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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported): November 12, 1999
STERICYCLE, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-21229 36-3640402
(State or other juris- (Commission file (IRS employer
diction of incorporation) number) identification number)
28161 North Keith Drive
Lake Forest, Illinois 60045
(Address of principal executive offices)
Registrant's telephone number, including area code: (847) 367-5910
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ITEM 2. Acquisition or Disposition of Assets
On November 12, 1999, Stericycle, Inc. (the "Company") completed its
pending acquisition from Allied Waste Industries, Inc. ("Allied") of the medical
waste business of Browning-Ferris Industries, Inc. ("BFI") in the United States,
Canada and Puerto Rico. Allied had acquired BFI in a merger completed in July
1999. The Company previously reported this pending acquisition from Allied by
Current Reports on Form 8-K filed on April 13, 1999 and October 25, 1999.
The purchase price for the Company's acquisition of BFI's medical waste
business was $410.5 million in cash. The Company paid the purchase price from
the following sources, in addition to cash on hand: (i) $225.0 million in
borrowings under the term loan facilities of a new senior credit facility that
the Company established with DLJ Capital Funding, Inc., Bankers Trust Company
and Bank of America, N.A.; (ii) $125.0 million in proceeds from the sale of
12-3/8% senior subordinated notes due 2009; and (iii) $75.0 in proceeds from the
issuance of new Series A convertible preferred stock to investment funds
affiliated with Bain Capital, Inc. and Madison Dearborn Partners, Inc. These
transactions were completed concurrently with the completion of the Company's
acquisition. The Company previously reported its contemplated issuance of the
new convertible preferred stock by Current Reports on Form 8-K filed on August
20, 1999 and October 15, 1999.
There is no material relationship between the Company (or any officer,
director or affiliate of the Company or any associate of any such officer or
director) and Allied. The Company intends to use the assets of the BFI medical
waste business in the conduct of the Company's own medical waste business.
ITEM 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
It is impracticable at present to file any of the financial statements
for the business to be acquired that are required to be filed for the periods
specified in Rule 3-05 of Regulation S-X (17 C.F.R. 210.3-05(b)).The Company
intends to file these financial statements by an amended Report on
Form 8-K/A as soon as practicable.
(b) Pro Forma Financial Information
It is impracticable at present to file any of the pro forma financial
information that is required to be filed pursuant to Article 11 of Regulation
S-X. The Company intends to file this financial information by an amended Report
on Form 8-K/A as soon as practicable.
(c) Exhibits
The following exhibits are filed with this Report:
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EXHIBIT NO. DESCRIPTION
2.1 Second Amendment to Stock Purchase Agreement, dated as of
November 12, 1999, between Allied Waste Industries, Inc. and
the Company
3.1 First Certificate of Amendment to Amended and Restated
Certificate of Incorporation of the Company, filed in the office
of the Secretary of State of the State of Delaware on
November 4, 1999
3.2 Certificate of Designation Relating to Series A Convertible
Preferred Stock, Par Value $.01 Per Share, filed in the office
of the Secretary of State of the State of Delaware on November
4, 1999
4.1 Registration Rights Agreement, dated as of November 12,
1999, between the Company and certain investment funds
affiliated with Bain Capital, Inc. and Madison Dearborn
Partners, Inc.
10.1 Credit Agreement, dated as of November 12, 1999, among the
Company and DLJ Capital Funding, Inc., Bankers Trust Company
and Bank of America, N.A., as lenders and as (i) syndication
agent, lead arranger and book manager, (ii) documentation
agent for the lenders and (iii) administrative agent for the
lenders, respectively.
Exhibit 2.1 omits Exhibits A-M. In accordance with Item 601(b)(2) of Regulation
S-K (17 C.F.R. 229.601(b)(2)), the Company agrees to furnish supplementally a
copy of any omitted exhibit to the Commission upon its request.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: November 29, 1999.
STERICYCLE, INC.
By /s/ Frank J.M. ten Brink
-------------------------------
Frank J.M. ten Brink
Vice President, Finance
and Chief Financial Officer
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EXHIBIT INDEX
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
------- ----------- ----
2.1 Second Amendment to Stock Purchase Agreement,
dated as of November 12, 1999, between Allied Waste
Industries, Inc. and the Company............................
3.1 First Certificate of Amendment to Amended and
Restated Certificate of Incorporation of the Company,
filed in the office of the Secretary of State of the
State of Delaware on November 4, 1999.......................
3.2 Certificate of Designation Relating to Series A
Convertible Preferred Stock, Par Value $.01 Per Share,
filed in the office of the Secretary of State of the
State of Delaware on November 4, 1999.......................
4.1 Registration Rights Agreement, dated as of November
12, 1999, between the Company and certain
investment funds affiliated with Bain Capital, Inc. and
Madison Dearborn Partners, Inc..............................
10.1 Credit Agreement, dated as of November 12, 1999,
among the Company and DLJ Capital Funding, Inc., Bankers
Trust Company and Bank of America, N.A., as lenders
and as (i) syndication agent, lead arranger and book
manager, (ii) documentation agent for the lenders and (iii)
administrative agent for the lenders, respectively..........
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Exhibit 2.1
SECOND AMENDMENT TO
STOCK PURCHASE AGREEMENT
This Second Amendment to Stock Purchase Agreement (the "Amendment") is
entered into as of November 12, 1999 by Allied Waste Industries, Inc., a
Delaware corporation ("Seller"), and Stericycle, Inc., a Delaware corporation
("Buyer").
Recitals
A. Seller and Buyer are parties to a Stock Purchase Agreement dated as
of April 14, 1999, as amended by a First Amendment to Stock Purchase Agreement
dated as of October 22, 1999 (as so amended, the "Stock Purchase Agreement"),
pursuant to which Seller has agreed to sell and Buyer has agreed to purchase the
Company Shares.
B. Seller and Buyer desire to amend the Stock Purchase Agreement as
provided in this Amendment pursuant to the terms of Section 9.7(a) of the Stock
Purchase Agreement.
Now, therefore, in consideration of their mutual promises, the parties
agree as follows:
A. GENERAL
1. SELLER. Immediately prior to the Closing, the capital stock of the
Company will be distributed by the owners of such capital stock (i.e., the
various subsidiaries of Seller that have received or may receive capital stock
of the Company upon their contribution to the Company prior to the Closing of
their respective assets which together constitute the Business) to Allied Waste
North America, Inc. ("AWNA"). Upon such contribution to AWNA, AWNA shall become
the "Seller" under the Stock Purchase Agreement for purposes of selling the
Company Shares to Buyer and receiving payment for the Company Shares from Buyer;
but Allied Waste Industries, Inc. ("AW") shall remain a party to the Stock
Purchase Agreement, and AW and AWNA shall be jointly and severally liable for
Seller's performance of all of its liabilities, obligations and covenants under
the Stock Purchase Agreement. Buyer accepts and agrees to this addition of AWNA
as part of the "Seller" under the Stock Purchase Agreement.
2. EMPLOYEE BENEFITS. At the Closing, Seller and Buyer shall enter into
a letter agreement clarifying and amending Section 6.5 of the Stock Purchase
Agreement substantially in the form of the letter agreement attached as EXHIBIT
A. The provisions of this letter agreement shall control in the event of any
conflict or inconsistency with the provisions of the Stock Purchase Agreement.
3. EFFECTIVE DATE. The parties agree that Buyer's acquisition of the
Company Shares from Seller shall be considered to have been effective as of
November 1, 1999. Seller shall indemnify Buyer and the Company for (i) all
casualty losses suffered by the Business during the period after October 31,
1999 and prior to the Closing (the "Gap Period") and for (ii) all property
liability and personal injury claims of third parties against Buyer, the Company
or the Business by reason of events occurring during the Gap Period, subject in
the case of each occurrence to a deductible of $50,000.
4. WORKING CAPITAL ADJUSTMENT METHODOLOGY. The working capital
adjustment required by Section 1.4 of the Stock Purchase Agreement shall be made
in the following manner:
(a) All cash collected by the Company or Buyer after the Closing in
respect of services performed and billed by the Business prior to
November 1, 1999 shall be credited to Seller.
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(b) All accounts payable of the Business paid by the Company or
Buyer after the Closing for goods or services provided to the Business
prior to November 1, 1999 shall be credited to Buyer, subject to
proration between Seller and Buyer based on days elapsed for accounts
payable for goods or services provided over a period beginning before
and ending after November 1, 1999.
For purposes of Section 1.4 of the Stock Purchase Agreement, "Closing
Date Working Capital" shall mean the difference obtained by subtracting (i) the
amount credited to Buyer under (b) from (ii) the amount credited to Seller under
(a).
5. SECTION 338(H)(10) ELECTION. The parties agree that the computation
of the payment by Buyer to Seller on account of the Section 338(h)(10) election
or the transfers described in the recitals to the Stock Purchase Agreement, as
described in Section 6.12 to the Stock Purchase Agreement, shall be computed in
the manner required by Section 6.12 within 180 days following the Closing. Buyer
shall make the payment to Seller promptly after the amount thereof is computed.
B. TRANSFER MATTERS
1. CONNECTICUT BUSINESS. The parties desire to restructure Buyer's
acquisition of that portion of the Business located in the State of Connecticut
(the "Connecticut Business") from a contribution of the Connecticut Business to
the Company to a direct sale to Buyer of all of the issued and outstanding
capital stock of Seller's subsidiary, Browning-Ferris Industries of Connecticut,
Inc., a Delaware corporation ("BFI Connecticut"), which at the Closing shall own
all of the Connecticut Business. At the Closing, Seller shall deliver a
certificate or certificates representing all of the issued and outstanding
shares of capital stock of BFI Connecticut, duly endorsed (or accompanied by
duly executed stock powers) for transfer to Buyer, together with such other
documents as Buyer shall reasonably request (as provided in Section 2.3(c) of
the Stock Purchase Agreement). The sale of the capital stock of BFI Connecticut
shall in all other respects be governed by the terms and conditions of the Stock
Purchase Agreement.
2. PUERTO RICO BUSINESS. The parties desire to restructure Buyer's
acquisition of that portion of the Business located in the Commonwealth of
Puerto Rico (the "Puerto Rico Business") from a contribution of the Puerto Rico
Business to the Company to a direct sale to Buyer of all of the issued and
outstanding capital stock of BFI Medical Waste, Inc., a Puerto Rico corporation
("BFI Medical Waste (Puerto Rico)"), which at the Closing shall own all of the
Puerto Rico Business. At the Closing, Seller shall deliver a certificate or
certificates representing all of the issued and outstanding shares of capital
stock of BFI Medical Waste (Puerto Rico), duly endorsed (or accompanied by duly
executed stock powers) for transfer to Buyer, together with such other documents
as Buyer reasonably requests (as provided in Section 2.3(c) of the Stock
Purchase Agreement). The sale of the capital stock of BFI Medical Waste (Puerto
Rico) shall in all other respects be governed by the terms and conditions of the
Stock Purchase Agreement.
3. WASHINGTON BUSINESS. The parties desire to restructure Buyer's
acquisition of that portion of the Business located in the State of Washington
and conducted by Seller's subsidiary, BFI Medical Waste Systems of Washington,
Inc., a Washington corporation ("BFI Washington"), from a contribution of such
portion of the Business (the "Washington Business") to the Company to a direct
sale to Buyer's subsidiary, Stericycle of Washington, Inc., a Washington
corporation ("Stericycle of Washington"), of all of the issued and outstanding
capital stock of BFI Washington, which at the Closing shall own all of the
Washington Business. At the Closing, Seller shall deliver a certificate or
certificates representing all of the issued and outstanding shares of capital
stock of BFI Washington, duly endorsed (or accompanied by duly executed stock
powers) for transfer to Stericycle of Washington, together with such other
documents as Buyer reasonably requests (as provided in Section 2.3(c) of the
Stock Purchase Agreement). The sale of the capital stock of BFI Washington shall
in all other respects be governed by the terms and conditions of the Stock
Purchase Agreement.
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4. FERNDALE FACILITY. Notwithstanding anything to the contrary in the
Stock Purchase Agreement, none of the assets, liabilities or obligations
relating to or associated with the portion of the Business conducted at 1524
Slater Road, Ferndale, Washington (the "Ferndale Facility") shall be transferred
to the Company, including without limitation the 1996 Mack tractor, 1992
Fruehauf trailer and 1992 utility trailer. Seller, or BFI Waste Systems of North
America, Inc., or another subsidiary of Seller shall retain all of the assets
and retain or assume and satisfy or discharge all of the obligations and
liabilities related to the operation of the Ferndale Facility, and neither Buyer
nor Stericycle of Washington nor any of Buyer's other subsidiaries shall assume
or be considered to have assumed any of such obligations and liabilities. Buyer
shall cooperate with Seller and provide such reasonable non-financial assistance
to Seller as Seller may request to satisfy, negotiate the settlement of or
prosecute claims associated with the Ferndale Facility. The retention by Seller
of the obligations described in this paragraph, and the operation by Seller or a
subsidiary of Seller of an on-site autoclave at the Ferndale Facility and the
transfer and/or hauling of treated medical waste from the autoclave (but not any
related medical waste collection, solicitation of customers or other activities)
shall not constitute a violation of the covenant not to compete in Section 6.14
of the Stock Purchase Agreement.
In the event that Seller (or any subsidiary of Seller) intends to sell
any assets associated with the Ferndale Facility to a third party or to assign
or sublease to a third party any rights under any agreement, license, permit or
lease associated with the Ferndale Facility, Seller shall give Buyer written
notice of its intent and the essential terms of the proposed sale, assignment or
sublease that Seller would be willing to accept, and Buyer shall have the first
right to bid and negotiate for such purchase, assignment or sublease. To
exercise its right, Buyer must give written notice to Seller within 10 business
days after the date of Seller's notice, and thereafter the parties shall
negotiate in good faith regarding such sale, assignment or sublease. Seller
shall not be obligated to accept any offer of Buyer, but if it rejects Buyer's
offer it cannot accept an offer from a third party on terms better to the
offeror than Buyer's offer without again first offering Buyer the right to bid
and negotiate as provided in this paragraph.
5. NEW JERSEY BUSINESS. The parties desire to restructure Buyer's
acquisition of that portion of the Business located in the State of New Jersey
(the "New Jersey Business"), from a contribution of the New Jersey Business to
the Company to a direct sale of the assets comprising the New Jersey Business to
Buyer and Buyer's subsidiary, Environmental Control Company, Inc., a New York
corporation ("ECCO"). At the Closing, Seller shall deliver to Buyer or ECCO, as
the case may be, a general bill of sale and assignment, in form and substance
satisfactory to Buyer, selling, transferring and assigning to Buyer the assets
described on the attached EXHIBIT B-1 and selling, transferring and assigning to
ECCO the assets described on the attached EXHIBIT B-2, together with such other
separate instruments of sale, assignment or transfer as Buyer shall reasonably
request.
6. BRONX FACILITY. Prior to the Closing, Seller shall cause
Browning-Ferris Industries of New York, Inc. ("BFI New York") to contribute to
the Company the real property located at 910 East 138th Street, Bronx, New York
(the "Bronx Facility"), BFI New York's leasehold interest in the premises
adjacent to the Bronx Facility and, to the extent possible, all permits and
licenses associated with the Bronx Facility and the portion of the Business
currently and formerly conducted at the Bronx Facility. Buyer agrees that, to
the extent required in order to enable the Company lawfully to operate the Bronx
Facility as a transfer station, the Company shall comply with the terms,
conditions and provisions of the Order on Consent of the New York State
Department of Environmental Conservation (DEC File No. R2-0433-99-03) (the "DEC
Consent Order"), and shall not take any action which would cause Seller to be in
default under the obligations it has agreed to retain pursuant to the following
sentence. Seller shall retain and satisfy or discharge (and indemnify the
Company and Buyer against) (i) all financial and penalty obligations under Part
II or other provisions of the DEC Consent Order or the related Memorandum of
Understanding between BFI New York and the Office of the Bronx Borough
President), (ii) all obligations and liabilities to Bronx-Lebanon Hospital
Center ("BLHC"), including, but not limited to, all obligations and liabilities
arising under an Assumption and Assignment Agreement,
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dated as of May 31, 1995, between BLHC and BFI New York and an Indemnity
Agreement signed by BFI on June 17, 1998 and by BLHC on July 29, 1988) and (iii)
all obligations and liabilities related to the operation of the Bronx Facility
arising prior to or outstanding as of the Closing. Neither the Company nor Buyer
nor any of Buyer's affiliates shall assume or be considered to have assumed any
of such obligations and liabilities. Buyer shall cooperate with Seller and
provide such reasonable non-financial assistance to Seller as Seller reasonably
requests to satisfy or negotiate the settlement of all claims of BLHC or other
third parties associated with the Bronx Facility. As part of Buyer's assistance
in this regard, Buyer shall make the services of Richard Geisser available to
Seller, on a reasonable basis during regular business hours at no cost to
Seller, if and while Mr. Geisser is employed by Buyer or a subsidiary of Buyer
following the Closing. To enable BFI New York to comply with any contractual
obligations to BLHC, Buyer or a subsidiary of Buyer shall provide medical waste
collection and disposal services to BLHC for BFI New York on a direct cost,
pass-through basis for a period of six months following the Closing and
thereafter at a cost equal to the average rate for such services charged by
Buyer and its subsidiaries to large account customers in the New York City
metropolitan area. The provision of such medical waste collection and disposal
services to BLHC by BFI New York (through services actually provided by Buyer or
a subsidiary of Buyer) and Seller's retention of the obligations described in
this paragraph shall not constitute a violation of the covenant not to compete
in Section 6.14 of the Stock Purchase Agreement.
7. GRAND RAPIDS FACILITY. Notwithstanding anything to the contrary in
the Stock Purchase Agreement, none of the assets, liabilities or obligations
relating to or associated with the portion of the Business conducted at 1040
Market Street N.W., Grand Rapids, Michigan (the "Grand Rapids Facility"), shall
be transferred to the Company except for the trucks and containers used in the
related hauling operation. Seller or a subsidiary of Seller shall retain all of
the assets and retain or assume and satisfy or discharge all of the obligations
and liabilities related to the operation of the Grand Rapids Facility
(including, but not limited to, (i) all obligations and liabilities under the
lease of the Grand Rapids Facility and (ii) all closure and demolition costs
associated with the closing of the Grand Rapids Facility if Seller elects to
close the same), and neither the Company nor Buyer nor any of Buyer's affiliates
shall assume or be considered to have assumed any of such obligations and
liabilities. The retention by Seller of the obligations described in this
paragraph, and the ownership and operation of the Grand Rapids Facility by
Seller or a subsidiary of Seller and the transfer and/or hauling of treated
medical waste from the Grand Rapids Facility (but not any related medical waste
collection, solicitation of customers or other activities) shall not constitute
a violation of the covenant not to compete in Section 6.14 of the Stock Purchase
Agreement.
In the event that Seller (or any subsidiary of Seller) intends to sell
any assets associated with the Grand Rapids Facility to a third party or to
assign or sublease to a third party any rights under any agreement, license,
permit or lease associated with the Grand Rapids Facility, Seller shall give
Buyer written notice of its intent and the essential terms of the proposed sale,
assignment or sublease that Seller would be willing to accept, and Buyer shall
have the first right to bid and negotiate for such purchase, assignment or
sublease. To exercise its right, Buyer must give written notice to Seller within
10 business days after the date of Seller's notice, and thereafter the parties
shall negotiate in good faith regarding such sale, assignment or sublease.
Seller shall not be obligated to accept any offer of Buyer, but if it rejects
Buyer's offer it cannot accept an offer from a third party on terms better to
the offeror than Buyer's offer without again first offering Buyer the right to
bid and negotiate as provided in this paragraph.
8. OHIO BUSINESS. The parties desire to proceed with the completion of
Buyer's acquisition of that portion of the Business located in the State of Ohio
(the "Ohio Business") through a contribution of the Ohio Business to the Company
before receipt of final approval from the Director of the Ohio Environmental
Protection Agency (the "Director"). Ohio's background investigation law,
specifically Section 3734.42(F), requires that the Director approve of Buyer
pursuant to Section 3734.44 of the Ohio Revised Code in order for Buyer to
assume ownership, either directly or indirectly, of the Ohio Business. Because
this approval will not have been received as of the Closing, the parties agree
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that Buyer's assumption of the ultimate ownership of the Ohio Business may be
negated by the Director's failure or refusal to approve Buyer. In the event of
any such failure or refusal, and following Buyer's failure to demonstrate
adequate rehabilitation pursuant to Section 3734.44(C) of the Ohio Revised Code
and Buyer's exhaustion of all of its review and appeal rights, the parties agree
that Buyer may be required by the Director to divest itself of the Ohio
Business.
9. NEW YORK CITY ASSETS. The contribution of the portion of the
Business located in New York City (the "New York City Business") is subject to
the approval of the City of New York Trade Waste Commission ("TWC") pursuant to
the parties' respective "Applications for Permission to Proceed with Asset or
Business Sale Transaction" ("Applications"). (For purposes of this paragraph,
"Buyer" shall be deemed to include its wholly-owned subsidiary, Environmental
Control Co., Inc.) The parties do not anticipate receiving TWC approval of the
Applications prior to Closing and desire to make certain provisions for the
operation of New York City Business reflecting an informal agreement between
Buyer and TWC.
(a) Prior to the Closing, all of the assets comprising the New York
City Business shall be contributed to the Company, with the exception
that Seller (or the appropriate subsidiary of Seller) shall retain the
original books and records of account relating to all customers of the
New York City Business located in New York City (the "NYC Customer
Accounts"). The Company, however, shall receive complete copies
(including copies of computer files) of these books and records. The
parties shall regard Seller (or the appropriate subsidiary of Seller)
as having retained formal title to the NYC Customer Accounts pending
approval of the Applications by the TWC. Upon such approval, title to
the NYC Customer Accounts shall be deemed to have passed automatically
to the Company, and Seller shall provide Buyer with such original books
and records of account as Buyer reasonably requests to facilitate its
continued operation of the NYC Business.
(b) The parties acknowledge that the transfer of the New York City
Business remains subject to the approval of the Applications by the
TWC.
(c) Following the Closing, Buyer shall operate the New York City
Business under its own permits. It shall service the NYC Customer
Accounts as it deems reasonable and appropriate, and shall bill and
collect all such accounts, bearing all expenses and keeping all
proceeds therefrom. It may integrate and consolidate the operation of
the New York City Business with its own medical waste business as it
sees fit.
(d) Pending approval of the Applications by the TWC:
(1) Buyer shall keep a separate sales journal for the NYC
Customer Accounts.
(2) Buyer shall not dispose of any trucks, vehicles or other
rolling stock which are transferred to the Company pursuant to the
transfer of the New York City Business, and will maintain them in
the approximately the same running order in which they were received
by the Company. During this period, Buyer need not operate such
trucks, vehicles and rolling stock in New York City, or at all, in
its discretion.
(3) Buyer shall keep all operating and transportation permits of
the New York City Business current at its expense. Seller (or an
appropriate subsidiary of Seller) shall cooperate in providing
information, executing documents and the like as Buyer reasonably
requests at Buyer's sole cost and expense.
(4) Buyer shall not convert NYC Customer Accounts to Buyer
accounts, and shall use its best efforts to renew expired agreements
in the name of Seller (or the appropriate subsidiary of Seller, as
the case may be) on commercially reasonable terms.
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(5) At Seller's request from time to time, Buyer shall inform
Seller of the status of the NYC Customer Accounts.
(6) Buyer shall continue to employ BFI-style containers on site
at the NYC Customer Accounts.
(e) In the event the Applications are not approved by the TWC, Buyer
shall be responsible for selling or transferring the New York City
Business to a third party or parties on such terms as it may secure, or
for taking such other actions as are required by the TWC. Until such
sale or transfer, Buyer shall continue to service the NYC Customer
Accounts. Seller shall cooperate with Buyer in affecting any such sale
or transfer of the New York City Business, including, but not limited
to, executing such documents and providing such information as Buyer
reasonably requires, and in transferring formal title to the NYC
Customer Accounts at Buyer's sole cost and expense.
10. CERTAIN VEHICLES. The parties desire to restructure Buyer's
acquisition of certain of the trucks and other vehicles used in the conduct of
the Business from a contribution of those trucks and vehicles to the Company to
a direct sale to Buyer. At the Closing, Seller shall deliver to Buyer a general
bill of sale and assignment, in form and substance satisfactory to Buyer,
together with duly endorsed certificates of title, selling, transferring and
assigning to Buyer the trucks and vehicles listed on the attached EXHIBIT C.
11. CERTAIN ROYALTY OBLIGATIONS. Buyer acknowledges and agrees that the
Company will assume all royalty obligations to the former owners of the Memphis,
Tennessee, Reserve, Louisiana and Lake City, Georgia treatment facilities
arising on or after the Closing (but not including any royalty obligations
arising prior to the Closing or any delinquent payments of any kind as of the
Closing) under: (i) an Agreement dated March 23, 1987 among BFI Hospital Waste
Systems (South Central), Inc., Health Management, Inc. and Edward C. Blank, II,
Peaches G. Blank, Charles M. Cooley, Jr., Wesley G. Grace, James A. Massey,
Meredith L. McCullar, John S. Wilder and Kevin Wright; (ii) an Agreement dated
January 30, 1988 among Browning-Ferris, Inc., Health Management of New Orleans,
Inc. and Edward C. Blank, II, Peaches G. Blank, Charles M. Cooley, Jr., Wesley
G. Grace, James A. Massey, Meredith L. McCullar, John S. Wilder and Kevin
Wright; (iii) an Agreement and General Release dated March 15, 1988 between BFI
Hospital Waste Systems, Inc., BFI Medical Waste Systems (Southeast), Inc.,
Health Management of Atlanta, Inc. and Edward C. Blank, II, Peaches G. Blank,
Charles M. Cooley, Jr., Wesley G. Grace, James A. Massey, Meredith L. McCullar,
John S. Wilder and Kevin Wright; (iv) a Memorandum of Understanding dated
January 30, 1988 among BFI Medical Waste Systems (South Central), Inc., Health
Management, Inc. and Edward C. Blank, II, Peaches G. Blank, Charles M. Cooley,
Jr., Wesley G. Grace, James A. Massey, Meredith L. McCullar, John S. Wilder and
Kevin Wright; and (v) a Release as to Royalty Payable Through June 30, 1997,
dated July 30, 1997, among Peaches Blank Simkins, Charles M. Cooley, Jr., Wesley
G. Grace, James A. Massey, Meredith L. McCullar, John S. Wilder, Sr. and Kevin
Wright (collectively, the "Royalty Agreements"). Seller shall use its reasonable
best efforts to cooperate with and provide non-financial assistance to Buyer in
negotiating with the owners of the royalty streams a complete buy-out of the
Royalty Agreements, with the amount of the negotiated settlement to be paid by
Buyer. Seller shall provide Buyer with all information that Buyer may reasonably
request concerning the amounts of past royalty payments, historical data on
plant and regional revenues and any other information concerning the parties'
performance under the Royalty Agreements.
C. ADDITIONAL CLOSING PAYMENTS BY BUYER
1. BIOTRACK SYSTEM. Prior to the closing of the BFI Merger, BFI was
implementing the Biotrack system to track medical waste containers. Seller has
continued to implement this system at Buyer's request, and all of the Biotrack
equipment and associated software have been transferred to the Company or will
be transferred to the Company prior to the Closing. Following the Closing,
Seller and
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Buyer shall agree on the amount of all equipment and software costs
relating to the Biotrack system that Seller incurred at Buyer's request, and
promptly following such agreement, Buyer shall reimburse Seller for the full
amount of these costs. If the Stock Purchase Agreement is terminated without a
closing having occurred due to an act or omission on the part of Buyer, Buyer
shall reimburse Seller on demand for the full amount of all equipment and
software costs relating to the Biotrack system that Seller incurred at Buyer's
request, and Seller shall convey the Biotrack equipment and associated software
that Seller purchased at Buyer's request to Buyer.
2. CERTAIN TRUCKS. Seller has purchased, at Buyer's request, the 25
trucks described on the attached EXHIBIT D at the individual and aggregate cost
shown on EXHIBIT D. All of these 25 trucks have been transferred to the Company
or will be transferred to the Company prior to the Closing, and at the Closing,
Buyer shall reimburse Seller for the full aggregate cost of these trucks. If the
Stock Purchase Agreement is terminated without a closing having occurred due to
an act or omission on the part of Buyer, Buyer shall reimburse Seller on demand
for the full aggregate cost of these trucks, and Seller shall convey all 25
trucks to Buyer.
3. CAPITAL EXPENDITURES. Buyer and Seller have agreed that Buyer shall
reimburse Seller at the Closing for the full amount of the capital expenditures
made by Seller at Buyer's request and described on the attached EXHIBIT E. All
of the capital equipment acquired by these capital expenditures has been
transferred to the Company or will be transferred to the Company prior to the
Closing. If the Stock Purchase Agreement is terminated without a closing having
occurred due to an act or omission on the part of Buyer, Buyer shall reimburse
Seller on demand for the full amount of the capital expenditures described on
the attached EXHIBIT E, and Seller shall convey to Buyer the capital equipment
acquired by these capital expenditures.
4. ADDITION TO PURCHASE PRICE. On May 28, 1999, Seller acquired the
Denver, Colorado Hemo Lab for $45,000. The Purchase Price paid at the Closing
shall be increased by $45,000.
D. TRANSITION MATTERS
1. TRANSITION FACILITIES. The sites used by the Business that at the
Closing will constitute "Other Locations" as defined in and for purposes of the
Transition Agreement are listed on the attached EXHIBIT F (with an appropriate
designation whether each site is owned or leased by Seller or a subsidiary of
Seller).
2. SUBLEASES. At the Closing, Seller or the appropriate subsidiary of
Seller and the Company shall enter into a sublease of each leased site listed on
EXHIBIT F substantially in the form of the sublease attached as EXHIBIT G.
3. OPERATING AGREEMENTS. At the Closing, Seller or the appropriate
subsidiary of Seller and the Company (or other appropriate subsidiary of Buyer)
shall enter into an operating agreement substantially in the form of the
operating agreement attached as EXHIBIT H-1 for each of the jurisdictions listed
on the attached EXHIBIT H-2.
4. KANSAS CITY AND TOLEDO FACILITIES. The parties and appropriate
Seller subsidiaries have agreed to enter into operating agreements substantially
in the form of the operating agreements attached as EXHIBIT I and EXHIBIT J,
respectively, for the facilities of the Business located in Kansas City, Kansas
and Toledo, Ohio. The parties agree that each of these operating agreements
shall remain in effect until partition of the shared property on which the
facility is located. Buyer and Seller shall work together and use their
respective reasonable best efforts to partition these properties as
expeditiously as possible. Seller or the appropriate subsidiary of Seller and
Buyer shall execute such documents and undertake such acts as the other, in its
reasonable discretion, deems appropriate or useful to partition the Kansas City
and Toledo properties.
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5. LICENSE AGREEMENT. At the Closing, Buyer and Seller shall enter into
a license agreement substantially in the form of the license agreement attached
as EXHIBIT K with respect to the use of the names "BFI Medical Waste, Inc." and
"Browning-Ferris Industries of Connecticut, Inc."
6. EMPLOYEE LEASING. At the Closing, Seller and Buyer shall enter into
an employee lease agreement substantially in the form of the Employee Lease
Agreement attached as EXHIBIT L. The provisions of this Employee Lease Agreement
shall control in the event of any conflict or inconsistency with the provisions
of the Stock Purchase Agreement. Notwithstanding the provisions of the Employee
Lease Agreement, however, Buyer will not have worker's compensation insurance in
place until the Closing. Buyer will reimburse Seller for the worker's
compensation insurance premiums allocable to the period after October 31, 1999
through the Closing Date promptly following receipt of a reasonably itemized
statement thereof from Seller. In addition, from time to time after the Closing,
Buyer will promptly pay to Seller the amounts paid with respect to worker's
compensation claims incurred by Allied Employees (as defined in the Employee
Lease Agreement) from the period after October 31, 1999 through the Closing
Date, not to exceed $50,000 per Allied Employee per occurrence.
7. LOCK BOX PROCEDURES. Following the Closing, Seller and Buyer shall
implement the lock box procedures consistent with the procedures described in
the memorandum attached as EXHIBIT M.
8. INDEMNITY UNDER LEASES. To the extent that the landlords under the
leases assigned to and assumed by Buyer at the Closing have not released Seller
or its affiliates from post-closing liability on account thereof, Buyer agrees
that it will indemnify Seller and its affiliates from and against any and all
claims, actions, damages, liabilities and expenses arising under the leases from
and after the Closing Date which do not result from Seller's or its affiliates
use of the leased premises prior to the Closing Date.
E. MISCELLANEOUS
1. CAPITALIZED TERMS. Capitalized terms used but not otherwise defined
in this Amendment have the same meanings that they have in the Stock Purchase
Agreement.
2. CONTINUING EFFECT. Except as amended by this Amendment, all of the
terms and provisions of the Stock Purchase Agreement shall remain in full force
and effect.
3. EXECUTION IN COUNTERPARTS. This Amendment may be executed in any
number of counterparts, each of which shall be deemed an original.
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In witness whereof, the parties have cause this Amendment to be duly
executed as of the day and year first written above.
ALLIED WASTE INDUSTRIES, INC.
By: /s/ Richard Van Hattem, Jr.
----------------------------------------
Name: Richard Van Hattem, Jr.
Title: Vice President
STERICYCLE, INC.
By: /s/ Richard T. Kogler
----------------------------------------
Name: Richard T. Kogler
Title: Chief Operating Officer
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EXHIBIT 3.1
FIRST CERTIFICATE OF AMENDMENT TO
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
STERICYCLE, INC.
Stericycle, Inc., a Delaware corporation (the "Corporation") certifies
that Article 4 of the Corporation's Amended and Restated Certificate of
Incorporation has been amended to read as follows by an amendment duly proposed
by the Corporation's board of directors and duly adopted by the Corporation's
stockholders in the manner and by the vote prescribed by Section 242 of the
General Corporation Law of the State of Delaware:
ARTICLE 4
CAPITAL STOCK
The total number of shares of all classes of stock which the
Corporation shall have authority to issue is 31,000,000 shares, divided
into two classes as follows: (i) 30,000,000 shares of Common Stock, with
a par value of $.01 per share, and (ii) 1,000,000 shares of Preferred
Stock, with a par value of $.01 per share.
Shares of Preferred Stock may be issued from time to time in one
or more series. The Board of Directors is expressly authorized to fix by
resolution the powers, designations, preferences and relative,
participating, optional and other rights, and qualifications, limitations
and restrictions, of each series of Preferred Stock, including, without
limitation, the dividend rate, conversion rights, voting rights,
liquidation preference and redemption price of the series.
In witness, the Corporation has caused this First Certificate of
Amendment to be signed by its President and Chief Executive Officer, Mark C.
Miller, on November 3, 1999. His signature below constitutes his affirmation and
acknowledgement, under penalties of perjury, that this instrument is the
Corporation's act and deed and that the facts stated in this instrument are
true.
STERICYCLE, INC.
By /s/ Mark C. Miller
----------------------------------------
Mark C. Miller
President and Chief Executive Officer
<PAGE> 1
EXHIBIT 3.2
STERICYCLE, INC.
CERTIFICATE OF DESIGNATION RELATING TO
SERIES A CONVERTIBLE PREFERRED STOCK, PAR VALUE $.01 PER SHARE
----------------------------------------------------
Pursuant to Section 151 of the General Corporation Law of the State of Delaware
----------------------------------------------------
Stericycle, Inc., a Delaware corporation (the "Corporation"), hereby
certifies that pursuant to the authority contained in Article Four of the
Corporation's Amended and Restated Certificate of Incorporation, as amended by a
First Certificate of Amendment (as amended, the "Restated Certificate of
Incorporation"), and in accordance with the provisions of Section 151 of the
General Corporation Law of the State of Delaware, the following resolution was
duly adopted by the Board of Directors of the Corporation creating a series of
its Preferred Stock designated as "Series A Convertible Preferred Stock":
RESOLVED, that there is hereby created a series of the Preferred Stock of
the Corporation designated as Series A Convertible Preferred Stock, par value
$.01 per share (the "Series A Preferred Stock"), consisting of 100,000 shares
(25,000 of which shall be available solely for the payment of preferential
dividends pursuant to the following Section 1A) and having the following voting
powers, preferences and relative, participating, optional, conversion and other
special rights, and qualifications, limitations and restrictions:
1. DIVIDENDS.
1A. PREFERENTIAL DIVIDENDS
Preferential dividends on each share of Series A Preferred Stock shall
accrue daily (whether or not there are profits or surplus available therefor) at
the rate of 3.375% per annum of the Liquidation Preference thereof from the date
of issuance of such share until the earliest of (i) the date on which the
Liquidation Value of such share of Series A Preferred Stock is paid to the
holder thereof in connection with the liquidation of the Corporation or the
Corporation's redemption of such share of Series A Preferred Stock, (ii) the
date on which such share of Series A Preferred Stock is converted into shares of
Common Stock or (iii) the date on which such share of Series A Preferred Stock
is otherwise acquired by the Corporation. Accrued preferential dividends on each
share of Series A Preferred Stock shall accumulate annually on the anniversary
of the date of initial issuance of such share. When and as declared,
preferential dividends shall be paid only by the issuance of additional shares
of Series A Preferred Stock (including fractional shares thereof) having an
aggregate Liquidation Value at the time of such payment equal to the amount of
the dividend to be paid. If and when any shares of Series A Preferred Stock are
issued under this Section 1A for the payment of accumulated dividends and
accrued dividends which have not yet been accumulated, such shares of Series A
Preferred Stock shall be deemed to be validly issued and outstanding and fully
paid and nonassessable.
1B. PARTICIPATING DIVIDENDS
In addition to preferential dividends payable under Section 1A, holders
of Series A Preferred Stock shall share pro rata with holders of Common Stock,
on the basis of the number of shares of Common Stock which each holder of
Preferred Stock would be entitled to receive upon conversion of the holder's
Preferred Stock into Common Stock as of the record date for the dividend or
distribution, in all
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other dividends and distributions, if any, that the Corporation's board of
directors may declare from time to time.
2. LIQUIDATION.
Upon any liquidation, dissolution or winding up of the Corporation
(a "Liquidation"), each holder of Series A Preferred Stock shall be entitled to
be paid, before any distribution or payment is made in respect of any Junior
Securities, an amount in cash equal to the greater of the following amounts (the
"Liquidation Distribution"): (i) the product obtained by multiplying the
Liquidation Value of each share by the number of shares of Series A Preferred
Stock held by the holder or (ii) the amount that would be payable to the holder
in respect of the Common Stock issuable upon conversion of the holder's shares
of Series A Preferred Stock if all outstanding Series A Preferred Stock were
converted into Common Stock immediately prior to the Liquidation. If upon a
Liquidation the Corporation's assets available for distribution to its
stockholders are insufficient to permit payment to holders of Series A Preferred
Stock of the aggregate Liquidation Value of their Series A Preferred Stock, then
the entire assets available for distribution shall be distributed among holders
of Series A Preferred Stock pro rata on the basis of the aggregate Liquidation
Value of the Series A Preferred Stock held by each holder. After payment in full
has been made to holders of Series A Preferred Stock of the aggregate
Liquidation Distributions in respect of their Series A Preferred Stock, holders
of Series A Preferred Stock shall not share in any remaining assets of the
Corporation available for distribution. The Corporation shall mail written
notice of a Liquidation to each holder of record of Series A Preferred Stock at
least 30 days prior to the date for payment or distribution to stockholders
stated in the Corporation's notice; and at any time prior to the date stated in
the Corporation's notice, a holder of Series A Preferred Stock may, at its
option, convert its Series A Preferred Stock into Common Stock in accordance
with Section 4.
3. VOTING RIGHTS.
3A. ORDINARY VOTING.
Except as otherwise required by law, the Corporation's Restated
Certificate of Incorporation or this Certificate of Designation, holders of
Series A Preferred Stock shall be entitled to vote with holders of Common Stock
as a single class on each matter submitted to a vote of the Corporation's
stockholders. Each share of Series A Preferred Stock shall have a number of
votes equal to the number of votes possessed by the number of shares of Common
Stock into which the share of Series A Preferred Stock is convertible as of the
record date for determining the stockholders entitled to vote on the matter. Any
fractional voting rights that result (after aggregating, in the case of each
holder of Series A Preferred Stock, all shares of Common Stock into which all of
the holders' shares of Series A Preferred Stock could be converted) shall be
rounded upwards or downwards to the nearest whole number (with one-half being
rounded upwards).
3B. ELECTION OF DIRECTORS.
So long as the initial purchasers of Series A Preferred Stock and their
affiliates hold at least 50% of the Underlying Common Stock (determined as of
the date of the initial issuance of Series A Preferred Stock), holders of Series
A Preferred Stock, voting separately as a single class to the exclusion of all
other classes of the Corporation's capital stock and with each share of Series A
Preferred Stock entitled to one vote, shall be entitled, in the election of
directors of the Corporation, to elect two directors to serve on the
Corporation's board of directors. Each director so elected shall serve until his
successor is duly elected by holders of Series A Preferred Stock or he is
removed from office by holders of Series A Preferred Stock. If holders of Series
A Preferred Stock for any reason fail to elect anyone to fill any such
directorship, the position shall remain vacant until such time as holders of
Series A Preferred Stock elect a director to fill the position, and it shall not
be filled by resolution or vote of the Corporation's board of directors or its
other stockholders. In the event that the initial purchasers of Series A
Preferred Stock and their affiliates cease to hold at least 50% of the
Underlying Common
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Stock but continue to hold at least 25% of the Underlying Common Stock
(determined as of the date of the initial issuance of Series A Preferred Stock),
the right and power provided to holders of Series A Preferred Stock by this
Section 3B shall be limited to the election of only one director. In the event
that the initial purchasers of Series A Preferred Stock and their affiliates
cease to hold at least 25% of the Underlying Common Stock (determined as of the
date of the initial issuance of Series A Preferred Stock), the right
and power provided to holders of Series A Preferred Stock by this Section 3B
shall terminate.
4. CONVERSION.
4A. CONVERSION PROCEDURE.
(a) At any time and on more than one occasion, a holder of Series A
Preferred Stock may convert all or any portion of the holder's shares of Series
A Preferred Stock (including any fraction of a share) into a number of shares of
Common Stock computed by dividing (i) the aggregate Liquidation Value of the
shares of Series A Preferred Stock to be converted by (ii) the Conversion Price
then in effect.
(b) Each conversion of Series A Preferred Stock shall be deemed to have
been effected as of the close of business on the date on which the certificate
or certificates representing the Series A Preferred Stock to be converted have
been surrendered for conversion at the Corporation's principal office. When the
conversion has been effected, the rights of the converting holder of Series A
Preferred Stock as such holder shall cease, and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock are to
be issued upon the conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby.
(c) As soon as possible but in any event within 10 business days after a
conversion has been effected, the Corporation shall deliver to the converting
holder: (i) a certificate or certificates representing the number of shares of
Common Stock issuable by reason of the conversion in such name or names and such
denomination or denominations as the converting holder has specified; and (ii) a
certificate representing any shares of Series A Preferred Stock which were
represented by the certificate or certificates delivered to the Corporation in
connection with the conversion but which were not converted.
(d) The issuance of a certificate or certificates for shares of Common
Stock upon the conversion of Series A Preferred Stock shall be made without
charge to the converting holder for any issuance tax in respect of the
conversion or other cost incurred by the Corporation in connection with the
conversion and the related issuance of shares of Common Stock. Upon conversion
of each share of Series A Preferred Stock, the Corporation shall take all
actions that may be necessary in order to insure that the Common Stock issued as
a result of the conversion is validly issued, fully paid and nonassessable.
(e) The Corporation shall not close its books against the transfer of
Series A Preferred Stock or of Common Stock issued or issuable upon conversion
of Series A Preferred Stock in any manner which interferes with the timely
conversion of Series A Preferred Stock.
(f) If any fractional interest in a share of Common Stock would, except
for the provisions of this Section 4A(f), be issuable upon any conversion of
Series A Preferred Stock, the Corporation, in lieu of issuing the fractional
share otherwise issuable, may pay an amount to the holder of the fractional
interest equal to the Market Price of the fractional interest as of the date of
conversion.
(g) Notwithstanding any other provision of this Section 4, if a
conversion of Series A Preferred Stock is to be made in connection with a
Corporate Change or any other transaction affecting the Corporation, the
conversion may be conditioned, at the election of the converting holder, upon
the consummation of the Corporate Change or such other transaction, in which
event the conversion shall not be deemed to be effective until the Corporate
Change or such other transaction has been
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consummated.
4B. CONVERSION PRICE. The initial conversion price for Series A Preferred
Stock (the "Conversion Price") shall be $17.50. In order to prevent dilution of
the conversion rights granted under Section 4A, the initial Conversion Price for
Series A Preferred Stock shall be subject to adjustment from time to time
pursuant to Sections 4C, 4D, 4E and 4F.
4C. COMMON STOCK SUBDIVISION OR COMBINATION. If the Corporation at any
time subdivides (by a stock split, stock dividend, recapitalization or
otherwise) its outstanding shares of Common Stock into a greater number of
shares, the Conversion Price in effect immediately prior to the subdivision
shall be proportionately reduced; and if the Corporation at any time combines
(by reverse stock split or otherwise) its outstanding shares of Common Stock
into a smaller number of shares, the Conversion Price in effect immediately
prior to the combination shall be proportionately increased. Any adjustment of
the Conversion Price under this Section 4C shall become effective as and when
the subdivision or combination becomes effective.
4D. CORPORATE CHANGE. Prior to the consummation of any Corporate Change,
the Corporation shall make appropriate provisions (in form and substance
satisfactory to holders of a majority of the shares of Series A Preferred Stock
then outstanding) to insure that each holder of Series A Preferred Stock shall
have the right to receive upon conversion of the holder's Series A Preferred
Stock, in lieu of the shares of Common Stock that the holder otherwise would
have been entitled to receive upon conversion, the stock, securities or assets
that the holder would have received in connection with the Corporate Change if
the holder had converted the holder's Series A Preferred Stock immediately prior
to the Corporate Change. The Corporation shall also make appropriate provisions
(in form and substance satisfactory to holders of a majority of the shares of
Series A Preferred Stock then outstanding) to insure that the provisions of this
Section 4 and Section 5 will continue to be applicable to the Series A Preferred
Stock (including, in the case of any Corporate Change in which the successor or
purchasing corporation is other than the Corporation, an immediate adjustment of
the Conversion Price to the value of the Common Stock reflected by the terms of
the Corporate Change, if the value so reflected is less than the Conversion
Price in effect immediately prior to the Corporate Change). The Corporation
shall not effect any Corporate Change unless, prior to the consummation of the
Corporate Change, the successor corporation (if other than the Corporation) or
the purchasing corporation assumes by written instrument (in form and substance
reasonably satisfactory to holders of a majority of the shares of Series A
Preferred Stock then outstanding) the obligation to deliver to each holder of
Series A Preferred Stock such shares of stock, securities or assets that the
holder is entitled to receive in accordance with this Section 4D.
4E. WEIGHTED AVERAGE ANTI-DILUTION PROTECTION. If and whenever on or
after the date of the initial issuance of Series A Preferred Stock the
Corporation issues or sells, or in accordance with Section 4F is deemed to have
issued or sold, any shares of the Common Stock for a consideration per share
less than (i) the Conversion Price in effect immediately prior to the time of
such issue or sale or (ii) the Market Price of the Common Stock determined as of
the date of such issue or sale, then immediately upon such issue or sale the
Conversion Price shall be reduced to whichever of the following Conversion
Prices is lower:
(1) the Conversion Price determined by dividing (i) the sum of (x)
the product derived by multiplying the Conversion Price in effect
immediately prior to such issue or sale by the number of shares of Common
Stock Deemed Outstanding immediate prior to such issue or sale plus (y)
the consideration, if any, received by the Corporation upon such issue or
sale, by (ii) the number of shares of Common Stock Deemed Outstanding
immediately after such issue or sale; or
(2) the Conversion Price determined by multiplying the Conversion
Price in effect immediately prior to such issue or sale by a fraction,
the numerator of which shall be the sum of (i) the number of shares of
Common Stock Deemed Outstanding immediately prior to such issue or
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sale multiplied by the Market Price of the Common Stock determined as of
the date of such issuance or sale plus (ii) the consideration, if any,
received by the Corporation upon such issue or sale, and the denominator
of which shall be the product derived by multiplying the Market Price of
the Common Stock by the number of shares of Common Stock deemed
outstanding immediately after such issue or sale.
Notwithstanding the foregoing, there shall be no adjustment in the Conversion
Price as a result of:
(i) the issue of shares of Common Stock upon the exercise of
Options outstanding as of the date of filing this Certificate of
Designation; and
(ii)for each fiscal year of the Corporation, the issue or sale (or
deemed issue or sale) (occurring on or after August 13, 1999, in the case
of the fiscal year ended December 31, 1999) of up to the Permissible
Number of Shares for such fiscal year by reason of any one or combination
of the following:
(A) the grant or repricing of Options which are authorized to
be granted or repriced under the Corporation's existing stock
option plans as of the date of filing this Certificate of
Designation and which are granted or repriced after the date of
filing this Certificate of Designation at an exercise price not
less than the Market Price on the date of grant or repricing; and
(B) the grant or repricing of Options which are authorized to
be granted or repriced under any new stock option plan which is
adopted by the Corporation and approved by its stockholders after
the date of filing this Certificate of Designation and which are
granted or repriced at an exercise price not less than the Market
Price on the date of grant or repricing;
(C) the issuance of Common Stock as consideration for (either
in whole or in part) the Corporation's acquisition of the assets
or stock of any other Person or Persons in one or more
transactions approved by the Corporation's board of directors.
As used in the preceding clause (ii), "Permissible Number of Shares" means, with
respect to any fiscal year, the number of shares of Common Stock equal to the
product of (i) the number of shares of Common Stock outstanding as of 4:00 p.m.
on the last trading day prior to the start of such fiscal year multiplied by
(ii) 0.04 (rounding any resulting fractional share to the nearest whole share).
The Permissible Number of Shares for any fiscal year shall be proportionately
adjusted for stock splits, combinations and dividends on the Common Stock during
such year.
4F. EFFECT ON CONVERSION PRICE OF CERTAIN EVENTS. For purposes of
determining the adjusted Conversion Price under Section 4E, the following shall
be applicable:
(a) If the Corporation in any manner grants or sells any Options and the
price per share for which Common Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any Convertible Securities issuable
upon exercise of such Options, is less than (i) the Conversion Price in effect
immediately prior to the time of the granting or sale of such Options or (ii)
the Market Price of the Common Stock determined as of such time, then the total
maximum number of shares of Common Stock issuable upon the exercise of such
Options or upon conversion or exchange of the total maximum amount of such
Convertible Securities issuable upon the exercise of such Options shall be
deemed to be outstanding and to have been issued and sold by the Corporation at
the time of the granting or sale of such Options for such price per share. For
purposes of this paragraph the "price per share for which Common Stock is
issuable" shall be determined by dividing (A) the total amount, if any, received
or receivable by the Corporation as consideration for the granting or sale of
such Options, plus the minimum aggregate amount of additional consideration
payable to the Corporation upon exercise of all
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such Options, plus in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable to the Corporation upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options. No further adjustment of the Conversion Price
shall be made when Convertible Securities are actually issued upon the exercise
of such Options or when Common Stock is actually issued upon the exercise of
such Options or the conversion or exchange of such Convertible Securities.
(b) If the Corporation in any manner issues or sells any Convertible
Securities and the price per share for which Common Stock is issuable upon
conversion or exchange thereof is less than (i) the Conversion Price in effect
immediately prior to the time of such issue or sale or (ii) the Market Price of
the Common Stock determined as of such time, then the maximum number of shares
of Common Stock issuable upon conversion or exchange of such Convertible
Securities shall be deemed to be outstanding and to have been issued and sold by
the Corporation at the time of the issuance or sale of such Convertible
Securities for such price per share. For the purposes of this paragraph, the
"price per share for which Common Stock is issuable" shall be determined by
dividing (A) the total amount received or receivable by the Corporation as
consideration for the issue or sale of such Convertible Securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Corporation upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the conversion or exchange of all
such Convertible Securities. No further adjustment of the Conversion Price shall
be made when Common Stock is actually issued upon the conversion or exchange of
such Convertible Securities, and if any such issue or sale of such Convertible
Securities is made upon exercise of any Options for which adjustments of the
Conversion Price had been or are to be made pursuant to other provisions of this
Section 6, no further adjustment of the Conversion Price shall be made by reason
of such issue or sale.
(c) If the purchase price provided for in any Options, the additional
consideration, if any, payable upon the conversion or exchange of any
Convertible Securities or the rate at which any Convertible Securities are
convertible into or exchangeable for Common Stock changes at any time, a
corresponding number of shares of Common Stock shall be deemed to have been
issued and the Conversion Price in effect at the time of such change shall be
immediately adjusted to the Conversion Price which would have been in effect at
such time had such Options or Convertible Securities still outstanding provided
for such changed purchase price, additional consideration or conversion rate, as
the case may be, at the time initially granted, issued or sold. If such
adjustment would result in an increase of the Conversion Price then in effect,
however, such adjustment shall not be effective until 30 days after written
notice thereof has been given by the Corporation to all holders of Series A
Preferred Stock. For purposes of this Section 4E, if the terms of any Option or
Convertible Security which was outstanding as of the date of issuance of the
Series A Preferred Stock are changed in the manner described in the immediately
preceding sentence, then such Option or Convertible Security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change; but no such change
shall at any time cause the Conversion Price hereunder to be increased.
(d) Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued. If such expiration or termination would result in an increase
in the Conversion Price then in effect, however, such increase shall not be
effective until 30 days after written notice thereof has been given to all
holders of Series A Preferred Stock. For purposes of this Section 4E, the
expiration or termination of any Option or Convertible Security which was
outstanding as of the date of issuance of the Series A Preferred Stock shall not
cause the Conversion Price hereunder to be adjusted unless, and only to the
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extent that, a change in the terms of such Option or Convertible Security caused
it to be deemed to have been issued after the date of issuance of the Series A
Preferred Stock.
(e) If any Common Stock, Option or Convertible Security is issued or sold
or deemed to have been issued or sold for cash, the Consideration received
therefor shall be deemed to be the amount received by the Corporation therefor
(net of discounts, commissions and related expenses). If any Common Stock,
Option or Convertible Security is issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by the
Corporation shall be the fair value of such consideration, except where such
consideration consists of securities, in which case the amount of consideration
received by the Corporation shall be the Market Price thereof as of the date of
receipt. If any Common Stock, Option or Convertible Security is issued to the
owners of the non-surviving entity in connection with any merger in which the
Corporation is the surviving corporation, the amount of consideration therefor
shall be deemed to be the fair value of such portion of the net assets and
business or the non-surviving entity as is attributable to such Common Stock,
Option or Convertible Security, as the case may be. The fair value of any
consideration other than cash and securities shall be determined jointly by the
Corporation and the holders of a majority of the outstanding shares of Series A
Preferred Stock. If such parties are unable to reach agreement within a
reasonable period of time, the fair value of such consideration shall be
determined by an independent appraiser experienced in valuing such type of
consideration jointly selected by the Corporation and the holders of a majority
of the outstanding shares of Series A Preferred Stock. The determination of such
appraiser shall be final and binding upon the parties, and the fees and expenses
of such appraiser shall be borne by the Corporation.
(f) In case any Option is issued in connection with the issue or sale of
other securities of the Corporation, together comprising one integrated
transaction in which no specific consideration is allocated to such Option by
the parties thereto, the Option shall be deemed to have been issued for a
consideration of $.01.
(g) The number of shares of Common Stock outstanding at any given time
shall not include shares owned or held by or for the account of the Corporation
or any Subsidiary, and the disposition of any shares so owned or held shall be
considered an issue or sale of Common Stock.
(h) If the Corporation takes a record of the holders of Common Stock for
the purpose of entitling them (i) to receive a dividend or other distribution
payable in Common Stock, Options or in Convertible Securities or (ii) to
subscribe for or purchase Common Stock, Options or Convertible Securities, then
such record date shall be deemed to be the date of the issue or sale of the
shares of Common Stock deemed to have been issued or sold upon the declaration
of such dividend or upon the making of such other distribution or the date of
the granting of such right of subscription or purchase, as the case may be.
4G. NOTICES. Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice of the adjustment to all holders of Series
A Preferred Stock. The Corporation shall also give written notice to all holders
of Preferred Stock at least 20 days prior to the date on which the Corporation
closes its books or takes a record (i) with respect to the payment of any
dividend or distribution to stockholders, (ii) with respect to any pro rata
subscription offer to holders of Common Stock or (iii) for determining rights to
vote with respect to any Liquidation or Corporate Change.
5. REDEMPTIONS.
5A. REDEMPTION AT HOLDER'S OPTION. At any time on or after (i) a Change
in Control or (ii) a Bankruptcy Event has occurred and has continued for 60
days, each holder of Series A Preferred Stock shall have the right to require
the Corporation to redeem all or a portion of the holder's Series A Preferred
Stock at a redemption price equal to the aggregate Liquidation Value of the
shares to be redeemed. Any holder of Series A Preferred Stock may exercise the
holder's redemption right under this Section 5A by delivering to the Corporation
at its principal office a written notice stating the
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holder's intention to exercise the holder's redemption right and the number of
the holder's shares of Series A Preferred Stock to be redeemed. The Corporation
shall be obligated to redeem the total number of shares of Series A Preferred
Stock specified in the holder's redemption notice on the 15th business day
following its receipt of the holder's notice. Within five days following receipt
of a redemption notice from any holder of Series A Preferred Stock, the
Corporation shall give written notice of the contemplated redemption to all
other holders of Series A Preferred Stock, and each of them shall have the
right, exercisable by written notice delivered to the Corporation at its
principal office within 10 business days after receipt of the Corporation's
notice, to request that all or a portion of the holder's shares of Series A
Preferred Stock also be redeemed at the same time as the contemplated
redemption. Redemptions under this Section 5A shall be subject to the terms of
the Corporation's outstanding indebtedness, and the Corporation shall have no
obligation to redeem any shares of Series A Preferred Stock in violation of the
terms of its outstanding funded indebtedness.
5B. REDEMPTION AT COMPANY'S OPTION. Beginning on the 30th-month
anniversary of the date of initial issuance of Series A Preferred Stock, the
Corporation shall have the right to redeem all (but not less than all) of the
outstanding shares of Series A Preferred Stock at a redemption price equal to
the aggregate Liquidation Value of the shares to be redeemed, upon written
notice of the proposed redemption to all holders of Series A Preferred Stock
given at least 30 days prior to the proposed redemption date, if both of the
following conditions are satisfied:
(1) the Market Price of a share of Common Stock for the 20
consecutive trading days immediately preceding the date of the
Corporation's redemption notice is at least 150% of the Conversion Price
then in effect; and
(2) as of the redemption date, a registration statement covering
all of the shares of Common Stock issued or issuable upon the conversion
of all of the shares of Series A Preferred Stock delivered for conversion
pursuant to Section 4A after the date of the Corporation's redemption
notice and at least five business days prior to the redemption date, and
providing for an offering on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, has been declared effective by
the Securities and Exchange Commission.
The Corporation's exercise of its redemption rights under this Section 5B shall
be subject to the conversion rights under Section 4A of each holder of Series A
Preferred Stock, who may exercise those rights at any time prior to the
redemption date. Redemptions under this Section 5B shall be subject to the terms
of the Corporation's outstanding indebtedness, and the Corporation may not
exercise its redemption rights under this Section 5B in violation of the terms
of its outstanding funded indebtedness.
5C. PAYMENT OF REDEMPTION PRICE. For each share of Series A Preferred
Stock which is to be redeemed pursuant to Sections 5A or 5B, the Corporation
shall be obligated on the redemption date to pay to the holder, upon the
holder's surrender at the Corporation's principal office of the certificate
representing the share to be redeemed, the full redemption price of the share in
immediately available funds. In the case of a redemption pursuant to Section 5A,
if the funds of the Corporation legally available for the redemption of Series A
Preferred Stock on the redemption date are insufficient to redeem the total
number of shares of Series A Preferred Stock that the Corporation is required to
redeem, those funds which are legally available shall be used to redeem the
maximum possible number of shares of Series A Preferred Stock pro rata among the
holders of the shares to be redeemed on the basis of the number of shares held
by each holder. As and when following the redemption date additional funds of
the Corporation become legally available for the redemption of Series A
Preferred Stock, the Corporation shall immediately use such funds to redeem the
balance of the shares of Series A Preferred Stock which the Corporation became
obligated to redeem on the redemption date but which it has not redeemed. In the
case of a redemption pursuant to Section 5B, the Corporation may not redeem any
shares of Series A Preferred Stock unless the funds of the Corporation legally
available for the redemption of Series A Preferred Stock are sufficient to
redeem all of the outstanding shares of Series A Preferred Stock.
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5D. REISSUANCE OF CERTIFICATES. In the event that fewer than the total
number of shares of Series A Preferred Stock represented by any certificate are
redeemed upon a redemption pursuant to Sections 5A or 5B, the Corporation shall
issue a new certificate representing the number of unredeemed shares of Series A
Preferred Stock to the holder of those shares without cost to the holder
promptly after the holder's surrender of the certificate representing the
redeemed shares of Series A Preferred Stock.
5E. REDEEMED SHARES. Any shares of Series A Preferred Stock which are
redeemed by the Corporation shall be canceled and shall not be reissued, sold or
transferred.
6. RESTRICTIONS AND LIMITATIONS.
As long as any shares of Series A Preferred Stock remain outstanding, the
Corporation shall not amend or restate this Certificate of Designation or its
Restated Certificate of Incorporation or by-laws in any manner that adversely
affects the powers, preferences and rights of Series A Preferred Stock as
designated in this Certificate of Designation. As long as any of the initial
number of shares of Series A Preferred Stock remain outstanding, the Corporation
shall not take any of the following actions without the affirmative vote or
written consent of holders of a majority of the shares of Series A Preferred
Stock then outstanding:
(1) file any other certificate of designation or amend or restate
this Certificate of Designation or the Corporation's Restated Certificate
of Incorporation or by-laws (as each of them may be amended in compliance
with this Section 6) in any manner that adversely affects the powers,
preferences and rights of Series A Preferred Stock as designated in this
Certificate of Designation (as it may be amended in compliance with this
Section 6);
(2) declare or pay any dividends on or declare or make any other
direct or indirect distribution on account of any Junior Securities, or
set apart any sum for any such purpose, except in accordance with Section
1;
(3) redeem, purchase or otherwise acquire for value any shares of
Series A Preferred Stock except in accordance with Section 5; or
(4) fix the size of the Corporation's board of directors at any
number in excess of nine except in accordance with Section 7.
7. SPECIAL VOTING RIGHTS.
7A. ADDITIONAL DIRECTORS. If a Bankruptcy Event has occurred and has
continued for 60 days, and if at the time there are at least 25% of the initial
number of shares of Series A Preferred Stock outstanding , the number of
directors constituting the Corporation's board of directors shall be increased,
at the request of holders of a majority of the shares of Series A Preferred
Stock then outstanding, by the minimum number that, taking into account the
number of incumbent directors, if any, already serving as nominees of holders of
Series A Preferred Stock, shall constitute a majority of the board of directors.
Holders of Series A Preferred Stock shall have the special right, voting
separately as a single class (with each share of Series A Preferred Stock being
entitled to one vote) and to the exclusion of all other classes of the
Corporation's stock, to elect individuals to fill the newly-created
directorships, to remove any individuals elected to these directorships and to
fill any vacancies in these directorships. The special right of the holders of
Series A Preferred Stock to elect or remove members of the board of directors
may be exercised at the special meeting called pursuant to Section 7B, at any
annual or special meeting of stockholders or by written consent in lieu of a
stockholders meeting. This special right of holders of Series A Preferred Stock
shall continue until such time as the Bankruptcy Event has ceased to exist, at
which time the special right shall terminate subject to revesting upon the
occurrence and continuation of any other Bankruptcy Event giving rise to the
special right under this Section 7A.
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7B. SPECIAL MEETING. At any time when the special right under Section 7A
has vested in the holders of Series A Preferred Stock, a proper officer of the
Corporation shall, upon the written request of holders of at least 20% of the
shares of Series A Preferred Stock then outstanding, addressed to the secretary
of the Corporation, call a special meeting of holders of Series A Preferred
Stock for the purpose of electing directors pursuant to this Section 7B. This
special meeting shall be held at the earliest legally permissible date at the
Corporation's principal office or at any other place designated by the holders
of at least 20% of the shares of Series A Preferred Stock then outstanding. If
the special meeting has not been called by a proper officer of the Corporation
within 10 days after personal service of the written request upon the secretary
of the Corporation or within 20 days after mailing the written request to the
secretary of the Corporation at the Corporation's principal office, holders of
at least 20% of the shares of Series A Preferred Stock then outstanding may
designate in writing one of their number to call such special meeting at the
Corporation's expense. The special meeting may be called by such Person so
designated upon the shortest legally permissible notice and shall be held at the
Corporation's principal office or at any other place designated by the holders
of at least 20% of the shares of Series A Preferred Stock then outstanding. Any
holder of Series A Preferred Stock so designated shall be given access to the
Corporation's stock register for its Series A Preferred Stock for the purpose of
causing a special meeting of holders of Series A Preferred Stock to be called
pursuant to this Section 7B.
7C. QUORUM AND VOTING. At any meeting or at any adjournment of a meeting
at which holders of Series A Preferred Stock have the special right to elect
directors, the presence, in person or by proxy, of holders of a majority of the
shares of Series A Preferred Stock then outstanding shall be required to
constitute a quorum for the election or removal of any director by holders of
the Series A Preferred Stock. The vote of a majority of the quorum shall be
required to elect or remove any such director.
7D. TERM. Any director elected by holders of Series A Preferred Stock
shall continue to serve as a director until the expiration of the lesser of (i)
a period of 90 days following the date on the Bankruptcy Event has ceased to
exist or (ii) the remaining period of the full term for which the director has
been elected. After the expiration of this 90-day period, or when the full term
for which the director has been elected expires (provided that the special right
to elect directors has terminated), as the case may be, the number of directors
constituting the board of directors of the Corporation shall decrease to the
number that constituted the whole board of directors of the Corporation
immediately prior to the occurrence of the Bankruptcy Event giving rise to the
special right to elect directors.
8. PURCHASE RIGHTS.
If at any time the Corporation distributes, grants or sells any options,
convertible securities or rights to stock, warrants, securities or other
property to all holders of Common Stock (the "Purchase Rights"), each holder of
Series A Preferred Stock shall be entitled to acquire, upon the terms applicable
to the Purchase Rights, the aggregate Purchase Rights which the holder could
have acquired if the holder had held the number of shares of Common Stock
issuable upon conversion of the holder's Series A Preferred Stock immediately
before the date on which a record is taken for the grant, issuance or sale of
the Purchase Rights, or, if no such record is taken, the date as of which the
record holders of Common Stock are to be determined for the distribution, issue
or sale of the Purchase Rights.
9. REGISTRATION OF TRANSFER.
The Corporation shall keep at its principal office a register for the
registration of Series A Preferred Stock. Upon the surrender of any certificate
representing Series A Preferred Stock at the Corporation's principal office, the
Corporation shall, at the request of the record holder of the certificate,
execute and deliver (at the Corporation's expense) a new certificate or
certificates in exchange representing in the aggregate the number of shares of
Series A Preferred Stock represented by the surrendered certificate. Each new
certificate shall be registered in the name and represent the number of shares
of Series A Preferred Stock requested by the holder of the surrendered
certificate and shall be substantially identical in form to the surrendered
certificate. Any transfer of Series A
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Preferred Stock shall be subject, however, to any applicable contractual or
other restrictions on transfer and the payment of any applicable transfer taxes
by the transferring holder.
10. REPLACEMENT.
Upon receipt of evidence reasonably satisfactory to the Corporation
(e.g., an affidavit of the registered holder) of the ownership and the loss,
theft, destruction or mutilation of any certificate evidencing shares of Series
A Preferred Stock, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation, or, in the case
of any such mutilation, upon surrender of the mutilated certificate, the
Corporation shall (at its expense) execute and deliver in replacement a new
certificate of like kind representing the number of shares of Series A Preferred
Stock represented by the lost, stolen, destroyed or mutilated certificate and
dated the date of the lost, stolen, destroyed or mutilated certificate.
11. AMENDMENT AND WAIVER.
No amendment, modification or waiver will be binding or effective with
respect to any provision of this Certificate of Designation without the prior
written consent of holders of not less than a majority of the shares of Series A
Preferred Stock outstanding at the time that the action is taken. No change in
the terms of this Certificate of Designation may be accomplished by merger or
consolidation of the Corporation with another corporation unless the Corporation
has obtained the prior affirmative vote or written consent of holders of not
less than a majority of the shares of Series A Preferred Stock then outstanding.
12. NOTICES.
All notices given pursuant to in this Certificate of Designation shall be
in writing and shall be delivered by a national overnight courier service or by
certified or registered mail, return receipt requested, and shall be deemed to
have been delivered one business day after being given to the courier service
for delivery, or three business days after being deposited in the mail (proper
postage paid), if sent (i) to the Corporation at its principal executive offices
and (ii) to any holder of Series A Preferred Stock at the holder's address as it
appears in the Corporation's stock register (unless the holder has otherwise
indicated in writing).
13. DEFINITIONS.
BANKRUPTCY EVENT means one of the following events: (i) the Corporation
makes an assignment for the benefit of creditors or admits in writing its
inability to pay its debts generally as they become due; (ii) an order, judgment
or decree is entered adjudicating the Corporation bankrupt or insolvent; or
(iii) any order for relief with respect to the Corporation is entered under the
federal Bankruptcy Code; or (iv) the Corporation petitions or applies to any
court for the appointment of a custodian, trustee, receiver or liquidator of the
Corporation or of any substantial part of its assets or commences any proceeding
relating to the Corporation under any bankruptcy, reorganization, arrangement or
insolvency law of any jurisdiction; or (v) any such petition or application is
filed, or any such proceeding is commenced, against the Corporation and either
(a) the Corporation by any act indicates its approval of, consent to or
acquiescence in the petition, application or proceeding or (b) the petition,
application or proceeding is not dismissed within 90 days after being filed or
commenced.
CHANGE OF CONTROL means: (i) the acquisition (including by way of merger,
consolidation or otherwise), directly or indirectly, by any person or related
group of persons of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities Exchange Act of 1934) of securities possessing more than 50% of
the total combined voting power of the Corporation's outstanding securities; or
(ii) a change in the composition of the Corporation's board of directors over a
period of 36 consecutive months or less such that, by reason of one or more
contested elections for directorships, a majority of the
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incumbent directors ceases to be comprised of individuals who either (A) have
been directors continuously since the beginning of the 36-month period or (B)
have been elected or nominated for election as directors during the 36-month
period by at least a majority of the directors described in clause (A) who were
still in office at the time that the board approved such election or nomination.
COMMON STOCK means the Corporation's common stock, par value $.01 per
share.
COMMON STOCK DEEMED OUTSTANDING means, at any given time, (i) the number
of shares of Common Stock actually outstanding at such time, plus (ii) the
number of shares of Common Stock issuable upon conversion at such time of the
shares of Series A Preferred Stock then outstanding, plus (iii) the number of
shares of Common Stock deemed to be outstanding pursuant to Sections 4F(a) and
4F(b), whether or not the Options or Convertible Securities are actually
exercisable at such time.
CONVERSION PRICE is defined in Section 4B.
CONVERTIBLE SECURITIES means any stock or securities directly or
indirectly convertible into or exchangeable for Common Stock.
CORPORATE CHANGE means any capital reorganization, reclassification,
consolidation, merger or sale of all or substantially all of the Corporation's
assets to another Person which is effected in such a way that holders of Common
Stock are entitled to receive (either directly or upon a subsequent liquidation
of the Corporation) stock, securities or assets in respect of or in exchange for
Common Stock.
JUNIOR SECURITIES means any capital stock of the Corporation other than
Series A Preferred Stock.
LIQUIDATION is defined in Section 2A.
LIQUIDATION DISTRIBUTION is defined in Section 2.
LIQUIDATION PREFERENCE means, with respect to a share of Series A
Preferred Stock, the sum of (i) $1,000 plus (ii) all accumulated preferential
dividends on such share.
LIQUIDATION VALUE means, with respect to a share of Series A Preferred
Stock, the sum of (i) $1,000 plus (ii) all accumulated preferential dividends on
such share plus (iii) all accrued and unpaid dividends on such share which have
not yet been accumulated.
MARKET PRICE of any security means the average of the closing prices of
such security's sales on all securities exchanges on which such security may be
listed at the time, or, if there has been no sales on any such exchange on any
day, or, if on any day such security is not so listed, the average of the
representative bid and asked prices quoted in the NASDAQ system as of 4:00 P.M.,
New York time, or, if on any day such security is not quoted in the NASDAQ
System, the average of the highest bid and lowest asked prices on such day in
the domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated or any similar successor organization, in each such case
(except when the "Market Price" is being determined for purposes of Section
5B(1)) averaged over a period of 20 days consisting of the day as of which the
"Market Price" is being determined and the 19 consecutive business days prior to
such day. If at any time such security is not listed on any securities exchange
or quoted in the NASDAQ System or the over-the-counter market, the "Market
Price" shall be the fair value thereof determined jointly by the Corporation and
the holders of a majority of the shares of Series A Preferred Stock. If such
parties are unable to reach agreement within a reasonable period of time, such
fair value shall be determined by an independent appraiser experienced in
valuing securities jointly selected by the Corporation and the holders of a
majority of the shares of Series A Preferred Stock. The determination of such
appraiser shall be final and binding upon the parties, and the Corporation shall
pay the fees and expenses of such appraiser. Notwithstanding the preceding: (i)
an Option which is granted or repriced at an exercise price equal to the last
reported sales price of a share of Common Stock
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on the Nasdaq National Market on the date of grant or repricing shall be
considered to have been granted or repriced at the Market Price on the date of
grant or repricing; and (ii) shares of Common Stock which are issued and sold in
an underwritten registered public offering shall be considered to have been
issued and sold at the Market Price.
OPTIONS means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.
PERSON means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or other entity.
PURCHASE RIGHTS is defined in Section 8.
UNDERLYING COMMON STOCK means all shares of Common Stock issued or
issuable upon conversion of the Series A Preferred Stock (which number shall be
determined, with respect to any given date, based upon the Conversion Price in
effect as of such date).
* * * * *
In witness, the Corporation has caused this Certificate of
Designation to be signed by its President and Chief Executive Officer, Mark C.
Miller, on November 3, 1999. His signature below constitutes his affirmation and
acknowledgement, under penalties of perjury, that this instrument is the
Corporation's act and deed and that the facts stated in this instrument are
true.
STERICYCLE, INC.
By /s/ Mark C. Miller
------------------------------------------
Mark C. Miller
President and Chief Executive Officer
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Exhibit 4.1
REGISTRATION RIGHTS AGREEMENT
This Agreement is entered into as of November 12, 1999 by Stericycle,
Inc., a Delaware corporation (the "Company"), and the Persons whose names are
set forth on the attached Schedule I (collectively, the "Investors").
A. The Company and the Investors are concurrently closing an Amended
and Restated Series A Convertible Preferred Stock Purchase Agreement, dated
September 26, 1999 (the "Purchase Agreement"), pursuant to the terms and
conditions of which the Company is issuing and selling to the Investors, and the
Investors are purchasing from the Company, 75,000 of Series A Convertible
Preferred Stock (the "Preferred Shares").
B. The Parties' execution and delivery of this Agreement is a condition
of their respective obligations to close the Purchase Agreement.
The Parties agree as follows:
Capitalized terms which are used in this Agreement without being
defined have the same meanings that they are given in the Purchase Agreement.
Certain capitalized terms used in this Agreement are defined in the attached
Schedule A.
1. DEMAND REGISTRATIONS.
1A. GENERAL. On or at any time after the first anniversary of Closing,
holders of a majority of the Registrable Securities then outstanding may request
registration under the Securities Act of all or any portion of their Registrable
Securities in connection with a public offering of those securities. All
registrations requested pursuant to this Section 1 are referred to in this
Agreement as "Demand Registrations." Holders of Registrable Securities shall be
limited to three Demand Registrations. All Demand Registrations (other than a
Demand Registration that consists of a Shelf Registration Statement (as defined
below)) shall be a firm commitment underwritten offering. In regard to Demand
Registrations:
(1) Each request for a Demand Registration shall specify the
approximate number of Registrable Securities requested to be registered. Within
10 days after receipt of any request for a Demand Registration, the Company
shall give written notice of the requested registration to all other holders of
Registrable Securities, and shall include in the registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion within 15 days after receipt of the Company's notice.
(2) A Demand Registration shall not be counted as one of the three
permitted Demand Registrations unless (i) it has become effective and (ii) the
Persons making the request are able to register and sell at least 75% of the
Registrable Securities requested to be included in the registration.
(3) The Company shall pay all Registration Expenses in connection with
any Demand Registration whether or not it is counted as one of the three
permitted Demand Registrations; provided, however, that the holders of
Registrable Securities included in the third Demand Registration shall pay all
Registration Expenses (other than as set forth in Section 5A) in connection with
such Demand Registration if such Demand Registration consists of the Shelf
Registration Statement; and provided further that, if the second Demand
Registration consisted of a Shelf Registration Statement, the holders of
Registrable Securities included in the third Demand Registration shall reimburse
the Company for all Registration Expenses (other than as set forth in Section
5A) in connection with the previous Shelf Registration Statement (i.e., the
second Demand Registration).
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(4) Demand Registrations shall be on Form S-2 or Form S-3 or any
similar short-form registration statement, if available.
(5) The Company shall have the right to select the managing underwriter
in connection with any firm commitment underwritten offering, subject to the
approval of a majority of the holders of the Registrable Securities requesting
registration, and holders of a majority of the Registrable Securities requesting
registration shall have the right to select a co-managing underwriter, subject
to the Company's approval.
1B. LIMIT ON REGISTRABLE SECURITIES. In the case of any firm commitment
underwritten offering, if the managing underwriters advise the Company in
writing that in their opinion the number of Registrable Securities requested to
be included in the offering exceeds the number of Registrable Securities that
can be sold without adversely affecting the marketability of the offering, the
Company shall include in the registration the number of Registrable Securities
requested to be included which in the opinion of the underwriters can be sold
without adversely affecting the marketability of the offering, pro rata among
the respective holders on the basis of the number of Registrable Securities
owned by each holder.
1C. RESTRICTIONS. The Company shall not be obligated to effect any
Demand Registration within 180 days after the effective date of a previous
Demand Registration or a previous registration in which the holders of
Registrable Securities were given piggyback rights pursuant to Section 2. The
Company may postpone for up to 180 days the filing or the effectiveness of a
registration statement for a Demand Registration if the Company's board of
directors in good faith reasonably determines that the Demand Registration would
reasonably be expected to have a material adverse effect on any proposal or plan
by the Company to engage in any acquisition of assets (other than in the
ordinary course of business) or any merger, consolidation, tender offer,
reorganization or similar transaction. In this event, the holders of Registrable
Securities initially requesting the Demand Registration shall be entitled to
withdraw their request. If their request is withdrawn, the Demand Registration
shall not count as one of the three permitted Demand Registrations, and the
Company shall pay all Registration Expenses in connection with the registration.
The Company may delay a Demand Registration pursuant to this Section 1C only
once in any 12-month period.
1D. SHELF REGISTRATION. At the request of the holders of a majority of
the Registrable Securities then outstanding, one Demand Registration (other than
the first Demand Registration) may consist of a shelf registration statement (as
amended and supplemented from time to time, the "Shelf Registration Statement")
in accordance with Rule 415 under the Securities Act (or any similar rule that
may be adopted by the Securities and Exchange Commission). In the event of any
such request, the Company shall promptly prepare and file the Shelf Registration
Statement and cause it to be declared effective as soon as reasonably
practicable (and in any event within 90 days) after such request and will keep
such Shelf Registration Statement continuously effective and in compliance with
the Securities Act and usable for resale or other disposition of such
Registrable Securities, subject to clauses (1) and (2) below, for the period
(the "Effective Period") commencing on the date on which the Securities and
Exchange Commission declares such Shelf Registration Statement effective and
ending on the earlier of (x) the first anniversary date of the date such Shelf
Registration Statement is declared effective (or, in the event the Company has
exercised its right under clause (1) below to refuse use of the Shelf
Registration for a Delay Period, the eighteen-month anniversary date of the date
such Shelf Registration Statement is declared effective) and (y) the first date
on which there are no longer any Registrable Securities. The Effective Period
shall be automatically extended by the number of days that the second Delay
Period, if any, is in effect during the final thirty days of the Effective
Period prior to any such extension. In regard to the Shelf Registration
Statement:
(1) The Company shall have the right to refuse use of an effective
Shelf Registration Statement (a "Delay Period") for a length of time not to
exceed 45 days if the Company's board of directors reasonably determines, with
respect to the advisability (as determined in good faith) of
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deferring public disclosure of material corporate developments, that use of the
Shelf Registration Statement and the disclosure required to be made therein
would not be in the best interests of the Company at such time; provided,
however, that there shall not be more than two Delay Periods during the
Effective Period. The Company shall use reasonable efforts to minimize the
length of any Delay Period and shall provide prompt written notice to the
holders of Registrable Securities of the beginning and end of each Delay Period.
(2) The Company shall promptly notify the holders of Registrable
Securities, at any time when a prospectus relating to the sale of the
Registrable Securities is required by law to be delivered in connection with
sales by an underwriter or dealer, of the occurrence of any event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading and shall (subject to any Delay Period) promptly make
available to holders of Registrable Securities and to the underwriters any such
supplement or amendment. Holders of Registrable Securities agree that, upon
receipt of any notice from the Company of the occurrence of any event of the
kind described in the preceding sentence, holders of Registrable Securities will
forthwith discontinue the offer and sale of Registrable Securities pursuant to
the Shelf Registration Statement until receipt by holders of Registrable
Securities and the underwriters of the copies of such supplemented or amended
prospectus.
2. PIGGYBACK REGISTRATIONS.
2A. RIGHT TO PIGGYBACK. Whenever the Company proposes to register any
of its securities under the Securities Act (other than pursuant to a Demand
Registration) and the registration form to be used may be used for the
registration of Registrable Securities (a "Piggyback Registration"), the Company
shall give prompt written notice to all holders of Registrable Securities of its
intention to effect such a registration and shall include in the registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion within 20 days after receipt of the Company's
notice. Holders of Registrable Securities shall be entitled to unlimited
Piggyback Registrations for their Registrable Securities.
2B. PIGGYBACK EXPENSES. The Registration Expenses of the holders of
Registrable Securities shall be paid by the Company in all Piggyback
Registrations.
2C. PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in the registration exceeds the number that
can be sold without adversely affecting the marketability of the offering, the
Company shall include in the registration (i) first, the securities that the
Company proposes to sell, (ii) second, the Registrable Securities requested to
be included in the registration, pro rata among the holders of the Registrable
Securities on the basis of the number of Registrable Securities owned by each
holder, and (iii) third, any other securities requested to be included in the
registration.
2D. PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders of the Company's
securities, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in the
registration exceeds the number that can be sold without adversely affecting the
marketability of the offering, the Company shall include in the registration (i)
first, the Registrable Securities requested to be included in the registration,
pro rata among the holders of the Registrable Securities on the basis of the
number of Registrable Securities owned by each holder, and (ii) second, the
other securities requested to be included in the registration.
2E. OTHER REGISTRATIONS. If the Company has previously filed a
registration statement with
3
<PAGE> 4
respect to Registrable Securities pursuant to Section 1 or pursuant to this
Section 2, and if the previous registration has not been withdrawn or abandoned,
the Company shall not file or cause to be effected any other registration of any
of its equity securities or securities convertible or exchangeable into or
exercisable for its equity securities under the Securities Act (except on Form
S-8 or any successor form), whether on its own behalf or at the request of any
holder or holders of its securities, until a period of at least 180 days has
elapsed from the effective date of the previous registration.
3. HOLDBACK AGREEMENTS.
3A. HOLDERS OF REGISTRABLE SECURITIES. Each holder of Registrable
Securities shall not effect any public sale or distribution (including sales
pursuant to Rule 144) of equity securities of the Company, or any securities
convertible into or exchangeable or exercisable for equity securities of the
Company, during the 30 days prior to and the 120-day period (or such lesser
period as the managing underwriters may agree to) beginning on the effective
date of any Demand Registration or any underwritten Piggyback Registration in
which Registrable Securities are included (except as part of such Demand
Registration or underwritten Piggyback Registration), unless the underwriters
managing the offering otherwise agree.
3B. COMPANY. The Company shall not effect any public sale or
distribution of its equity securities, or any securities convertible into or
exchangeable or exercisable for such securities, during such period prior to and
following the effective date of any Demand Registration or any underwritten
Piggyback Registration as the Company and the underwriters managing the offering
may agree.
4. REGISTRATION PROCEDURES.
Whenever holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement, the Company
shall use its reasonable best efforts to effect the registration and the sale of
the Registrable Securities in accordance with the intended method of
disposition, In this regard, the Company shall:
(1) prepare and file with the Securities and Exchange Commission a
registration statement with respect to such Registrable Securities and use its
reasonable best efforts to cause the registration statement to become effective;
(2) notify each holder of Registrable Securities of the effectiveness
of each registration statement filed under this Agreement and prepare and file
with the Securities and Exchange Commission any amendments and supplements to
the registration statement and the prospectus that may be necessary to keep the
registration statement effective for a period of not less than 180 days and
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by the registration statement during this 180-day
period in accordance with the intended methods of disposition by the sellers
described in the registration statement;
(3) furnish to each seller of Registrable Securities the number of
copies of the registration statement, each amendment and supplement, the
prospectus included in the registration statement ( including each preliminary
prospectus) and any other documents that each seller may reasonably request in
order to facilitate the disposition of the seller's Registrable Securities;
(4) use its best efforts to register or qualify the Registrable
Securities under such other securities or blue sky laws of such jurisdictions as
any seller reasonably requests and do any and all other acts and things which
may be reasonably necessary or advisable to enable the seller to consummate the
disposition in those jurisdictions of the Registrable Securities owned by the
seller (but the Company shall not be required to (i) qualify generally to do
business in any jurisdiction where it would not otherwise be required to qualify
but for this subparagraph, (ii) subject itself to taxation in any such
jurisdiction or (iii) consent to general service of process in any such
jurisdiction);
4
<PAGE> 5
(5) notify each seller of Registrable Securities, at any time when a
prospectus relating to those securities is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in the registration statement contains an untrue statement
of a material fact or omits any fact necessary to make the statements in the
prospectus not misleading; and, at the request of any seller, the Company shall
prepare a supplement or amendment to the prospectus so that, when delivered to
purchasers of the Registrable Securities, the prospectus, as supplemented or
amended, does not contain an untrue statement of a material fact or omit to
state any fact necessary to make the statements in the prospectus not
misleading;
(6) cause all Registrable Securities to be quoted on the Nasdaq
National Market System;
(7) provide a transfer agent and registrar for all such Registrable
Securities not later than the effective date of the registration statement;
(8) enter into such customary agreements (including underwriting
agreements in customary form) and take all other actions that holders of a
majority of the Registrable Securities being sold or the underwriters, if any,
reasonably request in order to expedite or facilitate the disposition of the
Registrable Securities;
(9) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to the
registration statement and any attorney, accountant or other agent retained by
any seller or underwriter, all financial and other records, pertinent corporate
documents and properties of the Company, and cause the Company's officers,
employees and independent accountants to supply all information reasonably
requested by any such seller, underwriter, attorney, accountant or agent in
connection with the registration statement;
(10) otherwise use its best efforts to comply with all applicable rules
and regulations of the Securities and Exchange Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve months beginning with the first day of
the Company's first full calendar quarter after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158; and
(11) in the event of the issuance of any stop order suspending the
effectiveness of a registration statement, or of any order suspending or
preventing the use of any related prospectus or suspending the qualification of
any Common Stock included in the registration statement for sale in any
jurisdiction, use its best efforts promptly to obtain the withdrawal of such
order.
5. REGISTRATION EXPENSES.
5A. PAYMENT BY COMPANY. All Registration Expenses shall be borne as
provided in this Agreement, except that the Company shall, in any event, pay its
internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review and the expenses and fees for listing the securities
to be registered on the Nasdaq National Market System.
5B. FEES OF COUNSEL. In connection with each Demand Registration and
each Piggyback Registration, the Company shall reimburse the holders of
Registrable Securities included in the registration for the reasonable fees and
disbursements of one counsel chosen by the holders of a majority of the
Registrable Securities included in the registration and for the reasonable fees
of one special counsel retained by the holders of Registrable Securities to
render any required legal opinions in connection with an underwritten
registration which the first counsel is unable or unwilling to render.
5C. PAYMENT BY HOLDERS. To the extent that Registration Expenses are
not required to be paid by the Company, each holder of securities included in
any registration under this Agreement shall pay
5
<PAGE> 6
those Registration Expenses allocable to the registration of the holder's
securities so included, and any Registration Expenses not so allocable shall be
borne by all sellers of securities included in the registration in proportion to
the aggregate selling price of the securities to be so registered.
6. INDEMNIFICATION.
6A. INDEMNIFICATION BY COMPANY. The Company agrees to indemnify, to the
extent permitted by law, each holder of Registrable Securities, its officers and
directors and each Person who controls such holder (within the meaning of the
Securities Act) against all losses, claims, damages, liabilities and expenses
caused by any Violation, except insofar as the Violation is caused by or
contained in any information furnished in writing to the Company by the holder
expressly for use in a registration statement, prospectus, amendment, supplement
or related document or is caused by the holder's failure to deliver a copy of
the registration statement or prospectus or any amendment or supplements after
the Company has furnished the holder with a sufficient number of copies. In
connection with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent
provided in this Section 6(a) with respect to the indemnification of holders of
Registrable Securities.
6B. INDEMNIFICATION BY HOLDER. In connection with any registration
statement in which a holder of Registrable Securities is participating, the
holder shall furnish to the Company in writing such information and affidavits
as the Company reasonably requests for use in connection with the registration
statement or prospectus and, to the extent permitted by law, shall indemnify the
Company, its directors and officers and each Person who controls the Company
(within the meaning of the Securities Act) against any losses, claims, damages,
liabilities and expenses resulting from any Violation to the extent that the
Violation is caused by or contained in any information furnished in writing to
the Company by the holder expressly for use in a registration statement,
prospectus, amendment, supplement or related document. This obligation to
indemnify shall be individual, not joint and several, for each holder and shall
be limited to the net amount of proceeds received by the holder from the sale of
Registrable Securities pursuant to the registration statement.
6C. PROCEDURES. Any Person entitled to indemnification under this
Section 6 shall give prompt written notice to the indemnifying party of any
claim with respect to which the Person seeks indemnification (provided that the
failure to give prompt notice shall not impair any Person's right to
indemnification to the extent that the failure has not prejudiced the
indemnifying party). Unless in the indemnified party's reasonable judgment a
conflict of interest between the indemnified and indemnifying parties may exist
with respect to the claim for indemnification, the indemnified party shall
permit the indemnifying party to assume the defense of the claim with counsel
reasonably satisfactory to the indemnified party. If the defense of the claim is
assumed by the indemnifying party, the indemnifying party shall not be subject
to any liability for any settlement made by the indemnified party without its
consent (but the indemnifying party shall not unreasonably withhold its
consent). An indemnifying party who is not entitled to, or who elects not to,
assume the defense of a claim for indemnification shall not be obligated to pay
the fees and expenses of more than one counsel for all parties indemnified by
the indemnifying party with respect to the claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between the
indemnified party and any of the other indemnified parties with respect to the
claim.
6D. SURVIVAL. The indemnification under this Section 6 shall remain in
full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of the
indemnified party and shall survive the transfer of securities. The Company also
agrees to make such provisions as are reasonably requested by any indemnified
party for contribution to the indemnified party in the event that the Company's
indemnification is unavailable for any reason.
6
<PAGE> 7
7. PARTICIPATION IN UNDERWRITTEN REGISTRATION.
No Person may participate in any underwritten registration pursuant to
this Agreement unless the Person (i) agrees to sell securities on the basis
provided in the underwriting arrangements and (ii) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of the underwriting arrangements. In
any event, however, no holder of Registrable Securities included in any
underwritten registration shall be required to make any representations or
warranties to the Company or the underwriters (other than representations and
warranties regarding the holder and the holder's intended method of
distribution) or to undertake any indemnification obligations to the Company or
the underwriters except as otherwise provided in Section 6.
8. MISCELLANEOUS.
8A. NO INCONSISTENT AGREEMENTS. The Company shall not enter into any
agreement with respect to its securities which is inconsistent with or violates
the rights granted to the holders of Registrable Securities in this Agreement.
Without limiting the generality of the foregoing, until the initial holders of
Registrable Securities cease to hold at least 25% of the number of Registrable
Securities initially acquired by such holders, the Company shall not grant to
any Person the right to request the Company to register any equity securities of
the Company, or any securities convertible or exchangeable into or exercisable
for such securities, without the prior written consent of the holders of a
majority of the Registrable Securities. The Company may grant rights to other
Persons to participate in Piggyback Registrations, however, so long as such
rights are subordinate to the rights of the holders of Registrable Securities
with respect to such Piggyback Registrations as set forth in Sections 2C and 2D
of this Agreement. The Company represents and warrants that, except as set
forth on the attached Schedule II, the Company is not a party to or otherwise
subject to any other agreement granting registration rights to any other Person
with respect to securities of the Company.
8B. NOTICES. All Notices under this Agreement shall be in writing and
sent by certified or registered mail, overnight messenger service, telecopier or
personal delivery, as follows:
(a) if to Stericycle, to:
Stericycle, Inc.
28161 North Keith Drive
Lake Forest, Illinois 60045
Attention: Mr. Mark C. Miller
President and Chief Executive Officer
Telecopier: (847) 367-9493
with a required copy to:
Johnson and Colmar
300 South Wacker Drive
Suite 1000
Chicago, Illinois 60606
Attention: Craig P. Colmar, Esq.
Telecopier: (312) 922-9283
(b) if to the Bain Investors, in care of:
Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
7
<PAGE> 8
Attention: Mr. Stephen G. Pagliuca
Mr. Robert Gay
Mr. John P. Connaughton
Mr. Joe Pretlow
Telecopier: (617) 572-3274
with a required copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Jeffrey C. Hammes, P.C.
Telecopier: (312) 861-2200
(c) if to the MDP Investors, in care of:
Madison Dearborn Partners, Inc.
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
Attention: Mr. Thomas R. Reusche
Telecopier: (312) 895-1001
with a required copy to:
Kirkland & Ellis
200 East Randolph Drive
Chicago, Illinois 60601
Attention: Michael H. Kerr, P.C.
Telecopier: (312) 861-2200
All Notices sent by certified or registered mail shall be considered to have
been given three business days after being deposited in the mail. All Notices
sent by overnight courier service, telecopier or personal delivery shall be
considered to have been given when actually received by the intended recipient.
A Party may change its address for purposes of this Agreement by Notice in
accordance with this Section 8B.
8C. WAIVER. The rights and remedies of the Company and holders of
Registrable Securities are cumulative and not alternative. Neither the failure
nor any delay by the Company or any holder of Registrable Securities in
exercising any right, power or privilege under this Agreement shall operate as a
waiver of that right, power or privilege, and no single or partial exercise of
any right, power or privilege shall preclude any other or further exercise of
that right, power or privilege or the exercise of any other right, power or
privilege. All waivers shall be in writing signed by the party to be charged
with the waiver, and no waiver that may be given by a party shall be applicable
except in the specific instance for which it is given.
8D. AMENDMENT. This Agreement may not be amended except by a written
agreement signed by the Company and holders of a majority of the Registrable
Securities.
8E. SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable by a court of competent jurisdiction, the other provisions of this
Agreement shall remain in full force and effect. Any provision of this Agreement
which is held invalid or unenforceable only in part shall remain in full force
and effect to the extent not held invalid or unenforceable.
8
<PAGE> 9
8F. CAPTIONS. The captions of sections of this Agreement are for
convenience only and shall not affect this the construction or interpretation of
this Agreement.
8G. CONSTRUCTION. All references in this Agreement to "Section" or
"Sections" refer to the corresponding section or sections of this Agreement. All
words used in this Agreement shall be construed to be of the appropriate gender
or number as the context requires. Unless otherwise expressly provided, the word
"including" does not limit the preceding words or terms.
8H. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be considered an original copy of this
Agreement and all of which, when taken together, shall be considered to
constitute one and the same agreement.
8I. GOVERNING LAW. This Agreement shall be governed by the Laws of the
State of Illinois without regard to conflicts of laws principles.
8J. BINDING EFFECT. This Agreement shall apply to, be binding in all
respects upon and inure to the benefit of Parties and their respective
successors and permitted assigns.
9
<PAGE> 10
In witness, the Parties have executed this Agreement.
STERICYCLE, INC.
By: /s/ Frank J.M. ten Brink
-------------------------------------
Name: Frank J.M. ten Brink
Title: CFO
BAIN CAPITAL FUND VI, L.P.
By: Bain Capital Partners VI, L.P.
Its: General Partner
By: Bain Capital Investors VI, Inc.
Its: General Partner
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
BCIP ASSOCIATES II
By: Bain Capital, Inc.
Its: Managing Partner
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
BCIP ASSOCIATES II-B
By: Bain Capital, Inc.
Its: Managing Partner
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
BCIP ASSOCIATES II-C
By: Bain Capital, Inc.
Its: Managing Partner
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
BCIP TRUST ASSOCIATES II
By: Bain Capital, Inc.
Its: Managing Partner
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
10
<PAGE> 11
BCIP TRUST ASSOCIATES II-B
By: Bain Capital, Inc.
Its: Managing Partner
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
SANKATY HIGH YIELD ASSET PARTNERS, L.P.
By: [signature illegible]
-------------------------------------
A Managing Director
PEP INVESTMENTS PTY. LIMITED
By: Bain Capital, Inc.
Its: Attorney-in-Fact
By: /s/ John P. Connaughton
-------------------------------------
A Managing Director
BROOKSIDE CAPITAL PARTNERS, L.P.
By: Ed [last name illegible]
-------------------------------------
A Managing Director
RANDOLPH STREET PARTNERS II
By: [signature illegible]
----------------------------------------
A General Partner
MADISON DEARBORN CAPITAL PARTNERS III, L.P.
By: Madison Dearborn Partners III, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Thomas R. Reusche
----------------------------------------
A Managing Director
MADISON DEARBORN SPECIAL EQUITY III, L.P.
By: Madison Dearborn Partners III, L.P.
Its: General Partner
By: Madison Dearborn Partners, LLC
Its: General Partner
By: /s/ Thomas R. Reusche
----------------------------------------
A Managing Director
11
<PAGE> 12
SPECIAL ADVISORS FUND I, LLC
By: Madison Dearborn Partners III, L.P.
Its: Manager
By: Madison Dearborn Partners, LLC
Its: General Partner
By: Thomas R. Reusche
------------------------------------
A Managing Director
12
<PAGE> 13
SCHEDULE I
<TABLE>
<CAPTION>
INVESTORS
NAME AND ADDRESS NUMBER OF SHARES PURCHASED PURCHASE PRICE
<S> <C> <C>
Bain Capital Fund VI, L.P. 25,403.76 $ 25,403,759.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
BCIP Associates II 4,491.38 $ 4,491,378.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
BCIP Associates II-B 615.62 $ 615,619.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
BCIP Associates II-C 1,319.76 $ 1,319,760.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Brookside Capital Partners, L.P. 1,856.25 $ 1,856,250.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
BCIP Trust Associates II 1,291.22 $ 1,291,222.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
BCIP Trust Associates II-B 206.08 $ 206,084.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Sankaty High Yield Asset Partners, L.P. 1,856.25 $ 1,856,250.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
PEP Investments Pty. Limited 84.68 $ 84,678.00
c/o Bain Capital, Inc.
Two Copley Place
Boston, Massachusetts 02116
Randolph Street Partners II 375.00 $ 375,000.00
200 East Randolph Drive
Chicago, Illinois 60601
</TABLE>
13
<PAGE> 14
<TABLE>
<CAPTION>
<S> <C> <C>
Madison Dearborn Capital Partners III, L.P. 36,538.68 $ 36,538,683.00
c/o Madison Dearborn Partners, Inc.
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
Madison Dearborn Special Equity III, L.P. 811.32 $ 811,317.00
c/o Madison Dearborn Partners, Inc.
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
Special Advisors Fund I, LLC 150.00 $ 150,000.00
c/o Madison Dearborn Partners, Inc.
Three First National Plaza
Suite 3800
Chicago, Illinois 60602
</TABLE>
14
<PAGE> 15
SCHEDULE II
The Company is a party to that certain Amended and Restated
Registration Agreement dated October 19, 1994 among the Company and certain
persons that formerly held previously existing classes of the Company's
preferred stock (the "Previous Agreement"). The Company hereby agrees to use
reasonable best efforts promptly to obtain a termination of the Previous
Agreement with a goal of finalizing such termination within 90 days of the date
of Closing. In any event, the Company shall at all times take actions to
preserve the rights and benefits that the Company has granted to the holders of
Registrable Securities hereunder and shall fully cooperate with the holders of
Registrable Securities (e.g., permitting less delay between the exercise of
demand registration rights than is permitted by Section 1C of the Agreement,
etc.) if their ability to dispose of Registrable Securities or other rights are
ever hindered by the Previous Agreement.
15
<PAGE> 16
16
<PAGE> 17
SCHEDULE A
DEFINED TERMS
EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.
PERSON means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or other entity.
REGISTRABLE SECURITIES means (i) any shares of Common Stock issued or
issuable upon conversion of the Preferred Shares and (ii) any shares of Common
Stock issued or issuable (A) as a dividend or distribution in respect of, or (B)
in exchange for or replacement of, or (C) upon conversion or exercise of any
warrant or other security issued or issuable as a dividend or distribution in
respect of or in exchange for or replacement of, the Preferred Shares and any
shares of Common Stock issued or issuable upon conversion of the Preferred
Shares. Any Registrable Securities shall cease to be Registrable Securities if
and when they (or, in respect of issuable but not yet issued Registrable
Securities, the underlying Preferred Stock or Common Stock) cease to be held by
an Investor or a Permitted Transferee (as "Permitted Transferee" is defined in
the Corporate Governance Agreement). In addition, in the case of a distribution
of Registrable Securities by an Investor to a partner of the Investor (and thus
a Permitted Transferee), the distributed securities shall cease to be
Registrable Securities when so distributed if, prior to or concurrently with the
distribution, the Investor has notified the Company in writing of the Investor's
election to terminate the status of the distributed securities as Registrable
Securities.
REGISTRATION EXPENSES means all expenses incident to the Company's
performance of or compliance with this Agreement, including all registration and
filing fees, fees and expenses of compliance with securities or blue sky laws,
printing expenses, messenger and delivery expenses, fees and disbursements of
custodians, and fees and disbursements of counsel for the Company and all
independent certified public accountants, underwriters (excluding discounts,
commissions and underwriters' counsel fees) and other Persons retained by the
Company.
SECURITIES ACT means the Securities Act of 1933, as amended.
VIOLATION means any of the following statements, omissions or
violations: (i) any untrue statement or alleged untrue statement of a material
fact contained in a registration statement under this Agreement, including any
related preliminary or final prospectus, any amendment or supplement, or any
document filed under state securities or "blue sky" laws, (ii) the omission or
alleged omission to state a material fact required to be stated in any such
registration statement, prospectus, amendment, supplement or document or
necessary to make the statements in any such registration statement, prospectus,
amendment, supplement or document not misleading, or (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
state securities law, or any rule or regulation promulgated under the Securities
Act, the Exchange Act or any state securities law.
17
<PAGE> 1
EXHIBIT 10.1
CREDIT AGREEMENT,
dated as of November 12, 1999,
among
STERICYCLE, INC.,
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS AND OTHER PERSONS
FROM TIME TO TIME PARTIES HERETO,
as the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent, the Lead Arranger and
the Book Manager,
BANKERS TRUST COMPANY,
as the Documentation Agent for the Lenders,
and
BANK OF AMERICA, N.A.,
as the Administrative Agent for the Lenders,
together with
LASALLE BANK NATIONAL ASSOCIATION
and
HARRIS TRUST & SAVINGS BANK,
as Co-Agents.
<PAGE> 2
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of November 12, 1999, is made by and
among STERICYCLE, INC., a Delaware corporation (the "Borrower"), the various
financial institutions and other Persons from time to time parties hereto (the
"Lenders"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as the Syndication Agent (in such
capacity, the "Syndication Agent"), the Lead Arranger and the Book Manager, BANK
OF AMERICA, N.A., as administrative agent (in such capacity, the "Administrative
Agent") for the Lenders, and BANKERS TRUST COMPANY, as the documentation agent
(in such capacity, the "Documentation Agent") for the Lenders.
W I T N E S S E T H:
WHEREAS, pursuant to a merger (the "BFI Merger") of a wholly-owned
subsidiary of Allied Waste Industries, Inc., a Delaware corporation ("Seller")
with and into Browning-Ferris Industries, Inc., a Delaware corporation ("BFI"),
on July 30, 1999, BFI became a wholly-owned subsidiary of Seller;
WHEREAS, in connection with the BFI Merger, Seller has (a) caused BFI
to transfer to (i) BFI Medical Waste, Inc., a Delaware corporation and a newly
formed, wholly-owned subsidiary of BFI ("Newco"), substantially all of the
assets utilized in the provision of BFI's medical waste services in the United
States (other than the BFI assets held through BFI Washington and BFI
Connecticut (as each such term is defined below)) and (ii) BFI Medical Waste,
Inc., a Puerto Rican corporation and a newly formed, wholly-owned subsidiary of
BFI ("Newco PR"), substantially all of the assets utilized in the provision of
BFI's medical waste services in Puerto Rico, (b) caused BFI to prepare for
transfer to the Borrower, the Capital Stock of (i) BFI Medical Waste Systems of
Washington, Inc., a Delaware corporation ("BFI Washington"), which conducts
substantially all of the business of BFI's medical waste services in the State
of Washington and (ii) Browning-Ferris Industries of Connecticut, Inc., a
Delaware corporation ("BFI Connecticut"), which owns certain motor vehicle
assets utilized in the provision of BFI's medical waste services in the United
States (all such businesses and assets transferred to and/or held by Newco,
Newco PR, BFI Washington and BFI Connecticut, collectively, the "BFI U.S.
Business"), and (c) transferred substantially all of the assets of Seller
utilized in the provision of Seller's medical waste services (the "Allied
Business") to Newco;
WHEREAS, the Borrower intends to acquire (the "Allied Acquisition")
(a) 100% of the issued and outstanding shares of the Capital
Stock of Newco, Newco PR, BFI Connecticut and indirectly through the
Borrower's wholly-owned subsidiary, Stericycle of Washington, Inc., a
Washington corporation, 100% of the issued and outstanding shares of
Capital Stock of BFI Washington, pursuant to a Stock Purchase
Agreement, dated as of April 14, 1999, and as amended on October 22,
1999 and November 12, 1999 (the "Stock Purchase Agreement"), between
the Borrower and Seller, for an aggregate purchase price of
$406,500,000, subject to adjustment in accordance with the Stock
Purchase Agreement; and
(b) through 507375 N.B. Ltd., a New Brunswick corporation and a
wholly-owned Subsidiary of the Borrower, substantially all of the
assets utilized in the provision of BFI's medical waste services in
Canada (the "BFI Canadian Business" and, together with the BFI U.S.
Business, collectively, the "BFI Businesses") pursuant to an Asset
Purchase Agreement, dated as of April 14, 1999 and as amended on
October 22, 1999 (the "Asset Purchase Agreement" and, together with
the Stock Purchase Agreement, collectively, the "Purchase
Agreements"), between the Borrower and Seller, for an aggregate
purchase price of $4,000,000, subject to adjustment in accordance with
the Asset Purchase Agreement (the BFI Businesses and the Allied
Business are collectively referred to herein as the "Acquired
Businesses");
WHEREAS, in connection with the Allied Acquisition, Newco, Newco PR
and BFI Connecticut will become direct, wholly-owned Restricted Subsidiaries of
the Borrower and BFI Washington will
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<PAGE> 3
become an indirect wholly-owned Restricted Subsidiary of the Borrower;
WHEREAS, in order to partially finance the consummation of the Allied
Acquisition and to fund related fees and expenses of approximately $22,000,000,
the Borrower will
(a) issue (the "Subordinated Note Issuance") its 12 3/8% Senior
Subordinated Notes due 2009 (its "Subordinated Notes") for aggregate
gross cash proceeds of at least $125,000,000 on terms and conditions
that are reasonably satisfactory in all material respects to the
Agents; and
(b) issue (the "Convertible PIK Preferred Equity Issuance")
convertible pay-in-kind preferred equity securities (the "Convertible
PIK Preferred Equity") for not less than $75,000,000 in gross cash
proceeds to third parties (the "Convertible PIK Preferred Equity
Holders") and on terms and conditions no more burdensome to the
Borrower or the Lenders than those contained in the Convertible PIK
Preferred Equity Purchase Agreement (the Allied Acquisition, the
Subordinated Note Issuance, the Convertible PIK Preferred Equity
Issuance, and the other transactions contemplated thereby (including
the payment of transaction-related fees and expenses) are collectively
referred to herein as the "Transaction");
WHEREAS, in order to partially finance the Transaction and in
connection with the post-closing ongoing working capital and general corporate
needs of the Borrower and its Restricted Subsidiaries, the Borrower desires to
obtain the following financing facilities from the Lenders:
(a) a Term A Loan Commitment and a Term B Loan Commitment
pursuant to which Borrowings of Term Loans will be made to the
Borrower on the Closing Date in a maximum, original principal amount
of $75,000,000 (in the case of Term A Loans) and $150,000,000 (in the
case of Term B Loans);
(b) a Revolving Loan Commitment (to include availability for
Revolving Loans, Swing Line Loans and Letters of Credit) pursuant to
which Borrowings of Revolving Loans, in a maximum aggregate principal
amount (together with all Swing Line Loans and Letter of Credit
Outstandings) not to exceed $50,000,000 will be made to the Borrower
from time to time on and subsequent to the Closing Date but prior to
the Revolving Loan Commitment Termination Date;
(c) a Letter of Credit Commitment pursuant to which the Issuer
will issue Letters of Credit for the account of the Borrower and its
Restricted Subsidiaries that are Subsidiary Guarantors from time to
time on and subsequent to the Closing Date but prior to the Revolving
Loan Commitment Termination Date in a maximum aggregate Stated Amount
at any one time outstanding not to exceed $10,000,000 (provided, that
the aggregate outstanding principal amount of Revolving Loans, Swing
Line Loans and Letter of Credit Outstandings at any time shall not
exceed the then existing Revolving Loan Commitment Amount); and
(d) a Swing Line Loan Commitment pursuant to which Borrowings of
Swing Line Loans in an aggregate outstanding principal amount not to
exceed $10,000,000 will be made on and subsequent to the Closing Date
but prior to the Revolving Loan Commitment Termination Date (provided,
that the aggregate outstanding principal amount of such Swing Line
Loans, together with Revolving Loans and Letter of Credit
Outstandings, at any time shall not exceed the then existing Revolving
Loan Commitment Amount); and
WHEREAS, the Lenders and the Issuer are willing, on the terms and
subject to the conditions hereinafter set forth, to extend the Commitments and
make Loans to the Borrower and issue (or participate in) Letters of Credit;
NOW, THEREFORE, the parties hereto agree as follows.
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<PAGE> 4
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"Acquired Businesses" is defined in clause (b) of the third recital.
"Acquired Person" is defined in clause (m) of Section 7.2.2.
"Acquisition" means the acquisition, by purchase or otherwise, of all
or substantially all of the assets (or any part of the assets constituting all
or substantially all of a business or line of business) of any Person, whether
such acquisition is direct or indirect, including through the acquisition of the
business of, or more than 50% of the outstanding Voting Stock of, such Person,
and whether such acquisition is effected in a single transaction or in a series
of related transactions, and the acquisition, by purchase or otherwise, of
additional shares of the outstanding Voting Stock of any Restricted Subsidiary
of the Borrower which is not then a wholly-owned Subsidiary of the Borrower.
"Adjustment Amount" means, with respect to any determination of
EBITDA, the amount equal to (a) for the four-Fiscal-Quarter period ending on or
about December 31, 1999, $12,800,000, (b) for the four-Fiscal-Quarter period
ending on or about March 31, 2000, $12,800,000, (c) for the four-Fiscal-Quarter
period ending on or about June 30, 2000, $9,600,000, (d) for the
four-Fiscal-Quarter period ending on or about September 30, 2000, $6,400,000 and
(e) for the four-Fiscal-Quarter period ending on or about December 31, 2000,
$3,200,000.
"Administrative Agent" is defined in the preamble and includes each
other Person appointed as the successor Administrative Agent pursuant to Section
9.4.
"Affected Lender" is defined in Section 4.11.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person. "Control" of a Person means the power, directly or indirectly,
(a) to vote 10% or more of the Capital Stock (on a fully diluted
basis) of such Person having ordinary voting power for the election of
directors, managing members or general partners (as applicable); or
(b) to direct or cause the direction of the management and
policies of such Person (whether by contract or otherwise).
"Agents" means, unless the context requires otherwise, the Syndication
Agent, the Administrative Agent and the Documentation Agent.
"Agents' Fee Letter" means the confidential letter captioned
"Stericycle Fee Letter", dated September 28, 1999, among the Agents and the
Borrower.
"Agreement" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated or otherwise modified from time to time and
in effect on such date.
"Allied Acquisition" is defined in the third recital.
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<PAGE> 5
"Allied Acquisition Documents" means, collectively, the Purchase
Agreements, and each other purchase, sales, operating, transition and other
agreement executed and delivered in connection with the Allied Acquisition
(including documentation relating to the contribution by Seller and BFI of the
Allied Business and the BFI U.S. Business to Newco).
"Allied Business" is defined in clause (c) of the second recital.
"Annualized Basis" means, with respect to the determination of any
amount for any period (for purposes of this definition, the "Subject Period"),
the product obtained by multiplying (a) the amount accrued during the period
commencing with (and including) the Closing Date and ending on the last day of
the Subject Period and (b) the quotient obtained by dividing (i) 365 by (ii) the
number of days from (and including) the Closing Date to (and including) the last
day of the Subject Period.
"Applicable Commitment Fee" means, (a) for each day from the Effective
Date to (but excluding) the earlier of the date upon which either a Compliance
Certificate pursuant to clause (c) of Section 7.1.1 or a Pricing Certificate, in
either case, for the second full Fiscal Quarter to have commenced and ended
after the Effective Date, is delivered by the Borrower to the Administrative
Agent and the Syndication Agent, a fee which shall accrue at a rate of 1/2 of 1%
per annum, and (b) at all times from the earlier of the date upon which the
Compliance Certificate or the Pricing Certificate described in the immediately
preceding clause (a) is delivered, a fee which shall accrue at the applicable
rate per annum set forth below under the column entitled "Applicable Commitment
Fee", determined by reference to the applicable Leverage Ratio referred to
below:
Leverage Ratio Applicable Commitment Fee
-------------- -------------------------
greater than 3.50:1.00 0.50%
greater than 3.00:1.00 and less than or
equal to 3.50:1.00 0.375%
less than or equal to 3.00:1.00 0.30%
The Leverage Ratio used to compute the Applicable Commitment Fee shall, subject
to the last sentence of this definition, be that set forth in the Compliance
Certificate or the Pricing Certificate, as the case may be, most recently
delivered by the Borrower to the Administrative Agent and the Syndication Agent;
changes in the Applicable Commitment Fee resulting from a change in the Leverage
Ratio shall become effective upon delivery by the Borrower to the Administrative
Agent and the Syndication Agent of (i) a new Compliance Certificate pursuant to
clause (c) of Section 7.1.1 or (ii) a new Pricing Certificate, whichever is
delivered earlier. If the Borrower (A) shall fail to deliver a Compliance
Certificate by the delivery due date specified in such clause (notwithstanding
the fact that the Borrower may have previously delivered a Pricing Certificate
for the same applicable period), the Applicable Commitment Fee from and
including the day immediately following such delivery due date to (but
excluding) the date the Borrower delivers to the Administrative Agent and the
Syndication Agent a Compliance Certificate shall conclusively be equal to the
highest Applicable Commitment Fee set forth above or (B) shall deliver a
Compliance Certificate for the same period for which a Pricing Certificate was
previously delivered, and such Compliance Certificate indicates a Leverage Ratio
that would result in an Applicable Commitment Fee which is greater than the
Applicable Commitment Fee then in effect, then (x) such greater Applicable
Commitment Fee shall be deemed to be in effect for all purposes of this
Agreement from the date such Pricing Certificate was delivered to the
Administrative Agent and the Syndication Agent and (y) in furtherance thereof,
if the Borrower shall have made any payment in respect of fees during the period
from the date such Pricing Certificate was delivered to the actual date of
delivery of such Compliance Certificate, then the Borrower shall pay in the form
of a supplemental payment of fees, an amount which equals the difference between
the amount of fees that would otherwise have been paid, determined as if such
Compliance Certificate was
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<PAGE> 6
delivered on the date such Pricing Certificate was actually delivered and the
amount of such fees so paid, which supplemental payment of fees shall be due and
payable on the actual date of delivery of such Compliance Certificate.
"Applicable Margin" means, at all times during the applicable periods
set forth below,
(a) from the Effective Date to (but excluding) the earlier of the
date upon which either a Compliance Certificate pursuant to clause (c)
of Section 7.1.1 or a Pricing Certificate, in either case, for the
second full Fiscal Quarter to have commenced and ended after the
Effective Date, is delivered by the Borrower to the Administrative
Agent and the Syndication Agent, with respect to the unpaid principal
amount of each
(i) Swing Line Loan (which shall be borrowed and maintained
only as a Base Rate Loan), Revolving Loan and Term A Loan
maintained as a Base Rate Loan, 1.75% per annum;
(ii) Term B Loan maintained as a Base Rate Loan, 2.50% per
annum;
(iii) Revolving Loan and Term A Loan maintained as a LIBO
Rate Loan, 2.75% per annum; and
(iv) Term B Loan maintained as a LIBO Rate Loan, 3.50% per
annum;
(b) with respect to Loans other than Term B Loans, at all times
from the earlier of the date upon which the Compliance Certificate or
the Pricing Certificate described in the immediately preceding clause
(a) is delivered, with respect to the unpaid principal amount of each
Swing Line Loan (which shall be borrowed and maintained only as a Base
Rate Loan), Revolving Loan and Term A Loan, the rate determined by
reference to the applicable Leverage Ratio and at the applicable
percentage per annum set forth below under the column entitled
"Applicable Margin for Base Rate Loans", in the case of such Loans
made or maintained as Base Rate Loans, or by reference to the
applicable Leverage Ratio and at the applicable percentage per annum
set forth below under the column entitled "Applicable Margin for LIBO
Rate Loans", in the case of such Loans made or maintained as LIBO Rate
Loans:
<TABLE>
<CAPTION>
Applicable Margin For Applicable Margin For
Leverage Ratio Base Rate Loans LIBO Rate Loans
-------------- --------------- ---------------
<S> <C> <C>
greater than 4.00:1.00 1.75% 2.75%
greater than 3.50:1.00 and less 1.50% 2.50%
than or equal to 4.00:1.00
greater than 3.00:1.00 and less 1.25% 2.25%
than or equal to 3.50:1.00
less than or equal to 3.00:1.00 1.00% 2.00%
</TABLE>
(c) with respect to Term B Loans, at all times from the earlier
of the date upon which either the Compliance Certificate or the
Pricing Certificate described in the immediately preceding clause (a)
is delivered, with respect to the unpaid principal amount of each Term
B Loan, the rate determined by reference to the applicable Leverage
Ratio and at the applicable percentage per annum set forth below under
the column entitled "Applicable Margin for Base Rate Loans", in the
case of such Loans made or maintained as Base Rate Loans, or by
reference to the applicable Leverage Ratio and at the applicable
percentage per annum set forth below
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<PAGE> 7
under the column entitled "Applicable Margin for LIBO Rate Loans", in
the case of such Loans made or maintained as LIBO Rate Loans:
<TABLE>
<CAPTION>
Applicable Margin For Applicable Margin For
Leverage Ratio Base Rate Loans LIBO Rate Loans
-------------- --------------- ---------------
<S> <C> <C>
greater than 3.50:1.00 2.50% 3.50%
greater than 3.00:1.00 and less 2.25% 3.25%
than or equal to 3.50:1.00
less than or equal to 3:00:1.00 2.00% 3.00%
</TABLE>
The Leverage Ratio used to compute the Applicable Margin shall, subject to the
last sentence of this definition, be that set forth in the Compliance
Certificate or the Pricing Certificate, as the case may be, most recently
delivered by the Borrower to the Administrative Agent and the Syndication Agent;
changes in the Applicable Margin resulting from a change in the Leverage Ratio
shall become effective upon delivery by the Borrower to the Administrative Agent
and the Syndication Agent of (i) a new Compliance Certificate pursuant to clause
(c) of Section 7.1.1 or (ii) a new Pricing Certificate, whichever is delivered
earlier. If the Borrower (A) shall fail to deliver a Compliance Certificate by
the delivery due date specified in such clause (notwithstanding the fact that
the Borrower may have previously delivered a Pricing Certificate for the same
applicable period), the Applicable Margin from and including the day immediately
following such delivery due date to (but excluding) the date the Borrower
delivers to the Administrative Agent and the Syndication Agent a Compliance
Certificate shall conclusively be equal to the highest Applicable Margin set
forth above or (B) shall deliver a Compliance Certificate for the same period
for which a Pricing Certificate was previously delivered, and such Compliance
Certificate indicates a Leverage Ratio that would result in an Applicable Margin
which is greater than the Applicable Margin then in effect, then (x) such
greater Applicable Margin shall be deemed to be in effect for all purposes of
this Agreement from the date such Pricing Certificate was delivered to the
Administrative Agent and the Syndication Agent and (y) in furtherance thereof,
if the Borrower shall have made any payment in respect of interest during the
period from the date such Pricing Certificate was delivered to the actual date
of delivery of such Compliance Certificate, then the Borrower shall pay in the
form of a supplemental payment of interest, an amount which equals the
difference between the amount of interest that would otherwise have been paid,
determined as if such Compliance Certificate was delivered on the date such
Pricing Certificate was actually delivered and the amount of such interest so
paid, which supplemental payment of interest shall be due and payable on the
actual date of delivery of such Compliance Certificate.
"Asset Purchase Agreement" is defined in clause (b) of the third
recital.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
"Authorized Officer" is defined in clause (b) of Section 5.1.1.
"Bain" means (i) Bain Capital, Inc., a Delaware corporation, any
Person that Bain Capital, Inc. has the power to direct or cause the direction of
the management and policies thereof (whether by contract or otherwise) and any
Person that has the power to direct or cause the direction of the management and
policies of Bain Capital, Inc. and (ii) any investment fund which is managed by
any Person referred to in the preceding clause (i) and a controlling interest of
which is owned by any such Person, by employees of Bain Capital, Inc. or by any
combination of such Persons and such employees.
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<PAGE> 8
"Base Rate" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum (rounded upward, if necessary,
to the next highest 1/100 of 1%) equal to the higher of
(a) the Reference Rate in effect on such day; and
(b) the Federal Funds Rate in effect on such day plus 1/2 of 1%.
Changes in the rate of interest on that portion of any Loans maintained as Base
Rate Loans will take effect simultaneously with each change in the Base Rate.
The Administrative Agent will give notice promptly to the Borrower and the
Lenders of changes in the Base Rate; provided, that the failure to give such
notice shall not affect the Base Rate in effect after such change.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Base Rate.
"BFI" is defined in the first recital.
"BFI Businesses" is defined in clause (b) of the third recital.
"BFI Canadian Business" is defined in clause (b) of the third recital.
"BFI Connecticut" is defined in clause (b)(ii) of the second recital.
"BFI Merger" is defined in the first recital.
"BFI U.S. Business" is defined in clause (b)(ii) of the second
recital.
"BFI Washington" is defined in clause (b)(i) of the second recital.
"BofA" means Bank of America, N.A., in its individual capacity.
"Borrower" is defined in the preamble.
"Borrower Closing Date Certificate" means the closing date certificate
executed and delivered by the Borrower pursuant to the terms of this Agreement,
substantially in the form of Exhibit D-1 hereto.
"Borrower Security and Pledge Agreement" means the Security and Pledge
Agreement executed and delivered by an Authorized Officer of the Borrower
pursuant to Section 5.1.13 or 7.1.9, substantially in the form of Exhibit G-1
hereto, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"Borrowing" means the Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by all Lenders required to make
such Loans on the same Business Day and pursuant to the same Borrowing Request
in accordance with Section 2.1.
"Borrowing Request" means a Loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of Exhibit
B-1 hereto.
"Business Day" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York, Chicago, Illinois or Charlotte,
7
<PAGE> 9
North Carolina; and
(b) relative to the making, continuing, prepaying or repaying of
any LIBO Rate Loans, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollars
are carried on in the London interbank eurodollar market.
"Capital Expenditures" means, for any period, the aggregate amount of
all expenditures of the Borrower and its Restricted Subsidiaries for fixed or
capital assets made during such period which, in accordance with GAAP, would be
classified as capital expenditures; provided, however, that Capital Expenditures
shall not include (i) capital expenditures that are (A) made with Casualty
Proceeds or Net Disposition Proceeds which are reinvested in accordance with
clause (e) or (f) of Section 3.1.1 or (B) in respect of Capitalized Lease
Liabilities which are Permitted Refinancings of previously incurred Capitalized
Lease Liabilities or (ii) Permitted Acquisitions.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued after the Effective Date.
"Capitalized Lease Liabilities" means all monetary obligations of the
Borrower or any of its Restricted Subsidiaries under any leasing or similar
arrangement which have been (or, in accordance with GAAP, should be) classified
as capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.
"Carry-Forward Amount" is defined in Section 7.2.7.
"Cash Collateralize" means, with respect to a Letter of Credit, the
deposit of immediately available funds into a cash collateral account maintained
with (or on behalf of) the Administrative Agent on terms reasonably satisfactory
to the Administrative Agent in an amount equal to the Stated Amount of such
Letter of Credit.
"Cash Equivalent Investment" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by)
the United States of America or a State thereof (or any agency or
political subdivision thereof, to the extent such obligations are
supported by the full faith and credit of the United States of America
or a State thereof) maturing not more than twelve months after such
time;
(b) commercial paper maturing not more than 270 days from the
date of issue, which is issued by
(i) a corporation (other than an Affiliate of any Obligor)
or bank organized under the laws of any State of the United
States or of the District of Columbia and rated A-1 (or the
equivalent thereof) or higher by S&P or P-1 (or the equivalent
thereof) or higher by Moody's, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit, time deposit or bankers
acceptance, maturing not more than one year after its date of
issuance, which is issued by either
(i) any bank organized under the laws of the United States
(or any State
8
<PAGE> 10
thereof) and which has (x) a credit rating of A2 (or the
equivalent thereof) or higher from Moody's or A (or the
equivalent thereof) or higher from S&P and (y) a combined capital
and surplus greater than $500,000,000, or
(ii) any Lender;
(d) any repurchase agreement having a term of 7 days or less
entered into with any Lender or any commercial banking institution
satisfying the criteria set forth in clause (c)(i) which
(i) is secured by a fully perfected security interest in any
obligation of the type described in clause (a), and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the repurchase
obligation of such commercial banking institution thereunder; or
(iii) shares of investment companies that are registered
under the Investment Company Act of 1940, as amended, and that
invest solely in one or more of the types of securities described
in clauses (a) through (d) above.
"Casualty Event" means the damage, destruction, condemnation, taking,
seizing or similar event, as the case may be, of any property of the Borrower or
any of its Restricted Subsidiaries.
"Casualty Proceeds" means, with respect to any Casualty Event, the
amount of any insurance proceeds or condemnation or similar awards received by
the Borrower or any of its Restricted Subsidiaries in connection therewith, but
excluding (i) any proceeds or awards required to be paid to a creditor (other
than any Secured Party) which holds a first-priority Lien permitted by Section
7.2.3 on the property which is the subject of such Casualty Event and (ii) any
taxes and other costs actually paid or estimated by such Person (in good faith)
to be payable in cash in connection with any adjustment or settlement in respect
of such proceeds or awards; provided, however, that if, after the payment of all
taxes with respect to such adjustment or settlement, the amount of estimated
taxes, if any, pursuant to clause (ii) above exceeded the tax amount actually
paid in cash in respect of such adjustment or settlement, the aggregate amount
of such excess shall, at such time, constitute Casualty Proceeds.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Change in Control" means
(a) at any time, any person or group (within the meaning of
Sections 13(d) and 14(d) under the Exchange Act), other than Bain
and/or MDCP (acting individually or as a group (within the meaning of
Sections 13(d) and 14(d) under the Exchange Act), shall become the
ultimate "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act), directly or indirectly, of Capital Stock
representing more than 25% of the Voting Stock of the Borrower on a
fully diluted basis; or
(b) during any period of 24 consecutive months, individuals who
at the beginning of such period constituted the Board of Directors of
the Borrower (together with any new directors whose election to such
Board or whose nomination for election by the stockholders of the
Borrower was approved by a vote of a majority of the directors then
still in office who were
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<PAGE> 11
either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the
Borrower then in office; or
(c) the occurrence of any "Change of Control" (or similar term)
under (and as defined in) any Subordinated Debt Document or any
document relating to the Convertible PIK Preferred Equity or any other
Capital Stock issued by the Borrower or any of its Restricted
Subsidiaries.
"Closing Date" means the date of the initial Credit Extension
hereunder.
"Code" means the Internal Revenue Code of 1986, and the regulations
and rulings thereunder, in each case as amended, reformed or otherwise modified
from time to time.
"Commitment" means, as the context may require, a Lender's Term A Loan
Commitment, Term B Loan Commitment, Revolving Loan Commitment or Letter of
Credit Commitment, or the Swing Line Lender's Swing Line Loan Commitment.
"Commitment Amount" means, as the context may require, the Term A Loan
Commitment Amount, the Term B Loan Commitment Amount, the Revolving Loan
Commitment Amount, the Letter of Credit Commitment Amount or the Swing Line Loan
Commitment Amount.
"Commitment Letter" means the confidential letter, dated as of
September 28, 1999, between the Agents and the Borrower.
"Commitment Termination Date" means, as the context may require, the
Term A Loan Commitment Termination Date, the Term B Loan Commitment Termination
Date or the Revolving Loan Commitment Termination Date.
"Commitment Termination Event" means
(a) the occurrence of any Event of Default described in clauses
(a) through (d) of Section 8.1.9; or
(b) the occurrence and continuance of any other Event of Default
and either
(i) the declaration of all or any portion of the Loans to be
due and payable pursuant to Section 8.3, or
(ii) the giving of notice by the Administrative Agent,
acting at the direction of the Required Lenders, to the Borrower
that the Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and
executed by the chief financial or accounting Authorized Officer of the
Borrower, substantially in the form of Exhibit E hereto, together with such
changes thereto as the Administrative Agent and the Syndication Agent may from
time to time reasonably request for the purpose of monitoring the Borrower's
compliance with the financial covenants contained herein.
"Consultant" means any natural person who is performing tasks for the
Borrower and/or any Restricted Subsidiary that are customarily performed by an
employee of the Borrower and/or such Restricted Subsidiary.
"Contingent Liability" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
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<PAGE> 12
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments for deposit or in the
course of collection), or guarantees the payment of dividends or other
distributions upon the Capital Stock of any other Person. The amount of any
Person's obligation under any Contingent Liability shall (subject to any
limitation set forth therein) be deemed to be the outstanding principal amount
of the debt, obligation or other liability guaranteed thereby (or, if such
amount is not expressly stated or capable of being determined, the maximum
reasonably anticipated liability in respect thereof as determined by such Person
in good faith).
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"Convertible PIK Preferred Equity" is defined in clause (b) of the
fifth recital.
"Convertible PIK Preferred Equity Holders" is defined in clause (b) of
the fifth recital.
"Convertible PIK Preferred Equity Issuance" is defined in clause (b)
of the fifth recital.
"Convertible PIK Preferred Equity Purchase Agreement" means the
Amended and Restated Series A Convertible Preferred Stock Purchase Agreement,
dated as of September 26, 1999, between the Borrower, Bain and MDCP.
"Copyright Security Agreement" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit D to
the applicable Security and Pledge Agreement, as amended, supplemented, amended
and restated or otherwise modified from time to time.
"Credit Extension" means, as the context may require,
(a) the making (but not the continuation or conversion) of a Loan
by a Lender; or
(b) the issuance of any Letter of Credit, or the extension of any
Stated Expiry Date of any existing Letter of Credit, by the Issuer.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"Current Assets" means, on any date, without duplication, all assets
which, in accordance with GAAP, would be included as current assets on a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries at
such date as current assets (excluding, however, (i) amounts due and to become
due from Affiliates of the Borrower which have arisen from transactions which
are other than arm's-length and in the ordinary course of its business and (ii)
cash and Cash Equivalent Investments).
"Current Liabilities" means, on any date, without duplication, all
amounts which, in accordance with GAAP, would be included as current liabilities
on a consolidated balance sheet of the Borrower and its Restricted Subsidiaries
at such date, excluding current maturities of Indebtedness.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"Disbursement" is defined in Section 2.6.2.
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"Disbursement Date" is defined in Section 2.6.2.
"Disbursement Due Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrower with (unless otherwise
provided hereunder) the written consent of the Required Lenders.
"Disposition" (or similar words such as "Dispose") means any sale,
transfer, lease, contribution or other conveyance (including by way of merger)
of, or the granting of options, warrants or other rights to, any of the
Borrower's or its Restricted Subsidiaries' assets (including accounts
receivables and Capital Stock of Subsidiaries) to any Person other than to the
Borrower or another Restricted Subsidiary in a single transaction or series of
related transactions.
"DLJ" is defined in the preamble.
"Documentation Agent" is defined in the preamble.
"Dollar" and the sign "$" mean lawful money of the United States.
"Domestic Office" means the office of a Lender designated as its
"Domestic Office" on its signature page hereto or in a Lender Assignment
Agreement, or such other office within the United States as may be designated
from time to time by notice from such Lender to the Administrative Agent and the
Syndication Agent and the Borrower.
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
Subsidiary.
"EBITDA" means, for any applicable period, the sum of
(a) Net Income,
plus
(b) to the extent deducted in determining Net Income, the sum,
without duplication, of (i) income tax (including foreign income taxes
and any state income taxes imposed on a single business, unitary or
similar basis) expense (whether paid or deferred), (ii) Interest
Expense, (iii) amounts attributable to amortization and depreciation
of assets, (iv) other non-cash charges and (v) extraordinary cash
losses (but solely to the extent such extraordinary cash losses do not
exceed the extraordinary cash gains for such period),
minus
(c) to the extent included in Net Income, non-cash credits;
provided, however, that (A) to the extent any such period includes the Fiscal
Quarter or Fiscal Quarters ending on or about March 31, 1999, June 30, 1999
and/or September 30, 1999, EBITDA attributable to the Acquired Businesses shall
be deemed to be $13,900,000, $14,400,000 and $14,100,000, in respect of such
Fiscal Quarters, respectively, (B) to the extent such period includes the period
from October 1, 1999 to the Closing Date (the "subperiod"), EBITDA attributable
to the Acquired Businesses in respect of such subperiod shall be deemed to equal
the product of (1) $42,400,000 and (2) the quotient obtained by dividing (x) the
number of days from (and including) the first day of such subperiod to (and
excluding) the Closing Date by (y) 273, (C) to the extent EBITDA is being
determined for any four-Fiscal Quarter period ending on or about December 31,
1999, March 31, 2000, June 30, 2000, September 30, 2000 or December 31, 2000,
EBITDA shall be increased by the applicable Adjustment Amount and (D) EBITDA
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<PAGE> 14
shall be increased by the amount of Transaction Costs actually paid during such
period to the extent such amount was deducted in determining Net Income for such
period.
"Effective Date" means the date this Agreement becomes effective
pursuant to Section 10.8.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment, including the Clean Air Act, as amended, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, as amended,
the Resource Conservation and Recovery Act of 1976, as amended, the Toxic
Substances Control Act of 1976, as amended, the Federal Water Pollution Control
Act Amendments of 1972, the Clean Water Act of 1977, as amended, the Hazardous
Materials Transportation Act, as amended, any so-called "Superfund" and
"Superlien" law (including those already referenced in this definition), and any
other law having a similar subject matter.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations and rulings thereunder, in each case as in effect from time to time.
References to Sections of ERISA also refer to any successor Sections thereto.
"Event of Default" is defined in Section 8.1.
"Excess Cash Flow" means, for any Fiscal Year, the excess (if any), of
(a) the sum of (i) EBITDA for such Fiscal Year (without giving
effect to the proviso to the definition of "EBITDA"), (ii) any
extraordinary cash gains of the Borrower and its Restricted
Subsidiaries during such Fiscal Year not included in such EBITDA (but
solely to the extent such extraordinary cash gains exceed the
extraordinary cash losses for such period) and (iii) the amount of any
net decrease in Current Assets over Current Liabilities of the
Borrower and its Restricted Subsidiaries for such Fiscal Year
over
(b) the sum (for such Fiscal Year), without duplication, of ()
Interest Expense accrued during such Fiscal Year and paid or payable
in cash by the Borrower and its Restricted Subsidiaries, () voluntary
prepayments and scheduled principal repayments, to the extent actually
made during such Fiscal Year, of Total Debt, including Term Loans and
Revolving Loans (provided, that, in the case of Revolving Loans or
other loans made pursuant to a revolving commitment, there is a
corresponding permanent reduction in such revolving commitment)
pursuant to, in the case of the Loans, clauses (a), (c) and (d) of
Section 3.1.1, () any portion of the amount included in the preceding
clause (a)(ii) applied toward the repayment of Term Loans pursuant to
clause (f) of Section 3.1.1, () all income taxes in respect of such
Fiscal Year (including foreign income taxes and any state income taxes
imposed on a single business, unitary or similar basis) paid or
payable in cash by the Borrower and its Restricted Subsidiaries (less
any cash tax refunds received during such Fiscal Year), () an amount
equal to (A) Capital Expenditures made in cash by the Borrower and its
Restricted Subsidiaries in such Fiscal Year to the extent financed
with internally generated cash flow of the Borrower and its Restricted
Subsidiaries plus (or minus, if negative) (B) the Carry-Forward Amount
for such Fiscal Year to be carried forward to the next succeeding
Fiscal Year less the Carry-Forward Amount (if any) for the Fiscal Year
immediately preceding such Fiscal Year carried forward to such Fiscal
Year, (vi) the aggregate amount of Investments made in cash by the
Borrower and its Restricted Subsidiaries during such Fiscal Year
pursuant to clause (f), (k) or (l) of Section 7.2.5 to the extent
financed with internally generated cash flow of the Borrower and its
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Restricted Subsidiaries, (vii) the aggregate amount of cash expended
by the Borrower and its Restricted Subsidiaries during such Fiscal
Year in respect of Permitted Acquisitions to the extent financed with
internally generated cash flow of the Borrower and its Restricted
Subsidiaries, (viii) the aggregate amount of Restricted Payments that
are permitted to be made pursuant to Section 7.2.6 and made in cash
during such Fiscal Year to the extent financed with internally
generated cash flow of the Borrower and its Restricted Subsidiaries,
(ix) the aggregate amount of expenditures actually made by the
Borrower and its Restricted Subsidiaries in cash during such Fiscal
Year (to the extent financed with internally generated cash flow of
the Borrower and its Restricted Subsidiaries) to the extent such
expenditures are (A) not expensed during such Fiscal Year and (B) in
respect of long-term liabilities of the Borrower and its Restricted
Subsidiaries other than Indebtedness, (x) with respect to the
aggregate amount of non-cash charges added back to Net Income in
calculating EBITDA for the purposes of determining Excess Cash Flow
under this Agreement for the Fiscal Year immediately preceding such
Fiscal Year, the aggregate amount of cash expended by the Borrower and
its Restricted Subsidiaries during such Fiscal Year in respect of any
such non-cash charges (to the extent the amount determined pursuant to
this clause (x) does not exceed the amount of Excess Cash Flow for
such immediately preceding Fiscal Year), (xi) the amount of the net
increase of Current Assets over Current Liabilities of the Borrower
and its Restricted Subsidiaries for such Fiscal Year.
"Excess Proceeds Amount" means, initially, zero, as increased from
time to time (i) on each date a mandatory prepayment is required under clause
(g) of Section 3.1.1, by the amount equal to 25% (or, in the case the proviso to
such clause (g) is in operation, 50%) of the Excess Cash Flow for the Fiscal
Year immediately preceding such date, so long as such mandatory prepayment has
been made and (ii) on each date the Borrower or any Restricted Subsidiary
receives Net Equity Proceeds, by the amount equal to 50% of such Net Equity
Proceeds, so long as the mandatory prepayment required pursuant to clause (h) of
Section 3.1.1 has been made, and as decreased from time to time (x) on each date
a mandatory prepayment under clause (g) of Section 3.1.1 would have been
required except that Excess Cash Flow for the Fiscal Year immediately preceding
such date was a negative amount, by such negative amount, (y) at the time any
Capital Expenditure is made pursuant to clause (ii) of the proviso to Section
7.2.7, by the amount thereof and (z) at the time any Investment is made pursuant
to clause (p)(ii) of Section 7.2.5, by the amount expended in respect of such
Investment (it being understood that the Excess Proceeds Amount may be reduced
to an amount below zero after giving effect to any decrease described in clause
(x) above).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exemption Certificate" is defined in clause (e) of Section 4.6.
"Existing Credit Agreement" means the Credit Agreement, dated as of
September 30, 1998, by and among the Borrower and certain of its Subsidiaries,
LaSalle Bank, National Association (f/k/a LaSalle National Bank), as agent, and
the lenders party thereto, as amended, supplemented, amended and restated or
otherwise modified from time to time prior to the Closing Date.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate for such day
will be the arithmetic mean as determined by the Administrative Agent of the
rates for the last transaction in overnight Federal funds arranged prior to 9:00
a.m. on that day by each of three leading brokers of Federal funds transactions
in New York City selected by the Administrative Agent.
"Filing Agent" is defined in Section 5.1.10.
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"Filing Statements" is defined in Section 5.1.10.
"Fiscal Quarter" means a quarter ending on the last day of March,
June, September or December.
"Fiscal Year" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (e.g., the "1999 Fiscal Year") refer to the Fiscal Year
ending on December 31 of such calendar year.
"Fixed Charge Coverage Ratio" means, as of the close of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters of:
(a) EBITDA (for all such Fiscal Quarters);
to
(b) the sum (for all such Fiscal Quarters) of (i) Interest
Expense accrued during such period and paid or payable in cash, (ii)
Capital Expenditures of the Borrower and its Restricted Subsidiaries
made during such period, (iii) scheduled principal repayments of
Indebtedness made during such period (including repayments of the Term
Loans pursuant to clauses (c) and (d) of Section 3.1.1, after giving
effect to any reductions in such scheduled principal repayments
attributable to any optional or mandatory prepayments of the Term
Loans), (iv) all income Taxes accrued during such period and paid or
payable in cash by the Borrower and its Restricted Subsidiaries and
(v) Restricted Payments made during such period.
"Foreign Pledge Agreement" means any supplemental pledge agreement
governed by the laws of a jurisdiction other than the United States or a State
thereof executed and delivered by the Borrower or any of its Restricted
Subsidiaries pursuant to the terms of this Agreement, in form and substance
reasonably satisfactory to the Administrative Agent and the Syndication Agent,
as may be necessary or, in the reasonable judgment of the Administrative Agent,
advisable under the laws of organization or incorporation of a Restricted
Subsidiary to further protect or perfect the Lien on and security interest in
any Collateral (as defined in the Security and Pledge Agreement).
"Foreign Subsidiary" means any Subsidiary of the Borrower (a) which is
organized under the laws of any jurisdiction outside of the United States of
America, (b) which conducts the major portion of its business outside of the
United States of America and (c) all or substantially all of the property and
assets of which are located outside of the United States of America.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
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(c) any solid waste that is generated in the diagnosis, treatment
(e.g., provision of medical services) or immunization of human beings
or animals, in research pertaining thereto, or in the production or
testing of biologicals;
(d) any pollutant or contaminant or hazardous, dangerous or toxic
chemical, material or substance (including any petroleum product)
within the meaning of any other applicable federal, state or local
law, regulation, ordinance or requirement (including consent decrees
and administrative orders) relating to or imposing liability or
standards of conduct concerning any hazardous, toxic or dangerous
waste, substance or material, all as amended.
"Hedging Agreements" means currency exchange agreements, interest rate
swap agreements, interest rate cap agreements and interest rate collar
agreements, and all other agreements or arrangements designed to protect such
Person against fluctuations in interest rates or currency exchange rates.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under Hedging Agreements.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"Impermissible Qualification" means any qualification or exception to
the opinion or certification of any independent public accountant as to any
financial statement of the Borrower
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of matters
relevant to such financial statement; or
(c) which relates to the treatment or classification of any item
in such financial statement and which, as a condition to its removal,
would require an adjustment to such item the effect of which would be
to cause the Borrower to be in Default.
"including" and "include" means including without limiting the
generality of any description preceding such term, and, for purposes of each
Loan Document, the parties hereto agree that the rule of ejusdem generis shall
not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or advances
and all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities of such Person;
(d) for purposes of Section 8.1.5 only, all other items which, in
accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of such Person as of the date at
which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging Obligations;
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(f) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase
price of property or services (excluding trade accounts payable and
accrued expenses in the ordinary course of business which are not
overdue for a period of more than 120 days or, if overdue for more
than 90 days, as to which a dispute exists and adequate reserves in
conformity with GAAP have been established on the books of such
Person), and indebtedness secured by (or for which the holder of such
indebtedness has an existing right, contingent or otherwise, to be
secured by) a Lien on property owned or being acquired by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have
been assumed by such Person or is limited in recourse (provided,
however, that, to the extent such Indebtedness is limited in recourse
solely to the assets securing such Indebtedness, the amount of such
Indebtedness shall be limited to the lesser of (i) the stated amount
(if any) of such Indebtedness and (ii) the fair market value of the
assets securing such Indebtedness);
(g) obligations arising under Synthetic Leases of such Person;
(h) Redeemable Capital Stock of such Person; and
(i) all Contingent Liabilities of such Person in respect of any
of the foregoing.
The Indebtedness of any Person shall include the Indebtedness of any other
entity (including any partnership in which such Person is a general partner) to
the extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Interco Subordination Agreement" means the Intercompany Subordination
Agreement, substantially in the form of Exhibit K hereto, executed and delivered
by two or more Obligors pursuant to the terms of this Agreement, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Intercompany Note" means, with respect to the Borrower or any of its
Restricted Subsidiaries, as the maker thereof, a promissory note substantially
in the form of Exhibit A to the Security and Pledge Agreement (with such
modifications as the Administrative Agent may consent to, such consent not to be
unreasonably withheld), which promissory note shall evidence all intercompany
loans which may be made from time to time by the payee thereunder to such maker
and shall be duly endorsed and pledged by the payee in favor of the
Administrative Agent.
"Interest Coverage Ratio" means, at the last day of any Fiscal
Quarter, the ratio computed for the period consisting of such Fiscal Quarter and
each of the three immediately preceding Fiscal Quarters of:
(a) EBITDA (for all such Fiscal Quarters)
to
(b) the sum (for all such Fiscal Quarters) of Interest Expense
accrued during such period and paid or payable in cash; provided that,
in the event the applicable four-Fiscal- Quarter period would include
any period of time prior to the Closing Date, Interest Expense for the
purposes of this clause (b) shall be determined on an Annualized
Basis.
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"Interest Expense" means, for any Fiscal Quarter, the aggregate
interest expense (both accrued and paid) of the Borrower and its Restricted
Subsidiaries for such Fiscal Quarter, including the portion of any payments made
in respect of Capitalized Lease Liabilities and Synthetic Leases allocable to
interest expense (net of interest income paid during such period to the Borrower
and its Restricted Subsidiaries), but excluding any Transaction Costs (to the
extent included in interest expense) and the annual administrative agency fees
payable to the Administrative Agent pursuant to the Agents' Fee Letter.
"Interest Period" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to Section 2.3 or 2.4
and shall end on (but exclude) the day which numerically corresponds to such
date one, two, three, six, or if then available to each applicable Lender,
twelve months thereafter (or, if such month has no numerically corresponding
day, on the last Business Day of such month), as the Borrower may select in its
relevant notice pursuant to Section 2.3 or 2.4; provided, however, that
(a) the Borrower shall not be permitted to select Interest
Periods to be in effect at any one time which have expiration dates
occurring on more than ten different dates;
(b) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day); and
(c) no Interest Period for any Loan may end later than the Stated
Maturity Date for such Loan.
"Investment" means, relative to any Person,
(a) any loan, advance or extension of credit made by such Person
to any other Person, including the purchase by such Person of any
bonds, notes, debentures or other debt securities of any other Person;
and
(b) any Capital Stock held by such Person in any other Person.
The amount of any Investment shall be the original principal or capital amount
thereof less all returns of principal or equity thereon and shall, if made by
the transfer or exchange of property other than cash, be deemed to have been
made in an original principal or capital amount equal to the fair market value
of such property at the time of such Investment.
"Investment Returns" is defined in Section 7.2.5.
"ISP Rules" is defined in Section 10.9.
"Issuance Request" means a Letter of Credit request and certificate
duly executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit B-2 hereto.
"Issuer" means BofA (or any successor appointed in accordance with
Section 9.4) in its capacity as Issuer of the Letters of Credit. At the request
of either the Borrower or BofA and with such other Person's consent (in either
case, not to be unreasonably withheld), another Lender or an Affiliate of BofA
may issue one or more Letters of Credit hereunder; provided, however, that no
more than two Persons shall at any time be, or be deemed to be, an "Issuer"
under the terms of this Agreement.
"Lender Assignment Agreement" means an assignment agreement
substantially in the form of
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Exhibit L hereto.
"Lenders" is defined in the preamble and includes each Person that
becomes a Lender pursuant to Section 10.11.1.
"Lender's Environmental Liability" means any and all losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
costs, judgments, suits, proceedings, damages (including consequential damages),
disbursements or expenses of any kind or nature whatsoever (including reasonable
attorneys' fees at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against or
prosecuting any litigation, claim or proceeding) which may at any time be
imposed upon, incurred by or asserted or awarded against any Agent, any Lender,
the Issuer or any of such Person's Affiliates, shareholders, directors,
officers, employees, and agents in connection with or arising from:
(a) any Hazardous Material on, in, under or affecting all or any
portion of any property of the Borrower or any of its Subsidiaries,
the groundwater thereunder, or any surrounding areas thereof to the
extent caused by Releases from the Borrower's or any of its
Subsidiaries' or any of their respective predecessors' properties;
(b) any investigation, claim, litigation, or proceeding related
to personal injury arising from exposure or alleged exposure to
Hazardous Materials handled by the Borrower or any of its
Subsidiaries;
(c) any misrepresentation, inaccuracy or breach of any warranty,
contained or referred to in Section 6.12;
(d) any violation or claim of violation by the Borrower or any of
its Subsidiaries of any Environmental Laws; or
(e) the imposition of any lien for damages caused by or the
recovery of any costs for the cleanup, Release or threatened Release
of Hazardous Material by the Borrower or any of its Subsidiaries, or
in connection with any property owned or formerly owned by the
Borrower or any of its Subsidiaries.
"Letter of Credit" is defined in Section 2.1.2.
"Letter of Credit Commitment" means the Issuer's obligation to issue
Letters of Credit pursuant to Section 2.1.2 and, with respect to each Revolving
Loan Lender, the obligations of each such Lender to participate in such Letters
of Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $10,000,000, as such amount may be permanently reduced from time to
time pursuant to Section 2.2.
"Letter of Credit Outstandings" means, on any date, an amount equal to
the sum of (i) the then aggregate amount which is undrawn and available under
all issued and outstanding Letters of Credit, and (ii) the then aggregate amount
of all unpaid and outstanding Reimbursement Obligations.
"Leverage Ratio" means, as of the last day of any Fiscal Quarter, the
ratio of
(a) the excess of (i) Total Debt outstanding on the last day of
such Fiscal Quarter over (ii) the amount of Unrestricted Cash on the
last day of such Fiscal Quarter
to
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(b) EBITDA computed for the period consisting of such Fiscal
Quarter and each of the three immediately preceding Fiscal Quarters.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate
Loans, the rate of interest equal to the average (rounded upwards, if necessary,
to the nearest 1/100 of 1%) of the rates per annum at which Dollar deposits in
immediately available funds are offered to BofA's (or any successor
Administrative Agent's) LIBOR Office in the London interbank market at or about
11:00 a.m. London, England time two Business Days prior to the beginning of such
Interest Period for delivery on the first day of such Interest Period, and in an
amount approximately equal to the amount of the requested LIBO Rate Loan and for
a period approximately equal to such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a rate of interest determined by
reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
-----------------------------------
(Reserve 1.00 - LIBOR Reserve Percentage
Adjusted)
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be determined by the Administrative Agent on the basis of the LIBOR Reserve
Percentage in effect two Business Days before the first day of such Interest
Period.
"LIBOR Office" means the office of a Lender designated as its "LIBOR
Office" on its signature page hereto or in a Lender Assignment Agreement, or
such other office designated from time to time by notice from such Lender to the
Borrower and the Administrative Agent and the Syndication Agent, whether or not
outside the United States, which shall be making or maintaining the LIBO Rate
Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the reserve percentage (expressed as a decimal) equal to the
maximum aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transitional adjustments or other scheduled changes in reserve requirements)
specified under regulations issued from time to time by the F.R.S. Board and
then applicable to assets or liabilities consisting of or including
"Eurocurrency Liabilities", as currently defined in Regulation D of the F.R.S.
Board, having a term approximately equal or comparable to such Interest Period.
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever, to secure payment of a debt or
performance of an obligation (it being understood that "protective filings"
comprised of UCC financing statements filed with respect to assets leased (and
not owned) by the Borrower and its Restricted Subsidiaries shall not be deemed
to be Liens on assets of the Borrower and its Restricted Subsidiaries).
"Loan" means, as the context may require, a Revolving Loan, a Term
Loan or a Swing Line Loan of any type.
"Loan Documents" means, collectively, this Agreement, the Letters of
Credit, the Notes, each Rate Protection Agreement, the Interco Subordination
Agreement, the Agents' Fee Letter, each
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<PAGE> 22
agreement pursuant to which the Administrative Agent is granted a Lien to secure
the Obligations and each other agreement, certificate, document or instrument
delivered in connection with any Loan Document, whether or not specifically
mentioned herein or therein.
"Material Adverse Effect" means a material adverse effect on (i) the
business, assets, financial condition, operations, properties or regulatory
status of the Borrower and its Restricted Subsidiaries, taken as a whole, (ii)
the rights and remedies of any Secured Party under any Loan Document or (iii)
the ability of any Obligor to perform its Obligations under any Loan Document.
"Material Documents" means the Allied Acquisition Documents, the
Organic Documents of the Borrower and its Restricted Subsidiaries, the
Subordinated Debt Documents, and the Convertible PIK Preferred Equity Purchase
Agreement in each case as amended, supplemented, amended and restated or
otherwise modified from time to time in accordance with Section 7.2.12.
"Material Subsidiary" means each Subsidiary of the Borrower that
(a) is designated as a "Material Subsidiary" in a written notice
delivered by the Borrower to the Administrative Agent and the
Syndication Agent on or prior to the Closing Date;
(b) (i) in the case of any Subsidiary which, at the time any
determination is made, is a Restricted Subsidiary, accounted for at
least 5.00%, and (ii) in the case of any Subsidiary which, at the time
any determination is made, is an Unrestricted Subsidiary, accounted
for at least 10.00%, in each case, of the consolidated gross revenues
of the Borrower and its Subsidiaries for the most recently completed
Fiscal Quarter with respect to which, pursuant to clause (a) or (b) of
Section 7.1.1, financial statements have been, or are required to have
been, delivered by the Borrower on or before the date as of which any
such determination is made, as reflected in such financial statements;
or
(c) (i) in the case of any Subsidiary which, at the time any
determination is made, is a Restricted Subsidiary, accounted for at
least 5.00%, and (ii) in the case of any Subsidiary which, at the time
any determination is made, is an Unrestricted Subsidiary, accounted
for at least 10.00%, in each case, of the consolidated gross assets of
the Borrower and its Subsidiaries as of the last day of the most
recently completed Fiscal Quarter with respect to which, pursuant to
clause (a) or (b) of Section 7.1.1, financial statements have been, or
are required to have been, delivered by the Borrower on or before the
date as of which any such determination is made, as reflected in such
financial statements.
"MDCP" means Madison Dearborn Capital Partners III, L.P., a Delaware
limited partnership, Madison Dearborn Partners III, L.P., a Delaware limited
partnership, and any Person that the general partner of Madison Dearborn
Partners III, L.P. has the power to direct or cause the direction of the
management and policies thereof (whether by contract or otherwise).
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means each mortgage, deed of trust or agreement executed
and delivered by any Obligor in favor of the Administrative Agent for the
benefit of the Secured Parties pursuant to the requirements of this Agreement in
substantially the form of Exhibit I-1 or Exhibit I-2 hereto, as applicable,
under which a Lien is granted on the real property and fixtures described
therein, in each case as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Net Debt Proceeds" means with respect to the incurrence, sale or
issuance by the Borrower or any of its Restricted Subsidiaries of any
Indebtedness (other than any Indebtedness permitted by Section 7.2.2), the
excess of:
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(a) the gross cash proceeds received by such Person from such
incurrence, sale or issuance,
over
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred or estimated (in good faith) to be payable in cash in
connection with such incurrence, sale or issuance which have not been
paid to Affiliates of the Borrower in connection therewith.
"Net Disposition Proceeds" means, with respect to any Disposition of
any assets of the Borrower or any of its Restricted Subsidiaries (other than
sales permitted pursuant to clause (a), (b), (c) or (d) of Section 7.2.11), the
excess of
(a) the gross cash proceeds received by such Person from any such
Disposition and any cash payments received in respect of promissory
notes or other non-cash consideration delivered to such Person in
respect thereof,
over
(b) the sum (without duplication) of (i) all reasonable and
customary legal, investment banking, brokerage and accounting and
other professional fees and disbursements actually incurred in
connection with such Disposition which have not been paid to
Affiliates of the Borrower in connection therewith, (ii) all taxes and
other governmental costs and expenses actually paid or estimated by
such Person (in good faith) to be payable in cash in connection with
such Disposition, and (iii) payments made by such Person to retire
Indebtedness (other than the Credit Extensions) of such Person where
payment of such Indebtedness is required in connection with such
Disposition;
provided, however, that if, after the payment of all taxes with respect to such
Disposition, the amount of estimated taxes, if any, pursuant to clause (b)(ii)
above exceeded the tax amount actually paid in cash in respect of such
Disposition, the aggregate amount of such excess shall, at such time, constitute
Net Disposition Proceeds.
"Net Equity Proceeds" means with respect to the sale or issuance by
the Borrower or any of its Restricted Subsidiaries to any Person of any Capital
Stock, warrants or options or the exercise of any such warrants or options, the
excess of:
(a) the gross cash proceeds received by such Person from such
sale, exercise or issuance,
over
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements actually
incurred in connection with such sale or issuance which have not been
paid to Affiliates of the Borrower in connection therewith;
provided, however, that Net Equity Proceeds shall not include (i) any gross cash
proceeds received by the Borrower or any Restricted Subsidiary (A) from Bain or
MDCP, or any director, officer or employee of the Borrower or any Restricted
Subsidiary or any Consultant; provided that, in each case, the Capital Stock
issued to any such Person is for such Person's own account and not with a view
to, or intention of, distribution thereof, (B) which are concurrently used by
the Borrower or any of its Restricted Subsidiaries to finance a Permitted
Acquisition or (C) in respect of Investments permitted
22
<PAGE> 24
pursuant to clause (e), (f) or (g) of Section 7.2.5 or (ii) $10,000,000 of gross
cash proceeds received by Foreign Subsidiaries in respect of issuances of their
Capital Stock.
"Net Income" means, for any period, the aggregate of all amounts
(including extraordinary losses, but excluding, except to the extent of
extraordinary losses during such period, extraordinary gains) which would be
included as net income on the consolidated financial statements of the Borrower
and its Restricted Subsidiaries for such period; provided, however, that the Net
Income of any Restricted Subsidiary that is not a Subsidiary Guarantor shall be
excluded from Net Income of the Borrower to the extent that the declaration or
payment of dividends or similar distributions by such Restricted Subsidiary of
its Net Income is not at the date of determination permitted without any prior
governmental approval that has not been obtained or, directly or indirectly, by
operation of the terms of its Organic Documents or any agreement (other than an
agreement with the Borrower or its Restricted Subsidiaries), instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
such Restricted Subsidiary or its stockholders.
"Newco" is defined in clause (a)(i) of the second recital.
"Newco PR" is defined in clause (a)(ii) of the second recital.
"Non-Domestic Lender" means any Lender that is not a "United States
person", as defined under Section 7701(a)(30) of the Code.
"Non-Excluded Taxes" means any Taxes other than net income, gross
receipts and franchise taxes imposed with respect to any Secured Party by a
Governmental Authority under the laws of which such Secured Party is organized
or in which it maintains its applicable lending office.
"Note" means, as the context may require, a Revolving Note, a Term A
Note, a Term B Note or a Swing Line Note.
"Obligations" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of each Obligor arising under or
in connection with a Loan Document, including the principal of and premium, if
any, and interest (including interest accruing during the pendency of any
proceeding of the type described in Section 8.1.9, whether or not allowed in
such proceeding) on the Loans and all Reimbursement Obligations.
"Obligor" means, as the context may require, the Borrower and each
other Person (other than a Secured Party) obligated under any Loan Document.
"Organic Document" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement, operating
agreement and all shareholder agreements, voting trusts and similar arrangements
applicable to any of such Obligor's partnership interests, limited liability
company interests or authorized shares of Capital Stock.
"Other Person" is defined in the definition of "Subsidiary".
"Other Taxes" means any and all stamp, documentary or similar taxes,
or any other excise or property taxes or similar levies that arise on account of
any payment made or required to be made under any Loan Document or from the
execution, delivery, registration, recording or enforcement of any Loan
Document.
"Participant" is defined in Section 10.11.2.
"Patent Security Agreement" means any Patent Security Agreement
executed and delivered by
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<PAGE> 25
any Obligor in substantially the form of Exhibit B to either Security and Pledge
Agreement, as amended, supplemented, amended and restated or otherwise modified
from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Pending Approvals" is defined in clause (b) of Section 6.3.
"Pension Plan" means a "pension plan", as such term is defined in
Section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in Section 4001(a)(3) of ERISA), and to which the
Borrower or any corporation, trade or business that is, along with the Borrower,
a member of a Controlled Group, may have liability, including any liability by
reason of having been a substantial employer within the meaning of Section 4063
of ERISA at any time during the preceding five years, or by reason of being
deemed to be a contributing sponsor under Section 4069 of ERISA.
"Percentage" means, as the context may require, any Lender's RL
Percentage, Term A Percentage or Term B Percentage.
"Perfection Certificate" means the Perfection Certificate executed and
delivered by an Authorized Officer of each Obligor that is a party to the
Security and Pledge Agreement pursuant to Section 5.1.16 or 7.1.8, substantially
in the form of Exhibit H hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time.
"Permitted Acquisition" means an Acquisition (whether pursuant to a
merger or an acquisition of Capital Stock, assets or otherwise) by the Borrower
or any Restricted Subsidiary from any Person in which the following conditions
are satisfied:
(a) immediately before and after giving effect to such
Acquisition, no Default shall have occurred and be continuing or would
result therefrom (including under Section 7.2.1);
(b) in the case of an Acquisition of Capital Stock by the
Borrower or such Restricted Subsidiary, such Acquisition results in
the issuer of such Capital Stock becoming a Restricted Subsidiary;
(c) consideration for such Acquisition shall be comprised of
Capital Stock of the Borrower, Capital Stock of a Foreign Subsidiary
issued in accordance with Section 7.2.9, the assumption or incurrence
of Indebtedness permitted under clause (m) or (n) of Section 7.2.2
and/or cash and the aggregate amount of the consideration for such
Acquisition (based on the fair market value of the Capital Stock
issued, the amount of Indebtedness assumed and the cash expended in
connection therewith), less the aggregate amount of cash and Cash
Equivalent Investments (if any) acquired by the Borrower or such
Restricted Subsidiary in such Acquisition, would not exceed
$20,000,000 and, when added to the total aggregate amount of net
consideration for all other Acquisitions since the Closing Date, would
not exceed
(i) $30,000,000;
(ii) to the extent such Acquisition is consummated after
January 1, 2001, $50,000,000; provided, however, that no more
than $30,000,000 of such $50,000,000 shall be comprised of
consideration other than Capital Stock of the Borrower; or
(iii) to the extent that (A) such Acquisition is consummated
after January 1, 2001 and (B) at the time of such Acquisition,
the Leverage Ratio is equal to or less than 3.00:1.00 (as set
forth in the Compliance Certificate then most recently delivered
by the
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<PAGE> 26
Borrower to the Administrative Agent and the Syndication Agent),
$60,000,000; provided, however, that no more than $40,000,000 of
such $60,000,000 shall be comprised of consideration other than
Capital Stock of the Borrower;
(d) after giving effect to such Acquisition, at least $10,000,000
of the Revolving Loan Commitment Amount shall be unused; and
(e) in the case of any Acquisition the total aggregate amount of
consideration therefor is in excess of $2,000,000, the Borrower shall
have delivered to the Administrative Agent and the Syndication Agent a
Compliance Certificate for the period of four full Fiscal Quarters
most recently ended immediately preceding such Acquisition (prepared
in good faith and in a manner and using such methodology which is
consistent with the most recent financial statements delivered
pursuant to Section 7.1.1) giving pro forma effect (consistent with
clause (b) of Section 1.4) to the consummation of such Acquisition and
evidencing compliance with the covenants set forth in Section 7.2.4
and the preceding clauses (c) and (d).
"Permitted Refinancing" means, as to any Indebtedness, the incurrence
of other Indebtedness to refinance such existing Indebtedness or the amendment,
renewal or other modification of such existing Indebtedness; provided that, in
the case of such other Indebtedness or modified Indebtedness, the following
conditions are satisfied:
(a) the weighted average life to maturity of such refinancing or
modified Indebtedness shall be greater than or equal to the weighted
average life to maturity of the Indebtedness being refinanced or
modified, and the first scheduled principal payment in respect of such
refinancing or modified Indebtedness shall not be earlier than the
first scheduled principal payment in respect of the Indebtedness being
refinanced or modified;
(b) the principal amount of such refinancing or modified
Indebtedness shall be less than or equal to the principal amount then
outstanding of the Indebtedness being refinanced or modified;
(c) the respective obligor or obligors shall be the same on the
refinancing or modified Indebtedness as on the Indebtedness being
refinanced or modified;
(d) the security, if any, for the refinancing or modified
Indebtedness shall be the same as that for the Indebtedness being
refinanced or modified (except to the extent that less security is
granted to holders of the refinancing Indebtedness or modified
Indebtedness);
(e) the refinancing or modified Indebtedness is subordinated to
the Obligations to the same degree, if any, or to a greater degree as
the Indebtedness being refinanced or modified; and
(f) with respect to any refinancing or modification of the
Indebtedness evidenced by the Subordinated Notes, no material terms
applicable to such refinancing or modified Indebtedness and, if
applicable, the related guarantees of such refinancing or modified
Indebtedness (including covenants, events of default, acceleration
rights and remedies) shall be more favorable to the lenders with
respect to such refinancing or modified Indebtedness than the terms
that are applicable under the instruments and documents governing the
Indebtedness being refinanced or modified.
"Person" means any natural person, corporation, limited liability
company, partnership, joint venture, association, trust or unincorporated
organization, Governmental Authority or any other legal entity, whether acting
in an individual, fiduciary or other capacity.
"Pledged Subsidiary" means each Subsidiary in respect of which the
Administrative Agent
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<PAGE> 27
has been granted a security interest in or a pledge of (i) any of the Capital
Stock of such Subsidiary or (ii) any intercompany notes of such Subsidiary owing
to the Borrower or a Restricted Subsidiary.
"Pricing Certificate" means a certificate duly completed and executed
by the chief financial or accounting Authorized Officer of the Borrower,
substantially in the form of Exhibit M hereto.
"Proceeding" is defined in Section 10.4.
"Projections" is defined in clause (a)(iii) of Section 5.1.8.
"Purchase Agreements" is defined in clause (b) of the third recital.
"Purchase Price Adjustment Proceeds" means, with respect to any
purchase price adjustment required to be made after the Closing Date pursuant to
the terms of either Purchase Agreement, the amount of any proceeds received by
the Borrower in connection therewith, less the net amount of liabilities
(including accounts payable) resulting in such adjustment that the Borrower and
its Restricted Subsidiaries are required to satisfy in cash.
"Quarterly Payment Date" means the last Business Day of March, June,
September and December.
"Rate Protection Agreement" means, any Hedging Agreement entered into
by the Borrower or any of its Restricted Subsidiaries under which the
counterparty of such agreement is (or at the time such agreement was entered
into, was) a Lender or an Affiliate of a Lender.
"Redeemable Capital Stock" means Capital Stock of the Borrower or any
of its Restricted Subsidiaries that, either by its terms, by the terms of any
security into which it is convertible or exchangeable or otherwise, (i) is or
upon the happening of an event or passage of time (other than (A) the occurrence
of a "Bankruptcy Event" (to the extent such event constitutes an Event of
Default under Section 8.1.9) or a "Change in Control", as such terms are defined
in the certificate of designations relating to the Convertible PIK Preferred
Equity on the Closing Date, or (B) the occurrence of an event substantially
similar to such "Bankruptcy Event" and defined by a substantially similar term
in the certificate of designations relating to any other Capital Stock of the
Borrower or any of its Restricted Subsidiaries otherwise permitted to be issued
hereunder (to the extent such event constitutes and Event of Default under
Section 8.1.9) or an event substantially similar to such "Change of Control" and
defined by a substantially similar term in the applicable certificate of
designations relating to any such other Capital Stock) would be required to be
redeemed or repurchased (for consideration other than shares of Capital Stock of
the Borrower) on or prior to the one year anniversary of the Stated Maturity
Date for Term B Loans (as such date may be amended from time to time), (ii) is
redeemable or required to be repurchased at the option of the holder thereof
(for consideration other than shares of Capital Stock of the Borrower) at any
time prior to such date or (iii) is convertible into or exchangeable for debt
securities of the Borrower or any of its Restricted Subsidiaries at any time
prior to such anniversary. Solely for the avoidance of doubt, Redeemable Capital
Stock shall not be deemed to include any of the Convertible PIK Preferred
Equity.
"Reference Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by BofA in Charlotte, North
Carolina, as its "reference rate." (The "reference rate" is a rate set by BofA
based upon various factors, including BofA's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above or below such announced rate.)
Any change in the reference rate announced by BofA shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
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"Register" is defined in clause (b)(i) of Section 2.7.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans and
is managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Lender" is defined in Section 4.11.
"Replacement Notice" is defined in Section 4.11.
"Required Lenders" means, at any time,
(a) prior to the Closing Date, Lenders having more than 50% of
the Term Loan Commitments and the Revolving Loan Commitments; and
(b) on and after the Closing Date, Lenders holding more than 50%
of the Total Exposure Amount.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as amended.
"Restricted Payment" means the declaration or payment of any dividend
(other than dividends payable solely in Capital Stock (other than Redeemable
Capital Stock) of the Borrower or any Restricted Subsidiary) on, or the making
of any payment or distribution on account of, or setting apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of any class of Capital Stock of the Borrower or
any Restricted Subsidiary or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, or the making of any other
payment or distribution in respect thereof, either directly or indirectly,
whether in cash or property, obligations of the Borrower or any Restricted
Subsidiary or otherwise.
"Restricted Subsidiary" means each Subsidiary of the Borrower which is
not an Unrestricted Subsidiary. Unless the context otherwise specifically
requires, the term "Restricted Subsidiary" shall be a reference to a Restricted
Subsidiary of the Borrower.
"Revolving Loan" is defined in Section 2.1.1.
"Revolving Loan Commitment" means, relative to any Lender, such
Lender's obligation (if any) to make Revolving Loans pursuant to clause (a) of
Section 2.1.1.
"Revolving Loan Commitment Amount" means, on any date, $50,000,000, as
such amount may be reduced from time to time pursuant to Section 2.2.
"Revolving Loan Commitment Termination Date" means the earliest of
(a) December 30, 1999 (if the initial Credit Extension has not
occurred on or prior to such date);
(b) November 11, 2005;
(c) the date on which the Revolving Loan Commitment Amount is
terminated in full or
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reduced to zero pursuant to the terms of this Agreement; and
(d) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in the preceding clause (c) or (d),
the Revolving Loan Commitments shall terminate automatically and without any
further action.
"Revolving Loan Lender" is defined in clause (a) of Section 2.1.1.
"Revolving Note" means a promissory note of the Borrower payable to
any Revolving Loan Lender, in the form of Exhibit A-1 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Revolving Loan
Lender resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or renewal
thereof.
"RL Percentage" means, relative to any Lender, the applicable
percentage relating to Revolving Loans set forth below its signature on the
signature pages hereto opposite the reference to "Revolving Loan Commitment" or
set forth in a Lender Assignment Agreement under the Revolving Loan Commitment
column, as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreements executed by such Lender and its Assignee Lender and
delivered pursuant to Section 10.11.1. A Lender shall not have any Revolving
Loan Commitment if its percentage under the Revolving Loan Commitment column is
zero.
"S&P" means Standard & Poor's Rating Services, a division of the
McGraw-Hill Companies.
"SEC" means the Securities and Exchange Commission.
"Secured Parties" means, collectively, the Lenders, the Swing Line
Lender, the Issuer, the Agents, each counterparty to a Rate Protection Agreement
that is (or at the time such Rate Protection Agreement was entered into, was) a
Lender or an Affiliate thereof, and, in each case, each of their respective
successors, transferees and assigns.
"Securities Act" means the Securities Act of 1933, as amended.
"Security and Pledge Agreement" means, as the context may require, the
Borrower Security and Pledge Agreement and/or the Subsidiary Security and Pledge
Agreement.
"Seller" is defined in the first recital.
"Solvent" means, with respect to any Person and its Subsidiaries on a
particular date, that on such date (a) the fair value on a going concern basis
of the property of such Person and its Subsidiaries on a consolidated basis is
greater than the total amount of liabilities, including contingent liabilities,
of such Person and its Subsidiaries on a consolidated basis, (b) the present
fair salable value on a going concern basis of the assets of such Person and its
Subsidiaries on a consolidated basis is not less than the amount that will be
required to pay the probable liability of such Person and its Subsidiaries on a
consolidated basis on its debts as they become absolute and matured, (c) such
Person does not intend to, and does not believe that it or its Subsidiaries
will, incur debts or liabilities beyond the ability of such Person and its
Subsidiaries to pay as such debts and liabilities mature, and (d) such Person
and its Subsidiaries on a consolidated basis is not engaged in business or a
transaction, and such Person and its Subsidiaries on a consolidated basis is not
about to engage in business or a transaction, for which the property of such
Person and its Subsidiaries on a consolidated basis would constitute an
unreasonably small capital. The amount of Contingent Liabilities at any time
shall be computed as the amount that, in light of all the facts and
circumstances existing at such time, can reasonably be expected to become an
actual or matured liability.
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"Stated Amount" means, on any date and with respect to a particular
Letter of Credit, the total amount then available to be drawn under such Letter
of Credit.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means
(a) with respect to all Term A Loans, November 11, 2005;
(b) with respect to all Term B Loans, November 10, 2006; and
(c) with respect to all Revolving Loans and Swing Line Loans,
November 11, 2005.
"Stock Purchase Agreement" is defined in clause (a) of the third
recital.
"Subordinated Debt" means (i) the Subordinated Notes, (ii)
Indebtedness described under clause (j) or (n) of Section 7.2.2 (provided, that
the Subordinated Debt Documents evidencing such Indebtedness described in this
clause (ii) shall not be subject to Section 7.2.12) and (iii) all other
unsecured Indebtedness of any Obligor subordinated in right of payment to the
Obligations pursuant to documentation containing redemption and other repurchase
or prepayment events, maturities, amortization schedules, covenants, events of
default, remedies, acceleration rights, subordination provisions and other
material terms satisfactory to the Required Lenders.
"Subordinated Debt Documents" means, collectively, the Subordinated
Note Indenture and each of the loan agreements, indentures, note purchase
agreements, promissory notes, guarantees, and other instruments (including the
Subordinated Notes) and agreements evidencing the terms of Subordinated Debt, as
amended, supplemented, amended and restated or otherwise modified in accordance
with Section 7.2.12.
"Subordinated Note Indenture" means the Indenture dated November 12,
1999, between the Borrower and State Street Bank and Trust Company, as trustee,
as amended, supplemented, amended and restated or otherwise modified in
accordance with Section 7.2.12.
"Subordinated Note Issuance" is defined in clause (a) of the fifth
recital.
"Subordinated Notes" is defined in clause (a) of the fifth recital.
"Subordination Provisions" is defined in Section 8.1.11.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership or other entity ("Other Person") of which
more than 50% of the outstanding Voting Stock of such Other Person (irrespective
of whether at the time Capital Stock of any other class or classes of such Other
Person shall or might have voting power upon the occurrence of any contingency)
is at the time directly or indirectly owned or controlled by such Person, by
such Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person. Unless the context otherwise specifically
requires, the term "Subsidiary" shall be a reference to a Subsidiary of the
Borrower.
"Subsidiary Guarantor" means each Domestic Subsidiary of the Borrower
that is a Restricted Subsidiary which has executed and delivered to the
Administrative Agent the Subsidiary Guaranty (or a supplement thereto).
"Subsidiary Guaranty" means the subsidiary guaranty executed and
delivered by each Domestic Subsidiary of the Borrower that is a Restricted
Subsidiary pursuant to the terms of this
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Agreement, substantially in the form of Exhibit F hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Security and Pledge Agreement" means the Security and
Pledge Agreement executed and delivered by an Authorized Officer of each
Subsidiary Guarantor pursuant to Section 5.1.13 or 7.1.9, substantially in the
form of Exhibit G-2 hereto, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"Swing Line Lender" means BofA (or any successor appointed in
accordance with Section 9.4) in its capacity as Swing Line Lender.
"Swing Line Loan" is defined in clause (b) of Section 2.1.1.
"Swing Line Loan Commitment" is defined in clause (b) of Section
2.1.1.
"Swing Line Loan Commitment Amount" means, on any date, $10,000,000,
as such amount may be reduced from time to time pursuant to Section 2.2.
"Swing Line Note" means a promissory note of the Borrower payable to
the Swing Line Lender, in the form of Exhibit A-2 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to the Swing Line Lender
resulting from outstanding Swing Line Loans, and also means all other promissory
notes accepted from time to time in substitution therefor or renewal thereof.
"Syndication Agent" is defined in the preamble.
"Synthetic Lease" means, as applied to any Person, any lease
(including leases that may be terminated by the lessee at any time) of any
property (whether real, personal or mixed) (a) that is not a capital lease in
accordance with GAAP and (b) in respect of which the lessee retains or obtains
ownership of the property so leased for federal income tax purposes, other than
any such lease under which that Person is the lessor.
"Taxes" means any and all income, stamp or other taxes, duties,
levies, imposts, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
and all interest, penalties or similar liabilities with respect thereto.
"Term A Loan" is defined in Section 2.1.3.
"Term A Loan Commitment" means, relative to any Lender, such Lender's
obligation (if any) to make Term A Loans pursuant to Section 2.1.3.
"Term A Loan Commitment Amount" means, on any date, $75,000,000.
"Term A Loan Commitment Termination Date" means the earliest of
(a) December 30, 1999 (if the Term A Loans have not been made on
or prior to such date);
(b) the Closing Date (immediately after the making of the Term A
Loans on such date); and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Term A Loan
Commitments shall terminate automatically and without any further action.
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"Term A Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-3 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term A Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term A Percentage" means, relative to any Lender, the applicable
percentage relating to Term A Loans set forth below its signature on the
signature pages hereto opposite the reference to "Term A Loan Commitment" or set
forth in a Lender Assignment Agreement under the Term A Loan Commitment column,
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreements executed by such Lender and its Assignee Lender and
delivered pursuant to Section 10.11.1. A Lender shall not have any Term A Loan
Commitment if its percentage under the Term A Loan Commitment column is zero.
"Term B Loan" is defined in Section 2.1.4.
"Term B Loan Commitment" means, relative to any Lender, such Lender's
obligation (if any) to make Term B Loans pursuant to Section 2.1.4.
"Term B Loan Commitment Amount" means, on any date, $150,000,000.
"Term B Loan Commitment Termination Date" means the earliest of
(a) December 30, 1999 (if the Term B Loans have not been made on
or prior to such date);
(b) the Closing Date (immediately after the making of the Term B
Loans on such date); and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in clause (b) or (c), the Term B Loan
Commitments shall terminate automatically and without any further action.
"Term B Note" means a promissory note of the Borrower payable to any
Lender, in the form of Exhibit A-4 hereto (as such promissory note may be
amended, endorsed or otherwise modified from time to time), evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from outstanding
Term B Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"Term B Percentage" means, relative to any Lender, the applicable
percentage relating to Term B Loans set forth below its signature on the
signature pages hereto opposite the reference to "Term B Loan Commitment" or set
forth in a Lender Assignment Agreement under the Term B Loan Commitment column,
as such percentage may be adjusted from time to time pursuant to Lender
Assignment Agreements executed by such Lender and its Assignee Lender and
delivered pursuant to Section 10.11.1. A Lender shall not have any Term B Loan
Commitment if its percentage under the Term B Loan Commitment column is zero.
"Term Loans" means, collectively, the Term A Loans and the Term B
Loans.
"Termination Date" means the date on which all Obligations have been
paid in full in cash (other than indemnification obligations that survive the
termination of this Agreement and with respect to which no claim has been made
against the Borrower that remains unpaid), all Letters of Credit have been
terminated, expired or Cash Collateralized, all Rate Protection Agreements have
been terminated (except to the extent otherwise consented to by the applicable
Secured Parties to the
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Rate Protection Agreement) and all Commitments have terminated.
"3CI Corporation" means 3CI Complete Compliance Corporation, a
Delaware corporation and a Subsidiary of the Borrower.
"Total Debt" means, on any date, without duplication, the outstanding
principal amount of all Indebtedness of the Borrower and its Restricted
Subsidiaries of the type referred to in clause (a), clause (b), clause (c),
clause (f) (but solely to the extent of Indebtedness of the type described in
clauses (e) and (n) of Section 7.2.2), clause (g) and clause (h), in each case
of the definition of "Indebtedness", and any Contingent Liability in respect of
any of the foregoing.
"Total Exposure Amount" means, on any date of determination (and
without duplication), the outstanding principal amount of all Loans, the
aggregate amount of all Letter of Credit Outstandings and the unfunded amount of
the Commitments.
"Trademark Security Agreement" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit C to
either Security and Pledge Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
"Tranche" means, as the context may require, the Loans constituting
Term A Loans, Term B Loans, Revolving Loans or Swing Line Loans.
"Transaction" is defined in clause (b) of the fifth recital.
"Transaction Costs" means extraordinary and non-recurring costs in
respect of (i) severance payments and facility closure costs resulting from the
Allied Acquisition, and the other costs actually incurred and paid or payable in
cash by the Borrower in effecting the Allied Acquisition (including fees of any
consultant engaged by the Borrower to assist with due diligence matters in
respect of the Allied Acquisition), (ii) fees payable to the Agents on or prior
to the Closing Date pursuant to the Agents' Fee Letter and the other costs and
expenses actually incurred and paid or payable in cash by the Borrower in
connection with the preparation, execution and delivery of the Loan Documents,
(iii) underwriting commissions or similar investment banking fees and other fees
and expenses actually incurred and paid or payable in cash by the Borrower in
connection with the Subordinated Note Issuance or the Convertible PIK Preferred
Equity Issuance and (iv) all other costs and expenses of the nature set forth in
clauses (i) through (iii) actually incurred and paid or payable in cash by the
Borrower or any Restricted Subsidiary in effecting any Permitted Acquisition.
"Transaction Documents" means each of the Material Documents and all
other material agreements, documents, instruments, certificates, filings,
consents, approvals, board of directors resolutions and opinions furnished
pursuant to or in connection with the Transaction and the other transactions
contemplated hereby or thereby, in each case as amended, supplemented, amended
and restated or otherwise modified from time to time in accordance with Section
7.2.12.
"type" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York; provided, that if, with respect to any Filing
Statement or by reason of any provisions of law, the perfection or the effect of
perfection or non-perfection of the security interests granted to the
Administrative Agent pursuant to the applicable Loan Document is governed by the
Uniform Commercial Code as in effect in a jurisdiction of the United States
other than New York, UCC means the Uniform Commercial Code as in effect from
time to time in such other jurisdiction for purposes of the provisions of each
Loan Document and any Filing Statement relating to such perfection or effect of
perfection or non-perfection.
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"United States" or "U.S." means the United States of America, its
fifty states and the District of Columbia.
"Unrestricted Cash" means, at any time, cash and Cash Equivalent
Investments of the Borrower and its Restricted Subsidiaries to the extent such
cash and Cash Equivalent Investments are not subject to any Lien (other than a
Lien in favor of the Administrative Agent pursuant to a Loan Document or a
banker's Lien or right of setoff pursuant to customary deposit arrangements) or
any restriction as to its use and is included in "cash and cash equivalents" and
not "restricted cash" on the consolidated balance sheet of the Borrower.
"Unrestricted Subsidiary" means (a) each Subsidiary first created or
acquired by the Borrower or a Restricted Subsidiary after the Closing Date to
the extent the acquisition price therefor (by capital contribution, purchase
price, etc.) is funded by the Borrower in accordance with clause (k) of Section
7.2.5 and such Subsidiary is designated by the Borrower as an Unrestricted
Subsidiary in a written notice delivered to the Administrative Agent and the
Syndication Agent prior to such creation or acquisition, (b) each Subsidiary
first created or acquired after the Closing Date by another Unrestricted
Subsidiary created or acquired in accordance with the provisions of this
definition, provided that the provisions of clause (k) of Section 7.2.5 are not
breached in connection with such creation or acquisition, (c) the designation by
the Board of Directors of the Borrower of an existing Restricted Subsidiary as
an Unrestricted Subsidiary for the purposes of this Agreement pursuant to a
certified board resolution delivered to the Administrative Agent and the
Syndication Agent, so long as the amount available at the time of such board
designation for Investments in Unrestricted Subsidiaries pursuant to clause (k)
of Section 7.2.5 exceeds the greater of (x) the book value of the equity of such
Restricted Subsidiary held directly or indirectly by the Borrower at such time
and (y) the fair market value of such equity (as reasonably determined or
estimated by the board), and (d) 3CI Corporation, so long as such Subsidiary is
not a wholly-owned Subsidiary; provided, however, that with respect to each
Subsidiary described in the preceding clauses (a), (b), (c) and (d), (i) the
Borrower and each such Subsidiary which would be included in the U.S. Federal
consolidated income tax return of the Borrower shall have entered into a tax
sharing agreement in form and substance reasonably satisfactory to the
Administrative Agent and the Syndication Agent, (ii) a Restricted Subsidiary
cannot be owned in whole or in part by an Unrestricted Subsidiary, (iii) an
Unrestricted Subsidiary cannot be designated as a Restricted Subsidiary (A) if,
either immediately before or after giving effect to such designation, a Default
shall have occurred and be continuing or would result therefrom (including under
Sections 7.2.1 and 7.2.2), (B) without prior written notice to the
Administrative Agent and the Syndication Agent, and the delivery, together with
such notice, of a Compliance Certificate for the period of four full Fiscal
Quarters most recently ended immediately preceding such designation (prepared in
good faith and in a manner and using such methodology which is consistent with
the most recent financial statements delivered pursuant to Section 7.1.1) giving
pro forma effect (consistent with clause (b) of Section 1.4) to such designation
(which designation shall be treated as an Acquisition for purposes hereof) and
evidencing compliance with the covenants set forth in Section 7.2.4 and the
preceding subclause (A), and (C) until such time as the Borrower has caused the
Unrestricted Subsidiary if it is not a Foreign Subsidiary to comply with the
requirements of Sections 7.1.8 through 7.1.10, and (iv) in order to be permitted
to be created or acquired or to continue to exist, no recourse whatsoever may be
had to the Borrower or any of its Restricted Subsidiaries or any of their
respective properties in respect of any obligations or liabilities (contingent
or otherwise) of such Unrestricted Subsidiary except to the extent the aggregate
maximum amount of such recourse constitutes an Investment made and permitted
pursuant to clause (k) of Section 7.2.5; provided further, however, that, prior
to any Subsidiary of the Borrower being designated an Unrestricted Subsidiary
for purposes of the Loan Documents, the Borrower shall be required to deliver to
the Administrative Agent and Syndication Agent a certificate, in form and
substance reasonably satisfactory to such Agents, in which an Authorized Officer
of the Borrower shall certify that such Subsidiary complies with clauses (i)
through (iv) above and clause (k) of Section 7.2.5.
"Voting Stock" means, with respect to any Person, Capital Stock of any
class or kind ordinarily having the power to vote for the election of directors,
managers or other voting members of the
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governing body of such Person.
"Welfare Plan" means a "welfare plan", as such term is defined in
Section 3(1) of ERISA.
"wholly-owned Subsidiary" means any Subsidiary all of the outstanding
common stock (or similar equity interest) of which (other than any director's
qualifying shares or investments by foreign nationals or other nominees as
mandated by applicable laws) is owned directly or indirectly by the Borrower.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in each other Loan Document and the
Disclosure Schedule, and each notice and other communication delivered from time
to time in connection with any Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in a Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. Accounting and Financial Determinations. (a) Unless
otherwise specified, all accounting terms used in each Loan Document shall be
interpreted, and all accounting determinations and computations thereunder
(including under Section 7.2.4 and the definitions used in such calculations)
shall be made, in accordance with those generally accepted accounting principles
("GAAP") applied in the preparation of the financial statements referred to in
clause (a) of Section 5.1.8. Unless otherwise expressly provided, all financial
covenants and defined financial terms shall be computed on a consolidated basis
for the Borrower and its Restricted Subsidiaries, in each case without
duplication.
(b) For purposes of computing the Leverage Ratio, the Interest
Coverage Ratio and the Fixed Charge Coverage Ratio, such ratios (and any
financial calculations or components required to be made or included therein)
shall be determined, with respect to the relevant period, after giving pro forma
effect to each Acquisition and Disposition of a Person, business or asset
consummated during such period, together with all transactions relating thereto
consummated during such period (including any incurrence, assumption,
refinancing or repayment of Indebtedness), as if such Acquisition, Disposition
and related transactions had been consummated on the first day of such period,
in each case (i) based on historical results accounted for in accordance with
GAAP and (ii) prepared in accordance with Regulation S-X under the Securities
Act, as in effect on the Closing Date (provided, that cost savings expected to
be realized following an Acquisition in respect of the elimination of
duplicative positions and the closing of duplicative facilities may be reflected
in such determination as if such cost savings had been effected as of the
beginning of such period, so long as (x) such elimination and/or closings are
implemented by the business that was the subject of any such Acquisition within
six months of the date of such Acquisition and are supportable and quantifiable
by the underlying accounting records of such business, (y) all cost increases
expected to be incurred following such Acquisition are also reflected in such
determination as if such cost increases had been incurred as of the beginning of
such period and (z) in the event the aggregate amount of such cost savings for
such period exceeds $2,000,000, a majority of the Board of Directors of the
Borrower have in good faith approved the calculation of such cost savings), and,
with respect to all calculations made in clauses (i) and (ii), to the extent
applicable, based upon reasonable assumptions that are specified in reasonable
detail in the relevant Compliance Certificate or other certificate furnished to
any Agent or Lender in connection with the terms of this Agreement. In
furtherance of, and not in limitation of, the preceding sentence, any
determination to be made in accordance with this clause (b) for any period
commencing prior to the Closing Date shall give pro forma effect to the Allied
Acquisition as provided in the preceding sentence.
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ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement, the Lenders and the Issuer severally agree to make Credit
Extensions as set forth below.
SECTION 2.1.1. Revolving Loan Commitment and Swing Line Loan
Commitment. From time to time on any Business Day occurring from and after the
Effective Date but prior to the Revolving Loan Commitment Termination Date,
(a) each Lender that has a Revolving Loan Commitment (referred to
as a "Revolving Loan Lender") agrees that it will make loans (relative
to such Lender, its "Revolving Loans") to the Borrower equal to such
Lender's RL Percentage of the aggregate amount of each Borrowing of
the Revolving Loans requested by the Borrower to be made on such day;
and
(b) the Swing Line Lender agrees that it will make loans (its
"Swing Line Loans") to the Borrower equal to the principal amount of
the Swing Line Loan requested by the Borrower to be made on such day.
The Commitment of the Swing Line Lender described in this clause is
herein referred to as its "Swing Line Loan Commitment".
On the terms and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow Revolving Loans and Swing Line Loans. No
Revolving Loan Lender shall be permitted or required to make any Revolving Loan
if, after giving effect thereto, the aggregate outstanding principal amount of
all Revolving Loans of such Revolving Loan Lender, together with such Lender's
RL Percentage of the aggregate amount of all Swing Line Loans and Letter of
Credit Outstandings, would exceed such Lender's RL Percentage of the then
existing Revolving Loan Commitment Amount. Furthermore, the Swing Line Lender
shall not be permitted or required to make Swing Line Loans if, after giving
effect thereto, (i) the aggregate outstanding principal amount of all Swing Line
Loans would exceed the then existing Swing Line Loan Commitment Amount or (ii)
the aggregate outstanding principal amount of all Swing Line Loans, together
with all Letter of Credit Outstandings and the aggregate outstanding principal
amount of all Revolving Loans, would exceed the Revolving Loan Commitment
Amount.
SECTION 2.1.2. Letter of Credit Commitment. From time to time on any
Business Day occurring from and after the Effective Date but prior to the
Revolving Loan Commitment Termination Date, the Issuer agrees that it will
(a) issue one or more standby letters of credit (each, a "Letter
of Credit") for the account of the Borrower or any Restricted
Subsidiary that is a Subsidiary Guarantor in the Stated Amount
requested by the Borrower on such day; or
(b) extend the Stated Expiry Date of an existing standby Letter
of Credit previously issued hereunder.
No Stated Expiry Date shall extend beyond the earlier of (i) 30 days prior to
the Revolving Loan Commitment Termination Date and (ii) unless otherwise agreed
to by the Issuer in its sole discretion, 364 days from the date of such issuance
or extension. The Issuer shall not be permitted or required to issue any Letter
of Credit if, after giving effect thereto, (i) the aggregate amount of all
Letter of Credit Outstandings would exceed the Letter of Credit Commitment
Amount or (ii) the sum of the aggregate amount of all Letter of Credit
Outstandings plus the aggregate principal amount of all Revolving Loans and
Swing Line Loans then outstanding would exceed the Revolving Loan Commitment
Amount.
SECTION 2.1.3. Term A Loan Commitment. In a single Borrowing on any
Business Day occurring on or prior to the Term A Loan Commitment Termination
Date, each Lender that has a Term A Loan
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Commitment agrees that it will make loans (relative to such Lender, its "Term A
Loans") to the Borrower equal to such Lender's Term A Percentage of the
aggregate amount of the Borrowing of Term A Loans requested by the Borrower to
be made on such day. No amounts paid or prepaid with respect to Term A Loans may
be reborrowed.
SECTION 2.1.4. Term B Loan Commitment. In a single Borrowing on any
Business Day occurring on or prior to the Term B Loan Commitment Termination
Date, each Lender that has a Term B Loan Commitment agrees that it will make
loans (relative to such Lender, its "Term B Loans") to the Borrower equal to
such Lender's Term B Percentage of the aggregate amount of the Borrowing of Term
B Loans requested by the Borrower to be made on such day. No amounts paid or
prepaid with respect to Term B Loans may be reborrowed.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reduction from time to time pursuant to this Section 2.2.
SECTION 2.2.1. Optional. The Borrower may, from time to time on any
Business Day occurring after the Effective Date, voluntarily reduce the amount
of the Revolving Loan Commitment Amount, the Swing Line Loan Commitment Amount
or the Letter of Credit Commitment Amount on the Business Day so specified by
the Borrower; provided, however, that all such reductions shall require at least
one Business Day's prior notice to the Administrative Agent and be permanent,
and any partial reduction of any Commitment Amount shall be in a minimum amount
of $1,000,000 and in an integral multiple of $500,000. Any optional or mandatory
reduction of the Revolving Loan Commitment Amount pursuant to the terms of this
Agreement which reduces the Revolving Loan Commitment Amount below the sum of
(i) the Swing Line Loan Commitment Amount and (ii) the Letter of Credit
Commitment Amount shall result in an automatic and corresponding reduction of
the Swing Line Loan Commitment Amount and/or Letter of Credit Commitment Amount
(as directed by the Borrower in a notice to the Administrative Agent delivered
together with the notice of such voluntary reduction in the Revolving Loan
Commitment Amount) to an aggregate amount not in excess of the Revolving Loan
Commitment Amount, as so reduced, without any further action on the part of the
Swing Line Lender or the Issuer.
SECTION 2.2.2. Mandatory. Following the prepayment in full of the Term
Loans, the Revolving Loan Commitment Amount shall, without any further action,
automatically and permanently be reduced on the date the Term Loans would
otherwise have been required to be prepaid pursuant to clause (e) or (f) of
Section 3.1.1, in an amount equal to the amount by which the Term Loans would
otherwise be required to be prepaid if Term Loans had been outstanding.
SECTION 2.3. Borrowing Procedures. Loans (other than Swing Line Loans)
shall be made by the Lenders in accordance with Section 2.3.1, and Swing Line
Loans shall be made by the Swing Line Lender in accordance with Section 2.3.2.
SECTION 2.3.1. Borrowing Procedure. In the case of Revolving Loans, by
delivering a Borrowing Request to the Administrative Agent on or before 11:00
a.m. on a Business Day, the Borrower may from time to time irrevocably request,
on not less than one Business Day's notice in the case of Base Rate Loans, or
three Business Days' notice in the case of LIBO Rate Loans, and in either case
not more than five Business Days' notice, that a Borrowing be made, in the case
of LIBO Rate Loans, in a minimum amount of $5,000,000 and an integral multiple
of $1,000,000, in the case of Base Rate Loans, in a minimum amount of $1,000,000
and an integral multiple of $500,000 or, in either case, in the unused amount of
the applicable Commitment. The Borrower shall be permitted to request that LIBO
Rate Loans be made on the Closing Date so long as (i) the Borrower delivers a
borrowing request to the Administrative Agent in a timely manner and in
accordance with this Section prior to the Closing Date (as if this Section were
in effect) and (ii) such borrowing request contains an acknowledgment and
agreement by the Borrower that in the event any initial Loans are not made as
LIBO Rate Loans in accordance with such borrowing request, the Borrower shall be
liable for any loss or expense incurred by any Lender as a result thereof as if
Section 4.4 were in effect at the time such borrowing request was
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delivered. On the terms and subject to the conditions of this Agreement, each
Borrowing shall be comprised of the type of Loans, and shall be made on the
Business Day, specified in such Borrowing Request. In the case of Revolving
Loans, on or before 11:00 a.m. on such Business Day each Lender that has a
Commitment to make the Loans being requested shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to the
Lenders. To the extent funds are received from the Lenders, the Administrative
Agent shall make such funds available to the Borrower by wire transfer to the
accounts the Borrower shall have specified in its Borrowing Request. No Lender's
obligation to make any Loan shall be affected by any other Lender's failure to
make any Loan.
SECTION 2.3.2. Swing Line Loans. (a) By telephonic notice to the Swing
Line Lender on or before 12:00 noon on a Business Day (followed (within one
Business Day) by the delivery of a confirming Borrowing Request), the Borrower
may from time to time irrevocably request that Swing Line Loans be made by the
Swing Line Lender in an aggregate minimum principal amount of $100,000 and an
integral multiple of $25,000. All Swing Line Loans shall be made as Base Rate
Loans and shall not be entitled to be converted into LIBO Rate Loans. The
proceeds of each Swing Line Loan shall be made available by the Swing Line
Lender to the Borrower by wire transfer to the account the Borrower shall have
specified in its notice therefor by the close of business on the Business Day
telephonic notice is received by the Swing Line Lender.
(b) If (i) any Swing Line Loan shall be outstanding for more than four
Business Days, (ii) any Swing Line Loan is or will be outstanding on a date when
the Borrower requests that a Revolving Loan be made, or (iii) any Default shall
occur and be continuing, then each Revolving Loan Lender (other than the Swing
Line Lender) irrevocably agrees that it will, at the request of the Swing Line
Lender in writing made on or before 12:00 p.m. (noon) on a Business Day, make a
Revolving Loan (which shall initially be funded as a Base Rate Loan) in an
amount equal to such Lender's Revolving Loan Percentage of the aggregate
principal amount of all such Swing Line Loans then outstanding (such outstanding
Swing Line Loans hereinafter referred to as the "Refunded Swing Line Loans"). On
or before 11:00 a.m. on the first Business Day following receipt by each
Revolving Loan Lender of a request to make Revolving Loans as provided in the
preceding sentence, each Revolving Loan Lender shall deposit in an account
specified by the Swing Line Lender the amount so requested in same day funds and
such funds shall be applied by the Swing Line Lender to repay the Refunded Swing
Line Loans. At the time the Revolving Loan Lenders make the above referenced
Revolving Loans the Swing Line Lender shall be deemed to have made, in
consideration of the making of the Refunded Swing Line Loans, Revolving Loans in
an amount equal to the Swing Line Lender's RL Percentage of the aggregate
principal amount of the Refunded Swing Line Loans. Upon the making (or deemed
making, in the case of the Swing Line Lender) of any Revolving Loans pursuant to
this clause, the amount so funded shall become outstanding under such Revolving
Loan Lender's Revolving Note and shall no longer be owed under the Swing Line
Note. All interest payable with respect to any Revolving Loans made (or deemed
made, in the case of the Swing Line Lender) pursuant to this clause shall be
appropriately adjusted to reflect the period of time during which the Swing Line
Lender had outstanding Swing Line Loans in respect of which such Revolving Loans
were made. Each Revolving Loan Lender's obligation to make the Revolving Loans
referred to in this clause shall be absolute and unconditional and shall not be
affected by any circumstance, including (i) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Swing
Line Lender, any Obligor or any Person for any reason whatsoever; (ii) the
occurrence or continuance of any Default; (iii) any adverse change in the
condition (financial or otherwise) of any Obligor; (iv) the acceleration or
maturity of any Obligations or the termination of any Commitment after the
making of any Swing Line Loan; (v) any breach of any Loan Document by any
Person; or (vi) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 11:00
a.m. on a Business Day,
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the Borrower may from time to time irrevocably elect,
(a) on not less than three nor more than five Business Days'
notice, that all, or any portion of (i) Base Rate Loans be converted
into LIBO Rate Loans or (ii) LIBO Rate Loans be continued as LIBO Rate
Loans, in either case, in an aggregate minimum amount of $5,000,000
and an integral multiple of $1,000,000, or
(b) on not less than one nor more than five Business Days'
notice, that all, or any portion of LIBO Rate Loans, in an aggregate
minimum amount of $1,000,000 and an integral multiple of $500,000, be
converted into Base Rate Loans;
provided, however, that (x) each such conversion or continuation shall be pro
rated among the applicable outstanding Loans of all Lenders that have made such
Loans, (y) no portion of the outstanding principal amount of any Loans may be
continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing, and (z) in the absence of delivery of a
Continuation/Conversion Notice with respect to any LIBO Rate Loan at least three
Business Days (but not more than five Business Days) before the last day of the
then current Interest Period with respect thereto, such LIBO Rate Loan shall, on
such last day, automatically convert to a Base Rate Loan.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; provided,
however, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. Issuance Procedures. By delivering to the Administrative
Agent an Issuance Request on or before 11:00 a.m. on a Business Day, the
Borrower may from time to time irrevocably request on not less than three nor
more than ten Business Days' notice, in the case of an initial issuance of a
Letter of Credit and not less than three nor more than ten Business Days'
notice, in the case of a request for the extension of the Stated Expiry Date of
a standby Letter of Credit (in each case, unless a shorter notice period is
agreed to by the Issuer, in its sole discretion), that the Issuer issue, or
extend the Stated Expiry Date of, a Letter of Credit on behalf of the Borrower
(whether issued for the account of or on behalf of the Borrower or any
Subsidiary Guarantor) in such form as may be requested by the Borrower and
approved by the Issuer, solely for the purposes described in Section 7.1.7.
Notwithstanding anything to the contrary contained herein or in any separate
application for any Letter of Credit, the Borrower hereby acknowledges and
agrees that it shall be obligated to reimburse the Issuer upon each Disbursement
paid under a Letter of Credit, and it shall be deemed to be the obligor for
purposes of each such Letter of Credit issued hereunder (whether the account
party on such Letter of Credit is the Borrower or a Subsidiary Guarantor). Each
Letter of Credit shall by its terms be stated to expire on a date (its "Stated
Expiry Date") no later than the earlier to occur of (i) 30 days prior to the
Revolving Loan Commitment Termination Date or (ii) (unless otherwise agreed to
by the Issuer, in its sole discretion), 364 days from the date of its issuance.
The Issuer will make available to the beneficiary thereof the original of the
Letter of Credit which it issues.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of each
Letter of Credit, and without further action, each Revolving Loan Lender (other
than the Issuer) shall be deemed to have irrevocably purchased, to the extent of
its RL Percentage, a participation interest in such Letter of Credit (including
the Contingent Liability and any Reimbursement Obligation with respect thereto),
and such Revolving Loan Lender shall, to the extent of its RL Percentage, be
responsible for reimbursing
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<PAGE> 40
within one Business Day the Issuer for Reimbursement Obligations which have not
been reimbursed by the Borrower in accordance with Section 2.6.3. In addition,
such Revolving Loan Lender shall, to the extent of its RL Percentage, be
entitled to receive a ratable portion of the Letter of Credit fees payable
pursuant to Section 3.3.3 with respect to each Letter of Credit (other than the
issuance fees payable to the Issuer of such Letter of Credit pursuant to the
last sentence of Section 3.3.3) and of interest payable pursuant to Section
2.6.2 with respect to any Reimbursement Obligation. To the extent that any
Revolving Loan Lender has reimbursed the Issuer for a Disbursement, such Lender
shall be entitled to receive its ratable portion of any amounts subsequently
received (from the Borrower or otherwise) in respect of such Disbursement.
SECTION 2.6.2. Disbursements; Conversion to Revolving Loans. The
Issuer will notify the Borrower and the Administrative Agent promptly of the
presentment for payment of any Letter of Credit issued by the Issuer, together
with notice of the date (the "Disbursement Date") such payment shall be made
(each such payment, a "Disbursement"). Subject to the terms and provisions of
such Letter of Credit, the Issuer shall make such payment to the beneficiary (or
its designee) of such Letter of Credit. Prior to 11:00 a.m. on the first
Business Day following the later of the receipt of such notice by the Borrower
and the Administrative Agent and the Disbursement Date (the "Disbursement Due
Date"), the Borrower will reimburse the Administrative Agent, for the account of
the Issuer, for all amounts which the Issuer has disbursed under such Letter of
Credit, together with interest thereon at a rate per annum equal to the rate per
annum then in effect for Base Rate Loans (with the then Applicable Margin for
Revolving Loans accruing on such amount) pursuant to Section 3.2 for the period
from the Disbursement Date through the date of such reimbursement; provided,
however, that, if no Default or Event of Default shall have then occurred and be
continuing, unless the Borrower has notified the Administrative Agent no later
than one Business Day prior to the Disbursement Due Date that it will reimburse
the Issuer for the applicable Disbursement, then the making of such Disbursement
shall be deemed to be a Borrowing of Revolving Loans constituting Base Rate
Loans and following the giving of notice thereof by the Administrative Agent to
the Lenders, each Lender with a Revolving Loan Commitment will deliver to the
Issuer on the Disbursement Due Date immediately available funds in an amount
equal to such Lender's Percentage of such Borrowing. Without limiting in any way
the foregoing and notwithstanding anything to the contrary contained herein or
in any separate application for any Letter of Credit, the Borrower hereby
acknowledges and agrees that it shall be obligated to reimburse the Issuer upon
each Disbursement of a Letter of Credit, and it shall be deemed to be the
obligor for purposes of each such Letter of Credit issued hereunder (whether the
account party on such Letter of Credit is such Borrower or a Subsidiary
Guarantor).
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of the Borrower under Section 2.6.2 to reimburse the Issuer with
respect to each Disbursement (including interest thereon), and, upon the failure
of the Borrower to reimburse the Issuer, each Revolving Loan Lender's obligation
under Section 2.6.1 to reimburse the Issuer, shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower or such Revolving Loan Lender, as the case
may be, may have or have had against the Issuer or any Lender, including any
defense based upon the failure of any Disbursement to conform to the terms of
the applicable Letter of Credit (if, in the Issuer's good faith opinion, such
Disbursement is determined to be appropriate) or any non-application or
misapplication by the beneficiary of the proceeds of such Letter of Credit;
provided, however, that after paying in full its Reimbursement Obligation
hereunder, nothing herein shall adversely affect the right of the Borrower or
such Lender, as the case may be, to commence any proceeding against the Issuer
for any wrongful Disbursement made by the Issuer under a Letter of Credit as a
result of acts or omissions constituting gross negligence or wilful misconduct
on the part of the Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Default under Section 8.1.9 or upon notification by the
Administrative Agent (acting at the direction of the Required Lenders) to the
Borrower of its obligations under this Section, following the occurrence and
during the continuation of any other Event of Default,
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(a) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to the Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuer of such Letters of
Credit (notwithstanding that such amount may not in fact have been
paid or disbursed); and
(b) the Borrower shall be immediately obligated to reimburse the
Issuer for the amount deemed to have been so paid or disbursed by the
Issuer.
Amounts payable by the Borrower pursuant to this Section shall be deposited in
immediately available funds with the Administrative Agent in an account (which
may be interest bearing) designated by the Administrative Agent and held as
collateral security for the Reimbursement Obligations. When all Defaults giving
rise to the deemed disbursements under this Section have been cured or waived
the Administrative Agent shall return to the Borrower all amounts (plus accrued
interest, if any, thereon) then on deposit with the Administrative Agent
pursuant to this Section which have not been applied to the satisfaction of the
Reimbursement Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. Each Obligor and,
to the extent set forth in Section 2.6.1, each Revolving Loan Lender shall
assume all risks of the acts, omissions or misuse of any Letter of Credit by the
beneficiary thereof. The Issuer (except to the extent of its own gross
negligence or wilful misconduct) shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, telecopier, cable, telegraph, telex
or otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any Revolving Loan Lender hereunder.
In furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by the Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor and each such Secured Party, and shall not put the Issuer under any
resulting liability to any Obligor or any Secured Party, as the case may be.
SECTION 2.7. Register; Notes. (a) Each Lender may maintain in
accordance with its usual practice an account or accounts evidencing the
Indebtedness of the Borrower to such Lender resulting from each Loan made by
such Lender, including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. In the case of a Lender that does not
request, pursuant to Section 2.7(c) below, execution and delivery of a Note
evidencing the Loans made by such Lender to the Borrower, such account or
accounts shall, to the extent not inconsistent with the notations made by the
Administrative Agent in the Register, be conclusive and binding on the Borrower
absent manifest error;
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provided, however, that the failure of any Lender to maintain such account or
accounts shall not limit or otherwise affect any Obligations of the Borrower or
any other Obligor.
(b) The Borrower hereby designates the Administrative Agent to serve
as the Borrower's agent, solely for the purpose of this clause (b), to maintain
a register (the "Register") in which the Administrative Agent will record each
Lender's Commitments, the Loans made by each Lender and each repayment in
respect of the principal amount of the Loans of each Lender and annexed to which
the Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to Section 10.11.1. Failure to
make any recordation, or any error in such recordation, shall not affect the
Borrower's obligation in respect of such Loans. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose name a
Loan (and as provided in Section 2.7(c) the Note evidencing such Loan, if any)
is registered as the owner thereof for all purposes of this Agreement,
notwithstanding notice or any provision herein to the contrary. A Lender's
Commitment and the Loans made pursuant thereto may be assigned or otherwise
transferred in whole or in part only by registration of such assignment or
transfer in the Register. Any assignment or transfer of a Lender's Commitment
and/or the Loans made pursuant thereto shall be registered in the Register only
upon delivery to the Administrative Agent of a Lender Assignment Agreement duly
executed by the assignor and assignee thereof. No assignment or transfer of a
Lender's Commitment or the Loans made pursuant thereto shall be effective unless
such assignment or transfer shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
(c) The Borrower agrees that, upon the request to the Administrative
Agent by any Lender, the Borrower will execute and deliver to such Lender, as
applicable, a Revolving Note, Term A Note, Term B Note and/or Swing Line Note
evidencing the Loans made by such Lender. The Borrower hereby irrevocably
authorizes each Lender to make (or cause to be made) appropriate notations on
the grid attached to such Lender's Notes (or on any continuation of such grid),
which notations, if made, shall evidence, inter alia, the date of, the
outstanding principal amount of, and the interest rate and Interest Period
applicable to the Loans evidenced thereby. Such notations shall, to the extent
not inconsistent with the notations made by the Administrative Agent in the
Register, be conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of any Lender to make any such notations or
any error in any such notation shall not limit or otherwise affect any
Obligations of any Obligor. The Loans evidenced by any such Note and interest
thereon shall at all times (including after assignment pursuant to Section
10.11.1) be represented by one or more Notes payable to the order of the payee
named therein and its registered assigns. A Note and the obligation evidenced
thereby may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer of such Note and the obligation
evidenced thereby in the Register (and each Note shall expressly so provide).
Any assignment or transfer of all or part of an obligation evidenced by a Note
shall be registered in the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such obligation, accompanied by a
Lender Assignment Agreement duly executed by the assignor thereof, and
thereupon, if requested by the assignee, one or more new Notes shall be issued
to the designated assignee and the old Note shall be returned by the
Administrative Agent to the Borrower marked "exchanged". No assignment of a Note
and the obligation evidenced thereby shall be effective unless it shall have
been recorded in the Register by the Administrative Agent as provided in this
Section.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application. The Borrower
agrees that the Loans shall be repaid and prepaid pursuant to the following
terms.
SECTION 3.1.1. Repayments and Prepayments. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the applicable Stated
Maturity Date therefor. Prior thereto,
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payments and prepayments of Loans shall or may be made as set forth below.
(a) From time to time on any Business Day, the Borrower may make
a voluntary prepayment, in whole or in part, of the outstanding
principal amount of any
(i) Loans (other than Swing Line Loans); provided, however,
that (A) any such prepayment of the Term Loans shall be made pro
rata among Term A Loans and Term B Loans (to be applied as set
forth in Section 3.1.2) and any such prepayment of Revolving
Loans shall be made pro rata among the Revolving Loans (to be
applied as set forth in Section 3.1.2); (B) all such voluntary
prepayments shall require at least one but no more than five
Business Days' prior written notice to the Administrative Agent;
and (C) all such voluntary partial prepayments shall be, in the
case of LIBO Rate Loans, in an aggregate minimum amount of
$5,000,000 and an integral multiple of $1,000,000 and, in the
case of Base Rate Loans, in an aggregate minimum amount of
$500,000 and an integral multiple of $100,000; and
(ii) Swing Line Loans; provided, that (A) all such voluntary
prepayments shall require prior telephonic notice to the Swing
Line Lender on or before 1:00 p.m. on the day of such prepayment
(such notice to be confirmed in writing within 24 hours
thereafter); and (B) all such voluntary partial prepayments shall
be in an aggregate minimum amount of $100,000 and an integral
multiple of $25,000.
(b) On each date when the sum of (i) the aggregate outstanding
principal amount of all Revolving Loans and Swing Line Loans and (ii)
the aggregate amount of all Letter of Credit Outstandings exceeds the
Revolving Loan Commitment Amount (as it may be reduced from time to
time pursuant to this Agreement), the Borrower shall make a mandatory
prepayment of Revolving Loans or Swing Line Loans (or both) and, if
necessary, Cash Collateralize Letter of Credit Outstandings, in an
aggregate amount equal to such excess.
(c) On the Stated Maturity Date with respect to the Term A Loans
and on each Quarterly Payment Date occurring during each period set
forth below, the Borrower shall make a scheduled repayment of the
aggregate outstanding principal amount, if any, of all Term A Loans in
an amount equal to the amount set forth below opposite such Stated
Maturity Date or period during which such Quarterly Payment Date
occurs, as applicable:
Amount of Required
Period Principal Repayment
------ -------------------
01/01/00 through (and
including) 01/02/01 $468,750.00
01/03/01 through (and
including) 12/31/01 $1,406,250.00
01/01/02 through (and
including) 12/31/02 $2,343,750.00
01/01/03 through (and
including) 12/31/03 $4,218,750.00
01/01/04 through (and
including) 12/31/04 $4,687,500.00
01/01/05 through (and
including) 9/30/05 $5,625,000.00
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Stated Maturity Date for
Term A Loans $5,625,000.00 or, if
different, the then
outstanding principal
amount of all Term A
Loans.
(d) On the Stated Maturity Date with respect to the Term B Loans
and on each Quarterly Payment Date occurring during each period set
forth below, the Borrower shall make a scheduled repayment of the
aggregate outstanding principal amount, if any, of all Term B Loans in
an amount equal to the amount set forth below opposite such Stated
Maturity Date or period during which such Quarterly Payment Date
occurs, as applicable:
Amount of Required
Period Principal Repayment
------ -------------------
01/01/00 through (and
including) 01/02/06 $375,000.00
01/03/06 through (and
including) 10/02/06 $35,250,000.00
Stated Maturity Date for
Term B Loans $35,250,000.00
or, if different, the then
outstanding principal amount of
all Term B Loans.
(e) The Borrower shall, following the receipt by the Borrower or
any Restricted Subsidiary of any Casualty Proceeds in excess of
$250,000 (individually or in the aggregate (when taken together with
all other Casualty Proceeds and all Net Disposition Proceeds) over the
course of a Fiscal Year) deliver to the Administrative Agent and the
Syndication Agent a calculation of the amount of such Casualty
Proceeds and make a mandatory prepayment of the Term Loans in an
amount equal to 100% of such Casualty Proceeds within 30 days of the
receipt thereof to be applied as set forth in Section 3.1.2; provided,
however, that no mandatory prepayment on account of Casualty Proceeds
shall be required under this clause if the Borrower informs the
Administrative Agent and the Syndication Agent in writing no later
than 30 days following the occurrence of the Casualty Event resulting
in such Casualty Proceeds of its or such Restricted Subsidiary's good
faith intention to apply such Casualty Proceeds to the rebuilding or
replacement of the damaged, destroyed or condemned assets or property
and the Borrower or such Restricted Subsidiary in fact uses such
Casualty Proceeds to rebuild or replace such assets or property within
360 days following the receipt of such Casualty Proceeds, with the
amount of such Casualty Proceeds unused after such 360-day period
being applied to the Term Loans pursuant to Section 3.1.2; provided,
further, however, that at any time when any Default or Event of
Default shall have occurred and be continuing, all Casualty Proceeds
(together with Net Disposition Proceeds not applied as provided in
clause (f) below) shall be deposited in an account maintained with the
Administrative Agent to pay for such rebuilding or replacement
whenever no Default or Event of Default is then continuing or except
as otherwise agreed to by the Administrative Agent and the Syndication
Agent for disbursement at the request of the Borrower or such
Restricted Subsidiary, as the case may be.
(f) The Borrower shall, following the receipt by the Borrower or
any Restricted Subsidiary of any Net Disposition Proceeds in excess of
$250,000 (individually or in the aggregate (when taken together with
all other Net Disposition Proceeds and all Casualty Proceeds) over the
course of a Fiscal Year) deliver to the Administrative Agent and the
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<PAGE> 45
Syndication Agent a calculation of the amount of such Net Disposition
Proceeds and make a mandatory prepayment of the Term Loans in an
amount equal to 100% of such Net Disposition Proceeds within three
Business Days of the receipt thereof to be applied as set forth in
Section 3.1.2; provided, however, that no mandatory prepayment on
account of Net Disposition Proceeds shall be required under this
clause if the Borrower informs the Administrative Agent and the
Syndication Agent in writing no later than one Business Day following
the receipt of such Net Disposition Proceeds of its or such Restricted
Subsidiary's good faith intention to apply such Net Disposition
Proceeds to the purchase of long-term assets or property used or
useful in the business of the Borrower and its Restricted
Subsidiaries, and the Borrower or such Restricted Subsidiary in fact
uses such Net Disposition Proceeds to purchase such assets or property
within 360 days following the receipt of such Net Disposition
Proceeds, with the amount of such Net Disposition Proceeds unused
after such 360-day period being applied to the Term Loans pursuant to
Section 3.1.2; provided, further, however, that at any time when any
Default or Event of Default shall have occurred and be continuing, all
Net Disposition Proceeds (together with Casualty Proceeds not applied
as provided in clause (e) above) shall be deposited in an account
maintained with the Administrative Agent to pay for such replacement
whenever no Default or Event of Default is then continuing or except
as otherwise agreed to by the Administrative Agent and the Syndication
Agent for disbursement at the request of the Borrower.
(g) The Borrower shall, no later than five Business Days
following the delivery of its annual audited financial reports and
certificates required pursuant to clause (b) of Section 7.1.1
(beginning with the financial reports delivered in respect of the 2000
Fiscal Year), deliver to the Administrative Agent and the Syndication
Agent a calculation of the Excess Cash Flow for the Fiscal Year last
ended and make a mandatory prepayment of the Loans in an amount equal
to 75% of the Excess Cash Flow (if any) for such Fiscal Year, to be
applied as set forth in Section 3.1.2; provided, however, that the
amount of such prepayment shall be reduced to an amount equal to 50%
of the Excess Cash Flow (if any) for such Fiscal Year if the Leverage
Ratio on the last day of such Fiscal Year is less than or equal to
3.75:1.00.
(h) Within three Business Days of the receipt by the Borrower or
any Restricted Subsidiary of any Net Debt Proceeds or Net Equity
Proceeds, the Borrower shall deliver to the Administrative Agent and
the Syndication Agent a calculation of the amount of such Net Debt
Proceeds or Net Equity Proceeds, as the case may be, and make a
mandatory prepayment of the Loans in an amount equal to 100% of such
Net Debt Proceeds or 50% of such Net Equity Proceeds, as the case may
be, to be applied as set forth in Section 3.1.2.
(i) Within three Business Days of the receipt by the Borrower of
any Purchase Price Adjustment Proceeds, the Borrower shall deliver to
the Administrative Agent and the Syndication Agent a calculation of
the amount of such Purchase Price Adjustment Proceeds and make a
mandatory prepayment of the Loans in an amount equal to 100% of such
Purchase Price Adjustment Proceeds, to be applied as set forth in
Section 3.1.2.
(j) Immediately upon any acceleration of the Stated Maturity Date
of any Loans pursuant to Section 8.2 or Section 8.3, the Borrower
shall repay all the Loans, unless, pursuant to Section 8.3, only a
portion of all the Loans is so accelerated (in which case the portion
so accelerated shall be so repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by Section 4.4.
SECTION 3.1.2. Application. Amounts prepaid pursuant to Section 3.1.1
shall be applied as set forth in this Section.
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(a) Subject to clause (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such
prepayment or repayment, first, to the principal amount thereof being
maintained as Base Rate Loans, and second, subject to the terms of
Section 4.4, to the principal amount thereof being maintained as LIBO
Rate Loans.
(b) Each prepayment of Term Loans made pursuant to clauses (a),
(e), (f), (g), (h) and (i) of Section 3.1.1 shall be applied (i)
first, pro rata to a mandatory prepayment of the outstanding principal
amount of all Term A Loans and Term B Loans (with the amount of such
prepayment of the Term A Loans and the Term B Loans being applied to
the remaining scheduled amortization payments of the Term A Loans or
Term B Loans, as the case may be, pro rata in accordance with the
amount of each such remaining Term A Loan or Term B Loan amortization
payments (provided, however, that any voluntary prepayments of Term A
Loans or Term B Loans, as the case may be, pursuant to clause (a) of
Section 3.1.1 may, at the Borrower's discretion, instead be applied to
the remaining scheduled amortization payments of the Term A Loans or
Term B Loans, as the case may be, in direct order of maturity)), and
(ii) second, once all Term Loans have been repaid in full, to the
repayment of any outstanding Revolving Loans and, in the case of
prepayments pursuant to clause (e) or (f) of Section 3.1.1, to a
reduction of the Revolving Loan Commitment Amount in accordance with
Section 2.2.2; provided, however, that in the case of any prepayment
of Term B Loans made pursuant to clauses (e) through (i) of Section
3.1.1, any Lender that has Term B Loans may elect not to have such
Loans prepaid by delivering a notice to the Administrative Agent and
the Syndication Agent at least one Business Day prior to the date that
such prepayment is to be made in which notice such Lender shall
decline to have such Loans prepaid with the amounts set forth above,
in which case the amounts that would have been applied to a prepayment
of such Lender's Term B Loans shall instead be applied in the manner
set forth above to a prepayment of the principal amount (if any) of
all outstanding Term A Loans until all outstanding Term A Loans have
been prepaid in full, then, once all Term A Loans have been repaid in
full, to the repayment of any outstanding Revolving Loans (but without
a corresponding reduction in the Revolving Loan Commitment Amount).
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of Loans and other monetary Obligations shall accrue and be
payable by the Borrower in accordance with the terms set forth below.
SECTION 3.2.1. Rates. Subject to Section 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
Borrower may elect that Loans comprising a Borrowing accrue interest at a rate
per annum:
(a) on that portion maintained from time to time as a Base Rate
Loan, equal to the sum of the Base Rate from time to time in effect
plus the Applicable Margin; provided that all Swing Line Loans shall
always accrue interest at the then effective Applicable Margin for
Revolving Loans maintained as Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during each
Interest Period applicable thereto, equal to the sum of the LIBO Rate
(Reserve Adjusted) for such Interest Period plus the Applicable
Margin.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal
amount of or accrued interest on any Loan or Reimbursement Obligation, or any
fee described in Article III, is due and payable (whether on the Stated Maturity
Date, upon acceleration or otherwise), the Borrower shall pay, but
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only to the extent permitted by law, interest (after as well as before judgment)
on such delinquent amounts at a rate per annum equal to the Base Rate from time
to time in effect, plus the Applicable Margin for Base Rate Loans, plus a margin
of 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any payment or prepayment, in whole or in
part, of principal outstanding on such Loan on the principal amount so
paid or prepaid (other than voluntary repayments of Revolving Loans
which are Base Rate Loans);
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the Closing Date;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the date occurring on each three-month interval
occurring after the first day of such Interest Period); and
(e) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth
below. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender, for the period (including
any portion thereof when any of its Commitments are suspended by reason of the
Borrower's inability to satisfy any condition of Article V) commencing on the
Effective Date and continuing through the applicable Commitment Termination
Date, a commitment fee in an amount equal to the Applicable Commitment Fee, in
each case on such Lender's Percentage of the sum of the average daily unused
portion of the applicable Commitment Amount (with Letter of Credit Outstandings
constituting usage of the Revolving Loan Commitment Amount). All commitment fees
payable pursuant to this Section shall be calculated on a year comprised of 360
days and payable by the Borrower in arrears on each Quarterly Payment Date,
commencing with the first Quarterly Payment Date following the Effective Date,
and on the Revolving Loan Commitment Termination Date. The making of Swing Line
Loans shall not constitute usage of the Revolving Loan Commitment with respect
to the calculation of commitment fees to be paid by the Borrower to the Lenders.
SECTION 3.3.2. Agents' Fee. (a) The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees in the amounts and on the
dates set forth in the Agents' Fee Letter.
(b) The Borrower agrees to pay to the Agents, for their own respective
accounts, the fees in the amounts and on the dates set forth in the Agents' Fee
Letter.
SECTION 3.3.3. Letter of Credit Fees. The Borrower agrees to pay to
the Administrative Agent, for the pro rata account of the Issuer and each
Revolving Loan Lender, a Letter of Credit fee in an amount equal to the then
effective Applicable Margin for Revolving Loans maintained as LIBO Rate Loans,
multiplied by the Stated Amount of each such Letter of Credit, such fees being
payable quarterly in arrears on each Quarterly Payment Date following the date
of issuance of each Letter of Credit and
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on the Revolving Loan Commitment Termination Date. The Borrower further agrees
to pay to the Issuer, in arrears, on each Quarterly Payment Date following the
date of issuance of each Letter of Credit and on the Revolving Loan Commitment
Termination Date an issuance fee in an amount equal to 1/8 of 1% per annum on
the Stated Amount of such Letter of Credit applicable from time to time during
the period of calculation.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the
Administrative Agent, be conclusive and binding on the Borrower) that the
introduction of or any change in or in the interpretation of any law makes it
unlawful, or any Governmental Authority asserts that it is unlawful, for such
Lender to make or continue any Loan as, or to convert any Loan into, a LIBO Rate
Loan, the obligations of such Lender to make, continue or convert any such LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist, and all outstanding LIBO Rate Loans payable to such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion.
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting its relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Borrower and the Lenders,
the obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the Borrower
and the Lenders that the circumstances causing such suspension no longer exist.
Upon receipt of such notice from the Administrative Agent, the Borrower may
revoke any Borrowing Request or Conversion/Continuation Notice then submitted by
it. If the Borrower does not revoke such Borrowing Request or
Continuation/Conversion Notice on or before 11:00 a.m. on the Business Day
immediately preceding the date of the proposed Borrowing, continuation or
conversion of Loans, as proposed by the Borrower, the Lenders shall make,
continue or convert such Loans in the amount specified in the applicable notice
submitted by the Borrower, but such Loans shall be made, continued or converted
as Base Rate Loans instead of LIBO Rate Loans.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees
to reimburse each Lender and the Issuer for any increase in the cost to such
Lender or the Issuer of, or any reduction in the amount of any sum receivable by
such Secured Party in respect of, such Secured Party's Commitments and the
making of Credit Extensions hereunder (including the making, continuing or
maintaining (or of its obligation to make or continue) any Loans as, or of
converting (or of its obligation to convert) any Loans into, LIBO Rate Loans)
that arise in connection with any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in after the Effective
Date of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority, except
for such changes with respect to increased capital costs and Taxes which are
governed by Sections 4.5 and 4.6, respectively. Each affected Secured Party
shall promptly notify the Administrative Agent and the Borrower in writing of
the occurrence of any such event, stating the reasons therefor and the
additional amount required fully to compensate such Secured Party for such
increased cost or reduced amount. Such additional amounts shall be payable by
the Borrower
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directly to such Secured Party within five days of its receipt of such notice,
and such notice shall, in the absence of manifest error, be conclusive and
binding on the Borrower. The Borrower shall have no obligation to make a payment
under this Section to a Secured Party unless such Secured Party shall have
notified the Borrower of its demand therefor within 90 days of the date on which
such Secured Party has obtained final internal financial statements with respect
to the fiscal year of such Secured Party in which such increased cost or reduced
amount occurred.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make or continue any portion of the principal amount of any Loan as, or to
convert any portion of the principal amount of any Loan into, a LIBO Rate Loan)
as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
Article III or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor;
then, upon the written notice of such Lender to the Borrower (with a copy to the
Administrative Agent), the Borrower shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice shall, in the absence of manifest error, be conclusive and
binding on the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority affects
or would affect the amount of capital required or expected to be maintained by
any Secured Party or any Person controlling such Secured Party, and such Secured
Party determines (in good faith but in its sole and absolute discretion) that
the rate of return on its or such controlling Person's capital as a consequence
of the Commitments or the Credit Extensions (not otherwise adjusted for by the
definition of LIBO Rate (Reserve Adjusted)) made, or the Letters of Credit
participated in, by such Secured Party is reduced to a level below that which
such Secured Party or such controlling Person could have achieved but for the
occurrence of any such circumstance, then upon written notice (which notice
shall contain good faith calculations with respect to the reduced rate of
return) from time to time by such Secured Party to the Borrower, the Borrower
shall within five days following receipt of such notice pay directly to such
Secured Party additional amounts sufficient to compensate such Secured Party or
such controlling Person for such reduction in rate of return. A statement of
such Secured Party as to any such additional amount or amounts shall, in the
absence of manifest error, be conclusive and binding on the Borrower. In
determining such amount, such Secured Party may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem applicable.
SECTION 4.6. Taxes. The Borrower covenants and agrees as follows with
respect to Taxes.
(a) Any and all payments by the Borrower under each Loan Document
shall be made without setoff, counterclaim or other defense, and free
and clear of, and without deduction or withholding for or on account
of, any Taxes. In the event that any Taxes are required by law to be
deducted or withheld from any payment required to be made by the
Borrower to or on behalf of any Secured Party under any Loan Document,
then:
(i) subject to clause (f), if such Taxes are Non-Excluded
Taxes, the amount of such
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payment shall be increased as may be necessary such that such
payment is made, after withholding or deduction for or on account
of such Taxes, in an amount that is not less than the amount
provided for in such Loan Document; and
(ii) the Borrower shall withhold the full amount of such
Taxes from such payment (as increased pursuant to clause (a) (i))
and shall pay such amount to the Governmental Authority imposing
such Taxes in accordance with applicable law.
(b) In addition, the Borrower shall pay any and all Other Taxes
imposed to the relevant Governmental Authority imposing such Other
Taxes in accordance with applicable law.
(c) The Borrower shall furnish to the Administrative Agent a copy
of an official receipt (or a certified copy thereof) evidencing the
payment of any Taxes or Other Taxes as promptly as practicable after
the payment of such Taxes or Other Taxes, and in any event within 45
days after the date on which any such payment was due or, if earlier,
5 days after the first day on which such receipt (or certified copy)
first becomes legally obtainable by the Borrower. The Administrative
Agent shall make copies thereof available to any Lender upon request
therefor.
(d) Subject to clause (f), the Borrower shall indemnify each
Secured Party for any Non-Excluded Taxes and Other Taxes levied,
imposed or assessed on (and whether or not paid directly by) such
Secured Party (whether or not such Non-Excluded Taxes or Other Taxes
are correctly or legally asserted by the relevant Governmental
Authority). Promptly upon having knowledge that any such Non-Excluded
Taxes or Other Taxes have been levied, imposed or assessed, and
promptly upon notice thereof by any Secured Party, the Borrower shall
pay such Non-Excluded Taxes or Other Taxes directly to the relevant
Governmental Authority (provided, however, that no Secured Party shall
be under any obligation to provide any such notice to the Borrower).
In addition, the Borrower shall indemnify each Secured Party for any
incremental Taxes that may become payable by such Secured Party as a
result of any failure of the Borrower to pay any Taxes when due to the
appropriate Governmental Authority or to deliver to the Administrative
Agent, pursuant to clause (c), documentation evidencing the payment of
Taxes or Other Taxes. With respect to indemnification for Non-Excluded
Taxes and Other Taxes actually paid by any Secured Party or the
indemnification provided in the immediately preceding sentence, such
indemnification shall be made within 30 days after the date such
Secured Party makes written demand therefor. The Borrower acknowledges
that any payment made to any Secured Party or to any Governmental
Authority in respect of the indemnification obligations of the
Borrower provided in this clause shall constitute a payment in respect
of which the provisions of clause (a) and this clause shall apply.
(e) Each Non-Domestic Lender, on or prior to the date on which
such Non-Domestic Lender becomes a Lender hereunder (and from time to
time thereafter upon the request of the Borrower or the Administrative
Agent, but only for so long as such Non-Domestic Lender is legally
entitled to do so), shall deliver to the Borrower and the
Administrative Agent either
(i) two duly completed copies of either (A) Internal Revenue
Service Form W-8BEN or (B) Internal Revenue Service Form 4224, or
in either case an applicable successor form; or
(ii) in the case of a Non-Domestic Lender that is not
legally entitled to deliver either form listed in clause (e)(i),
(x) a certificate of a duly authorized officer of such
Non-Domestic Lender to the effect that such Non-Domestic Lender
is not (A) a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, (B) a "10 percent shareholder" of the Borrower within
the meaning of Section 881(c)(3)(B) of the Code, or (C) a
controlled
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foreign corporation receiving interest from a related person
within the meaning of Section 881(c)(3)(C) of the Code (such
certificate, an "Exemption Certificate") and (y) two duly
completed copies of Internal Revenue Service Form W-8BEN or
applicable successor form.
(f) The Borrower shall not be obligated to gross up any payments
to any Lender pursuant to clause (a)(i), or to indemnify any Lender
pursuant to clause (d), in respect of United States federal
withholding taxes to the extent imposed as a result of (i) the failure
of such Lender to deliver to the Borrower the form or forms and/or an
Exemption Certificate, as applicable to such Lender, pursuant to
clause (e), (ii) such form or forms and/or Exemption Certificate not
establishing a complete exemption from U.S. federal withholding tax or
the information or certifications made therein by the Lender being
untrue or inaccurate on the date delivered in any material respect, or
(iii) the Lender designating a successor lending office at which it
maintains its Loans which has the effect of causing such Lender to
become obligated for tax payments in excess of those in effect
immediately prior to such designation; provided, however, that the
Borrower shall be obligated to gross up any payments to any such
Lender pursuant to clause (a)(i), and to indemnify any such Lender
pursuant to clause (d), in respect of United States federal
withholding taxes if (i) any such failure to deliver a form or forms
or an Exemption Certificate or the failure of such form or forms or
Exemption Certificate to establish a complete exemption from U.S.
federal withholding tax or inaccuracy or untruth contained therein
resulted from a change in any applicable statute, treaty, regulation
or other applicable law or any interpretation of any of the foregoing
occurring after the Effective Date, which change rendered such Lender
no longer legally entitled to deliver such form or forms or Exemption
Certificate or otherwise ineligible for a complete exemption from U.S.
federal withholding tax, or rendered the information or certifications
made in such form or forms or Exemption Certificate untrue or
inaccurate in a material respect or (ii) the obligation to gross up
payments to any such Lender pursuant to clause (a)(i) or to indemnify
any such Lender pursuant to clause (d) is with respect to an Assignee
Lender that becomes an Assignee Lender as a result of an assignment
made at the request of the Borrower.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided in a Loan Document, all payments by the Borrower pursuant to each Loan
Document shall be made by the Borrower to the Administrative Agent for the pro
rata account of the Secured Parties entitled to receive such payment. All
payments shall be made without setoff, deduction or counterclaim not later than
1:00 p.m. on the date due in same day or immediately available funds to such
account as the Administrative Agent shall specify from time to time by notice to
the Borrower. Funds received after that time shall be deemed to have been
received by the Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each Secured
Party its share, if any, of such payments received by the Administrative Agent
for the account of such Secured Party. All interest (including interest on LIBO
Rate Loans) and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the period
for which such interest or fee is payable over a year comprised of 360 days (or,
in the case of interest on a Base Rate Loan (calculated at other than the
Federal Funds Rate), 365 days or, if appropriate, 366 days). Payments due on
other than a Business Day shall (except as otherwise required by clause (c) of
the definition of the term "Interest Period") be made on the next succeeding
Business Day and such extension of time shall be included in computing interest
and fees in connection with that payment.
SECTION 4.8. Sharing of Payments. If any Secured Party shall obtain
any payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Obligations (other than pursuant to the
terms of Sections 4.3, 4.4, 4.5 or 4.6) in excess of its pro rata share of
payments obtained by all Secured Parties, such Secured Party shall purchase from
the other Secured Parties such participations in such Obligations made by them
as shall be necessary to cause such purchasing Secured Party to share the excess
payment or other recovery ratably (to the extent such other Secured Parties were
entitled to receive a portion of such payment or recovery) with each of
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them; provided, however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Secured Party, the
purchase shall be rescinded and each Secured Party which has sold a
participation to the purchasing Secured Party shall repay to the purchasing
Secured Party the purchase price to the ratable extent of such recovery together
with an amount equal to such selling Secured Party's ratable share (according to
the proportion of (a) the amount of such selling Secured Party's required
repayment to the purchasing Secured Party to (b) total amount so recovered from
the purchasing Secured Party) of any interest or other amount paid or payable by
the purchasing Secured Party in respect of the total amount so recovered. The
Borrower agrees that any Secured Party purchasing a participation from another
Secured Party pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including pursuant to Section 4.9) with
respect to such participation as fully as if such Secured Party were the direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law any Secured Party
receives a secured claim in lieu of a setoff to which this Section applies, such
Secured Party shall, to the extent practicable, exercise its rights in respect
of such secured claim in a manner consistent with the rights of the Secured
Parties entitled under this Section to share in the benefits of any recovery on
such secured claim.
SECTION 4.9. Setoff. Each Secured Party shall, upon the occurrence and
during the continuance of any Default described in clauses (a) through (d) of
Section 8.1.9 or, with the consent of the Required Lenders, upon the occurrence
and during the continuance of any other Event of Default, have the right to
appropriate and apply to the payment of the Obligations owing to it (whether or
not then due), and (as security for such Obligations) the Borrower hereby grants
to each Secured Party a continuing security interest in, any and all balances,
credits, deposits, accounts (other than any trust accounts comprised entirely of
moneys held in trust for the benefit of Persons other than the Borrower and its
Affiliates) or moneys of the Borrower then or thereafter maintained with such
Secured Party; provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.8. Each Secured Party agrees
promptly to notify the Borrower and the Administrative Agent after any such
setoff and application made by such Secured Party; provided, however, that the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Secured Party under this Section are in addition
to other rights and remedies (including other rights of setoff under applicable
law or otherwise) which such Secured Party may have.
SECTION 4.10. Change of Lending Office. Each Secured Party agrees that
if it makes any demand for payment under Section 4.3, 4.5 or 4.6, or if any
adoption or change of the type described in Section 4.1 shall occur with respect
to it, it will, if requested by the Borrower, use reasonable efforts (consistent
with its internal policy and legal and regulatory restrictions and so long as
such efforts would not be disadvantageous to it, as determined in its sole
discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrower to make payments
under Section 4.3, 4.5 or 4.6, or would eliminate or materially reduce the
effect of any adoption or change described in Section 4.1; provided, however,
that nothing in this Section shall affect or postpone any of the Obligations of
the Borrower or the right of any Secured Party provided in Section 4.1, 4.3, 4.5
or 4.6.
SECTION 4.11. Replacement of Lenders. If any Lender (an "Affected
Lender") makes a demand upon the Borrower for (or if the Borrower is otherwise
required to pay) amounts pursuant to Section 4.3, 4.5 or 4.6 (and the payment of
such amounts are, and are likely to continue to be, more onerous in the
reasonable judgment of the Borrower than with respect to the other Lenders), or
gives notice pursuant to Section 4.1 requiring a conversion of such Affected
Lender's LIBO Rate Loans to Base Rate Loans or suspending such Lender's
obligation to make Loans as, or to convert Loans into, LIBO Rate Loans, the
Borrower may, within 30 days of receipt by the Borrower of such demand or
notice, as the case may be, give notice (a "Replacement Notice") in writing to
the Administrative Agent and the Syndication Agent and such Affected Lender of
its intention to replace such Affected Lender with a financial institution or
other Person (a "Replacement Lender") designated in such Replacement Notice;
provided, however, that no Replacement Notice may be given by the Borrower if
(i) such replacement conflicts
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with any applicable law or regulation, (ii) any Event of Default shall have
occurred and be continuing at the time of such replacement or (iii) prior to any
such replacement, such Lender shall have taken any necessary action under
Section 4.3, 4.5 or 4.6 (if applicable) so as to eliminate the continued need
for payment of amounts owing pursuant to Section 4.3, 4.5 or 4.6. If the
Administrative Agent shall, in the exercise of its reasonable discretion and
within 30 days of its receipt of such Replacement Notice, notify the Borrower
and such Affected Lender in writing that the Replacement Lender is satisfactory
to the Administrative Agent (such consent not being required where the
Replacement Lender is already a Lender), then such Affected Lender shall,
subject to the payment of any amounts due pursuant to Section 4.4, assign, in
accordance with Section 10.11.1, all of its Commitments, Loans, Notes (if any)
and other rights and obligations under this Agreement and all other Loan
Documents (including Reimbursement Obligations, if applicable) to such
Replacement Lender; provided, however, that (i) such assignment shall be without
recourse, representation or warranty and shall be on terms and conditions
reasonably satisfactory to such Affected Lender and such designated financial
institution, (ii) the purchase price paid by such Replacement Lender shall be in
the amount of such Affected Lender's Loans and its Percentage of outstanding
Reimbursement Obligations, together with all accrued and unpaid interest and
fees in respect thereof, plus all other amounts (including the amounts demanded
and unreimbursed under Sections 4.3, 4.5 and 4.6), owing to such Affected Lender
hereunder and (iii) the Borrower shall pay to the Affected Lender and the
Administrative Agent all reasonable out-of-pocket expenses incurred by the
Affected Lender and the Administrative Agent and the Syndication Agent in
connection with such assignment and assumption (including the processing fees
described in Section 10.11.1). Upon the effective date of an assignment
described above, the Replacement Lender shall become a "Lender" for all purposes
under this Agreement and the other Loan Documents.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders
and, if applicable, the Issuer to fund the initial Credit Extension shall be
subject to the prior or concurrent satisfaction (or waiver) of each of the
conditions precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Agents shall have received from
each Obligor, as applicable, (i) a copy of a good standing certificate from the
jurisdiction of its organization and each other jurisdiction where the nature of
its business requires such Obligor to be qualified to do business and in good
standing as a foreign entity (except where the failure to be so qualified or in
good standing as a foreign entity could not reasonably be expected to have a
Material Adverse Effect), dated a date reasonably close to the Closing Date, for
each such Person and (ii) a certificate, dated the Closing Date and with
counterparts for each Lender, duly executed and delivered by such Person's
Secretary or Assistant Secretary, managing member or general partner, as
applicable, as to
(a) resolutions of each such Person's Board of Directors (or
other managing body, in the case of other than a corporation) then in
full force and effect authorizing, to the extent relevant, all aspects
of the Transaction applicable to such Person and the execution,
delivery and performance of each Loan Document to be executed by such
Person and the transactions contemplated hereby and thereby;
(b) the incumbency and signatures of those of its officers,
managing member or general partner, as applicable, authorized to act
with respect to each Loan Document to be executed by such Person
(each, an "Authorized Officer"); and
(c) the full force and validity of each Organic Document of such
Person and copies thereof;
upon which certificates each Secured Party may conclusively rely until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of
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any such Person canceling or amending the prior certificate of such Person.
SECTION 5.1.2. Transaction Consummated. (a) The Allied Acquisition
shall have been consummated and, in connection therewith, the Borrower shall
have acquired (i) 100% of the issued and outstanding shares of Capital Stock of
Newco, Newco PR, BFI Connecticut and, indirectly through the Borrower's
wholly-owned subsidiary, Stericycle of Washington, Inc., a Washington
corporation, 100% of the issued and outstanding shares of Capital Stock of BFI
Washington pursuant to the Stock Purchase Agreement for an aggregate purchase
price of $406,500,000, subject to adjustment in accordance with the Stock
Purchase Agreement, and (ii) through Med-Tech Environmental Ltd., a Canadian
corporation and a wholly-owned Subsidiary of the Borrower, the BFI Canadian
Business pursuant to the Asset Purchase Agreement for an aggregate purchase
price of $4,000,000, subject to adjustment in accordance with the Asset Purchase
Agreement.
(b) In connection with the consummation of the Allied Acquisition, (i)
Newco, Newco PR and BFI Connecticut shall have become direct, wholly-owned
Restricted Subsidiaries of the Borrower and BFI Washington shall have become an
indirect wholly-owned Restricted Subsidiary of the Borrower, and (ii) the
Borrower shall have paid the transaction-related fees and expenses in an amount
not exceeding approximately $22,000,000.
(c) The Subordinated Note Issuance shall have been consummated on
terms (including documentation in respect thereof in form and substance)
reasonably satisfactory in all material respects to the Agents and resulted in
gross cash proceeds of at least $125,000,000.
(d) The Convertible PIK Preferred Issuance shall have been consummated
on terms and conditions no more burdensome to the Borrower or the Lenders than
those contained in the Convertible PIK Preferred Equity Purchase Agreement, and
resulted in gross cash proceeds of at least $75,000,000.
SECTION 5.1.3. Transaction Documents; Material Documents. The Agents
shall have received (with copies for each Lender that shall have requested in
writing copies thereof) copies of fully executed versions of the Transaction
Documents, certified to be true and complete copies thereof by an Authorized
Officer of the Borrower. Each Material Document (including each Purchase
Agreement) shall be in full force and effect and shall not have been modified or
waived in any material respect, nor shall there have been any forbearance to
exercise any material rights with respect to any of the terms or provisions
relating to the conditions to the consummation of the Allied Acquisition set
forth in each of the Purchase Agreements unless otherwise agreed to by the
Agents.
SECTION 5.1.4. Closing Date Certificate. The Agents shall have
received, with counterparts for each Lender, the Borrower Closing Date
Certificate, dated the Closing Date and duly executed and delivered by an
Authorized Officer of the Borrower, in which certificate the Borrower shall
agree and acknowledge that the statements made therein shall be deemed to be
true and correct representations and warranties of the Borrower as of such date,
and, at the time each such certificate is delivered, such statements shall in
fact be true and correct. All documents and agreements required to be appended
to the Borrower Closing Date Certificate shall be in form and substance
reasonably satisfactory to the Agents.
SECTION 5.1.5. Delivery of Notes. The Agents shall have received, for
the account of each Lender that has requested a Note in writing two Business
Days prior to the Closing Date, such Lender's Notes duly executed and delivered
by an Authorized Officer of the Borrower.
SECTION 5.1.6. Payment of Outstanding Indebtedness, etc. All
Indebtedness identified in Item 7.2.2(b) of the Disclosure Schedule (including
all Indebtedness outstanding under the terms of the Existing Credit Agreement),
together with all interest, all prepayment premiums and other amounts due and
payable with respect thereto, shall have been paid in full from the proceeds of
the initial Credit Extension and the commitments in respect of such Indebtedness
shall have been terminated, and
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all Liens securing payment of any such Indebtedness have been released and the
Administrative Agent shall have received all executed UCC termination statements
(Form UCC-3) or other instruments as may be suitable or appropriate in
connection therewith.
SECTION 5.1.7. Closing Fees, Expenses, etc. The Agents shall have
received for their respective accounts, or for the account of each Lender, as
the case may be, all fees, costs and expenses due and payable pursuant to
Sections 3.3 and 10.3, to the extent then invoiced.
SECTION 5.1.8. Financial Information, Material Adverse Change. (a) The
Agents shall have received, with copies for each Lender, and be reasonably
satisfied with the form and scope (which shall be consistent with the financial
statements previously delivered to the Agents) of
(i) (A) consolidated financial statements of the Borrower
including balance sheets and income and cash flow statements as of the
end of and for each of the last three Fiscal Years ended December 31,
1998, December 31, 1997 and December 31, 1996 audited by independent
public accountants of recognized national standing and prepared in
conformity with GAAP, together with the report thereon; (B)
consolidated financial statements of the BFI Businesses including
balance sheets and income statements as of the end of and for each of
the last three Fiscal Years ended September 30, 1998, September 30,
1997 and September 30, 1996 audited by independent public accountants
of recognized national standing and prepared in conformity with GAAP,
together with the report thereon; and (C) unaudited interim financial
statements of each of the Borrower and the BFI Businesses prepared in
each case in the same manner as the historical audited statements as
of the end of the most recent Fiscal Quarter to have been completed 45
days or more before the Closing Date and for the same Fiscal Quarter
during the most recently ended Fiscal Year;
(ii) a consolidated pro forma balance sheet of the Borrower and
its Restricted Subsidiaries, as of the end of the most recent ended
Fiscal Quarter to have been completed 45 days or more before the
Closing Date, certified by the chief financial or accounting
Authorized Officer of the Borrower, giving effect to the consummation
of the Transaction and all the transactions contemplated by this
Agreement and the Transaction Documents and reflecting estimated
transaction related accounting adjustments, prepared by independent
public accountants of recognized national standing in accordance with
Regulation S-X; and
(iii) projected consolidated financial statements (including
balance sheets and statements of operations, stockholders' equity and
cash flows) of the Borrower and its Restricted Subsidiaries for the
seven-year period following the Closing Date (the "Projections").
(b) Since December 31, 1998 (or, with respect to the BFI Businesses,
September 30, 1998), there has not been any material adverse change in the
business (including the assumptions underlying the Projections), assets,
financial condition, operations, properties or regulatory status of the Borrower
and its Subsidiaries, taken as a whole, or the Acquired Businesses, taken as a
whole.
SECTION 5.1.9. Opinions of Counsel; Reliance Letters. The Agents shall
have received opinions, dated the Closing Date and addressed to the Agents and
all Lenders, from
(a) McDermott, Will & Emery, New York, Illinois, California,
Florida and Massachusetts counsel to the Obligors, in form and
substance reasonably satisfactory to the Agents;
(b) Johnson & Colmar, special corporate counsel to the Obligors,
in form and substance reasonably satisfactory to the Agents; and
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(c) local counsel to the Obligors in the jurisdictions set forth
in Schedule II hereto, in form and substance, and from counsel,
reasonably satisfactory to the Agents.
SECTION 5.1.10. Filing Agent, etc. All UCC financing statements (Form
UCC-1) or other similar financing statements and UCC termination statements
(Form UCC-3) required pursuant to the Loan Documents (collectively, the "Filing
Statements") shall have been delivered to CT Corporation System or another
similar filing service company reasonably acceptable to the Agents (the "Filing
Agent"). The Filing Agent shall have acknowledged in a writing reasonably
satisfactory to the Agents (i) the Filing Agent's receipt of all Filing
Statements, (ii) that the Filing Statements have either been submitted for
filing in the appropriate filing offices or will be submitted for filing in the
appropriate offices within ten days following the Closing Date and (iii) that
the Filing Agent will notify the Administrative Agent and the Syndication Agent
of the results of such submissions within 30 days following the Closing Date.
SECTION 5.1.11. Subsidiary Guaranty. The Agents shall have received,
with counterparts for each Lender, the Subsidiary Guaranty, dated as of the
Effective Date, duly executed and delivered by an Authorized Officer of each
Subsidiary Guarantor.
SECTION 5.1.12. Solvency Certificate. The Agents shall have received,
with counterparts for each Lender, a certificate duly executed and delivered by
the chief financial or accounting Authorized Officer of the Borrower, dated the
Closing Date, in the form of Exhibit J attached hereto.
SECTION 5.1.13. Security and Pledge Agreements. The Agents shall have
received, with counterparts for each Lender, each Security and Pledge Agreement,
dated as of the Closing Date and duly executed and delivered by an Authorized
Officer of the Borrower and each Subsidiary Guarantor, as applicable, together
with
(a) certificates evidencing all of the issued and outstanding
Capital Stock pledged pursuant to the applicable Security and Pledge
Agreement, which certificates in each case shall be accompanied by
undated instruments of transfer duly executed in blank, or, if any
such shares of Capital Stock pledged pursuant to such Security and
Pledge Agreement are uncertificated securities, the Administrative
Agent shall have obtained "control" (as defined in the UCC) over such
shares of Capital Stock and such other instruments and documents as
the Administrative Agent shall deem reasonably necessary or in the
reasonable opinion of the Administrative Agent advisable under
applicable law to perfect the first priority security interest of the
Administrative Agent in such shares of Capital Stock; provided,
however, that (i) no more than 65% of the shares of Capital Stock of a
Foreign Subsidiary of the Borrower held directly by the Borrower or a
Domestic Subsidiary of the Borrower will be required to be pledged
hereunder and (ii) no shares of Capital Stock of a Foreign Subsidiary
of the Borrower held by another Foreign Subsidiary of the Borrower
will be required to be pledged;
(b) all Intercompany Notes, if any, pledged pursuant to the
Security and Pledge Agreement;
(c) executed copies of Filing Statements naming each such Obligor
as a debtor and the Administrative Agent as the secured party, or
other similar instruments or documents to be filed under the UCC of
all jurisdictions as may be reasonably necessary or, in the reasonable
opinion of the Administrative Agent, desirable to perfect the security
interests of the Administrative Agent pursuant to the Security and
Pledge Agreement;
(d) executed copies of proper UCC termination statements (Form
UCC-3), if any, necessary to release all Liens and other rights of any
Person (i) in any collateral described in the applicable Security and
Pledge Agreement previously granted by any Person, and (ii) securing
any of the Indebtedness identified in Item 7.2.2(b) of the Disclosure
Schedule, together
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with such other UCC termination statements (Form UCC-3) as the
Administrative Agent may reasonably request from each such Obligor;
and
(e) certified copies of UCC Requests for Information or Copies
(Form UCC-11), or a similar search report certified by a party
reasonably acceptable to the Administrative Agent, dated a date
reasonably near to the Closing Date, listing all effective financing
statements which name each such Obligor (under its present name and
any previous names) as the debtor and which are filed in the
jurisdictions in which filings are to be made pursuant to clause (c)
above, together with copies of such financing statements (none of
which shall cover any collateral described in any Loan Document,
except to the extent permitted by Section 7.2.3).
The Agents shall be satisfied that () the Lien granted to the Administrative
Agent, for the benefit of the Secured Parties, in the collateral described above
is, subject to the Liens permitted under Section 7.2.3, a first priority, (or
local equivalent thereof) security interest; and () no Lien exists on any of the
collateral described above other than Liens created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant to a Loan
Document and Liens permitted under Section 7.2.3.
SECTION 5.1.14. Foreign Pledge Agreements. All Foreign Pledge
Agreements shall have been duly executed and delivered by all parties thereto
and shall remain in full force and effect, and all Liens granted to the
Administrative Agent thereunder shall be duly perfected to provide the
Administrative Agent with a security interest in and Lien on all collateral
granted thereunder free and clear of other Liens, except to the extent consented
to by the Administrative Agent.
SECTION 5.1.15. Patent Security Agreement, Copyright Security
Agreement and Trademark Security Agreement. The Agents shall have received the
Patent Security Agreement, the Copyright Security Agreement and the Trademark
Security Agreement, as applicable, each dated as of the Closing Date, duly
executed and delivered by an Authorized Officer of each Obligor that has
delivered a Security and Pledge Agreement.
SECTION 5.1.16. Perfection Certificate. The Agents shall have received
Perfection Certificates, dated as of the Closing Date, duly executed and
delivered by an Authorized Officer of each Obligor that is a party to a Security
and Pledge Agreement.
SECTION 5.1.17. Mortgage. The Agents shall have received counterparts
of each Mortgage, dated as of the Effective Date, duly executed by the
applicable Obligor, together with
(a) evidence of the completion (or satisfactory arrangements for
the completion) of all recordings and filings of each Mortgage as may
be necessary effectively to create a valid, perfected first priority
Lien (subject to the Liens permitted under Section 7.2.3) against the
properties purported to be covered thereby;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent for the benefit of the Secured Parties in amounts
and in form and substance and issued by insurers, reasonably
satisfactory to the Administrative Agent, with respect to the property
purported to be covered by each Mortgage, insuring that title to such
property is marketable and that the interests created by each Mortgage
constitute valid first Liens thereon free and clear of all defects and
encumbrances other than as approved by the Administrative Agent or
otherwise permitted pursuant to Section 7.2.3, and such policies shall
also include, if required by the Administrative Agent and the
Syndication Agent, a survey reading, and, if required by the
Administrative Agent and the Syndication Agent and if available,
revolving credit endorsement, comprehensive endorsement, variable rate
endorsement, access and utilities endorsements, mechanic's lien
endorsement and such other endorsements as the Administrative Agent
shall reasonably request and shall be accompanied by evidence of the
payment in full of all premiums thereon; and
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(c) such other approvals, opinions, or documents as the
Administrative Agent may reasonably request, including a current
survey of each property purported to be covered by a Mortgage in form
and substance reasonably satisfactory to the Administrative Agent and
the Syndication Agent and the title insurer, and a real estate
appraisal for each such property prepared in accordance with the
requirements of the Financial Institutions Reform Recovery and
Enforcement Act of 1989 and the regulations promulgated thereunder,
and otherwise in form and substance satisfactory to the Administrative
Agent and the Syndication Agent.
SECTION 5.1.18. Insurance. The Agents shall have received, with copies
for each Lender, certified copies of the insurance policies (or binders in
respect thereof), from one or more insurance companies reasonably satisfactory
to the Agents, evidencing coverage required to be maintained pursuant to each
Loan Document.
SECTION 5.1.19. Litigation. There shall exist no pending or threatened
action, suit, investigation, litigation or proceeding pending or threatened in
any court or before any arbitrator or governmental instrumentality which (a)
contests the consummation of the Transaction or the legality or validity of any
Loan Document or any Material Document, (b) could reasonably be expected to have
a Material Adverse Effect or (c) could reasonably be expected to materially
adversely effect the business (including the assumptions underlying the
Projections), assets, financial condition, operations, properties or regulatory
status of the Acquired Businesses, taken as a whole.
SECTION 5.1.20. Corporate, Tax and Capital Structure. The corporate,
tax, capital and ownership structure (including Organic Documents), shareholders
agreements and the management of the Borrower both before and after the
Transaction shall not have changed in any material respect from the structure
existing as of the date of the Commitment Letter. The corporate and capital
structure of the Borrower and its Subsidiaries shall be as set forth in Annex I
hereto.
SECTION 5.1.21. Leased Property; Landlord Consents and Waivers. The
Borrower shall have delivered a waiver, consent or estoppel agreement executed
by each lessor (on terms and conditions, and pursuant to documentation,
reasonably satisfactory in all respects to the Administrative Agent and the
Syndication Agent) of any real property leased by the Borrower or any Restricted
Subsidiary for a term in excess of one year, but only to the extent the Borrower
or such Restricted Subsidiary is able to obtain such waiver, consent or estoppel
agreement prior to or on the Closing Date with the exercise of all commercially
reasonable efforts.
SECTION 5.1.22. Approvals. All governmental, shareholder and third
party consents (including Hart-Scott-Rodino clearance) and approvals (other than
the Pending Approvals) necessary or advisable in the reasonable judgment of the
Agents in connection with the consummation of the Transaction, and the related
financings and other transactions contemplated hereby shall have been duly
obtained and all applicable waiting periods shall have expired without any
action being taken by any competent authority that could restrain, prevent or
impose any materially adverse conditions on the Transaction.
SECTION 5.1.23. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of any Obligor shall be reasonably
satisfactory in form and substance to the Administrative Agent and the
Syndication Agent; and such Agents shall have received all information,
approvals, opinions, documents or instruments as such Agents may reasonably
request.
SECTION 5.2. All Credit Extensions. The obligation of each Lender and
the Issuer to make any Credit Extension (including the initial Credit Extension)
shall be subject to, and the satisfaction (or waiver) of, each of the conditions
precedent set forth below.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Credit Extension (but, if any Default of
the nature referred to in Section 8.1.5 shall have
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occurred with respect to any other Indebtedness, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
(a) the representations and warranties set forth in each Loan
Document shall, in each case, be true and correct in all material
respects with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date); and
(b) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request, etc. Subject to Section
2.3.2, the Administrative Agent shall have received a Borrowing Request if Loans
are being requested, or an Issuance Request if a Letter of Credit is being
requested or extended. Each of the delivery of a Borrowing Request or Issuance
Request and the acceptance by the Borrower of the proceeds of such Credit
Extension shall constitute a representation and warranty by the Borrower that on
the date of such Credit Extension (both immediately before and after giving
effect to such Credit Extension and the application of the proceeds thereof) the
statements made in Section 5.2.1 are true and correct in all material respects.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Parties to enter into this Agreement and to
make Credit Extensions hereunder, the Borrower represents and warrants to each
Secured Party as set forth in this Article.
SECTION 6.1. Organization, etc. Each of the Borrower and its
Subsidiaries (i) is validly organized and existing and in good standing under
the laws of the state or jurisdiction of its incorporation or organization, (ii)
is duly qualified to do business and is in good standing as a foreign entity in
each jurisdiction where the nature of its business requires such qualification
(except where the failure to be so qualified or in good standing as a foreign
entity could not reasonably be expected to have a Material Adverse Effect), and
(iii) has full power and authority and holds all requisite governmental
licenses, permits and other approvals to enter into and perform its Obligations
under each Loan Document to which it is a party and to own and hold under lease
its property and to conduct its business substantially as currently conducted by
it (except where the failure to hold any such licenses, permits or other
approvals could not reasonably be expected to have a Material Adverse Effect).
SECTION 6.2. Due Authorization, Non-Contravention, etc. The execution,
delivery and performance by each Obligor of each Loan Document executed or to be
executed by it, each such Obligor's participation in the consummation of all
aspects of the Transaction, and the execution, delivery and performance by such
Obligor of the agreements executed and delivered by it in connection with the
Transaction are in each case within each such Person's powers, have been duly
authorized by all necessary action, and do not
(a) contravene any (i) Obligor's Organic Documents, (ii) material
contractual restriction binding on or affecting any Obligor, (iii)
court decree or order binding on or affecting any Obligor or (iv) law
or governmental regulation binding on or affecting any Obligor; or
(b) result in, or require the creation or imposition of, any Lien
on any Obligor's properties (except as permitted by this Agreement).
SECTION 6.3. Government Approval, Regulation, etc. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or other Person (other than those that have been, or on the Closing
Date will be, duly obtained or made and which are, or on the Closing Date will
be, in full force and effect) is required for (a) the due execution, delivery or
performance by any Obligor of any Loan Document to which it is a party or (b)
the due execution, delivery and/or
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performance of the Transaction Documents, in each case by the parties thereto,
or the consummation of the Transaction and the conducting of the Acquired
Businesses as conducted as of the Closing Date, except, in the case of the
Allied Acquisition, the authorizations, approvals, actions, notices and filings
set forth on Item 6.3 of the Disclosure Schedule (collectively, the "Pending
Approvals"). The failure to obtain the Pending Approvals, either individually or
in the aggregate, will not adversely affect the Borrower's ability to receive
the revenues associated with the facility, contract or other asset relating to
any such Pending Approval and will not result in a material adverse effect on
the business, assets, financial condition, operations, properties or regulatory
status of the Acquired Businesses. Neither the Borrower nor any of its
Subsidiaries is or is controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or 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.
SECTION 6.4. Validity, etc. Each Loan Document and the Transaction
Documents to which each Obligor is a party constitute, or will, on the due
execution and delivery thereof by such Obligor, constitute, the legal, valid and
binding obligations of such Obligor, enforceable against it in accordance with
their respective terms (except, in any case, as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally and by principles of equity).
SECTION 6.5. Financial Information. (a) The financial statements
furnished to the Agents and each Lender pursuant to Section 5.1.8(a)(i) have
been prepared in accordance with GAAP consistently applied, and present fairly
the consolidated financial condition of the Persons and/or businesses covered
thereby as at the dates thereof and the results of their operations for the
periods then ended.
(b) The pro forma balance sheets furnished to the Agents and each
Lender pursuant to Section 5.1.8(a)(ii) fairly presents in all material respects
the pro forma estimated financial condition of the Borrower as of such date.
(c) The Projections were prepared by the Borrower in good faith on the
basis of information and assumptions that the Borrower and its senior management
believed to be reasonable as of the date of the Projections and such assumptions
are reasonable as of the Closing Date (it being understood that projections are
not to be viewed as facts and that actual results during the period covered by
the Projections may differ from projected results).
(d) All balance sheets, all statements of operations, shareholders'
equity and cash flow and all other financial information of each of the Borrower
and its Restricted Subsidiaries furnished pursuant to Section 7.1.1 have been
and will for periods following the Effective Date be prepared in accordance with
GAAP consistently applied, and do or will present fairly the consolidated
financial condition of the Persons covered thereby as at the dates thereof and
the results of their operations for the periods then ended.
SECTION 6.6. No Material Adverse Change. There has been no material
adverse change in the business, assets, financial condition, operations,
properties or regulatory status of the Borrower and its Restricted Subsidiaries,
taken as a whole, since December 31, 1998 or since any later date which is the
last day of a Fiscal Year of the Borrower in the event the Lenders have received
the information described in clauses (b) and (c) of Section 7.1.1 with respect
to such Fiscal Year in accordance with the terms of such clauses, and the
Required Lenders have not asserted within 30 days of the receipt of such
information that any such material effect has occurred since the last day of the
Fiscal Year immediately preceding such Fiscal Year.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no pending
or, to the knowledge of
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the Borrower, threatened litigation, action, proceeding or labor controversy
(a) affecting the Borrower or any of its Subsidiaries or any of
their respective properties, businesses, assets or revenues, which
could reasonably be expected to have a Material Adverse Effect; or
(b) which purports to affect the legality, validity or
enforceability of any Loan Document, the Transaction Documents or the
Transaction.
SECTION 6.8. Subsidiaries. The Borrower has no Subsidiaries, except
those Subsidiaries
(a) which are identified in Item 6.8 of the Disclosure Schedule;
or
(b) which are permitted to have been organized or acquired in
accordance with Section 7.2.5 or 7.2.10.
Item 6.8 of the Disclosure Schedule (a) lists, with respect to each Subsidiary,
(i) the state or jurisdiction of such Subsidiary's incorporation or organization
and (ii) the percentage of shares of the Capital Stock of such Subsidiary owned
by the Borrower or another Subsidiary, and (b) identifies each Subsidiary which
is a Foreign Subsidiary.
SECTION 6.9. Ownership of Properties. The Borrower and each of its
Restricted Subsidiaries owns (a) in the case of owned real property, good and
marketable fee title to, and (b) in the case of owned personal property, good
and valid title to, or, in the case of leased real or personal property, valid
and enforceable leasehold interests (as the case may be) in, all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
permitted pursuant to Section 7.2.3. Item 6.9 of the Disclosure Schedule
contains a complete and accurate description, by owner/lessor and location (by
street address) of all owned and/or leased real properties as of the Effective
Date (as supplemented from time to time with information provided by the
Borrower in the Compliance Certificate delivered by the Borrower to the
Administrative Agent and the Syndication Agent pursuant to clause (c) of Section
7.1.1); provided, that Item 6.9 shall not be required to be supplemented at any
time other than such times as the Compliance Certificate is delivered or
required to be delivered hereunder.
SECTION 6.10. Taxes. Each of the Borrower and its Subsidiaries has
filed all Tax returns and reports required by law to have been filed by it, has
withheld all Taxes that were required to be withheld in respect of compensation
or other amounts paid to any employee or independent contractor and has paid all
Taxes and governmental charges thereby shown or required to be due and owing,
except any such Taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Credit Extension hereunder, no
steps have been taken to terminate any Pension Plan, and no contribution failure
has occurred with respect to any Pension Plan sufficient to give rise to a Lien
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any material liability,
fine or penalty. Except as disclosed in Item 6.11 of the Disclosure Schedule,
neither the Borrower nor any member of the Controlled Group has any contingent
liability with respect to any post-retirement benefit under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Title I of
ERISA.
SECTION 6.12. Environmental Warranties. The Borrower represents and
warrants that:
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(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its
Subsidiaries have been, and continue to be, owned or leased by the
Borrower and its Subsidiaries in material compliance with all
Environmental Laws;
(b) there have been no past, and there are no pending or
threatened () claims, complaints, notices or requests for information
received by the Borrower or any of its Subsidiaries with respect to
any alleged violation of any Environmental Law, or (ii) complaints,
notices or inquiries to the Borrower or any of its Subsidiaries
regarding potential liability under any Environmental Law, that could
(individually or in the aggregate) reasonably be expected to result in
liabilities of the Borrower and its Restricted Subsidiaries in excess
of $2,500,000 (exclusive of any amounts fully covered by insurance
(less any applicable deductible)) or to have a Material Adverse
Effect;
(c) there have been no Releases of Hazardous Materials at, on or
under any property now or previously owned or leased by the Borrower
or any of its Subsidiaries that could (individually or in the
aggregate) reasonably be expected to result in liabilities of the
Borrower and its Restricted Subsidiaries in excess of $2,500,000
(exclusive of any amounts fully covered by insurance (less any
applicable deductible)) or to have a Material Adverse Effect;
(d) the Borrower and its Subsidiaries have been issued, and are
in material compliance with, all material permits, certificates,
approvals, licenses and other authorizations relating to environmental
matters;
(e) no property now or previously owned or leased by the Borrower
or any of its Subsidiaries is listed or proposed for listing (with
respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of
sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Borrower or any of its Subsidiaries
that could (individually or in the aggregate) reasonably be expected
to result in liabilities of the Borrower and its Restricted
Subsidiaries in excess of $2,500,000 (exclusive of any amounts fully
covered by insurance (less any applicable deductible)) or to have a
Material Adverse Effect;
(g) neither the Borrower nor any Subsidiary has directly
transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations
which may lead to material claims against the Borrower or such
Subsidiary for any remedial work, damage to natural resources or
personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower or any Subsidiary that could (individually or in the
aggregate) reasonably be expected to result in liabilities of the
Borrower and its Restricted Subsidiaries in excess of $2,500,000
(exclusive of any amounts fully covered by insurance (less any
applicable deductible)) or to have a Material Adverse Effect; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower that could, with the
passage of time, or the giving of notice or both, reasonably be
expected (individually or in the aggregate) to result in liabilities
of the Borrower and its Restricted Subsidiaries in excess of
$2,500,000 (exclusive of any amounts fully covered by insurance (less
any applicable deductible)) or to have a Material Adverse Effect under
any
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Environmental Law.
SECTION 6.13. Accuracy of Information. None of the factual information
heretofore or contemporaneously furnished in writing to any Secured Party by or
on behalf of any Obligor in connection with any Loan Document (including the
Borrower's most recent filing with the SEC on Form 10-K and all filings with the
SEC subsequent thereto on Forms 10-Q and 8-K) or any transaction contemplated
hereby (including the Transaction) contains any untrue statement of a material
fact, or omits to state any material fact necessary to make any information not
misleading, and no other factual information hereafter furnished in connection
with any Loan Document by or on behalf of any Obligor to any Secured Party will
contain any untrue statement of a material fact or will omit to state any
material fact necessary to make any information not misleading on the date as of
which such information is dated or certified in light of the circumstances under
which such information was provided.
SECTION 6.14. Regulations U and X. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit Extensions
will be used to purchase or carry margin stock or otherwise for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation U or Regulation
X. Terms for which meanings are provided in F.R.S. Board Regulation U or
Regulation X or any regulations substituted therefor, as from time to time in
effect, are used in this Section with such meanings.
SECTION 6.15. Year 2000. Each of the Borrower and its Restricted
Subsidiaries has reviewed the areas within its business and operations which
could be adversely affected by, and has developed a program to address, the
"Year 2000 Problem" (that is, the risk that computer applications used by any
such Person may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to and any date after December 31,
1999). Based on such review and program, the Year 2000 Problem could not
reasonably be expected to have a Material Adverse Effect.
SECTION 6.16. Issuance of Subordinated Debt; Status of Obligations as
Senior Indebtedness, etc. The Borrower has the power and authority to incur the
Subordinated Debt evidenced by the Subordinated Notes and has duly authorized,
executed and delivered the Subordinated Debt Documents applicable to such
Subordinated Debt. The subordination provisions relating to the Subordinated
Debt (including the subordination provisions set forth in the Subordinated Note
Indenture) are enforceable against the holders of the applicable Subordinated
Debt by the holder of any "Senior Indebtedness" or similar term referring to the
Obligations (as defined in the applicable Subordinated Debt Documents). All
Obligations, including those to pay principal of and interest (including
interest accruing subsequent to the filing of, or which would have accrued but
for the filing of, a petition for bankruptcy, reorganization or similar
proceeding, whether or not allowed as a claim under such proceeding) on the
Loans and Reimbursement Obligations, and fees and expenses in connection
therewith, constitute "Senior Indebtedness" or similar term relating to the
Obligations (as defined in the applicable Subordinated Debt Documents) and all
such Obligations are entitled to the benefits of the subordination created by
such Subordinated Debt Documents. The Borrower acknowledges that the
Administrative Agent, each Lender and the Issuer is entering into this Agreement
and is extending its Commitments in reliance upon the subordination provisions
of the Subordinated Debt Documents.
SECTION 6.17. Solvency. The Transaction (including the incurrence of
the initial Credit Extension hereunder, the execution and delivery by the
Subsidiary Guarantors of the Subsidiary Guaranty and the granting of any Liens
as security therefor) will not involve or result in any fraudulent transfer or
fraudulent conveyance under the provisions of Section 548 of the Bankruptcy Code
(11 U.S.C. ss.101 et seq., as from time to time hereafter amended, and any
successor or similar statute) or any applicable state law relating to fraudulent
transfers or fraudulent conveyances. After giving effect to each Credit
Extension hereunder, the Borrower and each Subsidiary Guarantor is Solvent.
SECTION 6.18. Other Representations and Warranties. All
representations and warranties
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made by the Borrower and each other party to an Allied Acquisition Document
under such Allied Acquisition Document and all representations and warranties
made by the Borrower under the Convertible PIK Preferred Equity Purchase
Agreement are, in each case, true and correct in all material respects as of the
Closing Date (except to the extent any such representation and warranty is
stated to relate solely to an earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date) and no material default has occurred and is continuing under any
such Allied Acquisition Document or the Convertible PIK Preferred Equity
Purchase Agreement.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with each
Secured Party hereto that, until the Termination Date has occurred, the Borrower
will perform, or cause to be performed, the obligations set forth below.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or cause to be furnished, to the Administrative Agent
(with sufficient copies for each Lender) and to the Syndication Agent copies of
the following financial statements, reports, notices and information:
(a) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year, an unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and consolidated
statements of income and cash flow of the Borrower and its
Subsidiaries for such Fiscal Quarter and for the period commencing at
the end of the previous Fiscal Year and ending with the end of such
Fiscal Quarter, and including (in each case), in comparative form the
figures for the corresponding Fiscal Quarter in, and year to date
portion of, the immediately preceding Fiscal Year, certified as
complete and correct by the chief financial or accounting Authorized
Officer of the Borrower; provided, however, that, with respect to the
delivery in comparative form of figures for the corresponding Fiscal
Year when such Fiscal Year is the 1999 Fiscal Year, such figures shall
satisfy the requirements of this clause (a) if the preparation of such
figures satisfy the rules and regulations of the SEC;
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year, a copy of the consolidated balance sheet
of the Borrower and its Subsidiaries, and the related consolidated
statements of income and cash flow of the Borrower and its
Subsidiaries for such Fiscal Year, setting forth in comparative form
the figures for the immediately preceding Fiscal Year (provided,
however, that, with respect to the delivery in comparative form of
figures for the corresponding Fiscal Year when such Fiscal Year is the
1999 Fiscal Year, such figures shall satisfy the requirements of this
clause (b) if the preparation of such figures satisfy the rules and
regulations of the SEC) and, in the case of such consolidated balance
sheets and statements of income and cash flow, audited (without any
Impermissible Qualification) by any one of the "Big Five" accounting
firms or such other nationally recognized, independent public
accounting firm reasonably acceptable to the Administrative Agent and
the Syndication Agent, which shall include a calculation of the
financial covenants set forth in Section 7.2.4 and stating that, in
performing the examination necessary to deliver the audited financial
statements of the Borrower and its Subsidiaries, no knowledge was
obtained of any Event of Default;
(c) concurrently with the delivery of the financial information
pursuant to clauses (a) and (b), a Compliance Certificate, executed by
the chief financial or accounting Authorized Officer of the Borrower,
showing compliance with the financial covenants set forth in Section
7.2.4 and stating that no Default has occurred and is continuing (or,
if a Default has occurred, specifying the details of such Default and
the action that the applicable Obligor has taken or
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proposes to take with respect thereto), together with a reconciliation
between the financial condition and financial results of the Borrower
and its Restricted Subsidiaries (including balance sheet and income
statement items), on the one hand, and the Unrestricted Subsidiaries
(including balance sheet and income statement items), on the other
hand;
(d) as soon as available and in any event within 45 days after
the end of each Fiscal Year, capital and operating budgets of the
Borrower and its Restricted Subsidiaries for the succeeding Fiscal
Year and updated projected financial statements (including balance
sheets and statements of operations, stockholders' equity and cash
flows) of the Borrower and its Restricted Subsidiaries for such
succeeding Fiscal Year and each subsequent Fiscal Year up to (but not
including) the 2007 Fiscal Year, prepared in a manner consistent with
the Projections.
(e) as soon as possible and in any event within three Business
Days after any Obligor obtains knowledge of the occurrence of a
Default, a statement of an Authorized Officer of the Borrower setting
forth details of such Default and the action which such Obligor has
taken and proposes to take with respect thereto;
(f) as soon as possible and in any event within three Business
Days after any Obligor obtains knowledge of the commencement of any
litigation, action, proceeding or labor controversy of the type and
materiality described in Section 6.7, notice thereof and, to the
extent either the Administrative Agent or the Syndication Agent
requests, copies of all documentation relating thereto;
(g) promptly after the sending or filing thereof, copies of all
reports, notices, prospectuses and registration statements which any
Obligor files with the SEC or any national securities exchange;
(h) as soon as possible and in any event within three Business
Days of becoming aware of (i) the institution of any steps by any
Person to terminate any Pension Plan, (ii) the failure to make a
required contribution to any Pension Plan if such failure is
sufficient to give rise to a Lien under Section 302(f) of ERISA, (iii)
the taking of any action with respect to a Pension Plan which could
result in the requirement that any Obligor furnish a bond or other
security to the PBGC or such Pension Plan, or (iv) the occurrence of
any event with respect to any Pension Plan which could result in the
incurrence by any Obligor of any material liability, fine or penalty,
notice thereof and copies of all documentation relating thereto;
(i) promptly upon receipt thereof, copies of all "management
letters" submitted to any Obligor by the independent public
accountants referred to in clause (b) in connection with each audit
made by such accountants;
(j) promptly following the mailing or receipt of any notice or
report delivered by or to the Borrower or any of its Subsidiaries
under the terms of any Subordinated Debt, copies of such notice or
report; and
(k) such other financial and other information as any Lender or
the Issuer through either the Administrative Agent or the Syndication
Agent may from time to time reasonably request (including information
and reports in such detail as either such Agent may request with
respect to the terms of and information provided pursuant to the
Compliance Certificate).
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc.
The Borrower will
(a) preserve and maintain its legal existence and qualification
as a foreign corporation in each jurisdiction where the nature of its
business or the location of its assets requires it to be so qualified,
except to the extent the failure to be so qualified would not result
in a Material
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Adverse Effect;
(b) cause each of its Restricted Subsidiaries to, except as
otherwise permitted by Section 7.2.10, preserve and maintain its legal
existence and qualification as a foreign entity in each jurisdiction
where the nature of the business or the location of its assets
requires it to be so qualified, except to the extent the failure to be
so qualified would not result in a Material Adverse Effect; and
(c) comply in all material respects with all applicable laws,
rules, regulations and orders, including the payment (before the same
become delinquent) of all taxes, assessments and governmental charges
imposed upon the Borrower or any Subsidiary or upon their property
except to the extent being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP have been set aside on the books of the Borrower or any such
Subsidiary, as applicable.
SECTION 7.1.3. Maintenance of Properties. The Borrower will, and will
cause each of its Restricted Subsidiaries to, maintain, preserve, protect and
keep its and their respective properties in good repair, working order and
condition (ordinary wear and tear, and damage by casualty, excepted), and make
necessary repairs, renewals and replacements so that the business carried on by
the Borrower and its Restricted Subsidiaries may be properly conducted at all
times, unless the Borrower or such Restricted Subsidiary determines in good
faith that the continued maintenance of such property is no longer economically
desirable.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of
its Restricted Subsidiaries to, (a) maintain insurance with financially sound
and reputable insurance companies, and with respect to property and risks of a
character usually maintained by Persons of comparable size engaged in the same
or similar business and similarly situated, against loss, damage and liability
of the kinds and in the amounts customarily maintained by such Persons and (b)
use its commercially reasonable efforts to ensure that (i) each Person
contracted by the Borrower or any of its Restricted Subsidiaries that at any
time has possession of any materials handled by the Borrower or its Restricted
Subsidiaries maintains insurance with financially sound and reputable insurance
companies over such materials with respect to property and risks of a character
usually maintained by Persons of comparable size engaged in the same or similar
business and similarly situated against loss, damage and liability of the kinds
and in the amounts customarily maintained by such Persons and (ii) in addition
to, and not in limitation of, clause (i) above, all third party contract haulers
or other Person contracted by the Borrower or its Restricted Subsidiaries to
handle or transport Hazardous Materials also maintains pollution legal liability
insurance with financially sound and reputable insurance companies with respect
to the handling or transporting of such materials of a character usually
maintained by Persons of comparable size engaged in the same or similar business
and similarly situated, and in each case the Borrower or its Restricted
Subsidiary, as the case may be, be named an additional insured under all such
policies and obtain waivers of subrogation from such third party contractors. In
any event, the following insurance will be maintained by the Borrower as
indicated below.
(i) Property, Boiler & Machinery & Business Interruption
Insurance. Insurance (including business interruption insurance)
against loss (including loss of profits) and damage covering all of
the tangible real and personal property and improvements of the
Borrower and each of its Restricted Subsidiaries by reason of any
Insured Peril (as defined below) for a blanket amount covering the
full replacement value of all such property subject to a loss limit of
$25,000,000 per occurrence, with sublimits for earthquakes in the
amount of $5,000,000 and floods in the amount of $5,000,000, and as
shall be reasonable and customary and sufficient to avoid the insured
named therein from becoming a co-insurer of any loss under such policy
(it being understood that, for purposes of this sentence, payments of
standard deductibles under such policies shall not be considered
co-insurance by the insured).
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(ii) General Liability Insurance. A general liability policy
against claims for bodily injury, death or property damage, loss of
use of operating facilities and products and completed operations
liability comparable in all respects with insurance carried by
responsible owners and operators of businesses similar to those of the
Borrower and its Restricted Subsidiaries and for property similar in
use in the jurisdictions where such properties are located, but in no
event less than $1,000,000 inclusive per occurrence and $2,000,000 in
the aggregate, and such insurance shall contain all standard
extensions customary for such policy.
(iii) Pollution Legal Liability Insurance. A pollution legal
liability policy against on-site and off-site third party bodily
injury and property damage claims resulting from pollution related
incidents occurring on, in or about the properties (including
vehicles) owned, leased or operated by the Borrower and its Restricted
Subsidiaries and those occurring at disposal, transfer or other
locations not owned, operated or leased by the Borrower or any of its
Subsidiaries, including in connection with the transporting of
materials of the Borrower or its Subsidiaries comparable in all
respects with insurance carried by responsible owners and operators of
businesses similar to those of the Borrower and its Restricted
Subsidiaries, but in no event less than $5,000,000 inclusive per
occurrence and $10,000,000 in the aggregate, and such insurance shall
contain all standard extensions customary for such policy and shall
cover prior acts.
(iv) Workers' Compensation. Workers' compensation insurance
(including employers' liability insurance with the following limits:
$1,000,000 per accident for bodily injury due to accidents; $1,000,000
per employee and in the aggregate for bodily injury due to disease)
covering the Borrower and its Restricted Subsidiaries, in amounts and
coverages satisfactory to meet applicable legal requirements
(including state workers compensation laws).
(v) Automobile Liability Insurance for Bodily Injury and Property
Damage. Insurance against liability for bodily injury and property
damage in respect of all vehicles (whether owned, hired or rented by
the Borrower or any of its Restricted Subsidiaries) at any time
located at, or used in connection with, its properties or operations,
in such amounts as are then customary for vehicles used in connection
with similar properties and businesses and to the extent required by
law, but in no event less than $1,000,000 per accident.
(vi) Umbrella & Excess Program. Umbrella insurance establishing
excess limits over the employers' liability, automobile liability,
general liability and any other scheduled primary liability policy
(other than the pollution legal liability insurance) against liability
for bodily injury and property damage in amounts not less than
$25,000,000 per occurrence, and such insurance shall contain all
standard extensions customary for such policy.
All such insurance shall be written by financially responsible companies
selected by the Borrower and (except for automobile insurance) having an A.M.
Best rating of "A" or better and being in a financial size category of VII or
larger (or an equivalent rating of any successor publication of a similar
nature), or by other companies acceptable to the Administrative Agent, and
(other than workers' compensation) shall name the Administrative Agent as loss
payee (to the extent covering risk of loss or damage to tangible property) and
as an additional named insured as its interests may appear (to the extent
covering any other risk). Each policy referred to in this Section 7.1.4 shall
provide that it will not be canceled or reduced, or allowed to lapse without
renewal, except after not less than 30 days' notice to the Administrative Agent
and shall also provide that the interests of the Administrative Agent and the
Lenders shall not be invalidated by any act or negligence of the Borrower, any
of its Subsidiaries or any Person having an interest in any property covered by
a Mortgage nor by occupancy or use of any such property for purposes more
hazardous than permitted by such policy nor by any foreclosure or other
proceedings relating to such property. The Borrower will advise the
Administrative Agent promptly of any significant policy cancellation (other than
any such cancellation in connection with the replacement thereof), reduction or
amendment.
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On or before the Closing Date, the Borrower will deliver to the
Administrative Agent certificates of insurance satisfactory to the
Administrative Agent evidencing the existence of all insurance required to be
maintained by the Borrower hereunder setting forth the respective coverages,
limits of liability, carrier, policy number and period of coverage. The Borrower
will not, and will not permit any of its Restricted Subsidiaries to, obtain or
carry separate insurance concurrent in form or contributing in the event of loss
with that required by this Section 7.1.4 unless the Administrative Agent is the
named insured thereunder, for the benefit of the Secured Parties, with loss
payable as provided herein. The Borrower will immediately notify the
Administrative Agent whenever any such separate insurance is obtained and shall
deliver to the Administrative Agent the certificates evidencing the same.
Without limiting the obligations of the Borrower under the foregoing
provisions of this Section 7.1.4, in the event the Borrower shall fail to
maintain in full force and effect insurance as required by the foregoing
provisions of this Section 7.1.4, then the Administrative Agent may (upon notice
to the Borrower), but shall have no obligation so to do, procure insurance
covering the interests of the Lenders and the Administrative Agent in such
amounts and against such risks as the Administrative Agent (or the Required
Lenders) shall deem appropriate, and the Borrower shall promptly reimburse the
Administrative Agent in respect of any premiums paid by the Administrative Agent
in respect thereof.
For purposes hereof, the term "Insured Peril" shall mean,
collectively, all risks of physical loss including flood, earthquake and
windstorm in the jurisdictions where the properties owned or operated by the
Borrower or any of its Subsidiaries are located.
SECTION 7.1.5. Books and Records. (a) The Borrower will, and will
cause each of its Restricted Subsidiaries to,
(i) keep books and records in accordance with GAAP which
accurately reflect all of its business affairs and transactions;
(ii) permit the Administrative Agent, the Syndication Agent or
any of their respective representatives, at reasonable times and
intervals and upon reasonable notice to the Borrower to visit each of
the Borrower's and its Subsidiaries' offices, to discuss such Person's
financial matters with its officers and employees, and its independent
public accountants (and the Borrower hereby authorizes such
independent public accountant to discuss each of such Person's
financial matters with the Administrative Agent, the Syndication Agent
or any of their respective representatives whether or not any
representative of such Person is present, so long as a representative
of such Person has been afforded a reasonable opportunity to be
present) and to examine (and photocopy extracts from) any of such
Person's books and records; and
(iii) afford each other Secured Party or any of its respective
representatives, upon reasonable notice to each such Secured Party,
the opportunity to visit the Borrower's chief executive office once
per calender year, to discuss such Person's financial matters with its
officers and employees, and its independent public accountants (and
the Borrower hereby authorizes such independent public accountant to
discuss each of such Person's financial matters with each such Secured
Party or any of their respective representatives whether or not any
representative of such Person is present, so long as a representative
of such Person has been afforded a reasonable opportunity to be
present) and to examine (and photocopy extracts from) any of such
Person's books and records; provided, however, that each such Secured
Party or any of their respective representatives, at reasonable times
and intervals and upon reasonable notice to the Borrower, shall be
permitted to do any of the foregoing at any time after the occurrence
and during the continuation of an Event of Default.
(b) The Borrower shall pay any fees of such independent public
accountant incurred in connection with any Secured Party's exercise of its
rights pursuant to clause (a).
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SECTION 7.1.6. Environmental Law Covenant. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its and their facilities and
properties in material compliance with all Environmental Laws, keep
all necessary material permits, approvals, certificates, licenses and
other authorizations relating to environmental matters in effect and
remain in material compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable Environmental
Laws; and
(b) promptly notify the Administrative Agent and the Syndication
Agent and provide copies upon receipt of all written claims,
complaints, notices or inquiries relating to the condition of its
facilities and properties in respect of, or as to compliance with,
Environmental Laws, which claims, complaints, notices or inquiries
could (individually or in the aggregate) reasonably be expected to
result in liabilities of the Borrower and its Restricted Subsidiaries
in excess of $2,500,000 (exclusive of any amounts fully covered by
insurance (less any applicable deductible)), and shall promptly
resolve, subject to good faith disputes, any non-compliance with
Environmental Laws and keep its property free of any Lien imposed by
any Environmental Law.
SECTION 7.1.7. Use of Proceeds. The Borrower will:
(a) apply the proceeds of the Loans
(i) in the case of the Term Loans, to partially finance the
consummation of the Allied Acquisition; and
(ii) in the case of Revolving Loans and Swing Line Loans,
for post-closing working capital and general corporate purposes
of the Borrower and the Subsidiary Guarantors to the extent
permitted hereunder; and
(b) use Letters of Credit only for purposes of supporting working
capital and general corporate purposes of the Borrower and its
Restricted Subsidiaries that are Subsidiary Guarantors.
SECTION 7.1.8. Additional Real Property. The Borrower shall, and shall
cause each of its Restricted Subsidiaries to, cause the Administrative Agent and
the Lenders to have, at all times, a first priority perfected security interest
(subject only to Liens permitted hereunder) in all of the real property acquired
from time to time by the Borrower and its Restricted Subsidiaries (other than
any such real property (exclusive of real property acquired in connection with
the Allied Acquisition) that, when added to the net book value of all other such
real property acquired by the Borrower and its Restricted Subsidiaries in the
calendar year in which such determination is being made, has a net book value of
less than $1,000,000 (exclusive of the net book value of any such real property
subject to Liens permitted under clause (d) of Section 7.2.3, but only to the
extent of the aggregate principal amount of Indebtedness secured by such
Liens)); provided, however, that, in the event such real property is owned by a
Foreign Subsidiary, such Subsidiary shall not be required to grant such security
interest; provided, further, however, that, in the event of any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive or guideline of any Governmental
Authority that eliminates the amount of United States federal income tax that
would otherwise result from the operation of Section 956 (or any successor
provision thereto) of the Code by the Borrower and the other members of the
affiliated group of corporations filing a consolidated federal income tax return
with the Borrower, the Administrative Agent or the Required Lenders may require
the grant of such security interest. Without limiting the generality of the
foregoing, the Borrower shall, and shall cause each such Restricted Subsidiary
to, execute and deliver or cause to be executed and delivered Mortgages that may
be necessary to create a valid, first priority perfected Lien
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(subject only to Liens permitted hereunder) against such real property, together
with
(a) evidence of the completion (or satisfactory arrangements for
the completion) of all recordings and filings of each such Mortgage as
may be necessary effectively to create a valid, first priority
perfected Lien (subject to the Liens permitted under Section 7.2.3)
against the properties purported to be covered thereby;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent for the benefit of the Secured Parties in amounts
and in form and substance and issued by insurers, reasonably
satisfactory to the Administrative Agent, with respect to the property
purported to be covered by each Mortgage, insuring that title to such
property is marketable and that the interests created by each Mortgage
constitute valid first Liens thereon free and clear of all defects and
encumbrances other than as approved by the Administrative Agent or
otherwise permitted pursuant to Section 7.2.3, and such policies shall
also include, if required by the Administrative Agent, a survey
reading, and, if required by the Administrative Agent and if
available, revolving credit endorsement, comprehensive endorsement,
variable rate endorsement, access and utilities endorsements,
mechanic's lien endorsement and such other endorsements as the
Administrative Agent shall reasonably request and shall be accompanied
by evidence of the payment in full of all premiums thereon; and
(c) such other approvals, opinions, or documents as the
Administrative Agent may reasonably request, including a current
survey of each property purported to be covered by each such Mortgage
in form and substance reasonably satisfactory to the Administrative
Agent and the title insurer, and a real estate appraisal for each such
property prepared in accordance with the requirements of the Financial
Institutions Reform Recovery and Enforcement Act of 1989 and the
regulations promulgated thereunder, and otherwise in form and
substance satisfactory to the Administrative Agent.
SECTION 7.1.9. Future Subsidiaries; Subsidiary Guarantors. Without
limiting the effect of any provision contained herein: () Upon any Person
becoming either a direct or indirect Restricted Subsidiary of the Borrower or,
in the case of clause (ii) of this subsection (a), an Unrestricted Subsidiary
the Capital Stock of which is owned in whole or in part by the Borrower or a
Restricted Subsidiary of the Borrower,
(i) such Person, if not theretofore a party to the Subsidiary
Security and Pledge Agreement and the Subsidiary Guaranty, shall
execute and deliver to the Administrative Agent a supplement to each
of the Subsidiary Security and Pledge Agreement and the Subsidiary
Guaranty for the benefit of the Secured Parties; provided, however,
that, in the event such Subsidiary is a Foreign Subsidiary, such
Subsidiary shall not be required to become a guarantor under the
Subsidiary Guaranty or execute and deliver a supplement to the
Subsidiary Security and Pledge Agreement; provided, further, however,
that, in the event of any change in, or the introduction, adoption,
effectiveness, interpretation, reinterpretation or phase-in of, any
law or regulation, directive or guideline of any Governmental
Authority that eliminates the amount of United States federal income
tax that would otherwise result from the operation of Section 956 (or
any successor provision thereto) of the Code by the Borrower and the
other members of the affiliated group of corporations filing a
consolidated federal income tax return with the Borrower, the
Administrative Agent or the Required Lenders may require the execution
and delivery by such Person of a supplement to each of the Subsidiary
Guaranty and the Subsidiary Security and Pledge Agreement; and
(ii) the Borrower or, if not the Borrower, the Restricted
Subsidiary of the Borrower (provided such Restricted Subsidiary is not
a Foreign Subsidiary that would otherwise be required to execute and
deliver a supplement to the Subsidiary Security and Pledge Agreement
pursuant to the second proviso to the preceding clause (a)) that will
own shares of the Capital
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Stock of such Person (which Restricted Subsidiary, if not theretofore
a party to the Subsidiary Security and Pledge Agreement, shall execute
and deliver to the Administrative Agent a supplement to the Subsidiary
Security and Pledge Agreement for the purpose of becoming a pledgor
thereunder) shall, pursuant to the applicable Security and Pledge
Agreement, deliver to the Administrative Agent
(A) certificates evidencing all of the issued and
outstanding Capital Stock pledged pursuant to the applicable
Security and Pledge Agreement, which certificates in each case
shall be accompanied by undated instruments of transfer duly
executed in blank, or, if any such shares of Capital Stock
pledged pursuant to such Security and Pledge Agreement are
uncertificated securities, the Administrative Agent shall have
obtained "control" (as defined in the UCC) over such shares of
Capital Stock) and such other instruments and documents as the
Administrative Agent shall deem reasonably necessary or in the
reasonable opinion of the Administrative Agent advisable under
applicable law to perfect the first priority security interest of
the Administrative Agent in such shares of Capital Stock;
provided, however, that no more than 65% of the shares of Capital
Stock of a Foreign Subsidiary of the Borrower held by the
Borrower or a Domestic Subsidiary of the Borrower will be
required to be pledged hereunder; provided, further, however,
that, in the event of any change in, or the introduction,
adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive or guideline of any
Governmental Authority that eliminates the amount of United
States federal income tax that would otherwise result from the
operation of Section 956 (or any successor provision thereto) of
the Code by the Borrower and the other members of the affiliated
group of corporations filing a consolidated federal income tax
return with the Borrower, the Administrative Agent or the
Required Lenders may require the pledge of more than 65% of such
shares of Capital Stock;
(B) all Intercompany Notes, if any, pledged pursuant to the
applicable Security and Pledge Agreement;
(C) executed copies of Filing Statements naming such Obligor
as a debtor and the Administrative Agent as the secured party, or
other similar instruments or documents to be filed under the UCC
of all jurisdictions as may be reasonably necessary or, in the
reasonable opinion of the Administrative Agent, advisable to
perfect the security interests of the Administrative Agent
pursuant to the applicable Security and Pledge Agreement; and
(D) executed copies of proper UCC termination statements
(Form UCC-3), if any, necessary to release all Liens and other
rights of any Person in any collateral described in the
applicable Security and Pledge Agreement previously granted to
such Person except to the extent permitted by Section 7.2.3,
together with such other UCC termination statements (Form UCC-3)
as the Administrative Agent may reasonably request from each such
Obligor; and
(E) certified copies of UCC Requests for Information or
Copies (Form UCC-11) or a similar search report certified by a
party acceptable to the Administrative Agent, dated a date
reasonably near (but prior to) the date of any such Person
becoming a direct or indirect Restricted Subsidiary of the
Borrower, listing all effective financing statements which name
such Person (under its present name and any previous names) as
the debtor and which are filed in the jurisdictions in which
filings are to be made pursuant to clause (iii) above, together
with copies of such financing statements (none of which shall
cover any collateral described in any Loan Document, except to
the extent permitted by Section 7.2.3),
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together, in each case, with such opinions of legal counsel as the
Administrative Agent and the Syndication Agent may reasonably request,
which legal opinions shall be in form and substance reasonably
satisfactory to such Agents. The Administrative Agent and the
Syndication Agent shall be satisfied that the Lien granted to the
Administrative Agent, for the benefit of the Secured Parties in the
collateral described above is a first priority (or local equivalent
thereof) security interest, and no Lien exists on any of the
collateral described above other than the Lien created in favor of the
Administrative Agent, for the benefit of the Secured Parties, pursuant
to a Loan Document, and the other Liens permitted hereunder.
(b) Prior to (or contemporaneously with) any Subsidiary becoming a
"Guarantor" (as such term is defined in the Subordinated Note Indenture) under
the Subordinated Note Indenture or a guarantor with respect to any other
Subordinated Debt described in clause (k) of Section 7.2.2, such Subsidiary
shall, if not theretofore a party to the Subsidiary Guaranty, execute and
deliver to the Administrative Agent a supplement to the Subsidiary Guaranty for
the benefit of the Secured Parties.
SECTION 7.1.10. Additional Collateral. Without limiting the provisions
of Sections 7.1.8 and 7.1.9, the Borrower shall, and shall cause each Restricted
Subsidiary (other than a Restricted Subsidiary exempted from the requirement of
granting a security interest as a result of the proviso to the first sentence of
Section 7.1.8) to, cause the Lenders to have at all times a first priority
perfected security interest (subject only to (i) Liens permitted hereunder and
(ii) exceptions provided for in the applicable Security and Pledge Agreement) in
all of the property (real and personal) owned from time to time by the Borrower
and such Restricted Subsidiary to the extent the same constitutes or would
constitute collateral under the applicable Security and Pledge Agreement.
SECTION 7.1.11. Year 2000. The Borrower shall take all action
reasonably necessary to assure that its computer based systems are able to
effectively process data including dates on and after January 1, 2000. At the
reasonable request of the Administrative Agent or any Lender, the Borrower shall
provide the Administrative Agent or such Lender, as the case may be, with
assurance reasonably acceptable to the Administrative Agent or such Lender, as
the case may be, of the Borrower's year 2000 capability.
SECTION 7.1.12. Rate Protection Agreements. Within 180 days following
the Closing Date, the Borrower will enter into interest rate swap, cap, collar
or similar arrangements designed to protect the Borrower against fluctuations in
interest rates to the extent necessary to provide that at least 50% of the
aggregate principal amount then outstanding of Term Loans and Indebtedness
permitted under clause (k) of Section 7.2.2 is subject to a fixed interest rate
(after giving effect to each such arrangement) for a minimum period of two years
from the date of such determination (but not beyond the Stated Maturity Date of
the Term B Loans), with the terms and conditions of such arrangement being
reasonably satisfactory to the Administrative Agent.
SECTION 7.1.13. Maintenance of Corporate Separateness. The Borrower
will, and will cause each of its Subsidiaries to, satisfy customary corporate
formalities, including the holding of regular board of directors' and
shareholders' meetings and the maintenance of corporate offices and records.
Neither the Borrower nor any Restricted Subsidiary shall make any payment to a
creditor of any Unrestricted Subsidiary in respect of any liability of such
Unrestricted Subsidiary (unless such payment is pursuant to a guaranty permitted
by both Section 7.2.2 and clause (a) or (k) of Section 7.2.5), and no bank
account of an Unrestricted Subsidiary shall be commingled with any bank account
of the Borrower or any of its Restricted Subsidiaries. Any financial statements
distributed to any creditors of an Unrestricted Subsidiary shall clearly
establish the separateness of such Unrestricted Subsidiary from the Borrower and
its Restricted Subsidiaries and each lender to an Unrestricted Subsidiary shall
be notified in writing by such Unrestricted Subsidiary that such lender will not
have any recourse to the assets of the Borrower or any of its Restricted
Subsidiaries. Neither the Borrower nor any of its Subsidiaries shall take any
action, or conduct its affairs in a manner, which is likely to result in the
corporate existence of any Unrestricted Subsidiary which is a direct Subsidiary
of the Borrower or any
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Restricted Subsidiary being ignored by any court of competent jurisdiction, or
in the assets and liabilities of the Borrower or any Restricted Subsidiary being
substantively consolidated with those of any Unrestricted Subsidiary in a
bankruptcy, reorganization or other insolvency proceeding.
SECTION 7.1.14. Leased Property. With respect to any lease of any real
property with a term in excess of one year in existence prior to the Closing
Date and for which the Borrower shall not have delivered a waiver, consent or
estoppel agreement pursuant to Section 5.1.21, and prior to entering into any
new lease of any real property with a term in excess of one year following the
Closing Date, the Borrower shall use all commercially reasonable efforts to (and
to cause each of its Restricted Subsidiaries to) deliver to the Administrative
Agent a waiver, consent or estoppel agreement executed by the lessor (on terms
and conditions, and pursuant to documentation, reasonably satisfactory to the
Administrative Agent) of such real property.
SECTION 7.2. Negative Covenants. The Borrower covenants and agrees
with each Secured Party hereto that, until the Termination Date has occurred,
the Borrower will perform, or cause to be performed, the obligations set forth
below.
SECTION 7.2.1. Business Activities. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, engage in any business
activity except those business activities in which the Borrower and its
Restricted Subsidiaries are engaged on the Effective Date and activities
reasonably incidental or ancillary thereto, including business activities in
respect of the delivery of services and products substantially related to those
services and products delivered by the Borrower and its Restricted Subsidiaries
to their customers on the Effective Date.
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, create, incur, assume or permit to
exist any Indebtedness, other than:
(a) Indebtedness in respect of the Obligations;
(b) until the Closing Date, Indebtedness that is to be repaid in
full as further identified in Item 7.2.2(b) of the Disclosure
Schedule;
(c) Indebtedness existing as of the Effective Date which is
identified in Item 7.2.2(c) of the Disclosure Schedule, and Permitted
Refinancings of such Indebtedness;
(d) unsecured Indebtedness of the Borrower and its Restricted
Subsidiaries (i) incurred in the ordinary course of business of the
Borrower and its Restricted Subsidiaries in an aggregate amount at any
time outstanding not to exceed $5,000,000, (ii) in respect of
performance, surety or appeal bonds provided in the ordinary course of
business and (iii) in respect of financing provided by suppliers of
insurance to the Borrower and its Restricted Subsidiaries in the
ordinary course of business in order to finance insurance premiums due
and payable within 365 days thereof, but excluding (in each case),
Indebtedness incurred through the borrowing of money or Contingent
Liabilities in respect thereof
(e) Indebtedness of the Borrower and its Restricted Subsidiaries
(i) in respect of industrial revenue bonds or other similar
governmental or municipal bonds, (ii) evidencing the deferred purchase
price of newly acquired property or incurred to finance the
acquisition of equipment of the Borrower and its Restricted
Subsidiaries (pursuant to purchase money mortgages or otherwise,
whether owed to the seller or a third party) used in the ordinary
course of business of the Borrower and its Restricted Subsidiaries
(provided, that such Indebtedness is incurred within 90 days of the
acquisition of such property) and (iii) Capitalized Lease Liabilities;
provided, that the aggregate amount of all Indebtedness outstanding
pursuant to this clause shall not at any time exceed $5,000,000;
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(f) Indebtedness of any Subsidiary Guarantor owing to the
Borrower or any other Subsidiary Guarantor, which Indebtedness shall,
if payable to the Borrower or a Domestic Subsidiary, be evidenced by
one or more Intercompany Notes, duly executed and delivered in pledge
to the Administrative Agent pursuant to a Security and Pledge
Agreement;
(g) Indebtedness of a Foreign Subsidiary owing to the Borrower or
a Subsidiary Guarantor which, when aggregated with the amount of
Investments made by the Borrower and the Subsidiary Guarantors in
Foreign Subsidiaries under clause (f) of Section 7.2.5, less
Investment Returns, shall not exceed $15,000,000, and which shall be
evidenced by one or more Intercompany Notes duly executed and
delivered in pledge to the Administrative Agent pursuant to a Security
and Pledge Agreement;
(h) Indebtedness of Foreign Subsidiaries owing to other Foreign
Subsidiaries which are not Unrestricted Subsidiaries;
(i) Indebtedness of Foreign Subsidiaries incurred for working
capital purposes in an aggregate amount at any time outstanding not to
exceed $10,000,000;
(j) unsecured Indebtedness (not evidenced by a note or other
instrument) of the Borrower owing to a Restricted Subsidiary that has
previously executed and delivered to the Administrative Agent and the
Syndication Agent the Interco Subordination Agreement (or a supplement
thereto);
(k) unsecured Subordinated Debt of the Borrower evidenced by the
Subordinated Notes incurred pursuant to the terms of the applicable
Subordinated Debt Documents in a principal amount not to exceed
$125,000,000, and unsecured Contingent Liabilities of the Subsidiary
Guarantors in respect of such Subordinated Debt, but only if such
Contingent Liabilities are subordinated to the Obligations on
substantially the same terms as such Subordinated Debt of the Borrower
is subordinated to the Obligations and, in each case, Permitted
Refinancings of such Subordinated Debt and Contingent Liabilities
which continue to satisfy the terms of the definition of "Subordinated
Debt";
(l) Indebtedness under Hedging Obligations entered into in the
ordinary course of business to limit risks of currency or interest
rate fluctuations and not for speculative purposes;
(m) Indebtedness of a Person existing at the time such Person (an
"Acquired Person") became a Restricted Subsidiary of the Borrower,
together with all Indebtedness assumed by the Borrower or any
Restricted Subsidiary in connection with any Permitted Acquisition
(including any Permitted Acquisition of assets), in an aggregate
amount not to exceed $10,000,000, but only to the extent that such
Indebtedness was not created or incurred in contemplation of such
Person becoming a Restricted Subsidiary or such Permitted Acquisition;
provided that, to the extent that, upon the consummation of any
Permitted Acquisition, the aggregate amount of all Indebtedness of an
Acquired Person (together with the amount of all other Indebtedness
permitted under this clause (m)) shall exceed $10,000,000, such amount
shall be increased (but only for a period of 30 days from the date of
such Acquisition) dollar-for-dollar by an amount equal to the unused
portion of the Revolving Loan Commitment Amount that exceeds
$10,000,000;
(n) other unsecured Indebtedness of the Borrower and its
Restricted Subsidiaries incurred in connection with any Permitted
Acquisition and evidencing Indebtedness owing to the Person from which
the Borrower or such Restricted Subsidiary purchased the assets
subject to such Acquisition in an aggregate amount at any time
outstanding not to exceed (i) $5,000,000 plus (ii) an additional
amount of such Indebtedness (but in no event in an aggregate amount at
any time outstanding pursuant to this subclause (ii) in excess of
$20,000,000) to the extent such
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additional Indebtedness could be incurred without increasing the
Leverage Ratio or decreasing the Interest Coverage Ratio (after giving
pro forma effect (consistent with clause (b) of Section 1.4) to such
Permitted Acquisition and incurrence of additional Indebtedness) from
the Leverage Ratio and Interest Coverage Ratio, respectively, set
forth in the Compliance Certificate for the period of four full Fiscal
Quarters most recently ended immediately preceding such Permitted
Acquisition and incurrence of additional Indebtedness, as evidenced in
a revised Compliance Certificate giving pro forma effect to such
Permitted Acquisition and incurrence of additional Indebtedness
(prepared in good faith and in a manner and using such methodology
which is consistent with the most recent financial statements
delivered pursuant to Section 7.1.1) delivered by the Borrower to the
Administrative Agent and the Syndication Agent prior to such Permitted
Acquisition and incurrence of additional Indebtedness; provided that
all Indebtedness incurred by the Borrower and its Restricted
Subsidiaries pursuant to this clause (n) shall be, except as otherwise
consented to by the Administrative Agent, subordinated on terms and
conditions no less favorable to any Secured Party than those contained
in the Interco Subordination Agreement;
(o) other unsecured Indebtedness of the Borrower issued in
respect of any Restricted Payment permitted to be made pursuant to
clause (a) of the proviso to Section 7.2.6 in an aggregate amount at
any time outstanding not to exceed $2,000,000, but only if such
Indebtedness is, except as otherwise consented to by the
Administrative Agent, subordinated on terms and conditions no less
favorable to any Secured Party than those contained in the Interco
Subordination Agreement; and
(p) other unsecured (except to the extent permitted to be secured
under clause (m) of Section 7.2.3) Indebtedness of the Borrower and
its Restricted Subsidiaries (other than Indebtedness of Foreign
Subsidiaries owing to the Borrower or any Subsidiary Guarantor) in an
aggregate amount at any time outstanding not to exceed (i) $10,000,000
or (ii) in the event the Leverage Ratio is equal to or less than
3.00:1.00 (as set forth in the Compliance Certificate then most
recently delivered by the Borrower to the Administrative Agent and the
Syndication Agent), $20,000,000 (provided that, after the assumption
or other incurrence of any Indebtedness pursuant to this subclause
(ii), the Leverage Ratio remains equal to or less than 3.00:1.00);
provided, however, that (i) no Indebtedness otherwise permitted by clause (e),
(g), (i), (j), (m), (n), (o) or (p) shall be assumed or otherwise incurred if a
Default has occurred and is then continuing or would result therefrom and (ii)
the Borrower shall not permit any Indebtedness (other than Indebtedness in
respect of the Obligations) to constitute Indebtedness incurred pursuant to a
"Credit Facility" (as such term is defined in the Subordinated Note Indenture).
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, create, incur, assume or permit to exist any
Lien upon any of its property (including Capital Stock of any Person), revenues
or assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) until the Closing Date, Liens securing payment of
Indebtedness of the type described in clause (b) of Section 7.2.2;
(c) Liens existing as of the Effective Date and disclosed and
described in Item 7.2.3(c) of the Disclosure Schedule securing
Indebtedness described in clause (c) of Section 7.2.2, including any
Permitted Refinancings of such Indebtedness; provided, that no such
Lien shall encumber any additional property and the amount of
Indebtedness secured by such Lien is not increased from that existing
on the Effective Date (as such Indebtedness may have been permanently
reduced subsequent to the Effective Date);
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(d) Liens securing Indebtedness of the type permitted under
clause (e) of Section 7.2.2; provided, that (i) such Lien is granted
within 90 days after such Indebtedness is incurred, (ii) the
Indebtedness secured thereby does not exceed 100% of the lesser of the
cost or the fair market value of the applicable property, improvements
or equipment at the time of such acquisition (or construction) and
(iii) such Lien secures only the assets that are the subject of the
Indebtedness referred to in such clause;
(e) Liens securing Indebtedness permitted by clause (m) of
Section 7.2.2; provided, that such Liens existed prior to such Person
becoming a Restricted Subsidiary or such Permitted Acquisition
occurring, were not created in anticipation thereof and attach only to
specific tangible assets of such Person or any other Person (and not
assets of such Person or any other Person generally);
(f) Liens in favor of carriers, warehousemen, mechanics,
materialmen and landlords granted in the ordinary course of business
for amounts not overdue or being diligently contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
(g) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits (other
than Liens in favor of the PBGC), or to secure performance of tenders,
statutory obligations, bids, leases or other similar obligations
(other than for borrowed money) entered into in the ordinary course of
business;
(h) judgment Liens in existence for less than 45 days after the
entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full (subject to a customary
deductible) by insurance maintained with responsible insurance
companies and which do not otherwise result in an Event of Default
under Section 8.1.6;
(i) easements, rights-of-way, zoning restrictions, minor defects
or irregularities in title and other similar encumbrances not
interfering in any material respect with the value or use of the
property to which such Lien is attached;
(j) Liens for Taxes, assessments or other governmental charges or
levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(k) Liens securing Indebtedness of the type permitted by clause
(i) of Section 7.2.2 and covering only assets of the Foreign
Subsidiary obligated under such Indebtedness;
(l) leases, subleases, licenses and sublicenses granted to third
parties in the ordinary course of business, in each case not
interfering in any respect with the operations or business of the
Borrower or any of its Restricted Subsidiaries or the Liens of the
Secured Parties granted by the Loan Documents; and
(m) other Liens securing Indebtedness, the aggregate amount of
which Indebtedness shall not exceed $2,500,000 at any time
outstanding.
SECTION 7.2.4. Financial Condition and Operations. The Borrower will
not permit any of the events set forth below to occur.
(a) The Borrower will not permit the Leverage Ratio, as of the
last day of each Fiscal Quarter, commencing with the fourth Fiscal
Quarter of the 1999 Fiscal Year, to be greater than
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the ratio set forth opposite such Fiscal Quarter below:
Period Leverage Ratio
------ --------------
The fourth Fiscal Quarter
of the 1999 Fiscal Year
and the first, second and
third Fiscal Quarters of
the 2000 Fiscal Year 5.00:1.00
The fourth Fiscal Quarter
of the 2000 Fiscal Year 4.75:1.00
The first Fiscal Quarter
of the 2001 Fiscal Year 4.75:1.00
The second Fiscal Quarter
of the 2001 Fiscal Year 4.50:1.00
The third Fiscal Quarter
of the 2001 Fiscal Year 4.25:1.00
The fourth Fiscal Quarter
of the 2001 Fiscal Year 4.00:1.00
The first Fiscal Quarter
of the 2002 Fiscal Year 4.00:1.00
The second Fiscal Quarter
of the 2002 Fiscal Year 3.75:1.00
The third Fiscal Quarter
of the 2002 Fiscal Year 3.50:1.00
The fourth Fiscal Quarter
of the 2002 Fiscal Year 3.25:1.00
The first Fiscal Quarter
of the 2003 Fiscal Year
and each Fiscal Quarter
thereafter 3.00:1.00
(b) The Borrower will not permit the Interest Coverage Ratio, as
of the last day of each Fiscal Quarter, commencing with the fourth
Fiscal Quarter of the 1999 Fiscal Year, to be less than the ratio set
forth opposite such Fiscal Quarter below:
Period Interest Coverage Ratio
------ -----------------------
The fourth Fiscal Quarter
of the 1999 Fiscal Year 1.75:1.00
Each Fiscal Quarter of the
2000 Fiscal Year 1.75:1.00
Each Fiscal Quarter of the
2001 Fiscal Year 2.00:1.00
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The first and second
Fiscal Quarters of the
2002 Fiscal Year 2.25:1.00
The third and fourth
Fiscal Quarters of the
2002 Fiscal Year 2.50:1.00
The first Fiscal Quarter
of the 2003 Fiscal Year
and each Fiscal Quarter
thereafter 3.00:1.00
(c) The Borrower will not permit the Fixed Charge Coverage Ratio
as of the last day of any Fiscal Quarter to be less than 1.00:1.00.
SECTION 7.2.5. Investments. The Borrower will not, and will not permit
any of its Restricted Subsidiaries to, purchase, make, incur, assume or permit
to exist any Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified in
Item 7.2.5(a) of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) 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;
(d) Investments made by the Borrower and its Restricted
Subsidiaries that are permitted as Capital Expenditures pursuant to
Section 7.2.7;
(e) Investments by way of contributions to capital or purchases
of Capital Stock (i) by the Borrower in any Subsidiary Guarantor that
is a wholly-owned Subsidiary or by any Subsidiary Guarantor that is a
wholly-owned Subsidiary in other Subsidiary Guarantors that are
wholly-owned Subsidiaries or (ii) by any Restricted Subsidiary in the
Borrower;
(f) Investments by way of contributions to capital or purchases
of Capital Stock by the Borrower or by any Subsidiary Guarantor in
Foreign Subsidiaries; provided, that the aggregate amount of
intercompany loans made pursuant to clause (g) of Section 7.2.2 and
Investments made pursuant to this clause, less Investment Returns,
shall not exceed $15,000,000;
(g) Investments by a Foreign Subsidiary in any other Foreign
Subsidiary which is not an Unrestricted Subsidiary;
(h) Investments made by the Borrower and its Restricted
Subsidiaries that constitute (i) accounts receivable arising, (ii)
trade debt granted, or (iii) deposits made in connection with leases
or the purchase price of goods or services, in each case in the
ordinary course of business;
(i) Investments in respect of Permitted Acquisitions;
(j) Investments consisting of any deferred portion of the sales
price received by the Borrower or any Restricted Subsidiary in
connection with any Disposition permitted under Section 7.2.11 to the
extent such deferred portion does not exceed the portion of such sales
price
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which may be non-cash under Section 7.2.11;
(k) Investments made by the Borrower and its Restricted
Subsidiaries in Unrestricted Subsidiaries (other than the acquisition
of additional shares of the common stock of 3CI Corporation by the
Borrower or any Restricted Subsidiary from other stockholders of 3CI
Corporation to the extent such acquisition increases the percentage
ownership of common stock of 3CI Corporation held by the Borrower and
its Restricted Subsidiary), less Investment Returns, in an amount not
to exceed $5,000,000; and
(l) without duplication, Investments permitted as Indebtedness
pursuant to clause (f), (g), (h), (j) or (l) of Section 7.2.2;
(m) Investments by a Person existing at the time such Person
became a Restricted Subsidiary of the Borrower, but only to the extent
that such Investments were not made or incurred in contemplation of
such Person becoming a Restricted Subsidiary;
(n) Investments in the ordinary course of business in the form of
loans and advances to officers, directors and employees of the
Borrower or any of its Restricted Subsidiaries and Consultants to
finance the purchase of Capital Stock of the Borrower, so long as the
aggregate amount of any such loan or advance does not exceed the
purchase price of the Capital Stock so financed and no cash is
actually expended by the Borrower and its Restricted Subsidiaries; and
(o) Investments in the form of advances or loans to officers
and/or employees of the Borrower and its Restricted Subsidiaries in an
aggregate principal amount not to exceed $5,000,000 at any time
outstanding;
(p) other Investments made by the Borrower and its Restricted
Subsidiaries (excluding any Investments in Unrestricted Subsidiaries
(other than the acquisition of additional shares of the common stock
of 3CI Corporation by the Borrower or any Restricted Subsidiary from
other stockholders of 3CI Corporation to the extent such acquisition
increases the percentage ownership of common stock of 3CI Corporation
held by the Borrower and its Restricted Subsidiary) and any
Investments in respect of Acquisitions), less Investment Returns, (i)
in an amount not to exceed $10,000,000 over the term of this Agreement
or (ii) in an amount not to exceed the Excess Proceeds Amount at such
time;
provided, however, that
(i) any Investment which when made complies with the requirements
of clause (a), (b) or (c) of the definition of the term "Cash
Equivalent Investment" may continue to be held notwithstanding that
such Investment if made thereafter would not comply with such
requirements; and
(ii) no Investment otherwise permitted by clause (d), (f), (i),
(k), (o) or (p) shall be permitted to be made if any Default has
occurred and is continuing or would result therefrom.
"Investment Returns" means, with respect to any Investment by the Borrower or
any Subsidiary Guarantor in a Foreign Subsidiary, Unrestricted Subsidiary or
other Person, as the case may be, pursuant to clause (f), (k) or (p) of this
Section 7.2.5 or clause (g) of Section 7.2.2 after the Closing Date, cash
received by the Borrower or such Subsidiary Guarantor from such Foreign
Subsidiary, Unrestricted Subsidiary or other Person, as the case may be, after
the making of such Investment (but in an aggregate amount not exceeding the
amount of such Investment) in respect of, without duplication, (i) return of
capital, (ii) dividends and (iii) profits from sales of equipment permitted
pursuant to clause (b) of Section 7.2.11.
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SECTION 7.2.6. Restricted Payments, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, declare or make a
Restricted Payment, or make any deposit for any Restricted Payment, other than
Restricted Payments made by Restricted Subsidiaries to the Borrower or other
Restricted Subsidiaries; provided, however, that, notwithstanding any of the
foregoing, the Borrower may, without duplication,
(a) repurchase, redeem, or otherwise retire for value any shares
of its Capital Stock (together with options or warrants in respect of
any thereof) held by officers, directors and employees of the Borrower
(or any of their respective estates or beneficiaries under such
estates), in all cases upon the death, disability, retirement or
termination of employment of such Persons, pursuant to a mandatory
repurchase or redemption provision under the terms of the stock option
plan, stock subscription agreement, shareholder agreement or other
agreement under which such shares of Capital Stock (and options or
warrants in respect of any thereof) were issued; provided, that the
aggregate consideration paid for such repurchase, redemption or other
retirement for value of such shares of its Capital Stock (together
with options or warrants in respect of any thereof) shall not exceed
$2,000,000 over the term of this Agreement;
(b) redeem, defease or otherwise prepay or retire the
Subordinated Notes with the Net Equity Proceeds of a substantially
concurrent sale of the Capital Stock of the Borrower (or warrants or
options in respect thereof) to the extent such Net Equity Proceeds are
not required to be applied to a mandatory prepayment of the Loans
pursuant to clause (h) of Section 3.1.1; provided, that the aggregate
amount of the Subordinated Notes so redeemed, defeased or otherwise
prepaid or retired shall not, over the term of this Agreement, exceed
35% of the aggregate principal amount of the Subordinated Notes on the
Closing Date; and
(c) declare, pay and make Restricted Payments in any Fiscal Year,
commencing with the 2001 Fiscal Year, to the extent the aggregate
amount of such Restricted Payments to be made by the Borrower pursuant
to this clause (c), when added to the aggregate amount of all other
such Restricted Payments made pursuant to this clause (c) during the
Fiscal Year in which such Restricted Payment would be made, does not
exceed the lesser of (x) $2,000,000 and (y) 50% of the Net Income of
the Borrower for the immediately preceding Fiscal Year;
provided further, however, that
(i) the Borrower may make any Restricted Payment permitted
pursuant to clause (a), (b) or (c) above, only so long as both before
and after giving effect to any such Restricted Payment, no Default
shall have occurred and be continuing, and
(ii) in the case of any Restricted Payment otherwise permitted
pursuant to clause (b) or (c) above, the Borrower shall have delivered
to the Administrative Agent (A) financial statements prepared on a pro
forma basis to give effect to such Restricted Payment for the period
of four consecutive Fiscal Quarters ending with the Fiscal Quarter
then last ended for which financial statements and the Compliance
Certificate relating thereto have been delivered to the Administrative
Agent pursuant to Section 7.1.1 and (B) a certificate of the Borrower
executed by an Authorized Officer of the Borrower demonstrating that
the financial results reflected in such financial statements would
comply with the requirements of Section 7.2.4 for the Fiscal Quarter
in which such Restricted Payment is to be made.
SECTION 7.2.7. Capital Expenditures, etc. Subject (in the case of
Capitalized Lease Liabilities) to clause (e) of Section 7.2.2, the Borrower will
not, and will not permit any of its Restricted Subsidiaries to, make or commit
to make Capital Expenditures other than Capital Expenditures made or committed
to be made by the Borrower and its Restricted Subsidiaries in any Fiscal Year
which in the aggregate do not exceed, (a) for that portion of the 1999 Fiscal
Year remaining after the Closing Date, $7,000,000.00, and (b) for each Fiscal
Year thereafter, the amount set forth below opposite such
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Fiscal Year:
Fiscal Year Capital Expenditure Amount
----------- --------------------------
2000 $20,000,000.00
2001 $25,000,000.00
2002 $25,000,000.00
2003 $30,000,000.00
2004 $30,000,000.00
2005 $35,000,000.00
2006 $35,000,000.00
provided, however, that notwithstanding anything to the contrary contained in
clause (b) above, (i) in the event that the amount of Capital Expenditures
permitted to be made by the Borrower and its Restricted Subsidiaries during any
Fiscal Year (or portion thereof) pursuant to clauses (a) and (b) above (prior to
giving effect to any increase in such permitted amounts pursuant to this clause
(i)) is greater than the aggregate amount of such Capital Expenditures made by
the Borrower and its Restricted Subsidiaries during such Fiscal Year (or portion
thereof), such excess (each such amount of excess, a "Carry-Forward Amount") may
be carried forward to the immediately succeeding Fiscal Year and utilized to
make Capital Expenditures in such succeeding Fiscal Year (it being understood
and agreed that a Carry-Forward Amount may not be carried beyond the Fiscal Year
immediately succeeding the Fiscal Year in which it arose) and (ii) the Borrower
and its Subsidiaries may make Capital Expenditures at any time in an aggregate
amount not to exceed the Excess Proceeds Amount at such time (which Capital
Expenditures pursuant to this clause (ii) shall not be included in any
determination under clauses (a) and (b) above).
SECTION 7.2.8. No Prepayment of Subordinated Debt. The Borrower will
not, and will not permit any of its Restricted Subsidiaries to,
(a) (i) make any payment or prepayment of principal of, or
premium or interest on, any Subordinated Debt described in clause (k)
of Section 7.2.2, other than the stated, scheduled date for payment of
interest set forth in the applicable Subordinated Debt Documents with
respect to such Subordinated Debt, or (ii) make any payment or
prepayment of principal of, or premium or interest on, or any other
obligation in respect of, any Subordinated Debt which would violate
the terms of this Agreement or the applicable Subordinated Debt
Documents;
(b) redeem, retire, purchase, defease or otherwise acquire any
Subordinated Debt, except to the extent any such redemption is
otherwise permitted under clause (b) of Section 7.2.6; or
(c) make any deposit (including the payment of amounts into a
sinking fund or other similar fund) for any of the foregoing purposes;
provided, however, that the Borrower may effect at any time a Permitted
Refinancing of the aggregate principal amount outstanding at such time of the
Subordinated Notes.
Furthermore, neither the Borrower nor any Restricted Subsidiary will (i)
designate any Indebtedness other than the Obligations as "Designated Senior
Debt" (or any analogous term) in any Subordinated Debt Document or (ii) provide
the trustee under the Subordinated Note Indenture with any notice of default /
"payment blockage notice" described in clause (ii) of Section 10.03(a) of the
Subordinated Note Indenture.
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SECTION 7.2.9. Capital Stock of Restricted Subsidiaries. The Borrower
will not, and will not permit any of its Restricted Subsidiaries to,
(a) issue any Capital Stock (whether for value or otherwise),
other than Capital Stock of the Borrower, to any Person other than (in
the case of Restricted Subsidiaries) the Borrower or another
Restricted Subsidiary; provided, however, that a Foreign Subsidiary
that is a Restricted Subsidiary may issue its Capital Stock (i) as
consideration in a Permitted Acquisition or (ii) for cash, so long as
the Borrower and its Restricted Subsidiaries concurrently comply with
the provisions of clause (h) of Section 3.1.1; or
(b) become liable in respect of any obligation (contingent or
otherwise) to purchase, redeem, retire, acquire or make any other
payment in respect of any Capital Stock of the Borrower or any
Restricted Subsidiary or any option, warrant or other right to acquire
any such Capital Stock prior to the one-year anniversary of the Stated
Maturity Date of the Term B Loans (as such date may be amended from
time to time), except any obligation of the Borrower to redeem any
shares of its Capital Stock (together with options or warrants in
respect of any thereof) held by officers, directors and employees of
the Borrower (or any of their respective estates or beneficiaries
under such estates), in all cases upon the death, disability,
retirement or termination of employment of such Persons, pursuant to a
mandatory repurchase or redemption provision under the terms of the
stock option plan, stock subscription agreement, shareholder agreement
or other agreement under which such shares of Capital Stock (and
options or warrants in respect of any thereof) were issued; provided,
however, that any Restricted Payment to be made by the Borrower in
respect of any such obligation must otherwise be permitted Section
7.2.6.
SECTION 7.2.10. Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other Person, or otherwise enter
into or consummate any Acquisition, except
(a) any Restricted Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower (so long
as the Borrower is the continuing or surviving corporation) or any
other Restricted Subsidiary (provided, however, that a Subsidiary
Guarantor may only liquidate or dissolve into, or merge with and into,
the Borrower or another Subsidiary Guarantor), and the assets or
Capital Stock of any Restricted Subsidiary may be purchased or
otherwise acquired by the Borrower or any other Restricted Subsidiary
(provided, however, that the assets or Capital Stock of any Subsidiary
Guarantor may only be purchased or otherwise acquired by the Borrower
or another Subsidiary Guarantor); provided, further, that in no event
shall any Pledged Subsidiary consolidate with or merge with and into
any Subsidiary other than another Pledged Subsidiary unless after
giving effect thereto, the Administrative Agent shall have a perfected
pledge of, and security interest in and to, at least the same
percentage of the issued and outstanding interests of Capital Stock
(on a fully diluted basis) of the surviving Person as the
Administrative Agent had immediately prior to such merger or
consolidation, pursuant to such documentation and opinions as shall be
necessary in the reasonable opinion of the Administrative Agent to
create, perfect or maintain the collateral position of the Secured
Parties therein; and
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, the Borrower or any of its
Restricted Subsidiaries may consummate a Permitted Acquisition.
SECTION 7.2.11. Permitted Dispositions. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, Dispose of any of the
Borrower's or such Restricted Subsidiaries' assets (including accounts
receivable and Capital Stock of Restricted Subsidiaries) to any Person in one
transaction or series of transactions unless:
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(a) such Disposition is of inventory or obsolete equipment
Disposed of in the ordinary course of its business;
(b) such Disposition is of equipment, together with any
non-exclusive license of intellectual property related to the use and
operation of such equipment, Disposed of in the ordinary course of
business;
(c) such Disposition is of accounts receivables in connection
with the collection or compromise of such receivables in the ordinary
course of business;
(d) such Disposition is permitted by Section 7.2.10;
(e) such Disposition is of unused equipment Disposed of in the
ordinary course of business;
(f) such Disposition is a swap/exchange of assets of the Borrower
or any of its Restricted Subsidiaries for similar assets (although not
necessarily serving the same geographical area), provided that (i) the
net book value of the assets so Disposed by the Borrower and its
Restricted Subsidiaries in any transaction or series of related
transactions does not exceed $40,000,000 over the term of this
Agreement, (ii) any cash received by the Borrower and its Restricted
Subsidiaries in connection with such swap/exchange is applied in
accordance with the terms of clause (f) of Section 3.1.1, (iii) any
cash paid (or Indebtedness assumed) by the Borrower or any of its
Restricted Subsidiaries in connection with such swap/exchange shall
reduce dollar-for-dollar the amount set forth in clause (g)(iii) below
and (iv) the fair market value of the consideration to be received by
the Borrower or applicable Restricted Subsidiary shall be
substantially equivalent to the fair market value of the assets to be
Disposed; or
(g) (i) such Disposition is for not less than the fair market
value of the assets to be Disposed, (ii) the consideration received by
the Borrower or applicable Restricted Subsidiary consists of at least
75% cash and (iii) the net book value of such assets, together with
the net book value of all other assets Disposed of pursuant to this
clause (g), does not exceed $20,000,000 over the term of this
Agreement.
SECTION 7.2.12. Modification of Certain Agreements. The Borrower will
not, and will not permit any of its Restricted Subsidiaries to, consent to any
amendment, supplement, waiver or other modification of, or enter into any
forbearance from exercising any rights with respect to the terms or provisions
contained in,
(a) the Subordinated Debt Documents, other than any amendment,
supplement, waiver or modification for which no fee is payable to the
holders of the Subordinated Debt and which (i) extends the date or
reduces the amount of any required repayment, prepayment or redemption
of the principal of such Subordinated Debt, (ii) reduces the rate or
extends the date for payment of the interest, premium (if any) or fees
payable on such Subordinated Debt or (iii) makes the covenants, events
of default or remedies in such Subordinated Debt Documents less
restrictive on the Borrower; or
(b) any of the Material Documents, other than any amendment,
supplement, waiver or modification which would not impair, or in any
manner be adverse to, the rights, interests or obligations of any
Secured Party under any Loan Document.
SECTION 7.2.13. Transactions with Affiliates. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, enter into or cause
or permit to exist any arrangement, transaction or contract (including for the
purchase, lease or exchange of property or the rendering of services) with any
of its other Affiliates, unless such arrangement, transaction or contract is (i)
on fair and reasonable
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terms no less favorable to the Borrower or such Restricted Subsidiary than it
could obtain in an arm's-length transaction with a Person that is not an
Affiliate and (ii) of the kind which would be entered into by a prudent Person
in the position of the Borrower or such Restricted Subsidiary with a Person that
is not one of its Affiliates, except to the extent expressly permitted by the
terms of this Agreement.
SECTION 7.2.14. Restrictive Agreements, etc. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, enter into any
agreement prohibiting
(a) the creation or assumption of any Lien for the benefit of any
Secured Party;
(b) the ability of any Obligor to amend or otherwise modify any
Loan Document; or
(c) the ability of any Restricted Subsidiary to make any
payments, directly or indirectly, to the Borrower, including by way of
dividends, advances, repayments of loans, reimbursements of management
and other intercompany charges, expenses and accruals or other returns
on investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of clause (a), in (A) any agreement governing
any Indebtedness permitted by clause (e) of Section 7.2.2 as to the assets
financed with the proceeds of such Indebtedness, (B) any customary
non-assignment provisions in leases, licenses and other agreements entered into
in the ordinary course of business and (C) provisions with respect to the
Disposition or distribution of assets or other property subject to asset sale
agreements and stock sale agreements entered into in the ordinary course of
business, (iii) in the case of clause (i), in any provisions with respect to the
Disposition or distribution of assets or other property of a Restricted
Subsidiary organized as a joint venture that are set forth in the joint venture
agreement establishing such Restricted Subsidiary or (iv) in the case of clauses
(a) and (c), in any agreement of a Foreign Subsidiary governing the Indebtedness
permitted by clause (i) of Section 7.2.2 as to the assets of such Foreign
Subsidiary.
SECTION 7.2.15. Sale and Leaseback. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly enter
into any agreement or arrangement providing for the sale or transfer by it of
any property (now owned or hereafter acquired) to a Person and the subsequent
lease or rental of such property or other similar property from such Person.
SECTION 7.2.16. Take or Pay Contracts. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, enter into or be a party to
any arrangement for the purchase of materials, supplies, other property or
services if such arrangement by its express terms requires that payment be made
by the Borrower or such Restricted Subsidiary regardless of whether such
materials, supplies, other property or services are delivered or furnished to
it.
SECTION 7.2.17. Accounting Changes. The Borrower will not, and will
not permit any of its Subsidiaries to, change its Fiscal Year from twelve
consecutive calender months ending on December 31.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Article shall constitute an "Event of
Default".
SECTION 8.1.1. Non-Payment of Obligations. The Borrower shall default
in the payment or prepayment when due of
(a) any principal of any Loan, or any Reimbursement Obligation or
any deposit of cash
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for collateral purposes pursuant to Section 2.6.4;
(b) interest on any Loan or any Reimbursement Obligation, or any
fee described in Article III, and such default shall continue
unremedied for a period of two Business Days after such amount was
due; or
(c) any other monetary Obligation, and such default shall
continue unremedied for a period of five Business Days after such
amount was due.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
any Obligor made or deemed to be made in any Loan Document (including any
certificates delivered pursuant to Article V) is or shall be incorrect when made
or deemed to have been made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance or observance of any of its
obligations under Section 7.1.1 or 7.2.
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations. Any
Obligor shall default in the due performance and observance of any other
agreement contained in any Loan Document executed by it, and such default shall
continue unremedied for a period of 30 days after notice thereof shall have been
given to the Borrower by any Agent or any Lender.
SECTION 8.1.5. Default on Other Indebtedness. A default shall occur in
the payment of any amount when due (subject to any applicable grace period),
whether by acceleration or otherwise, of any principal or stated amount of, or
interest or fees on, any Indebtedness (other than Indebtedness described in
Section 8.1.1) of the Borrower or any Restricted Subsidiary having a principal
or stated amount, individually or in the aggregate, in excess of $5,000,000, or
a default shall occur in the performance or observance of any obligation or
condition with respect to such Indebtedness if the effect of such default is to
accelerate the maturity of any such Indebtedness or such default shall continue
unremedied for any applicable period of time sufficient to permit the holder or
holders of such Indebtedness, or any trustee or agent for such holders, to cause
or declare such Indebtedness to become due and payable or to require such
Indebtedness to be prepaid, redeemed, purchased or defeased, or require an offer
to purchase or defease such Indebtedness to be made, prior to its expressed
maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money, individually or in the aggregate, in excess of $5,000,000 (exclusive of
any amounts fully covered by insurance (less any applicable deductible) and as
to which the insurer has acknowledged its responsibility to cover such judgment
or order) shall be rendered against the Borrower or any Restricted Subsidiary
and such judgment shall not have been vacated or discharged or stayed or bonded
pending appeal within 30 days after the entry thereof or enforcement proceedings
shall have been commenced by any creditor upon such judgment or order.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan
(a) the institution of any steps by the Borrower, any member of
its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, the Borrower or any such member
could be required to make a contribution to such Pension Plan, or
could reasonably expect to incur a liability or obligation to such
Pension Plan, in excess of $1,000,000; or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
SECTION 8.1.18. Change in Control. Any Change in Control shall occur.
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SECTION 8.1.19. Bankruptcy, Insolvency, etc. The Borrower, any
Material Subsidiary or any group of Subsidiaries that, taken together, would
constitute a Material Subsidiary shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial
part of the property of any thereof, or make a general assignment for
the benefit of creditors;
(c) in the absence of such application, consent or acquiescence
in, permit or suffer to exist the appointment of a trustee, receiver,
sequestrator or other custodian for a substantial part of the property
of any thereof, and such trustee, receiver, sequestrator or other
custodian shall not be discharged within 60 days;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law or any dissolution, winding up or
liquidation proceeding, in respect thereof, and, if any such case or
proceeding is not commenced by any such Person, such case or
proceeding shall be consented to or acquiesced in by such Person or
shall result in the entry of an order for relief or shall remain for
60 days undismissed; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document or any
Lien granted thereunder shall (except in accordance with its terms), in whole or
in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; any Obligor or
any other party shall, directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability; or, except as
permitted under any Loan Document or as a result of a Secured Party's wilful
misconduct or gross negligence, any Lien securing any Obligation shall, in whole
or in part, cease to be a perfected first priority Lien.
SECTION 8.1.11. Failure of Subordination. Unless otherwise waived or
consented to by the Secured Parties in writing, the subordination provisions
relating to any Subordinated Debt (the "Subordination Provisions") shall fail to
be enforceable by the Secured Parties in accordance with the terms thereof or
the monetary Obligations shall fail to constitute "Senior Indebtedness" (or a
similar term) referring to the Obligations; or any Obligor or holder of
Subordinated Debt shall breach any Subordinated Provision or any Obligor shall,
directly or indirectly, disavow or contest in any manner (i) the effectiveness,
validity or enforceability of any of the Subordination Provisions, (ii) that the
Subordination Provisions exist for the benefit of the Secured Parties or (iii)
that all payments of principal of or premium and interest on the Subordinated
Debt, or realized from the liquidation of any property of any Obligor, shall be
subject to any of such Subordination Provisions.
SECTION 8.1.12. Redemption. Any event shall occur which, under the
terms of any Subordinated Debt Document, shall require the Borrower or any of
its Restricted Subsidiaries to purchase, redeem or otherwise acquire or offer to
purchase, redeem or otherwise acquire all or any portion of the principal amount
of any such Subordinated Debt prior to its final stated maturity date.
SECTION 8.1.13. Regulatory Action. Any Governmental Authority shall
take any action with respect to the Borrower or any of its Restricted
Subsidiaries (including any action that would cause any license, permit, consent
or other authorization to cease to be in full force and effect or to be held to
be illegal or invalid and including any action (including the commencement of an
action or proceeding) that results or may result in the revocation, termination,
withdrawal, suspension or substantial and adverse modification of any such
license, permit, consent or other authorization) which would have a
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Material Adverse Effect, unless such action is set aside, dismissed or withdrawn
within 60 days of its institution or such action is being contested in good
faith and its effect is stayed during such contest.
SECTION 8.2. Action if Bankruptcy. If any Event of Default described
in clauses (a) through (d) of Section 8.1.9 shall occur, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable by the Borrower, without notice or demand to any Person, and the
Borrower shall automatically and immediately be obligated to Cash Collateralize
all Letter of Credit Outstandings.
SECTION 8.3. Action if Other Event of Default. If any Event of Default
(other than any Event of Default described in clauses (a) through (d) of Section
8.1.9) shall occur for any reason, whether voluntary or involuntary, and be
continuing, the Administrative Agent, upon the direction of the Required
Lenders, shall by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Loans and other Obligations (including
Reimbursement Obligations) to be due and payable by the Borrower and/or the
Commitments (if not theretofore terminated) to be terminated, whereupon the full
unpaid amount of such Loans and other Obligations which shall be so declared due
and payable shall be and become immediately due and payable, without further
notice, demand or presentment, and/or, as the case may be, the Commitments shall
terminate and the Borrower shall automatically and immediately be obligated to
Cash Collateralize all Letter of Credit Outstandings.
ARTICLE IX
THE AGENTS
SECTION 9.1. Appointments and Authorizations; Actions. (a) Each Lender
hereby appoints DLJ as its Syndication Agent and BofA as its Administrative
Agent under and for purposes of each Loan Document. Each Lender authorizes the
Administrative Agent and/or the Syndication Agent to act on behalf of such
Lender under each Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by the
Administrative Agent and the Syndication Agent (with respect to which each such
Agent agrees that it will comply, except as otherwise provided in this Section
or as otherwise advised by counsel in order to avoid contravention of applicable
law), to exercise such powers hereunder and thereunder as are specifically
delegated to or required of each such Agent by the terms hereof and thereof,
together with such powers as may be reasonably incidental thereto. Each Lender
hereby indemnifies (which indemnity shall survive any termination of this
Agreement) each Agent, pro rata according to such Lender's proportionate Total
Exposure Amount, from and against any and all liabilities, obligations, losses,
damages, claims, costs or expenses of any kind or nature whatsoever which may at
any time be imposed on, incurred by, or asserted against, each such Agent in any
way relating to or arising out of any Loan Document, including reasonable
attorneys' fees, to the extent such Agent shall not have been reimbursed by the
Borrower; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, claims, costs or
expenses which are determined by a court of competent jurisdiction in a final
proceeding to have resulted from such Agent's gross negligence or wilful
misconduct. Neither the Administrative Agent nor the Syndication Agent shall be
required to take any action under any Loan Document, or to prosecute or defend
any suit in respect of any Loan Document, unless it is indemnified hereunder to
its satisfaction. If any indemnity in favor of either the Administrative Agent
or the Syndication Agent shall be or become, in such Agent's determination,
inadequate, such Agent may call for additional indemnification from the Lenders
and cease to do the acts indemnified against hereunder until such additional
indemnity is given. Notwithstanding any provision to the contrary contained
elsewhere in any Loan Document, neither the Administrative Agent nor the
Syndication Agent shall have any duties or responsibilities except those
expressly set forth herein, nor shall either such Agent have or be deemed to
have any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into any Loan Document or otherwise exist against either such Agent.
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(b) The Issuer shall act on behalf of the Lenders with respect to the
Letters of Credit issued by it and the documents associated therewith until such
time and except for so long as the Administrative Agent may agree at the request
of the Required Lenders to act for the Issuer with respect thereto; provided,
however, that the Issuer shall have all of the benefits and immunities (i)
provided to the Administrative Agent and the Syndication Agent in this Section
9.1 with respect to any acts taken or omissions of the Issuer in connection with
Letters of Credit issued by it or proposed to be issued by it and the
applications and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Agent", as used in this Section 9.1, included
the Issuer with respect to such acts or omissions, and (ii) as additionally
provided in this Agreement with respect to the Issuer.
(c) The Swing Line Lender shall have all of the benefits and
immunities (i) provided to the Administrative Agent and the Syndication Agent in
this Section 9.1 with respect to any acts taken or omissions suffered by the
Swing Line Lender in connection with Swing Line Loans made or proposed to be
made by it as fully as if the term "Agent", as used in this Section 9.1,
included the Swing Line Lender with respect to such acts or omissions and (ii)
as additionally provided in this Agreement with respect to the Swing Line
Lender.
(d) The Lenders authorize the Administrative Agent to hold, for and on
behalf of the Lenders, security in the assets and properties of the Borrower and
its Restricted Subsidiaries securing the Obligations.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified in writing by any Lender by 3:00 p.m. on the Business
Day prior to a Borrowing that such Lender will not make available the amount
which would constitute its Percentage of such Borrowing on the date specified
therefor (assuming the Administrative Agent shall have promptly notified such
Lender of the request for such Borrowing), the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the Borrower a corresponding
amount. If and to the extent that such Lender shall not have made such amount
available to the Administrative Agent, such Lender and the Borrower severally
agree to repay the Administrative Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date the
Administrative Agent made such amount available to the Borrower to the date such
amount is repaid to the Administrative Agent, at the interest rate applicable at
the time to Loans comprising such Borrowing (in the case of the Borrower) and
(in the case of a Lender), at the Federal Funds Rate (for the first two Business
Days after which such amount has not been repaid, and thereafter at the interest
rate applicable to Loans comprising such Borrowing.
SECTION 9.3. Exculpation. Neither the Administrative Agent nor the
Syndication Agent nor any of its respective directors, officers, employees or
agents shall be liable to any Lender for any action taken or omitted to be taken
by it under any Loan Document, in connection herewith or therewith, except for
its own wilful misconduct or gross negligence, nor responsible for any recitals,
statements, representations or warranties herein or therein or in any
certificate, report, statement or other document referred to or provided for
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of any Loan Document, nor for the creation, perfection or priority of
any Liens purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the observance or performance by
any Obligor of its Obligations. Any such inquiry which may be made by either the
Administrative Agent and the Syndication Agent shall not obligate it to make any
further inquiry or to take any action. Each such Agent shall be entitled to rely
upon advice of counsel concerning legal matters and upon any notice, consent,
certificate, statement or writing which such Agent believes to be genuine and to
have been presented by a proper Person.
SECTION 9.4. Successor. The Syndication Agent may resign as such upon
one Business Day's notice to the Borrower and the Administrative Agent. The
Administrative Agent may resign as such at
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any time upon at least 30 days' prior notice to the Borrower and all Lenders. If
the Administrative Agent at any time shall resign, the Required Lenders may
(with, so long as no Default or Event of Default shall have occurred and be
continuing, the approval of the Borrower (not to be unreasonably withheld))
appoint another Lender as a successor Administrative Agent which shall thereupon
become the Administrative Agent hereunder. If no successor Administrative Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within 30 days after the retiring Administrative Agent's
giving notice of resignation, then the retiring Administrative Agent may (with,
so long as no Default or Event of Default shall have occurred and be continuing,
the approval of the Borrower (not to be unreasonably withheld)), on behalf of
the Lenders, appoint a successor Administrative Agent, which shall be one of the
Lenders or a commercial banking institution organized under the laws of the U.S.
(or any State thereof) or a U.S. branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least $250,000,000;
provided, however, that if, such retiring Administrative Agent is unable to find
a commercial banking institution which is willing to accept such appointment and
which meets the qualifications set forth in above, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor
as provided for above. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall be entitled to receive from the retiring
Administrative Agent such documents of transfer and assignment as such successor
Administrative Agent may reasonably request, and shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under the Loan Documents. After any retiring
Administrative Agent's resignation hereunder as the Administrative Agent, the
provisions of this Article shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under the Loan
Documents, and Sections 10.3 and 10.4 shall continue to inure to its benefit.
With respect to BofA, in its individual capacity as the Administrative Agent,
the Issuer and the Swing Line Lender, delivery of any notice of resignation as
the Administrative Agent shall, unless otherwise specifically provided in such
notice, serve as notice of BofA's intent to resign as the Issuer (except with
respect to any Letters of Credit Outstanding at such time, for which BofA shall
remain the Issuer hereunder with respect to such Letters of Credit Outstanding
until the Stated Expiry Date) and the Swing Line Lender hereunder as well. Each
such resignation shall take effect simultaneously and, except as otherwise
provided herein, without any further action on the part of BofA. Any successor
Administrative Agent appointed pursuant to this Section shall, unless otherwise
specifically provided, also serve as the successor Issuer and the successor
Swing Line Lender hereunder.
SECTION 9.5. Credit Extensions by each Agent. Each of the
Administrative Agent and the Syndication Agent, and the Issuer shall have the
same rights and powers with respect to (x)(i) in the case of an Agent, the
Credit Extensions made by it or any of its Affiliates and (ii) in the case of
the Issuer, the Loans made by it or any of its Affiliates, and (y) the Notes
held by it or any of its Affiliates as any other Lender and may exercise the
same as if it were not an Agent or the Issuer. Each Agent, the Issuer, each
Lender and each of their respective Affiliates may accept deposits from, lend
money to, and generally engage in any kind of business with the Borrower or any
Subsidiary or Affiliate of the Borrower as if such Agent or the Issuer were not
an Agent or the Issuer hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of each Agent and each other Lender, and based on such Lender's
review of the financial information of the Borrower and its Subsidiaries, the
Loan Documents (the terms and provisions of which being satisfactory to such
Lender) and such other documents, information and investigations as such Lender
has deemed appropriate, made its own credit decision to extend its Commitments.
Each Lender also acknowledges that it will, independently of each Agent and each
other Lender, and based on such other documents, information and investigations
as it shall deem appropriate at any time, continue to make
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its own credit decisions as to exercising or not exercising from time to time
any rights and privileges available to it under the Loan Documents.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of the
Loan Documents (unless concurrently delivered to the Lenders by the Borrower).
The Administrative Agent will distribute to each Lender each document or
instrument received for its account and copies of all other communications
received by the Administrative Agent from the Borrower for distribution to the
Lenders by the Administrative Agent in accordance with the terms of the Loan
Documents.
SECTION 9.8. Reliance by Agents. Each of the Administrative Agent and
the Syndication Agent shall be entitled to rely, and shall be fully protected in
relying, upon any certification, notice or other communication (including any
thereof by telephone, telecopy, telegram or cable) believed by it to be genuine
and correct and to have been signed, sent or made by or on behalf of the proper
Person, and upon advice and statements of legal counsel, independent accountants
and other experts selected by such Agent. As to any matters not expressly
provided for by the Loan Documents, each of the Administrative Agent and the
Syndication Agent (and, with respect to Section 5.1 only, the Documentation
Agent) shall in all cases be fully protected in acting, or in refraining from
acting, hereunder or thereunder in accordance with instructions given by the
Required Lenders or all of the Lenders as is required in such circumstance or as
such Agent deems appropriate, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding on all Secured
Parties; prior to acting, or refraining from acting, in any such circumstance,
either such Agent may request confirmation from the Lenders of their obligation
to indemnify such Agent against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. For
purposes of applying amounts in accordance with this Section, each Agent shall
be entitled to rely upon any Secured Party that has entered into a Rate
Protection Agreement with any Obligor for a determination (which such Secured
Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Obligations owed to such Secured Party
under any Rate Protection Agreement. Unless it has actual knowledge evidenced by
way of written notice from any such Secured Party and the Borrower to the
contrary, each of the Administrative Agent and the Syndication Agent, in acting
in such capacity under the Loan Documents, shall be entitled to assume that no
Rate Protection Agreements or Obligations in respect thereof are in existence or
outstanding between any Secured Party and any Obligor.
SECTION 9.9. Notice of Defaults. Neither the Administrative Agent nor
the Syndication Agent shall be deemed to have knowledge or notice of the
occurrence of a Default or an Event of Default unless such Agent has received a
written notice from a Lender or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event that
either the Administrative Agent or the Syndication Agent receives such a notice
of the occurrence of a Default or Event of Default, such Agent shall give prompt
notice thereof to the Lenders. Each of the Administrative Agent and the
Syndication Agent shall (subject to Section 10.1) take such action with respect
to such Default or Event of Default as shall be directed by the Required Lenders
(or, if required, all Lenders); provided, that unless and until either such
Agent shall have received such directions, such Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interest of the Lenders except to the extent that this Agreement expressly
requires that such action be taken, or not be taken, only with the consent or
upon the authorization of the Required Lenders or all Lenders, as applicable;
provided further, that, with respect to any actions to be taken by the
Administrative Agent with respect to purchasing, possessing, managing or
controlling any Property, Goods, Leases or Permits (as each such term is defined
in the applicable Mortgage), the Administrative Agent may only take such action
with the consent or upon the authorization of the Required Lenders.
SECTION 9.10. Release of Collateral. Each Secured Party hereby
irrevocably authorizes the
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Administrative Agent at its option and in its discretion, to release any
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty and any
Lien granted to or held by or in favor of the Administrative Agent for the
benefit of the Secured Parties () upon the occurrence of the Termination Date or
() in connection with (A) Collateral being Disposed of or (B) the release of any
Subsidiary Guarantor (including pursuant to a permitted redesignation by the
Borrower of a Restricted Subsidiary as an Unrestricted Subsidiary) so long as,
in either the case of clause (A) or (B), such Disposition or release is
otherwise permitted under the terms of a Loan Document; provided, however, that
the Administrative Agent may, prior to any such release, request that the
Borrower certify in a written notice delivered to the Administrative Agent that
the Disposition or release is made in compliance with the terms of the Loan
Documents. Upon request by the Administrative Agent at any time, each Secured
Party will confirm in writing the Administrative Agent's authority to release
any Subsidiary Guarantor or particular types or items of Collateral pursuant to
this Section 9.10.
SECTION 9.11. Documentation Agent; Co-Agents. The Lender identified on
the signature pages of this Agreement as the "Documentation Agent" and the
Lenders identified on the cover page of this Agreement as the "Co-Agents" shall
not have any right, power, obligation, liability, responsibility or duty under
this Agreement (or any other Loan Document) other than, (a) with respect to the
Lender so identified as the "Documentation Agent", those specifically referenced
in Section 5.1 and (b) with respect to each such Lender, those applicable to all
Lenders as such. Without limiting the foregoing, each such Lender shall not have
or be deemed to have any fiduciary relationship with any other Lender. Each
Lender acknowledges that it has not relied, and will not rely, on each such
Lender so identified as the "Documentation Agent" or the "Co-Agent", as the case
may be, in deciding to enter into this Agreement and each other Loan Document to
which it is a party or in taking or not taking action hereunder or thereunder.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of each Loan
Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by the Borrower
and the Required Lenders; provided, however, that no such amendment,
modification or waiver shall:
(a) modify this Section without the consent of all Lenders;
(b) increase the aggregate amount of any Credit Extensions
required to be made by a Lender pursuant to its Commitments, extend
any final Commitment Termination Date or reduce any fees described in
Article III payable to any Lender without the consent of such Lender;
(c) extend or waive any date of payment of principal for any
Lender's Loan, or reduce the principal amount of, rate of interest or
fees on any Loan or Reimbursement Obligations (which shall in each
case include the conversion of all or any part of the Obligations into
equity of any Obligor), or extend or waive the date on which interest
or fees are payable in respect of such Loan or Reimbursement
Obligation, in each case, without the consent of the Lender which has
made such Loan or, in the case of a Reimbursement Obligation, the
Issuer owed, and those Lenders participating in, such Reimbursement
Obligation (it being understood and agreed, however, that any vote to
rescind any acceleration made pursuant to Section 8.2 and Section 8.3
of amounts owing with respect to the Loans and other Obligations shall
only require the vote of the Required Lenders);
(d) reduce the percentage set forth in the definition of
"Required Lenders" or modify any requirement hereunder that any
particular action be taken by all Lenders without the consent of all
Lenders;
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(e) except as otherwise expressly provided in a Loan Document,
release (i) the Borrower from its Obligations under the Loan Documents
or any Subsidiary Guarantor from its Obligations under the Subsidiary
Guaranty (other than in connection with a Disposition of all or
substantially all of the Capital Stock of such Subsidiary Guarantor in
a transaction permitted by Section 7.2.11) or (ii) all or
substantially all of the collateral under the Loan Documents, in each
case without the consent of all Lenders;
(f) (i) amend, modify or waive clause (b) of Section 3.1.1 or
(ii) have the effect (either immediately or at some later time) of
enabling the Borrower to satisfy a condition precedent to the making
of a Revolving Loan or Swing Line Loan or the issuance of a Letter of
Credit unless such amendment, modification or waiver shall have been
consented to by the holders of at least a majority of the Revolving
Loan Commitments.
(g) amend, modify or waive the provisions of clause (a)(i), (e),
(f) or (g) of Section 3.1.1 or clause (b) of Section 3.1.2 or effect
any amendment, modification or waiver that by its terms adversely
affects the rights of Lenders participating in any Tranche differently
from those of Lenders participating in other Tranches, unless such
amendment, modification or waiver shall have been consented to by the
holders of at least a majority of the aggregate amount of Loans
outstanding under the Tranche or Tranches affected by such
modification, or, in the case of a modification affecting the
Revolving Loan Commitments, the Lenders holding at least a majority of
the Revolving Loan Commitments;
(h) with respect to any LIBO Rate Loan, waive the requirement
that each Lender consent to an Interest Period of twelve months with
respect to such Loan, unless consented to by each Lender making such
Loan;
(i) change any of the terms of Section 2.3.2 without the consent
of the Swing Line Lender; or
(j) affect adversely the interests, rights or obligations of any
Agent (in its capacity as an Agent) or the Issuer, unless consented to
by such Agent or the Issuer, as the case may be.
No failure or delay on the part of any Agent, the Issuer or any Lender in
exercising any power or right under any Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power or right
preclude any other or further exercise thereof or the exercise of any other
power or right. No notice to or demand on any Obligor in any case shall entitle
it to any notice or demand in similar or other circumstances. No waiver or
approval by any Agent, the Issuer or any Lender under any Loan Document shall,
except as may be otherwise stated in such waiver or approval, be applicable to
subsequent transactions. No waiver or approval hereunder shall require any
similar or dissimilar waiver or approval thereafter to be granted hereunder.
For purposes of this Section 10.1, the Syndication Agent, if any, in
coordination with the Administrative Agent, shall have primary responsibility,
together with the Borrower, in the negotiation, preparation and documentation
relating to any amendment, modification or waiver under this Agreement, any
other Loan Document or any other agreement or document related hereto or thereto
contemplated pursuant to this Section.
SECTION 10.2. Notices; Time. All notices and other communications
provided under each Loan Document shall be in writing or by facsimile and
addressed, delivered or transmitted, if to any Agent or the Borrower, at its
address or facsimile number set forth below its signature in this Agreement, and
if to a Lender or the Issuer to the applicable Person at its address or
facsimile number set forth below its signature in this Agreement or set forth in
the Lender Assignment Agreement pursuant to which it became a Lender hereunder,
or at such other address or facsimile number as may be designated by any such
party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage
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prepaid or if properly addressed and sent by pre-paid courier service, shall be
deemed given when received; any notice, if transmitted by facsimile, shall be
deemed given when the confirmation of transmission thereof is received by the
transmitter. Unless otherwise indicated, all references to the time of a day in
a Loan Document shall refer to New York City time.
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to
pay on demand (together with documentation supporting such demand) all expenses
of each Agent (including the reasonable fees and reasonable out-of-pocket
expenses of Mayer, Brown & Platt, counsel to the Syndication Agent and of local
counsel, if any, who may be retained by or on behalf of the Agents) in
connection with
(a) the negotiation, preparation, execution and delivery and
ongoing administration of each Loan Document, including schedules and
exhibits, the syndication of the Loans and any amendments, waivers,
consents, supplements or other modifications to any Loan Document as
may from time to time hereafter be required, whether or not the
transactions contemplated hereby are consummated;
(b) the filing or recording of any Loan Document (including the
Filing Statements) and all amendments, supplements, amendment and
restatements and other modifications to any thereof, searches made
following the Closing Date in jurisdictions where Filing Statements
(or other documents evidencing Liens in favor of the Secured Parties)
have been recorded and any and all other documents or instruments of
further assurance required to be filed or recorded by the terms of any
Loan Document; and
(c) the preparation and review of the form of any document or
instrument relevant to any Loan Document.
The Borrower further agrees to pay, and to save each Secured Party harmless from
all liability for, any stamp or other taxes which may be payable in connection
with the execution or delivery of each Loan Document, the Credit Extensions or
the issuance of the Notes. The Borrower also agrees to reimburse each Secured
Party promptly upon written demand (together with documentation supporting such
demand) for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and legal expenses of counsel to each Secured Party) incurred by
such Secured Party in connection with (x) the negotiation of any restructuring
or "work-out" with the Borrower, whether or not consummated, of any Obligations
and (y) the enforcement of any Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Secured Party, the Borrower hereby
indemnifies, exonerates and holds each Secured Party and each of their
respective officers, directors, employees and agents (collectively, the
"Indemnified Parties") free and harmless from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether any such Indemnified
Party is a party to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements, whether incurred in
connection with actions between or among the parties hereto or the parties
hereto and third parties (collectively, the "Indemnified Liabilities"), incurred
by the Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the Transaction;
(b) the entering into and performance of any Loan Document by any
of the Indemnified Parties (including any action brought by or on
behalf of the Borrower as the result of any determination by the
Required Lenders pursuant to Article V not to fund any Credit
Extension,
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provided that any such action is resolved in favor of such Indemnified
Party);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Obligor or any Subsidiary
thereof of all or any portion of the Capital Stock or assets of any
Person, whether or not an Indemnified Party is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release or threatened Release
by any Obligor or any Subsidiary thereof of any Hazardous Material;
(e) any investigation, claim, litigation or proceeding related to
personal injury arising from exposure or alleged exposure to Hazardous
Materials handled by the Borrower or any of its Subsidiaries;
(f) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by any Obligor or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, such Obligor or Subsidiary; or
(g) each Lender's Environmental Liability (the indemnification
herein shall survive repayment of the Obligations and any transfer of
the property of any Obligor or its Subsidiaries by foreclosure or by a
deed in lieu of foreclosure for any Lender's Environmental Liability,
regardless of whether caused by, or within the control of, such
Obligor or such Subsidiary);
except for Indemnified Liabilities arising for the account of a particular
Indemnified Party by reason of the relevant Indemnified Party's gross negligence
or wilful misconduct as determined by a court of competent jurisdiction in a
final proceeding. Each Obligor and its successors and assigns hereby waive,
release and agree not to make any claim or bring any cost recovery action
against, any Indemnified Party under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted. It is expressly understood and
agreed that to the extent that any Indemnified Party is strictly liable under
any Environmental Laws, each Obligor's obligation to such Indemnified Party
under this indemnity shall likewise be without regard to fault on the part of
any Obligor with respect to the violation or condition which results in
liability of an Indemnified Party. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, each Obligor agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
In case any of the foregoing investigations, claims, litigations or
proceedings (any "Proceeding") is brought against any Indemnified Party and such
Indemnified Party notifies the Borrower of the commencement thereof, the
Borrower will be entitled to participate therein, and may elect by written
notice delivered to such Indemnified Party to assume the defense thereof, with
counsel reasonably satisfactory to such Indemnified Party; provided, that if the
defendants in any such Proceeding include both the Indemnified Party and the
Borrower (or any Affiliate of the Borrower) and such Indemnified Party shall
have been advised by counsel that its interests in the Proceeding are likely to
conflict with those of the Borrower (or such Affiliate) or that such litigation
may result in a non-indemnified claim, such Indemnified Party shall have the
right to select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such Proceeding on behalf of such Indemnified
Party. Upon receipt of notice from the Borrower to such Indemnified Party of its
election so to assume the defense of such Proceeding and approval by such
Indemnified Party of counsel, the Borrower will not be liable to such
Indemnified Party for expenses incurred by such Indemnified Party from and after
such assumption by the Borrower of such defense in connection with the defense
thereof (other than reasonable costs of investigation) unless (i) such
Indemnified Party shall have employed separate counsel in connection with a
conflict of interest in accordance with the proviso to the immediately preceding
sentence (it
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being understood, however, that, so long as the interests of an Indemnified
Party subject to such Proceeding are not likely to conflict with the interests
of any other Indemnified Party subject to such Proceeding, the Borrower shall
not be liable for the expenses of more than one separate counsel, approved by
the Administrative Agent, representing each Indemnified Party who is party to
such Proceeding), (ii) the Borrower shall not have employed counsel reasonably
satisfactory to such Indemnified Party to represent such Indemnified Party
within a reasonable time after notice of commencement of the Proceeding, or
(iii) the Borrower has authorized in writing the employment of separate counsel
for such Indemnified Party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). In addition, no settlement involving any
Indemnified Party who is a party to such Proceeding may be entered into by the
Borrower or any Subsidiary on behalf of such Indemnified Party if such
settlement contains any admission of liability or fault by the Indemnified Party
and unless a full release of the Indemnified Party is entered into in connection
therewith. At any time after the Borrower has assumed the defense of any
Proceeding involving any Indemnified Party, such Indemnified Party may elect to
withdraw its request for indemnity and thereafter the defense of such Proceeding
on behalf of such Indemnified Party shall be maintained by counsel of such
Indemnified Party's choosing and at such Indemnified Party's expense.
SECTION 10.5. Survival. The obligations of the Borrower under Sections
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 and the obligations of the Lenders under
Section 9.1, shall in each case survive any assignment from one Lender to
another (in the case of Sections 10.3 and 10.4) and the occurrence of the
Termination Date. The representations and warranties made by each Obligor in
each Loan Document shall survive the execution and delivery of such Loan
Document.
SECTION 10.6. Severability. Any provision of any Loan Document which
is prohibited or unenforceable in any jurisdiction shall, as to such provision
and such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
SECTION 10.7. Headings. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or interpretation
of such Loan Document or any provisions thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be an original and all of which shall constitute together but one
and the same agreement. This Agreement shall become effective when counterparts
hereof executed on behalf of the Borrower, each Agent and each Lender (or notice
thereof satisfactory to the Agents), shall have been received by the Agents.
SECTION 10.9. Governing Law; Entire Agreement. EACH LOAN DOCUMENT
(OTHER THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (INCLUDING
FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF
THE STATE OF NEW YORK). EACH LETTER OF CREDIT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN SUCH LETTER OF
CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL STANDBY
PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER 590 (THE
"ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE LAWS OF THE
STATE OF NEW YORK. The Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter thereof and supersede any
prior agreements, written or oral, with respect thereto.
SECTION 10.10. Successors and Assigns. This Agreement shall be binding
upon and shall inure
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to the benefit of the parties hereto and their respective successors and
assigns; provided, however, that the Borrower may not assign or transfer its
rights or obligations hereunder without the consent of all of the Lenders.
SECTION 10.11. Sale and Transfer of Credit Extensions; Participations
in Credit Extensions Notes. Each Lender may assign, or sell participations in,
its Loans, Letters of Credit and Commitments to one or more other Persons in
accordance with this the terms set forth below.
SECTION 10.11.1. Assignments. Any Lender (an "Assignor Lender"),
(a) (i) with the written consents of the Borrower, the
Administrative Agent and (in the case of any assignment of Revolving
Loan Commitments and related participations in Letters of Credit and
Letter of Credit Outstandings) the Issuer (which consents (A) shall
not be unreasonably delayed or withheld, (B) of the Borrower shall not
be required upon the occurrence and during the continuance of any
Default or Event of Default and (C) of the Administrative Agent and
the Issuer shall not be required in the case of any assignment made by
or to DLJ or any of its Affiliates at any time during the period from
(and including) the Closing Date to (and including) the later of (x)
the date which is thirty Business Days from the Closing Date and (y)
the date on which the Syndication Agent shall have completed all
assignments to be consummated in connection with the primary
syndication of the Loans and Commitments), and (ii) with notice to,
and the acknowledgment of, the Syndication Agent, may at any time
assign and delegate to one or more commercial banks, funds that are
regularly engaged in making, purchasing or investing in loans or
securities, or other financial institutions, and
(b) with notice to the Borrower, the Administrative Agent, the
Syndication Agent, and (in the case of any assignment of Revolving
Loan Commitments and related participations in Letters of Credit and
Letter of Credit Outstandings) the Issuer, but without the consent of
the Borrower, the Administrative Agent or the Issuer, may assign and
delegate to any of its Affiliates or Related Funds or to any other
Lender or any Affiliate or Related Fund of any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "Assignee Lender"), all or any fraction of such Assignor Lender's Loans
and Commitments (and, in the case of any assignment of Revolving Loan
Commitments, related participations in Letters of Credit, Letter of Credit
Outstandings and Swing Line Loans) (which assignment and delegation shall be, as
among Revolving Loan Commitments, Revolving Loans and participations in Letters
of Credit, Letter of Credit Outstandings and Swing Line Loans, of a constant,
and not a varying, percentage) is in a minimum aggregate amount of (i)
$1,000,000 (provided that (1) assignments that are made on the same day to funds
that (x) invest in commercial loans and (y) are managed or advised by the same
investment advisor or any Affiliate of such investment advisor may be treated as
a single assignment for purposes of the minimum amount and (2) no minimum amount
shall be required in the case of any assignment between two Lenders so long as
the Assignor Lender has an aggregate amount of Loans and Commitments of at least
$2,000,000 following such assignment) unless the Borrower and the Administrative
Agent and Syndication Agent otherwise consent or (ii) the then remaining amount
of such Assignor Lender's Loans and Commitments; provided, however, that,
notwithstanding any of the foregoing, the Administrative Agent and the Issuer
may withhold consent in their sole discretion to an assignment of Revolving
Loans and Revolving Loan Commitments to a Person not satisfying the credit
ratings set forth below in this Section; provided further; however, that any
such Assignee Lender will comply, if applicable, with the provisions contained
in Section 4.6 and each Obligor, the Administrative Agent and the Syndication
Agent shall be entitled to continue to deal solely and directly with such
Assignor Lender in connection with the interests so assigned and delegated to an
Assignee Lender until
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(A) written notice of such assignment and delegation, together
with payment instructions, addresses and related information with
respect to such Assignee Lender, shall have been given to the
Borrower, the Administrative Agent and the Syndication Agent by such
Assignor Lender and such Assignee Lender;
(B) such Assignee Lender shall have executed and delivered to the
Borrower and the Administrative Agent and the Syndication Agent a
Lender Assignment Agreement, accepted by the Administrative Agent and
the Syndication Agent;
(C) the processing fees described below shall have been paid; and
(D) the Administrative Agent shall have registered such
assignment and delegation in the Register pursuant to clause (b) of
Section 2.7.
From and after the date that the Administrative Agent and the Syndication Agent
accept such Lender Assignment Agreement and such assignment and delegation is
registered pursuant to clause (b) of Section 2.7, (x) the Assignee Lender
thereunder shall be deemed automatically to have become a party hereto and to
the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee Lender in connection with such Lender Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and under
the other Loan Documents, and (y) the Assignor Lender, to the extent that rights
and obligations hereunder have been assigned and delegated by it in connection
with such Lender Assignment Agreement, shall be released from its obligations
hereunder and under the other Loan Documents. Any Assignor Lender that shall
have previously requested and received any Note or Notes in respect of any
Tranche to which any such assignment applies shall, upon the acceptance by the
Administrative Agent of the applicable Lender Assignment Agreement, mark such
Note or Notes "exchanged" and deliver them to the Borrower (against, if the
Assignor Lender has retained Loans or Commitments with respect to the applicable
Tranche and has requested replacement Notes pursuant to clause (b)(ii) of
Section 2.7, its receipt from the Borrower of replacement Notes in the principal
amount of the Loans and Commitments of the applicable Tranche retained by it).
Such Assignor Lender or such Assignee Lender must also pay a processing fee to
the Administrative Agent upon delivery of any Lender Assignment Agreement in the
amount of $3,500, unless (i) such assignment and delegation is by a Lender to
its Affiliate or Related Fund, or a Federal Reserve Bank, as provided below or
(ii) the Administrative Agent otherwise agrees in writing. Any attempted
assignment and delegation not made in accordance with this Section 10.11.1 shall
be null and void. Nothing contained in this Section 10.11.1 shall prevent or
prohibit any Lender from pledging its rights (but not its obligations to make
Loans or participate in Letters of Credit, Letter of Credit Outstandings or
Swing Line Loans) under this Agreement and/or its Loans hereunder to a Federal
Reserve Bank in support of borrowings made by such Lender from such Federal
Reserve Bank and any Lender that is a fund that invests in bank loans may pledge
all or any portion of its rights (but not its obligations to make Loans or
participate in Letters of Credit or Letter of Credit Outstandings) hereunder to
any trustee or any other representative of holders of obligations owed or
securities issued by such fund as security for such obligations or securities.
In the event that S&P, Moody's or Thompson's BankWatch (or Insurance Watch
Ratings Service, in the case of Lenders that are insurance companies (or Best's
Insurance Reports, if such insurance company is not rated by Insurance Watch
Ratings Service)) shall, after the date that any Lender with a Commitment to
make Revolving Loans or participate in Letters of Credit, Letter of Credit
Outstandings or Swing Line Loans becomes a Lender, downgrade the long-term
certificate of deposit rating or long-term senior unsecured debt rating of such
Lender, and the resulting rating shall be below BBB-, Baa3 or C (or BB, in the
case of any Lender that is an insurance company (or B, in the case of an
insurance company not rated by InsuranceWatch Ratings Service)) respectively,
then the Issuer or the Borrower shall have the right, but not the obligation,
upon notice to such Lender, the Administrative Agent and the Syndication Agent,
to replace such Lender with an Assignee Lender in accordance with and subject to
the restrictions contained in this Section, and such Lender hereby agrees to
transfer and assign without recourse (in accordance with and subject to the
restrictions contained in this Section) all its interests, rights and
obligations in respect of its Revolving Loan Commitment under
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this Agreement to such Assignee Lender; provided, however, that (i) no such
assignment shall conflict with any law, regulation or order of any governmental
authority and (ii) such Assignee Lender shall pay to such Lender in immediately
available funds on the date of such assignment the principal of and interest and
fees (if any) accrued to the date of payment on the Loans made, and Letters of
Credit participated in, by such Lender hereunder and all other amounts accrued
for such Lender's account or owed to it hereunder.
SECTION 10.11.12. Participations. Any Lender may sell to one or more
commercial banks or other Persons (each of such commercial banks and other
Persons being herein called a "Participant") participating interests in any of
the Loans, Commitments, or other interests of such Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section shall relieve
such Lender from its Commitments or its other obligations under any
Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) each Obligor and the Administrative Agent shall continue to
deal solely and directly with such Lender in connection with such
Lender's rights and obligations under each Loan Document;
(d) no Participant, unless such Participant is an Affiliate of
such Lender or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action under any Loan
Document, except that such Lender may agree with any Participant that
such Lender will not, without such Participant's consent, take any
actions of the type described in clauses (a), (b), (c) or (f) of
Section 10.1 with respect to Obligations participated in by such
Participant; and
(e) the Borrower shall not be required to pay any amount under
this Agreement that is greater than the amount which it would have
been required to pay had no participating interest been sold.
The Borrower acknowledges and agrees that each Participant, for purposes of
Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 7.1.1, 10.3 and 10.4, shall be considered
a Lender. Each Participant shall only be indemnified for increased costs
pursuant to Section 4.3, 4.5 or 4.6 if and to the extent that the Lender which
sold such participating interest to such Participant concurrently is entitled to
make, and does make, a claim on the Borrower for such increased costs. Any
Lender that sells a participating interest in any Loan, Commitment or other
interest to a Participant under this Section shall indemnify and hold harmless
the Borrower and the Administrative Agent from and against any taxes, penalties,
interest or other costs or losses (including reasonable attorneys' fees and
expenses) incurred or payable by the Borrower or the Administrative Agent as a
result of the failure of the Borrower or the Administrative Agent to comply with
its obligations to deduct or withhold any Taxes from any payments made pursuant
to this Agreement to such Lender or the Administrative Agent, as the case may
be, which Taxes would not have been incurred or payable if such Participant had
been a Non-Domestic Lender that was entitled to deliver to the Borrower, the
Administrative Agent or such Lender, and did in fact so deliver, a duly
completed and valid Form W-8BEN or W-8ECI (or applicable successor form)
entitling such Participant to receive payments under this Agreement without
deduction or withholding of any United States federal taxes.
Each Lender shall, as agent of the Borrower solely for the purpose of
this Section, record in book entries maintained by such Lender the name and the
amount of the participating interest of each Participant entitled to receive
payments in respect of any participating interests sold pursuant to this
Section.
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SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude the Administrative Agent, the Issuer or any other Lender from engaging
in any transaction, in addition to those contemplated by the Loan Documents,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. Independence of Covenants. All covenants contained in
this Agreement and each other Loan Document shall be given independent effect
such that, in the event a particular action or condition is not permitted by any
of such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not, unless
expressly so provided in such first covenant, avoid the occurrence of a Default
or an Event of Default if such action is taken or such condition exists.
SECTION 10.14. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY
LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS, THE ISSUER OR THE
BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY BE BROUGHT AND MAINTAINED IN
THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
AGENTS' OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. THE BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR
WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION
10.2. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE
TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED
TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY
IN RESPECT OF ITS OBLIGATIONS UNDER THE LOAN DOCUMENTS.
SECTION 10.15. Waiver of Jury Trial. EACH AGENT, EACH LENDER, THE
ISSUER AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE TO
THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, EACH LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF SUCH AGENT, SUCH
LENDER, THE ISSUER OR THE BORROWER IN CONNECTION THEREWITH. THE BORROWER
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH
AGENT, EACH LENDER AND THE ISSUER ENTERING INTO THE LOAN DOCUMENTS.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the day
and year first above written
STERICYCLE, INC.
By: /s/ Richard T. Kogler
--------------------------------------------
Title:
Address: 28161 North Keith Drive
Lake Forest, IL 60045
Facsimile No.: (847) 367-9462
Attention: Frank J.M. ten Brink
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DLJ CAPITAL FUNDING, INC., as the
Syndication Agent
By: /s/ Richard Beaudoin
--------------------------------------------
Title:
Address: 277 Park Avenue
New York, New York 10172
Facsimile No.: (212) 892-7542
Attention: Richard Beaudoin
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BANK OF AMERICA, N.A., as the
Administrative Agent
By: /s/ Kristine D. Hyde
--------------------------------------------
Title:
Address: 231 S. LaSalle Street
Chicago, IL 60697
Facsimile No.: (312) 974-9102
Attention: Kristine D. Hyde
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BANKERS TRUST COMPANY, as the
Documentation Agent
By: /s/ Mary Kay Coyle
--------------------------------------------
Title:
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<PAGE> 104
LENDERS:
DLJ CAPITAL FUNDING, INC.
By: /s/ Richard Beaudoin
--------------------------------------------
Title: Richard N. Beaudoin
Senior Vice President
Domestic Office:
----------------
277 Park Avenue
New York, New York 10172
Attention: Diane Albanese
Telecopier: (212) 892-5286
LIBOR Office:
-------------
277 Park Avenue
New York, New York 10172
Attention: Diane Albanese
Telecopier: (212) 892-5286
Commitment Percentages:
-----------------------
RL Percentage:
50%
Term A Percentage:
50%
Term B Percentage:
50%
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BANK OF AMERICA, N.A.
By: /s/ Jennifer L. Gerdes
--------------------------------------------
Title: Vice President
Domestic Office:
----------------
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Jennifer Gerdes
Telecopier: (312) 974-0761
LIBOR Office:
-------------
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Jennifer Gerdes
Telecopier: (312) 947-0761
Commitment Percentages:
-----------------------
RL Percentage:
25%
Term A Percentage:
25%
Term B Percentage:
25%
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BANKERS TRUST COMPANY
By: /s/ Mary Kay Coyle
--------------------------------------------
Title:
Domestic Office:
----------------
130 Liberty Street
New York, New York 10006
Attention: Mary Kay Coyle
Telecopier: (212) 250-7218
LIBOR Office:
-------------
130 Liberty Street
New York, New York 10006
Attention: Mary Kay Coyle
Telecopier: (212) 250-7218
Commitment Percentages:
-----------------------
RL Percentage:
25%
Term A Percentage:
25%
Term B Percentage:
25%
105
