EXHIBIT 10.3
Execution Copy
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$320,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
among
AVETA INC.,
as Holdings,
and
MMM HOLDINGS, INC.
and
NAMM HOLDINGS, INC.,
as Borrowers,
The Several Lenders
from Time to Time Parties Hereto,
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC.,
as Administrative Agent,
and
Dated as of April 11, 2006
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BEAR, ▇▇▇▇▇▇▇ & CO. INC., as Sole Lead Arranger and Sole Bookrunner
TABLE OF CONTENTS
Page
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SECTION 1. DEFINITIONS................................................... 1
1.1. Defined Terms................................................. 1
1.2. Other Definitional Provisions................................. 26
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS.......................... 27
2.1. Term Commitments.............................................. 27
2.2. Procedure for New Term Loan Borrowing......................... 28
2.3. Repayment of Term Loans....................................... 28
2.4. Incremental Term Commitments.................................. 29
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS..................... 30
3.1. Revolving Commitments......................................... 30
3.2. Procedure for Revolving Loan Borrowing........................ 30
3.3. Swingline Commitment.......................................... 31
3.4. Procedure for Swingline Borrowing; Refunding of
Swingline Loans............................................ 31
3.5. Commitment Fees, etc.......................................... 33
3.6. Termination or Reduction of Revolving Commitments............. 33
3.7. L/C Commitment................................................ 33
3.8. Procedure for Issuance of Letter of Credit.................... 34
3.9. Fees and Other Charges........................................ 34
3.10. L/C Participations............................................ 34
3.11. Reimbursement Obligation of the Borrower...................... 35
3.12. Obligations Absolute.......................................... 36
3.13. Letter of Credit Payments..................................... 37
3.14. Applications.................................................. 37
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT.. 37
4.1. Optional Prepayments.......................................... 37
4.2. Mandatory Prepayments and Revolving Commitment
Reductions................................................. 37
4.3. Conversion and Continuation Options........................... 38
4.4. Limitations on Eurodollar Tranches............................ 39
4.5. Interest Rates and Payment Dates.............................. 39
4.6. Computation of Interest and Fees.............................. 40
4.7. Inability to Determine Interest Rate.......................... 40
4.8. Pro Rata Treatment and Payments............................... 40
4.9. Requirements of Law........................................... 42
4.10. Taxes......................................................... 43
4.11. Indemnity..................................................... 45
4.12. Change of Lending Office...................................... 46
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4.13. Replacement of Lenders........................................ 46
4.14. Evidence of Debt.............................................. 46
4.15. Illegality.................................................... 47
SECTION 5. REPRESENTATIONS AND WARRANTIES................................ 47
5.1. Financial Condition........................................... 47
5.2. No Change..................................................... 48
5.3. Corporate Existence; Compliance with Law...................... 48
5.4. Power; Authorization; Enforceable Obligations................. 49
5.5. No Legal Bar.................................................. 49
5.6. Litigation.................................................... 49
5.7. No Default.................................................... 49
5.8. Ownership of Property; Liens.................................. 50
5.9. Intellectual Property......................................... 50
5.10. Taxes......................................................... 50
5.11. Federal Regulations........................................... 50
5.12. Labor Matters................................................. 50
5.13. ERISA......................................................... 51
5.14. Investment Company Act; Other Regulations..................... 51
5.15. Subsidiaries.................................................. 51
5.16. Use of Proceeds............................................... 51
5.17. Environmental Matters......................................... 52
5.18. Accuracy of Information, etc.................................. 52
5.19. Security Documents............................................ 53
5.20. Solvency...................................................... 53
5.21. Certain Documents............................................. 53
5.22. Dormant Subsidiaries.......................................... 54
SECTION 6. CONDITIONS PRECEDENT.......................................... 54
6.1. Conditions to Initial Extension of Credit..................... 54
6.2. Conditions to Each Extension of Credit........................ 55
SECTION 7. AFFIRMATIVE COVENANTS......................................... 56
7.1. Financial Statements.......................................... 56
7.2. Certificates; Other Information............................... 58
7.3. Payment of Obligations........................................ 59
7.4. Maintenance of Existence; Compliance.......................... 59
7.5. Maintenance of Property; Insurance............................ 59
7.6. Inspection of Property; Books and Records; Discussions........ 59
7.7. Notices....................................................... 60
7.8. Environmental Laws............................................ 60
7.9. Additional Collateral, etc.................................... 61
7.10. Excess Cash Dividends......................................... 62
7.11. Maintenance of Requisite Statutory Capital.................... 62
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7.12. Further Assurances............................................ 62
7.13. Licensed Subsidiaries......................................... 63
7.14. Deposit Accounts.............................................. 63
7.15. Dormant Subsidiaries.......................................... 63
7.16. Interest Rate Protection...................................... 63
7.17. Post-Closing Requirement...................................... 64
SECTION 8. NEGATIVE COVENANTS............................................ 64
8.1. Financial Condition Covenants................................. 64
8.2. Indebtedness.................................................. 65
8.3. Liens......................................................... 66
8.4. Fundamental Changes........................................... 67
8.5. Disposition of Property....................................... 68
8.6. Restricted Payments........................................... 68
8.7. Capital Expenditures.......................................... 69
8.8. Investments................................................... 70
8.9. Certain Payments and Modifications of Certain Debt
Instruments................................................ 71
8.10. Transactions with Affiliates.................................. 72
8.11. Sales and Leasebacks.......................................... 72
8.12. Hedge Agreements.............................................. 72
8.13. Changes in Fiscal Periods..................................... 72
8.14. Negative Pledge Clauses....................................... 72
8.15. Clauses Restricting Subsidiary Distributions.................. 73
8.16. Lines of Business............................................. 73
8.17. Passive Holding Company Status................................ 73
8.18. Amendments to Transaction Documentation....................... 73
8.19. Amendments to Operating Agreement............................. 73
8.20. Immaterial Subsidiaries....................................... 73
8.21. Dormant Subsidiaries.......................................... 74
SECTION 9. EVENTS OF DEFAULT............................................. 74
SECTION 10. THE AGENTS................................................... 77
10.1. Appointment................................................... 77
10.2. Delegation of Duties.......................................... 77
10.3. Exculpatory Provisions........................................ 78
10.4. Reliance by Agents............................................ 78
10.5. Notice of Default............................................. 78
10.6. Non-Reliance on Agents and Other Lenders...................... 79
10.7. Indemnification............................................... 79
10.8. Agent in Its Individual Capacity.............................. 80
10.9. Successor Administrative Agent................................ 80
10.10. Agents Generally.............................................. 80
10.11. The Lead Arranger............................................. 80
10.12. The L/C Lender................................................ 80
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SECTION 11. MISCELLANEOUS................................................ 81
11.1. Amendments and Waivers........................................ 81
11.2. Notices....................................................... 83
11.3. No Waiver; Cumulative Remedies................................ 84
11.4. Survival of Representations and Warranties.................... 84
11.5. Payment of Expenses and Taxes................................. 84
11.6. Successors and Assigns; Participations and Assignments........ 85
11.7. Adjustments; Set-off.......................................... 89
11.8. True-Up....................................................... 89
11.9. Counterparts.................................................. 90
11.10. Severability.................................................. 90
11.11. Integration................................................... 90
11.12. GOVERNING LAW................................................. 90
11.13. Submission To Jurisdiction; Waivers........................... 90
11.14. Acknowledgments............................................... 91
11.15. Releases of Guarantees and Liens.............................. 91
11.16. Confidentiality............................................... 92
11.17. WAIVERS OF JURY TRIAL......................................... 93
11.18. Delivery of Addenda........................................... 93
11.19. Several Obligations........................................... 93
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SCHEDULES:
---------
1.1(a) Dormant Subsidiaries
1.1(b) Mortgaged Property
1.1(c) Certain Shareholders of Holdings
5.3 Group Member Corporate Existence
5.4 Consents, Authorizations, Filings and Notices
5.6 Litigation
5.7 Defaults
5.8 Ownership of Property; Liens
5.15 Subsidiaries
5.19(a) UCC Filing Jurisdictions
5.19(b) Mortgage Filing Jurisdictions
8.2(e) Existing Indebtedness
8.3(f) Existing Liens
8.15 Subsidiary Distributions
EXHIBITS:
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A Form of Addendum
B Form of Assignment and Assumption
C Form of Compliance Certificate
D Form of Guarantee and Collateral Agreement
E Form of Prepayment Option Notice
F Form of Exemption Certificate
G Form of Closing Certificate
H-1 Form of Legal Opinion of Proskauer Rose LLP
H-2 Form of Legal Opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & Calabria
H-3 Form of Legal Opinion of Fiddler ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.S.C.
H-4 Form of Legal Opinion of General Counsel
I Form of Reaffirmation Agreement
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AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 11, 2006,
among AVETA INC., a Delaware corporation (formerly known as Aveta Holdings, LLC)
("Holdings"), MMM HOLDINGS, INC., a Puerto Rico corporation ("MMM"), NAMM
HOLDINGS, INC., a Delaware corporation ("NAMM," and together with MMM, the "
Borrowers"), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the "Lenders"), BEAR, ▇▇▇▇▇▇▇ & CO.
INC., as sole lead arranger and sole bookrunner (in such capacity, the "Lead
Arranger") and BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC., as administrative agent
("BSCL" and, in such capacity, the "Administrative Agent").
WITNESSETH:
WHEREAS, Holdings and the Borrowers are parties to the Credit
Agreement (as amended, supplemented or otherwise modified prior to the date
hereof, the "Existing Credit Agreement"), dated as of August 22, 2005 (the
"Original Closing Date"), among Holdings, the Borrowers, the several banks and
other financial institutions or entities parties thereto (the "Existing
Lenders"), the documentation agents and syndication agents named therein and
Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., as administrative agent, pursuant to which
the Existing Lenders made (i) term loans (the "Original Term Loans") to the
Borrowers which have a current outstanding principal balance of $271,320,000
(comprised of $219,640,000of Original Term Loans made to MMM and $51,680,000of
Original Terms Loans made to NAMM) and (ii) commitments to make revolving
extensions of credit in an aggregate principal amount of up to $20,000,000;
WHEREAS, Holdings and the Borrowers desire to amend and restate the
Existing Credit Agreement to, among other things, (i) provide for the borrowing
of $28,680,000 of additional term loans (the "New Term Loans") by NAMM
hereunder, (ii) permit a portion of the proceeds of such New Term Loans to be
used by the Borrowers to repay the aggregate principal amount of all outstanding
revolving loans, (iii) provide for an incremental term loan facility in an
aggregate principal amount of up to $200,000,000 and (iv) make certain other
amendments to the Existing Credit Agreement;
WHEREAS, Holdings and the Borrowers have requested that the Existing
Lenders amend and restate the Existing Credit Agreement as provided in this
Agreement and that certain of the Lenders make available the New Term Loans; and
WHEREAS, the Lenders are willing to provide the New Term Loans and
amend and restate the Existing Credit Agreement on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree, subject to the
conditions in Section 6.1, that the Existing Credit Agreement is hereby amended
and restated to read in its entirety as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
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"Addendum": an instrument, substantially in the form of Exhibit A, by
which a Lender becomes a party to this Agreement as of the Closing Date.
"Adjustment Date": as defined in the Pricing Grid.
"Administrative Agent": as defined in the preamble to this Agreement.
"Affiliate": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"Agents": the collective reference to the Lead Arranger and the
Administrative Agent, which term shall include, for purposes of Section 10 only,
the L/C Lender, the Issuing Lender and the Swingline Lender.
"Aggregate Exposure": with respect to any Lender at any time, an
amount equal to the sum of (a) the aggregate then unpaid principal amount of
such Lender's Term Loans (and, prior to the Closing Date, New Term Commitments,
if any) and (b) the amount of such Lender's Revolving Commitment then in effect
or, if the Revolving Commitments have been terminated, the amount of such
Lender's Revolving Extensions of Credit then outstanding.
"Aggregate Exposure Percentage": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"Agreement": this Amended and Restated Credit Agreement.
"Applicable Margin": for each Type of Loan, the rate per annum set
forth under the relevant column heading below:
Eurodollar Loans Base Rate Loans
---------------- ---------------
Revolving Loans and Swingline Loans 2.25% 1.25%
Term Loans (other than Incremental Term Loans) 2.25% 1.25%
provided, (a) that on and after the first Adjustment Date occurring after the
Closing Date, the Applicable Margin with respect to the Revolving Loans,
Swingline Loans and Term Loans (other than Incremental Term Loans) will be
determined pursuant to the Pricing Grid; and (b) that (i) the Applicable Margin
in the case of any Incremental Term Loan shall be such per annum rate as shall
be agreed to by the relevant Borrower and the applicable Incremental Term
Lenders as shown in the applicable Incremental Assumption Agreement and (ii) if
at any time the Applicable Margin for any Incremental Term Loan is higher than
the Applicable Margin set forth
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herein in respect of any other Term Loans, the Applicable Margin for such other
Term Loans shall automatically be correspondingly increased in an amount
necessary for the Applicable Margin for such other Term Loans to be equal to the
Applicable Margin for such Incremental Term Loans.
"Applicable Percentage": as of the last day of any fiscal quarter of
MMM set forth below, the percentage opposite such fiscal quarter:
Fiscal Quarter Ending Applicable Percentage
--------------------- ---------------------
September 30, 2005 1.0%
December 31, 2005 1.0%
March 31, 2006 2.0%
June 30, 2006 3.0%
September 30, 2006 and thereafter 3.5%
"Application": an application, in such form as the L/C Lender may
specify from time to time, requesting the L/C Lender to cause a Letter of Credit
to be issued.
"Approved Fund": 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.
"Acquired Entity": as defined in Section 8.8(h).
"Asset Sale": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (e), or (f) of Section 8.5) that yields gross proceeds to
any Group Member (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.
"Assignee": as defined in Section 11.6(b).
"Assignment and Assumption": an Assignment and Assumption,
substantially in the form of Exhibit B.
"Available Revolving Commitment": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect over (b) such Lender's Revolving Extensions of Credit
then outstanding; provided that, in calculating any Lender's Revolving
Extensions of Credit for the purpose of determining such Lender's Available
Revolving Commitment pursuant to Section 3.5, the aggregate principal amount of
Swingline Loans then outstanding shall be deemed to be zero.
"Base Rate": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in
effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 0.50%. For purposes hereof: "Prime
4
Rate" shall mean the rate of interest per annum publicly announced from time to
time by the Reference Lender as its prime rate in effect at its principal office
in New York City (the Prime Rate not being intended to be the lowest rate of
interest charged by the Reference Lender in connection with extensions of credit
to debtors). Any change in the Base Rate due to a change in the Prime Rate or
the Federal Funds Effective Rate shall be effective as of the opening of
business on the effective day of such change in the Prime Rate or the Federal
Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is
based upon the Base Rate.
"Base Term Amount": An amount equal to the sum of (a) the aggregate
principal amount of the Original Term Loans outstanding on the Closing Date plus
(b) the aggregate initial principal amount of the New Term Loans, which sum is
equal to $300,000,000.
"Benefited Lender": as defined in Section 11.7(a).
"Board": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"Borrowers": as defined in the preamble to this Agreement.
"Borrowing Date": any Business Day specified by a Borrower as a date
on which such Borrower requests the relevant Lenders to make Loans hereunder.
"Business": as defined in Section 5.17(b).
"BSCL": as defined in the preamble to this Agreement.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, provided, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the interbank
eurodollar market.
"Capital Expenditures": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements, capitalized repairs and
improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.
"Capital Lease Obligations": as to any Person, the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP and, for the purposes of
this Agreement, the amount of such obligations at any time shall be the
capitalized amount thereof at such time determined in accordance with GAAP.
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"Capital Stock": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"Cash Equivalents": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof or the Commonwealth of Puerto
Rico having combined capital and surplus of not less than $500,000,000; (c)
commercial paper of an issuer rated at least A-1 by Standard & Poor's Ratings
Services ("S&P") or P-1 by ▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's"), or
carrying an equivalent rating by a nationally recognized rating agency, if both
of the two named rating agencies cease publishing ratings of commercial paper
issuers generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank satisfying
the requirements of clause (b) of this definition, having a term of not more
than 30 days, with respect to securities issued or fully guaranteed or insured
by the United States government; (e) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed by any state,
commonwealth or territory of the United States, by any political subdivision or
taxing authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's; (f) securities with maturities of four
years or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political
subdivision or taxing authority of any such state, commonwealth or territory or
by any foreign government, the securities of which state, commonwealth,
territory, political subdivision, taxing authority or foreign government (as the
case may be) are rated at least A by S&P or A by Moody's and for which a
commercially recognized trading market exists; (g) securities with maturities of
six months or less from the date of acquisition backed by standby letters of
credit issued by any Lender or any commercial bank satisfying the requirements
of clause (b) of this definition; or (h) shares of money market mutual or
similar funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (g) of this definition or money market funds that (i) comply
with the criteria set forth in Securities and Exchange Commission Rule 2a-7
under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P
and Aaa by Moody's and (iii) have portfolio assets of at least $5,000,000,000.
"Certifications": as defined in Section 5.3(d).
"Closing Date": the date on which the conditions precedent set forth
in Section 6.1 shall have been satisfied, which date is April 11, 2006.
"Code": the Internal Revenue Code of 1986, as amended from time to
time.
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"Collateral": all property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document.
"Commitment Fee Rate": 0.50% per annum.
"Commonly Controlled Entity": an entity, whether or not incorporated,
that is under common control with any Loan Party within the meaning of Section
4001 of ERISA or is part of a group that includes Holdings and that is treated
as a single employer under Sections 414 (b) or (c) of the Code and solely to the
extent required by operation of Title IV of ERISA or Section 412 of the Code or
Section 302 of ERISA, Sections 414(m) or (o) of the Code.
"Compliance Certificate": a certificate duly executed by a Responsible
Officer substantially in the form of Exhibit C.
"Conduit Lender": any special purpose entity organized and
administered by any Lender for the purpose of making Loans otherwise required to
be made by such Lender and designated by such Lender in a written instrument,
subject to the consent of the Administrative Agent and the Borrowers (which
consent shall not be unreasonably withheld); provided, that the designation by
any Lender of a Conduit Lender shall not relieve the designating Lender of any
of its obligations to fund a Loan under this Agreement if, for any reason, its
Conduit Lender fails to fund any such Loan, and the designating Lender (and not
the Conduit Lender) shall have the sole right and responsibility to deliver all
consents and waivers required or requested under this Agreement with respect to
its Conduit Lender, and provided, further, that no Conduit Lender shall (a) be
entitled to receive any greater amount pursuant to Section 4.9, 4.10, 4.11 or
11.5 than the designating Lender would have been entitled to receive in respect
of the extensions of credit made by such Conduit Lender or (b) be deemed to have
any Revolving Commitment.
"Confidential Information Memorandum": the Confidential Information
Memorandum furnished to the Lenders in connection with the Existing Credit
Agreement.
"Consolidated Current Assets": at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of Holdings and its Subsidiaries at such date.
"Consolidated Current Liabilities": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of Holdings
and its Subsidiaries at such date, but excluding (a) the current portion of any
Funded Debt of Holdings and its Subsidiaries and (b) without duplication of
clause (a) above, all Indebtedness consisting of Revolving Loans or Swingline
Loans to the extent otherwise included therein.
"Consolidated EBITDA": for any period, Consolidated Net Income for
such period plus, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
7
limited to, goodwill) and organization costs, (e) any extraordinary charges or
losses determined in accordance with GAAP, (f) non-cash compensation expenses
arising from the issuance of stock, options to purchase stock and stock
appreciation rights to the management of Holdings, and (g) any other non-cash
charges, non-cash expenses or non-cash losses of Holdings or any of its
Subsidiaries for such period (excluding any such charge, expense or loss
incurred in the ordinary course of business that constitutes an accrual of or a
reserve for cash charges for any future period), provided, however, that cash
payments made in such period or in any future period in respect of such non-cash
charges, expenses or losses (excluding any such charge, expense or loss incurred
in the ordinary course of business that constitutes an accrual of or a reserve
for cash charges for any future period) shall be subtracted from Consolidated
Net Income in calculating Consolidated EBITDA in the period when such payments
are made, and minus, to the extent included in the statement of such
Consolidated Net Income for such period, the sum of (a) any extraordinary income
or gains determined in accordance with GAAP and (b) any other non-cash income
(excluding (i) non-cash income related to accounts receivable in the ordinary
course of business and (ii) any items that represent the reversal of any accrual
of, or cash reserve for, anticipated cash charges in any prior period that are
described in the parenthetical to clause (g) above), all as determined on a
consolidated basis. For the purposes of calculating Consolidated EBITDA for any
period of four consecutive fiscal quarters (each, a "Reference Period") pursuant
to any determination of the Consolidated Leverage Ratio, (i) if at any time
during such Reference Period Holdings or any Subsidiary shall have made any
Material Disposition, the Consolidated EBITDA for such Reference Period shall be
reduced by an amount equal to the Consolidated EBITDA (if positive) attributable
to the property that is the subject of such Material Disposition for such
Reference Period or increased by an amount equal to the Consolidated EBITDA (if
negative) attributable thereto for such Reference Period and (ii) if during such
Reference Period Holdings or any Subsidiary shall have made a Material
Acquisition, Consolidated EBITDA for such Reference Period shall be calculated
after giving pro forma effect thereto as if such Material Acquisition occurred
on the first day of such Reference Period (which pro forma calculation may
include pro forma adjustments in accordance with Regulation S-X under the
Securities Act of 1933, as amended, or otherwise approved by the Administrative
Agent). As used in this definition, "Material Acquisition" means the Original
Transactions and any other acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the payment
of consideration by Holdings and its Subsidiaries in excess of $1,000,000; and
"Material Disposition" means any Disposition of property or series of related
Dispositions of property that yields gross proceeds to Holdings or any of its
Subsidiaries in excess of $1,000,000. Notwithstanding the foregoing,
Consolidated EBITDA shall be deemed to be $27,000,000.00 and $30,600,000.00 for
the fiscal quarters ending March 31, 2005 and June 30, 2005, respectively.
"Consolidated Fixed Charge Coverage Ratio": for any period, the ratio
of (a) Consolidated EBITDA for such period to (b) Consolidated Fixed Charges for
such period.
"Consolidated Fixed Charges": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period, (b) scheduled
payments made during such period on account of principal of Indebtedness of
Holdings or any of its Subsidiaries (including scheduled principal payments in
respect of the Term Loans), (c) income taxes paid in cash during
8
such period, (d) Capital Expenditures paid in cash during such period, (e)
Restricted Payments paid in cash during such period pursuant to Section 8.6(c)
and (d) management fees paid in cash during such period pursuant to the
Management Services Agreement.
"Consolidated Interest Expense": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations and any
permitted cash interest on the Subordinated Notes or any Permitted Subordinated
Seller Indebtedness paid in cash during such period) of Holdings and its
Subsidiaries for such period with respect to all outstanding Indebtedness of
Holdings and its Subsidiaries other than the Subordinated Notes (including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Hedge Agreements
in respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP); provided that interest income shall not be
deducted in the calculation of Consolidated Interest Expense.
"Consolidated Leverage Ratio": at any time, the ratio of (a)
Consolidated Total Debt as of the last day of then most recently completed
fiscal quarter to (b) Consolidated EBITDA for the period of four consecutive
fiscal quarters ended on such last day.
"Consolidated Net Income": for any period, the consolidated net income
(or loss) of Holdings and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP; provided that there shall be excluded (a) the income
(or deficit) of any Person acquired after the Closing Date which is accrued
prior to the date it becomes a Subsidiary of Holdings or is merged into or
consolidated after the Closing Date with Holdings or any of its Subsidiaries,
(b) the income (or deficit) of any Person (other than a Subsidiary of Holdings)
in which Holdings or any of its Subsidiaries has an ownership interest, except
to the extent that any such income is actually received by Holdings or such
Subsidiary in the form of dividends or similar distributions and (c) the
undistributed earnings of any Subsidiary of Holdings to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary (it being understood that compliance with the Requisite Statutory
Capital requirements shall not result in excluding any undistributed earnings
under this clause (c)).
"Consolidated Total Debt": at any date, the aggregate principal amount
of all Indebtedness of Holdings and its Subsidiaries at such date, determined on
a consolidated basis in accordance with GAAP; provided that Consolidated Total
Debt shall not include (a) the Subordinated Notes and (b) any Permitted
Subordinated Seller Indebtedness to the extent such Permitted Subordinated
Seller Indebtedness does not provide for, or require payments of interest in
cash.
"Consolidated Working Capital": at any date, the excess of
Consolidated Current Assets on such date over Consolidated Current Liabilities
on such date.
"Contractual Obligation": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
9
"Control": with respect to a Person, the power, directly or
indirectly, to direct or cause the direction of the management and policies of
such Person whether by contract or otherwise.
"Control Agreement": a Control Agreement to be executed by the
applicable Loan Party in a form reasonably approved by the Administrative Agent.
"Control Investment Affiliate": as to any Person, any other Person
that (a) directly or indirectly, is in Control of, is Controlled by, or is under
common Control with, such Person and (b) is organized by such Person primarily
for the purpose of making equity or debt investments in one or more companies.
"Default": any of the events specified in Section 9, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"Disposition": with respect to any Property, any sale, lease, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof. The
terms "Dispose" and "Disposed of" shall have correlative meanings.
"Dollars" and "$": dollars in lawful currency of the United States.
"Domestic Subsidiary": any Subsidiary of Holdings organized under the
laws of any jurisdiction within the United States (but excluding Subsidiaries
organized under the laws of Puerto Rico).
"Dormant Subsidiaries": the Subsidiaries listed on Schedule 1.1(a).
"ECF Percentage": 50%; provided that the ECF Percentage shall be 0%,
if the Consolidated Leverage Ratio as of the last day of such fiscal year is
less than 2.00 to 1.00.
"Enterprises": Care Enterprises I, Inc., a New Jersey Corporation.
"Environmental Laws": any and all foreign, Federal, state,
Commonwealth of Puerto Rico, local or municipal laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirements of Law (including common law)
regulating, relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect.
"Equity Offering": The issuance by Holdings in December 2005 of
additional shares of common stock in a private placement yielding approximately
$388,100,000 in gross proceeds to Holdings (comprised of $337,500,000 of gross
proceeds completed in December 2005 plus an over allotment option completed in
January 2006 of $50,600,000 of gross proceeds).
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
10
"Eurocurrency Reserve Requirements": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period. In the event that such rate does
not appear on Page 3750 of the Telerate screen (or otherwise on such screen),
the "Eurodollar Base Rate" shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent or, in the absence of such availability, by
reference to the rate at which the Administrative Agent is offered Dollar
deposits at or about 11:00 A.M., New York City time, two Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
its eurodollar and foreign currency and exchange operations are then being
conducted for delivery on the first day of such Interest Period for the number
of days comprised therein.
"Eurodollar Loans": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"Eurodollar Rate": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche": the collective reference to Eurodollar Loans
under a particular Facility the then current Interest Periods with respect to
all of which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"Event of Default": any of the events specified in Section 9, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Excess Cash Flow": for any fiscal year of Holdings, the excess, if
any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) decreases in Consolidated Working Capital for such fiscal year,
(iv) the aggregate net amount of non-cash loss on the Disposition of Property by
Holdings and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent deducted in
arriving at such Consolidated Net Income and (v) the net
11
decrease during such fiscal year of the amount of cash and Cash Equivalents
required to be maintained by MMM in order to comply with Section 8.1(c) as of
the last day of such fiscal year over (b) the sum, without duplication, of (i)
the amount of all non-cash credits included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by Holdings and its Subsidiaries
in cash during such fiscal year on account of Capital Expenditures (excluding
the principal amount of Indebtedness incurred to finance such expenditures (but
including repayments of any such Indebtedness incurring during such period or
any prior period) and any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all prepayments of
Revolving Loans and Swingline Loans during such fiscal year to the extent
accompanying permanent optional reductions of the Revolving Commitments and all
optional prepayments of the Term Loans during such fiscal year, (iv) the
aggregate amount of all regularly scheduled principal payments of Funded Debt
(including the Term Loans) of Holdings and its Subsidiaries made during such
fiscal year (other than in respect of any revolving credit facility to the
extent there is not an equivalent permanent reduction in commitments
thereunder), (v) increases in Consolidated Working Capital for such fiscal year,
(vi) the aggregate net amount of non-cash gain on the Disposition of Property by
Holdings and its Subsidiaries during such fiscal year (other than sales of
inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income, (vii) net increase during such fiscal
year of the amount of cash or Cash Equivalents required to be maintained by MMM
in order to comply with Section 8.1(c) as of the last day of such fiscal year
and (viii) with respect to the determination of Excess Cash Flow for the fiscal
year ended December 31, 2005, the sum of (x) $3,000,000 and (y) the amount of
cash and Cash Equivalents required to be maintained by MMM in order to comply
with Section 8.1(c) as of December 31, 2005.
"Excess Cash Flow Application Date": as defined in Section 4.2(c).
"Excluded Foreign Subsidiary": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral to support the Obligations of either Borrower or (b) the guaranteeing
by such Subsidiary of the Obligations of either Borrower would, in the good
faith judgment of Holdings, result in adverse tax consequences to Holdings, in
which case such Foreign Subsidiary shall be an "Excluded Foreign Subsidiary" as
to the Obligations of such Borrower.
"Excluded Indebtedness": all Indebtedness permitted by clauses (a),
(b), (c), (d), (e), (f), (g), (h), and (i) of Section 8.2.
"Existing Credit Agreement": as defined in the recitals to this
Agreement.
"Existing Lender": as defined in the recitals to this Agreement.
"Facility": each of (a) the Original Term Loans and the New Term
Commitments and Loans made thereunder (the "Term Facility"), (b) the Incremental
Term Commitments having the same Increased Amount Date and the Incremental Term
Loans made thereunder (each, an "Incremental Term Facility") and (c) the
Revolving Commitments and the extensions of credit made thereunder (the
"Revolving Facility").
12
"Federal Funds Effective Rate": for any day, the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"First Amendment": the First Amendment to the Existing Credit
Agreement, dated as of December 16, 2005.
"Foreign Subsidiary": any Subsidiary of Holdings that is not a
Domestic Subsidiary.
"Funded Debt": as to any Person, all Indebtedness of such Person that
matures more than one year from the date of its creation or matures within one
year from such date but is renewable or extendible, at the option of such
Person, to a date more than one year from such date or arises under a revolving
credit or similar agreement that obligates the lender or lenders to extend
credit during a period of more than one year from such date, including all
current maturities and current sinking fund payments in respect of such
Indebtedness whether or not required to be paid within one year from the date of
its creation and, in the case of either Borrower, Indebtedness in respect of the
Loans.
"Funding Office": the office of the Administrative Agent specified in
Section 11.2 or such other office as may be specified from time to time by the
Administrative Agent as its funding office by written notice to the Borrowers
and the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time.
"Governmental Authority": any nation or government (including the
Commonwealth of Puerto Rico), any state, municipality or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative functions of or pertaining to government,
any securities exchange and any self-regulatory organization (including the
NAIC).
"Group Members": the collective reference to Holdings and its
Subsidiaries.
"Guarantee and Collateral Agreement": the Guarantee and Collateral
Agreement to be executed and delivered by Holdings, each Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit D.
"Guarantee Obligation": as to any Person (the "guaranteeing person"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly,
13
including any obligation of the guaranteeing person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the owner
of any such primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to
be the lower of (a) an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Guarantee Obligation is made and (b)
the maximum amount for which such guaranteeing person may be liable pursuant to
the terms of the instrument embodying such Guarantee Obligation, unless such
primary obligation and the maximum amount for which such guaranteeing person may
be liable are not stated or determinable, in which case the amount of such
Guarantee Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the relevant Borrower
in good faith.
"Guarantors": the collective reference to Holdings and the Subsidiary
Guarantors.
"Health Plan Authorities": as defined in Section 5.3(d).
"Hedge Agreements": any agreement with respect to any swap, forward,
future or derivative transaction or option or similar agreement involving, or
settled by reference to, one or more rates, currencies, commodities, equity or
debt instruments or securities, or economic, financial or pricing indices or
measures of economic, financial or pricing risk or value or any similar
transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services
provided by current or former directors, officers, employees or consultants of
Holdings or the Subsidiaries shall be a Swap Agreement.
"Holdings": as defined in the preamble to this Agreement.
"Immaterial Subsidiary": any Subsidiary with (a) total assets
determined in accordance with GAAP not exceeding $500,000 and (b) total revenue
determined in accordance with GAAP not exceeding $500,000 for the most recent
four quarter period for which financial statements have been delivered; provided
that the (a) aggregate total assets of all Immaterial Subsidiaries determined in
accordance with GAAP shall not exceed $3,000,000 at any time or (b) aggregate
total revenue of all Immaterial Subsidiaries determined in accordance with GAAP
shall not exceed $3,000,000 for the most recent four quarter period for which
financial statements have been delivered.
"Incremental Amount": at any time, the excess, if any, of (a)
$200,000,000 over (b) the aggregate amount of all Incremental Term Commitments
established prior to such time pursuant to Section 2.4.
14
"Incremental Assumption Agreement": an Incremental Assumption
Agreement in form and substance reasonably satisfactory to the Administrative
Agent, among the Borrowers, the Administrative Agent and one or more Incremental
Term Lenders.
"Incremental Term Commitment": the commitment of any Lender,
established pursuant to Section 2.4, to make Incremental Term Loans to one of
the Borrowers.
"Incremental Term Facility": as defined in the "Facility" definition.
"Incremental Term Lender": a Lender with an Incremental Term
Commitment or an outstanding Incremental Term Loan.
"Incremental Term Loan Maturity Date": the final maturity date of any
Incremental Term Loan, as set forth in the applicable Incremental Assumption
Agreement.
"Incremental Term Percentage": as to any Lender in respect of any
Incremental Facility, at any time, the percentage which the aggregate principal
amount of such Lender's Incremental Term Loans under such Facility then
outstanding constitutes of the aggregate principal amount of the Incremental
Term Loans then outstanding under such Facility.
"Incremental Term Loan Repayment Dates": subject to Section 2.4(b),
the dates scheduled for the repayment of principal of any Incremental Term Loan,
as set forth in the applicable Incremental Assumption Agreement.
"Incremental Term Loans": as defined in Section 2.1(b).
"Indebtedness": of any Person at any date, without duplication, (a)
all indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all Capital Lease Obligations of
such Person, (f) all obligations of such Person, contingent or otherwise, as an
account party or applicant under or in respect of acceptances, letters of
credit, surety bonds or similar arrangements, (g) all Guarantee Obligations of
such Person in respect of obligations of the kind referred to in clauses (a)
through (f) above, (h) all obligations of the kind referred to in clauses (a)
through (g) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property
(including accounts and contract rights) owned by such Person, whether or not
such Person has assumed or become liable for the payment of such obligation and
(i) for the purposes of Sections 8.2 and 9(e) only, all obligations of such
Person in respect of Hedge Agreements. 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 expressly
provide that such Person is not liable therefor.
15
"Insolvency": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"Insolvent": pertaining to a condition of Insolvency.
"Intellectual Property": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to ▇▇▇ at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"Interest Payment Date": (a) as to any Base Rate Loan (other than any
Swingline Loan), the last day of each March, June, September and December to
occur while such Loan is outstanding and the final maturity date of such Loan,
(b) as to any Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan having an
Interest Period longer than three months, each day that is three months, or a
whole multiple thereof, after the first day of such Interest Period and the last
day of such Interest Period, (d) as to any Loan (other than any Revolving Loan
that is a Base Rate Loan and any Swingline Loan), the date of any repayment or
prepayment made in respect thereof and (e) as to any Swingline Loan, the day
that such Loan is required to be paid.
"Interest Period": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the relevant Borrower in its notice of borrowing or
notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Eurodollar Loan and ending one, two, three or
six months thereafter, as selected by such Borrower by irrevocable notice to the
Administrative Agent no later than 11:00 A.M., New York City time, on the date
that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions
relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) the Borrowers may not select an Interest Period under a
particular Facility that would extend beyond the Revolving Termination
Date or beyond the date final payment is due on the Term Loans or the
applicable Incremental Term Loan Maturity Date, as the case may be;
and
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the
16
calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month.
"Investments": as defined in Section 8.8.
"Issuing Lender": any financial institution designated by the L/C
Lender as the "Issuing Lender" hereunder.
"L/C Commitment": $3,000,000.
"L/C Fee Payment Date": the last day of each March, June, September
and December and the last day of the Revolving Commitment Period.
"L/C Lender": Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., in its capacity as
the party responsible for causing the issuance of Letters of Credit hereunder.
"L/C Obligations": at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed pursuant to Section 3.11.
"L/C Participants": the collective reference to all the Revolving
Lenders other than the L/C Lender.
"Lead Arranger": as defined in the preamble to this Agreement.
"Lenders": as defined in the preamble hereto; provided, that unless
the context otherwise requires, each reference herein to the Lenders shall be
deemed to include any Conduit Lender.
"Letters of Credit": as defined in Section 3.7(a).
"Licensed Subsidiaries": any Subsidiary of Holdings which is licensed
and subject to regulation under applicable Federal, state or Commonwealth of
Puerto Rico insurance, health services organization, or health care statutes,
rules or regulations or Medicare rules and regulations.
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"Loan": any loan made by any Lender pursuant to this Agreement
(including any Incremental Term Loans).
"Loan Documents": this Agreement, the Security Documents, each
Incremental Assumption Agreement, the Reaffirmation Agreement and the Notes.
17
"Loan Parties": each Group Member that is a party to a Loan Document.
"Majority Facility Lenders": with respect to any Facility, the holders
of more than 50% of the aggregate unpaid principal amount of the Term Loans
(other than Incremental Term Loans), the Incremental Term Loans outstanding
thereunder or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Facility,
prior to any termination of the Revolving Commitments, the holders of more than
50% of the Total Revolving Commitments).
"Management Services Agreement": the Management Services Agreement
among MMM and Enterprises, dated November 30, 2004, relating to Enterprises'
provision of certain investment and management services to MMM and its
Subsidiaries.
"Managing Member": Care Enterprises III, LLC, a Delaware limited
liability company.
"Material Adverse Effect": a material adverse effect on (a) the
business, assets, property, condition (financial or otherwise), results of
operations or prospects of Holdings and its Subsidiaries taken as a whole or (b)
the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agents or the Lenders, taken as a
whole, hereunder or thereunder.
"Materials of Environmental Concern": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"MMM": as defined in the preamble to this Agreement.
"MMM Healthcare": as defined in the definition of "Original
Transactions".
"Mortgaged Properties": the real properties listed on Schedule 1.1(b),
as to which the Administrative Agent for the benefit of the Secured Parties
shall be granted a Lien pursuant to the Mortgages.
"Mortgages": each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties, in a form reasonably satisfactory to the
Administrative Agent and meeting the requirements of the law of the jurisdiction
in which such mortgage or deed of trust is to be recorded. In the case of
property located in the Commonwealth of Puerto Rico, each such Mortgage shall
secure a mortgage note that shall be pledged to the Administrative Agent for the
benefit of the Secured Parties pursuant to a mortgage note pledge agreement, and
the term "Mortgage" shall include each such mortgage note and mortgage note
pledge agreement.
"Multiemployer Plan": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
18
"NAIC": the National Association of Insurance Commissioners or any
successor thereto, or in the absence of the National Association of Insurance
Commissioners or such successor, any other association, agency or other
organization performing advisory, coordination or other like functions among
insurance departments, insurance commissioners and similar Governmental
Authorities of the various states of the United States towards the promotion of
uniformity in the practices of such Governmental Authorities.
"NAMM": as defined in the preamble to this Agreement.
"NAMM Group": the collective reference to PrimeCare, North American
Medical Management California, Inc., a Tennessee corporation, NAMM Illinois,
Inc., a Delaware corporation, and their Subsidiaries.
"NAMM Purchase Agreement": the Stock Purchase Agreement by and among
Holdings and Aveta Health, Inc. dated as of the Closing Date.
"Net Cash Proceeds": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or by the Disposition of any non-cash consideration received in
connection therewith or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of attorneys' fees, accountants' fees, investment
banking fees, amounts required to be applied to the repayment of Indebtedness
secured by a Lien expressly permitted hereunder on any asset that is the subject
of such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of Capital Stock, any capital contribution or any incurrence of
Indebtedness, the cash proceeds received from such issuance, contribution or
incurrence, net of attorneys' fees, investment banking fees, accountants' fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.
"New Term Commitment": as to any Lender, the obligation of such
Lender, if any, to make a New Term Loan to the Borrowers hereunder in a
principal amount not to exceed the amount set forth under the heading "New Term
Commitment" under such Lender's name on such Lender's Addendum. The original
aggregate amount of the New Term Commitments is $28,680,000.
"New Term Lender": each Lender that has a New Term Commitment or that
holds a New Term Loan.
"New Term Loan": as defined in Section 2.1.
"New Term Percentage": as to any New Term Lender at any time, the
percentage which such Lender's New Term Commitment then constitutes of the
aggregate New Term Commitments (or, at any time after the Closing Date, the
percentage which the aggregate
19
principal amount of such Lender's New Term Loans then outstanding constitutes of
the aggregate principal amount of the New Term Loans then outstanding).
"Non-Excluded Taxes": as defined in Section 4.10(a).
"Non-U.S. Lender": as defined in Section 4.10(d).
"Notes": the collective reference to any promissory note evidencing
Loans.
"Obligations": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligations
and interest accruing after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
either Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and Reimbursement Obligations
and all other obligations and liabilities of the Borrowers to any Agent or to
any Lender (or, in the case of Specified Hedge Agreements, any Qualified
Counterparty or Subordinated Qualified Counterparty), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Specified Hedge
Agreement or any other document made, delivered or given in connection herewith
or therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including all fees, charges and
disbursements of counsel to any Agent or to any Lender that are required to be
paid by the Borrowers pursuant hereto) or otherwise; provided that any release
of Collateral or Guarantors effected in the manner permitted by this Agreement
shall not require the consent of holders of obligations under Specified Hedge
Agreements.
"Operating Agreement": the Second Amended and Restated Operating
Agreement of Holdings dated as of the Closing Date.
"Original Closing Date": as defined in the recitals to this Agreement.
"Original Term Lender": each Lender that holds an Original Term Loan.
"Original Term Loan": as defined in the recitals to this Agreement.
"Original Term Percentage": as to any Original Term Lender at any
time, the percentage which the aggregate principal amount of such Lender's
Original Term Loans then outstanding constitutes of the aggregate principal
amount of the Original Term Loans then outstanding.
"Original Transactions": the collective reference to the following
transactions entered into by Holdings on the Original Closing Date pursuant to
which (a) Holdings purchased all of the outstanding capital stock of NAMM for
consideration consisting of a promissory note in an amount equal to $95,756,000,
financed in part by an issuance of pay-in-kind subordinated notes issued by
Holdings in an aggregate principal amount equal to $30,500,000 (the
"Subordinated Notes"); (b) MMM refinanced the then existing senior secured
credit facilities of MMM and repaid all the other outstanding indebtedness of
MMM in an aggregate amount of approximately $150,700,000; (c) MMM Healthcare
Inc. ("MMM Healthcare") paid a dividend to
20
MMM for the purpose of financing a dividend by MMM to Holdings and, in turn, by
Holdings to the Sponsors, in each case in an aggregate amount up to
$193,000,000; and (d) MMM paid an earn-out payment owed to the prior owners of
the equity of MMM in an amount equal to $37,100,000.
"Other Taxes": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"Participant": as defined in Section 11.6(c).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"Permitted Acquisition": as defined in Section 8.8(h).
"Permitted Investors": the collective reference to the Sponsors and
their Control Investment Affiliates.
"Permitted Subordinated Seller Indebtedness": Indebtedness in an
aggregate principal amount not to exceed $50,000,000 incurred in connection with
a Permitted Acquisition that (a) is issued by Holdings or either or both of the
Borrowers to any seller in connection with such Permitted Acquisition; provided
that any Permitted Subordinated Seller Indebtedness issued to either or both of
the Borrowers shall be apportioned to NAMM and MMM in a manner acceptable to the
Administrative Agent, (b) matures no earlier than, and does not require any
scheduled principal payments prior to February 22, 2012, (c) is, together with
any Guarantees thereof, subordinated to the Obligations on terms satisfactory to
the Administrative Agent, (d) does not include any mandatory prepayment
provisions (including any rights of the holder to require the repayment or
prepayment of such Indebtedness) and (e) otherwise has terms and conditions that
are satisfactory to the Administrative Agent.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"Plan": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which any Loan Party or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Pricing Grid": the table set forth below.
21
Applicable Margin Applicable Margin
Consolidated Leverage Ratio for Eurodollar Loans for Base Rate Loans
--------------------------- -------------------- -------------------
Greater than or equal to
1.75 to 1.00 2.25% 1.25%
Less than 1.75 to 1.00 2.00% 1.00%
For the purposes of the Pricing Grid, changes in the Applicable Margin
resulting from changes in the Consolidated Leverage Ratio shall become effective
on the date (the "Adjustment Date") that is three Business Days after the date
on which financial statements are delivered to the Lenders pursuant to Section
7.1 and shall remain in effect until the next change to be effected pursuant to
this paragraph. If any financial statements referred to above are not delivered
within the time periods specified in Section 7.1, then, until the date that is
three Business Days after the date on which such financial statements are
delivered, the highest rate set forth in each column of the Pricing Grid shall
apply. In addition, at all times while an Event of Default shall have occurred
and be continuing, the highest rate set forth in each column of the Pricing Grid
shall apply. Each determination of the Consolidated Leverage Ratio pursuant to
the Pricing Grid shall be made in a manner consistent with the determination
thereof pursuant to Section 8.1.
"PrimeCare": PrimeCare Medical Network, Inc., a California
corporation.
"Pro Forma Balance Sheet": as defined in Section 5.1(a).
"Pro Forma Income Statement": as defined in Section 5.1(a).
"Projections": as defined in Section 7.2(c).
"Properties": as defined in Section 5.17(a).
"Property": any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock.
"Qualified Counterparty": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender, an Affiliate of a Lender, an Agent or
an Affiliate of an Agent; provided that, in the event a counterparty to a
Specified Hedge Agreement at the time such Specified Hedge Agreement was entered
into was a Qualified Counterparty, such counterparty shall constitute a
Qualified Counterparty hereunder and under the other Loan Documents. It being
understood that for purposes of determining whether a counterparty to a
Specified Hedge Agreement is a Qualified Counterparty, in the event any
Specified Hedge Agreement is assigned to a Lender, an Affiliate of a Lender, an
Agent or an Affiliate of an Agent, such Specified Hedge Agreement shall be
deemed to be entered into as of the date of such assignment.
22
"Reaffirmation Agreement": a Reaffirmation Agreement, substantially in
the form of Exhibit I.
"Recovery Event": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating to
any asset of any Group Member.
"Reference Lender": The Bank of New York.
"Refunded Swingline Loans": as defined in Section 3.4(b).
"Refunding Date": as defined in Section 3.4(c).
"Register": as defined in Section 11.6(b).
"Regulation U": Regulation U of the Board as in effect from time to
time.
"Reimbursement Obligation": with respect to a Borrower, the obligation
of such Borrower to reimburse the L/C Lender pursuant to Section 3.11 for
amounts drawn under Letters of Credit issued at the request of such Borrower.
"Reinvestment Deferred Amount": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by any Group Member in
connection therewith that are not applied to prepay the Term Loans or reduce the
Revolving Commitments pursuant to Section 4.2(b) as a result of the delivery of
a Reinvestment Notice.
"Reinvestment Event": any Asset Sale or Recovery Event in respect of
which either Borrower has delivered a Reinvestment Notice.
"Reinvestment Notice": a written notice executed by a Responsible
Officer of either Borrower stating that no Event of Default has occurred and is
continuing and that the Borrowers (directly or indirectly through a Subsidiary)
intend and expect to use all or a specified portion of the Net Cash Proceeds of
an Asset Sale or Recovery Event to acquire or repair assets useful in its
business.
"Reinvestment Prepayment Amount": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire or repair
assets useful in such Borrower's business.
"Reinvestment Prepayment Date": with respect to any Reinvestment
Event, the earlier of (a) the date occurring one year after such Reinvestment
Event and (b) the date on which either Borrower shall have determined not to, or
shall have otherwise ceased to, acquire or repair assets useful in such
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"Reorganization": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
23
"Reportable Event": any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived by the PBGC under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of
PBGC Reg. Section 4043.
"Required Lenders": at any time, the holders of more than 50% of the
sum of (a) the aggregate unpaid principal amount of the Term Loans then
outstanding (and prior to the Closing Date, New Term Commitments, if any) and
(b) the Total Revolving Commitments then in effect or, if the Revolving
Commitments have been terminated, the Total Revolving Extensions of Credit then
outstanding.
"Requirement of Law": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Requisite Statutory Capital": (a) with respect to MMM Healthcare, the
sum of (i) $3,000,000 and (ii) the minimum amount of net capital required to be
maintained by it under applicable law and regulation and (b) for any other
Licensed Subsidiary, the minimum amount of net capital required to be maintained
by such Licensed Subsidiary under applicable law and regulations.
"Responsible Officer": the chief executive officer, president or chief
financial officer of Holdings or either Borrower, but in any event, with respect
to financial matters, the chief financial officer of Holdings or either
Borrower, as applicable.
"Restricted Payments": as defined in Section 8.6.
"Revolving Commitment": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Swingline Loans and
Letters of Credit in an aggregate principal and/or face amount not to exceed the
amount set forth under the heading "Revolving Commitment" under such Lender's
name on such Lender's Addendum or in the Assignment and Assumption pursuant to
which such Lender became a party hereto, as the same may be changed from time to
time pursuant to the terms hereof. The original amount of the Total Revolving
Commitments on the Closing Date is $20,000,000.
"Revolving Commitment Period": the period from and including the
Closing Date to the Revolving Termination Date.
"Revolving Extensions of Credit": as to any Revolving Lender at any
time, an amount equal to the sum of (a) the aggregate principal amount of all
Revolving Loans held by such Lender then outstanding, (b) such Lender's
Revolving Percentage of the L/C Obligations then outstanding and (c) such
Lender's Revolving Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
"Revolving Lender": each Lender that has a Revolving Commitment or
that holds Revolving Loans.
24
"Revolving Loans": as defined in Section 3.1(a).
"Revolving Percentage": as to any Revolving Lender at any time, the
percentage which such Lender's Revolving Commitment then constitutes of the
Total Revolving Commitments (or, at any time after the Revolving Commitments
shall have expired or terminated, the percentage which the aggregate principal
amount of such Lender's Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding).
"Revolving Termination Date": August 23, 2010.
"SEC": the Securities and Exchange Commission, any successor thereto
and any analogous Governmental Authority.
"Secured Parties": the collective reference to the Lenders, the
Administrative Agent, the Qualified Counterparties, the Issuing Lender, the L/C
Lender and the Swingline Lender.
"Security Documents": the collective reference to (i) the Guarantee
and Collateral Agreement, (ii) the Control Agreements, (iii) the Mortgages and
(iv) all other security documents hereafter delivered to the Administrative
Agent granting a Lien on any property of any Person to secure the obligations
and liabilities of any Loan Party to any Secured Party under any Loan Document
or Specified Hedge Agreement.
"Single Employer Plan": any Plan that is covered by Title IV of ERISA,
but that is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, means that, as of any
date of determination, (a) the amount of the "present fair saleable value" of
the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise", as of such date, as such
quoted terms are determined in accordance with applicable federal and state laws
governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater
than the amount that will be required to pay the liability of such Person on its
debts as such debts become absolute and matured, (c) such Person will not have,
as of such date, an unreasonably small amount of capital with which to conduct
its business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) "debt" means liability on a "claim", and
(ii) "claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives rise
to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.
"Specified Hedge Agreement": any Hedge Agreement (a) entered into by
(i) Holdings or either Borrower and (ii) a Qualified Counterparty, as
counterparty or a Subordinated Qualified Counterparty, as counterparty and (b)
that has been designated by such Qualified Counterparty or such Subordinated
Qualified Counterparty, as applicable, and the
25
relevant Borrower, by notice to the Administrative Agent, as a Specified Hedge
Agreement; provided that Specified Hedge Agreements entered into by the
Borrowers may only relate to payments of interest under this Agreement. The
designation of any Hedge Agreement as a Specified Hedge Agreement shall not
create in favor of any Qualified Counterparty or Subordinated Qualified
Counterparty that is a party thereto any rights in connection with the
management or release of any Collateral or of the obligations of any Guarantor
under the Guarantee and Collateral Agreement, except as contemplated in Section
11.15. It being understood that any Hedge Agreement entered into prior to the
Closing Date that satisfies the requirements set forth above may be designated
as a Specified Hedge Agreement.
"Sponsors": the collective reference to the ▇▇▇▇▇▇ Group and certain
shareholders of Holdings as of the Closing Date, set forth on Schedule 1.1(c).
"▇▇▇▇▇▇ Group": the collective reference to (a) ▇▇▇▇▇▇ ▇▇▇▇▇▇, (b)
▇▇▇▇▇▇ ▇▇▇▇ and (c) each Control Investment Affiliate or Affiliate of ▇▇▇▇▇▇
▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇▇▇▇.
"Subordinated Notes": as defined in the definition of "Original
Transactions".
"Subordinated Qualified Counterparty": with respect to any Specified
Hedge Agreement, any other financial institution designated by Holdings so long
as prior to entering into such Specified Hedge Agreement such financial
institution and the Loan Parties shall execute a subordination agreement
providing for the subordination of the Liens securing such Specified Hedge
Agreement to any Liens securing the Secured Parties on terms and conditions
satisfactory to the Administrative Agent; provided that, in the event a
counterparty to a Specified Hedge Agreement at the time such Specified Hedge
Agreement was entered into was a Subordinated Qualified Counterparty, such
counterparty shall constitute a Subordinated Qualified Counterparty hereunder
and under the other Loan Documents.
"Subsidiary": as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a contingency) to
elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of Holdings.
"Subsidiary Guarantor": each Subsidiary of Holdings other than (i) any
Foreign Subsidiary with respect to any Obligations which would cause such
Foreign Subsidiary to be an Excluded Foreign Subsidiary if such Obligations were
guaranteed or secured by such Foreign Subsidiary, (ii) any Dormant Subsidiary,
(iii) any Immaterial Subsidiary and (iv) any Licensed Subsidiary to the extent
such Licensed Subsidiary is required to obtain the consent of any Governmental
Authority in connection with its execution of the Guarantee and Collateral
Agreement or any Mortgage and such Licensed Subsidiary has not obtained such
consent.
26
"Swingline Commitment": the obligation of the Swingline Lender to make
Swingline Loans pursuant to Section 3.3 in an aggregate principal amount at any
one time outstanding not to exceed $5,000,000.
"Swingline Lender": Bear ▇▇▇▇▇▇▇ Corporate Lending Inc., in its
capacity as the lender of Swingline Loans.
"Swingline Loans": as defined in Section 3.3(a).
"Swingline Participation Amount": as defined in Section 3.4(c).
"Term Lenders": the collective reference to the Original Term Lenders.
the New Term Lenders and, unless the context otherwise requires, any Incremental
Term Lender.
"Term Loans": the collective reference to the Original Term Loans, the
New Term Loans and, unless the context otherwise requires, the Incremental Term
Loans.
"Term Percentage": as to any Term Lender at any time, the percentage
which the aggregate principal amount of such Lender's Term Loans (other than
Incremental Term Loans) then outstanding constitutes of the aggregate principal
amount of the Term Loans (other than Incremental Term Loans) of all of the Term
Lenders then outstanding.
"Total Revolving Commitments": at any time, the aggregate amount of
the Revolving Commitments then in effect.
"Total Adjusted Capital": as to any Licensed Subsidiary, the sum of
(i) such Licensed Subsidiary's statutory capital and surplus as determined in
accordance with the relevant statutory accounting applicable to the annual
financial statements required to be filed by such Licensed Subsidiary and (ii)
such other items, if any, as the relevant risk based capital instructions under
applicable law may provide.
"Total Revolving Extensions of Credit": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"Transaction Documentation": as defined in Section 6.1(b)(i).
"Transferee": any Assignee or Participant.
"Type": as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.
"United States": the United States of America.
1.2. Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto, (i)
accounting terms relating to any
27
Group Member not defined in Section 1.1 and accounting terms partly defined in
Section 1.1, to the extent not defined, shall have the respective meanings given
to them under GAAP, (ii) the words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation", (iii) the word
"incur" shall be construed to mean incur, create, issue, assume, become liable
in respect of or suffer to exist (and the words "incurred" and "incurrence"
shall have correlative meanings), (iv) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock,
securities, revenues, accounts, leasehold interests and contract rights and (v)
references to agreements or other Contractual Obligations shall, unless
otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time (subject to any applicable restrictions hereunder).
(c) The words "hereof", "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP;
provided that, if either Borrower notifies the Administrative Agent that such
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrowers that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith; provided, that the Borrowers on the one hand, and the Administrative
Agent and Lenders on the other hand, agree to negotiate in good faith any
proposed amendment to eliminate or adjust for the effect of any such change in
GAAP.
SECTION 2. AMOUNT AND TERMS OF TERM COMMITMENTS
2.1. Term Commitments. (a) Subject to the terms and conditions hereof,
each New Term Lender severally agrees to make a term loan (a "New Term Loan") to
NAMM on the Closing Date in an aggregate amount not to exceed the amount of the
New Term Commitment of such Lender.
(b) Subject to the terms and conditions hereof and in the applicable
Incremental Assumption Agreement, each Incremental Term Loan Lender under an
Incremental Term Facility severally agrees to make incremental term loans (each,
an "Incremental Term Loan") to the relevant Borrower on the Increased Amount
Date for such Facility in an amount for such
28
Incremental Term Loan Lender not to exceed the amount of the Incremental Term
Commitment of such Lender in respect of such Facility.
(c) All Original Term Loans outstanding under the Existing Credit
Agreement on the Closing Date shall remain outstanding hereunder on the terms
set forth herein and, in the case of Eurodollar Loans, with the same Interest
Periods in effect.
(d) The Term Loans may from time to time be Eurodollar Loans or Base
Rate Loans, as determined by the Borrowers and notified to the Administrative
Agent in accordance with Sections 2.2 and 4.3.
2.2. Procedure for New Term Loan Borrowing. Each Borrower shall give
the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 10:00 A.M., New York City time, one Business
Day prior to the anticipated Closing Date) requesting that the New Term Lenders
make the New Term Loans on the Closing Date and specifying the amount to be
borrowed. The New Term Loans made on the Closing Date shall initially be Base
Rate Loans and, unless otherwise agreed by the Administrative Agent in its sole
discretion, no New Term Loan may be converted into or continued as a Eurodollar
Loan having an Interest Period in excess of one month prior to the date that is
60 days after the Closing Date. Upon receipt of such notice the Administrative
Agent shall promptly notify each New Term Lender thereof. Not later than 12:00
Noon, New York City time, on the Closing Date each New Term Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the New Term Loans to be made by such
Lender. The Administrative Agent shall credit the account of the relevant
Borrower on the books of such office of the Administrative Agent with the
aggregate of the amounts made available to the Administrative Agent by the New
Term Lenders in immediately available funds.
2.3. Repayment of Term Loans. (a) The Term Loans of each Term Lender
shall mature in the following consecutive quarterly installments each of which
shall be in an amount equal to (a) such Lender's Term Percentage of the Base
Term Amount multiplied by (b) the percentage set forth below opposite such
installment:
Installment Principal Amount
----------- ----------------
June 30, 2006 0.25%
September 30, 2006 0.25%
December 31, 2006 0.25%
March 31, 2007 0.25%
June 30, 2007 0.25%
September 30, 2007 0.25%
December 31, 2007 0.25%
March 31, 2008 0.25%
June 30, 2008 0.25%
September 30, 2008 0.25%
29
December 31, 2008 0.25%
March 31, 2009 0.25%
June 30, 2009 0.25%
September 30, 2009 0.25%
December 31, 2009 0.25%
March 31, 2010 0.25%
June 30, 2010 0.25%
September 30, 2010 0.25%
December 31, 2010 23.75%
March 31, 2011 23.75%
June 30, 2011 23.75%
August 22, 2011 24.25%
2.4. Incremental Term Commitments. (a) Either or both of the Borrowers
may, by written notice to the Administrative Agent from time to time, request
Incremental Term Commitments from, unless otherwise agreed by the Administrative
Agent, BSCL in an amount not to exceed the Incremental Amount; provided that any
Incremental Term Loans shall be apportioned to NAMM and MMM in a manner
acceptable to the Administrative Agent (it being understood that nothing in this
Agreement shall constitute a commitment by BSCL to provide any Incremental Term
Loans and any such Incremental Term Commitment will be subject to the sole
discretion of BSCL at the time the Borrower requests any Incremental Term Loans
pursuant to this Section). Such notice shall set forth (i) the amount of the
Incremental Term Commitments being requested (which shall be in a minimum amount
of $50,000,000 and minimum increments of $1,000,000) and (ii) the date on which
such Incremental Term Commitments are requested to become effective (an
"Increased Amount Date").
(b) The applicable Borrower or Borrowers and the relevant Incremental
Term Lender shall execute and deliver to the Administrative Agent an Incremental
Assumption Agreement and such other documentation as the Administrative Agent
shall reasonably specify to evidence the Incremental Term Commitment of such
Incremental Term Lender. Each Incremental Assumption Agreement shall specify the
terms of the Incremental Term Loans to be made thereunder; provided, that (i)
the final maturity date of any Incremental Term Loans shall be no earlier than
the maturity date of the existing Term Loans and (ii) the Incremental Term Loans
shall not have a weighted average life that is shorter than that of the
then-remaining weighted average life of the existing Term Loans. The
Administrative Agent shall promptly notify each Lender as to the effectiveness
of each Incremental Assumption Agreement. Each of the parties hereto hereby
agrees that, upon the effectiveness of any Incremental Assumption Agreement,
this Agreement shall be amended without further consent from Lenders to the
extent (but only to the extent) necessary to reflect the existence and terms of
the Incremental Term Commitments evidenced thereby as provided for in Section
11.1. Any such deemed amendment may be memorialized in writing by the
Administrative Agent with the Borrowers' consent (not to be unreasonably
withheld) and furnished to the other parties hereto.
(c) Notwithstanding the foregoing, no Incremental Term Commitment
shall become effective under this Section 2.4 unless (i) Holdings and its
Subsidiaries shall be in pro forma compliance with the financial covenants set
forth in Section 8.1, after giving effect to the incurrence of such Incremental
Term Loans and the application of the proceeds therefrom as if
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made and applied on such date, (ii) no Default or Event of Default would exist
prior to or after giving pro forma effect to the incurrence of such Incremental
Term Loans and the application of proceeds therefrom, (iii) on the date of such
effectiveness, the conditions set forth in Section 6.2 shall be satisfied, (iv)
the Facilities shall have been rated at least "B1" by ▇▇▇▇▇'▇ and at least "B"
by S&P, in each case with a stable or better outlook, and ▇▇▇▇▇'▇ and S&P shall
have confirmed that such ratings shall remain in effect after giving effect to
such Incremental Term Loans and the application of the proceeds therefrom, (v)
the Administrative Agent shall have received a certificate dated the date of
such effectiveness executed by a Responsible Officer of the relevant Borrower
stating that each of the foregoing conditions has been satisfied and setting
forth the relevant calculations demonstrating such compliance, and (vi) the
Administrative Agent shall have received legal opinions, board resolutions and
other closing certificates and documentation as required by the relevant
Incremental Assumption Agreement and consistent with those delivered on the
Closing Date under Section 6.1 and such additional documents and filings
(including amendments to the Security Documents) as the Administrative Agent may
reasonably require to assure that the Incremental Term Loans are secured by the
Collateral ratably with the existing Term Loans.
SECTION 3. AMOUNT AND TERMS OF REVOLVING COMMITMENTS
3.1. Revolving Commitments. (a) Subject to the terms and conditions
hereof, each Revolving Lender severally agrees to make revolving credit loans
("Revolving Loans") to the Borrowers from time to time during the Revolving
Commitment Period in an aggregate principal amount at any one time outstanding
which, when added to such Lender's Revolving Percentage of the sum of (i) the
L/C Obligations then outstanding and (ii) the aggregate principal amount of the
Swingline Loans then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period, each Borrower may
use the Revolving Commitments by borrowing, prepaying and reborrowing the
Revolving Loans in whole or in part, all in accordance with the terms and
conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans
or Base Rate Loans, as determined by the Borrowers and notified to the
Administrative Agent in accordance with Sections 3.2 and 4.3.
(b) Each Borrower agrees to repay all outstanding Revolving Loans made
to such Borrower on the Revolving Termination Date.
3.2. Procedure for Revolving Loan Borrowing. Each Borrower may borrow
under the Revolving Commitments during the Revolving Commitment Period on any
Business Day, provided that such Borrower shall give the Administrative Agent
irrevocable notice (which notice must be received by the Administrative Agent
prior to 12:00 Noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business
Day prior to the requested Borrowing Date, in the case of Base Rate Loans)
(provided that any such notice of a borrowing of Base Rate Loans to finance
payments required to be made pursuant to Section 3.5 may be given not later than
10:00 A.M., New York City time, on the date of the proposed borrowing),
specifying (i) the amount and Type of Revolving Loans to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of Eurodollar Loans, the
respective amounts of each such Type of Loan and the respective lengths of the
initial Interest Period therefor. Any Revolving Loans made on the Closing Date
shall initially be Base Rate Loans and, unless otherwise agreed by the
Administrative Agent in its sole discretion, no
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Revolving Loan may be made as, converted into or continued as a Eurodollar Loan
having an Interest Period in excess of one month prior to the date that is 60
days after the Closing Date. Each borrowing by a Borrower under the Revolving
Commitments shall be in an amount equal to (x) in the case of Base Rate Loans,
$1,000,000 or a whole multiple thereof (or, if the then aggregate Available
Revolving Commitments are less than $1,000,000, such lesser amount) and (y) in
the case of Eurodollar Loans, $1,000,000 or a whole multiple of $1,000,000 in
excess thereof; provided, that (x) the Swingline Lender may request, on behalf
of the relevant Borrower, borrowings under the Revolving Commitments that are
Base Rate Loans in other amounts pursuant to Section 3.4 and (y) borrowings of
Base Rate Loans pursuant to Section 3.11 shall not be subject to the foregoing
minimum amounts. Upon receipt of any such notice from either Borrower, the
Administrative Agent shall promptly notify each Revolving Lender thereof. Each
Revolving Lender will make the amount of its pro rata share of each borrowing
available to the Administrative Agent for the account of the relevant Borrower
at the Funding Office prior to 12:00 Noon, New York City time, on the Borrowing
Date requested by such Borrower in funds immediately available to the
Administrative Agent. Such borrowing will then be made available to the relevant
Borrower by the Administrative Agent crediting the account of such Borrower on
the books of such office with the aggregate of the amounts made available to the
Administrative Agent by the Revolving Lenders and in like funds as received by
the Administrative Agent.
3.3. Swingline Commitment. (a) Subject to the terms and conditions
hereof, the Swingline Lender agrees to make a portion of the credit otherwise
available to the Borrowers under the Revolving Commitments from time to time
during the Revolving Commitment Period by making swing line loans ("Swingline
Loans") to the Borrowers; provided that (i) the aggregate principal amount of
Swingline Loans outstanding at any time shall not exceed the Swingline
Commitment then in effect (notwithstanding that the Swingline Loans outstanding
at any time, when aggregated with the Swingline Lender's other outstanding
Revolving Loans hereunder, may exceed the Swingline Commitment then in effect)
and (ii) the Borrowers shall not request, and the Swingline Lender shall not
make, any Swingline Loan if, after giving effect to the making of such Swingline
Loan, the aggregate amount of the Available Revolving Commitments would be less
than zero. During the Revolving Commitment Period, the Borrowers may use the
Swingline Commitment by borrowing, repaying and reborrowing, all in accordance
with the terms and conditions hereof. Swingline Loans shall be Base Rate Loans
only.
(b) Each Borrower agrees to repay all outstanding Swingline Loans made
to such Borrower on the Revolving Termination Date.
3.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans.
(a) Whenever a Borrower desires that the Swingline Lender make Swingline Loans
it shall give the Swingline Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swingline
Lender not later than 1:00 P.M., New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested Borrowing
Date (which shall be a Business Day during the Revolving Commitment Period).
Each borrowing under the Swingline Commitment shall be in an amount equal to
$500,000 or a whole multiple of $100,000 in excess thereof. Not later than 3:00
P.M., New York City time, on the Borrowing Date specified in a notice in respect
of Swingline Loans, the Swingline Lender shall make available to the
Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline
Lender.
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The Administrative Agent shall make the proceeds of such Swingline Loan
available to the relevant Borrower on such Borrowing Date by depositing such
proceeds in the account of such Borrower with the Administrative Agent on such
Borrowing Date in immediately available funds.
(b) The Swingline Lender, at any time and from time to time in its
sole and absolute discretion may, on behalf of the relevant Borrower (which
hereby irrevocably directs the Swingline Lender to act on its behalf), on one
Business Day's notice given by the Swingline Lender no later than 12:00 Noon,
New York City time, request each Revolving Lender to make, and each Revolving
Lender hereby agrees to make, a Revolving Loan to such Borrower, in an amount
equal to such Revolving Lender's Revolving Percentage of the aggregate amount of
the Swingline Loans (the "Refunded Swingline Loans") outstanding on the date of
such notice, to repay the Swingline Lender. Each Revolving Lender shall make the
amount of such Revolving Loan available to the Administrative Agent at the
Funding Office in immediately available funds, not later than 10:00 A.M., New
York City time, one Business Day after the date of such notice. The proceeds of
such Revolving Loans shall be immediately made available by the Administrative
Agent to the Swingline Lender for application by the Swingline Lender to the
repayment of the Refunded Swingline Loans. Each Borrower irrevocably authorizes
the Swingline Lender to charge such Borrower's accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of the relevant Refunded Swingline Loans to the extent amounts
received from the Revolving Lenders are not sufficient to repay in full such
Refunded Swingline Loans.
(c) If prior to the time a Revolving Loan would have otherwise been
made pursuant to Section 3.4(b), one of the events described in Section 9(f)
shall have occurred and be continuing with respect to the relevant Borrower or
if for any other reason, as determined by the Swingline Lender in its sole
discretion, Revolving Loans may not be made as contemplated by Section 3.4(b),
each Revolving Lender shall, on the date such Revolving Loan was to have been
made pursuant to the notice referred to in Section 3.4(b) (the "Refunding
Date"), purchase for cash an undivided participating interest in the then
outstanding Swingline Loans by paying to the Swingline Lender an amount (the
"Swingline Participation Amount") equal to (i) such Revolving Lender's Revolving
Percentage times (ii) the sum of the aggregate principal amount of Swingline
Loans then outstanding that were to have been repaid with such Revolving Loans.
(d) Whenever, at any time after the Swingline Lender has received from
any Revolving Lender such Lender's Swingline Participation Amount, the Swingline
Lender receives any payment on account of the Swingline Loans, the Swingline
Lender will distribute to such Lender its Swingline Participation Amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded and, in the case of principal and interest payments, to reflect such
Lender's pro rata portion of such payment if such payment is not sufficient to
pay the principal of and interest on all Swingline Loans then due); provided,
however, that in the event that such payment received by the Swingline Lender is
required to be returned, such Revolving Lender will return to the Swingline
Lender any portion thereof previously distributed to it by the Swingline Lender.
(e) Each Revolving Lender's obligation to make the Loans referred to
in Section 3.4(b) and to purchase participating interests pursuant to Section
3.4(c) shall be absolute
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and unconditional and shall not be affected by any circumstance, including (i)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender or the Borrowers may have against the Swingline Lender, the Borrowers or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 6; (iii) any adverse change in the condition
(financial or otherwise) of either Borrower; (iv) any breach of this Agreement
or any other Loan Document by either Borrower, any other Loan Party or any other
Revolving Lender; or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing.
3.5. Commitment Fees, etc. (a) The Borrowers agree to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee
for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the average
daily amount of the Available Revolving Commitment of such Lender during the
period for which payment is made, payable quarterly in arrears on the last day
of each March, June, September and December and on the Revolving Termination
Date, commencing on the first of such dates to occur after the date hereof.
(b) Each Borrower agrees to pay to the Administrative Agent and the
Lead Arranger the fees in the amounts and on the dates previously agreed to in
writing by Holdings, the Borrowers, the Administrative Agent and the Lead
Arranger.
3.6. Termination or Reduction of Revolving Commitments. The Borrowers
shall have the right, upon not less than three Business Days' notice to the
Administrative Agent, to terminate the Revolving Commitments or, from time to
time, to reduce the amount of the Revolving Commitments; provided that no such
termination or reduction of Revolving Commitments shall be permitted if, after
giving effect thereto and to any prepayments of the Revolving Loans and
Swingline Loans made on the effective date thereof, the Total Revolving
Extensions of Credit would exceed the Total Revolving Commitments. Any such
reduction shall be in an amount equal to $1,000,000, or a whole multiple
thereof, and shall reduce permanently the Revolving Commitments then in effect.
3.7. L/C Commitment. (a) Subject to the terms and conditions hereof,
the L/C Lender, in reliance on the agreements of the other Revolving Lenders set
forth in Section 3.10(a), agrees to cause the Issuing Lender to issue letters of
credit ("Letters of Credit") for the account of the relevant Borrower on any
Business Day during the Revolving Commitment Period in such form as may be
approved from time to time by the L/C Lender and the Issuing Lender; provided
that the L/C Lender shall have no obligation to cause any Letter of Credit to be
issued if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the aggregate amount of the Available
Revolving Commitments would be less than zero. Each Letter of Credit shall (i)
be denominated in Dollars, (ii) have a face amount of at least $100,000 (unless
otherwise agreed by the L/C Lender and the Issuing Lender) and (iii) expire no
later than the earlier of (x) the first anniversary of its date of issuance and
(y) the date that is five Business Days prior to the Revolving Termination Date,
provided, that any Letter of Credit with a one-year term may provide for the
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above).
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(b) The L/C Lender shall not at any time be obligated to cause any
Letter of Credit to be issued hereunder if such issuance would conflict with, or
cause the L/C Lender, the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.
3.8. Procedure for Issuance of Letter of Credit. Each Borrower may
from time to time request that the L/C Lender cause a Letter of Credit to be
issued by delivering to the L/C Lender and the Issuing Lender at its address for
notices specified herein an Application therefor (which application may specify
the requirements of any applicable Governmental Authority), completed to the
satisfaction of the L/C Lender and the Issuing Lender, and such other
certificates, documents and other papers and information as the L/C Lender or
the Issuing Lender may request. Upon receipt of any Application, the L/C Lender
will notify the Administrative Agent of the amount, the beneficiary and the
requested expiration of the requested Letter of Credit, and upon receipt of
confirmation from the Administrative Agent that after giving effect to the
requested issuance, the Available Revolving Commitments would not be less than
zero, the L/C Lender will cause such Application and the certificates, documents
and other papers and information delivered to it in connection therewith to be
processed by the L/C Lender and the Issuing Lender in accordance with its
customary procedures and shall promptly cause the Letter of Credit requested
thereby to be issued (but in no event shall the L/C Lender be required to cause
any Letter of Credit to be issued earlier than three Business Days after its
receipt of the Application therefor and all such other certificates, documents
and other papers and information relating thereto) by causing the original of
such Letter of Credit to be issued to the beneficiary thereof or as otherwise
may be agreed to by the L/C Lender, the Issuing Lender and the relevant
Borrower. The L/C Lender shall furnish a copy of such Letter of Credit to the
relevant Borrower (with a copy to the Administrative Agent) promptly following
the issuance thereof. The L/C Lender shall promptly furnish to the
Administrative Agent, which shall in turn promptly furnish to the Lenders,
notice of the issuance of each Letter of Credit (including the amount thereof).
3.9. Fees and Other Charges. (a) Each Borrower agrees to pay a fee on
all outstanding Letters of Credit issued at its request at a per annum rate
equal to the Applicable Margin then in effect with respect to Eurodollar Loans
under the Revolving Facility, shared ratably among the Revolving Lenders and
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date. In addition, each Borrower agrees to pay to the L/C Lender for its own
account a fronting fee on the undrawn and unexpired amount of each Letter of
Credit issued at its request as agreed by such Borrower and the L/C Lender,
payable quarterly in arrears on each L/C Fee Payment Date after the issuance
date.
(b) In addition to the foregoing fees, each Borrower agrees to pay or
reimburse the L/C Lender and the Issuing Lender, as the case may be, for such
normal and customary costs and expenses as are incurred or charged by the L/C
Lender and the Issuing Lender, as the case may be, in issuing, negotiating,
effecting payment under, amending or otherwise administering any Letter of
Credit.
3.10. L/C Participations. (a) The L/C Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the L/C Lender
to cause Letters of Credit to be issued hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
the L/C Lender, on the terms and conditions set forth below, for such
35
L/C Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Percentage in the L/C Lender's obligations and rights
under and in respect of each Letter of Credit issued hereunder and the amount of
each draft paid by the Issuing Lender thereunder (which shall include the L/C
Lender's obligation to reimburse such applicable Issuing Lender for the amount
of such drawing). Each L/C Participant unconditionally and irrevocably agrees
with the L/C Lender that, if a draft is paid under any Letter of Credit for
which the L/C Lender is not reimbursed in full by the relevant Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Administrative Agent upon demand of the L/C Lender an amount equal to such
L/C Participant's Revolving Percentage of the amount of such draft, or any part
thereof, that is not so reimbursed. The Administrative Agent shall promptly
forward such amounts to the L/C Lender.
(b) If any amount required to be paid by any L/C Participant to the
Administrative Agent for the account of the L/C Lender pursuant to Section
3.10(a) in respect of any unreimbursed portion of any payment made by the L/C
Lender to the Issuing Lender under any Letter of Credit is paid to the
Administrative Agent for the account of the L/C Lender within three Business
Days after the date such payment is due, such L/C Participant shall pay to the
Administrative Agent for the account of the L/C Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to the L/C
Lender, times (iii) a fraction the numerator of which is the number of days that
elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any L/C Participant pursuant to Section 3.10(a) is
not made available to the Administrative Agent for the account of the L/C Lender
by such L/C Participant within three Business Days after the date such payment
is due, the L/C Lender shall be entitled to recover from such L/C Participant,
on demand, such amount with interest thereon calculated from such due date at
the rate per annum applicable to Base Rate Loans under the Revolving Facility. A
certificate of the L/C Lender submitted to any L/C Participant with respect to
any amounts owing under this Section shall be conclusive in the absence of
manifest error.
(c) Whenever, at any time after the L/C Lender has made payment under
any Letter of Credit and has received from any L/C Participant its pro rata
share of such payment in accordance with Section 3.10(a), the Administrative
Agent or the L/C Lender receives any payment related to such Letter of Credit
(whether directly from the relevant Borrower or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest on
account thereof, the Administrative Agent or the L/C Lender, as the case may be,
will distribute to such L/C Participant its pro rata share thereof; provided,
however, that in the event that any such payment received by Administrative
Agent or L/C Lender, as the case may be, shall be required to be returned by the
Administrative Agent or L/C Lender, such L/C Participant shall return to the
Administrative Agent for the account of the L/C Lender the portion thereof
previously distributed by the Administrative Agent or the L/C Lender, as the
case may be, to it.
3.11. Reimbursement Obligation of the Borrower. Each Borrower agrees
to reimburse the L/C Lender on the Business Day next succeeding the Business Day
on which the L/C Lender notifies such Borrower of the date and amount of a draft
presented under any Letter of Credit and paid by the Issuing Lender for the
amount of (a) such draft so paid and (b) any
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taxes, fees, charges or other costs or expenses incurred by the L/C Lender or
the Issuing Bank in connection with such payment. Each such payment shall be
made to the L/C Lender at its address for notices referred to herein in Dollars
and in immediately available funds. Interest shall be payable on any such
amounts from the date on which the relevant draft is paid until payment in full
at the rate set forth in (i) until the Business Day next succeeding the date of
the relevant notice, Section 4.5(b) and (ii) thereafter, Section 4.5(c). Each
drawing under any Letter of Credit shall (unless (i) the relevant Borrower shall
have notified the Administrative Agent, the L/C Lender and the Issuing Lender
prior to 1:00 P.M., New York City time, on the date such drawing is honored that
such Borrower intends to reimburse the L/C Lender for the amount of such payment
with funds other than the proceeds of Loans or (ii) an event of the type
described in clause (i) or (ii) of Section 9(f) shall have occurred and be
continuing with respect to either Borrower, in which case the procedures
specified in Section 3.10 for funding by L/C Participants shall apply)
constitute a request by the relevant Borrower to the Administrative Agent for a
borrowing pursuant to Section 3.2 of Base Rate Loans (or, at the option of the
Administrative Agent and the Swingline Lender in their sole discretion, a
borrowing pursuant to Section 3.4 of Swingline Loans) in the amount of such
drawing. The Borrowing Date with respect to such borrowing shall be the first
date on which a borrowing of Revolving Loans (or, if applicable, Swingline
Loans) could be made, pursuant to Section 3.2 or, if applicable, Section 3.4),
if the Administrative Agent had received a notice of such borrowing at the time
the Administrative Agent receives notice from the L/C Lender of such drawing
under such Letter of Credit.
3.12. Obligations Absolute. Each Borrower's obligations under Section
3.11 shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that such
Borrower may have or have had against the L/C Lender and the Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. Each Borrower also agrees
with the L/C Lender that the L/C Lender shall not be responsible for, and such
Borrower's Reimbursement Obligations under Section 3.11 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among either Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of either Borrower
against any beneficiary of such Letter of Credit or any such transferee. The L/C
Lender shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. Each Borrower agrees that any action taken or omitted by the
L/C Lender or the Issuing Lender under or in connection with any Letter of
Credit or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards of care
specified in the Uniform Commercial Code of the State of New York, shall be
binding on such Borrower and shall not result in any liability of the L/C Lender
or the Issuing Lender to such Borrower. The Issuing Lender shall not have any
liability to the Borrowers, the Administrative Agent or the Lenders in respect
of any Letters of Credit issued by it or any Letters of Credit requested to be
issued by it, nor shall the Issuing Lender owe any duty to any Person, or be
deemed to have agreed, to issue any Letters of Credit (it being understood that
the Issuing Lender shall issue Letters of Credit, if at all, pursuant to
separate contractual arrangements with, and
37
solely for the benefit of, the L/C Lender and any duties, obligations or
liabilities of the Issuing Lender shall be only those set forth in such separate
contractual arrangements).
3.13. Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the L/C Lender shall promptly notify the
relevant Borrower of the date and amount thereof. The responsibility of the L/C
Lender to the Borrowers in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to causing the Issuing Lender
to determine that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.14. Applications. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
4.1. Optional Prepayments. (a) Each Borrower may at any time and from
time to time prepay its Loans, in whole or in part, without premium or penalty,
upon irrevocable notice delivered to the Administrative Agent no later than
11:00 A.M., New York City time, two Business Days prior thereto, in the case of
Eurodollar Loans, and no later than 11:00 A.M., New York City time, one Business
Day prior thereto, in the case of Base Rate Loans, which notice shall specify
the date and amount of prepayment and whether the prepayment is of Eurodollar
Loans or Base Rate Loans; provided, that if a Eurodollar Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, such
Borrower shall also pay any amounts owing pursuant to Section 4.11. Upon receipt
of any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein, together with (except in
the case of Revolving Loans that are Base Rate Loans and Swingline Loans)
accrued interest to such date on the amount prepaid. Partial prepayments of Term
Loans and Revolving Loans shall be in an aggregate principal amount of
$1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans
shall be in an aggregate principal amount of $100,000 or a whole multiple
thereof.
4.2. Mandatory Prepayments and Revolving Commitment Reductions. (a) If
any Capital Stock or Indebtedness shall be issued or incurred by any Group
Member (other than Excluded Indebtedness and any Capital Stock issued to any
Group Member, and any issuance of Capital Stock by Holdings, to the extent the
Net Cash Proceeds thereof are used to finance a Permitted Acquisition) or any
capital contribution is made to any Group Member (other than a capital
contribution by any Group Member), an amount equal to 100% (or, in the case of
any such issuance of Capital Stock or capital contribution, 50%) of the Net Cash
Proceeds (in the case of a issuance of Capital Stock, Net Cash Proceeds less any
amount paid to the holders of any Permitted Subordinated Seller Indebtedness)
thereof shall be applied on the date of such issuance, incurrence or
contribution toward the prepayment of the Term Loans as set forth in
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Section 4.2(d); provided, that, notwithstanding the foregoing, it is understood
that pursuant to the terms of the First Amendment, only $148,000,000 of Net Cash
Proceeds of the Equity Offering was required to be applied on the date of
receipt thereof toward the prepayment of the Term Loans as set forth in Section
4.2(d)).
(b) If on any date any Group Member shall receive Net Cash Proceeds
from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall
be delivered in respect thereof, the Borrowers shall cause an amount equal to
such Net Cash Proceeds to be applied on such date toward the prepayment of the
Term Loans as set forth in Section 4.2(d); provided, that, notwithstanding the
foregoing, (i) the aggregate Net Cash Proceeds of Asset Sales and Recovery
Events that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $10,000,000 in any fiscal year of Holdings
and (ii) on each Reinvestment Prepayment Date, an amount equal to the
Reinvestment Prepayment Amount with respect to the relevant Reinvestment Event
shall be applied toward the prepayment of the Term Loans as set forth in Section
4.2(d).
(c) If, for any fiscal year of Holdings commencing with the fiscal
year ending December 31, 2006, there shall be Excess Cash Flow, the Borrowers
shall, on the relevant Excess Cash Flow Application Date, apply the ECF
Percentage of such Excess Cash Flow toward the prepayment of the Term Loans as
set forth in Section 4.2(d). Each such prepayment and commitment reduction shall
be made on a date (an "Excess Cash Flow Application Date") no later than five
days after the earlier of (i) the date on which the financial statements of
Holdings referred to in Section 7.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the Lenders and
(ii) the date such financial statements are actually delivered.
(d) Amounts to be applied in connection with prepayments made pursuant
to Section 4.2 shall be applied to the prepayment of the Term Loans in the
manner provided in Section 4.8(b). The application of any prepayment pursuant to
Section 4.2 shall be made, first, to Base Rate Loans and, second, to Eurodollar
Loans. Each prepayment of the Loans under Section 4.2 shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.
4.3. Conversion and Continuation Options. (a) Each Borrower may elect
from time to time to convert its Eurodollar Loans to Base Rate Loans by giving
the Administrative Agent prior irrevocable notice of such election no later than
11:00 A.M., New York City time, on the Business Day preceding the proposed
conversion date, provided that any such conversion of Eurodollar Loans may only
be made on the last day of an Interest Period with respect thereto. Each
Borrower may elect from time to time to convert its Base Rate Loans to
Eurodollar Loans by giving the Administrative Agent prior irrevocable notice of
such election no later than 11:00 A.M., New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify
the length of the initial Interest Period therefor), provided that no Base Rate
Loan under a particular Facility may be converted into a Eurodollar Loan when
any Event of Default has occurred and is continuing and the Administrative Agent
or the Majority Facility Lenders in respect of such Facility have determined in
its or their sole discretion not to permit such conversions. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.
39
(b) Any Eurodollar Loan may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the relevant
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to such
Loans, provided that no Eurodollar Loan under a particular Facility may be
continued as such when any Event of Default has occurred and is continuing and
the Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion not to permit such
continuations, and provided, further, that if the relevant Borrower shall fail
to give any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso such Loans shall
be automatically converted to Base Rate Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.
4.4. Limitations on Eurodollar Tranches. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
Eurodollar Loans hereunder and all selections of Interest Periods hereunder
shall be in such amounts and be made pursuant to such elections so that, (a)
after giving effect thereto, the aggregate principal amount of the Eurodollar
Loans comprising each Eurodollar Tranche shall be equal to $5,000,000 or a whole
multiple of $1,000,000 in excess thereof and (b) no more than ten Eurodollar
Tranches shall be outstanding at any one time.
4.5. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at a
rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per annum equal
to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due subject to any grace period
provided herein (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum equal to (x) in the
case of the Loans, the rate that would otherwise be applicable thereto pursuant
to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to Base Rate Loans under the
Revolving Facility plus 2%, and (ii) if all or a portion of any interest payable
on any Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do not
relate to a particular Facility, the rate then applicable to Base Rate Loans
under the Revolving Facility plus 2%), in each case, with respect to clauses (i)
and (ii) above, from the date of such non-payment until such amount is paid in
full (as well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
40
4.6. Computation of Interest and Fees. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the relevant Borrower and the relevant Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Loan
resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the relevant Borrower and the relevant Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrowers and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of either Borrower, deliver to such
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 4.5(a).
4.7. Inability to Determine Interest Rate. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined in good faith
(which determination shall be conclusive and binding upon the Borrowers) that,
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lenders (as conclusively
certified by such Lenders) of making or maintaining their affected Loans during
such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrowers and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent (which withdrawal shall occur promptly following the
termination of any such circumstances), no further Eurodollar Loans under the
relevant Facility shall be made or continued as such, nor shall either Borrower
have the right to convert Loans under the relevant Facility to Eurodollar Loans.
4.8. Pro Rata Treatment and Payments. (a) Each borrowing by each
Borrower from the Lenders hereunder, each payment by each Borrower on account of
any commitment fee and any reduction of the Revolving Commitments of the Lenders
shall be made pro rata
41
according to the respective Original Term Percentages, New Term Percentages,
Incremental Term Percentages or Revolving Percentages, as the case may be, of
the relevant Lenders.
(b) Each payment (including each prepayment) by each Borrower on
account of principal of and interest on the Term Loans shall be made pro rata
according to the respective outstanding principal amounts of the Original Term
Loans, New Term Loans and Incremental Term Loans of such Borrower then held by
the Term Lenders and shall be applied pro rata to the Original Term Loans, New
Term Loans and Incremental Term Loans of each Borrower to the remaining
installments thereof; provided that to the extent any mandatory prepayment of
Term Loans required pursuant to Section 4.2 would require the payment of a
dividend by MMM in order to finance such payment which would trigger the payment
of taxes by the recipient of such dividend, MMM may request, and the
Administrative Agent may consent in its discretion, that such prepayment not be
required to be applied ratably to the Term Loans of each Borrower. Amounts
prepaid on account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by a Borrower on account
of principal of and interest on the Revolving Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving Loans
then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrowers
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 12:00 Noon,
New York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
relevant Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the relevant
Borrower a corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the greater of (i) the Federal Funds
Effective Rate and (ii) a rate determined by the Administrative Agent in
accordance with banking industry rules on interbank compensation for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts
42
owing under this paragraph shall be conclusive in the absence of manifest error.
If such Lender's share of such borrowing is not made available to the
Administrative Agent by such Lender within three Business Days of such Borrowing
Date, the Administrative Agent shall also be entitled to recover such amount
with interest thereon at the rate per annum applicable to Base Rate Loans under
the relevant Facility, on demand, from the relevant Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by a Borrower prior to the date of any payment due to be made by such
Borrower hereunder that such Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that such Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective pro rata shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the relevant Borrower within three Business
Days after such due date, the Administrative Agent shall be entitled to recover,
on demand, from each Lender to which any amount which was made available
pursuant to the preceding sentence, such amount with interest thereon at the
rate per annum equal to the daily average Federal Funds Effective Rate. Nothing
herein shall be deemed to limit the rights of the Administrative Agent or any
Lender against either Borrower.
(g) The Administrative Agent may elect, in its sole discretion, to
reallocate Original Term Loans and New Term Loans between the Lenders for
administrative purposes.
4.9. Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority made subsequent to
the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application
or any Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for Non-Excluded
Taxes covered by Section 4.10 and changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held
by, deposits or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender that is not otherwise included in
the determination of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the relevant Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If any Lender
becomes
43
entitled to claim any additional amounts pursuant to this paragraph, it shall
promptly notify the Borrowers (with a copy to the Administrative Agent) of the
event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrowers (with a copy to the Administrative
Agent) of a written request therefor, the Borrowers agree to pay to such Lender
such additional amount or amounts as will compensate such Lender or such
corporation for such reduction.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrowers (with a copy to the
Administrative Agent) shall be prima facie evidence of the amount or amounts
thereof. Notwithstanding anything to the contrary in this Section, neither
Borrower shall be required to compensate a Lender pursuant to this Section for
any amounts incurred more than three months prior to the date that such Lender
notifies such Borrower of such Lender's intention to claim compensation
therefor; provided that, if the circumstances giving rise to such claim have a
retroactive effect, then such three-month period shall be extended to include
the period of such retroactive effect. The obligations of the Borrowers pursuant
to this Section shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.
4.10. Taxes. (a) All payments made by the Borrowers under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, net interest income, stamp
or other taxes, licenses, excises, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on any Agent
or any Lender as a result of a present or former connection between such Agent
or such Lender and the jurisdiction of the Governmental Authority imposing such
tax or any political subdivision or taxing authority thereof or therein (other
than any such connection arising solely from such Agent or such Lender having
executed, delivered or performed its obligations or received a payment under, or
enforced, this Agreement or any other Loan Document). If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") or Other Taxes are required to be withheld from any
amounts payable to any Agent or any Lender hereunder, the amounts so payable to
such Agent or such Lender shall be increased to the extent necessary to yield to
such Agent or such Lender (after payment of all Non-Excluded Taxes and Other
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, provided, however, that neither
Borrower shall be required to increase any such amounts payable to any Lender
with respect to any Non-Excluded Taxes (i) that are attributable
44
to such Lender's failure to deliver to the Borrowers the forms and documentation
described in paragraph (d) or (e) of this Section, (ii) that are United States
withholding taxes (excluding Puerto Rico withholding taxes) imposed on amounts
payable to such Lender at the time such Lender becomes a party to this
Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from such
Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph or
(iii) that are imposed on amounts payable to such Lender as a result of the
designation by such Lender of a new lending office.
(b) In addition, each Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrowers, as promptly as possible thereafter such Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Agent or Lender, as the case may be, a certified copy of an original official
receipt received by such Borrower showing payment thereof. If the Borrowers fail
to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrowers agree to indemnify the Agents
and the Lenders for any incremental taxes, interest, surcharges or penalties
that may become payable by any Agent or any Lender as a result of any such
failure.
(d) Each Lender that is not a "U.S. Person" as defined in Section
7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the Borrowers and
the Administrative Agent (or, in the case of a Participant, to the Lender from
which the related participation shall have been purchased) two copies of either
U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, and, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a statement substantially in the form of Exhibit F in addition to a
Form W-8BEN, or any subsequent versions thereof or successors thereto, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all payments by such
Borrower under this Agreement and the other Loan Documents. Each Lender that is
not a Non-U.S. Lender shall deliver to the Borrowers two copies of U.S. Internal
Revenue Service Form W-9 (or any successor form). Such forms shall be delivered
by each Lender on or before the date it becomes a party to this Agreement (or,
in the case of any Participant, on or before the date such Participant purchases
the related participation). In addition, each Lender shall deliver such forms
promptly upon the obsolescence or invalidity of any form previously delivered by
such Lender. Each Lender shall promptly notify the Borrowers at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrowers (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). A Lender shall not be
required to deliver any form pursuant to this paragraph that such Lender is not
legally able to deliver.
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which a Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to such Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by
45
applicable law or reasonably requested by such Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that such
Lender is legally entitled to complete, execute and deliver such documentation
and in such Lender's judgment such completion, execution or submission would not
materially prejudice the legal position of such Lender.
(f) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
(g) If the Administrative Agent or any Lender determines, in its sole
discretion, that it has received a refund of any Non-Excluded Taxes or Other
Taxes as to which it has been indemnified by either Borrower or with respect to
which either Borrower has paid additional amounts pursuant to this Section 4.10,
it shall pay over such refund to the applicable Borrower (but only to the extent
of indemnity payments made, or additional amounts paid, by such Borrower under
this Section 4.10 with respect to the Non-Excluded Taxes or Other Taxes giving
rise to such refund), net of all out-of-pocket expenses of the Administrative
Agent or such Lender and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that
such Borrower, upon the request of the Administrative Agent or such Lender,
agrees to repay the amount paid over to such Borrower (plus any penalties,
interest or other charges imposed by the relevant Governmental Authority) to the
Administrative Agent or such Lender in the event the Administrative Agent or
such Lender is required to repay such refund to such Governmental Authority.
This paragraph shall not be construed to require the Administrative Agent or any
Lender to make available its tax returns (or any other information relating to
its taxes which it deems confidential) to the Borrowers or any other Person.
4.11. Indemnity. Each Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by such Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after such Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by such Borrower in making any prepayment of or
conversion from Eurodollar Loans after such Borrower has given a notice thereof
in accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal to
the excess, if any, of (i) the amount of interest that would have accrued on the
amount so prepaid, or not so borrowed, converted or continued, for the period
from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the relevant Borrower by any Lender shall
be conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
46
4.12. Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 4.9 or 4.10(a)
with respect to such Lender, it will, if requested by the Borrowers, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and provided, further, that nothing in this Section shall affect
or postpone any of the obligations of either Borrower or the rights of any
Lender pursuant to Section 4.9 or 4.10(a).
4.13. Replacement of Lenders. The Borrowers shall be permitted to
replace any Lender that (a) requests reimbursement for amounts owing pursuant to
Section 4.9 or 4.10(a), (b) is a Non-Consenting Lender (as defined in Section
11.1) or (c) defaults in its obligation to make Loans hereunder, with a
replacement financial institution; provided that (i) such replacement does not
conflict with any Requirement of Law, (ii) no Event of Default shall have
occurred and be continuing at the time of such replacement, (iii) prior to any
such replacement, such Lender shall have taken no action under Section 4.12 so
as to eliminate the continued need for payment of amounts owing pursuant to
Section 4.9 or 4.10(a), (iv) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (v) the Borrowers shall be liable to such
replaced Lender under Section 4.11 if any Eurodollar Loan owing to such replaced
Lender shall be purchased other than on the last day of the Interest Period
relating thereto, (vi) the replacement financial institution, if not already a
Lender, shall be reasonably satisfactory to the Administrative Agent, (vii) the
replaced Lender shall be obligated to make such replacement in accordance with
the provisions of Section 11.6 (provided that the Borrowers shall be obligated
to pay the registration and processing fee referred to therein), (viii) until
such time as such replacement shall be consummated, the Borrowers shall pay all
additional amounts (if any) required pursuant to Section 4.9 or 4.10(a), as the
case may be, and (ix) any such replacement shall not be deemed to be a waiver of
any rights that either Borrower, the Administrative Agent or any other Lender
shall have against the replaced Lender.
4.14. Evidence of Debt. (a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing indebtedness of each
Borrower to such Lender resulting from each Loan of such Lender from time to
time, including the amounts of principal and interest payable and paid to such
Lender from time to time under this Agreement.
(b) The Administrative Agent, on behalf of the Borrowers, shall
maintain the Register pursuant to Section 11.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, the Type of such Loan and each
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) both the amount of any sum received by the Administrative
Agent hereunder from each Borrower and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 4.14(a) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of each Borrower therein recorded; provided, however, that the
failure of any Lender or the Administrative Agent to maintain the
47
Register or any such account, or any error therein, shall not in any manner
affect the obligation of each Borrower to repay (with applicable interest) the
Loans made to such Borrower by such Lender in accordance with the terms of this
Agreement.
(d) The Borrowers agree that, upon the request to the Administrative
Agent by any Lender, the Borrowers will execute and deliver to such Lender a
promissory note evidencing any Term Loans, Revolving Loans or Swingline Loans,
as the case may be, of such Lender, in a form reasonably satisfactory to the
Administrative Agent and the Borrowers.
4.15. Illegality. Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Loans as contemplated by this Agreement, (a) the commitment of such
Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and
convert Base Rate Loans to Eurodollar Loans shall forthwith be canceled and (b)
such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days of the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrowers shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 4.11.
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Agents and the Lenders to enter into this Agreement and
to make the Loans and issue or participate in the Letters of Credit, Holdings
and the Borrowers hereby jointly and severally represent and warrant to each
Agent and each Lender that:
5.1. Financial Condition. (a) (x) The unaudited pro forma consolidated
balance sheet of Holdings as at December 31, 2005 (including the notes thereto)
(the "Pro Forma Balance Sheet") and (y) the unaudited income statement of
Holdings for the fiscal year ended December 31, 2005 (the "Pro Forma Income
Statement"), copies of which have heretofore been furnished to each Lender, have
been prepared giving effect (as if such events had occurred on such date or the
first day of the relevant period, as the case may be) to (i) the consummation of
the Original Transactions, (ii) the Loans to be made on the Closing Date and the
use of proceeds thereof and (iii) the payment of fees and expenses in connection
with the foregoing. The Pro Forma Balance Sheet and the Pro Forma Income
Statement each have been prepared based on the best information available to
each Borrower as of the date of delivery thereof, and presents fairly on a pro
forma basis the estimated financial position or results of operations, as the
case may be, of Holdings and its consolidated Subsidiaries as at or for the
period ending December 31, 2005, assuming that the events specified in the
preceding sentence had actually occurred at such date or the first day of such
period.
(b) The audited consolidated balance sheets of the NAMM Group as at
December 31, 2002, December 31, 2003 and December 31, 2004, and the related
consolidated statements of income and of cash flows for the fiscal years ended
on such dates, reported on by and accompanied by an unqualified report from KPMG
LLP, present fairly the consolidated financial condition of each Borrower as at
such date, and the consolidated results of its
48
operations and its consolidated cash flows for the respective fiscal years then
ended. The audited consolidated balance sheets of MMM Healthcare as at December
31, 2004, and the related consolidated statements of income and of cash flows
for the period from January 1, 2004 through November 30, 2004 and for the period
from November 30, 2004 through December 31, 2004, reported on by and accompanied
by an unqualified report from KPMG LLP, taken together present fairly the
consolidated financial condition of MMM Healthcare as at such dates, and the
consolidated results of its operations and its consolidated cash flows for the
fiscal year then ended. The unaudited consolidated balance sheet of each
Borrower as at September 30, 2005, and the related unaudited consolidated
statements of income and cash flows for the 9-month period ended on such date,
present fairly the consolidated financial condition of each Borrower as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the 6-month period then ended (subject to normal year-end audit
adjustments and, with respect to the financial statements of NAMM, giving effect
to the formation of NAMM and its acquisition of the NAMM Group as if it had
occurred on January 1, 2005). All such financial statements, including the
related schedules and notes thereto, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein and, with respect to
the financial statements of NAMM, giving effect to the formation of NAMM and its
acquisition of the NAMM Group as if it had occurred on January 1, 2005). No
Group Member has any material Guarantee Obligations, contingent liabilities and
liabilities for taxes, or any long-term leases or unusual forward or long-term
commitments, including any interest rate or foreign currency swap or exchange
transaction or other obligation in respect of derivatives, which are not
reflected in the most recent financial statements referred to in this paragraph.
During the period from December 31, 2004 to and including the date hereof there
has been no Disposition by any Group Member of any material part of its business
or property.
5.2. No Change. Since December 31, 2004 there has been no development
or event (excluding the effect of the Original Transactions) that has had or
could reasonably be expected to have a Material Adverse Effect.
5.3. Corporate Existence; Compliance with Law. Except as set forth on
Schedule 5.3, each Group Member (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the power and authority, and the legal right, to own and operate its property,
to lease the property it operates as lessee and to conduct the business in which
it is currently engaged, (c) is duly qualified as a foreign corporation and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
except to the extent that the failure to be so qualified could not reasonably be
expected to have a Material Adverse Effect, (d) owns and/or possess all legally
required certificates, certifications, permits, licenses, authorizations,
consents and approvals (collectively, the "Certifications") from any health care
and/or insurance-related federal, state, Commonwealth of Puerto Rico or local
governmental or quasi-governmental authority or any agency, board, authority or
entity concerned with the ownership or operation of any Group Member as a
company providing healthcare, health services or other insurance benefits and/or
as a managed care plan (collectively, "Health Plan Authorities") except to the
extent that the failure to own and/or possess such Certifications could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect and (e)
is in compliance with all Requirements of Law, including, without limitation,
material provisions of
49
the laws, ordinances, statutes, codes, regulations, orders of all Health Plan
Authorities having jurisdiction over the financing and operation of the Group
Members except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
5.4. Power; Authorization; Enforceable Obligations. Each Loan Party
has the power and authority, and the legal right, to make, deliver and perform
the Loan Documents to which it is a party and, in the case of the Borrowers, to
obtain extensions of credit hereunder. Each Loan Party has taken all necessary
organizational action to authorize the execution, delivery and performance of
the Loan Documents to which it is a party and, in the case of the Borrowers, to
authorize the extensions of credit on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Original Transactions and the extensions of credit
hereunder or with the execution, delivery, performance, validity or
enforceability of this Agreement or any of the Loan Documents, except (i)
consents, authorizations, filings and notices described in Schedule 5.4, which
consents, authorizations, filings and notices will be obtained or made within
the time frames required by applicable Governmental Authorities or Persons and
(ii) consents, authorizations, filings and notices not reasonably expected to
have a Material Adverse Effect and (iii) the filings referred to in Section
5.19. Each Loan Document has been duly executed and delivered on behalf of each
Loan Party party thereto. This Agreement constitutes, and each other Loan
Document upon execution will constitute, a legal, valid and binding obligation
of each Loan Party party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).
5.5. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of any Group Member and will
not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or
any such Contractual Obligation (other than the Liens created by the Security
Documents). No Requirement of Law or Contractual Obligation applicable to
Holdings or any of its Subsidiaries as of the date of this Agreement could
reasonably be expected to have a Material Adverse Effect.
5.6. Litigation. Except as set forth on Schedule 5.6, no litigation,
investigation or proceeding of or before any arbitrator or Governmental
Authority is pending or, to the knowledge of Holdings or either Borrower,
threatened by or against any Group Member or against any of their respective
properties or revenues (a) with respect to any of the Loan Documents or any of
the transactions contemplated hereby or thereby, or (b) that could reasonably be
expected to have a Material Adverse Effect.
5.7. No Default. Except as set forth on Schedule 5.7, no Group Member
is in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Group Member has received
50
notice from any federally funded healthcare program that it has engaged in any
activity that reasonably would be expected to result in the revocation of, or
imposition of other sanctions affecting, the right of any Group Member to
participate in federally funded healthcare programs except to the extent that
such revocation or imposition of sanctions could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
5.8. Ownership of Property; Liens. Except as set forth on Schedule
5.8, each Group Member has title in fee simple to, or a valid leasehold interest
in, all its material real property, and good title to, or a valid leasehold
interest in, all its other material property, and none of such property is
subject to any Lien except as permitted by Section 8.3. Notwithstanding the
foregoing, as of the Closing Date, no Group Member has any fee-owned real
property.
5.9. Intellectual Property. Each Group Member owns, or is licensed to
use, all Intellectual Property necessary for the conduct of its business as
currently conducted; no material claim has been asserted and is pending by any
Person challenging or questioning the use of any Intellectual Property or the
validity or effectiveness of any Intellectual Property, nor does either Borrower
know of any valid basis for any such claim; and the use of Intellectual Property
by each Group Member does not infringe on the rights of any Person in any
material respect.
5.10. Taxes. Each Group Member has filed or caused to be filed all
Federal, state, Commonwealth of Puerto Rico, municipal and other material tax
returns that are required to be filed (which returns are accurate and complete
in all material respects) and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other material taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any taxes, fees or other
charges the amount or validity of which are currently being contested in good
faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of Holdings or its
Subsidiaries, as the case may be); no tax Lien has been filed, and, to the
knowledge of Holdings or either Borrower, no claim is being asserted, with
respect to any such tax, fee or other charge.
5.11. Federal Regulations. No part of the proceeds of any Loans, and
no other extensions of credit hereunder, will be used for "buying" or "carrying"
any "margin stock" within the respective meanings of each of the quoted terms
under Regulation U as now and from time to time hereafter in effect or for any
purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrowers will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form G-3 or FR Form U-1, as
applicable, referred to in Regulation U.
5.12. Labor Matters. Except as, in the aggregate, could not reasonably
be expected to have a Material Adverse Effect: (a) there are no strikes or other
labor disputes against any Group Member pending or, to the knowledge of Holdings
or either Borrower, threatened; (b) hours worked by and payment made to
employees of each Group Member have not been in violation of the Fair Labor
Standards Act or any other applicable Requirement of Law dealing with such
matters; and (c) all payments due from any Group Member on account of employee
health and welfare insurance have been paid or accrued as a liability on the
books of the relevant Group Member.
51
5.13. ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all respects with the applicable provisions of ERISA and the
Code. No termination of a Single Employer Plan has occurred, and no Lien in
favor of the PBGC or a Plan has arisen, during such five-year period. The
present value of all accrued benefits under each Single Employer Plan (based on
those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed the value of the assets of such Plan allocable to such accrued
benefits. Neither any Loan Party nor any Commonly Controlled Entity has had a
complete or partial withdrawal from any Multiemployer Plan that has resulted or
could reasonably be expected to result in a liability under ERISA, and neither
any Loan Party nor any Commonly Controlled Entity would become subject to any
liability under ERISA if any Loan Party or any such Commonly Controlled Entity
were to withdraw completely from all Multiemployer Plans as of the valuation
date most closely preceding the date on which this representation is made or
deemed made. No such Multiemployer Plan is in Reorganization or Insolvent.
Notwithstanding the foregoing, the representations and warranties contained in
this Section 5.13 are qualified such (i) that to the extent that any such
representation or warranty applies to a Multiemployer Plan, such representation
or warranty shall be deemed to be to the knowledge of Holdings or any Loan Party
and (ii) a breach or failure to comply with such representation or warranty
shall not be treated as such unless the circumstances of such breach or failure
have resulted in or could reasonably be expected to have, in the aggregate, a
Material Adverse Effect.
5.14. Investment Company Act; Other Regulations. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
5.15. Subsidiaries. Except as disclosed to the Administrative Agent by
the Borrowers in writing from time to time after the Closing Date, (a) Schedule
5.15 sets forth the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of either Borrower or any of their
respective Subsidiaries, except as created by the Loan Documents.
5.16. Use of Proceeds. The proceeds of the Original Term Loans were
used, together with cash on hand at the Borrowers as of the opening of business
on the Original Closing Date, to finance the Original Transactions and to pay
related fees and expenses. The proceeds of the New Term Loans shall be used to
repay the aggregate principal amount of all Revolving Loans outstanding on the
Closing Date and for general corporate purposes. The proceeds of the Incremental
Term Loans shall be used to finance Permitted Acquisitions and to pay related
fees and expenses. The proceeds of the Revolving Loans, the Swingline Loans and
the Letters of
52
Credit shall be used for general business purposes of the Borrowers and their
Subsidiaries in the ordinary course of business.
5.17. Environmental Matters. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by any Group
Member (the "Properties") do not contain, and have not previously contained, any
Materials of Environmental Concern in amounts or concentrations or under
circumstances that constitute or constituted a violation of, or could give rise
to liability under, any Environmental Law;
(b) no Group Member has received or is aware of any notice of violation,
alleged violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard to any
of the Properties or the business operated by any Group Member (the "Business"),
nor does either Borrower have knowledge or reason to believe that any such
notice will be received or is being threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a location
that could give rise to liability under, any Environmental Law, nor have any
Materials of Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a manner that
could give rise to liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action has
been commenced or, to the knowledge of Holdings or either Borrower, is pending
or threatened, under any Environmental Law to which any Group Member is or will
be named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or the
Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related to
the operations of any Group Member in connection with the Properties or
otherwise in connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in compliance,
and have in the last five years been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about the
Properties or violation of any Environmental Law with respect to the Properties
or the Business; and
(g) no Group Member has assumed any liability of any other Person under
Environmental Laws.
5.18. Accuracy of Information, etc. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement furnished
by any Loan Party to the Administrative Agent or the Lenders, or any of them,
for use in connection with the transactions contemplated by this Agreement or
the other Loan Documents, contained as of the date such statement, information,
53
document or certificate was so furnished (or, in the case of the Confidential
Information Memorandum, as of the date of this Agreement), any untrue statement
of a material fact or omitted to state a material fact necessary to make the
statements contained herein or therein not misleading. The projections and pro
forma financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of
Holdings and the Borrowers to be reasonable at the time made, it being
recognized by the Lenders that such financial information as it relates to
future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. There is no fact
actually known to any Borrower that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the Administrative Agent and
the Lenders for use in connection with the transactions contemplated hereby and
by the other Loan Documents.
5.19. Security Documents. (a) The Guarantee and Collateral Agreement
is effective to create in favor of the Administrative Agent, for the benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, the delivery to, and
continuing possession by, the Collateral Agent of stock certificates
representing such Pledged Stock are delivered to the Administrative Agent, and
in the case of the other Collateral described in the Guarantee and Collateral
Agreement, the financing statements on file (or to be filed) in the offices
specified on Schedule 5.19(a), create (or, when filed, will create) a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person (except, in the case of
Collateral other than Pledged Stock, Liens permitted by Section 8.3).
(b) Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid and
enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
5.19(b), each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the Loan Parties in the
Mortgaged Properties and the proceeds thereof, as security for the Obligations
(as defined in the relevant Mortgage), in each case prior and superior in right
to any other Person. Schedule 1.1(b) lists, as of the Closing Date, each parcel
of owned real property and each leasehold interest in real property located in
the United States (including the Commonwealth of Puerto Rico) and held by the
Borrowers or any of their Subsidiaries that has a value, in the reasonable
opinion of the relevant Borrower, in excess of $500,000.
5.20. Solvency. Each Loan Party is, and after giving effect to the
Original Transactions and the incurrence of all Indebtedness and obligations
being incurred in connection herewith and therewith will be, Solvent.
5.21. Certain Documents. The Borrowers have delivered to the
Administrative Agent a complete and correct copy of (a) the Transaction
Documentation including any
54
amendments, supplements or modifications with respect thereto and (b) the
Management Services Agreement.
5.22. Dormant Subsidiaries. None of the Dormant Subsidiaries (a) is
engaged in any business operations (b) hold any assets exceeding $500,000 in the
aggregate (for all such Dormant Subsidiaries) or (c) has any liabilities
exceeding $500,000.
SECTION 6. CONDITIONS PRECEDENT
6.1. Conditions to Initial Extension of Credit. The effectiveness of
this Agreement and the agreement of each New Term Lender to make the initial
extension of credit requested to be made by it is subject to the satisfaction,
prior to or concurrently with the making of such extension of credit on the
Closing Date (but in any event no later than May 30, 2006), of the following
conditions precedent:
(a) Credit Agreement; Reaffirmation Agreement. The Administrative Agent
shall have received (i) this Agreement, or, in the case of the Lenders, an
Addendum, executed and delivered by each Agent, Holdings, each Borrower and each
Person that is a Lender as of the Closing Date and (ii) a Reaffirmation
Agreement, substantially in the form of Exhibit I, executed and delivered by
Holdings, each Borrower and each Subsidiary Guarantor.
(b) Approvals. All governmental and third party approvals (required by the
Transaction Documentation) necessary or, in the reasonable discretion of the
Administrative Agent, advisable in connection with this Agreement, the financing
contemplated hereby and the continuing operations of the Group Members shall
have been obtained and be in full force and effect, and all applicable waiting
periods shall have expired without any action being taken or threatened by any
competent authority that would restrain, prevent or otherwise impose adverse
conditions on this Agreement or the financing contemplated hereby except (i)
consents, authorizations, filings and notices described in Schedule 5.4 and (ii)
consents, authorizations, filings and notices not reasonably expected to have a
Material Adverse Effect.
(c) Fees. The Lenders and the Agents shall have received all fees required
to be paid, and all reasonable expenses for which invoices have been presented
(including the reasonable fees and expenses of legal counsel), on or before the
Closing Date. All such amounts will be paid with proceeds of Loans made on the
Closing Date and will be reflected in the funding instructions given by the
Borrowers to the Administrative Agent on or before the Closing Date.
(d) Closing Certificate. The Administrative Agent shall have received (i) a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit G, with appropriate insertions and attachments including the
certificate of incorporation of each Loan Party that is a corporation certified
by the relevant authority of the jurisdiction of organization of such Loan
Party, and (ii) a long form good standing certificate for each Loan Party from
its jurisdiction of organization.
55
(e) Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Proskauer Rose LLP, counsel to Holdings
and its Subsidiaries, substantially in the form of Exhibit H-1;
(ii) the legal opinion of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & Calabria, local
counsel in Puerto Rico to MMM and its Subsidiaries, substantially in
the form of Exhibit H-2;
(iii) the legal opinion of Fiddler ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, P.S.C.,
special local counsel in Puerto Rico to MMM Healthcare and its
Subsidiaries, substantially in the form of Exhibit H-3; and
(iv) the legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, general counsel of
Holdings and its Subsidiaries, substantially in the form of Exhibit
H-4;
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(f) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent
shall have received, to the extent not previously delivered on or prior to the
Original Closing Date, (i) the certificates representing the shares of Capital
Stock pledged pursuant to the Guarantee and Collateral Agreement, together with
an undated stock power for each such certificate executed in blank by a duly
authorized officer of the pledgor thereof and (ii) each promissory note (if any)
pledged to the Administrative Agent pursuant to the Guarantee and Collateral
Agreement endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof.
(g) Filings, Registrations and Recordings. To the extent not previously
delivered on or prior to the Original Closing Date, each document (including any
Uniform Commercial Code financing statement) required by the Security Documents
or under law or reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create or maintain in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on the
Collateral described therein, prior and superior in right to any other Person
(other than with respect to Liens expressly permitted by Section 8.3), shall
have been filed, registered or recorded.
(h) Solvency Certificate. The Administrative Agent shall have received a
satisfactory solvency certificate from the chief financial officer of Holdings,
which shall document the solvency of Holdings and its Subsidiaries after giving
effect to the transactions contemplated hereby.
6.2. Conditions to Each Extension of Credit. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
56
(a) Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents shall be
true and correct on and as of such date as if made on and as of such date.
(b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of a Borrower
hereunder shall constitute a representation and warranty by Holdings and the
Borrowers as of the date of such extension of credit that the conditions
contained in this Section 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
Holdings and each Borrower hereby jointly and severally agree that, so
long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or Agent
hereunder, each of Holdings and each Borrower shall and shall cause each of its
Subsidiaries (except for Dormant Subsidiaries and Immaterial Subsidiaries) to:
7.1. Financial Statements. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 120 days after December
31, 2005, a copy of (i) the audited consolidated balance sheet of Holdings and
its consolidated Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, which
financial statements shall include the NAMM Group for the period beginning on
the Original Closing Date and ending on December 31, 2005, (ii) the audited
consolidated balance sheet of MMM Holdings and its consolidated Subsidiaries as
at the end of such year and the related audited consolidated statements of
income and of cash flows for such year and (iii) the audited consolidated
balance sheet of the NAMM Group and its consolidated Subsidiaries as at the end
of such year and the related audited consolidated statements of income and of
cash flows for (x) the period beginning on January 1, 2005 and ending on the
Original Closing Date and (y) the period beginning on the Original Closing Date
and ending on December 31, 2005, all reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope of
the audit, by KPMG LLP or other independent certified public accountants of
nationally recognized standing;
(b) as soon as available, but in any event within 90 days after the end of
each fiscal year of Holdings (commencing with the fiscal year ending December
31, 2006), a copy of the audited consolidated balance sheet of Holdings and its
consolidated Subsidiaries as at the end of such year and the related audited
consolidated statements of income and of cash flows for such year, setting forth
in each case in comparative form the figures for the previous year, reported on
without a "going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by KPMG LLP or other independent
certified public accountants of nationally recognized standing;
57
(c) as soon as available, but in any event within 120 days after the end of
the fiscal year of Holdings ending December 31, 2005, a copy of the unaudited
consolidated balance sheet of each Borrower and its respective consolidated
Subsidiaries as at the end of such year and the related unaudited consolidated
statements of income and of cash flows for such year, such financial statements
to be prepared in a manner consistent with the Pro Forma Balance Sheet and the
Pro Forma Income Statement, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer of as being
fairly stated in all material respects;
(d) as soon as available, but in any event not later than 45 days after the
end of each of the first three quarterly periods of each fiscal year of Holdings
commencing with the fiscal quarter ending September 30, 2005, the unaudited
consolidated balance sheet of Holdings and its consolidated Subsidiaries as at
the end of such quarter and the related unaudited consolidated statements of
income and of cash flows for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
the figures for the previous year, certified by a Responsible Officer as being
fairly stated in all material respects (subject to normal year-end audit
adjustments);
(e) as soon as available, but in any event not later than 45 days after the
end of each of the first three quarterly periods of each fiscal year of Holdings
commencing with the fiscal quarter ending September 30, 2005, the unaudited
consolidated balance sheet of each Borrower and its respective consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments); and
(f) as soon as available, but in any event within 90 days after the end of
each fiscal year of Holdings (commencing with the fiscal year ending December
31, 2006), a copy of the unaudited consolidated balance sheet of each Borrower
and its respective consolidated Subsidiaries as at the end of such year and the
related unaudited consolidated statements of income and of cash flows for such
year, setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly stated in all
material respects.
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
Documents required to be delivered pursuant to this Section 7.1 may be delivered
electronically and if so delivered, shall be deemed to have been delivered to
each Lender on the date on which such documents are posted on behalf of the
Borrowers on IntraLinks or another relevant website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that the Borrower shall deliver paper copies of such documents to the
Administrative Agent for further distribution to each Lender upon written
request of Administrative Agent or such Lender.
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7.2. Certificates; Other Information. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (f), to the relevant Lender):
(a) concurrently with the delivery of the financial statements referred to
in Section 7.1(a), a certificate of the independent certified public accountants
reporting on such financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate;
(b) concurrently with the delivery of any financial statements pursuant to
Section 7.1, (i) a certificate of a Responsible Officer stating that, to the
best of each such Responsible Officer's knowledge, each Loan Party during such
period has observed or performed all of its covenants and other agreements, and
satisfied every condition, contained in this Agreement and the other Loan
Documents to which it is a party to be observed, performed or satisfied by it,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations reasonably satisfactory to the
Administrative Agent and necessary for determining compliance by each Group
Member with the provisions of this Agreement (including, without limitation,
Sections 7.11 and 8.1) referred to therein as of the last day of the fiscal
quarter or fiscal year of Holdings, as the case may be, and, if applicable, for
determining the Applicable Margins and Commitment Fee Rate, and (y) to the
extent not previously disclosed to the Administrative Agent, a listing of any
Intellectual Property acquired by any Loan Party since the date of the most
recent list delivered pursuant to this clause (y) (or, in the case of the first
such list so delivered, since the Closing Date);
(c) as soon as available, and in any event no later than 60 days after the
end of each fiscal year of Holdings, a detailed quarterly consolidated budget
for the following fiscal year (including a projected consolidated balance sheet
of Holdings and its Subsidiaries as of the end of the following fiscal year, the
related consolidated statements of projected cash flow, projected changes in
financial position and projected income and a description of the underlying
assumptions applicable thereto), and, as soon as available, significant
revisions, if any, of such budget and projections with respect to such fiscal
year (collectively, the "Projections"), which Projections shall in each case be
accompanied by a certificate of a Responsible Officer stating that such
Projections are based on reasonable estimates, information and assumptions and
that such Responsible Officer has no reason to believe that such Projections are
incorrect or misleading in any material respect;
(d) if Holdings is not then a reporting company under the Securities
Exchange Act of 1934, as amended, within 35 days after the end of each fiscal
quarter of Holdings (or 90 days, in the case of the last fiscal quarter of any
fiscal year), a narrative discussion and analysis of the financial condition and
results of operations of Holdings and its Subsidiaries for such fiscal quarter
and for the period from the beginning of the then current fiscal year to the end
of such fiscal quarter, as compared to the portion of the Projections covering
such periods and to the comparable periods of the previous year;
59
(e) no later than 10 Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification with respect to the Transaction Documentation; and
(f) within a reasonable time, such additional financial and other
information as any Lender may from time to time reasonably request in writing.
Documents required to be delivered pursuant to this Section 7.2 may be delivered
electronically and if so delivered, shall be deemed to have been delivered to
each Lender on the date on which such documents are posted on behalf of the
Borrowers on IntraLinks or another relevant website, if any, to which each
Lender and the Administrative Agent have access (whether a commercial,
third-party website or whether sponsored by the Administrative Agent); provided
that the Borrower shall deliver paper copies of such documents to the
Administrative Agent for further distribution to each Lender upon written
request of Administrative Agent or such Lender.
7.3. Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, or before Liens attach as the
case may be, all its obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the relevant Group Member, or except where the failure
to pay could not reasonably be expect to have a Material Adverse Effect.
7.4. Maintenance of Existence; Compliance. (a) (i) Preserve, renew and
keep in full force and effect its organizational existence and (ii) take all
reasonable action to maintain all rights, privileges, licenses and franchises
necessary in the normal conduct of the business of the Group Members, except, in
each case, as otherwise permitted by Section 8.4 and except, in the case of
clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
7.5. Maintenance of Property; Insurance. (a) Keep all property useful
and necessary in the business of the Group Members in good working order and
condition, ordinary wear and tear excepted and (b) maintain with financially
sound and reputable insurance companies insurance on all its property in at
least such amounts and against at least such risks (but including in any event
public liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or a
similar business.
7.6. Inspection of Property; Books and Records; Discussions. (a) Keep
proper books of records and account in which full, true and correct entries in
all material respects, in conformity with GAAP and all Requirements of Law shall
be made of all dealings and transactions in relation to its business and
activities and (b) upon at least three Business Days prior notice, permit
representatives of any Lender to visit and inspect any of its properties and
examine and make abstracts from any of its books and records at any reasonable
time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and
60
other condition of the Group Members with officers and employees of the Group
Members and with their independent certified public accountants.
7.7. Notices. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual Obligation of
any Group Member or (ii) litigation, investigation or proceeding that may exist
at any time between any Group Member and any Governmental Authority, that in
either case, if not cured or if adversely determined, as the case may be, could
reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member (i) in which
the amount involved is $5,000,000 or more and not covered by insurance, (ii) in
which injunctive or similar relief is sought or (iii) which relates to any Loan
Document or in the case of clause (ii) above, to the extent such action could be
reasonably expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within 30
days after any Loan Party knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of proceedings or
the taking of any other action by the PBGC or any Loan Party or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal from,
or the termination, Reorganization or Insolvency of, any Plan; and
(e) any development or event that has had or could reasonably be expected
to have a Material Adverse Effect.
(f) each notice pursuant to this Section 7.7 shall be accompanied by a
statement of a Responsible Officer setting forth details of the occurrence
referred to therein and stating what action Holdings, the relevant Borrower or
the relevant Subsidiary proposes to take with respect thereto.
7.8. Environmental Laws. (a) Comply with, and ensure compliance in all
material respects by all tenants and subtenants, if any, with, all applicable
Environmental Laws, and obtain and comply with and maintain, and ensure that all
tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except, in each case, to the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of
all Governmental Authorities regarding Environmental Laws, except to the extent
the failure to do so could not reasonably be expected to have a Material Adverse
Effect.
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7.9. Additional Collateral, etc. (a) With respect to any property
acquired after the Closing Date by any Group Member (other than (x) any property
described in paragraph (b), (c) or (d) below, and (y) any property subject to a
Lien expressly permitted by Section 8.3(g) as to which the Administrative Agent,
for the benefit of the Secured Parties, does not have a perfected Lien, promptly
(i) execute and deliver to the Administrative Agent such amendments to the
Guarantee and Collateral Agreement or such other documents as the Administrative
Agent deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a security interest in such property and (ii)
take all actions necessary or advisable to grant to the Administrative Agent,
for the benefit of the Secured Parties, a perfected first priority security
interest in such property, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Guarantee
and Collateral Agreement or by law or as may be requested by the Administrative
Agent, provided, that any such security interest in property acquired by an
Excluded Foreign Subsidiary shall not secure Obligations of NAMM as a Borrower.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $1,000,000 acquired after
the Closing Date by any Group Member (other than (x) any such real property
subject to a Lien expressly permitted by Section 8.3(g) and (y) real property
acquired by any Excluded Foreign Subsidiary), promptly (i) execute and deliver a
first priority Mortgage, in favor of the Administrative Agent, for the benefit
of the Secured Parties, covering such real property, (ii) if requested by the
Administrative Agent, provide the Secured Parties with (x) title and extended
coverage insurance covering such real property in an amount at least equal to
the purchase price of such real property (or such other amount as shall be
reasonably specified by the Administrative Agent) as well as a current ALTA
survey thereof, together with a surveyor's certificate and (y) any consents or
estoppels reasonably deemed necessary or advisable by the Administrative Agent
in connection with such Mortgage, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent, provided, that any such Mortgage on property acquired by an Excluded
Foreign Subsidiary shall not secure Obligations of NAMM as a Borrower.
(c) With respect to any new Subsidiary created or acquired after the
Closing Date by any Group Member (which, for the purposes of this paragraph (c),
shall include any existing Subsidiary that ceases to be an Excluded Foreign
Subsidiary), promptly (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement as the Administrative Agent
deems necessary or advisable to grant to the Administrative Agent, for the
benefit of the Secured Parties, a perfected first priority security interest in
the Capital Stock of such new Subsidiary that is owned by any Group Member, (ii)
deliver to the Administrative Agent the certificates representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered by a
duly authorized officer of the relevant Group Member, (iii) cause such new
Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B)
to take such actions necessary or advisable to grant to the Administrative Agent
for the benefit of the Secured Parties a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement
with respect to such new Subsidiary, including the filing of Uniform Commercial
Code financing statements in
62
such jurisdictions as may be required by the Guarantee and Collateral Agreement
or by law or as may be requested by the Administrative Agent and (C) to deliver
to the Administrative Agent a certificate of such Subsidiary, substantially in
the form of Exhibit C, with appropriate insertions and attachments, and (iv) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent, provided that to the extent any such Subsidiary is an
Excluded Foreign Subsidiary, such Subsidiary shall not be required to be a
Subsidiary Guarantor with respect to the Obligations of NAMM as a Borrower.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by any Group Member (other than by any Group
Member that is an Excluded Foreign Subsidiary) insofar as such Excluded Foreign
Subsidiary does not guarantee, or create a security interest in its assets with
respect to, the Obligations of NAMM as a Borrower, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent deems necessary or advisable to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by any such Group Member to secure such Obligations of
NAMM as a Borrower, (ii) deliver to the Administrative Agent the certificates
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Group
Member, as the case may be, and take such other action as may be necessary or,
in the opinion of the Administrative Agent, desirable to perfect the
Administrative Agent's security interest therein, and (iii) if requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
7.10. Excess Cash Dividends. Cause each Licensed Subsidiary of each
Borrower to distribute to such Borrower (no less frequently than quarterly) an
amount equal to the excess of (a) the greater of (i) the portion of Consolidated
Net Income attributable to the operations of such Licensed Subsidiary for such
quarter and (ii) the amount of cash and Cash Equivalents on hand at such
Licensed Subsidiary at the end of the relevant quarterly period (to the extent
the same would not result in the payment of capital gains taxes by the Group
Member receiving such dividends); provided that in no event shall any Licensed
Subsidiary be required to make or cause a distribution that would result in any
Licensed Subsidiary having an amount of capital that is below the Requisite
Statutory Capital, violating applicable capital and surplus requirements under
applicable Requirements of Law or pursuant to contractual commitments to
maintain statutory capital reasonably satisfactory to the Administrative Agent
or where prohibited by Governmental Authorities.
7.11. Maintenance of Requisite Statutory Capital. Cause each Licensed
Subsidiary of each Borrower to maintain its Requisite Statutory Capital at all
times.
7.12. Further Assurances. From time to time execute and deliver, or
cause to be executed and delivered, such additional instruments, certificates or
documents, and take all such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Secured Parties with
63
respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds thereof or with respect to any other property or assets
hereafter acquired by either Borrower or any Subsidiary which may be deemed to
be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Secured Party of any power, right, privilege or
remedy pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording qualification or authorization of any Governmental
Authority, each Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Secured Party may be
required to obtain from such Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
7.13. Licensed Subsidiaries. Upon request of the Administrative Agent,
to the extent permitted under applicable law, use its reasonable efforts to
cause each Subsidiary (a) which is a Licensed Subsidiary as of the Closing Date
to become a Subsidiary Guarantor as soon as practicable after the Closing Date
and (b) which becomes a Licensed Subsidiary (by virtue of acquisition or
otherwise) after the Closing Date to become a Subsidiary Guarantor at the time
such Subsidiary becomes a Licensed Subsidiary or as soon as practicable
thereafter (it being understood that to the extent that such Licensed Subsidiary
is an Excluded Foreign Subsidiary with respect to the Obligations of either
Borrower, such Licensed Subsidiary shall not be required to become a Subsidiary
Guarantor with respect to the Obligations of such Borrower (it being understood
that the Borrowers are not using any such reasonable efforts to cause a Licensed
Subsidiary to become a Subsidiary Guarantor as of the date hereof).
7.14. Deposit Accounts. Promptly after the Closing Date (but in no
event later than June 30, 2006), cause all Deposit Accounts (as defined on the
Guarantee and Collateral Agreement) of the Loan Parties to be subject to Control
Agreements executed by all parties thereto.
7.15. Dormant Subsidiaries. Promptly after the Closing Date cause each
Dormant Subsidiary to be dissolved, liquidated, wound up, consolidated or merged
with or into any other Person.
7.16. Interest Rate Protection. In the case of the Borrowers, in the
event (a) the applicable Borrower or Borrowers shall have borrowed Incremental
Term Loans in an initial aggregate principal amount of not less than
$100,000,000 and (b)(i) the aggregate amount of Term Loans outstanding on the
date that is 180 days after the date of such borrowing is not less than the
aggregate amount of Term Loans outstanding on the date immediately preceding
such borrowing plus $95,000,000 or (ii) the Consolidated Leverage Ratio is
greater than 2.75 to 1.0 on a pro forma basis (for the avoidance of doubt, such
calculation shall be based on the Borrowers' Consolidated Total Debt on such
date and the Borrowers' Consolidated EBITDA for the most recent four quarter
period for which financial statements have been delivered), within 190 days
after the date of such borrowing, enter into, and thereafter maintain, Hedge
Agreements to the extent necessary to provide that at least 33% of the aggregate
principal amount of the Term Loans is subject to either a fixed interest rate or
interest rate protection for a period of not less than three years, which Hedge
Agreements shall have terms and conditions reasonably satisfactory to the
Administrative Agent.
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7.17. Post-Closing Requirement. No later than 15 days after the
Closing Date, the Administrative Agent shall have received a long form good
standing certificate for North American Medical Management California, Inc. from
its jurisdiction of organization and an executed legal opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇,
general counsel of Holdings and its Subsidiaries with respect to the good
standing of North American Medical Management California, Inc. in form and
substance reasonably satisfactory to the Administrative Agent.
SECTION 8. NEGATIVE COVENANTS
Holdings and each Borrower hereby jointly and severally agree that, so
long as the Revolving Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender or Agent
hereunder, each of Holdings and each Borrower shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly:
8.1. Financial Condition Covenants. (a) Consolidated Leverage Ratio.
Permit the Consolidated Leverage Ratio as at the last day of any period of four
consecutive fiscal quarters of Holdings ending with any fiscal quarter set forth
below to exceed the ratio set forth below opposite such fiscal quarter:
Consolidated
Fiscal Quarter Ending Leverage Ratio
--------------------- --------------
December 31, 2005 3.85 to 1.00
March 31, 2006 3.75 to 1.00
June 30, 2006 3.65 to 1.00
September 30, 2006 3.50 to 1.00
December 31, 2006 3.25 to 1.00
March 31, 2007 3.00 to 1.00
June 30, 2007 2.75 to 1.00
September 30, 2007 2.50 to 1.00
December 31, 2007 2.25 to 1.00
March 31, 2008 and thereafter 2.00 to 1.00
(b) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of Holdings ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:
Consolidated Fixed
Fiscal Quarter Ending Charge Coverage Ratio
--------------------- ---------------------
December 31, 2005 1.25 to 1.00
March 31, 2006 1.25 to 1.00
June 30, 2006 1.25 to 1.00
September 30, 2006 1.25 to 1.00
December 31, 2006 1.35 to 1.00
March 31, 2007 1.35 to 1.00
June 30, 2007 1.35 to 1.00
September 30, 2007 1.35 to 1.00
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December 31, 2007 1.45 to 1.00
March 31, 2008 1.45 to 1.00
June 30, 2008 1.45 to 1.00
September 30, 2008 and thereafter 1.50 to 1.00
; provided, that for the purposes of determining the ratio described above for
the fiscal quarters of Holdings ending December 31, 2005, March 31, 2006 and
June 30, 2006, Consolidated Fixed Charges for the relevant period shall be
deemed to equal Consolidated Fixed Charges for such fiscal quarter (and, in the
case of the latter two such determinations, each previous fiscal quarter
commencing after the Original Closing Date) multiplied by 4, 2 and 4/3,
respectively.
(c) Risk Based Capital. Permit the Total Adjusted Capital (which shall
be maintained in cash or Cash Equivalents) of MMM as of the last day of any
fiscal quarter to be less than the Applicable Percentage of aggregate revenues
of MMM Healthcare in respect of premiums for any period of four consecutive
fiscal quarters of MMM.
8.2. Indebtedness. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness (i) of the Borrowers to any of their respective
Subsidiaries, (ii) of any Subsidiary Guarantor to either Borrower or any other
Subsidiary, (iii) of any Foreign Subsidiary to any other Foreign Subsidiary and
(iv) subject to Section 8.8(h), of any Foreign Subsidiary to either Borrower or
any Subsidiary Guarantor;
(c) Guarantee Obligations incurred in the ordinary course of business by
MMM or any of its Subsidiaries of obligations of either Borrower, any Subsidiary
Guarantor and, subject to Section 8.8(h), of any Foreign Subsidiary;
(d) Guarantee Obligations incurred in the ordinary course of business by
NAMM or any of its Subsidiaries of obligations of NAMM, any Subsidiary Guarantor
which is a Domestic Subsidiary and, subject to Section 8.8(h), of any Foreign
Subsidiary;
(e) Indebtedness outstanding on the Original Closing Date and listed on
Schedule 8.2(e) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
(f) Indebtedness (including, without limitation, Capital Lease Obligations)
secured by Liens permitted by Section 8.3(g) in an aggregate principal amount
not to exceed $5,000,000 at any one time outstanding;
(g) Indebtedness of a Person which becomes an Acquired Entity pursuant to
any Permitted Acquisition in an aggregate principal amount not to exceed
$5,000,000 at any one time outstanding; provided that such Indebtedness was not
incurred in contemplation of or in connection with such Permitted Acquisition
and is not increased thereafter;
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(h) Hedge Agreements permitted under Section 8.12;
(i) Indebtedness of Holdings or either or both of the Borrowers, as
applicable, in respect of any Permitted Subordinated Seller Indebtedness; and
(j) additional Indebtedness of the Borrowers or any of their Subsidiaries
in an aggregate principal amount (for the Borrowers and all Subsidiaries) not to
exceed $5,000,000 at any one time outstanding;
provided that no Licensed Subsidiary shall be permitted to incur any
Indebtedness prior to the time such Licensed Subsidiary becomes a Subsidiary
Guarantor other than Intercompany Indebtedness owed to Loan Parties which
constitutes Collateral under the Guarantee and Collateral Agreement.
8.3. Liens. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or that are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the relevant Borrower or its Subsidiaries, as the
case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's or
other like Liens arising in the ordinary course of business that are not overdue
for a period of more than 60 days or that are being contested in good faith by
appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and that do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of either Borrower or any of their Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 8.3(f),
securing Indebtedness permitted by Section 8.2(e), provided that no such Lien is
spread to cover any additional property after the Original Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of either Borrower or any of their
Subsidiaries incurred pursuant to Section 8.2(f) to finance the acquisition of
fixed or capital assets, provided that (i) such Liens shall be created
substantially simultaneously with the acquisition of such fixed or capital
assets, (ii) such Liens do not at any time encumber any property other than the
property
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financed by such Indebtedness and (iii) the amount of Indebtedness secured
thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
either Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) Liens existing on any property or asset prior to the acquisition
thereof by Holdings or existing on any property or asset of any Person that
becomes a Subsidiary after the Closing Date prior to the time such Person
becomes a Subsidiary (including pursuant to a Permitted Acquisition); provided
that (i) such Lien is not created in contemplation of or in connection with such
acquisition or such Person becoming a Subsidiary, as the case may be, (ii) such
Lien shall not apply to any other property or assets of Holdings, Borrowers or
any of their Subsidiaries and (iii) such Lien shall secure only those
obligations that it secures on the date of such acquisition or the date such
Person becomes a Subsidiary, as the case may be and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof; and
(k) Liens not otherwise permitted by this Section so long as neither (i)
the aggregate outstanding principal amount of the obligations secured thereby
nor (ii) the aggregate fair market value (determined as of the date such Lien is
incurred) of the assets subject thereto exceeds (as to each Borrower and all
Subsidiaries) $5,000,000 at any one time.
8.4. Fundamental Changes. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of either Borrower may be merged or consolidated with or
into such Borrower (provided that such Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor which is a
Subsidiary of such Borrower (provided that the Subsidiary Guarantor shall be the
continuing or surviving corporation) or, subject to Section 8.8(h), with or into
any Foreign Subsidiary; and
(b) any Subsidiary of either Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to such Borrower or any
Subsidiary Guarantor which is a Subsidiary of such Borrower or, subject to
Section 8.8(h), any Foreign Subsidiary which is a Subsidiary of such Borrower;
(c) any Subsidiary may merge with another Person to effect a transaction
permitted under Section 8.8;
(d) transactions permitted under Section 8.5 shall be permitted; and
(e) any Subsidiary may merge with any other Person in connection with the
effectuation of a Permitted Acquisition.
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8.5. Disposition of Property. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary course
of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Section 8.4(b);
(d) subject to Section 8.8(h), the sale or issuance of any Subsidiary's
Capital Stock to any Group Member which holds other Capital Stock of such
Subsidiary;
(e) the sale or discount of accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection
thereof;
(f) leases or subleases granted by Holdings, each of the Borrowers or any
of the other Loan Parties to third Persons not interfering in any material
respect with the business of Holdings, the Borrowers or any of the other Loan
Parties; and
(g) the Disposition of other property having a fair market value not to
exceed $5,000,000 in the aggregate for any fiscal year of the Borrower.
8.6. Restricted Payments. Declare or pay any dividend (other than
dividends payable solely in common stock of the Person making such dividend) on,
or make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of any Group Member, whether now or hereafter
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash or property or in obligations of either Borrower
or any Subsidiary (collectively, "Restricted Payments"), except that:
(a) any Subsidiary may make Restricted Payments to the Group Members which
own the Capital Stock of such Subsidiary;
(b) so long as no Default or Event of Default shall have occurred and be
continuing or would result therefrom, the Borrowers may pay dividends to
Holdings to permit Holdings to (i) purchase Holdings' common stock or common
stock options from present or former officers or employees of any Group Member
upon the death, disability or termination of employment of such officer or
employee, provided, that the aggregate amount of payments under this clause (b)
after the Original Closing Date (net of any proceeds received by Holdings and
contributed to Holdings after the date hereof in connection with resales of any
common stock or common stock options so purchased) shall not exceed $2,000,000
and (ii) pay management fees expressly permitted by the last sentence of Section
8.10;
(c) so long as (i) (x) after giving effect thereto the Consolidated
Leverage Ratio is less than 2.0 to 1.0, (y) Holdings is in compliance with
Section 8.1 (assuming for purposes of this Section that the Consolidated
Leverage Ratio is not permitted to equal or exceed 2.0 to 1.0) on a pro forma
basis as of the end of the two immediately preceding fiscal quarters for which
69
financial statements have been delivered as if such dividend had been paid on
the first day of the relevant period and (z) no Default or Event of Default
shall have occurred and be continuing at such time or would result therefrom and
(ii) Holdings shall have delivered a certificate to the Administrative Agent
showing such compliance in a manner reasonably satisfactory to the
Administrative Agent, Holdings may pay cash dividends in respect of any quarter
commencing on or after October 1, 2005, in an aggregate amount up to 50% of the
Consolidated Net Income for such quarterly period; provided that the amount
permitted to be paid as dividends pursuant to this paragraph (c) shall be
decreased by the amount of any cash interest payments or payments of principal
on any Permitted Subordinated Seller Indebtedness made in reliance on Section
8.9(b); and
(d) so long as (i) (x) after giving effect thereto the Consolidated
Leverage Ratio is less than 2.0 to 1.0, (y) Holdings is in compliance with
Section 8.1 (assuming for purposes of this Section that the Consolidated
Leverage Ratio is not permitted to equal or exceed 2.0 to 1.0) on a pro forma
basis as of the end of the two immediately preceding fiscal quarters for which
financial statements have been delivered as if such dividend had been paid on
the first day of the relevant period and (z) no Default or Event of Default
shall have occurred and be continuing at such time or would result therefrom and
(ii) Holdings shall have delivered a certificate to the Administrative Agent
showing such compliance in a manner reasonably satisfactory to the
Administrative Agent, Holdings may pay cash dividends, in an aggregate amount up
to 50% of the aggregate Net Cash Proceeds of any issuance of Capital Stock or
capital contributions to Holdings (in each case excluding those to or from a
Sponsor) to the extent (x) the other 50% of the Net Cash Proceeds from such
issuance was applied to prepay the Term Loans in accordance with Section 4.2(a),
(y) no dividends were previously paid in reliance on such Net Cash Proceeds
pursuant to this paragraph (d) and (z) after giving effect thereto, no Revolving
Loans shall be outstanding; provided that (x) the foregoing provisions of this
Section 8.6(d) shall not apply to any issuance of Capital Stock pursuant to the
Equity Offering and (y) the amount permitted to be paid as dividends pursuant to
this paragraph (d) shall be decreased by the amount of any cash interest
payments or payments of principal on any Permitted Subordinated Seller
Indebtedness made in reliance on Section 8.9(c).
8.7. Capital Expenditures. Make or commit to make any Capital
Expenditure, except (a) Capital Expenditures of Holdings and its Subsidiaries in
the ordinary course of business not exceeding during any of the fiscal years of
Holdings set forth below, the amount set forth opposite such fiscal year below:
Fiscal Year Amount
----------- -----------
2005 $ 7,000,000
2006 $10,000,000
2007 $12,000,000
2008 and thereafter $15,000,000
and (b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount.
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8.8. Investments. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "Investments"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) Investments in Cash Equivalents;
(c) Guarantee Obligations permitted by Section 8.2;
(d) loans and advances to employees of any Group Member in the ordinary
course of business (including for travel, entertainment and relocation expenses)
in an aggregate amount for all Group Members not to exceed $1,000,000 at any one
time outstanding;
(e) the Original Transactions;
(f) Investments in assets useful in the business of the Borrowers and their
Subsidiaries made by the Borrowers or any of their Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
(g) intercompany Investments by any Group Member in either Borrower or any
Person that, prior to such Investment, is a Subsidiary Guarantor; provided that
amounts dividended pursuant to Section 7.10 may only be used to finance an
Investment in the Licensed Subsidiaries to the extent necessary for such
Licensed Subsidiary to comply with the requirements of Section 7.11;
(h) the acquisition of all or substantially all the assets of a Person or
line of business of such Person, or not less than 100% of the Capital Stock
(except for directors' qualifying shares) of a Person (referred to herein as the
"Acquired Entity"); provided that (i) such acquisition was not preceded by an
unsolicited tender offer for such Capital Stock by, or proxy contest initiated
by, any Group Member and is otherwise consummated on a friendly basis; (ii) the
Acquired Entity is located, and substantially all of its operations are
conducted, in the United States of America (including the Commonwealth of Puerto
Rico); (iii) both before and after giving effect to such acquisition no Default
or Event of Default shall have occurred and be continuing; (iv) after giving
effect to such acquisition (A) Holdings shall have delivered a certificate to
the Administrative Agent containing all information and calculations necessary
for determining pro forma compliance with Section 8.1, utilizing the financial
statements for the most recently completed fiscal quarter for which financial
statements have been delivered and assuming that such acquisition had actually
occurred at the first day of such period, (B) the aggregate principal amount of
Revolving Loans then outstanding shall not exceed $16,000,000, after giving
effect thereto; (v) the total cash and non-cash consideration paid in connection
with such acquisition and any other acquisitions pursuant to this Section 8.8(h)
(including the fair market value of all Capital Stock of Holdings issued or
transferred to the seller or sellers in any such acquisition, any Indebtedness
of the Acquired Entity that is assumed, refinanced or repaid by Holdings in
connection with or following such acquisition) shall not exceed $250,000,000 in
the aggregate subsequent to the Original Closing Date; (vi) Holdings shall
comply, and shall cause the Acquired Entity to comply, with the applicable
provisions of Sections 7.10 and 7.13 and the
71
Security Documents (vii) the Facilities shall have been rated at least "B1" by
▇▇▇▇▇'▇ and at least "B" by S&P, in each case with a stable or better outlook,
and ▇▇▇▇▇'▇ and S&P shall have confirmed that such ratings shall remain in
effect after giving effect to such acquisition and (viii) prior to such
acquisition, the Acquired Entity shall not be an Affiliate of any Permitted
Investor (any acquisition of an Acquired Entity meeting all the criteria of this
Section 8.8(h) being referred to herein as a "Permitted Acquisition");
(i) intercompany Investments by the Borrowers or any of their Subsidiaries
in any Person, that, prior to such Investment, is a Subsidiary (other than a
Subsidiary Guarantor) (including, without limitation, Guarantee Obligations with
respect to obligations of any such Subsidiary, loans made to any such Subsidiary
and Investments resulting from mergers with or sales of assets to any such
Subsidiary) in an aggregate amount (valued at cost) not to exceed $5,000,000
subsequent to the Original Closing Date; provided that notwithstanding the
foregoing monetary limitation on Investments, Investments necessary to cause
Licensed Subsidiaries to be in compliance with Section 7.11 shall be permitted
(and will be included for purposes of determining compliance with such monetary
limitation in connection with other Investments made in reliance on this
paragraph (i)); and
(j) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrowers or any of their Subsidiaries in an
aggregate amount (valued at cost) not to exceed $3,000,000 subsequent to the
Original Closing Date.
8.9. Certain Payments and Modifications of Certain Debt Instruments.
(a) Except as provided in clause (b) and (c) below, take or offer to make any
payment, prepayment, repurchase or redemption of or otherwise defease or
segregate funds with respect to the principal of any Permitted Subordinated
Seller Indebtedness;
(b) (i) so long as (i) (x) after giving effect thereto the
Consolidated Leverage Ratio is less than 2.0 to 1.0, (y) Holdings is in
compliance with Section 8.1 (assuming for purposes of this Section that the
Consolidated Leverage Ratio is not permitted to equal or exceed 2.0 to 1.0) on a
pro forma basis as of the end of the two immediately preceding fiscal quarters
for which financial statements have been delivered as if such dividend had been
paid on the first day of the relevant period and (z) no Default or Event of
Default shall have occurred and be continuing at such time or would result
therefrom and (ii) Holdings shall have delivered a certificate to the
Administrative Agent showing such compliance in a manner reasonably satisfactory
to the Administrative Agent, Holding or the relevant Borrower or Borrowers, as
applicable, may make cash interest payments or payments of principal on any
Permitted Subordinated Seller Indebtedness, in an amount up to 50% of the
Consolidated Net Income for such quarterly period (such payments to be made
prior to the beginning of the next succeeding quarter and such payments may not
occur in any prior period); provided that the amount permitted to be paid as
cash interest payments on any Permitted Subordinated Seller Indebtedness
pursuant to this paragraph (b) shall be decreased by the amount of any dividends
made in reliance on Section 8.6(c); and
(c) so long as (i) no Default or Event of Default shall have occurred
and be continuing at such time or would result therefrom and (ii) Holdings shall
have delivered a certificate to the Administrative Agent showing such compliance
in a manner reasonably
72
satisfactory to the Administrative Agent, Holdings or the relevant Borrower or
Borrowers, as applicable, may make cash interest payments or payments of
principal on any Permitted Subordinated Seller Indebtedness, in an aggregate
amount up to 100% of the aggregate Net Cash Proceeds of any issuance of Capital
Stock or capital contributions to Holdings (in each case excluding those to or
from a Sponsor) to the extent (x) no cash interest payments or payments of
principal were previously made in reliance on such Net Cash Proceeds pursuant to
this paragraph (c) and (y) after giving effect thereto, no Revolving Loans shall
be outstanding; provided that the amount permitted to be paid as cash interest
payments or payments of principal on any Permitted Subordinated Seller
Indebtedness pursuant to this paragraph (c) shall be decreased by the amount of
any dividends made in reliance on Section 8.6(d).
8.10. Transactions with Affiliates. Enter into any transaction,
including any purchase, sale, lease or exchange of property (other than the
lease for the property located in Fort ▇▇▇, New Jersey, executed and delivered
by Holdings, as tenant, as in effect on the date hereof), the rendering of any
service or the payment of any management, advisory or similar fees, with any
Affiliate (other than Holdings, the Borrowers or any Subsidiary Guarantor)
unless such transaction is (a) otherwise permitted under this Agreement, (b) in
the ordinary course of business of the relevant Group Member, and (c) upon fair
and reasonable terms no less favorable to the relevant Group Member, than it
would obtain in a comparable arm's length transaction with a Person that is not
an Affiliate.
8.11. Sales and Leasebacks. Enter into any arrangement with any Person
providing for the leasing by any Group Member of real or personal property that
has been or is to be sold or transferred by such Group Member to such Person or
to any other Person to whom funds have been or are to be advanced by such Person
on the security of such property or rental obligations of such Group Member.
8.12. Hedge Agreements. Enter into any Hedge Agreement, except (a)
Hedge Agreements entered into to hedge or mitigate risks to which either
Borrower has actual exposure (other than those in respect of Capital Stock) and
(b) Hedge Agreements entered into in order to effectively cap, collar or
exchange interest rates (from fixed to floating rates, from one floating rate to
another floating rate or otherwise) with respect to any interest-bearing
liability or investment of either Borrower.
8.13. Changes in Fiscal Periods. Permit the fiscal year of Holdings or
either Borrower to end on a day other than December 31 or change Holdings or
either Borrower's method of determining fiscal quarters.
8.14. Negative Pledge Clauses. Enter into or suffer to exist or become
effective any agreement that prohibits, limits or imposes any condition upon the
ability of any Group Member to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
other than (a) this Agreement and the other Loan Documents and (b) any
agreements governing any purchase money Liens or Capital Lease Obligations
otherwise permitted hereby (in which case, any prohibition or limitation shall
only be effective against the assets financed thereby).
73
8.15. Clauses Restricting Subsidiary Distributions. Except as listed
on Schedule 8.15, enter into or suffer to exist or become effective any
consensual encumbrance or restriction on the ability of any Subsidiary of either
Borrower to (a) make Restricted Payments in respect of any Capital Stock of such
Subsidiary held by, or pay any Indebtedness owed to, the Borrower which owns the
Capital Stock of such Subsidiary or any other Subsidiary of such Borrower, (b)
make loans or advances to, or other Investments in, the Borrower which owns the
Capital Stock of such Subsidiary or any other Subsidiary of such Borrower or (c)
transfer any of its assets to the Borrower which owns the Capital Stock of such
Subsidiary or any other Subsidiary of such Borrower, except for such
encumbrances or restrictions existing under or by reason of (i) any restrictions
existing under the Loan Documents and (ii) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement that has been entered into in
connection with the Disposition of all or substantially all of the Capital Stock
or assets of such Subsidiary.
8.16. Lines of Business. Enter into any business, either directly or
through any Subsidiary, except for those businesses in which Holdings and its
Subsidiaries (after giving effect to the Original Transactions) are engaged on
the date of this Agreement or that are reasonably related thereto.
8.17. Passive Holding Company Status. In the case of Holdings, (i)
conduct, transact or otherwise engage in, or commit to conduct, transact or
otherwise engage in, any business or operations other than those incidental to
its ownership of the Capital Stock of the Borrowers, (ii) incur, create, assume
or suffer to exist any Indebtedness or other liabilities or financial
obligations, except (x) nonconsensual obligations imposed by operation of law,
(y) pursuant to the Loan Documents to which it is a party and (z) obligations
with respect to its Capital Stock, or (iii) own, lease, manage or otherwise
operate any properties or assets (including cash (other than cash received in
connection with dividends made by the Borrowers in accordance with Section 8.6
pending application in the manner contemplated by said Section) and cash
equivalents) other than the ownership of shares of Capital Stock of the
Borrowers.
8.18. Amendments to Transaction Documentation. Amend, supplement or
otherwise modify the terms and conditions of the Transaction Documentation or
the Management Services Agreement to the extent, in the case of the Transaction
Documentation, such amendment, supplement or modification that becomes effective
after the Closing Date would be materially adverse to the interests of the
Lenders, and, in the case of the Management Services Agreement, unless otherwise
approved by the Administrative Agent in its sole discretion.
8.19. Amendments to Operating Agreement. Amend, supplement or
otherwise modify the terms and conditions of the Operating Agreement unless
otherwise approved by the Administrative Agent in its sole discretion; provided
that amendments to the provisions relating to cash distributions shall be
permitted to the extent the same would not result in an Event of Default under
Section 9(k) and other changes that do not effect the level of control of the
Managing Member, voting or other corporate governance provisions shall be
permitted subject to the reasonable approval of the Administrative Agent.
8.20. Immaterial Subsidiaries. Permit the (a) aggregate total assets
of all Immaterial Subsidiaries determined in accordance with GAAP to exceed
$3,000,000 at any time
74
or (b) aggregate total revenue of all Immaterial Subsidiaries determined in
accordance with GAAP to exceed $3,000,000 for the most recent four quarter
period for which financial statements have been delivered.
8.21. Dormant Subsidiaries. Permit any Dormant Subsidiary to engage in
any business operations, acquire any assets or incur any liabilities.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) either Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or either
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any other amount payable hereunder or under any other Loan Document, within
five days after any such interest or other amount becomes due in accordance with
the terms hereof; or
(b) any representation or warranty made or, deemed made under the Guarantee
and Collateral Agreement by any Loan Party herein or in any other Loan Document
or that is contained in any certificate, document or financial or other
statement furnished by it at any time under or in connection with this Agreement
or any such other Loan Document shall prove to have been inaccurate in any
material respect on or as of the date made or, deemed made under the Guarantee
and Collateral Agreement; or
(c) (i) any Loan Party shall default in the observance or performance of
any agreement contained in clause (i) or (ii) of Section 7.4(a) (with respect to
the Borrowers only), Section 7.7(a), Section 7.11 or Section 8 of this Agreement
or Sections 5.5 and 5.7(b) of the Guarantee and Collateral Agreement; or
(d) any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after notice to the
Borrowers from the Administrative Agent or the Required Lenders; or
(e) any Group Member (i) defaults in making any payment of any principal of
any Indebtedness (including any Guarantee Obligation, but excluding the Loans)
on the scheduled or original due date with respect thereto after giving effect
to any applicable grace periods; or (ii) defaults in making any payment of any
interest on any such Indebtedness beyond the period of grace, if any, provided
in the instrument or agreement under which such Indebtedness was created; or
(iii) defaults in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the
75
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or to become subject to a mandatory offer to purchase by the
obligor thereunder or (in the case of any such Indebtedness constituting a
Guarantee Obligation) to become payable; provided, that a default, event or
condition described in clause (i), (ii) or (iii) of this paragraph (e) shall not
at any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing with respect
to Indebtedness the outstanding principal amount of which exceeds in the
aggregate $10,000,000; or
(f) (i) any Group Member (other than Immaterial Subsidiaries) shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or any Group Member (other than Immaterial Subsidiaries) shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against any Group Member (other than Immaterial Subsidiaries) any
case, proceeding or other action of a nature referred to in clause (i) above
that (A) results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a period of
60 days; or (iii) there shall be commenced against any Group Member (other than
Immaterial Subsidiaries) any case, proceeding or other action seeking issuance
of a warrant of attachment, execution, restraint or similar process against all
or any substantial part of its assets that results in the entry of an order for
any such relief that shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any Group
Member (other than Immaterial Subsidiaries) shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) any Group Member
(other than Immaterial Subsidiaries) shall generally not, or shall be unable to,
or shall admit in writing its inability to, pay its debts as they become due; or
(g) (i) any Loan Party shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan
other than any "prohibited transaction" for which statutory or administrative
exemption is available, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of any
Loan Party or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA in a distress termination under Section 4041(c) of ERISA or a termination
instituted by the PBGC under Section 4042 of ERISA, (iv) any Single Employer
Plan shall terminate for purposes of Title IV of ERISA, (v) any Loan Party or
any Commonly Controlled Entity shall, or in the reasonable opinion of the
Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or
76
(vi) any other event or condition shall occur or exist with respect to a Plan;
and in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could, in the
reasonable opinion of the Required Lenders, reasonably be expected to have a
Material Adverse Effect; or
(h) one or more judgments or decrees shall be entered against any Group
Member involving in the aggregate a liability (not paid or fully covered by
insurance as to which the relevant insurance company (including any
creditworthy, captive insurance company established in connection with a
self-insurance program) has acknowledged coverage) of $10,000,000 or more, and
all such judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 45 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be in
full force and effect, or any Loan Party or any Affiliate of any Loan Party
shall so assert, or any Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported to be
created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and Collateral
Agreement shall cease, for any reason, to be in full force and effect or any
Loan Party or any Affiliate of any Loan Party shall so assert; or
(k) (i) the ▇▇▇▇▇▇ Group shall cease to own at least direct or indirect
interests in Holdings entitling the ▇▇▇▇▇▇ Group to receive at least 15% of all
cash distributions made by Holdings; (ii) any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), excluding the Permitted Investors, shall acquire,
directly or indirectly, beneficially or of record, equity interests representing
more than 35% of the aggregate ordinary voting power represented by the issued
and outstanding Capital Stock of Holdings; (iii) occupation of a majority of the
seats (other than vacant seats) on the board of directors of Holdings by Persons
who were neither (A) members of the board of directors as of the Closing Date
(B) nominated by the board of directors of Holdings nor (C) appointed by
directors so nominated; (iv) Holdings shall cease to own and control, of record
and beneficially, directly, 100% of each class of outstanding Capital Stock of
the Borrowers free and clear of all Liens (except Liens created by the Guarantee
and Collateral Agreement); (v) MMM shall cease to own and control, of record and
beneficially, directly, 100% of each class of outstanding Capital Stock of MMM
Healthcare free and clear of all Liens (except Liens created by the Guarantee
and Collateral Agreement, if any); or (vi) NAMM shall cease to own and control,
of record and beneficially, directly, 100% of each class of outstanding Capital
Stock of PrimeCare, North American Medical Management California, Inc. and NAMM
Illinois, Inc. free and clear of all Liens (except Liens created by the
Guarantee and Collateral Agreement, if any);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to either Borrower,
automatically the Revolving Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall
77
immediately become due and payable, and (B) if such event is any other Event of
Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrowers declare the Revolving Commitments to be terminated forthwith,
whereupon the Revolving Commitments shall immediately terminate; and (ii) with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Borrowers, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) to be due and payable forthwith, whereupon the same shall
immediately become due and payable. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to this paragraph, the Borrowers shall at such time
deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Borrowers in accordance with the Guarantee and Collateral
Agreement. After all such Letters of Credit shall have expired or been fully
drawn upon, all Reimbursement Obligations shall have been satisfied and all
other obligations of the Borrowers hereunder and under the other Loan Documents
and the Specified Hedge Agreements shall have been paid in full, the balance, if
any, in such cash collateral account shall be returned to the Borrowers (or such
other Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any
kind are hereby expressly waived by the Borrowers to the extent permitted by
applicable law.
SECTION 10. THE AGENTS
10.1. Appointment. Each Lender hereby irrevocably designates and
appoints each Agent as the agent of such Lender under this Agreement and the
other Loan Documents, and each such Lender irrevocably authorizes such Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
10.2. Delegation of Duties. Each Agent may execute any of its duties
under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the gross
negligence or misconduct of any agents or attorneys in-fact selected by it with
reasonable care.
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10.3. Exculpatory Provisions. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its or such Person's own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto to perform its obligations
hereunder or thereunder. The Agents shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
10.4. Reliance by Agents. Each Agent shall be entitled to rely, and
shall be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including counsel to
Holdings or the Borrowers), independent accountants and other experts selected
by such Agent. The Administrative Agent may deem and treat the payee of any Note
as the owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent. Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense that may be incurred by it by reason of taking or continuing to take any
such action. The Agents shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
10.5. Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent has received notice from a Lender, Holdings or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
notice thereof to the Lenders. The Administrative Agent shall take such action
with respect to such Default or Event of Default as shall be reasonably directed
by the Required Lenders (or, if so specified by this Agreement, all Lenders or
any other instructing group of Lenders specified by this Agreement); provided
that unless and until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or
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refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.
10.6. Non-Reliance on Agents and Other Lenders. Each Lender expressly
acknowledges that neither the Agents nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates have made any
representations or warranties to it and that no act by any Agent hereafter
taken, including any review of the affairs of a Loan Party or any Affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
Affiliates and made its own decision to make its Loans hereunder and enter into
this Agreement. Each Lender also represents that it will, independently and
without reliance upon any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their Affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any Affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
10.7. Indemnification. The Lenders agree to indemnify each Agent in
its capacity as such (to the extent not reimbursed by the Borrowers and without
limiting the obligation of the Borrowers to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Revolving Commitments shall have terminated and
the Loans shall have been paid in full, ratably in accordance with such
Aggregate Exposure Percentages immediately prior to such date), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (whether before or after the payment of the Loans) be imposed
on, incurred by or asserted against such Agent in any way relating to or arising
out of, the Revolving Commitments, this Agreement, any of the other Loan
Documents or any documents contemplated by or referred to herein or therein or
the transactions contemplated hereby or thereby or any action taken or omitted
by such Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision
of a court of competent jurisdiction to have resulted from such Agent's gross
negligence or willful misconduct. The agreements in this Section shall survive
the payment of the Loans and all other amounts payable hereunder.
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10.8. Agent in Its Individual Capacity. Each Agent and its Affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
10.9. Successor Administrative Agent. The Administrative Agent may
resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrowers. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 9(a) or Section
9(f) with respect to either Borrower shall have occurred and be continuing) be
subject to approval by the Borrowers (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor agent
has accepted appointment as Administrative Agent by the date that is 10 days
following a retiring Administrative Agent's notice of resignation, 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 agent as provided for above. After any retiring Administrative Agent's
resignation as Administrative Agent, the provisions of this Section 10 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent under this Agreement and the other Loan Documents.
10.10. Agents Generally. Except as expressly set forth herein, no
Agent shall have any duties or responsibilities hereunder in its capacity as
such.
10.11. The Lead Arranger. The Lead Arranger, in its capacity as such,
shall have no duties or responsibilities, and shall incur no liability, under
this Agreement and other Loan Documents.
10.12. The L/C Lender
(a) Without limiting any rights otherwise granted herein to the L/C
Lender, it is understood and agreed that the L/C Lender (i) shall have all of
the benefits and immunities (x) provided to the Agents in this Section 10 with
respect to their rights and obligations under this Agreement and with respect to
acts taken or omissions suffered by the L/C Lender in connection with Letters of
Credit issued or made under this Agreement and the documents associated
therewith as fully as if the term "Agents", as used in this Section 10, included
the L/C Lender with respect to such acts or omissions and (y) as additionally
provided in this Agreement and (ii) shall have all of the benefits of the
provisions of Section 10.7 as fully as if the term
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"Agents", as used in Section 10.7 included the L/C Lender; provided that any
resignation by the L/C Lender shall apply to its agreement to cause the issuance
of Letters of Credit and, provided further that if the L/C Lender shall resign
(which may occur at any time for any reason) and no successor L/C Lender shall
be appointed, no additional Letters of Credit shall be issued under this
Agreement.
SECTION 11. MISCELLANEOUS
11.1. Amendments and Waivers. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates, which waiver shall
be effective with the consent of the Majority Facility Lenders of each adversely
affected Facility and (y) that any amendment or modification of defined terms
used in the financial covenants in this Agreement shall not constitute a
reduction in the rate of interest or fees for purposes of this clause (i)) or
extend the scheduled date of any payment thereof, or increase the amount or
extend the expiration date of any Lender's Revolving Commitment, in each case
without the written consent of each Lender directly affected thereby; (ii)
eliminate or reduce the voting rights of any Lender under this Section 11.1
without the written consent of such Lender; (iii) reduce any percentage
specified in the definition of Required Lenders, consent to the assignment or
transfer by either Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents without the written consent of all
Lenders, (iv) release all or substantially all of the Collateral or release all
or substantially all of the Subsidiary Guarantors from their obligations under
the Guarantee and Collateral Agreement, in each case without the written consent
of all Lenders and any Qualified Counterparty with Obligations then outstanding;
(v) amend, modify or waive any condition precedent to any extension of credit
under the Revolving Facility set forth in Section 6.2 (including in connection
with any waiver of an existing Default or Event of Default) without the written
consent of the Majority Facility Lenders with respect to the Revolving Facility;
(vi) amend, modify or waive any provision of Section 4.8 without the written
consent of the Majority Facility Lenders in respect of each Facility adversely
affected thereby; (vii) reduce the percentage specified in the definition of
Majority Facility Lenders with respect to any Facility without the written
consent of all Lenders under such Facility; (viii) amend, modify or waive any
provision of Section 9 without the written consent of each Agent adversely
affected thereby; (ix) amend, modify or waive any provision of Section 3.3 or
3.4 without the written consent of the Swingline Lender; (x) amend, modify or
waive any
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provision of Sections 3.7 to 3.14 without the written consent of the L/C Lender
or (xi) amend, modify or waive any Security Document so as to alter the ratable
treatment of the Borrower Hedge Agreement Obligations and the Borrower Credit
Agreement Obligations (as defined in the Guarantee and Collateral Agreement) in
a manner adverse to any Qualified Counterparty with Obligations then outstanding
without the written consent of any such Qualified Counterparty; (xii) amend,
modify or waive this clause (xii) or clauses (iv) or (xi) without the written
consent of any Qualified Counterparty with Obligations then outstanding. Any
such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, this Agreement may be amended (or
amended and restated) with the written consent of the Required Lenders,
Administrative Agent and the Borrowers (a) to add one or more additional credit
facilities to this Agreement and to permit the extensions of credit from time to
time outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "Additional Extensions of Credit") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans and
Revolving Extensions of Credit and the accrued interest and fees in respect
thereof and (b) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders and Majority Facility
Lenders.
In addition, notwithstanding the foregoing, this Agreement may be
amended with the written consent of the Administrative Agent, the Borrowers and
the Lenders providing the relevant Replacement Term Loans (as defined below) to
permit the refinancing of all outstanding Original Term Loans, New Term Loans or
Incremental Term Loans, as applicable ("Refinanced Term Loans") with a
replacement term loan hereunder ("Replacement Term Loans"), provided that (a)
the aggregate principal amount of such Replacement Term Loans shall not exceed
the aggregate principal amount of such Refinanced Term Loans, (b) the Applicable
Margin for such Replacement Term Loans shall not be higher than the Applicable
Margin for such Refinanced Term Loans, (c) the weighted average life to maturity
of such Replacement Term Loans shall not be shorter than the weighted average
life to maturity of such Refinanced Term Loans at the time of such refinancing
and (d) all other terms applicable to such Replacement Term Loans shall be
substantially identical to, or less favorable to the Lenders providing such
Replacement Term Loans than, those applicable to such Refinanced Term Loans,
except to the extent necessary to provide for covenants and other terms
applicable to any period after the latest final maturity of the Term Loans in
effect immediately prior to such refinancing.
If, in connection with any proposed amendment, modification, waiver or
termination requiring the consent of all Lenders (including all Lenders under a
single Facility), the consent of the Required Lenders (or Majority Facility
Lenders, as the case may be) is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained being referred to as a "Non-Consenting Lender"), then, so long as the
Administrative Agent is not a Non-Consenting Lender, the Administrative Agent or
a Person reasonably acceptable to the Administrative Agent shall have the right
to purchase from
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such Non-Consenting Lenders, and such Non-Consenting Lenders agree that they
shall, upon the Administrative Agent's request, sell and assign to the
Administrative Agent or such Person, all of the Term Loans of such
Non-Consenting Lenders for an amount equal to the principal balance of all Term
Loans held by such Non-Consenting Lenders and all accrued interest and fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment and Assumption. In addition to
the foregoing, the Borrowers may replace any Non-Consenting Lender pursuant to
Section 4.13.
Notwithstanding the foregoing, technical and conforming modifications
to the Loan Documents may be made with the consent of Borrowers and the
Administrative Agent to the extent necessary to integrate any Incremental Term
Commitments on substantially the same basis as the existing Term Loans.
11.2. Notices. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of Holdings, the Borrowers and the
Agents, and as set forth in an administrative questionnaire delivered to the
Administrative Agent in the case of the Lenders, or to such other address as may
be hereafter notified by the respective parties hereto:
Holdings and the Borrowers: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: Proskauer Rose LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent: Bear ▇▇▇▇▇▇▇ Corporate Lending Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon any Agent, the L/C Lender
or the Lenders shall not be effective until received.
Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative
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Agent; provided that the foregoing shall not apply to notices pursuant to
Section 2 unless otherwise agreed by the Administrative Agent and the applicable
Lender. The Administrative Agent or the Borrowers may, in its discretion, agree
to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of
such procedures may be limited to particular notices or communications.
11.3. No Waiver; Cumulative Remedies. No failure to exercise and no
delay in exercising, on the part of any Agent or any Lender, any right, remedy,
power or privilege hereunder or under the other Loan Documents shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
11.4. Survival of Representations and Warranties. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
11.5. Payment of Expenses and Taxes. Each Borrower jointly and
severally agrees (a) except as otherwise agreed, to pay or reimburse each Agent
for all its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement and the other Loan Documents and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby, including
the reasonable fees and disbursements of counsel to such Agent and filing and
recording fees and expenses, with statements with respect to the foregoing to be
submitted to the Borrowers prior to the Closing Date (in the case of amounts to
be paid on the Closing Date) and from time to time thereafter on a quarterly
basis or such other periodic basis as such Agent shall deem appropriate, (b) to
pay or reimburse each Lender and Agent for all its costs and expenses incurred
in connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any such other documents, including the
reasonable fees and disbursements of counsel (including the reasonably allocated
fees and expenses of in-house counsel) to each Lender and of counsel to such
Agent, (c) to pay, indemnify, and hold each Lender and Agent harmless from, any
and all recording and filing fees and any and all liabilities with respect to,
or resulting from any delay in paying, stamp, excise and other taxes, if any,
that may be payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the other Loan Documents and
any such other documents, and (d) to pay, indemnify, and hold each Lender and
Agent and their respective officers, directors, employees, Affiliates, agents
and controlling persons (each, an "Indemnitee") harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents (regardless of
whether any Loan Party is or is not a party to any such actions or suits) and
any such other documents, including any of the foregoing relating to the use of
proceeds of the Loans
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or the violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of any Group Member or any of the Properties
and the reasonable fees and expenses of legal counsel in connection with claims,
actions or proceedings by any Indemnitee against any Loan Party under any Loan
Document (all the foregoing in this clause (d), collectively, the "Indemnified
Liabilities"), provided, that the Borrowers shall have no obligation hereunder
to any Indemnitee with respect to Indemnified Liabilities to the extent such
Indemnified Liabilities are found by a final and nonappealable decision of a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of such Indemnitee. Without limiting the foregoing, and to
the extent permitted by applicable law, the Borrowers agree not to assert and to
cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature, under or
related to Environmental Laws, that any of them might have by statute or
otherwise against any Indemnitee. All amounts due under this Section 11.5 shall
be payable not later than 10 days after written demand therefor is received.
Statements payable by the Borrowers pursuant to this Section 11.5 shall be
submitted to ▇▇▇▇▇▇ ▇▇▇▇ (Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇) (Telecopy No. (201)
346-8410) at the address of the Borrowers set forth in Section 11.2, or to such
other Person or address as may be hereafter designated by the Borrowers in a
written notice to the Administrative Agent. The agreements in this Section 11.5
shall survive repayment of the Loans and all other amounts payable hereunder.
11.6. Successors and Assigns; Participations and Assignments. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Lender or the L/C Lender that issues any
Letter of Credit or causes any Letter of Credit to be issued), except that (i)
neither Borrower may assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by either Borrower without such consent shall
be null and void) and (ii) no Lender may assign or otherwise transfer its rights
or obligations hereunder except in accordance with this Section.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees (each, an "Assignee") all
or a portion of its rights and obligations under this Agreement (including all
or a portion of its Revolving Commitments and the Loans at the time owing to it)
with the prior written consent (such consent not to be unreasonably withheld)
of:
(A) the Borrowers and the Administrative Agent, provided that
neither Borrower's consent shall be required for an (x) assignment to
a Lender, an Affiliate of a Lender, an Approved Fund (as defined
below) or, if an Event of Default under Section 9(a) or (f) has
occurred and is continuing, any other Person, (y) any assignment by
the Administrative Agent (or its Affiliates) or (z) any assignment of
Term Loans;
(B) the Administrative Agent, provided that no consent of the
Administrative Agent shall be required for (x) an assignment to an
Assignee that is a Lender immediately prior to giving effect to such
assignment, except in the
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case of an assignment of a Revolving Commitment to an Assignee that
does not already have a Revolving Commitment, (y) any assignment by
the Administrative Agent (or its Affiliates) or (z) any assignment of
Term Loans; and
(C) in the case of any assignment of a Revolving Commitment, the
L/C Lender and the Swingline Lender; and
(ii) Assignments shall be subject to the following additional
conditions:
(A) any assignment of Original Term Loans shall be made ratably
as between the Original Term Loans of each Borrower;
(B) except in the case of an assignment to a Lender, an Affiliate
of a Lender or an Approved Fund or an assignment of the entire
remaining amount of the assigning Lender's Revolving Commitments or
Loans under any Facility, the amount of the Revolving Commitments or
Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Assumption with respect
to such assignment is delivered to the Administrative Agent) shall not
be less than $1,000,000 unless each of the Borrowers and the
Administrative Agent otherwise consent, provided that (1) no such
consent of the Borrowers shall be required if an Event of Default
under Section 9(a) or (f) has occurred and is continuing and (2) such
amounts shall be aggregated in respect of each Lender and its
Affiliates or Approved Funds, if any;
(C) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption;
(D) the Assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an administrative questionnaire; and
(E) in the case of an assignment to a related CLO (as defined
below), the assigning Lender shall retain the sole right to approve
any amendment, modification or waiver of any provision of this
Agreement and the other Loan Documents, provided that the Assignment
and Assumption between such Lender and such CLO may provide that such
Lender will not, without the consent of such CLO, agree to any
amendment, modification or waiver that (1) requires the consent of
each Lender directly affected thereby pursuant to the proviso to the
second sentence of Section 11.1 and (2) directly affects such CLO.
For the purposes of this Section 11.6, the terms "Approved Fund" and
"CLO" have the following meanings:
"Approved Fund" means (a) a CLO and (b) with respect to any Lender
that is a fund which invests in bank loans and similar extensions of credit, any
other fund that invests in bank loans and similar extensions of credit and is
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.
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"CLO" means any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) below, from and after the effective date specified in each
Assignment and Assumption the Assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Assumption, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption covering all of the assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto but shall continue to be entitled to the benefits of Sections
4.9, 4.10, 4.11 and 10.5). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this Section 11.6
shall be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrowers, shall maintain at one of its offices a copy of each Assignment
and Assumption delivered to it and a register for the recordation of the names
and addresses of the Lenders, and the Revolving Commitments of, and principal
amount of the Loans and L/C Obligations owing to, each Lender pursuant to the
terms hereof from time to time (the "Register"). The entries in the Register
shall be conclusive, and the Borrowers, the Administrative Agent, the L/C Lender
and the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrowers, the L/C Lender and any Lender, at any
reasonable time and from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an Assignee, the Assignee's completed
administrative questionnaire (unless the Assignee shall already be a Lender
hereunder) and any written consent to such assignment required by paragraph (b)
of this Section, the Administrative Agent shall accept such Assignment and
Assumption and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrowers or the
Administrative Agent, sell participations to one or more banks or other entities
(a "Participant") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Revolving Commitments
and the Loans owing to it); provided that (A) such Lender's obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (C) the Borrowers, the Administrative Agent, the L/C Lender and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement
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and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver that (1) requires the consent of each Lender directly affected thereby
pursuant to the proviso to the second sentence of Section 11.1 and (2) directly
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrowers agree that each Participant shall be entitled to the benefits of
Sections 4.9, 4.10 and 4.11 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section.
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 11.7(b) as though it were a Lender, provided such
Participant shall be subject to Section 11.7(a) as though it were a Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under Section 4.9 or 4.10 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrowers' prior written consent. Any Participant that is a Non-U.S. Lender
shall not be entitled to the benefits of Section 4.10 unless such Participant
has delivered to the Borrowers the forms and documentation described in Section
4.10(d) or (e) and otherwise complies with these paragraphs. For the avoidance
of doubt, a Participant shall not be entitled to receive any payment from the
Borrowers as a result of the imposition of Non-Excluded Taxes resulting from the
change in the Participant's lending office after the Borrowers have provided
their written consent to the sale of the participation to the Participant.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or Assignee for such Lender as a party hereto.
(e) The Borrowers, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (d) above.
(f) Notwithstanding the foregoing, any Conduit Lender may assign any
or all of the Loans it may have funded hereunder to its designating Lender
without the consent of the Borrowers or the Administrative Agent and without
regard to the limitations set forth in Section 116(b). Each Borrower, each
Lender and the Administrative Agent hereby confirms that it will not institute
against a Conduit Lender or join any other Person in instituting against a
Conduit Lender any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding under any state bankruptcy or similar law, for one year
and one day after the payment in full of the latest maturing commercial paper
note issued by such Conduit Lender; provided, however, that each Lender
designating any Conduit Lender hereby agrees to indemnify, save and hold
harmless each other party hereto for any loss, cost, damage or expense arising
out of its inability to institute such a proceeding against such Conduit Lender
during such period of forbearance.
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11.7. Adjustments; Set-off. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "Benefited
Lender") shall, at any time after the Loans and other amounts payable hereunder
shall immediately become due and payable pursuant to Section 9, receive any
payment of all or part of the Obligations owing to it, or receive any collateral
in respect thereof (whether voluntarily or involuntarily, by set-off, pursuant
to events or proceedings of the nature referred to in Section 9(f), or
otherwise), in a greater proportion than any such payment to or collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, such Benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of the Obligations owing to
each such other Lender, or shall provide such other Lenders with the benefits of
any such collateral, as shall be necessary to cause such Benefited Lender to
share the excess payment or benefits of such collateral ratably with each of the
Lenders; provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefited Lender, such purchase shall
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to either Borrower,
any such notice being expressly waived by such Borrower to the extent permitted
by applicable law, upon any amount becoming due and payable by such Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise), to set
off and appropriate and apply against such amount any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of either Borrower, as the case may be. Each Lender agrees
promptly to notify the Borrowers and the Administrative Agent after any such
setoff and application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such setoff and application.
11.8. True-Up. In the event that any Loan shall be outstanding and (i)
the principal of or interest on such Loan shall not be paid within three
Business Days after the date on which it is due and the Required Lenders shall
deliver to the Administrative Agent and the Borrowers a request that the
provisions of this paragraph take effect with respect to all Loans (after which
time all additional borrowings of Loans, if any, must be ratable as between the
Borrowers) or (ii) the Revolving Commitments shall be terminated or the Loans
accelerated pursuant to Section 9, then (unless such request is revoked by the
Required Lenders) (w) each Lender shall acquire at face value (or sell at face
value, as the case may be) a participation in the obligations of each Borrower
in respect of the principal of and interest on each outstanding Loan of such
Borrower such that each Lender shall have a participation in the Loans of each
Borrower, together with Loans owed by such Borrower and held by such Lender not
subject to any participation pursuant to this paragraph, equal to its Aggregate
Exposure Percentage of such obligations (it being further understood and agreed
that, upon such purchase, the risk participations of the Lenders in all
outstanding Letters of Credit and Swingline Loans shall be automatically
adjusted such that each Lender's risk participation (expressed as a percentage)
in each Letter of Credit issued at the request of, or Swingline Loan made to, a
Borrower shall equal its Aggregate Exposure Percentage), (x) the Lenders shall
enter into such documentation as the Administrative Agent for the purpose of
evidencing such participations and other interests,
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(y) each applicable Lender shall pay the purchase price for its purchase of
participations pursuant to this paragraph by wire transfer of immediately
available funds in dollars to the Administrative Agent in accordance with
instructions provided by the Administrative Agent and the Administrative Agent
shall promptly wire the amounts so received to the relevant Lenders) and (z) all
payments in respect of the principal or interest of in respect of the Aggregate
Exposure or fees from and after the purchase of such participations shall be
shared by the Lenders in accordance with this paragraph and such participations
will generally be subject to the same provisions as are applicable to the
participations in Letters of Credit set forth in Sections 3.10(b) and 3.10(c)
giving effect to changes necessary to reflect the nature of the arrangements set
forth herein. The obligations of the Lenders to acquire and pay for
participations in Loans (as well as the adjustments provided for herein)
pursuant to this paragraph shall be absolute and unconditional under any and all
circumstances.
11.9. Counterparts. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrowers and the Administrative Agent.
11.10. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.11. Integration. This Agreement and the other Loan Documents
represent the entire agreement of Holdings, the Borrowers, the Agents and the
Lenders with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Agent or any Lender
relative to subject matter hereof not expressly set forth or referred to herein
or in the other Loan Documents.
11.12. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.13. Submission To Jurisdiction; Waivers. Holdings and each Borrower
hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York, the
courts of the United States for the Southern District of New York, and appellate
courts from any thereof;
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(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to Holdings or the
Borrowers, as the case may be at its address set forth in Section 11.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to ▇▇▇ in
any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.
11.14. Acknowledgments. Holdings and each Borrower hereby acknowledge
that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) no Agent or Lender has any fiduciary relationship with or duty to
Holdings or the Borrowers arising out of or in connection with this Agreement or
any of the other Loan Documents, and the relationship between the Agents and
Lenders, on one hand, and Holdings and the Borrowers, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among Holdings, the Borrowers and the Lenders.
11.15. Releases of Guarantees and Liens. (a) Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each Secured Party
(without requirement of notice to or consent of any Lender except as expressly
required by Section 11.1) to take any action requested by either Borrower having
the effect of releasing any Collateral or guarantee obligations (i) to the
extent necessary to permit consummation of any transaction not prohibited by any
Loan Document or that has been consented to in accordance with Section 11.1 or
(ii) under the circumstances described in paragraph (b) below.
(b) At such time as the Loans, the Reimbursement Obligations and the
other obligations under the Loan Documents (other than obligations under or in
respect of Hedge Agreements) shall have been paid in full, the Revolving
Commitments have been terminated and no Letters of Credit shall be outstanding
and the Obligations to any Qualified Counterparty under or in respect of
Specified Hedge Agreements shall have been cash collateralized or paid in full,
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the Collateral shall be released from the Liens created by the Security
Documents, and the Security Documents and all obligations (other than those
expressly stated to survive such termination) of the Administrative Agent and
each Loan Party under the Security Documents shall terminate, all without
delivery of any instrument or performance of any act by any Person.
11.16. Confidentiality. Each Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement that is designated by such Loan Party as
confidential; provided that nothing herein shall prevent any Agent or any Lender
from disclosing any such information (a) to any Agent, any other Lender or any
Lender Affiliate, (b) subject to an agreement to comply with the provisions of
this Section, to any actual or prospective Transferee or any direct or indirect
counterparty to any Hedge Agreement (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys, accountants
and other professional advisors or those of any of its Affiliates, (d) upon the
request or demand of any Governmental Authority, (e) in response to any order of
any court or other Governmental Authority or as may otherwise be required
pursuant to any Requirement of Law, (f) if requested or required to do so in
connection with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the NAIC or any similar organization or any nationally
recognized rating agency that requires access to information about a Lender's
investment portfolio in connection with ratings issued with respect to such
Lender, or (i) in connection with the exercise of any remedy hereunder or under
any other Loan Document.
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11.17. WAIVERS OF JURY TRIAL. HOLDINGS, THE BORROWERS, THE AGENTS AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
AND FOR ANY COUNTERCLAIM THEREIN.
11.18. Delivery of Addenda. Each Lender shall become a party to this
Agreement by delivering to the Administrative Agent an Addendum duly executed by
such Lender.
11.19. Several Obligations. Except as otherwise expressly provided
herein, the Obligations of the Borrowers under this Agreement in respect of the
payment of principal or interest on the Loans or fees in respect of Letters of
Credit shall be several and not joint and no Borrower shall be liable for any
such Obligations of the other Borrowers (except to the extent provided in the
Security Documents).
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
AVETA INC.,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
MMM HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Title: Vice President
NAMM HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
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BEAR, ▇▇▇▇▇▇▇ & CO. INC., as Sole Lead
Arranger and Sole Bookrunner
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Senior Managing Director
---------------------------------
BEAR ▇▇▇▇▇▇▇ CORPORATE LENDING INC., as
Administrative Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
----------------------------------
Title: Vice President
---------------------------------