunrise.
"Net Debt Maximum" shall mean $7,900,000 (plus an additional amount
of up to $20,000,000 to the extent incurred under the Existing Credit Agreement
in connection with the Restructuring and/or to finance the working capital
requirements of Sunrise).
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of Bankers Trust Company, as
Administrative Agent, located at 130 Liberty Street, New York, New York 10006,
or such other office or offices as the Administrative Agent may designate to the
Borrower and the Banks from time to time.
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"Obligations" shall mean all amounts owing to the Administrative
Agent or any Bank pursuant to the terms of this Agreement or any other Credit
Document.
"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against fluctuations of currency
or commodity values.
"PAEP" shall mean Park Avenue Equity Partners, L.P.
"Parent" shall mean V.S.M. Investors, LLC, a Delaware limited
liability company.
"Payment Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, New York 10006 or such other office as
the Administrative Agent may designate to the Borrower and the Banks from time
to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean the acquisition by the Borrower
or any of its Subsidiaries of (x) assets constituting all or substantially all
of a business or division of any Person not already a Subsidiary of the Borrower
or (y) all or substantially all of the capital stock or other ownership
interests of any such Person which Person shall, as a result of such
acquisition, become a Wholly-Owned Subsidiary of the Borrower or such
Subsidiary, PROVIDED that (A) the consideration paid by the Borrower and/or its
Domestic Subsidiaries can be in the form of (i) cash, (ii) the issuance to any
such Person of Permitted Seller Notes, (iii) the issuance to such Person of
Permitted Earn-Out Debt and/or Permitted Earn-Out Preferred Equity, or (iv) the
issuance to any such Person of common equity of Holdings or membership interests
in the Intermediate Parent or the Parent or Qualified Preferred Equity issued by
Holdings or the Intermediate Parent or the Parent, and (B) the assets acquired,
or the business of the Person whose stock is acquired, shall be in the same,
similar or related line of business in which the Borrower and its Subsidiaries
are already engaged. Notwithstanding anything to the contrary contained in the
immediately preceding sentence, an acquisition shall be a Permitted Acquisition
only if all requirements of Section 6.13 are met with respect thereto.
"Permitted Earn-Out Debt" shall mean Indebtedness of Holdings, the
Intermediate Parent or the Parent incurred in connection with a Permitted
Acquisition and in accordance with Section 6.13, which Indebtedness is not
secured by any assets of Holdings or any of its Subsidiaries (including, without
limitation, the assets so acquired) and is not guaranteed by any Subsidiary of
Holdings and is only payable by Holdings, the Intermediate Parent or the Parent,
as applicable, in the event certain future performance goals are achieved with
respect to the assets acquired and is not payable in accordance with its terms
to the extent there exists a Default or an Event of Default; PROVIDED that such
Indebtedness shall only constitute Permitted Earn-Out Debt to the extent the
terms of such Indebtedness expressly limit the maximum potential liability of
Holdings with respect thereto.
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"Permitted Earn-Out Preferred Equity" shall mean preferred equity of
Holdings, the Intermediate Parent or the Parent issued in connection with a
Permitted Acquisition and in accordance with Section 6.13, which preferred
equity is not secured by any assets of Holdings or any of its Subsidiaries
(including, without limitation, the assets so acquired) and is not guaranteed by
any Subsidiary of Holdings and is only payable by Holdings, the Intermediate
Parent or the Parent, as applicable, in the event certain future performance
goals are achieved with respect to the assets acquired and is not payable in
accordance with its terms to the extent there exists a Default or an Event of
Default; PROVIDED that such preferred equity shall only constitute Permitted
Earn-Out Preferred Equity to the extent the terms of such preferred equity
expressly limit the maximum potential liability of Holdings with respect
thereto.
"Permitted Encumbrance" shall have the meaning provided in the
Senior Credit Facility.
"Permitted Holders" shall mean Persons holding the equity interests
(or rights to purchase equity interests) of the Parent on or within 90 days
after the Closing Date and their respective Affiliates and partners and, in the
case of any such Person who is an individual, the immediate family members of
such Person and trusts for the benefit of such Person and/or his or her
immediate family members.
"Permitted Liens" shall have the meaning provided in Section 7.01.
"Permitted Seller Notes" shall mean notes issued by Holdings to
sellers of stock (or other equity interests) or assets in a Permitted
Acquisition and issued in accordance with Section 6.13, which notes shall be
subordinated, unsecured and unguaranteed, and shall be substantially in the form
of Exhibit I or shall otherwise be in form and substance satisfactory to the
Administrative Agent.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower or any of its Subsidiaries or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Borrower or any of its Subsidiaries or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan with respect to which Holdings, any of its Subsidiaries or any of their
ERISA Affiliates has any actual or contingent liability; provided, however, that
solely for purposes of Section 5.10, "Plan" shall mean any pension plan as
defined in Section 3(2) of ERISA maintained by Holdings, the Borrower or any of
the Borrower's Subsidiaries.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the
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lowest or best rate actually charged to any customer. BTCo may make commercial
loans or other loans at rates of interest at, above or below the Prime Lending
Rate.
"Qualified Preferred Equity" shall mean any preferred equity
(including, without limitation, any preferred equity issued on the Closing Date
as part of the Equity Financing) of Holdings, the Intermediate Parent or the
Parent the express terms of which shall provide that Dividends thereon shall not
be required to be paid in cash at any time that such cash payment would be
prohibited by the terms of this Agreement (and any refinancing, replacements or
extensions hereof) and in either case which, by its terms (or by the terms of
any security into which it is convertible or for which it is exchangeable), or
upon the happening of any event (including an event which would constitute a
Change of Control), cannot mature (excluding any maturity as the result of an
optional redemption by the issuer thereof) and is not mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise, and is not redeemable, or
required to be repurchased, at the sole option of the holder thereof (including,
without limitation, upon the occurrence of an event which would constitute a
Change of Control), in whole or in part, on or prior to the first anniversary of
the then latest Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December (commencing with the last Business Day of
December, 2000).
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. ss. 6901 eT SEq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements thereto and fixtures
thereon, including Leaseholds.
"Refinancing" shall mean and include the refinancing and repayment
in full of all amounts outstanding under, and the termination in full of all
commitments in respect of, the Indebtedness to be Refinanced.
"Register" shall have the meaning provided in Section 12.14.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
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"Release" shall mean any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping,
disposing or migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsections
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Banks the sum of whose outstanding
Commitments (or after the Total Commitment has been terminated, outstanding
Loans) constitute greater than 50% of the Total Commitment (or, after the Total
Commitment has been terminated, the total outstanding Loans at such time).
"Restructuring" shall mean the restructuring of the operations of
Holdings and its Subsidiaries pursuant to the transactions and other events
described in Schedule XIII hereto.
"Returns" shall have the meaning provided in Section 5.09.
"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall have the meaning provided in Section 6.01(h).
"Section 3.04(b)(ii) Certificate" shall have the meaning provided in
Section 3.04(b).
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Senior Credit Facility" shall have the meaning provided in Section
11.01.
"Senior Indebtedness" shall have the meaning provided in Section
11.01.
"Senior Loan Documents" shall mean and include each of the
documents, instruments and other agreements, including the Senior Credit
Facility, evidencing or governing, or otherwise relating to the incurrence by
the Borrower of the Senior Indebtedness (including all Credit Documents as
defined in the Senior Credit Facility), as in effect on the Closing Date and as
the same may be entered into, amended, modified or supplemented from time to
time in accordance with the terms thereof and Section 11.01.
"Shareholder Subordinated Note" shall mean an unsecured junior
subordinated note issued by Holdings (and not guaranteed or supported in any way
by the Borrower or any of its Subsidiaries) in the form of Exhibit J, as the
same may be amended, modified or supplemented from time to time pursuant to the
terms hereof and thereof.
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"Shareholders' Agreement" shall have the meaning provided in Section
4.06(i).
"Sponsors" shall mean each of VCP IV and PAEP and their respective
Affiliates and partners and, in the case of any such Person who is an
individual, the immediate family members of such Person and trusts for the
benefit of such Person and his/her immediate family members.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50% equity interest at
the time. Notwithstanding the foregoing, (a) at all times on and after the
Closing Date, Sunrise and its Subsidiaries shall be deemed to be Subsidiaries of
the Borrower and (b) following the consummation of the Dynavox Restructuring,
the Dynavox LLC shall be deemed to be a Subsidiary of Sunrise.
"SunMed Finance" means SunMed Finance Inc., a Delaware corporation.
"Sunrise" shall mean Sunrise Medical Inc., a Delaware corporation.
"Sunrise Common Stock" shall mean the outstanding common stock of
Sunrise.
"Tax Benefit" shall have the meaning provided in Section 3.04(c).
"Taxes" shall have the meaning provided in Section 3.04(a).
"Tender Offer" shall mean the offer of Newco to tender for all of
the Sunrise Common Stock for the Tender Offer Price, made pursuant to the Offer
to Purchase dated October 30, 2000 (as supplemented from time to time).
"Tender Offer Documents" shall mean the material documentation
related to the Tender Offer, including all public filings made with the SEC in
connection therewith.
"Tender Offer Price" shall mean the price of $10.00 per share of
Sunrise Common Stock offered pursuant to the Tender Offer.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Transaction" shall mean (i) the consummation of the Tender Offer,
(ii) the consummation of the Equity Financing, (iii) the incurrence of the
initial Loans under the Senior Credit Facility, (iv) the incurrence of the Loans
hereunder on the Closing Date, (v) the payment of fees and expenses in
connection with the foregoing (which shall in no event exceed
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$23,500,000) and (vi) at all times after (and at no time prior to) the
consummation of the Merger, the consummation of the Merger and the Refinancing.
"Transaction Documents" shall mean the Tender Offer Documents, the
documents governing the Equity Financing, the Senior Loan Documents, the
documents governing the Refinancing and the Merger Documents.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, I.E., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial assumptions
at such time consistent with those prescribed by the PBGC for purposes of
Section 4044 of ERISA, exceeds the fair market value of all plan assets
allocable to such liabilities under Title IV of ERISA (excluding any accrued but
unpaid contributions).
"United States" and "U.S." shall each mean the United States of
America.
"Unrecovered Amount" shall mean, with respect to any investment,
loan or advance at any time, the principal cost of such investment, loan or
advance less (i) any return of capital with respect thereto and (ii) the net
cash proceeds of any sale of all or any part thereof; PROVIDED that the
"Unrecovered Amount" of any investment, loan or advance shall not be less than
zero.
"Vestar Guaranty" shall mean the Guaranty and Loan Purchase
Agreement, dated as of December 6, 2000 (as amended, modified or otherwise
supplemented from time to time), made by VCP IV, in form and substance
satisfactory to the Administrative Agent and the Banks.
"VCP IV" shall mean Vestar Capital Partners IV, L.P.
"Wholly-Owned Domestic Subsidiary" shall mean any Domestic
Subsidiary of the Borrower that is a Wholly-Owned Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock or other equity interests (other than
(a) director's qualifying shares and (b) any other shares of equity interests of
a Foreign Subsidiary of the Borrower (not to exceed 5% of such Foreign
Subsidiary's total equity interests (determined on a fully diluted basis)
required by law to be issued to Persons other than the Borrower and its
Wholly-Owned Subsidiaries)) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100%
equity interest at such time (other than a portion of such equity interest
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of any Foreign Subsidiary (not to exceed 5% of such Foreign Subsidiary's
total equity interest (determined on a fully diluted basis) required by law
to be issued to Persons other than the Borrower and its Wholly-Owned
Subsidiaries).
SECTION 10. THE ADMINISTRATIVE AGENT.
10.01 APPOINTMENT. The Banks hereby designate BTCo as the
Administrative Agent (for purposes of this Section 10, the term "Administrative
Agent" shall include BTCo in its capacity as Administrative Agent and any
Lending Affiliate of BTCo performing any of the duties or functions of the
Administrative Agent hereunder or under any other Credit Document) to act as
specified herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Administrative Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of its duties hereunder by or through
its respective officers, directors, agents, employees or affiliates.
10.02 NATURE OF DUTIES. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and in the other Credit Documents. Neither the Administrative Agent nor any of
its respective officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank or the holder of
any Note; and nothing in this Agreement or any other Credit Document, expressed
or implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.
10.03 LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT. Independently
and without reliance upon the Administrative Agent, each Bank and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of the Borrower and its Subsidiaries in connection with the making and
the continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Bank or the holder of
any Note 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. The Administrative Agent shall not be responsible to any Bank
or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing
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delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of the Borrower and its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of the Borrower and its Subsidiaries or the existence or
possible existence of any Default or Event of Default.
10.04 CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks;
and the Administrative Agent shall not incur liability to any Bank or the holder
of any Note by reason of so refraining. Without limiting the foregoing, no Bank
or the holder of any Note shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
10.05 RELIANCE. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex, teletype or telecopier message,
cablegram, radiogram, order or other document or telephone message signed, sent
or made by any Person that the Administrative Agent believed to be the proper
Person, and, with respect to all legal matters pertaining to this Agreement and
any other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Administrative Agent.
10.06 INDEMNIFICATION. (a) To the extent the Administrative Agent is
not reimbursed and indemnified by the Borrower, the Banks will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Banks, for and against any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; PROVIDED that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
(b) The Administrative Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Credit Document
(except actions expressly required to be taken by it hereunder or under the
Credit Documents) unless it shall first be indemnified to its satisfaction by
the Banks pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.
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10.07 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to its obligation to make a Loan under this Agreement, the
Administrative Agent in its individual capacity shall have the rights and powers
specified herein for a "Bank" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term "Banks,"
"Required Banks," "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent in its individual capacity may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Borrower or any Affiliate of the
Borrower as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower or any Affiliate of the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
10.08 HOLDERS. The Administrative Agent may deem and treat the payee
of any Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as the
case may be, of such Note or of any Note or Notes issued in exchange therefor.
10.09 RESIGNATION BY THE ADMINISTRATIVE AGENT. (a) The
Administrative Agent may resign from the performance of all its functions and
duties hereunder and/or under the other Credit Documents at any time by giving
15 Business Days' prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor Administrative
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Administrative Agent hereunder and under the other Credit
Documents who shall be a Bank, a commercial bank or a trust company in each case
reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower, shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant
to clause (b) or (c) above by the 30th Business Day after the date such notice
of resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any of the Credit
Document until such time, if any, as the Required Banks appoint a successor
Administrative Agent as provided above.
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SECTION 11. SUBORDINATION.
11.01 DEFINITIONS. As used in this Section 11, the following terms
shall have the following meanings:
"PIK NOTES" shall mean promissory notes issued by the Borrower to
the holders of Notes, which promissory notes shall be (i) substantially in
the same form as the Notes, and (ii) issued in lieu of cash interest on
the Notes on the date that such cash interest payments would otherwise be
due, and in a principal amount equal to such cash interest that would
otherwise be payable.
"POST-PETITION INTEREST" shall mean interest accruing in respect of
Senior Indebtedness after the commencement of any bankruptcy, insolvency,
receivership or similar proceedings by or against the Borrower, at the
rate applicable to such Senior Indebtedness pursuant to the terms
applicable thereto, whether or not such interest is allowed as a claim
enforceable against the Borrower in any such proceedings.
"SENIOR COVENANT DEFAULT" shall mean any default under any Senior
Indebtedness (other than a Senior Payment Default) which continues uncured
for the period of grace, if any, with respect thereto.
"SENIOR CREDIT FACILITY" shall mean the Credit Agreement, dated as
of December 6, 2000 among Holdings, the Borrower, the lending institutions
party thereto from time to time and Bankers Trust Company, as
Administrative Agent, as amended, modified, supplemented, refinanced and
refunded from time to time.
"SENIOR DEFAULT" shall mean a Senior Payment Default or a Senior
Covenant Default.
"SENIOR INDEBTEDNESS" shall mean the principal of, premium, if any,
and interest on (including any Post-Petition Interest) and any other
monetary obligations with respect to any Indebtedness of the Borrower,
whether outstanding on the date hereof of hereafter created, unless, in
the case of any particular Indebtedness, the instrument creating or
evidencing the same or pursuant to which the same is outstanding expressly
provides that such Indebtedness shall not be senior in right of payment to
the Notes. Without limiting the generality of the foregoing, "SENIOR
INDEBTEDNESS" shall also include the principal of, premium, if any,
interest (including any Post-Petition Interest) on, and all other amounts
owing in respect of, (i) all monetary obligations (including guarantees
thereof) of every nature of the Borrower under the Senior Credit Facility,
including, without limitation, obligations to pay principal and interest,
reimbursement obligations under letters of credit, fees, expenses and
indemnities, and (ii) all interest rate and currency swaps, caps, collars
and similar agreements or hedging devices under which payments are
obligated to be made by the Borrower; PROVIDED, HOWEVER, in no event shall
the aggregate principal amount of Senior Indebtedness exceed the amount
allowable under Section 7.04(x) of this Agreement. At any time on or prior
to the termination of the Senior Credit Facility, "Senior Indebtedness"
shall be limited to the Indebtedness and other obligations
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referenced in the immediately preceding sentence unless the Administrative
Agent or the Required Banks, as such terms are defined in the Senior
Credit Facility, otherwise consent in writing.
"SENIOR PAYMENT DEFAULT" shall mean any default in the payment of
any Senior Indebtedness whether upon the scheduled maturity thereof, upon
acceleration or otherwise.
11.02 SUBORDINATION. The Borrower, for itself and its successors and
assigns, covenants and agrees, and each Bank, by its acceptance thereof, shall
be deemed to have agreed, that the payment from whatever source of the
Indebtedness of the Borrower evidenced by this Agreement and the Notes,
including the principal thereof, interest and premium thereon, and any other
amounts owing hereunder or thereunder shall be subordinate and subject in right
of payment, to the extent and in the manner hereinafter set forth, to the prior
payment in full of all Senior Indebtedness, and that each holder of such Senior
Indebtedness, with respect to the Senior Indebtedness now existing or hereafter
arising, shall be deemed to have acquired such Senior Indebtedness in reliance
upon the covenants and provisions contained in this Section 11.
11.03 SUBORDINATION UPON DISTRIBUTION OF ASSETS.
(a) Upon any payment or distribution of assets of the Borrower of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or total or partial liquidation or
reorganization of the Borrower, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings or pursuant to any
assignment for the benefit of creditors or any other marshaling of assets and
liabilities of the Borrower (including upon any event described in Section
8.05), all Senior Indebtedness shall first be paid in full in cash or duly
provided for to the satisfaction of the holders of Senior Indebtedness before
any payment of cash, property or securities is made on account of the Loans or
Notes, and any such payment or distribution which otherwise would be payable or
deliverable upon or with respect to the Loans or Notes shall be paid or
delivered directly to the holders of the Senior Indebtedness or as otherwise
directed by such holders or a court of competent jurisdiction for application to
the payment or prepayment of the Senior Indebtedness (in such order as the
holders of the Senior Indebtedness may elect) until the Senior Indebtedness
shall have been paid in full in cash or duly provided for to the satisfaction of
the holders of Senior Indebtedness.
(b) For purposes of this Section 11, the words "cash, property or
securities" shall not be deemed to include securities of the Borrower or any
other successor corporation to the Borrower provided for by a plan of
reorganization or readjustment which (i) are unsecured, (ii) have a maturity
date which is not earlier than the maturity date of the Notes, (iii) do not
contain any mandatory repayment provisions which are more favorable to the Banks
than the terms contained herein, (iv) shall not be entitled to the benefits of
covenants or defaults materially more beneficial to the holders of such
securities than those in effect with respect to the Notes on the date hereof,
(v) shall not have a rate of interest payable in cash on such securities that
exceeds the effective rate of interest on the Notes, and (vi) shall be
subordinate to the Senior Indebtedness, at least to the same extent as the
Notes, (it being acknowledged that such securities
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shall not be deemed to be so subordinated if the holder is permitted to receive
and retain cash payments thereon prior to the indefeasible payment of the Senior
Indebtedness in full in cash).
11.04 PROHIBITIONS AND LIMITATIONS ON PAYMENT. (a) Subject to
Section 11.03 hereof, upon receipt by the Borrower of a Blockage Notice (as
defined below) in respect of any Senior Payment Default and unless and until
such Senior Payment Default shall have been cured or effectively waived in
writing by the holders of the Senior Indebtedness, no direct or indirect payment
(in cash, property, securities or by set-off or otherwise) shall be made of or
on account of the Loans or the Notes or in respect of any redemption,
retirement, purchase or other acquisition of the Loans or the Notes and the
Banks shall not accept (in cash, property, securities or by setoff or
otherwise), other than by payment of PIK Notes, from the Borrower any payment of
or on account of the Loans or the Notes. Upon the earlier of the cure or waiver
of such Senior Payment Default, the Borrower shall, subject to Section 11.03
hereof, promptly pay to the Banks all sums then due and payable hereunder as a
result of this Section 11.04(a).
(b) Subject to Section 11.03 hereof, upon receipt by the Borrower of
a Blockage Notice in respect of any Senior Covenant Default and until the
earlier of (i) such Senior Covenant Default having been cured or effectively
waived in writing by the holders of the Senior Indebtedness and (ii) the
expiration of the applicable Blockage Period (as defined below), no direct or
indirect payment (in cash, property, securities or by set-off or otherwise)
shall be made by the Borrower of or on account of the Loans or the Notes or in
respect of any redemption, retirement, purchase or other acquisition of the
Loans or the Notes and the Banks shall not accept (in cash, property, securities
or by setoff or otherwise) other than by payment of PIK Notes from the Borrower
any payment of or on account of the Loans or the Notes. Upon the earlier of the
dates described in clause (i) and (ii) above, the Borrower shall, subject to
Section 11.03 hereof, promptly pay to the Banks all sums then due and payable
under the Notes as a result of this Section 11.04(b).
(c) For purposes of this Section 11.04, a "Blockage Notice" is a
notice of a Senior Default given to the Borrower by the holders of a majority in
principal amount of the Senior Indebtedness or their authorized agent and a
"Blockage Period" is the period commencing upon the Borrower's receipt of such
Blockage Notice and ending on the date one hundred eighty (180) days thereafter;
PROVIDED that (i) no Blockage Notice may be given by reason of the continuance
of any Senior Default which existed at the time of the giving of a prior
Blockage Notice; and (ii) no more than one Blockage Notice may be given in any
three hundred sixty (360)-day period. Upon receipt of any Blockage Notice, the
Borrower shall promptly, but in any event with five (5) Business Days of
receipt, deliver the same to each Bank.
11.05 LIMITATION ON REMEDIES. So long as any Senior Indebtedness
remains outstanding, upon the occurrence of an Event of Default, no Bank shall
declare or join in any declaration of any of the Loans or Notes to be due and
payable by reason of such Event of Default or otherwise take or cause to be
taken any action against the Borrower (including, without limitation, commencing
any legal action against the Borrower or filing or joining in the filing of any
insolvency petition against the Borrower) until the expiration of the Remedy
Standstill Period (as defined below) with respect to such Event of Default;
PROVIDED, that any
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Remedy Standstill Period shall expire immediately and, subject to the provisions
of Sections 11.03 and 11.04 hereof, the Banks shall be entitled to exercise all
rights and remedies under Section 8 hereof in the event (a) the holders of the
Senior Indebtedness shall have caused such Senior Indebtedness to become due
prior to its stated maturity, (b) the Senior Covenant Default in respect of
which any Blockage Period shall have commenced shall have been cured to the
satisfaction of the holders of the Senior Indebtedness or effectively waived in
writing by the holders of the Senior Indebtedness, (c) an Event of Default
pursuant to Section 8.05 shall have occurred and be continuing, or (d) any
holder of the Senior Indebtedness commences any action to foreclose upon,
attach, seize, take control of or otherwise exercise remedies under the Senior
Credit Facility or other agreement governing such Senior Indebtedness or any
security therefor on or with respect to a material portion of the assets of the
Borrower. For the purposes of this Section 11.05, a "Remedy Standstill Period"
is the period commencing on the date a notice of intention to exercise remedies
on account of the occurrence of an Event of Default shall have been given by the
Administrative Agent to the Borrower and the administrative agent on behalf of
the holders of the Senior Indebtedness and expiring on the later of (i) thirty
(30) Business Days after the date of such notice and (ii) the earlier of (A) the
expiration of any Blockage Period in effect on the last day of such thirty (30)
Business Day period or (B) the one hundred eightieth (180th) day after the date
of such notice. The Administrative Agent shall give the administrative agent on
behalf of the holders of the Senior Indebtedness at least five (5) Business Days
prior written notice of any exercise of any such remedies by the Administrative
Agent. Any notice which is required to be given to the Borrower and the
administrative agent for the benefit of the holders of the Senior Indebtedness
pursuant to this Section 11.05 shall be ineffective unless given to both such
parties in accordance with this Section 11.05.
11.06 PAYMENTS AND DISTRIBUTIONS RECEIVED. If any Bank shall have
received any payment from, or distribution of assets of, the Borrower in respect
of any of the Loans or Notes in contravention of the terms of this Section 11,
then and in such event such payment or distribution shall be received and held
in trust for and shall be paid over or delivered to the holders of the Senior
Indebtedness (or to the applicable agent on their behalf) for application to the
Senior Indebtedness, to the extent necessary to pay all such Senior Indebtedness
in full in the form received (except for the endorsement or assignment of such
Bank where necessary).
11.07 PROOFS OF CLAIM. If, while any Senior Indebtedness is
outstanding, any event described in Section 11.03(a) occurs, the Banks shall
duly and promptly take such action as any holder of the Senior Indebtedness may
reasonably request to collect any payment with respect to the Loans and Notes
for the account of the holders of the Senior Indebtedness and to file
appropriate claims or proofs of claim in respect of the Loans and Notes and to
execute and deliver on demand such powers of attorney, proofs of claim,
assignments of claim or other instruments as may be required to enforce any and
all claims on or with respect to the Loans and Notes. Upon the failure of any
Bank to take any such action, each holder of the Senior Indebtedness is hereby
irrevocably authorized and empowered (in its own name or otherwise), but shall
have no obligation, to demand, sue for, collect and receive every payment or
distribution referred to in respect of the Loans and Notes and to file claims
and proofs of claim with respect to the Loans and Notes and each of the Banks
hereby appoints each holder of the
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Senior Indebtedness or its representative as attorney-in-fact for such Bank to
take any and all actions permitted by this paragraph to be taken by such Bank.
11.08 SUBROGATION. After all amounts payable under or in respect of
the Senior Indebtedness have been paid in full in cash or duly provided for to
the satisfaction of the holders of Senior Indebtedness, the Banks shall be
subrogated to the rights of the holders of the Senior Indebtedness to receive
payments or distributions applicable to the Senior Indebtedness to the extent
that distributions otherwise payable to the Banks have been applied to the
payment of the Senior Indebtedness. A distribution made under this Section 11.08
to a holder of the Senior Indebtedness which otherwise would have been made to a
Bank is not, as between the Borrower and such Bank, a payment by the Borrower on
the Senior Indebtedness.
11.09 RELATIVE RIGHTS. This Section 11 defines the relative rights
of the Banks and the holders of the Senior Indebtedness. Nothing in this Section
11 shall (a) impair, as between the Borrower and the Banks, the obligations of
the Borrower, which are absolute and unconditional, to pay principal of and
interest (including default interest) on the Loans in accordance with their
terms, (b) affect the relative rights of the Holders and creditors of the
Borrower other than holders of the Senior Indebtedness, or (c) prevent the Banks
from exercising their available remedies upon a default or Event of Default,
subject to the rights, if any, under this Section 11 of holders of the Senior
Indebtedness.
11.10 SUBORDINATION NOT IMPAIRED; BENEFIT OF SUBORDINATION. Each of
the Banks agrees and consents that without notice to or assent by such Bank, and
without affecting the liabilities and obligations of the Borrower and any holder
of the Notes and the rights and benefits of the holders of the Senior
Indebtedness set forth in this Section 11:
(a) Subject to the terms and conditions hereof and except as
otherwise prohibited hereunder, the obligations and liabilities of the
Borrower and any other party or parties for or upon the Senior
Indebtedness may, from time to time, be increased, renewed, refinanced,
extended, modified, amended, restated, compromised, supplemented,
terminated, waived or released;
(b) The holders of the Senior Indebtedness, and any representative
or representatives acting on behalf thereof, may exercise or refrain from
exercising any right, remedy or power granted by or in connection with any
agreements relating to the Senior Indebtedness and the subordination
provisions hereof, including, without limitation, accelerating the Senior
Indebtedness or exercising any right of set-off; and
(c) Any balance or balances of funds with any holder of the Senior
Indebtedness at any time outstanding to the credit of the Borrower may,
from time to time, in whole or in part, be surrendered or released;
all as the holders of the Senior Indebtedness, and any representative or
representatives acting on their behalf, may deem advisable, and all without
impairing, abridging, diminishing, releasing or affecting the subordination of
the Loans and Notes to the Senior Indebtedness provided for herein.
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11.11 COVENANTS OF THE BANKS. Until all of the Senior Indebtedness
has been indefeasibly and fully paid in cash and discharged:
(a) No Bank shall hereafter (i) give any further subordination to
any other creditor in respect of the Loans or Notes, (ii) take any
security or collateral to secure the Loans or Notes or (iii) sell, assign,
transfer or pledge the Loans or Notes or any part thereof unless expressly
subject to the terms of this Section 11.
(b) No Bank shall release, exchange, extend the time of payment of,
compromise, set off or otherwise discharge any part of the Loans or Notes
or modify or amend the Notes in such a manner as to have an adverse effect
upon the rights of the holders of the Senior Indebtedness.
(c) Each Bank hereby undertakes and agrees for the benefit of the
holders of the Senior Indebtedness that, upon the occurrence and during
the continuance of a Senior Default, it shall take any actions reasonably
requested by any holder of the Senior Indebtedness to effectuate the full
benefit of the subordination contained herein.
11.12 MODIFICATION OF SECTION 11. The provisions of this Section 11
are for the benefit of the holders from time to time of Senior Indebtedness and,
so long as any Senior Indebtedness remains unpaid, may not be modified,
rescinded or canceled in whole or in part without the prior written consent
thereto of the Required Banks, as such term is defined in the Senior Credit
Facility.
11.13 MISCELLANEOUS. (a) To the extent permitted by applicable law,
the Banks and the Borrower hereby waive (i) notice of acceptance hereof and
reliance hereon by the holders of the Senior Indebtedness and (ii) all diligence
in the collection or protection of or realization upon the Senior Indebtedness.
(b) The Borrower and the Banks hereby expressly agree that the
holders of the Senior Indebtedness may enforce any and all rights derived herein
by suit, either in equity or law, for specific performance of any agreement
contained in this Section 11 or for judgment at law and any other relief
whatsoever appropriate to such action or procedure.
(c) Each Bank acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration to each holder of the Senior Indebtedness, whether such Senior
Indebtedness was created or acquired before or after the date of this Agreement,
and each holder of the Senior Indebtedness shall be deemed conclusively to have
relied upon such subordination provisions in acquiring and continuing to hold
such Senior Indebtedness.
11.14 VESTAR GUARANTY. Notwithstanding anything to the contrary
contained in this Section 11, it is hereby understood and agreed that this
Section 11 shall not apply in any manner to any payment made or to be made by
VCP IV, or any other obligation of VCP IV, in each case under the Vestar
Guaranty.
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SECTION 12. MISCELLANEOUS.
12.01 PAYMENT OF EXPENSES, ETC. The Borrower hereby agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay (A) all
reasonable out-of-pocket costs and expenses of the Administrative Agent (for
purposes of this Section 12.01, the term "Administrative Agent" shall include
BTCo in its capacity as Administrative Agent pursuant to the Vestar Guaranty)
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP and one local counsel in each jurisdiction) in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein, (B)
all reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent) in connection with any amendment, waiver or consent
relating hereto or thereto, and the determination of compliance or
non-compliance by the Borrower and its Subsidiaries with the provisions hereof
or thereof, including, without limitation, with respect to Permitted
Acquisitions, (C) all reasonable fees and disbursements of consultants and
advisors retained by the Administrative Agent or its counsel in connection with
the administration of the Credit Documents, but only to the extent retained
after a determination by the Administrative Agent (in its sole discretion) that
such retention is advisable to protect the interests of the Banks in light of
underperformance by, or other distressed situation relating to, the Borrower and
its Subsidiaries taken as a whole, (D) all reasonable out-of-pocket costs and
expenses of the Administrative Agent in connection with its syndication efforts
with respect to this Agreement (including, without limitation, the reasonable
fees and disbursements of White & Case LLP) and (E) all reasonable out-of-pocket
costs and expenses of the Administrative Agent and each of the Banks in
connection with the enforcement of this Agreement and the other Credit Documents
and the documents and instruments referred to herein and therein (including,
without limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and for each of the Banks); (ii) pay and hold each of the
Banks harmless from and against any and all present and future stamp, excise and
other similar taxes with respect to the execution, delivery or enforcement of
this Agreement or any other Credit Document or any document or instrument
referred to therein or herein and save each of the Banks harmless from and
against any and all liabilities with respect to or resulting from any delay or
omission (other than to the extent attributable to such Bank) to pay such taxes;
and (iii) defend, protect, indemnify and hold harmless the Administrative Agent,
each Bank and each of their respective Affiliates, and each of their respective
officers, directors, employees, representatives, attorneys and agents
(collectively called the "Indemnitees") from and against any and all
liabilities, obligations (including removal or remedial actions), losses,
damages (including foreseeable and unforeseeable consequential damages and
punitive damages), penalties, claims, actions, judgments, suits, reasonable
out-of-pocket costs, expenses and disbursements (including reasonable attorneys'
and consultants fees and disbursements) of any kind or nature whatsoever that
may at any time be incurred by, imposed on or assessed against the Indemnitees
directly or indirectly based on, or arising or resulting from, or in any way
related to, or by reason of (a) any investigation, litigation or other
proceeding (whether or not the Administrative Agent or any Bank is a party
thereto and whether or not any such investigation, litigation or other
proceeding is between or among the Administrative Agent, any Bank, the Borrower
or any third person or otherwise) related to the entering into and/or
performance of this Agreement or any other Credit Document or the
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proceeds of any Loans hereunder or the consummation of any transactions
contemplated herein (including, without limitation, the Transaction) or in any
other Credit Document or the exercise of any of their rights or remedies
provided herein or in the other Credit Documents; (b) any non-compliance of any
Environmental Law relating to any Real Property at any time owned or operated by
the Borrower or any of its Subsidiaries; (c) the actual or alleged generation,
presence or Release of Hazardous Materials on or from, or the transportation of
Hazardous Materials to or from, any Real Property owned or at any time operated
by the Borrower or any of its Subsidiaries; (d) any Environmental Claim relating
to the Borrower or any of its Subsidiaries or any Real Property owned or at any
time operated by the Borrower or any of its Subsidiaries; (e) the exercise of
the rights of the Administrative Agent and of any Bank under any of the
provisions of this Agreement or any other Credit Document or any Loans
hereunder; or (f) the consummation of any transaction contemplated herein
(including, without limitation, the Transaction) or in any other Credit Document
(clauses (a) through (f), collectively, the "Indemnified Matters") regardless of
when such Indemnified Matter arises; but excluding any such Indemnified Matter
to the extent based on the gross negligence or willful misconduct of any
Indemnitee.
12.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to the Borrower
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of the Borrower against and on account of the
Obligations and liabilities of such Person to such Bank under this Agreement or
under any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 12.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or not
such Bank shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
12.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including facsimile communication) and mailed, telecopied or delivered: if to
the Borrower, at its address specified opposite its signature below (with a copy
thereof to VCP IV); if to any Bank, at its address specified on Schedule II; and
if to the Administrative Agent, at its Notice Office; or, as to the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties hereto and, as to each Bank, at such
other address as shall be designated by such Bank in a written notice to the
Borrower and the Administrative Agent. All such notices and communications
shall, when mailed, facsimilied or sent by overnight courier, be effective three
Business Days after deposited in the mails, certified, return receipt requested,
one day following delivery to an overnight courier, as the case may be, or when
sent by facsimile device, except that notices and communications to the
Administrative Agent shall not be effective until received by the Administrative
Agent.
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12.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; PROVIDED, HOWEVER, that, except pursuant to the
Borrower Acknowledgment and Assumption, the Borrower may not assign or transfer
any of its rights, obligations or interest hereunder or under any other Credit
Document without the prior written consent of all of the Banks; and PROVIDED
FURTHER, that although any Bank may grant participations in its rights
hereunder, such Bank shall remain a "Bank" for all purposes hereunder (and may
not transfer or assign all or any portion of its Commitment or Loan hereunder
except as provided in Section 12.04(b)) and the participant shall not constitute
a "Bank" hereunder; and PROVIDED FURTHER, that no Bank shall transfer or grant
any participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note in which such participant is participating, or
reduce the rate or extend the time of payment of interest thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the
Commitment in which such participant is participating over the amount thereof
then in effect (it being understood that a waiver of any conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment or of a mandatory prepayment shall not constitute an increase
of the Commitment in which any participant is participating, that an increase in
the available portion of any Commitment of any Bank shall not constitute an
increase in the Commitment in which any participant is participating, and that
an increase in any Commitment shall be permitted without the consent of any
participant if the participant's participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrower of any of
its rights and obligations under this Agreement or (iii) release VCP IV from the
Vestar Guaranty. In the case of any such participation, the participant shall
not have any rights under this Agreement or any of the other Credit Documents
(the participant's rights against such Bank in respect of such participation to
be those set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrower hereunder
shall be determined as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its Commitment
(and related outstanding Obligations hereunder) and/or its outstanding Loan to
(i) its parent company and/or any Lending Affiliate of such Bank, to one or more
Banks or to VCP IV and/or any of its Affiliates or (ii) in the case of any Bank
that is a fund that invests in bank loans, any other fund that invests in bank
loans and is managed by the same investment advisor of such Bank or by a Lending
Affiliate of such investment advisor or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such Commitment (and related outstanding Obligations
hereunder) and/or outstanding principal amount of such Loan to one or more
Eligible Transferees (treating (x) any fund that invests in bank loans and (y)
any other fund that invests in bank loans and is managed by the same investment
advisor as such fund or by a Lending Affiliate of such investment advisor, as a
single Eligible Transferee), each of which assignees shall become a party to
this Agreement as a Bank by execution of an Assignment and Assumption Agreement
substantially in the form of Exhibit H, PROVIDED that (i) at such time Schedule
I shall be deemed modified to reflect the Commitment and/or outstanding Loans,
as the
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case may be, of such new Bank and of the existing Banks, (ii) if requested by
the assigning Bank or the assignee Bank, upon surrender of the old Notes (with
the old Notes of the assigning Bank to be marked "Canceled") (or the furnishing
of a standard indemnity letter from the respective assigning Bank in respect of
any lost Notes reasonably acceptable to the Borrower), new Notes will be issued,
at the Borrower's expense, to such new Bank and to the assigning Bank, such new
Notes to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitments and/or outstanding Loans, as the case may be, (iii) the consent of
the Administrative Agent and, so long as no Event of Default exists, the
Borrower and VCP IV shall be required in connection with any assignment to an
Eligible Transferee pursuant to clause (y) of this Section 12.04(b) (which
consent, in each case, shall not be unreasonably withheld or delayed) and (iv)
the Administrative Agent shall receive at the time of each assignment, from the
assigning or assignee Bank, the payment of a non-refundable assignment fee of
$3,500 and, PROVIDED FURTHER, that such transfer or assignment will not be
effective until recorded by the Administrative Agent on the Register pursuant to
Section 12.14. To the extent of any assignment pursuant to this Section
12.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Commitments and/or outstanding Loans. At the time of
each assignment pursuant to this Section 12.04(b) to a Person which is not
already a Bank hereunder, the respective assignee Bank shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a Section 3.04(b)(ii) Certificate) described in
Section 3.04(b). To the extent that an assignment of all or any portion of a
Bank's Commitment and outstanding Obligations pursuant to Section 1.13 or this
Section 12.04(b) would, due to circumstances existing at the time of such
assignment, result in increased costs under Section 1.10, 1.11 or 3.04 from
those being charged by the respective assigning Bank prior to such assignment,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank or
BTCo from pledging its Loan and Note hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Administrative Agent, any Bank which is a fund may pledge all
or any portion of its Note or Loan to its trustee in support of its obligations
to its trustee. No pledge pursuant to this clause (c) shall release the
transferor Bank from any of its obligations hereunder.
12.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Administrative Agent or any Bank or any holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between Holdings or the Borrower or any other
Person and the Administrative Agent or any Bank or the holder of any Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights, powers and remedies herein or
in any other Credit Document expressly provided are cumulative and not exclusive
of any rights, powers or remedies which the Administrative Agent or any Bank or
the holder of any Note would otherwise have. No notice to
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or demand on any of the Borrower and VCP IV in any case shall entitle any such
Person to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or any Bank or the holder of any Note to any other or further action in any
circumstances without notice or demand.
12.06 PAYMENTS PRO RATA. (a) The Administrative Agent agrees that
promptly after its receipt of each payment from or on behalf of the Borrower in
respect of any Obligations hereunder, it shall distribute such payment to the
Banks PRO RATA based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation then
owed and due to such Bank bears to the total of such Obligation then owed and
due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the Borrower or
VCP IV (as the case may be) to such Banks in such amount as shall result in a
proportional participation by all the Banks in such amount; PROVIDED that if all
or any portion of such excess amount is thereafter recovered from such Bank,
such purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
12.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Banks; it
being understood and agreed that notes may be absent in the interim financial
statements). In addition, except as otherwise specifically provided herein, all
computations determining compliance with Section 7, including definitions used
therein, shall utilize accounting principles and policies in effect from time to
time; PROVIDED that if any such accounting principle or policy shall change
after the Effective Date, the Borrower shall give prompt notice thereof to the
Administrative Agent and each of the Banks and if within 90 days following such
notice the Borrower, the Administrative Agent or the Required Banks shall elect
by giving written notice of such election to the other parties hereto, such
computations shall not give effect to such change unless and until this
Agreement shall be amended pursuant to Section 12.12 to give effect to such
change.
(b) All computations of interest hereunder shall be made on the
basis of a year of 360 days (365-366 days in the case of interest on Base Rate
Loans maintained at the Prime Lending Rate) for the actual number of days
(including the first day but excluding the last day) occurring in the period for
which such interest are payable.
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<PAGE>
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Agreement or any other Credit Document
may be brought in the Courts of the State of New York or of the United States
for the Southern District of New York, and, by execution and delivery of this
Agreement, the Borrower hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of the aforesaid
Courts. The Borrower hereby further irrevocably waives any claim that such
courts lack jurisdiction over it, and agrees not to plead or claim, in any legal
action or proceeding with respect to this Agreement or any other Credit Document
brought in any of the aforesaid courts, that any such court lacks jurisdiction
over it. The Borrower irrevocably consents to the service of process out of any
of the aforementioned Courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the Borrower
at its address set forth opposite its signatures below, such service to become
effective 30 days after such mailing. Nothing herein shall affect the right of
the Administrative Agent under this Agreement, any Bank or the holder of any
Note to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower in any other jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
credit document brought in the Courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such Court
that any such action or proceeding brought in any such Court has been brought in
an inconvenient forum.
(c) Each of the parties to this Agreement hereby irrevocably waives
all right to a trial by jury in any action, proceeding or counterclaim arising
out of or relating to this Agreement, the other Credit Documents or the
transactions contemplated hereby or thereby.
12.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
12.10 EFFECTIVENESS. This Agreement shall become effective on the
date (the "Effective Date") on which the Borrower and each of the Banks shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Administrative Agent at its Notice Office or, in the
case of the Banks, shall have given to the Administrative Agent telephonic
(confirmed in writing), written or facsimile transmission notice (actually
received) in accordance with Section 12.03 at such office that the same has been
signed and mailed to it.
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<PAGE>
12.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
12.12 AMENDMENT OR WAIVER. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower (and, in the case of the Vestar Guaranty, VCP
IV) and the Required Banks; PROVIDED that no such change, waiver, discharge or
termination shall, without the consent of each Bank directly affected thereby:
(i) extend the final scheduled maturity of any Loan or Note, or reduce the rate
or extend the time of payment of interest thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates), or
reduce the principal amount thereof; (ii) release VCP IV from the Vestar
Guaranty; (iii) amend, modify or waive any provision of Section 12.06 or this
Section 12.12; (iv) reduce the percentage specified in, or otherwise modify, the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, extensions of credit pursuant to this Agreement in addition to
those set forth in or contemplated by this Agreement on the Effective Date may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Loans are included on the Effective Date); or (v)
except for the Borrower Acknowledgment and Assumption, consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement; PROVIDED FURTHER, that no such change, waiver, discharge or
termination shall: (1) increase the Commitment of any Bank over the amount
thereof then in effect (it being understood that a waiver of any conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitment or of a mandatory prepayment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank) without the consent of such Bank; or (2) without the
consent of the Administrative Agent, amend, modify or waive any provision of
Section 10 or any other provision relating to the rights or obligations of the
Administrative Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right to replace each such non-consenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each Replacement Bank consents to the proposed change, waiver,
discharge or termination, provided that the Borrower shall not have the right to
replace a Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second proviso
to Section 12.12(a).
12.13 CONFIDENTIALITY. (a) Subject to the provisions of clause (b)
of this Section 12.13, each Bank agrees that it will use its reasonable efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another
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Bank if such Bank or such Bank's holding or parent company in its sole
discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 12.13 to the same extent as such Bank) any information with respect to
the Borrower or any of its Subsidiaries which is now or in the future furnished
pursuant to this Agreement or any other Credit Document and which is designated
by the Borrower to the Banks in writing as confidential or would customarily be
treated as confidential in banking practice, PROVIDED that any Bank may disclose
any such information (a) as has become generally available to the public, (b) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Bank, (e) to the Administrative Agent and (f) to any prospective or actual
transferee or participant (or its investment advisor) in connection with any
contemplated transfer or participation of any Note or Commitment or any interest
therein by such Bank, PROVIDED that such prospective transferee agrees to
maintain the confidentiality contained in this Section.
(b) The Borrower hereby acknowledges and agrees that each Bank may
share with any of its Lending Affiliates any information related to the Borrower
or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of the Borrower and its
Subsidiaries, provided such Persons shall be subject to the provisions of this
Section 12.13 to the same extent as such Bank).
12.14 REGISTER. The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for purposes of this Section
12.14, to maintain a register (the "Register") on which it will record the
Commitment from time to time of each of the Banks, the Loan made by each of the
Banks and each repayment in respect of the principal amount of the Loan of each
Bank. Failure to make any such recordation, or any error in such recordation,
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Bank, the transfer of the Commitment of such Bank and the rights
to the principal of, and interest on, any Loan made pursuant to such Commitment
shall not be effective until such transfer is recorded on the Register
maintained by the Administrative Agent with respect to ownership of such
Commitment and Loan and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loan shall remain owing to the
transferor. The registration of the assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
12.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of the
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall, to the extent requested, be issued to the assigning or
transferor Bank and/or the new Bank. The Borrower agrees to indemnify the
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Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this Section
12.14 other than those resulting from the Administrative Agent's willful
misconduct or gross negligence.
* * *
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
ADDRESS:
245 Park Avenue, 41st Floor V.S.M. ACQUISITION CORP.
New York, NY 10167
Telephone No.: (212) 351-1600
Telecopy No.: (212) 808-4922 By /s/ Steven M. Silver
Attention: Steven M. Silver -------------------------------------
Name: Steven M. Silver
Title: Vice President
with a copy to:
Vestar Capital Partners IV, L.P.
245 Park Avenue, 41st Floor
New York, NY 10167
Telephone No.: (212) 351-1600
Telecopy No.: (212) 808-4922
Attention: Jack M. Feder, Esq.
<PAGE>
BANKERS TRUST COMPANY,
Individually and as
Administrative Agent
By /s/ Scottye D. Lindsey
-------------------------------------
Name: Scottye D. Lindsey
Title: Vice President
<PAGE>
SCHEDULE I
COMMITMENTS
BANK COMMITMENT
Bankers Trust Company $40,000.00
-----------
Total: $40,000,000
<PAGE>
Schedule XIII
BANK ADDRESSES
BANK ADDRESS
Bankers Trust Company 130 Liberty Street
New York, NY 10006
Attn: Scottye Lindsey
Tel. No.: (212) 250-3964
Fax No.: (212) 250-7218
<PAGE>
EXHIBIT A
FORM OF NOTICE OF BORROWING
Bankers Trust Company, as Administrative Agent
for the Banks party to the
Senior Subordinated Loan Agreement referred
to below
130 Liberty Street
New York, New York 10006
Attention: ____________________
Ladies and Gentlemen:
The undersigned V.S.M. Acquisition Corp. (the "Borrower"), refers to
the Senior Subordinated Loan Agreement, dated as of December 6, 2000 (as
amended, supplemented or otherwise modified from time to time, the "Senior
Subordinated Loan Agreement", the terms defined therein being used herein as
therein defined), among the Borrower, the financial institutions from time to
time party thereto (the "Banks"), and you, as Administrative Agent for such
Banks, and hereby gives you notice, irrevocably (provided that the Minimum
Condition (as defined in the Tender Offer Documents) is satisfied), pursuant to
Section 1.03 of the Senior Subordinated Loan Agreement, that the undersigned
hereby requests a Borrowing under the Senior Subordinated Loan Agreement, and in
that connection sets forth below the information relating to such Borrowing (the
"Proposed Borrowing") as required by Section 1.03 of the Senior Subordinated
Loan Agreement:
(i) The Business Day of the Proposed Borrowing is [Closing
Date].(1)
(ii) The aggregate principal amount of the Proposed Borrowing
is _____________.
(iii) The Loans to be made pursuant to the Proposed Borrowing
shall be initially maintained as [Base Rate Loans] [Eurodollar Loans].
[(iv) The initial Interest Period for the Proposed Borrowing
is [one, two, three, six, nine or twelve month[s]].(2)
----------------------
(1) Shall be same day written notice in the case of Base Rate Loans and
three Business Days notice in the case of all Eurodollar Loans.
<PAGE>
Exhibit A
Page 2
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing:
(A) the representations and warranties contained in the Senior
Subordinated Loan Agreement or in the other Credit Documents are and
will be true and correct in all material respects, before and after
giving effect to the Proposed Borrowing and to the application of the
proceeds thereof (except for any representation and warranty that
speaks only as of a specific date, which shall be true and correct in
all material respects as of such date), as though made on such date;
and
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof.
Very truly yours,
V.S.M. ACQUISITION CORP.
By:
--------------------------
Name:
Title:
------------------------
(...continued)
(2) To be included for a Proposed Borrowing of Eurodollar Loans.
<PAGE>
EXHIBIT B
FORM OF NOTE
$___________________ New York, New York
[Date of Issuance]
FOR VALUE RECEIVED, V.S.M. Acquisition Corp., a Delaware corporation
(the "Borrower"), hereby promises to pay to the order of ______________________
(the "Bank"), in lawful money of the United States in immediately available
funds, at the Payment Office (as defined in the Agreement referred to below) of
Bankers Trust Company (the "Administrative Agent"), on the Maturity Date (as
defined in the Agreement) the principal sum of __________________ DOLLARS or, if
less, the then unpaid principal amount of all Loans (as defined in the
Agreement) made by the Bank to the Borrower pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at
the rates and at the times provided in Section 1.08 of the Agreement referred to
below.
This Note is one of the Notes referred to in the Senior Subordinated
Loan Agreement, dated as of December 6, 2000 among the Borrower, the financial
institutions from time to time party thereto (including the Bank), and Bankers
Trust Company, as Administrative Agent (as amended, modified or supplemented
from time to time, the "Agreement") and is entitled to the benefits thereof and
of the other Credit Documents. As provided in the Agreement, this Note is
subject to voluntary prepayment and mandatory repayment prior to the Maturity
Date, in whole or in part.
In case an Event of Default (as defined in the Agreement) shall occur
and be continuing, the principal of and accrued interest on this Note may become
or be declared to be due and payable in the manner and with the effect provided
in the Agreement.
The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note.
<PAGE>
EXHIBIT B
Page 2
This Note is subordinated in right of payment to the Senior
Indebtedness (as defined in the Senior Subordinated Loan Agreement) of the
Borrower as and to the extent provided in Section 11 of the Senior Subordinated
Loan Agreement.
<PAGE>
EXHIBIT B
Page 3
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
V.S.M. ACQUISITION CORP.
By:
----------------------------
Name:
Title:
<PAGE>
EXHIBIT C
FORM OF SECTION 3.04(B)(II) CERTIFICATE
Reference is hereby made to the Senior Subordinated Loan Agreement,
dated as of December 6, 2000 among V.S.M. Acquisition Corp., the financial
institutions from time to time party thereto, and Bankers Trust Company, as
Administrative Agent (as amended, modified or supplemented from time to time,
the "Senior Subordinated Loan Agreement"). Pursuant to the provisions of Section
3.04(b)(ii) of the Senior Subordinated Loan Agreement, the undersigned hereby
certifies that it is not a "bank" as such term is used in Section 881(c)(3)(A)
of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By:
---------------------
Name:
Title:
Date:
<PAGE>
EXHIBIT D-1
December 7, 2000
Bankers Trust Company, as Administrative Agent
under the Senior Subordinated Loan Agreement,
as hereinafter defined (the "Administrative
Agent")
and
The Lenders listed on Schedule I hereto which
are parties to the Senior Subordinated
Loan Agreement on the date hereof
Re: Senior Subordinated Loan Agreement dated as of December 6,
2000 (the "Senior Subordinated Loan Agreement") among V.S.M.
Acquisition Corp., the lending institutions identified in the
Senior Subordinated Loan Agreement (the "Lenders") and the
Administrative Agent
Ladies and Gentlemen:
We have acted as counsel to Vestar Capital Partners IV, L.P., a
Delaware limited partnership ("Vestar"), and V.S.M. Acquisition Corp., a
Delaware corporation (the "Borrower" and, together with Vestar, the "Obligors"),
in connection with the preparation, execution and delivery of the following
documents:
(a) the Senior Subordinated Loan Agreement;
(b) Notes delivered to the Lenders on the date hereof; and
(c) the Vestar Guaranty.
The documents described in the foregoing clauses (a) through (c) are
collectively referred to herein as the "Credit Documents". Unless otherwise
indicated, capitalized terms used but not defined herein shall have the
respective meanings set forth in the Senior Subordinated Loan Agreement. This
opinion is furnished to you pursuant to Section 4.04(i) of the Senior
Subordinated Loan Agreement.
In connection with the opinion, we have examined:
(A) the Senior Subordinated Loan Agreement, signed by the Borrower
and by the Administrative Agent and certain of the Lenders;
(B) each other Credit Document, signed by each Obligor that is a
party thereto; and
<PAGE>
2
(C) forms of the Notes to be delivered after the date hereof.
We also have examined the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and have made such other investigations as we have deemed relevant and necessary
in connection with the opinions expressed herein. As to questions of fact
material to this opinion, we have relied upon certificates of public officials
and of officers and representatives of the Obligors. In addition, we have
examined, and have relied as to matters of fact upon, the representations made
in the Credit Documents.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies, and the authenticity of the originals of such latter
documents.
In rendering the opinion set forth in paragraph 5 below with respect to
the Notes, we have assumed that at the time of any execution and delivery of
Notes after the date hereof, the Board of Directors of the Borrower (or any
committee thereof acting pursuant to authority properly delegated to such
committee by the Board of Directors) has not taken any action to rescind or
otherwise reduce its prior authorization of the issuance of such Notes.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
1. The Borrower (a) has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of Delaware,
(b) has the corporate power and authority to execute and deliver each of the
Credit Documents to which it is a party and to borrow and perform its
obligations thereunder and (c) has duly authorized, executed and delivered each
Credit Document to which it is a party.
2. Vestar (a) is a limited partnership validly existing and in good
standing under the Delaware Revised Uniform Limited Partnership Act (the
"Partnership Act"), (b) has the partnership power and authority to execute and
deliver each of the Credit Documents to which it is a party and perform its
obligations thereunder and (c) has duly authorized, executed and delivered the
Credit Documents to which it is a party.
3. The execution and delivery by each Obligor of the Credit Documents
to which it is a party, its borrowings in accordance with the terms of the
Credit Documents and the performance of its payment obligations thereunder (a)
will not result in any violation of (1) the Certificate of Incorporation or
By-Laws of the Borrower or Vestar's Agreement of Limited Partnership (the
"Partnership Agreement"), (2) assuming that proceeds of borrowings will be used
in accordance with the terms of the Senior Subordinated Loan Agreement, any
Federal or New York statute, the Delaware General Corporation Law or the
Partnership Act or any rule or regulation issued pursuant to any New York or
Federal statute (including, without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System), the Delaware General
Corporation Law or the Partnership Act or any order known to us issued by any
court or governmental agency or body and (b) will not breach or result in a
default under or result in the
<PAGE>
3
creation of any lien upon or security interest in the Borrower's properties
pursuant to the terms of any agreement or instrument identified on Schedule II
hereto furnished to us by the Borrower and which the Borrower has represented
lists all material agreements and instruments to which the Borrower is a party
or by which the Borrower is bound or to which any of the property or assets of
the Borrower is subject.
4. No consent, approval, authorization, order, filing, registration or
qualification of or with any Federal or New York governmental agency or body or
any Delaware governmental agency or body acting pursuant to the Delaware General
Corporation Law or the Partnership Act is required (a) for the execution and
delivery by any Obligor of the Credit Documents to which it is a party, (b) for
the borrowings by the Borrower in accordance with the terms of the Credit
Documents, (c) for the performance by the Obligors of their respective payment
obligations under the Credit Documents or (d) in connection with the legality,
validity, binding effect or enforceability of the payment obligations under the
Credit Documents.
5. Assuming that (a) each of the Credit Documents is a valid and
legally binding obligation of each of the Lenders parties thereto, (b)
execution, delivery and performance by each Obligor of the Credit Documents to
which it is a party do not violate the laws of any applicable jurisdiction
(excepting the laws of the State of New York, the General Corporation Law of the
State of Delaware, the Partnership Act and the Federal laws of the United
States) and (c) execution, delivery and performance by each Obligor of the
Credit Documents to which it is a party do not constitute a breach or violation
of any agreement or instrument which is binding upon any Obligor (except that we
do not make this assumption with respect to the agreements and instruments that
are the subject of opinion paragraph 3 of this letter), each Credit Document
constitutes, and each Note delivered to a Lender after the date hereof, assuming
the due execution and delivery by the Borrower, will constitute, the valid and
legally binding obligation of each Obligor which is a party thereto, enforceable
against such Obligor in accordance with its terms.
6. To our knowledge, there is no action, suit or proceeding before or
by any court, arbitrator or governmental agency, body or official, now pending
to which any Obligor is a party or to which the business, assets or property of
any Obligor is subject and no such action, suit or proceeding is threatened to
which any Obligor or the business, assets or property of any Obligor would be
subject that, in either case, questions the validity of, or is otherwise in
respect of, the Credit Documents.
7. No Obligor is an "investment company" within the meaning of and
subject to regulation under the Investment Company Act of 1940, as amended, or a
"holding company," or a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
8. The submission by each Obligor to the jurisdiction of the courts of
New York and of the United States for the Southern District of New York
(assuming the other relevant federal jurisdictional prerequisites are met), as
set forth in the Credit Documents, is valid and binding on such Obligor.
<PAGE>
4
Our opinion in paragraph 5 above is subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing.
We express no opinion with respect to:
(A) the effect of any provision of the Credit Documents which is
intended to permit modification thereof only by means of an agreement signed in
writing by the parties thereto;
(B) the effect of any provision of the Credit Documents insofar as it
provides that any Person purchasing a participation from a Lender or other
Person may exercise set-off or similar rights with respect to such participation
or that any Lender or other Person may exercise set-off or similar rights other
than in accordance with applicable law;
(c) the effect of any provision of the Credit Documents imposing
penalties or forfeitures;
(D) the enforceability of any provision of any of the Credit Documents
to the extent that such provision constitutes a waiver of illegality as a
defense to performance of contract obligations; and
(E) the effect of any provision of the Credit Documents relating to
indemnification or exculpation in connection with violations of any securities
laws or relating to indemnification, contribution or exculpation in connection
with willful, reckless or criminal acts or gross negligence of the indemnified
or exculpated Person or the Person receiving contribution.
In connection with the provisions of the Credit Documents whereby
Obligors submit to the jurisdiction of the United States District Court for the
Southern District of New York, we note the limitations of 28 U.S.C. ss.ss. 1331
and 1332 on Federal court jurisdiction, and we also note that such submissions
cannot supersede such court's discretion in determining whether to transfer an
action from one Federal court to another under 28 U.S.C. ss. 1404(a).
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the Federal law of the United States, the Delaware General Corporation
Law and the Partnership Act.
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
SCHEDULE I
THE LENDERS
-----------
Bankers Trust Company
<PAGE>
SCHEDULE II
AGREEMENTS AND INSTRUMENTS
--------------------------
1. Agreement and Plan of Merger, dated as of October 16, 2000, among
the Parent, Vestar, the Borrower and Sunrise.
2. Management Agreement, dated as of [___________], 2000, among the
Parent, Holdings, the Borrower, Vestar Capital Partners and Park Avenue Equity
Management, LLC.
3. Credit Agreement, dated as of December 6, 2000, among the Borrower,
V.S.M. Holdings, Inc., the various lending institutions party thereto and
Bankers Trust Company, as administrative agent.
4. Securities Letter among Vestar Capital Partners IV, L.P., the
Borrower and V.S.M. Holdings, LLC.
<PAGE>
EXHIBIT D-2
December 7, 2000
Bankers Trust Company, as Administrative Agent
under the Senior Subordinated Loan
Agreement, as hereinafter defined (the
"Administrative Agent")
and
The Lenders listed on Schedule I hereto which are parties to the Senior
Subordinated Loan Agreement on the date hereof
Re: Senior Subordinated Loan Agreement dated as of December 6, 2000
among V.S.M. Acquisition Corp., the lending institutions identified
in the Senior Subordinated Loan Agreement (the "Lenders") and the
Administrative Agent
Ladies and Gentlemen:
I am the Senior Vice President and General Counsel of Sunrise
Medical, Inc., a Delaware corporation ("Sunrise"), and acted as such in
connection with the preparation, execution and delivery of the Senior
Subordinated Loan Agreement.
Unless otherwise indicated, capitalized terms used but not defined
herein shall have the respective meanings set forth in the Senior Subordinated
Loan Agreement. This opinion is furnished to you pursuant to Section 4.04(ii) of
the Senior Subordinated Loan Agreement.
In connection with the opinion, I have examined:
(A) the Senior Subordinated Loan Agreement, signed by the Borrower
and by the Administrative Agent and certain of the Lenders;
and
(B) the Notes delivered to the Lenders on the date hereof, each
signed by the Borrower.
I also have examined the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and have made such other investigations as I have deemed relevant and necessary
in connection with the opinions expressed herein. As to questions of fact
material to this opinion, I have relied upon certificates of public officials
and of officers and representatives of Sunrise and its Subsidiaries. In
addition, I have examined, and have relied as to matters of fact upon, the
representations made in the Senior Subordinated Loan Agreement.
<PAGE>
2
In rendering the opinions set forth below, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as duplicates or certified
or conformed copies, and the authenticity of the originals of such latter
documents.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, I am of the opinion that:
1. The consummation of the Tender Offer, execution and delivery by
the Borrower of the Senior Subordinated Loan Agreement and the performance of
its payment obligations thereunder (a) will not result in any violation of (1)
the Certificate of Incorporation or By-Laws of Sunrise or any of its
Subsidiaries, (2) any California statute or any rule or regulation issued
pursuant to any California statute or any order issued by any court or
governmental agency or body and (b) will not breach or result in a default under
or result in the creation of any lien upon or security interest in the
properties of Sunrise or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement, loan agreement or other
material agreement or instrument to which Sunrise or any of its Subsidiaries is
a party or by which any of them or any of their respective property or assets
are bound or to which any of them may be subject.
2. To my knowledge, there is no action, suit or proceeding before or
by any court, arbitrator or governmental agency, body or official, now pending
or threatened (a) with respect to the Senior Subordinated Loan Agreement or the
Transaction (other than as identified in the Senior Subordinated Loan Agreement)
or (b) with respect to Sunrise or any of its Subsidiaries (1) that could
reasonably be expected to have a material adverse effect on the business,
property, assets, liabilities, condition (financial or otherwise), operations or
results of operations of Sunrise and its Subsidiaries taken as a whole or (2)
that could reasonably be expected to have a material adverse effect on the
rights or remedies of the Lenders or on the ability of the Borrower to perform
its respective obligations under the Senior Subordinated Loan Agreement.
<PAGE>
3
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without my prior written consent.
Very truly yours,
<PAGE>
SCHEDULE I
THE LENDERS
-----------
Bankers Trust Company
<PAGE>
EXHIBIT D-3
December 7, 2000
BY HAND
To: The Administrative Agent and the various lending institutions
(collectively, the "Banks") party to the Credit Agreement referred to
below
Re: Credit Agreement, dated as of December 6, 2000 (as amended, modified or
supplemented from time to time, the "Credit Agreement"), among V.S.M.
Acquisition Corp., the lending institutions from time to time party
thereto, and Bankers Trust Company, as Administrative Agent
-----------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel to the Administrative Agent in
connection with the execution and delivery of the Credit Agreement. This opinion
is delivered to you pursuant to Section 4.04(iii) of the Credit Agreement. Terms
used herein which are defined in the Credit Agreement shall have the respective
meanings set forth in the Credit Agreement unless otherwise defined herein.
In connection with this opinion, we have examined the originals, or
certified, conformed or reproduction copies, of all records, agreements,
instruments and documents as we have deemed relevant or necessary as the basis
for the opinions hereinafter expressed. In stating our opinion, we have assumed
the genuineness of all signatures on original or certified copies, the
authenticity of documents submitted to us as originals and the conformity to
original or certified copies of all copies submitted to us as certified or
reproduction copies.
We have also assumed, for purposes of the opinions expressed herein,
that the parties to the Credit Agreement have the corporate power and authority
to enter into and perform the Credit Agreement and that the Credit Agreement has
been duly authorized, executed and delivered by each such party.
Based upon the foregoing, and subject to the limitations set forth
herein, we are of the opinion that the Credit Agreement constitutes the valid
and binding obligation of the Borrower enforceable in accordance with its terms
except to the extent that enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by equity principles (regardless of whether enforcement is sought
in equity or at law).
We have not been requested to render and, with your permission, we
express no opinion as to the applicability to the obligations of the Borrower
under the Credit Agreement of Section
<PAGE>
EXHIBIT D-3
Page 2
548 of the Bankruptcy Code and Article 10 of the New York Debtor & Creditor Law
relating to fraudulent transfers and obligations.
This opinion is limited to the federal law of the United States of
America and the law of the State of New York.
Very truly yours,
DNK:RDH
<PAGE>
EXHIBIT D-4
[Merger Date]
Bankers Trust Company, as Administrative Agent
under the Senior Subordinated Loan Agreement,
as hereinafter defined (the "Administrative
Agent")
and
The Lenders listed on Schedule I hereto which
are parties to the Senior Subordinated
Loan Agreement on the date hereof
Re: Senior Subordinated Loan Agreement dated as of December 6,
2000 (as amended, supplemented or otherwise modified, the
"Senior Subordinated Loan Agreement") among Sunrise Medical,
Inc. (as successor by merger to V.S.M. Acquisition Corp.), the
lending institutions identified in the Senior Subordinated
Loan Agreement (the "Lenders") and the Administrative Agent
Ladies and Gentlemen:
We have acted as counsel to V.S.M. Acquisition Corp., a Delaware
corporation ("Newco"), Sunrise Medical, Inc., a Delaware corporation (the
"Borrower") and Vestar Capital Partners IV, L.P. ("Vestar" and, together with
the Borrower, the "Obligors") in connection with the preparation, execution and
delivery of the following documents:
the Senior Subordinated Loan Agreement;
Notes delivered to the Lenders on the date hereof;
the Vestar Guaranty; and
the Borrower Acknowledgement and Assumption.
The documents described in the foregoing clauses (a) through (d) are
collectively referred to herein as the "Credit Documents". Unless otherwise
indicated, capitalized terms used but not defined herein shall have the
respective meanings set forth in the Senior Subordinated Loan Agreement. This
opinion is furnished to you pursuant to Section 6.12(b)(i) of the Senior
Subordinated Loan Agreement.
In connection with the opinion, we have examined:
<PAGE>
2
(A) the Senior Subordinated Loan Agreement, signed by the Borrower
and by the Administrative Agent and certain of the Lenders; and
(B) each other Credit Document, signed by each Obligor that is a
party thereto.
We also have examined the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and have made such other investigations as we have deemed relevant and necessary
in connection with the opinions expressed herein. As to questions of fact
material to this opinion, we have relied upon certificates of public officials
and of officers and representatives of the Obligors. In addition, we have
examined, and have relied as to matters of fact upon, the representations made
in the Credit Documents.
In rendering the opinions set forth below, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as duplicates or certified
or conformed copies, and the authenticity of the originals of such latter
documents.
In rendering the opinion set forth in paragraph 5 below with respect
to the Notes, we have assumed that at the time of any execution and delivery of
Notes after the date hereof, the Board of Directors of the Borrower (or any
committee thereof acting pursuant to authority properly delegated to such
committee by the Board of Directors) has not taken any action to rescind or
otherwise reduce its prior authorization of the issuance of such Notes.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, we are of the opinion that:
1. Newco (a) has been duly incorporated and is validly existing and
in good standing as a corporation under the laws of the State of Delaware, (b)
has the corporate power and authority to execute and deliver each of the Credit
Documents to which it is a party and to perform its obligations thereunder and
(c) has duly authorized, executed and delivered each Credit Document to which it
is a party.
2. Vestar (a) is a limited partnership validly existing and in good
standing under the Delaware Revised Uniform Limited Partnership Act (the
"Partnership Act"), (b) has the partnership power and authority to execute and
deliver each of the Credit Documents to which it is a party and perform its
obligations thereunder and (c) has duly authorized, executed and delivered the
Credit Documents to which it is a party.
3. The execution and delivery by each of Newco and Vestar of the
Credit Documents to which it is a party and performance of its payment
obligations thereunder (a) will not result in any violation of the Certificate
of Incorporation or By-Laws of Newco or Vestar's Agreement of Limited
Partnership (the "Partnership Agreement"), as applicable, and (b) will not
breach or result in a default under or result in the creation of any lien upon
or security interest in the respective properties of Newco pursuant to the terms
of any agreement or instrument identified on Schedule II hereto furnished to us
by Newco and which Newco has represented lists
<PAGE>
3
all material agreements and instruments to which Newco is a party or by which
Newco is bound or to which any of the property or assets of Newco is subject.
4. Assuming that proceeds of borrowings will be used in accordance
with the terms of the Senior Subordinated Loan Agreement, the execution and
delivery by any Obligor of the Credit Documents to which it is a party, its
borrowings in accordance with the terms of the Credit Documents and performance
of its payment obligations thereunder will not result in any violation of any
Federal or New York statute, the Delaware General Corporation Law, the
Partnership Act or any rule or regulation issued pursuant to any New York or
Federal statute (including without limitation, Regulations T, U and X of the
Board of Governors of the Federal Reserve System), the Delaware General
Corporation Law or the Partnership Act or any order known to us issued by any
court or governmental agency or body.
5. No consent, approval, authorization, order, filing, registration
or qualification of or with any Federal or New York governmental agency or body
or any Delaware governmental agency or body acting pursuant to the Delaware
General Corporation Law or the Partnership Act is required (a) for the execution
and delivery by any Obligor of the Credit Documents to which it is a party, (b)
for the borrowings by the Borrower in accordance with the terms of the Credit
Documents, (c) for the performance by the Obligors of their respective payment
obligations under the Credit Documents or (d) in connection with the legality,
validity, binding effect or enforceability of the payment obligations under the
Credit Documents.
6. Assuming that each of the Credit Documents is a valid and legally
binding obligation of each of the Lenders parties thereto and assuming that (a)
the Borrower is validly existing and in good standing under the laws of the
jurisdiction in which it is organized and has duly authorized, executed and
delivered the Credit Documents to which it is a party in accordance with its
Certificate of Incorporation and By-Laws, (b) execution, delivery and
performance by each Obligor of the Credit Documents to which it is a party do
not violate the laws of the jurisdiction in which it is organized or any other
applicable laws (excepting the laws of the State of New York, the General
Corporation Law of the State of Delaware, the Partnership Act and the Federal
laws of the United States) and (c) execution, delivery and performance by each
Obligor of the Credit Documents to which it is a party do not constitute a
breach or violation of any agreement or instrument which is binding upon such
Person (except that we do not make this assumption with respect to the
agreements and instruments that are the subject of opinion paragraph 5 of this
letter), each Credit Document constitutes, and each Note delivered to a Lender
after the date hereof, assuming the due execution and delivery by the Obligor
which is the maker of such Note, will constitute, the valid and legally binding
obligation of each Obligor which is a party thereto, enforceable against such
Obligor in accordance with its terms.
7. To our knowledge, there is no action, suit or proceeding before
or by any court, arbitrator or governmental agency, body or official, now
pending to which Newco is a party or to which the business, assets or property
of Newco is subject and no such action, suit or proceeding is threatened to
which Newco or the business, assets or property of any of Newco would be subject
that, in either case, questions the validity of, or is otherwise in respect of,
the Credit Documents.
<PAGE>
4
8. No Obligor is an "investment company" within the meaning of and
subject to regulation under the Investment Company Act of 1940, as amended, or a
"holding company," or a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
9. The submission by each Obligor to the jurisdiction of the courts
of New York and of the United States for the Southern District of New York
(assuming the other relevant federal jurisdictional prerequisites are met), as
set forth in the Credit Documents, is valid and binding on such Obligor.
Our opinion in paragraph 5 above is subject to (i) the effects of
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally, (ii)
general equitable principles (whether considered in a proceeding in equity or at
law) and (iii) an implied covenant of good faith and fair dealing.
We express no opinion with respect to:
(A) the effect of any provision of the Credit Documents which is
intended to permit modification thereof only by means of an agreement signed in
writing by the parties thereto;
(B) the effect of any provision of the Credit Documents insofar as
it provides that any Person purchasing a participation from a Lender or other
Person may exercise set-off or similar rights with respect to such participation
or that any Lender or other Person may exercise set-off or similar rights other
than in accordance with applicable law;
(C) the effect of any provision of the Credit Documents imposing
penalties or forfeitures;
(D) the enforceability of any provision of any of the Credit
Documents to the extent that such provision constitutes a waiver of illegality
as a defense to performance of contract obligations; and
(E) the effect of any provision of the Credit Documents relating to
indemnification or exculpation in connection with violations of any securities
laws or relating to indemnification, contribution or exculpation in connection
with willful, reckless or criminal acts or gross negligence of the indemnified
or exculpated Person or the Person receiving contribution.
In connection with the provisions of the Credit Documents whereby
Obligors submit to the jurisdiction of the United States District Court for the
Southern District of New York, we note the limitations of 28 U.S.C. ss.ss. 1331
and 1332 on Federal court jurisdiction, and we also note that such submissions
cannot supersede such court's discretion in determining whether to transfer an
action from one Federal court to another under 28 U.S.C. ss. 1404(a).
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State of
New York, the Federal law of the United States, the Delaware General Corporation
Law and the Partnership Act.
<PAGE>
5
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without our prior written consent.
Very truly yours,
SIMPSON THACHER & BARTLETT
<PAGE>
SCHEDULE I
THE LENDERS
-----------
Bankers Trust Company
<PAGE>
SCHEDULE II
AGREEMENTS AND INSTRUMENTS
--------------------------
1. Agreement and Plan of Merger, dated as of October 16, 2000, among
the Parent, Holdings, Newco and the Borrower.
2. Management Agreement, dated as of [___________], 2000, among the
Parent, Holdings, the Borrower, Vestar Capital Partners and Park Avenue Equity
Management, LLC.
3. Credit Agreement, dated as of December 6, 2000, among Newco (the
obligations under which have been assumed by the Borrower), V.S.M. Holdings,
Inc., the various lending institutions party thereto and Bankers Trust Company,
as administrative agent.
4. Securities Letter among Vestar Capital Partners IV, L.P., Newco
and V.S.M. Holdings, LLC.
<PAGE>
EXHIBIT D-5
[Merger Date]
Bankers Trust Company, as Administrative Agent
under the Senior Subordinated Loan Agreement,
as hereinafter defined (the "Administrative
Agent")
and
The Lenders listed on Schedule I hereto which
are parties to the Senior Subordinated
Loan Agreement on the date hereof
Re: Senior Subordinated Loan Agreement dated as of December 6,
2000 (as amended, supplemented or otherwise modified, the
"Senior Subordinated Loan Agreement") among Sunrise Medical,
Inc. (as successor by merger to V.S.M. Acquisition Corp.), the
lending institutions identified in the Senior Subordinated
Loan Agreement (the "Lenders") and the Administrative Agent
Ladies and Gentlemen:
I am general counsel to Sunrise Medical, Inc., a Delaware
corporation (the "Borrower") and acted as such in connection with the
preparation, execution and delivery of the following documents:
(a) the Senior Subordinated Loan Agreement;
(b) Notes delivered to the Lenders on the date hereof; and
(c) the Borrower Acknowledgement and Assumption.
The documents described in the foregoing clauses (a) through (c) are
collectively referred to herein as the "Credit Documents". Unless otherwise
indicated, capitalized terms used but not defined herein shall have the
respective meanings set forth in the Senior Subordinated Loan Agreement. This
opinion is furnished to you pursuant to Section 6.12(b)(ii) of the Senior
Subordinated Loan Agreement.
In connection with the opinion, I have examined the Senior
Subordinated Loan Agreement, signed by the Borrower and by the Administrative
Agent and certain of the Lenders.
I also have examined the originals, or duplicates or certified or
conformed copies, of such records, agreements, instruments and other documents
and have made such other investigations as I have deemed relevant and necessary
in connection with the opinions
<PAGE>
2
expressed herein. As to questions of fact material to this opinion, I have
relied upon certificates of public officials and of officers and representatives
of the Borrower. In addition, I have examined, and have relied as to matters of
fact upon, the representations made in the Credit Documents.
In rendering the opinions set forth below, I have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to me as originals, the conformity to
original documents of all documents submitted to me as duplicates or certified
or conformed copies, and the authenticity of the originals of such latter
documents.
Based upon and subject to the foregoing, and subject to the
qualifications and limitations set forth herein, I am of the opinion that:
1. The Borrower (a) has been duly formed or incorporated and is
validly existing and in good standing as a corporation under the laws of the
State of Delaware, (b) is duly qualified and is authorized to do business and is
in good standing in all jurisdictions where the failure to be so qualified could
reasonably be expected to have a material adverse effect on its business,
property, assets, liabilities, condition (financial or otherwise), operations or
results of operations taken as a whole, (c) has the corporate power and
authority to execute and deliver each of the Credit Documents to which it is a
party and to perform its obligations thereunder and (d) has duly authorized,
executed and delivered each Credit Document to which it is a party.
2. The execution and delivery by the Borrower of the Credit
Documents to which it is a party and performance of its payment obligations
thereunder (a) will not result in any violation of (1) its Certificate of
Incorporation or By-Laws, (2) any California statute or any rule or regulation
issued pursuant to any California statute or any order issued by any court or
governmental agency or body and (b) will not breach or result in a default under
or result in the creation of any lien upon or security interest in the
Borrower's properties pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement or other material agreement or
instrument to which the Borrower is a party or by which it or any of its
property or assets are bound or to which it may be subject.
3. No consent, approval, authorization, order, filing, registration
or qualification of or with any California governmental agency or body is
required (a) for the execution and delivery by the Borrower of the Credit
Documents to which it is a party, (b) for the borrowings by the Borrower in
accordance with the terms of the Credit Documents, (c) for the performance by
the Borrower of its payment obligations under the Credit Documents or (d) in
connection with the legality, validity, binding effect or enforceability of the
payment obligations under the Credit Documents.
4. To my knowledge and other than as identified in the Senior
Subordinated Loan Agreement, there is no action, suit or proceeding before or by
any court, arbitrator or governmental agency, body or official, now pending or
threatened (a) with respect to any Credit Document or (b) with respect to the
Borrower (1) that could reasonably be expected to have a material adverse effect
on the business, property, assets, liabilities, condition (financial or
otherwise), operations or results of operations of the Borrower or (2) that
could reasonably be
<PAGE>
3
expected to have a material adverse effect on the rights or remedies of the
Lenders or on the ability of the Borrower to perform its obligations under the
Credit Documents to which it is a party.
<PAGE>
4
This opinion letter is rendered to you in connection with the above
described transactions. This opinion letter may not be relied upon by you for
any other purpose, or relied upon by, or furnished to, any other person, firm or
corporation without my prior written consent.
Very truly yours,
<PAGE>
SCHEDULE I
THE LENDERS
-----------
Bankers Trust Company
<PAGE>
EXHIBIT E
FORM OF BORROWER ACKNOWLEDGMENT AND ASSUMPTION AGREEMENT
BORROWER ACKNOWLEDGMENT AND ASSUMPTION AGREEMENT (this "Agreement"),
dated as of [__________ __, ____], made by Sunrise Medical Inc., a Delaware
corporation ("Sunrise"), in favor of Bankers Trust Company, as Administrative
Agent for the Banks party to the Senior Subordinated Loan Agreement referred to
below (the "Administrative Agent"). Unless otherwise defined herein, all
capitalized terms used herein and defined in the Senior Subordinated Loan
Agreement are used herein as so defined.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, V.S.M. Acquisition Corp. ("Newco"), the lenders from time
to time party thereto, and the Administrative Agent have entered into a Senior
Subordinated Loan Agreement, dated as of December 6, 2000 (as amended, modified
or supplemented from time to time, the "Senior Subordinated Loan Agreement"),
providing for the making of Loans to the Borrower as contemplated therein;
WHEREAS, on the Merger Date and after giving effect to the Merger
and the Credit Events occurring on such date, Newco merged with and into
Sunrise, with Sunrise being the surviving corporation of such merger; and
WHEREAS, Sunrise desires to acknowledge that, upon the consummation
of the Merger, Sunrise has assumed all rights, obligations, duties and
liabilities of Newco under the Senior Subordinated Loan Agreement, the Notes
issued thereunder and the other Credit Documents to which Newco is a party;
NOW, THEREFORE, it is agreed:
1. Sunrise, as the surviving corporation of the Merger, hereby
acknowledges that it (i) has assumed all rights, obligations, duties and
liabilities of Newco under the Senior Subordinated Loan Agreement, the Notes
issued thereunder and the other Credit Documents to which Newco is a party and
(ii) shall be the "Borrower" for all purposes under the Senior Subordinated Loan
Agreement and the other Credit Documents and all references in the Senior
Subordinated Loan Agreement and the other Credit Documents to the "Borrower"
shall be deemed to be references to Sunrise.
2. To induce the Administrative Agent to enter into this Agreement,
Sunrise hereby represents, warrants and agrees on and after the date hereof,
Sunrise will fully and faithfully perform all obligations (including payment
obligations and compliance with all covenants) of the "Borrower" under the
Senior Subordinated Loan Agreement and the Notes delivered pursuant thereto, and
will fully and faithfully perform all of its obligations under any other Credit
Documents executed and delivered by it.
<PAGE>
Exhibit E
Pabe 2
3. This Agreement shall become effective as of the date first above
written, when each of the parties hereto shall have executed a copy hereof and
shall have delivered the same to the Administrative Agent.
4. This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall constitute
one and the same instrument. A complete set of counterparts shall be lodged with
Sunrise and the Administrative Agent.
5. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
* * * * *
<PAGE>
Exhibit E
Page 3
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
SUNRISE MEDICAL INC.
By:
-------------------------------
Name:
Title:
BANKERS TRUST COMPANY,
as Administrative Agent
By:
-------------------------------
Name:
Title:
<PAGE>
EXHIBIT F
[BORROWER] [VESTAR CAPITAL PARTNERS IV, L.P.] [SUNRISE MEDICAL INC.]
Officers' Certificate
I, the undersigned, [Chief Executive Officer/President/Chief
Financial Officer/Treasurer/Controller/Managing Director/Assistant
Treasurer/Vice President/Secretary/General Counsel] of [Borrower] [VCP IV]
[Sunrise Medical Inc.], a corporation organized and existing under the laws of
[the State of] [____________] (the "Company"), do hereby certify on behalf of
the Company, that:
This Certificate is furnished pursuant to the Senior Subordinated
Loan Agreement, dated as of December 6, 2000 among V.S.M. Acquisition Corp., the
Banks from time to time party thereto and Bankers Trust Company, as
Administrative Agent (such Senior Subordinated Loan Agreement, as in effect on
the date of this Certificate, being herein called the "Senior Subordinated Loan
Agreement"). Unless otherwise defined herein, capitalized terms used in this
Certificate shall have the meanings set forth in the Senior Subordinated Loan
Agreement.
The following named individuals are elected officers of the Company;
each holds the office of the Company set forth opposite his name and has held
such office since _______ __, ____.1 The signature written opposite the name and
title of each such officer is his or her correct signature.
<TABLE>
<CAPTION>
Name(2) Office Signature
------- ------ ---------
<S> <C> <C>
----------------------- ----------------------- ------------------------
----------------------- ----------------------- ------------------------
----------------------- ----------------------- ------------------------
</TABLE>
--------
(1) Insert a date prior to the time of any corporate action relating to the
Senior Subordinated Loan Agreement or any other Document.
(2) Include name, office and signature of each officer who will sign any Credit
Document, including the officer who will sign the certification at the end
of this Certificate.
<PAGE>
Exhibit F
Page 2
1. Attached hereto as Exhibit A is a certified copy of the
[Certificate][Articles] of Incorporation or other organizational documents, as
the case may be, of the Company as filed in the Office of the ______________
_____________ on _________ ___, _____, together with all amendments thereto
adopted through the date hereof.
2. Attached hereto as Exhibit B is a true and correct copy of the
By-Laws of the Company, together with all amendments thereto, which were duly
adopted and are in full force and effect on the date hereof, and have been in
effect since ___________, ___________.
3. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, ____ [by unanimous written
consent of the Board of Directors of the Company] [by a meeting of the Board of
Directors of the Company at which a quorum was present and acting throughout],
and said resolutions have not been rescinded, amended or modified. Except as
attached hereto as Exhibit C, no resolutions have been adopted by the Board of
Directors of the Company which deal with the execution, delivery or performance
of any of the Documents to which the Company is party.
[4. On the date hereof, all of the conditions in Sections 4.02,
4.07, 4.10 and 4.12 of the Senior Subordinated Loan Agreement have been
satisfied (except to the extent as to the acceptability of any items to the
Administrative Agent and/or the Required Banks or as to whether the
Administrative Agent and/or the Required Banks are satisfied with any of the
matters described in said Sections).
5. Attached hereto as Exhibit D is a true and correct list of (i)
all Shareholders' Agreements (ii) all Management Agreements (iii) any Employment
Agreements and (iv) all Affiliate Contracts of Holdings or Sunrise or any
Subsidiary of Holdings or Sunrise.
6. Attached hereto as Exhibit E are true and correct copies of all
Tender Offer Documents.
7. Attached hereto as Exhibit F are true and correct copies of all
documents governing the Equity Financing.
8. Attached hereto as Exhibit G are true and correct copies of all
documents governing the Senior Loan Documents.]3
[4. Attached hereto as Exhibit D are true and correct copies of all
Merger Documents.
------------
(3) Insert bracketed items 4-8 only for the Certificate delivered on the Closing
Date on behalf of the Borrower.
<PAGE>
Exhibit F
Page 3
5. Attached hereto as Exhibit E are true and correct copies of all
documents governing the Refinancing (other than the Transaction Documents
previously provided on the Closing Date).]4
[4.][6.][9.] On the date hereof, the representations and warranties
contained in the Senior Subordinated Loan Agreement and the other Credit
Documents, both before and after giving effect to each Credit Event to occur on
the date hereof and the application of the proceeds thereof, unless stated to
relate to a specific earlier date, in which case such representations and
warranties were true and correct in all material respects as of such earlier
date.
[5.][7.][10.] On the date hereof, no Default or Event of Default has
occurred and is continuing or would result from the Credit Events to occur on
the date hereof or from the application of the proceeds thereof, in each case
after giving effect thereto.
[6.][8.][11.] There is no pending proceeding for the dissolution or
liquidation of the Company or threatening its existence.
-------------
(4) Insert bracketed items 4-5 only for the Certificate delivered on the Merger
Date on behalf of Sunrise Medical, Inc.
<PAGE>
Exhibit F
Page 4
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
__________, 200_.
[BORROWER] [VESTAR CAPITAL PARTNERS
IV, L.P.] [SUNRISE MEDICAL INC.]
------------------------------
Name:
Title:
<PAGE>
Exhibit F
Page 5
I, the undersigned, [Secretary/Assistant Secretary] of the Company,
do hereby certify on behalf of the Company that:
1. [Name of Person making above certifications] is the duly elected
and qualified [President/Vice President] of the Company and the signature above
is his genuine signature.
2. The certifications made by [name of Person making above
certifications] on behalf of the Company in the third paragraph and in Items 1,
2, 3 and [6][8][11] above are true and correct.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day of
_____, 200_.
[BORROWER] [VESTAR CAPITAL PARTNERS
IV, L.P.] [SUNRISE MEDICAL INC.]
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT G
FORM OF SOLVENCY CERTIFICATE
----------------------------
To: the Administrative Agent
and each of the Banks party
to the Senior Subordinated Loan Agreement
referred to below
I, the undersigned, the Chief Financial Officer of V.S.M. Acquisition
Corp. (the "Borrower"), a corporation duly organized and existing under the laws
of the State of Delaware, do hereby certify on behalf of the Borrower that:
1. This Certificate is furnished pursuant to Section 6.12(g) of the
Senior Subordinated Loan Agreement, dated as of December 6, 2000, among the
Borrower, the Banks from time to time party thereto and Bankers Trust Company,
as Administrative Agent (such Senior Subordinated Loan Agreement, as in effect
on the date of this Certificate, being herein called, the "Senior Subordinated
Loan Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Senior Subordinated
Loan Agreement.
2. For purposes of this Certificate, the terms below shall have the
following definitions:
(a) "Fair Value" shall mean the amount at which the assets, in their
entirety, determined on a going concern basis of the Borrower (on a stand-alone
basis) and the Borrower and its Subsidiaries (on a consolidated basis) in each
case would change hands between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable knowledge of the
relevant facts, with neither being under any compulsion to act.
(b) "Present Fair Salable Value" shall mean the amount that could be
obtained by an independent willing seller from an independent willing buyer if
the assets of each of the Borrower (on a stand-alone basis) and the Borrower and
its Subsidiaries (on a consolidated basis) are sold in an arm's-length
transaction with reasonable promptness under present conditions for the sale of
comparable business enterprises.
The same methodology has been used in determining Fair Value and
Present Fair Salable Value.
(c) "New Financing" shall mean the indebtedness incurred or to
be incurred by the Borrower and its Subsidiaries under the Senior Loan Documents
(assuming the utilization
<PAGE>
Exhibit G
Page 2
by the Borrower of the Commitments under the Senior Credit Facility) and the
Senior Subordinated Loan Agreement.
(d) "Stated Liabilities" shall mean the recorded liabilities (including
Contingent Liabilities that would be recorded in accordance with generally
accepted accounting principles ("GAAP") consistently applied) of the Borrower
(on a stand-alone PRO FORMA basis after giving effect to the Transaction) and
the Borrower and its Subsidiaries (on a consolidated PRO FORMA basis after
giving effect to the Transaction) in each case at September 30, 2000, together
with (i) the net change in long-term debt (including current maturities) between
September 30, 2000 and the date hereof; and (ii) without duplication, the amount
of all New Financing.
(e) "Contingent Liabilities" shall mean the maximum estimated amount of
liability reasonably likely to result from pending litigation, asserted claims
and assessments, guarantees, uninsured risks and other contingent liabilities of
each of the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (on a consolidated basis) (exclusive of such Contingent Liabilities
to the extent reflected in Stated Liabilities).
(f) "Will be able to pay its Stated Liabilities and Contingent
Liabilities, as they mature," shall mean for the period from the date hereof
through the stated maturity of all New Financing, each of the Borrower (on a
stand-alone basis) and the Borrower and its Subsidiaries (on a consolidated
basis) will have sufficient assets and cash flow to pay its Stated Liabilities
and Contingent Liabilities as those liabilities mature or otherwise become
payable.
(g) "Will not have Unreasonably Small Capital" shall mean for the
period from the date hereof through the stated maturity of all New Financing,
each of the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (on a consolidated basis) in each case after all Indebtedness
(including the Loans) being incurred or assumed and Liens created in connection
therewith, is a going concern and has sufficient capital to ensure that it will
continue to be a going concern for such period and to remain a going concern.
3. For purposes of this Certificate, I, or officers of the Borrower
under my direction and supervision, have performed the following procedures as
of and for the periods set forth below:
(a) I have reviewed the financial statements of Sunrise and its
Subsidiaries referred to in Sections 5.05(a) of the Senior Subordinated Loan
Agreement.
(b) I have reviewed the September 30, 2000, unaudited PRO FORMA
consolidated balance sheet of Holdings and its Subsidiaries referred to in
Section 4.13 of the Senior Subordinated Loan Agreement after giving effect to
the incurrence of the New Financing.
(c) I have made inquiries of certain other officers of the Borrower and
its Subsidiaries that I deemed necessary as a foundation for this Certificate.
(d) I have read the Credit Documents (together with the Schedules and
Exhibits thereto).
<PAGE>
Exhibit G
Page 3
(e) With respect to Contingent Liabilities, I have made inquires of
certain other officials of the Borrower and its Subsidiaries that I deemed
necessary as a foundation for this Certificate.
(f) I have had the projections, which have been previously delivered to
the Banks, re-examined on the date hereof and considered the effect thereof on
any changes since the date of the preparation hereof and considered the effect
thereon of any changes since the date of the preparation thereof on the results
projected therein. After such review, I hereby certify that in my opinion such
projections were based on good faith estimates and assumptions, believed to be
reasonable at the time made, it being recognized that projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered thereby may differ materially from the projected results.
4. Based on and subject to the foregoing, I hereby certify on behalf of
the Borrower that, after giving effect to the New Financing, it is my opinion
that as of the date hereof (i) the Fair Value and Present Fair Salable Value of
the assets of the Borrower (on a stand alone basis) and of the Borrower and its
Subsidiaries (on a consolidated basis) exceeds its and their Stated Liabilities
and Contingent Liabilities; (ii) the Borrower (on a stand alone basis) and the
Borrower and its Subsidiaries (on a consolidated basis) will not have
Unreasonably Small Capital; and (iii) the Borrower (on a stand alone basis) and
the Borrower and its Subsidiaries (on a consolidated basis) will be able to pay
its Stated Liabilities and Contingent Liabilities as they mature or otherwise
become payable.
IN WITNESS WHEREOF, the Borrower has caused its duly authorized Chief
Financial Officer to execute and deliver this ___ day of _________, ____.
V.S.M. ACQUISITION CORP.
By
---------------------------------
Name:
Title: Chief Financial Officer
<PAGE>
Exhibit H
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
Date: ________,__
Reference is made to the Senior Subordinated Loan Agreement described
in Item 2 of Annex I annexed hereto (as such Senior Subordinated Loan Agreement
may hereafter be amended, supplemented or otherwise modified from time to time,
the "Senior Subordinated Loan Agreement"). Unless defined in Annex I hereto,
terms defined in the Senior Subordinated Loan Agreement are used herein as
therein defined. __________________ (the "Assignor") and __________________ (the
"Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Senior Subordinated Loan Agreement as of the date hereof which
represents the percentage interest specified in Item 4 of Annex I hereto (the
"Assigned Share") of all of the outstanding rights and obligations under the
Senior Subordinated Loan Agreement relating to the facility listed in Item 4 of
Annex I hereto, including, without limitation, (i) in the case of any assignment
of all or any portion of the outstanding Loans, all rights and obligations with
respect to the Assigned Share of all then outstanding Loans and (ii) in the case
of any assignment of all or any portion of the Total Commitment, all rights and
obligations with respect to the Assigned Share of the Total Commitment. After
giving effect to such sale and assignment, the Assignee's Commitment and the
amount of the outstanding Loans owing to the Assignee will be as set forth in
Item 4 of Annex I hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Senior
Subordinated Loan Agreement or the other Credit Documents or the execution,
legality, validity, enforceability, genuineness, sufficiency, or value of the
Senior Subordinated Loan Agreement or the other Credit Documents or any other
instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Credit Parties of any of their obligations under the Senior Subordinated Loan
Agreement or the other Credit Documents to which they are a party or any other
instrument or document furnished pursuant thereto.
<PAGE>
Exhibit H
Page 2
3. The Assignee (i) confirms that it has received a copy of the Senior
Subordinated Loan Agreement and the other Credit Documents, together with copies
of the financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Senior Subordinated Loan Agreement; (iii)
confirms that it is an Eligible Transferee under the Senior Subordinated Loan
Agreement; (iv) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the Senior
Subordinated Loan Agreement and the other Credit Documents as are delegated to
the Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; [and] (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Senior Subordinated Loan Agreement are required to be performed by it as a
Bank[; and (vi) to the extent legally entitled to do so, attaches the forms
described in Section 3.04(b)(ii) of the Senior Subordinated Loan Agreement].(1)
4. Following the execution of this Assignment and Assumption Agreement
by the Assignor and the Assignee, an executed original hereof (together with all
attachments) will be delivered to the Administrative Agent. The effective date
of this Assignment and Assumption Agreement shall be the date of execution
hereof by the Assignor and the Assignee and the receipt of the consent of the
Administrative Agent and, so long as no Event of Default then exists, the
Borrower pursuant to Section 12.04(b) of the Senior Subordinated Loan Agreement
and receipt by the Administrative Agent of the assignment fee referred to in
such Section 12.04(b) (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to the
Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Senior Subordinated Loan Agreement and, to the extent provided in
this Assignment and Assumption Agreement, have the rights and obligations of a
Bank thereunder and under the other Credit Documents and (ii) the Assignor
shall, to the extent provided in this Assignment and Assumption Agreement,
relinquish its rights and be released from its obligations under the Senior
Subordinated Loan Agreement and the other Credit Documents.
6. It is agreed that the Assignee shall be entitled to all interest on
the Assigned Share of the Loans at the rates specified in Item 6 of Annex I
which accrue on and after the Settlement Date, such interest to be paid by the
Administrative Agent directly to the Assignee. It is further agreed that all
payments of principal made on the Assigned Share of the Loans which occur on and
after the Settlement Date will be paid directly by the Administrative
-----------------
(1) Include bracketed language if the Assignee is organized under the laws
of a jurisdiction outside the United States.
<PAGE>
Exhibit H
Page 3
Agent to the Assignee. Upon the Settlement Date, the Assignee shall pay to the
Assignor an amount specified by the Assignor in writing which represents the
Assigned Share of the principal amount of the respective Loans made by the
Assignor incurred pursuant to the Senior Subordinated Loan Agreement which are
outstanding on the Settlement Date, net of any closing costs, and which are
being assigned hereunder. The Assignor and the Assignee shall make all
appropriate adjustments in payments under the Senior Subordinated Loan Agreement
for periods prior to the Settlement Date directly between themselves on the
Settlement Date.
<PAGE>
Exhibit H
Page 4
7. THIS BANK ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR],
of _________, __ ___ as Assignor
By
-----------------------------
Name:
Title:
[NAME OF ASSIGNEE],
as Assignee
By
-----------------------------
Name:
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY, as
Administrative Agent
By
---------------------------
Name:
Title:
[V.S.M. ACQUISITION CORP.]
[SUNRISE MEDICAL INC.]
By
---------------------------
Name:
Title:
<PAGE>
ANNEX I
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
1. Borrower: shall mean (i) prior to the Merger Date, V.S.M. Acquisition
Corp. and (ii) on and after the Merger Date, Sunrise Medical Inc. as
the surviving corporation of the Merger.
2. Name and Date of Senior Subordinated Loan Agreement:
Senior Subordinated Loan Agreement, dated as of December 6, 2000, among
V.S.M. Acquisition Corp., the Banks from time to time party thereto and
Bankers Trust Company, as Administrative Agent.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
<TABLE>
<CAPTION>
Outstanding Total
Principal COMMITMENT
of LOANS
<S> <C> <C>
a. Aggregate
Amount for
all Banks $ ________ $ _________
b. Assigned ________% _________%
Share2
c. Amount of
Assigned
Share $ ________ $ _________
</TABLE>
5. Settlement Date:
6. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the
Senior Subordinated Loan Agreement (unless
otherwise agreed to by the Assignor and the
Assignee)2
-------------------
(1) Percentage taken to 12 decimal places.
<PAGE>
Annex I
Page 2
7. Notice Information for Assignor:
ASSIGNOR:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Attention:
Telephone:
Telecopier:
Reference:
----------------------------
(...continued)
2 The Borrower and the Administrative Agent shall direct the entire
amount of the interest to the Assignee at the rate set forth in Section
1.08 of the Senior Subordinated Loan Agreement, with the Assignor and
Assignee effecting the agreed upon sharing of the interest through
payments by the Assignee to the Assignor.
<PAGE>
Annex I
Page 3
Payment Instructions for Assignor:
ASSIGNOR:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Attention:
Reference:
<PAGE>
Annex I
Page 4
Notice Information for Assignee:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Attention:
Telephone:
Telecopier:
Reference:
Payment Instructions for Assignee:
-----------------------------
-----------------------------
-----------------------------
-----------------------------
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE]
By
----------------------------
----------------------------
(Print Name and Title)
[NAME OF ASSIGNOR]
By
----------------------------
----------------------------
(Print Name and Title)
<PAGE>
EXHIBIT I
FORM OF PERMITTED SELLER NOTE
$_______________ New York, New York
[DATE]
FOR VALUE RECEIVED, V.S.M. HOLDINGS, INC., a Delaware corporation
("Holdings"), hereby promises to pay to _____________ or [his] [her] [its]
assigns (the "Payee"), in lawful money of the United States of America in
immediately available funds, at ____________________, the principal sum of
____________________ DOLLARS, which amount shall be payable on December 31,
2009.
Holdings promises also to pay interest on the unpaid principal
amount hereof in like money at said office from the date hereof until paid at a
rate per annum equal to ___________________, such interest to be paid quarterly
on ______________________, ______________________, ______________________ and
________________ of each year and at maturity hereof.
This Note is subject to voluntary prepayment, in whole or in part,
at any time at the option of Payor, without premium or penalty. Each such
prepayment shall be applied to accrued but unpaid interest and then the next
installment(s) in principal becoming due.
This Note is issued pursuant to a ________________ Purchase
Agreement dated ______ __, ____ (the "Agreement"), between [Sunrise Medical
Inc.] and the vendors of ________________. This Note is subject to the
provisions of the Agreement, including, without limitation, adjustment of, and
offset to the principal amount pursuant to the Agreement.
If an Event of Default (as hereinafter defined) shall have occurred
and be continuing, then, at the option of the holder hereof, and subject to the
terms and conditions set forth on Annex A, this Note shall upon presentment
become immediately due and payable.
An "Event of Default" shall be deemed to have occurred hereunder if
(a) Holdings shall fail to make any payment under this Note in full when due and
such failure shall not be cured within twenty (20) days following receipt of
written notice thereof; or (b) any proceeding shall be commenced by Holdings, as
debtor, under any bankruptcy, reorganization, insolvency, readjustment of debt,
arrangement, receivership or liquidation law or statute, and such proceeding is
not dismissed within 90 days or is not timely controverted in good faith and on
reasonable grounds by Holdings or an order of relief is granted in such
proceedings.
This Note, and Holdings' obligations hereunder, shall be subordinate
and junior to all indebtedness of Holdings constituting Senior Indebtedness (as
defined in Section 1.07 of Annex A attached hereto) on the terms and conditions
set forth in Annex A attached hereto, which Annex A is herein incorporated by
reference and made a part hereof as if set forth herein in its entirety.
<PAGE>
Exhibit I
Page 2
This Note, and Holdings' obligations hereunder, shall be equal in
priority with all other Permitted Acquisition Indebtedness (as hereinafter
defined) including, without limitation, all interest incurred in relation
thereto of Holdings. "Permitted Acquisition Indebtedness" shall mean all
indebtedness of Holdings incurred in full or partial payment for the assets or
stock associated with a business acquired by Holdings or any of its Subsidiaries
prior to the date of this Note or at any future time except Senior Indebtedness
(as defined in Section 1.07 of Annex A attached hereto).
Holdings hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK.
V.S.M. HOLDINGS, INC.
By:
---------------------------------
Name:
Title:
<PAGE>
Annex A to
EXHIBIT I
Section 1.01. SUBORDINATION OF LIABILITIES. V.S.M. Holdings, Inc.
("Holdings"), for itself, its successors and assigns, covenants and agrees, and
each holder of the Note to which this Annex A is attached (the "Note") by its
acceptance thereof likewise covenants and agrees, that the payment of the
principal of, interest on, and all other amounts owing in respect of, the Note
(the "Subordinated Indebtedness") is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full in
cash of all Senior Indebtedness (as defined in Section 1.07 of this Annex A).
The provisions of this Annex A are made for the benefit of the present and
future holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such, and they
and/or each of them may proceed to enforce such provisions.
Section 1.02. HOLDINGS NOT TO MAKE PAYMENTS WITH RESPECT TO
SUBORDINATED INDEBTEDNESS IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of any
Senior Indebtedness (including interest thereon or fees or any other amounts
owing in respect thereof), whether at stated maturity, by acceleration or
otherwise, all Obligations (as defined in Section 1.07 of this Annex A) owing in
respect thereof, in each case to the extent due and owing, shall first be paid
in full in cash, before any payment, whether in cash, property, securities or
otherwise, is made on account of the Subordinated Indebtedness.
(b) Holdings may not, directly or indirectly, make any payment of
any Subordinated Indebtedness and may not acquire any Subordinated Indebtedness
for cash or property until all Senior Indebtedness has been paid in full in cash
if any default or event of default under the Credit Agreement (as defined in
Section 1.07 of this Annex A) or any other issue of Senior Indebtedness is then
in existence or would result therefrom. Each holder of the Note hereby agrees
that, so long as any such default or event of default in respect of any issue of
Senior Indebtedness exists, it will not sue for, or otherwise take any action to
enforce Holdings' obligations to pay, amounts owing in respect of the Note. Each
holder of the Note understands and agrees that to the extent that the provisions
of clause (a) or (b) of this Section 1.02 prohibits the payment of interest
and/or principal under the Note, in either case, such unpaid amount shall not
constitute a payment default under the Note and the holder of the Note may not
sue for, or otherwise take action to enforce Holdings' obligation to pay such
amount, PROVIDED that such unpaid principal or interest shall remain an
obligation of Holdings to the holder of the Note pursuant to the terms of the
Note.
(c) In the event that notwithstanding the provisions of the
preceding subsections (a) and (b) of this Section 1.02, Holdings shall make any
payment on account of the Subordinated Indebtedness at a time when payment is
not permitted by said subsection (a) or (b), such payment shall be held by the
holder of the Note, in trust for the benefit of, and shall be paid forthwith
over and delivered to, the holders of Senior Indebtedness or their
representative or the trustee under the indenture or other agreement pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application pro rata to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash in accordance with the terms of such
Senior
<PAGE>
Annex A to
Exhibit I
Page 2
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness. Without in any way modifying the
provisions of this Annex A or affecting the subordination effected hereby,
Holdings shall give the holder of the Note prompt written notice of any event
which would prevent payments under Section 1.02(a) or (b) hereof.
Section 1.03. SUBORDINATION TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF HOLDINGS. Upon any
distribution of assets of Holdings upon dissolution, winding up, liquidation or
reorganization of Holdings (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled
to receive payment in full in cash of all Senior Indebtedness (including,
without limitation, post-petition interest at the rate provided in the
documentation with respect to the Senior Indebtedness, whether or not such
post-petition interest is an allowed claim against the debtor in any bankruptcy
or similar proceeding) before the holder of the Note is entitled to receive any
payment of any kind or character on account of the Subordinated Indebtedness;
(b) any payment or distributions of assets of Holdings of any kind
or character, whether in cash, property or securities to which the holder of the
Note would be entitled except for the provisions of this Annex A, shall be paid
by the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any such Senior Indebtedness
may have been issued, to the extent necessary to make payment in full in cash of
all Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of Holdings of any kind
or character, whether in cash, property or securities, shall be received by the
holder of the Note on account of Subordinated Indebtedness before all Senior
Indebtedness is paid in full in cash, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders of the
Senior Indebtedness remaining unpaid or unprovided for or their representative
or representatives, or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Senior Indebtedness may have been
issued, for application to the payment of such Senior Indebtedness until all
such Senior Indebtedness shall have been paid in full in cash, after giving
effect to any concurrent payment or distribution to the holders of such Senior
Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby, Holdings shall give prompt written
notice to the holder of the Note of any dissolution, winding up, liquidation or
reorganization of Holdings (whether in bankruptcy, insolvency or receivership
proceedings or upon assignment for the benefit of creditors or otherwise).
<PAGE>
Annex A to
Exhibit I
Page 3
Section 1.04. SUBROGATION. Subject to the prior payment in full in
cash of all Senior Indebtedness, the holder of the Note shall be subrogated to
the rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of Holdings applicable to the Senior Indebtedness until
all amounts owing on the Note shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of Holdings or by or on behalf of the holder of the
Note by virtue of this Annex A which otherwise would have been made to the
holder of the Note shall, as between Holdings, its creditors other than the
holders of Senior Indebtedness, and the holder of the Note, be deemed to be
payment by Holdings to or on account of the Senior Indebtedness, it being
understood that the provisions of this Annex A are and are intended solely for
the purpose of defining the relative rights of the holder of the Note, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
Section 1.05. OBLIGATION OF HOLDINGS UNCONDITIONAL. Nothing
contained in this Annex A or in the Note is intended to or shall impair, as
between Holdings and the holder of the Note, the obligation of Holdings, which
is absolute and unconditional, to pay to the holder of the Note the principal of
and interest on the Note as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holder of the Note and creditors of Holdings other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the holder of the Note from exercising all remedies otherwise permitted by
applicable law upon an event of default under the Note, subject to the
provisions of this Annex A and the rights, if any, under this Annex A of the
holders of Senior Indebtedness in respect of cash, property, or securities of
Holdings received upon the exercise of any such remedy. Upon any distribution of
assets of Holdings referred to in this Annex A, the holder of the Note shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of the
Note, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other indebtedness
of Holdings, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Annex A.
Section 1.06. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS
OF HOLDINGS OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of Holdings or by any act or failure to act in good faith by any
such holder, or by any noncompliance by Holdings with the terms and provisions
of the Note, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of the Senior Indebtedness may,
without in any way affecting the obligations of the holder of the Note with
respect hereto, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment of, change or extend
the time of payment of, or renew or alter, any Senior Indebtedness or amend,
modify, or supplement any agreement or instrument governing or evidencing such
Senior Indebtedness or any other document referred to therein, or exercise or
refrain from exercising any other of their
<PAGE>
Annex A to
Exhibit I
Page 4
rights under the Senior Indebtedness including, without limitation, the waiver
of default thereunder and the release of any collateral securing such Senior
Indebtedness, all without notice to or assent from the holder of the Note.
Section 1.07. SENIOR INDEBTEDNESS. The term "Senior Indebtedness"
shall mean all Obligations (as defined below) (i) of Holdings under, or in
respect of, the Credit Agreement (as amended, modified, supplemented, extended,
restated, refinanced, replaced or refunded from time to time, the "Credit
Agreement"), dated as of December 6, 2000, among Holdings, V.S.M. Acquisition
Corp. ("Newco"), the banks from time to time party thereto, and Bankers Trust
Company, as Administrative Agent, and the other Credit Documents (as defined in
the Credit Agreement), and any renewal, extension, restatement, refinancing or
refunding thereof and (ii) under, or in respect of, any Interest Rate Protection
Agreements or Other Hedging Agreements (each as defined in the Credit
Agreement). As used herein, the term "Obligation" shall mean any principal,
interest, premium, penalties, fees, expenses, indemnities and other liabilities
and obligations payable under the documentation governing any Senior
Indebtedness (including post-petition interest of the rate provided in the
documentation with respect to such Senior Indebtedness, whether or not such
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding).
<PAGE>
EXHIBIT J
FORM OF SHAREHOLDER SUBORDINATED NOTE
-------------------------------------
$_______________ New York, New York
[DATE]
FOR VALUE RECEIVED, V.S.M. HOLDINGS, INC., a Delaware corporation
("Holdings"), hereby promises to pay to _____________ or [his] [her] [its]
assigns (the "Payee"), in lawful money of the United States of America in
immediately available funds, at ____________________, the principal sum of
____________________ DOLLARS, which amount shall be payable on December 31,
2000.
[Holdings promises also to pay interest on the unpaid principal amount
hereof in like money at said office from the date hereof until paid at a rate
per annum equal to ___________________, such interest to be paid [quarterly]
[semi- annually] [annually] on ______________________ [and ________________] of
each year and at maturity hereof.]
This Note is subject to voluntary prepayment, in whole or in part, at
the option of Payor, without premium or penalty.
Notwithstanding anything to the contrary contained in this Note, the
Payee understands and agrees that Holdings shall not be required to make, and
shall not make, any payment of principal, interest or other amounts on this Note
to the extent that such payment is prohibited by the terms of any Senior
Indebtedness.
This Note, and Holdings' obligations hereunder, shall be subordinate
and junior to all indebtedness of Holdings constituting Senior Indebtedness (as
defined in Section 1.07 of Annex A attached hereto) on the terms and conditions
set forth in Annex A attached hereto, which Annex A is herein incorporated by
reference and made a part hereof as if set forth herein in its entirety.
Holdings hereby waives presentment, demand, protest or notice of any
kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
<PAGE>
Exhibit J
Page 2
V.S.M. HOLDINGS, INC.
By:
---------------------------
Name:
Title:
<PAGE>
Annex A to
EXHIBIT J
Section 1.01. SUBORDINATION OF LIABILITIES. V.S.M. Holdings, Inc.
("Holdings"), for itself, its successors and assigns, covenants and agrees, and
each holder of the Note to which this Annex A is attached (the "Note") by its
acceptance thereof likewise covenants and agrees, that the payment of the
principal of, interest on, and all other amounts owing in respect of, the Note
(the "Subordinated Indebtedness") is hereby expressly subordinated, to the
extent and in the manner hereinafter set forth, to the prior payment in full in
cash of all Senior Indebtedness (as defined in Section 1.07 of this Annex A).
The provisions of this Annex A are made for the benefit of the present and
future holders of Senior Indebtedness, and such holders are hereby made obligees
hereunder the same as if their names were written herein as such, and they
and/or each of them may proceed to enforce such provisions.
Section 1.02. HOLDINGS NOT TO MAKE PAYMENTS WITH RESPECT TO
SUBORDINATED INDEBTEDNESS IN CERTAIN CIRCUMSTANCES. (a) Upon the maturity of any
Senior Indebtedness (including interest thereon or fees or any other amounts
owing in respect thereof), whether at stated maturity, by acceleration or
otherwise, all Obligations (as defined in Section 1.07 of this Annex A) owing in
respect thereof, in each case to the extent due and owing, shall first be paid
in full in cash, before any payment, whether in cash, property, securities or
otherwise, is made on account of the Subordinated Indebtedness.
(b) Until all Senior Indebtedness has been paid in full in cash and all
commitments in respect of such Senior Indebtedness have been terminated, the sum
of all payments in respect of the Note (including principal and interest),
together with the sum of (i) all payments made under all other Shareholder
Subordinated Notes and (ii) all payments made by Holdings and its Subsidiaries
to redeem or repurchase stock or options to purchase stock of Holdings held by
employees or former employees of Holdings and its Subsidiaries shall not exceed
at any time that amount permitted by the terms of the respective issue of Senior
Indebtedness.
(c) Holdings may not, directly or indirectly, make any payment of any
Subordinated Indebtedness and may not acquire any Subordinated Indebtedness for
cash or property until all Senior Indebtedness has been paid in full in cash if
any default or event of default under the Credit Agreement (as defined in
Section 1.07 of this Annex A) or any other issue of Senior Indebtedness is then
in existence or would result therefrom. Each holder of the Note hereby agrees
that, so long as any such default or event of default in respect of any issue of
Senior Indebtedness exists, it will not sue for, or otherwise take any action to
enforce Holdings' obligations to pay, amounts owing in respect of the Note. Each
holder of the Note understands and agrees that to the extent that clause (b) of
this Section 1.02 reduces the payment of interest and/or principal which would
otherwise be payable under the Note but for the limitations set forth in such
clause (b), or that the provisions of clause (a) or (c) of this Section 1.02
prohibits the payment of interest and/or principal under the Note, in either
case, such unpaid amount shall not constitute a payment default under the Note
and the holder of the Note may not sue for, or otherwise take action to enforce
Holdings' obligation to pay such amount, PROVIDED that such unpaid principal or
interest shall remain an obligation of Holdings to the holder of the Note
pursuant to the terms of the Note.
<PAGE>
Annex A to
Exhibit J
Page 2
(d) In the event that notwithstanding the provisions of the preceding
subsections (a), (b) and (c) of this Section 1.02, Holdings shall make any
payment on account of the Subordinated Indebtedness at a time when payment is
not permitted by said subsection (a), (b) or (c), such payment shall be held by
the holder of the Note, in trust for the benefit of, and shall be paid forthwith
over and delivered to, the holders of Senior Indebtedness or their
representative or the trustee under the indenture or other agreement pursuant to
which any instruments evidencing any Senior Indebtedness may have been issued,
as their respective interests may appear, for application pro rata to the
payment of all Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. Without in any way
modifying the provisions of this Annex A or affecting the subordination effected
hereby, Holdings shall give the holder of the Note prompt written notice of any
event which would prevent payments under Section 1.02(a), (b) or (c) hereof.
Section 1.03. SUBORDINATION TO PRIOR PAYMENT OF ALL SENIOR INDEBTEDNESS
ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF HOLDINGS. Upon any distribution
of assets of Holdings upon dissolution, winding up, liquidation or
reorganization of Holdings (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including, without
limitation, post-petition interest at the rate provided in the documentation
with respect to the Senior Indebtedness, whether or not such post-petition
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding) before the holder of the Note is entitled to receive any payment of
any kind or character on account of the Subordinated Indebtedness;
(b) any payment or distributions of assets of Holdings of any kind or
character, whether in cash, property or securities to which the holder of the
Note would be entitled except for the provisions of this Annex A, shall be paid
by the liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or other trustee or agent, directly to the holders of Senior Indebtedness or
their representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any such Senior Indebtedness
may have been issued, to the extent necessary to make payment in full in cash of
all Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution to the holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of this
Section 1.03, any payment or distribution of assets of Holdings of any kind or
character, whether in cash, property or securities, shall be received by the
holder of the Note on account of Subordinated Indebtedness before all Senior
Indebtedness is paid in full in cash, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders of the
Senior
<PAGE>
Annex A to
Exhibit J
Page 3
Indebtedness remaining unpaid or unprovided for or their representative or
representatives, or to the trustee or trustees under any indenture under which
any instruments evidencing any of such Senior Indebtedness may have been issued,
for application to the payment of such Senior Indebtedness until all such Senior
Indebtedness shall have been paid in full in cash, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
Without in any way modifying the provisions of this Annex A or
affecting the subordination effected hereby, Holdings shall give prompt written
notice to the holder of the Note of any dissolution, winding up, liquidation or
reorganization of Holdings (whether in bankruptcy, insolvency or receivership
proceedings or upon assignment for the benefit of creditors or otherwise).
Section 1.04. SUBROGATION. Subject to the prior payment in full in cash
of all Senior Indebtedness, the holder of the Note shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of assets of Holdings applicable to the Senior Indebtedness until
all amounts owing on the Note shall be paid in full, and for the purpose of such
subrogation no payments or distributions to the holders of the Senior
Indebtedness by or on behalf of Holdings or by or on behalf of the holder of the
Note by virtue of this Annex A which otherwise would have been made to the
holder of the Note shall, as between Holdings, its creditors other than the
holders of Senior Indebtedness, and the holder of the Note, be deemed to be
payment by Holdings to or on account of the Senior Indebtedness, it being
understood that the provisions of this Annex A are and are intended solely for
the purpose of defining the relative rights of the holder of the Note, on the
one hand, and the holders of the Senior Indebtedness, on the other hand.
Section 1.05. OBLIGATION OF HOLDINGS UNCONDITIONAL. Nothing contained
in this Annex A or in the Note is intended to or shall impair, as between
Holdings and the holder of the Note, the obligation of Holdings, which is
absolute and unconditional, to pay to the holder of the Note the principal of
and interest on the Note as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holder of the Note and creditors of Holdings other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
the holder of the Note from exercising all remedies otherwise permitted by
applicable law upon an event of default under the Note, subject to the
provisions of this Annex A and the rights, if any, under this Annex A of the
holders of Senior Indebtedness in respect of cash, property, or securities of
Holdings received upon the exercise of any such remedy. Upon any distribution of
assets of Holdings referred to in this Annex A, the holder of the Note shall be
entitled to rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding up, liquidation or
reorganization proceedings are pending, or a certificate of the liquidating
trustee or agent or other person making any distribution to the holder of the
Note, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other indebtedness
of Holdings, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this Annex A.
<PAGE>
Annex A to
Exhibit J
Page 4
Section 1.06. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
HOLDINGS OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or future
holders of any Senior Indebtedness to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of Holdings or by any act or failure to act in good faith by any
such holder, or by any noncompliance by Holdings with the terms and provisions
of the Note, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of the Senior Indebtedness may,
without in any way affecting the obligations of the holder of the Note with
respect hereto, at any time or from time to time and in their absolute
discretion, change the manner, place or terms of payment of, change or extend
the time of payment of, or renew or alter, any Senior Indebtedness or amend,
modify, or supplement any agreement or instrument governing or evidencing such
Senior Indebtedness or any other document referred to therein, or exercise or
refrain from exercising any other of their rights under the Senior Indebtedness
including, without limitation, the waiver of default thereunder and the release
of any collateral securing such Senior Indebtedness, all without notice to or
assent from the holder of the Note.
Section 1.07. SENIOR INDEBTEDNESS. The term "Senior Indebtedness" shall
mean all Obligations (as defined below) (i) of Holdings under, or in respect of,
the Credit Agreement (as amended, modified, supplemented, extended, restated,
refinanced, replaced or refunded from time to time, the "Credit Agreement"),
dated as of December 6, 2000, among Holdings, V.S.M. Acquisition Corp.
("Newco"), the banks from time to time party thereto, and Bankers Trust Company,
as Administrative Agent and the other Credit Documents (as defined in the Credit
Agreement), and any renewal, extension, restatement, refinancing or refunding
thereof, and (ii) under, or in respect of, any Interest Rate Protection
Agreements or Other Hedging Agreements (each as defined in the Credit
Agreement). As used herein, the term "Obligation" shall mean any principal,
interest, premium, penalties, fees, expenses, indemnities and other liabilities
and obligations payable under the documentation governing any Senior
Indebtedness (including post-petition interest of the rate provided in the
documentation with respect to such Senior Indebtedness, whether or not such
interest is an allowed claim against the debtor in any bankruptcy or similar
proceeding).
