1
EXHIBIT 10.2
================================================================================
$75,000,000.00
CREDIT AGREEMENT
Dated as of March 31, 1999
Among
ADVANCE PARADIGM, INC.
as Borrower,
THE BANKS NAMED IN THIS CREDIT AGREEMENT
as Banks,
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
as Arranger,
and
NATIONSBANK, N.A.
as Agent
================================================================================
2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms.......................................1
Section 1.02. Computation of Time Periods................................20
Section 1.03. Accounting Terms; Changes in GAAP..........................20
Section 1.04. Types of Advances..........................................20
Section 1.05. Miscellaneous..............................................20
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. The Advances and the Swing Loans...........................21
Section 2.02. Method of Borrowing........................................22
Section 2.03. Fees.......................................................26
Section 2.04. Reduction of the Commitments...............................27
Section 2.05. Repayment..................................................27
Section 2.06. Interest...................................................27
Section 2.07. Prepayments................................................28
Section 2.08. Breakage Costs.............................................30
Section 2.09. Increased Costs and Reduced Return.........................30
Section 2.10. Payments and Computations..................................33
Section 2.11. Taxes......................................................34
Section 2.12. Sharing of Payments, Etc...................................36
Section 2.13. Letters of Credit..........................................37
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Borrowing..................40
Section 3.02. Conditions Precedent to all Borrowings.....................42
Section 3.03. Determinations Under Sections 3.01 and 3.02................43
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.01. Corporate Existence; Subsidiaries..........................43
Section 4.02. Corporate Power............................................44
Section 4.03. Authorization and Approvals................................44
Section 4.04. Enforceable Obligations....................................44
Section 4.05. Financial Statements.......................................45
Section 4.06. Ownership and Liens........................................45
Section 4.07. True and Complete Disclosure...............................45
-i-
3
Section 4.08. Litigation.................................................45
Section 4.09. Use of Proceeds............................................46
Section 4.10. Investment Company Act.....................................46
Section 4.11. Public Utility Holding Company Act.........................46
Section 4.12. Taxes......................................................46
Section 4.14. Insurance..................................................47
Section 4.15. No Burdensome Restrictions; No Defaults....................47
Section 4.16. Environmental Condition....................................47
Section 4.17. Permits, Licenses, etc.....................................48
Section 4.18. Security Interests.........................................48
Section 4.19. Compliance with Laws, Material Agreements. ................48
Section 4.20. Year 2000..................................................49
Section 4.21. Regulatory Matters.........................................49
Section 4.22. Net Worth..................................................50
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.01. Compliance with Laws, Material Agreements, Etc.............50
Section 5.02. Maintenance of Insurance...................................51
Section 5.03. Preservation of Corporate Existence, Etc...................51
Section 5.04. Payment of Taxes, Etc......................................51
Section 5.05. Visitation Rights; Environmental Inspections...............52
Section 5.06. Reporting Requirements.....................................52
Section 5.07. Maintenance of Property....................................55
Section 5.08. New Subsidiaries...........................................55
Section 5.09. Security...................................................55
Section 5.09. Books and Records..........................................55
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Debt.......................................................56
Section 6.02. Liens, Etc.................................................56
Section 6.03. Restricted Payments........................................56
Section 6.04. Agreements Restricting Liens and Distributions.............56
Section 6.05. Merger or Consolidation; Asset Sales.......................56
Section 6.06. Permitted Investments......................................57
Section 6.07. Affiliate Transactions.....................................57
Section 6.08. Compliance with ERISA......................................57
Section 6.09. Maintenance of Ownership of Subsidiaries...................57
Section 6.10. Fixed Coverage Ratio.......................................58
Section 6.11. Leverage Ratio.............................................58
Section 6.12. Minimum Net Worth..........................................58
Section 6.13. Capital Expenditures.......................................58
-ii-
4
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01. Events of Default..........................................58
Section 7.02. Optional Acceleration of Maturity..........................61
Section 7.03. Automatic Acceleration of Maturity.........................61
Section 7.04. Cash Collateral Account....................................62
Section 7.05. Non-exclusivity of Remedies................................62
Section 7.06. Right of Set-off...........................................63
Section 7.07. Application of Payments....................................63
ARTICLE VIII
THE AGENT AND THE ISSUING BANK
Section 8.01. Appointment, Powers, and Immunities........................63
Section 8.02. Reliance by Agent..........................................64
Section 8.03. Defaults...................................................64
Section 8.04. Rights as Bank.............................................64
Section 8.05. Indemnification............................................65
Section 8.06. Non-Reliance on Agent and Other Banks......................65
Section 8.07. Resignation of Agent and Issuing Bank......................66
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc............................................66
Section 9.02. Notices, Etc...............................................67
Section 9.03. No Waiver; Remedies........................................67
Section 9.04. Costs and Expenses.........................................67
Section 9.05. Binding Effect.............................................68
Section 9.06. Bank Assignments and Participations........................68
Section 9.07. INDEMNIFICATION............................................70
Section 9.08. Confidentiality............................................71
Section 9.09. Execution in Counterparts..................................71
Section 9.10. Survival of Representations, etc...........................71
Section 9.11. Severability...............................................71
Section 9.12. Business Loans.............................................71
Section 9.13. Usury Not Intended.........................................72
Section 9.14. Governing Law..............................................72
Section 9.15. Waiver of Jury.............................................72
-iii-
5
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Guaranty
Exhibit C - Form of Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Notice of Conversion or Continuation
Exhibit F - Form of Notice of Swing Loan Request or Prepayment
Exhibit G - Form of NationsBank Letter of Credit Application
Exhibit H - Form of Compliance Certificate
Exhibit I - Form of Acquisition Consent Request
Exhibit J - Form of Pledge Agreement
Exhibit K - Form of Swing Note
SCHEDULES:
Schedule 1.01(a) - Notice Information
Schedule 1.01(b) - Permitted Debt
Schedule 1.01(c) - Permitted Investments
Schedule 1.01(d) - Permitted Liens
Schedule 4.01 - Subsidiaries
-iv-
6
CREDIT AGREEMENT
This Credit Agreement dated as of March 31, 1999 is among Advance
Paradigm, Inc., a Delaware corporation ("Borrower"), the Banks (as defined
below), and NationsBank, N.A., as Agent for the Banks.
The Borrower, the Banks, and the Agent agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms. As used in this Agreement, the
term "Borrower" shall have the meaning set forth above and the following terms
shall have the following meanings (unless otherwise indicated, such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"Acceptable Security Interest" means a security interest which (a)
exists in favor of the Agent for its benefit and the ratable benefit of the
Banks, (b) is superior to all other security interests (other than the Liens
permitted under clauses (b), (c), (d), (e), (f), (g), (k), (l), and (m) of the
definition of "Permitted Liens"), (c) secures the Credit Obligations, and (d) is
perfected and enforceable against the Credit Party which created such security
interest.
"Acquired Business" means the stock and assets to be acquired under the
terms of the Purchase Agreement.
"Adjusted Eurodollar Rate" means, for any Eurodollar Rate Advance for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
obtained by dividing (a) the Eurodollar Rate for such Eurodollar Rate Advance
for such Interest Period by (b) 1 minus the Eurodollar Rate Reserve Percentage
for such Eurodollar Rate Advance for such Interest Period.
"Advance" means any advance by a Bank to the Borrower as part of a
Borrowing and refers to a Base Rate Advance or a Eurodollar Rate Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of a Control Percentage, by contract or otherwise.
7
"Agent" means NationsBank, N.A. in its capacity as an agent pursuant to
Article VIII and any successor agent pursuant to Section 8.07.
"Agreement" means this Credit Agreement dated as of March 31, 1999
among the Borrower, the Banks, and the Agent, as it may be amended, modified, or
supplemented from time to time.
"Applicable Lending Office" means, for each Bank and for each Type of
Advance, the "Lending Office" of such Bank (or of an affiliate of such Bank)
designated for such Type of Advance on Schedule 1.01(a) or such other office of
such Bank (or an affiliate of such Bank) as such Bank may from time to time
specify to the Agent and the Borrower by written notice in accordance with the
terms of this Agreement as the office by which its Advances of such Type are to
be made and maintained.
"Applicable Margin" means, at any time with respect to any Advance or
the commitment fee, the following percentages determined as a function of the
Leverage Ratio as determined below:
==================================================================================================================
LEVEL I LEVEL II LEVEL III LEVEL IV
Ratio greater Ratio less than Ratio less than Ratio less than 1.50
than or equal to 2.50, but greater 2.00, but greater
2.50 than or equal to than or equal to 1.50
2.00
==================================================================================================================
Eurodollar Rate Advance 2.50% 2.125% 1.75% 1.375%
------------------------------------------------------------------------------------------------------------------
Base Rate Advance 1.50% 1.125% 0.75% 0.375%
------------------------------------------------------------------------------------------------------------------
Commitment Fee 0.50% 0.45% 0.40% 0.35%
==================================================================================================================
For purposes of determining the foregoing, the Leverage Ratio (a) shall be
deemed to be Level III from the Effective Date until the delivery of the
financial statements pursuant to Section 5.06(b) for the fiscal quarter ending
on June 30, 1999 and (b) shall thereafter be determined from the financial
statements of the Borrower and its Subsidiaries most recently delivered pursuant
to Sections 5.06(b) and (c). Any change in the Applicable Margin on or after
delivery of the financial statements for the fiscal quarter ending after June
30, 1999 shall be effective upon the date of delivery of the financial
statements pursuant to Sections 5.06(b) and (c). If the Borrower fails to
deliver such financial statements within the times specified in Sections 5.06(b)
or (c), the Leverage Ratio shall be deemed to be Level I until the Borrower
delivers such financial statements to the Agent and the Banks.
"Arranger" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Bank and an Eligible Assignee, and accepted by the Agent, in
substantially the form of the attached Exhibit A.
"Banks" means the lenders listed on the signature pages of this
Agreement and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 9.06.
-2-
8
"Base Rate" means, for any day, the rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus .5% and (b) the Prime Rate for
such day. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Advance" means an Advance which bears interest as provided
in Section 2.06(a).
"Borrowing" means a borrowing consisting of simultaneous Advances of
the same Type made by each Bank pursuant to Section 2.01(a) or Converted by each
Bank to Advances of a different Type pursuant to Section 2.02(b).
"Business Day" means a day of the year on which banks are not required
or authorized to close in ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and, if
the applicable Business Day relates to any Eurodollar Rate Advances, on which
dealings are carried on by banks in the London interbank market.
"Capital Expenditures" means, for any period, the aggregate of all
expenditures and costs (whether paid in cash or accrued as liabilities during
that period and including that portion of Capital Leases incurred during such
period which are capitalized on the balance sheet of the Borrower) of the
Borrower during such period that, in conformity with GAAP, are required to be
included in or reflected by the property, plant or equipment or similar fixed
asset accounts reflected in the consolidated balance sheet of the Borrower.
"Capital Leases" means, as applied to any Person, any lease of any
Property by such Person as lessee which would, in accordance with GAAP, be
required to be classified and accounted for as a capital lease on the balance
sheet of such Person.
"Cash Collateral Account" means a special interest bearing cash
collateral account containing cash deposited pursuant to Section 7.02(b) or
7.03(b) to be maintained at the Agent's office in accordance with Section 7.04.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 12 U.S.C. ss. 9601 et seq., as amended, state and
local analogs, and all rules and regulations and requirements thereunder in each
case as now or hereafter in effect.
"Change in Control" means (a) the direct or indirect acquisition after
the Effective Date by any person (as such term is used in Section 13(d) and
Section 14(d)(2) of the Exchange Act), or related persons constituting a group
(as such term is used in Rule 13d-5 under the Exchange Act) other than a
Permitted Holder (as defined below), of (i) beneficial ownership of issued and
outstanding shares of voting stock of the Borrower, the result of which
acquisition is that such person or such group possesses in excess of 30% of the
combined voting power of all then-issued and outstanding voting stock of the
Borrower, or (ii) the power to elect, appoint, or cause the election or
appointment of at least a majority of the members of the board of directors of
the Borrower or (b)
-3-
9
during any period of 12 consecutive months, beginning with and after the
Effective Date, individuals who at the beginning of such 12-month period were
directors of the Borrower (together with new directors elected by, or nominated
for election by, such directors or directors elected under this parenthetical
clause) shall cease for any reason to constitute a majority of the board of
directors of the Borrower at any time during such period. A "Permitted Holder"
is (a) ▇▇▇▇▇ ▇. or ▇▇▇ ▇. ▇▇▇▇▇▇▇, (b) any trust, corporation, partnership or
other entity, the beneficiaries, stockholders, partners, owners or Persons
beneficially holding 80% or more controlling interest of which consist of either
or both of the individuals listed in the foregoing clause (a), and (c) any
Person related by lineal or collateral consanguinity to either such individual
or to the spouse of either such individual (adopted persons shall be considered
the natural born child of their adoptive parents; lineal consanguinity is that
relationship that exists between persons of whom one is descended or ascended in
a direct line from the other, as between son, father, and grandfather and
collateral consanguinity is that relationship that exists between persons who
have the same ancestors, but who do not descend or ascend from the other, as
between uncle and nephew, siblings, or cousin and cousin), in each case to whom
such individual has transferred capital stock of the Borrower.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor statute.
"Collateral" means the "Collateral" as defined in the Pledge
Agreements.
"Commitment" has the meaning set forth in Section 2.01(a).
"Control Percentage" means, with respect to any Person, the percentage
of the outstanding capital stock or other ownership interests of such Person
having ordinary voting power which gives the direct or indirect holder of such
stock or interests the power to elect a majority of the Board of Directors or
similar governing body of such Person.
"Controlled Group" means all members of a controlled group of
corporations and all trades (whether or not incorporated) under common control
which, together with the Borrower, are treated as a single employer under
Section 414 of the Code.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.02(b) of Advances of one Type as Advances of
the same Type from one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 2.02(b) of one Type of Advance into another Type of Advance.
"Credit Documents" means this Agreement, the Notes, the Swing Note, the
Guaranties, the Notices of Borrowing, the Notices of Conversion, the Letters of
Credit, the Letter of Credit Applications, any Derivatives with a Bank, the
Security Documents, and each other agreement, instrument, or document executed
by the Borrower or any of its Subsidiaries at any time in connection with this
Agreement.
-4-
10
"Credit Obligations" means all principal, interest, fees,
reimbursements, indemnifications, and other amounts now or hereafter owed by the
Credit Parties to the Banks and the Agent under this Agreement and the other
Credit Documents and any increases, extensions, and rearrangements of those
obligations under any amendments, supplements, and other modifications of the
documents and agreements creating those obligations.
"Credit Parties" means the Borrower and each of its Subsidiaries.
"Debt," for any Person, means without duplication:
(a) obligations of such Person for borrowed money;
(b) obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
(c) obligations of such Person to pay the deferred purchase price of
property or services other than obligations in the form of accounts payable
incurred in the ordinary course of business to trade creditors for goods or
services and current operating liabilities (other than for borrowed money) which
in both cases are either (i) not more than 90 days past due or (ii) contested in
good faith and by appropriate proceedings;
(d) obligations of such Person as lessee under Capital Leases;
(e) obligations of such Person under forward sales arrangements, calls,
options, swaps, collars, caps, or other similar transactions, including any
obligations to purchase or sell any commodity or security at a future date for a
specific price, entered into to protect such Person from fluctuations in prices
or rates, including interest rates, foreign exchange rates, commodity prices,
and securities prices;
(f) obligations of such Person in respect of letters of credit and
agreements relating to the issuance of letters of credit;
(g) obligations of such Person under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) of such Person to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness of others of the kinds referred to in clauses (a) through (f)
above;
(h) indebtedness or obligations of others of the kinds referred to in
clauses (a) through (g) secured by any Lien on or in respect of any Property of
such Person to the extent of the fair market value of such Property; and
(i) all liabilities of such Person in respect of unfunded vested
benefits under any Plan.
-5-
11
"Default" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived, become
an Event of Default.
"Derivative" means (a) any foreign exchange transaction between the
Borrower or any of its Subsidiaries and a Bank and (b) any interest hedge, rate
swap, or cap, or similar arrangement between the Borrower or any of its
Subsidiaries and a Bank providing for the exchange of interest obligations or
the cap of the interest rate on the Advances.
"Dollar Equivalent" means the equivalent in another currency of an
amount in Dollars to be determined by reference to the rate of exchange quoted
by NationsBank, N.A., at 10:00 a.m. (Charlotte, North Carolina time) on the date
of determination, for the spot purchase in the foreign exchange market of such
amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
"EBITDA" means, for any period, (a) Net Income for such period plus (b)
to the extent deducted in determining Net Income, Interest Expense, taxes, and
depreciation and amortization.
"Effective Date" means the date on which the initial Advance is made
under this Agreement.
"Eligible Assignee" means (a) a Bank, (b) an Affiliate of a Bank, and
(c) any other Person approved by the Agent and, unless an Event of Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 9.06, the Borrower, such approval not to be unreasonably withheld
or delayed by the Agent or the Borrower and such approval to be deemed given by
the Borrower if no objection is received by the assigning Bank and the Agent
from the Borrower within three Business Days after notice of such proposed
assignment has been provided by the assigning Bank to the Borrower; provided,
however, that neither the Borrower nor an Affiliate of the Borrower shall
qualify as an Eligible Assignee nor a financial institution which on the date
its assignment becomes effective would be entitled to compensation under Section
2.11.
"Environment" or "Environmental" shall have the meanings set forth in
42 U.S.C. Section 9601(8).
"Environmental Claim" means any third party (including governmental
agencies and employees) action, lawsuit, claim, demand, regulatory action or
proceeding, order, decree, consent agreement or notice of potential or actual
responsibility or violation which seeks to impose liability under any
Environmental Law.
"Environmental Law" means all Legal Requirements arising from, relating
to, or in connection with the Environment, health, or safety, including without
limitation CERCLA and Legal Requirements relating to (a) pollution,
contamination, injury, destruction, loss, protection, cleanup, remediation,
reclamation or restoration of the air, surface water, groundwater, land surface
or subsurface strata, or other natural resources; (b) manufacture, handling,
generation, treatment, processing, recycling, reclamation, cleanup, storage,
disposal or transportation of hazardous or toxic materials, substances or
wastes; (c) exposure to pollutants, contaminants, or hazardous or toxic
substances, materials or wastes; or (d) the safety or health of employees.
-6-
12
"Environmental Permit" means any permit, license, order, approval or
other authorization under Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Rate" means, for any Eurodollar Rate Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page)
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any reason
such rate is not available, the term "Eurodollar Rate" means, for any Eurodollar
Rate Advance for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Eurodollar Rate Advance" means an Advance which bears interest at
rates based upon the Adjusted Eurodollar Rate as provided in Section 2.06(b).
"Eurodollar Rate Reserve Percentage" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against in the case of Eurodollar Rate Advances, "Eurocurrency liabilities" (as
such term is used in Regulation D). Without limiting the effect of the
foregoing, the Eurodollar Rate Reserve Percentage shall reflect any other
reserves required to be maintained by such member banks with respect to (a) any
category of liabilities which includes deposits by reference to which the
Adjusted Eurodollar Rate is to be determined or (b) any category of extensions
of credit or other assets which include Eurodollar Rate Advances. The Adjusted
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Rate Reserve Percentage.
"Events of Default" has the meaning set forth in Section 7.01.
"Expiration Date" means, with respect to any Letter of Credit, the date
on which such Letter of Credit will expire or terminate in accordance with its
terms.
-7-
13
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to the Agent (in its
individual capacity) on such day on such transactions as determined by the
Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any of its successors.
"Financial Statements" means the balance sheet and related statements
of operations, cash flow, and stockholders' equity dated March 31, 1998 referred
to in Section 4.05(a), copies of which have been delivered to the Agent and the
Banks.
"Fixed Charges" means, for any period, the sum of Interest Expense and
Lease Expense for such period.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance
Response Trust Fund, established pursuant to 42 U.S.C. Section 9631 (1988) and
the Post-closure Liability Trust Fund, established pursuant to 42 U.S.C. Section
9641 (1988), which statutory provisions have been amended or repealed by the
Superfund Amendments and Reauthorization Act of 1986, and the "Fund," "Trust
Fund," or "Superfund" that are now maintained pursuant to Section 9507 of the
Code.
"GAAP" means United States generally accepted accounting principles as
in effect from time to time, applied on a basis consistent with the requirements
of Section 1.03.
"Governmental Authority" means any foreign governmental authority, the
United States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Borrower, or the Borrower's Subsidiaries or any of their
respective Properties.
"Governmental Proceedings" means any action or proceedings by or before
any Governmental Authority, including, without limitation, the promulgation,
enactment or entry of any Legal Requirement.
"Guarantor" means each Subsidiary of the Borrower that has entered into
a Guaranty, and "Guarantors" means such Persons collectively.
-8-
14
"Guaranty" means (a) the Guaranty by the Subsidiaries of the Borrower
for the benefit of the Agent and the Banks dated as of the date of this
Agreement and (b) any Guaranty made after the date of this Agreement pursuant to
Section 5.08, each in substantially the form of the attached Exhibit B, as each
may be amended, modified, or supplemented from time to time.
"Hazardous Substance" or "Hazardous Waste" means any substance,
material, contaminant, or waste that is regulated by any Governmental Authority
and any material that is defined as a "hazardous waste," "hazardous substance,"
"hazardous material," "restricted hazardous waste," "toxic waste," or "toxic
pollutant" under any Environmental Law.
"Interest Expense" means, for any period, total interest expense for
the Borrower and its Subsidiaries, whether paid or accrued (including that
attributable to obligations which have been or should be, in accordance with
GAAP, recorded as Capital Leases), including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under Derivatives, all
as determined in conformity with GAAP.
"Interest Period" means, for each Eurodollar Rate Advance comprising
part of the same Borrowing, the period commencing on the date of such Advance or
the date of the Conversion of any Base Rate Advance into such an Advance and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.02 and, thereafter, each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by the Borrower pursuant to the
provisions below and Section 2.02. The duration of each such Interest Period
shall be one, two, three, or six months, in each case as the Borrower may, upon
notice received by the Agent not later than 11:00 a.m. (Charlotte, North
Carolina time) on, the third Business Day prior to the first day of such
Interest Period select; provided, however, that:
(a) the Borrower may not select any Interest Period for any Advance
which ends after the Maturity Date;
(b) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
(c) whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(d) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month.
-9-
15
"Issuing Bank" means NationsBank and any successor issuing bank
pursuant to Section 8.07.
"Lease Expense" means, for any period, all amounts payable by the
Borrower and its Subsidiaries during such period under any lease, sublease, or
other instrument (other than a Capital Lease) pursuant to which the Borrower or
any of its Subsidiaries is entitled to use any Property of another Person, all
as determined in accordance with GAAP.
"Legal Requirement" means any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or official interpretation of
any of the foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, including, but not limited to, Regulations T, U and X.
"Letter of Credit" means, individually, any letter of credit issued by
the Issuing Bank which is subject to this Agreement, and "Letters of Credit"
means all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of
Credit, such Letter of Credit and any agreements, documents, and instruments
entered into in connection with or relating to such Letter of Credit.
"Letter of Credit Exposure" means, at any time, the sum of (a) the
aggregate undrawn maximum face amount of each Letter of Credit at such time and
(b) the aggregate unpaid amount of all Reimbursement Obligations at such time.
"Leverage Ratio" means, as of the last day of any fiscal quarter, the
ratio of the Borrower's (a) Debt as of such day to (b) EBITDA for the four
fiscal quarter period ending on such day, except that, for the fiscal quarters
ending June 30, 1999, September 30, 1999, and December 31, 1999, EBITDA shall be
determined by annualizing EBITDA for the one, two and three fiscal quarter
period, respectively, ending on such dates.
"Lien" means any mortgage, lien, pledge, charge, deed of trust,
security interest, or encumbrance to secure or provide for the payment of any
obligation of any Person, whether arising by contract, operation of law or
otherwise (including, without limitation, the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease or other title retention
agreement).
"Liquid Investments" means:
(a) securities issued or directly and fully guaranteed or insured by
the United States;
(b) bankers acceptances or time deposits and certificates of deposit
with maturities of not more than 180 days from the date of acquisition thereof
and demand deposits ("bank debt securities"), which are either issued by (i) any
Bank or (ii) any other bank or trust company which has a combined capital
surplus and undivided profit of not less than $500,000,000.00 or the Dollar
Equivalent thereof, if at the time of deposit or purchase, such bank debt
securities are rated not less than "A" (or the then equivalent) by S&P or
Moody's;
-10-
16
(c) commercial paper with maturities of not more than 180 days from the
date of acquisition thereof issued by (i) any Bank or (ii) any other Person if
at the time of purchase such commercial paper is rated not less than "A-2" (or
the then equivalent) by S&P or not less than "P-2" (or the then equivalent) by
Moody's;
(d) repurchase or reverse purchase agreements relating to investments
described in clauses (a), (b) and (c) above with a market value at least equal
to the consideration paid in connection therewith, with any Person who regularly
engages in the business of entering into repurchase agreements and has a
combined capital surplus and undivided profit of not less than $500,000,000.00
or the Dollar Equivalent thereof, if at the time of entering into such agreement
the debt securities of such Person are rated not less than "A" (or the then
equivalent) by S&P or of Moody's;
(e) investments in any money market fund which holds investments
substantially of the type described in the foregoing clauses (a) through (d);
and
(f) such other instruments (within the meaning of Article 9 of the
Texas Business and Commerce Code) as the Borrower may request and the Agent may
approve in writing, which approval will not be unreasonably withheld.
All the Liquid Investments described in clauses (a) through (f) above shall have
maturities of not more than 397 days from the date of issue.
"Majority Banks" means, at any time, Banks holding 66-2/3% or more of
the then aggregate unpaid principal amount of the Advances owed to the Banks and
the Letter of Credit Exposure of the Banks at such time, or, if no such
principal amount and Letter of Credit Exposure is then outstanding, Banks having
66-2/3% or more of the aggregate amount of the Commitments at such time.
"Material Adverse Change" means (a) a material adverse change in the
business, financial condition, or results of operations of the Credit Parties,
taken as a whole, since the date of the Financial Statements or (b) a material
adverse effect (i) on the Borrower's ability to perform its monetary
obligations, negative covenants, or material other obligations under any of the
Credit Documents; (ii) on the ability of the other Credit Parties, taken as a
whole, to perform their monetary obligations, negative covenants, or material
other obligations under the Credit Documents; or (iii) on the business,
financial condition, or results of operations of the Credit Parties, taken as a
whole.
"Material Agreements" means (a) the Purchase Agreement, (b) all
indentures and other loan or credit agreements to which any of the Credit
Parties is a party, and (c) any other agreement for the purchase or sale of
goods or services under which the amount payable to or by the Credit Parties,
taken as a whole, exceeds 5% of the Borrower's consolidated gross revenue for
the prior fiscal year.
-11-
17
"Maturity Date" means the earlier of (a) April 2, 2002 and (b) the
earlier termination in whole of the Commitments pursuant to Section 2.04 or
Article VII.
"Maximum Rate" means the maximum nonusurious interest rate under
applicable law.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor to
its business.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any member of the Controlled Group
is making or accruing an obligation to make contributions.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Cash Proceeds" means:
(a) with respect to any sale, transfer, or other disposition of any of
the Property of any Credit Party (including the sale or transfer of stock or
other equity interest by such Credit Party and property insurance proceeds), all
cash and Liquid Investments received by any Credit Party from such sale,
transfer, or other disposition after, without duplication, (i) payment of, or
provision for, all brokerage commissions, legal fees, accounting fees, and other
reasonable out-of-pocket fees and expenses actually incurred; (ii) payment of,
or provision for, taxes payable as a result of such disposition, (iii) payment
of any outstanding obligations relating to such Property paid in connection with
any such sale, transfer, or other disposition; and (iv) recording of the amount
of reserves required in accordance with GAAP for indemnity or similar
obligations of the Credit Parties directly related to such sale, transfer, or
other disposition and
(b) with respect to the issuance of any debt securities, all cash
received by the Borrower or any of its Subsidiaries from the issuance of such
debt securities after payment of or deduction for (i) all underwriter's or
placement agent's discounts and fees and (ii) reasonable legal, accounting, and
other fees and expenses of the Borrower or such Subsidiary incurred in
connection with the issuance of any such debt securities.
"Net Income" means, for any period, the Borrower's net income for such
period, as determined in accordance with GAAP.
"Net Worth" means, at any date for any Person that is a corporation,
the sum of (a) the par value (or value stated on the books of such Person) of
the capital stock of all classes of such Person, (b) the additional paid-in
capital of such Person, and (c) the amount of the retained earnings of such
Person, all determined in accordance with GAAP, excluding, however, the value of
any redeemable preferred stock or similar capital stock and any treasury stock
of such Person.
-12-
18
"Nonordinary Course Asset Sales" means, any sales, conveyances, or
other transfers made by the Borrower or any of its Subsidiaries (a) of any
division of the Borrower or any of its Subsidiaries, (b) of the capital stock of
a Subsidiary of the Borrower by the Borrower or any of its Subsidiaries, or (c)
outside the ordinary course of business, of assets in a transaction or related
series of transactions in which the aggregate consideration (whether cash,
securities, other Property or assumption of Debt) exceeds $1,000,000.00.
"Note" means a promissory note of the Borrower payable to the order of
any Bank, in substantially the form of the attached Exhibit C, evidencing
indebtedness of the Borrower to such Bank resulting from Advances owing to such
Bank.
"Notice of Borrowing" means a notice of borrowing in the form of the
attached Exhibit D signed by the chief executive officer, chief financial
officer, or controller of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
continuation in the form of the attached Exhibit E signed by the chief executive
officer, chief financial officer, or controller of the Borrower.
"Notice of Swing Loan Request or Prepayment" means a notice of swing
loan request or prepayment in the form of the attached Exhibit F signed by the
chief executive officer, chief financial officer, or controller the Borrower.
"Obligations" means all Advances, Swing Loans, Reimbursement
Obligations, and other amounts payable by the Borrower to the Agent, or the
Banks under the Credit Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means:
(a) the acquisition of the Acquired Business;
(b) the acquisition of business assets, stock, partnership interests,
joint venture interests, or other equity interests by any Credit Party from
another Person (other than investments permitted under clause (i) of the
definition of "Permitted Investments"):
(i) made in substantially the same or complementary lines of
business of the Borrower and which does not violate any other provision
of this Agreement;
(ii) for which (a) the aggregate cash consideration paid for such
acquisition and all other acquisitions made after the date of this
Agreement during the four quarter period in which such acquisition
occurs plus (B) the aggregate principal amount of Debt assumed or
acquired in connection with such acquisition and all other acquisitions
made after the date of this Agreement during such period does not
exceed $20,000,000.00;
-13-
19
(iii) which, at the time of such acquisition, no Default has
occurred and is continuing or would occur upon the consummation of such
acquisition;
(iv) for which, if such acquisition or a related series of
acquisitions had an aggregate purchase price (whether in cash,
Property, assumption of Debt, or issuance of equity) of $5,000,000.00
or more, the Agent shall have received (a) a completed and duly
executed compliance certificate in the form of the attached Exhibit H
demonstrating pro forma financial covenant compliance, including
adjustments to the Borrower's EBITDA for such acquired business, for
the four quarters ending immediately preceding the date of such
acquisition; (B) if available, reviewed or audited financial statements
for the business acquired for at least the three fiscal years preceding
the date of the acquisition; and (C) copies of the internal financial
analysis of the acquired business completed by the Borrower and other
financial due diligence reviewed by the Borrower; and
(v) for which the aggregate consideration paid (whether in cash,
Property, assumption of Debt, or issuance of equity) for such
acquisition and all other acquisitions made after the date of this
Agreement during the four fiscal quarter period in which such
acquisition occurs does not exceed $35,000,000.00; and
(c) the acquisition of business assets, stock, partnership interests,
joint venture interests, or other equity interests by any Credit Party from
another Person for which the Majority Banks shall have consented in writing
after receipt of a completed request for consent in the form of the attached
Exhibit I including the information contemplated under clause (b)(iv) of this
definition.
To determine the value of capital stock or Property other than cash used as
consideration, the value of the Borrower's capital stock shall be based on the
closing price on the Business Day before the date of the public announcement of
the acquisition and the value of such other Property shall be the fair market
value as determined by the Borrower's board of directors in good faith.
"Permitted Debt" means all of the following Debt:
(a) Debt of the Credit Parties under the Credit Documents;
(b) Debt listed in Schedule 1.01(b) and any rearrangements, extensions,
or refinancings thereof on terms and for amounts substantially similar to the
terms and amounts existing as of the date of this Agreement;
(c) intercompany Debt incurred in the ordinary course of business owed
(i) by any wholly-owned Subsidiary of the Borrower to the Borrower; (ii) by the
Borrower to any of its wholly-owned Subsidiaries; and (iii) by any wholly-owned
Subsidiary of the Borrower to another wholly-owned Subsidiary of the Borrower;
-14-
20
(d) purchase money indebtedness, any obligations under Capital Leases,
and any Debt used to finance any Credit Party's owned or leased real estate
(including any rearrangements, extensions, or refinancing thereof), in each case
incurred or assumed after the Effective Date in an aggregate principal amount
outstanding at any time not to exceed $5,000,000.00; provided that the Borrower
may not enter into additional indebtedness of the type described in this clause
(d) (other than rearrangements, extensions, or refinancings thereof) if a
Default is continuing or entering into the additional indebtedness would
reasonably be expected to cause a Default;
(e) Debt under a Derivative so long as such Derivative is a bona fide
hedging activity (and is not for speculative purposes) and is in the ordinary
course of business;
(f) contingent obligations of any Credit Party as a guarantor of the
obligations of another Credit Party so long as such primary obligation is
otherwise permitted or not prohibited hereunder;
(g) Debt with respect to performance bonds, surety bonds, appeal bonds
or customs bonds required in the ordinary course of business or in connection
with the judgments that do not result in an Event of Default, provided that the
aggregate outstanding amount of all such performance bonds, surety bonds, appeal
bonds and customs bonds permitted by this clause shall not at any time exceed
$2,000,000.00; and
(h) Debt of the Credit Parties not otherwise permitted by this
Agreement in an aggregate principal amount at any time outstanding not exceeding
$3,000,000.00.
"Permitted Investments" means:
(a) investments in the form of trade credit to customers of the Credit
Parties arising in the ordinary course of business and represented by accounts
from such customers;
(b) Liquid Investments;
(c) investments listed in Schedule 1.01(c);
(d) Permitted Acquisitions;
(e) contributions, loans, or advances to, or investments in (i) a
wholly-owned Subsidiary of the Borrower, including investments in connection
with the creation of any such Subsidiary or (ii) the Borrower (including in each
case those made before the date of this Agreement), other than transfers of
assets constituting more than 30% of the net book value of the Borrower's
tangible assets on the date of this Agreement;
-15-
21
(f) loans and advances by the Credit Parties to employees, officers and
directors of the Credit Parties in connection with relocations, purchases by
such employees of Borrower common stock or options or similar rights to purchase
Borrower common stock and other ordinary course of business purposes (including
travel and entertainment expenses) in an aggregate amount outstanding at any
time not to exceed $500,000.00;
(g) promissory notes and other noncash consideration received by the
Credit Parties in connection with any asset sale permitted hereunder, with the
bankruptcy or reorganization of suppliers and customers, or with the settlement
of delinquent obligations of, and disputes with, customers and suppliers arising
in the ordinary course of business;
(h) advances in the form of a prepayment of up to 90 days of expenses,
so long as such expenses were incurred in the ordinary course of business and
are being paid in accordance with customary trade terms of the Borrower or any
of its Subsidiaries;
(i) loans, advances or investments in or acquisition of business
assets, stock, partnership interests, joint venture interests, or other equity
interests in an online internet venture in an aggregate amount not to exceed
$10,000,000.00 outstanding at any time so long as neither the Borrower nor any
of its Subsidiaries shall have guaranteed any obligations of such venture, shall
be a general partner in such venture, or shall otherwise have personal liability
for any obligations of such venture and Borrower and its Subsidiaries' interest
in such venture is pledged to the Agent for the benefit of the Banks as required
by Section 5.08;
(j) in addition to investments permitted by this Agreement, loans,
advances and investments to or in a Person in an aggregate amount for all loans,
advances and investments made pursuant to this clause not to exceed
$1,000,000.00 in the aggregate outstanding at any time; and
(k) such other investments as the Agent may approve in writing.
"Permitted Liens" means all of the following Liens:
(a) Liens securing the Credit Obligations;
(b) Liens disclosed to the Banks in Schedule 1.01(d) securing the
Debt described in part (b) of the definition of Permitted Debt;
(c) Liens imposed by law or contract, such as landlord's,
materialmen's, mechanics', carriers', workmen's and repairmen's liens, and other
similar liens arising in the ordinary course of business securing obligations
which are not overdue for a period of more than 30 days;
-16-
22
(d) Liens arising in the ordinary course of business out of pledges or
deposits under workers compensation laws, unemployment insurance, old age
pensions, or other social security or retirement benefits, or similar
legislation to secure public or statutory obligations;
(e) Liens for taxes, assessment, or other governmental charges which
are not yet delinquent or which are being actively contested in good faith by
appropriate proceedings;
(f) Liens securing purchase money debt, Capital Leases, or real estate
Debt permitted under clause (d) of the definition of Permitted Debt, provided
that each such Lien encumbers only the property purchased, leased, owned, or
financed in connection with the creation of any such purchase money debt,
Capital Lease, or real estate Debt, additions and accessions thereto,
improvements thereof and proceeds of any of the foregoing;
(g) Liens arising from judgments, decrees, awards or attachments in
circumstances not constituting an Event of Default;
(h) licenses, sublicenses, leases or subleases granted to third Persons
in the ordinary course of business not interfering in any material respect with
the business of the Borrower or any of its Subsidiaries;
(i) easements, rights-of-way, restrictions, minor defects or
irregularities in title, encroachments and other similar charges or
encumbrances, in each case not securing Debt and not interfering in any material
respect with the ordinary conduct of the business of the Borrower or any of its
Subsidiaries;
(j) Liens arising from precautionary UCC financing statements regarding
operating leases;
(k) Liens arising out of consignment or similar arrangements for the
sale of goods entered into by the Borrower or any of its Subsidiaries in the
ordinary course of business;
(l) additional Liens incurred by the Credit Parties so long as the
value of the property subject to such Liens, and the Debt and other obligations
secured thereby, does not exceed $3,000,000.00 outstanding at any time; and
(m) Liens arising out of the Permitted Debt contemplated by clause (g)
of the definition of "Permitted Debt."
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, limited liability company, or other entity, or a government or any
political subdivision or agency thereof or any trustee, receiver, custodian or
similar official.
-17-
23
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code.
"Pledge Agreements" means the Pledge Agreements made by the Borrower
and, if applicable, its Subsidiaries in substantially the same form as the
attached Exhibit J, as the same may be amended, supplemented, and otherwise
modified from time to time.
"Prime Rate" means the per annum rate of interest established from time
to time by NationsBank as its prime rate, which rate may not be the lowest rate
of interest charged by NationsBank to its customers.
"Property" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"Pro Rata Share" means, at any time with respect to any Bank, either
(a) the ratio (expressed as a percentage) of such Bank's Commitments at such
time to the aggregate Commitments at such time, (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such Bank's aggregate
outstanding Advances and Letter of Credit Exposure at such time to the aggregate
outstanding Advances and Letter of Credit Exposure of all the Banks at such
time, or (c) if no Advances are then outstanding and no Commitments then in
effect, the ratio (expressed as a percentage) of the aggregate principal amount
of such Bank's Advances when most recently outstanding to the aggregate
principal amount of all Advances when most recently outstanding.
"Purchase Agreement" means the Purchase Agreement dated as of February
26, 1999 among the Borrower and Foundation Health Systems, Inc. ("FHS"),
Foundation Health Pharmaceutical Services, Inc. ("FHPS"), Foundation Health
Corporation, and Integrated Pharmaceutical Services, Inc. ("IPS"), pursuant to
which the Borrower will acquire (a) all of the outstanding capital stock of FHPS
from FHS and (b) certain assets of IPS from IPS.
"Register" has the meaning set forth in Section 9.06(b).
"Regulations T, U, and X" means Regulation T, U, and X of the Federal
Reserve Board, as each is from time to time in effect, and all official rulings
and interpretations thereunder or thereof.
"Reimbursement Obligations" means all of the obligations of the
Borrower set forth in paragraph (c) of Section 2.13.
-18-
24
"Release" shall have the meaning set forth in 42 U.S.C. Section
9601(22) or under any other Environmental Law.
"Response" shall have the meaning set forth in 42 U.S.C. Section
9601(25) or under any other Environmental Law.
"Responsible Officer" means the chief executive officer, president, the
chief financial officer, any senior or executive vice president, the controller,
the treasurer, or any secretary of any Person.
"Restricted Payment" means the making by any Person of (a) any
dividends or other distributions (in cash, property, or otherwise) on, or any
payment for the purchase, redemption or other acquisition of, any shares of any
capital stock of such Person, other than dividends, distributions, and other
payments payable by the issuance of such Person's stock and (b) any voluntary
prepayment of principal or interest (in cash, property or otherwise) on any Debt
(other than the Obligations or Capital Leases or made in common stock of the
Borrower).
"Security Documents" means, collectively, the Pledge Agreements and any
and all other instruments, documents or agreements now or hereafter executed by
the Borrower or any other Person to secure the Credit Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇,
Inc., or any successor to its business.
"Subsidiary" of a Person means any corporation or other entity of which
(a) more than 50% of the outstanding capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
similar governing body of such corporation or other entity (irrespective of
whether at such time capital stock or other ownership interests of any other
class or classes of such corporation or other entity shall or might have voting
power upon the occurrence of any contingency) is at the time directly or
indirectly owned by such Person, by such Person and one or more Subsidiaries of
such Person or by one or more Subsidiaries of such Person, and (b) the financial
information of such corporation or other entity is required to be consolidated
with the financial information of such Person in accordance with GAAP.
"Swing Loan" has the meaning set forth in Section 2.01(b).
"Swing Note" means a promissory note of the Borrower payable to the
order of the Agent in substantially the form of the attached Exhibit K,
evidencing indebtedness of the Borrower to the Agent from Swing Loans owing to
the Agent.
-19-
25
"Termination Event" means (a) the occurrence of a Reportable Event with
respect to a Plan, as described in Section 4043 of ERISA and the regulations
issued thereunder (other than a Reportable Event not subject to the provision
for 30-day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of its Affiliates from a Plan during a plan year in which it was
a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan under Section 4041(c) of ERISA,
(d) the institution of proceedings to terminate a Plan by the PBGC, or (e) any
other event or condition which constitutes grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan.
"Type" has the meaning set forth in Section 1.04.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03. Accounting Terms; Changes in GAAP.
(a) All accounting terms not specifically defined in this Agreement
shall be construed in accordance with GAAP applied on a consistent basis with
those applied in the preparation of the Financial Statements (except for changes
to which the Borrower's independent public accountants take no exception).
(b) Unless otherwise indicated, all financial statements of the
Borrower, all calculations for compliance with covenants in this Agreement, all
determinations of the Applicable Margin, and all calculations of any amounts to
be calculated under the definitions in Section 1.01 shall be based upon the
consolidated accounts of the Borrower and its Subsidiaries in accordance with
GAAP and consistent with the principles of consolidation applied in preparing
the Financial Statements (except for changes in the principles of consolidation
to which the Borrower's independent public accountants take no exception).
Section 1.04. Types of Advances. Advances are distinguished by "Type".
The "Type" of an Advance refers to the determination whether such Advance is a
Eurodollar Rate Advance or Base Rate Advance, each of which constitutes a Type.
Section 1.05. Miscellaneous. Article, Section, Schedule and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
-20-
26
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. The Advances and the Swing Loans.
(a) The Advances. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Advances to the Borrower from
time to time on any Business Day during the period from the date of this
Agreement until the Maturity Date in an aggregate amount not to exceed at any
time outstanding (i) the amount set opposite such Bank's name on the signature
pages of this Agreement as its Commitment, or if such Bank has entered into any
Assignment and Acceptance after the Effective Date, set forth for such Bank as
its Commitment in the Register maintained by the Agent pursuant to Section
9.06(b), as such amount may be reduced pursuant to Section 2.04 (such Bank's
"Commitment") less (ii) such Bank's Pro Rata Share of the Letter of Credit
Exposure at such time; provided that the aggregate principal amount of
outstanding Advances, plus the Letter of Credit Exposure, plus the aggregate
principal amount of outstanding Swing Loans shall never exceed $75,000,000.00.
Each Borrowing shall (i) be in an aggregate amount not less than (a) in the case
of Base Rate Advances, $500,000.00 and in integral multiples of $100,000.00 in
excess thereof and (B) in the case of Eurodollar Rate Advances, $3,000,000.00
and in integral multiples of $1,000,000.00 in excess thereof, provided that such
limits shall not apply to Advances which refinance Swing Loans or reimburse
drawings under any Letter of Credit and (ii) consist of Advances of the same
Type made on the same day by the Banks ratably according to their respective
Commitments. Within the limits of each Bank's Commitment, the Borrower may from
time to time borrow, prepay pursuant to Section 2.07 and reborrow under this
Section 2.01.
(b) Swing Loans.
-21-
27
(i) On the terms and conditions set forth in this Agreement, the
Agent may, in its discretion from time to time on any Business Day
during the period from the date of this Agreement until the Maturity
Date, make loans ("Swing Loans") under the Swing Note to the Borrower
in an aggregate principal amount not to exceed $10,000,000.00
outstanding at any time; provided, that the aggregate principal amount
of outstanding Advances, plus the Letter of Credit Exposure, plus the
aggregate principal amount of outstanding Swing Loans shall never
exceed $75,000,000.00. Subject to the other provisions of this
Agreement, the Borrower may from time to time borrow, prepay (in whole
or in part and without premium or penalty) and reborrow Swing Loans.
Except as provided in the following clause (ii), each Swing Loan and
optional prepayment of a Swing Loan shall be made pursuant to telephone
notice to the Agent given no later that 1:00 p.m. (Charlotte, North
Carolina time) on the date of the proposed Swing Loan or prepayment,
promptly confirmed by a completed and executed Notice of Swing Loan
Request or Prepayment in the form of the attached Exhibit F telecopied
to the Agent. The Agent will make the Swing Loan available to the
Borrower, and the Borrower will make the prepayment available to the
Agent, at the Borrower's account with the Agent.
(ii) The Borrower shall repay the outstanding principal amount of
the Swing Loans on the Maturity Date. The Borrower and the Banks agree
that the Agent may request each Bank to pay, and upon such a request
made in accordance with the following sentence each Bank shall pay, to
the Agent such Bank's Pro Rata Share of all outstanding Swing Loans as
a Base Rate Advance under such Bank's Commitment (a) on each Wednesday,
or if such Wednesday is not a Business Day on the next Business Day
after such Wednesday, on which the aggregate outstanding principal
balance of all Swing Loans, after giving effect to all Swing Loans to
be made on such day and notices of prepayments of Swing Loans given for
such day, is greater than or equal to $3,000,000.00, (B) on any
Business Day on which a Swing Loan has been outstanding for 14 or more
days, and (C) upon written request from the Agent. In connection with
any Advance to be made as contemplated by the foregoing sentence, the
Agent shall give each Bank a notice to make a Base Rate Advance to the
Borrower in the amount of its Pro Rata Share of the outstanding Swing
Loans by 1:00 p.m. (Charlotte, North Carolina time) on the date the
proposed Advances are to be made. All Advances made pursuant to each
request made by the Agent pursuant to the foregoing sentence shall be
considered to be a Borrowing, and the Borrower hereby irrevocably
instructs the Agent to apply the proceeds of such Advances to the
prepayment of the outstanding Swing Loans. Each Bank (including the
Agent) shall make its Pro Rata Share of each such Borrowing available
to the Agent in immediately available funds by 3 p.m. (Charlotte, North
Carolina time) on the date requested.
(iii) Upon the acceleration of the Maturity Date pursuant to
Section 7.02 or 7.03, each Bank shall pay to the Agent such Bank's Pro
Rata Share of all outstanding Swing Loans as a Base Rate Advance under
such Bank's Commitment, but in no event shall any Bank be
-22-
28
obligated to fund more than its Commitment. Upon the date of such
payment all accrued but unpaid interest on the Swing Note to such date
shall be due and payable by the Borrower to the Agent.
Section 2.02. Method of Borrowing.
(a) Notice. Each Borrowing shall be made pursuant to a Notice of
Borrowing, given not later than (i) 11:00 a.m. (Charlotte, North Carolina time)
on the third Business Day before the date of the proposed Borrowing, in the case
of a Eurodollar Rate Advance or (ii) 10:00 a.m. (Charlotte, North Carolina time)
on the Business Day of the proposed Borrowing, in the case of a Base Rate
Advance, by the Borrower to the Agent, which shall give to each Bank prompt
notice and use best efforts to give notice not later than 12:00 p.m. (Charlotte,
North Carolina time) on the day of receipt of timely Notice of Borrowing of such
proposed Borrowing by telecopier or telex. Each Notice of a Borrowing shall be
by telecopier or telex, confirmed immediately in writing specifying the
requested (i) date of such Borrowing, (ii) Type of Advances comprising such
Borrowing, (iii) aggregate amount of such Borrowing, and (iv) if such Borrowing
is to be comprised of Eurodollar Rate Advances, Interest Period for each such
Advance. In the case of a proposed Borrowing comprised of Eurodollar Rate
Advances, the Agent shall promptly notify each Bank of the applicable interest
rate under Section 2.06(b). Each Bank shall (i) in the case of all Borrowings
other than Borrowings made on the same day as the day the Notice of Borrowing is
received, before 11:00 a.m. (Charlotte, North Carolina time) on the date of such
Borrowing and (ii) in the case of Borrowings made on the same day as the date of
the Notice of Borrowing, before 2:00 p.m. (Charlotte, North Carolina time), make
available for the account of its Applicable Lending Office to the Agent at its
address referred to in Section 9.02, or such other location as the Agent may
specify by notice to the Banks, in same day funds, such Bank's Pro Rata Share of
such Borrowing. After the Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Agent will make such
funds available to the Borrower at its account with the Agent.
(b) Conversions and Continuations. In order to elect to Convert or
Continue an Advance under this Section, the Borrower shall deliver an
irrevocable Notice of Conversion or Continuation to the Agent at the Agent's
office no later than 11:00 a.m. (Charlotte, North Carolina time) (i) the
Business Day of the proposed conversion date in the case of a Conversion to a
Base Rate Advance and (ii) at least three Business Days in advance of the
proposed Conversion or Continuation date in the case of a Conversion to, or a
Continuation of, a Eurodollar Rate Advance. Each such Notice of Conversion or
Continuation shall be in writing or by telex or telecopier, confirmed
immediately in writing specifying (i) the requested Conversion or Continuation
date (which shall be a Business Day), (ii) the amount, Type of the Advance to be
Converted or Continued, (iii) whether a Conversion or Continuation is requested,
and if a Conversion, into what Type of Advance, and (iv) in the case of a
Conversion to, or a Continuation of, a Eurodollar Rate Advance, the requested
Interest Period. Promptly after receipt of a Notice of Conversion or
Continuation under this paragraph, the Agent shall provide each Bank with a copy
thereof and, in the case of a Conversion to or a Continuation
-23-
29
of a Eurodollar Rate Advance, notify each Bank of the applicable interest rate
under Section 2.06(b). For purposes other than the making of deemed
representations and warranties pursuant to Section 3.02, the portion of Advances
comprising part of the same Borrowing that are converted to Advances of another
Type shall constitute a new Borrowing.
(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and
(b) above:
(i) at no time shall there be more than five Interest Periods
applicable to outstanding Eurodollar Rate Advances;
(ii) the Borrower may not select Eurodollar Rate Advances for any
Borrowing at any time when a Default has occurred and is continuing;
(iii) (A) if any Bank shall, at least one Business Day before the
date of any requested Borrowing, notify the Agent that the introduction
of or any change in or in the interpretation of any law or regulation
makes it unlawful, or that any central bank or other governmental
authority asserts that it is unlawful, for such Bank or its Applicable
Lending Office to perform its obligations under this Agreement to make
Eurodollar Rate Advances or to fund or maintain Eurodollar Rate
Advances, the right of the Borrower to select Eurodollar Rate Advances
for such Borrowing or for any subsequent Borrowing shall be suspended
until such Bank shall notify the Agent that the circumstances causing
such suspension no longer exist, and each Advance comprising such
Borrowing shall be a Base Rate Advance, and (B) such Bank agrees to use
commercially reasonable efforts (consistent with its internal policies
and legal and regulatory restrictions) to designate a different
Applicable Lending Office if the making of such designation would avoid
the effect of this paragraph and would not, in the reasonable judgment
of such Bank, be otherwise disadvantageous to such Bank;
(iv) if the Agent is unable to determine the Eurodollar Rate for
Eurodollar Rate Advances comprising any requested Borrowing, the right
of the Borrower to select Eurodollar Rate Advances for such Borrowing
or for any subsequent Borrowing shall be suspended until the Agent
shall notify the Borrower and the Banks that the circumstances causing
such suspension no longer exist, and each Advance comprising such
Borrowing shall be a Base Rate Advance;
(v) if the Majority Banks shall, at least one Business Day before
the date of any requested Borrowing, notify the Agent that the
Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing
will not adequately reflect the cost to such Banks of making or funding
their respective Eurodollar Rate Advances, as the case may be, for such
Borrowing, the right of the Borrower to select Eurodollar Rate Advances
for such Borrowing or for any subsequent Borrowing shall be suspended
until the Agent shall notify the Borrower and the Banks that the
circumstances causing such suspension no longer exist, and each Advance
comprising such Borrowing shall be a Base Rate Advance; and
-24-
30
(vi) if the Borrower shall fail to select the duration or
continuation of any Interest Period for any Eurodollar Rate Advances in
accordance with the provisions contained in the definition of Interest
Period in Section 1.01 and paragraph (b) above, the Agent will
forthwith so notify the Borrower and the Banks and such Advances will
be made available to the Borrower on the date of such Borrowing as Base
Rate Advances or, if an existing Advance, Convert into Base Rate
Advances.
(d)Treatment of Affected Loans. If the obligation of any Bank to make a
Eurodollar Rate Advance or to Continue, or to Convert Base Rate Advances into,
Eurodollar Rate Advance shall be suspended pursuant to Sections 2.02(c) or
2.07(d) (such Eurodollar Rate Advances being herein called "Affected Loans"),
such Bank's Affected Loans shall be automatically Converted into Base Rate
Advances on the last day(s) of the then current Interest Period(s) for Affected
Loans (or, in the case of a Conversion required by Section 2.02(c)(iii), on such
earlier date as such Bank may specify to the Borrower with a copy to the Agent)
and, unless and until such Bank gives notice as provided below that the
circumstances specified in Section 2.02(c) or 2.07(d) that gave rise to such
Conversion no longer exist:
(i) to the extent that such Bank's Affected Loans have been so
Converted, all payments and prepayments of principal that would
otherwise be applied to such Bank's Affected Loans shall be applied
instead to its Base Rate Advances; and
(ii) all Loans that would otherwise be made or Continued by such
Bank as Eurodollar Rate Advances shall be made or Continued instead as
Base Rate Advances, and all Base Rate Advances of such Bank that would
otherwise be Converted into Eurodollar Rate Advances shall be Converted
instead into (or shall remain as) Base Rate Advances.
If such Bank gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 2.02(c) or 2.07(d) that gave rise to the
Conversion of such Bank's Affected Loans pursuant to this Section 2.02(d) no
longer exist (which such Bank agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Rate Advances made by other Banks
are outstanding, such Bank's Base Rate Advances shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Rate Advances, to the extent necessary so that,
after giving effect thereto, all Eurodollar Rate Advances held by the Banks by
such Bank are held pro rata (as to principal amounts, Types, and Interest
Periods) in accordance with their respective Commitments.
-25-
31
(e) Notices Irrevocable. Each Notice of Borrowing, Notice of Conversion
or Continuation, and Notice of Swing Loan Request or Prepayment shall be
irrevocable and binding on the Borrower.
(f) Agent Reliance. Unless the Agent shall have received notice from a
Bank before the date of any Borrowing that such Bank will not make available to
the Agent such Bank's Pro Rata Share of such Borrowing, the Agent may assume
that such Bank has made its Pro Rata Share of such Borrowing available to the
Agent on the date of such Borrowing in accordance with paragraph (a) of this
Section 2.02 and the Agent may, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent that
such Bank shall not have so made its Pro Rata Share of such Borrowing available
to the Agent, such Bank and the Borrower severally agree to immediately repay to
the Agent on demand such corresponding amount, together with interest on such
amount, for each day from the date such amount is made available to the Borrower
until the date such amount is repaid to the Agent, at (i) in the case of the
Borrower, the interest rate applicable on such day to Advances comprising such
Borrowing and (ii) in the case of such Bank, the Federal Funds Rate for such
day. If such Bank shall repay to the Agent such corresponding amount and
interest as provided above, such corresponding amount so repaid shall constitute
such Bank's Advance as part of such Borrowing for purposes of this Agreement
even though not made on the same day as the other Advances comprising such
Borrowing.
(g) Bank Obligations Several. The failure of any Bank to make the
Advance to be made by it as part of any Borrowing shall not relieve any other
Bank of its obligation, if any, to make its Advance on the date of such
Borrowing. No Bank shall be responsible for the failure of any other Bank to
make the Advance to be made by such other Bank on the date of any Borrowing.
(h) Notes. The indebtedness of the Borrower to each Bank resulting from
Advances owing to such Bank shall be evidenced by a Note of the Borrower payable
to the order of such Bank in substantially the form of Exhibit C.
(i) Swing Note. The indebtedness of the Borrower to the Agent resulting
from Swing Loans owing to the Agent shall be evidenced by the Swing Note of the
Borrower payable to the order of the Agent in substantially the same form as
Exhibit K.
-26-
32
Section 2.03. Fees.
(a) Commitment Fees. The Borrower agrees to pay to the Agent for the
account of each Bank a commitment fee on the average daily amount by which such
Bank's Commitment exceeds the sum of such Bank's outstanding Advances and its
Pro Rata Share of the Letter of Credit Exposure from the date of this Agreement
until the later of (i) the Maturity Date and (ii) the date on which all Advances
have been repaid in full and the Commitments have terminated, at the rate equal
to the Applicable Margin for commitment fees during such period. The fee payable
pursuant to this clause (a) is due quarterly in arrears on the first day of each
January, April, July, and October commencing July 1, 1999 and on the date on
which the commitment fee ends under the preceding sentence.
(b) Other Fees. The Borrower agrees to pay to the Agent and the
Arranger the agent's and arranger's fees described in the letter dated March 3,
1999 from the Agent to the Borrower on the dates required by such letter.
(c) Letter of Credit Fees. The Borrower agrees to pay (i) to the Agent
for the pro rata benefit of the Banks, a fee per annum for each Letter of Credit
equal to the Applicable Margin for Eurodollar Rate Advances and (ii) to the
Issuing Bank, a fee for each Letter of Credit of .125% per annum of the face
amount of such Letter of Credit. Each such fee shall be based on the maximum
amount available to be drawn under such Letter of Credit from the date of
issuance of the Letter of Credit until its Expiration Date and be payable
quarterly in arrears on the last day of each March, June, September, and
December.
Section 2.04. Reduction of the Commitments.
(a) (i) The Borrower shall have the right, upon at least three Business
Days' irrevocable notice to the Agent, to terminate in whole or reduce ratably
in part the unused portion of the Commitments; provided that each partial
reduction shall be in the aggregate amount of not less than $3,000,000.00 and in
integral multiples of $1,000,000.00 in excess thereof, and (ii) in conjunction
with the prepayment of Advances required by Section 2.07(c)(ii), the Commitments
shall be reduced automatically upon the receipt of the cash proceeds from a
Nonordinary Course Asset Sale, by an amount equal to 50% of the Net Cash
Proceeds any Credit Party receives from such Nonordinary Course Asset Sale.
(b) Any reduction or termination of the Commitments pursuant to this
Section 2.04 shall be permanent, with no obligation of the Banks to reinstate
such Commitments, and the commitment fees provided for in Section 2.03(a) shall
thereafter be computed on the basis of the Commitments, as so reduced.
Section 2.05. Repayment. The Borrower shall repay the outstanding
principal amount of and all accrued and unpaid interest on each Advance on the
Maturity Date.
-27-
33
Section 2.06. Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such Advance
until such principal amount shall be paid in full and on the unpaid principal
amount of each Swing Loan made by the Agent from the date of such Swing Loan
until such Swing Loan shall be paid in full, at the following rates per annum:
(a) Base Rate Advances and Swing Loans. For Base Rate Advances and for
Swing Loans, a rate per annum equal at all times to the lesser of (i) the Base
Rate in effect from time to time plus the Applicable Margin and (ii) the Maximum
Rate, payable in arrears on the last day of each calendar quarter.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate
Advance, a rate per annum equal at all times during the Interest Period for such
Advance to the lesser of (i) the Adjusted Eurodollar Rate for such Interest
Period plus the Applicable Margin and (ii) the Maximum Rate, payable on the last
day of such Interest Period, and, in the case of six-month Interest Periods, on
the day which occurs during such Interest Period three months from the first day
of such Interest Period.
(c) Default Rate. After the occurrence and during the continuance of an
Event of Default and after written notice from the Agent to the Borrower that
the Majority Banks have elected to charge the default rate, all principal of the
Advances and the Swing Loans, the Reimbursement Obligations, and past due
interest shall bear interest from the later of the date of the occurrence of the
Event of Default that is continuing and another date after the occurrence of
such Event of Default indicated in such notice until the earlier of the date
such Event of Default is cured or waived and the date on which the Agent
notifies the Borrower in writing that the Majority Banks have elected to no
longer charge the default rate at a rate per annum equal to the lesser of (i)
the rate of interest otherwise applicable plus 2% and (ii) the Maximum Rate.
Section 2.07. Prepayments.
(a) Right to Prepay. The Borrower shall have no right to prepay any
principal amount of any Advance except as provided in this Section 2.07. All
prepayments shall be without premium or penalty except as provided in Section
2.08. Subject to Section 7.07, unless the Borrower designates otherwise, all
prepayments shall be applied first to Swing Loans, then to Base Rate Borrowings,
then to Eurodollar Borrowings, in order of maturity.
(b) Optional. The Borrower may elect to prepay any of the Advances,
after giving by 11:00 a.m. (Charlotte, North Carolina time) (i) in the case of
Eurodollar Rate Advances, at least three Business Days' or (ii) in case of Base
Rate Advances, same Business Day's prior written notice to the Agent stating the
proposed date and aggregate principal amount of such prepayment. If any such
notice is given, the Borrower shall prepay Advances comprising part of the same
Borrowing in
-28-
34
whole or ratably in part in an aggregate principal amount equal to the amount
specified in such notice, together with accrued interest to the date of such
prepayment on the principal amount prepaid and amounts, if any, required to be
paid pursuant to Section 2.08 as a result of such prepayment being made on such
date; provided, however, that each partial payment shall be in an aggregate
amount not less than (i) in the case of Base Rate Advances, $500,000.00 and in
integral multiples of $100,000.00 in excess thereof and (ii) in the case of
Eurodollar Rate Advances, $3,000,000.00 and in integral multiples of
$1,000,000.00 in excess thereof.
(c) Mandatory.
(i) On the date of each reduction of the aggregate Commitments
pursuant to Section 2.04, the Borrower agrees to make a prepayment in
respect of the outstanding amount of Advances to the extent, if any,
that the aggregate unpaid principal amount of all Advances exceeds the
Commitment, as so reduced.
(ii) The Borrower shall repay the Advances by an amount equal to
50% of Net Cash Proceeds from a Nonordinary Course Asset Sale that are
not used within 120 days after the Borrower's or any of its
Subsidiaries' receipt thereof to purchase assets used in the Borrower
and its Subsidiaries business. Such repayments shall be made on the
120th day after the date of receipt of such Net Cash Proceeds.
(iii) The Borrower shall repay the Advances by an amount equal to
100% of the Net Cash Proceeds any Credit Party receives from the sale
of any capital stock (other than issuance under a warrant or option
issued in the ordinary course or business) or the issuance of any debt
securities. Such repayments shall be made promptly after the Borrower's
or any of its Subsidiaries' receipt thereof.
(iv) Each prepayment pursuant to this Section 2.07(c) shall be
accompanied by accrued interest on the amount prepaid to the date of
such prepayment and amounts, if any, required to be paid pursuant to
Section 2.08 as a result of such prepayment being made on such date.
(d) Illegality. If any Bank shall notify the Agent and the Borrower
that the introduction of or any change in or in the interpretation of any law or
regulation makes it unlawful, or that any central bank or other Governmental
Authority asserts that it is unlawful for such Bank or its Applicable Lending
Office to perform its obligations under this Agreement to maintain any
Eurodollar Rate Advances of such Bank then outstanding hereunder, (i) the
Borrower shall, no later than 11:00 a.m. (Charlotte, North Carolina time), (a)
if not prohibited by law or regulation to maintain such Eurodollar Rate Advances
for the duration of the Interest Period, on the last day of the Interest Period
for each outstanding Eurodollar Rate Advance or (B) if prohibited by law or
regulation to maintain such Eurodollar Rate Advances for the duration of the
Interest Period, on the
-29-
35
second Business Day following its receipt of such notice, prepay all of the
Eurodollar Rate Advances of all of the Banks then outstanding, together with
accrued interest on the principal amount prepaid to the date of such prepayment
and amounts, if any, required to be paid pursuant to Section 2.08 as a result of
such prepayment being made on such date, (ii) each Bank shall simultaneously
make a Base Rate Advance to the Borrower on such date in an amount equal to the
aggregate principal amount of the Eurodollar Rate Advances prepaid to such Bank,
and (iii) the right of the Borrower to select Eurodollar Rate Advances for any
subsequent Borrowing shall be suspended until the Bank which gave notice
referred to above shall notify the Agent that the circumstances causing such
suspension no longer exist. Each Bank agrees to use commercially reasonable
efforts (consistent with its internal policies and legal and regulatory
restrictions) to designate a different Applicable Lending Office if the making
of such designation would avoid the effect of this paragraph and would not, in
the reasonable judgment of such Bank, be otherwise disadvantageous to such Bank.
(e) Ratable Payments; Effect of Notice. Each payment of any Advance
pursuant to this Section 2.07 or any other provision of this Agreement shall be
made in a manner such that all Advances comprising part of the same Borrowing
are paid in whole or ratably in part. All notices given pursuant to this Section
2.07 shall be irrevocable and binding upon the Borrower.
Section 2.08. Breakage Costs. Upon the request of any Bank, the
Borrower shall pay to such Bank such amount or amounts as shall be sufficient
(in the reasonable opinion of such Bank) to compensate it for any loss, cost, or
expense (excluding loss of anticipated profits) incurred by it as a result of:
(a) Funding Losses. In the case of any Borrowing which the related
Notice of Borrowing specifies is to be comprised of Eurodollar Rate Advances,
the Borrower shall indemnify each Bank against any loss, out-of-pocket cost, or
expense incurred by such Bank as a result of any failure to fulfill on or before
the date specified in such Notice of Borrowing for such Borrowing the applicable
conditions set forth in Article III, including, without limitation, any loss
(excluding any loss of anticipated profits), cost, or expense incurred by reason
of the liquidation or redeployment of deposits or other funds acquired by such
Bank to fund the Eurodollar Rate Advance to be made by such Bank as part of such
Borrowing when such Eurodollar Rate Advance, as a result of such failure, is not
made on such date.
(b) Prepayment Losses. If (i) any payment of principal of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance as a result of any voluntary prepayment, payment
pursuant to Section 2.07(d), the acceleration of the maturity of the Notes and
the Swing Note, or for any other reason or (ii) the Borrower fails to make a
principal or interest payment with respect to any Eurodollar Rate Advance on the
date such payment is due and payable, the Borrower shall, within 10 days of any
written demand sent by any Bank to the Borrower, pay to such Bank any amounts
required to compensate such Bank for any additional losses, out-of-pocket costs,
or expenses which it may reasonably incur as a result of such payment or
nonpayment,
-30-
36
including, without limitation, any loss (excluding loss of anticipated profits),
cost, or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Bank to fund or maintain such Advance.
All such demands shall show in reasonable detail the calculation of such losses.
Section 2.09. Increased Costs and Reduced Return.
(a) Eurodollar Rate Advances. If, after the date of this Agreement, the
adoption of any applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency:
(i) shall subject such Bank (or its Applicable Lending Office)
to any tax, duty, or other charge with respect to any Eurodollar Rate
Advances, its Notes, or its obligation to make Eurodollar Rate
Advances, or change the basis of taxation of any amounts payable to
such Bank (or its Applicable Lending Office) under this Agreement or
its Notes in respect of any Eurodollar Rate Advances (other than
franchise taxes or taxes imposed on the overall net income of such Bank
by the jurisdiction in which such Bank has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than by way
of imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities or
commitments of, such Bank (or its Applicable Lending Office), including
the Commitments of such Bank hereunder; or
(iii) shall impose on such Bank (or its Applicable Lending
Office) or on the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making, Converting into, continuing, or
maintaining any Eurodollar Rate Advances or to reduce any sum received or
receivable by such Bank (or its Applicable Lending Office) under this Agreement
or its Notes with respect to any Eurodollar Rate Advances, then the Borrower
shall pay to such Bank within three Business Days after written demand made by
such Bank such amount or amounts as will compensate such Bank for such increased
cost or reduction.
-31-
37
(b) Capital Adequacy. If, after the date of this Agreement, any Bank
shall have determined that the adoption of any applicable law, rule, or
regulation regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any governmental authority, central
bank, or comparable agency charged with the interpretation or administration
thereof, or any request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central bank, or
comparable agency, has or would have the effect of reducing the rate of return
on the capital of such Bank or any corporation controlling such Bank as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank or such corporation could have achieved but for such adoption, change,
request, or directive (taking into consideration its policies with respect to
capital adequacy), then from time to time within three Business Days after
written demand by such Bank the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such reduction.
(c) Letters of Credit. If, after the date of this Agreement, the
adoption of any applicable law, rule, or regulation, or any change in any
applicable law, rule, or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
compliance by the Issuing Bank (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency:
(i) shall subject the Issuing Bank (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Letter of
Credit issued by it or its obligation to issue Letters of Credit, or
change the basis of taxation of any amounts payable to the Issuing Bank
(or its Applicable Lending Office) under this Agreement in respect of
any Letters of Credit issued by its (other than franchise taxes or
taxes imposed on the overall net income of the Issuing Bank by the
jurisdiction in which the Issuing Bank has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement relating to any
letters of credit or other assets of, or any deposits with or other
liabilities or commitments of, the Issuing Bank (or its Applicable
Lending Office); or
(iii) shall impose on the Issuing Bank (or its Applicable
Lending Office) any other condition affecting the provision under this
Agreement relating to Letters of Credit issued by it or its obligation
to issue Letters of Credit;
and the result of any of the foregoing is to increase the cost to the Issuing
Bank (or its Applicable Lending Office) of issuing or maintaining, or being
obligated to issue, any Letters of Credit or to reduce any sum received or
receivable by the Issuing Bank (or its Applicable Lending Office) under this
Agreement or the Letters of Credit, then the Borrower shall within three
Business Days after written demand by such Bank pay to the Issuing Bank on
demand such amount or amounts as will compensate the Issuing Bank for such
increased cost or reduction.
-32-
38
(d) Mitigation. Each Bank and the Issuing Bank shall promptly (but in
any event within 90 days after the occurrence of the event giving rise to such
right to compensation) notify the Borrower and the Agent of any event of which
it has knowledge which will entitle such Bank or the Issuing Bank to
compensation pursuant to this Section 2.09 and will designate a different
Applicable Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the reasonable judgment of
such Bank or the Issuing Bank, be otherwise disadvantageous to it. Any Bank or
the Issuing Bank claiming compensation under this Section 2.09 shall furnish to
the Borrower and the Agent a copy of the applicable law, rule, regulation or
directive and a statement setting forth the additional amount or amounts to be
paid to it hereunder which shall be conclusive in the absence of manifest error.
In determining such amount, such Bank and the Issuing Bank may use any
reasonable averaging and attribution methods.
(e) Right to Replace. The Borrower shall have the right to replace each
Bank affected by a condition under Section 2.02(c)(iii) or (v), 2.07(d), or
2.09(a) or (b) for more than 30 days from the date such Bank was affected by
such condition (each such affected Bank, an "Affected Bank") with an Eligible
Assignee designated by the Borrower or by the Agent with the Borrower's consent.
Any replacement of a Bank pursuant to this paragraph shall be (i) made by the
Eligible Assignee's and the Affected Bank's entering into an Assignment and
Acceptance and by following the procedures in Section 9.06 for adding a Bank;
(ii) shall close within 10 days after the Agent's receipt of a notice of
election to replace such Bank from the Borrower; and (iii) shall only be made
upon the Affected Bank's being paid in full all principal, interest, and other
amounts owed to it as of the effective date of the replacement.
(f) Nondiscrimination. No Bank or Issuing Bank may pass through to the
Borrower charges or costs under Section 2.08 and 2.09 which are not also passed
through by such Bank or Issuing Bank to other customers of such Bank or Issuing
Bank similarly situated and subject to documents providing for such pass
through.
-33-
39
Section 2.10. Payments and Computations.
(a) Payments. All payments of principal, interest, and other amounts to
be made by the Borrower under this Agreement and the other Credit Documents
shall be made to the Agent in Dollars, without setoff, deduction, or
counterclaim.
(b) Payment Procedures. The Borrower shall make each payment under this
Agreement and under the Notes not later than noon (Charlotte, North Carolina
time) on the day when due in Dollars to the Agent at the location referred to in
the Notes (or such other location as the Agent shall designate in writing to the
Borrower) in same day funds. The Agent will promptly thereafter, and in any
event prior to the close of business on the day any timely payment is made,
cause to be distributed like funds relating to the payment of principal,
interest or fees ratably (other than amounts payable solely to the Agent, the
Issuing Bank, or a specific Bank pursuant to Section 2.03(b), 2.03(c), 2.08,
2.09, 2.11, or 9.07) in accordance with each Bank's Pro Rata Share to the Banks
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Bank or the Issuing
Bank to such Bank for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement.
(c) Computations. All computations of interest based on the Base Rate,
the Eurodollar Rate, and the Federal Funds Rate and all computations of fees
shall be made by the Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day, but excluding the last day)
occurring in the period for which such interest or fees are payable. Each
determination by the Agent of an interest rate shall be conclusive and binding
for all purposes, absent manifest error.
(d) Non-Business Day Payments. Whenever any payment shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(e) Agent Reliance. Unless the Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to the Banks
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank, together with interest, for each day from the date
such amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate for such day, but not in excess
of the Maximum Rate.
-34-
40
Section 2.11. Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the
Borrower to or for the account of any Bank or the Agent hereunder or under any
other Credit Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect to such payments,
excluding, in the case of each Bank and the Agent, taxes imposed on its income,
and franchise taxes imposed on it (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities with respect to such
payments being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable under
this Agreement or any other Credit Document to any Bank or the Agent, (i) the
sum payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.11) such Bank or the Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions, (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with applicable
law, and (iv) the Borrower shall furnish to the Agent written evidence of
payment thereof.
(b) Other Taxes. In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made under this
Agreement or any other Credit Document or from the execution or delivery of, or
otherwise with respect to, this Agreement or any other Credit Document
(hereinafter referred to as "Other Taxes").
(c) Indemnification. The Borrower agrees to indemnify each Bank and the
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 2.11) paid by such Bank or the Agent (as the
case may be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto.
(d) Foreign Bank Withholding Exemption. Each Bank organized under the
laws of a jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each Bank listed on the
signature pages of this Agreement and on or prior to the date on which it
becomes a Bank in the case of each other Bank, and from time to time thereafter
if requested in writing by the Borrower or the Agent (but only so long as such
Bank remains lawfully able to do so), shall provide the Borrower and the Agent
with (i) Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Bank is entitled to benefits under an income tax treaty to which
-35-
41
the United States is a party which reduces the rate of withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States, (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
and (iii) any other form or certificate required by any taxing authority
(including any certificate required by Sections 871(h) and 881(c) of the
Internal Revenue Code), certifying that such Bank is entitled to an exemption
from or a reduced rate of tax on payments pursuant to this Agreement or any of
the other Credit Documents. For any period with respect to which a Bank has
failed to provide the Borrower and the Agent with the appropriate form pursuant
to Section 2.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 2.11(a) or 2.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Bank, which is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Bank shall reasonably request to assist such Bank to recover such
Taxes.
(e) Change in Applicable Lending Office. If the Borrower is required to
pay additional amounts to or for the account of any Bank pursuant to this
Section 2.11, then such Bank will agree to use reasonable efforts to change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce any
such additional payment which may thereafter accrue if such change, in the
judgment of such Bank, is not otherwise disadvantageous to such Bank.
(f) Evidence of Tax Payments. Within 30 days after the date of any
payment of Taxes, the Borrower shall furnish to the Agent written evidence of
such payment.
(g) Survival. Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 2.11 shall survive the termination of the Commitments
and the payment in full of the Notes.
Section 2.12. Sharing of Payments, Etc. If any Bank shall obtain any
payment or collateral (whether voluntary, involuntary, through the exercise of
any right of set-off or otherwise) on account of the Advances made by it in
excess of its Pro Rata Share of payments or collateral on account of the
Advances or Reimbursement Obligations obtained by all the Banks, such Bank shall
notify the Agent and forthwith purchase from the other Banks such participations
in the Advances made by them or Reimbursement Obligations held by them as shall
be necessary to cause such purchasing Bank to share the excess payment or
benefits of such collateral or proceeds ratably in accordance with the
requirements of this Agreement with each of them; provided, however, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such purchasing Bank, such purchase from each Bank shall be rescinded and such
Bank shall repay to the purchasing Bank the purchase price to the extent of such
Bank's ratable share (according to the proportion of (a) the
-36-
42
amount of the participation sold by such Bank to the purchasing Bank as a result
of such excess payment to (b) the total amount of such excess payment) of such
recovery, together with an amount equal to such Bank's ratable share (according
to the proportion of (a) the amount of such Bank's required repayment to the
purchasing Bank to (b) the total amount of all such required repayments to the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Borrower agrees
that any Bank so purchasing a participation from another Bank pursuant to this
Section 2.12 may, to the fullest extent permitted by law, unless and until
rescinded as provided above, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Bank
were the direct creditor of the Borrower in the amount of such participation.
Section 2.13. Letters of Credit.
(a) Issuance. From time to time from the date of this Agreement until
three months before the Maturity Date, at the request of the Borrower, the
Issuing Bank shall, on the terms and conditions hereinafter set forth, issue,
increase, or extend the expiration date of Letters of Credit for the account of
the Borrower on any Business Day. No Letter of Credit will be issued, increased,
or extended:
(i) if such issuance, increase, or extension would cause the
Letter of Credit Exposure to exceed the lesser of (1) $10,000,000.00
and (2) the aggregate Commitments less the aggregate outstanding
principal amount of all Advances less the aggregate outstanding
principal amount of all Swing Loans;
(ii) unless such Letter of Credit has an Expiration Date not later
than the earlier of (a) one year after the date of issuance thereof and
(B) the Maturity Date;
(iii) unless such Letter of Credit is in form and substance
acceptable to the Issuing Bank in its sole discretion;
(iv) unless such Letter of Credit is a standby letter of credit
not supporting the repayment of Debt of any Person;
(v) unless the Borrower has delivered to the Issuing Bank a
completed and executed letter of credit application on the Issuing
Bank's standard form, which application for the initial Issuing Bank is
in the form of the attached Exhibit G and which successor application
for the initial Issuing Bank or application for any successor Issuing
Bank shall contain terms no more restrictive than the terms of this
Agreement (and in the case of conflict between this Agreement and any
such application, this Agreement shall control); and
-37-
43
(vi) unless such Letter of Credit is governed by the International
Standby Practices (ISP98), International Chamber of Commerce
Publication No. 590 or any successor to such publication. If the terms
of any letter of credit application referred to in the foregoing clause
(v) conflicts with the terms of this Agreement, the terms of this
Agreement shall control.
(b) Participations. Upon the date of the issuance or increase of a
Letter of Credit, the Issuing Bank shall be deemed to have sold to each other
Bank and each other Bank shall have been deemed to have purchased from the
Issuing Bank a participation in the related Reimbursement Obligations equal to
such Bank's Pro Rata Share at such date and such sale and purchase shall
otherwise be in accordance with the terms of this Agreement. The Issuing Bank
shall promptly notify each such participant Bank by telex, telephone, or
telecopy of each Letter of Credit issued or increased and the actual dollar
amount of such Bank's participation in such Letter of Credit.
(c) Reimbursement. The Borrower hereby agrees to pay on demand to the
Issuing Bank for the benefit of the Banks in respect of each Letter of Credit an
amount equal to any amount paid by the Issuing Bank under or in respect of such
Letter of Credit. In the event the Issuing Bank makes a payment pursuant to a
request for draw presented under a Letter of Credit and such payment is not
promptly reimbursed by the Borrower upon demand, the Issuing Bank shall give
notice of such payment to the Agent and the Banks, and each Bank shall promptly
reimburse the Issuing Bank for such Bank's Pro Rata Share of such payment, and
such reimbursement shall be deemed for all purposes of this Agreement to
constitute a Borrowing comprised of Base Rate Advances to the Borrower from such
Bank. If such reimbursement is not made by any Bank to the Issuing Bank on the
same day on which the Issuing Bank shall have made payment on any such draw,
such Bank shall pay interest thereon to the Issuing Bank at a rate per annum
equal to the Federal Funds Rate. The Borrower hereby unconditionally and
irrevocably authorizes, empowers, and directs the Agent and the Banks to record
and otherwise treat such payment under a Letter of Credit not immediately
reimbursed by the Borrower as a Borrowing comprised of Base Rate Advances to the
Borrower.
(d) Obligations Unconditional. The obligations of the Borrower under
this Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit Documents;
(ii) any amendment or waiver of or any consent to departure from
any Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other right
which the Borrower may have at any time against any beneficiary or
transferee of such Letter of Credit (or any Persons for whom any such
beneficiary or any such transferee may be acting), the Issuing Bank,
any Bank or any other Person, whether in connection with this
Agreement, the transactions contemplated in this Agreement or in any
Letter of Credit Documents or any unrelated transaction;
-38-
44
(iv) any statement or any other document presented under such
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect to the extent the Issuing Bank would not be
liable therefor pursuant to the following paragraph (e);
(v) payment by the Issuing Bank under such Letter of Credit
against presentation of a draft or certificate which does not comply
with the terms of such Letter of Credit; or
(vi) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing;
provided, however, that nothing contained in this paragraph (d) shall be deemed
to constitute a waiver of any remedies of the Borrower in connection with the
Letters of Credit.
(e) Liability of Issuing Bank. The Borrower assumes all risks of the
acts or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit. Neither the Issuing Bank nor any of
its officers or directors shall be liable or responsible for:
(i) the use which may be made of any Letter of Credit or any acts
or omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of documents, or of
any endorsement thereon, even if such documents should prove to be in
any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of documents
which do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to
the relevant Letter of Credit; or
(iv) any other circumstances whatsoever in making or failing to
make payment under any Letter of Credit (including the Issuing Bank's
own negligence),
except that the Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to, and shall promptly pay to, the Borrower, to the
extent of any direct, as opposed to consequential, damages suffered by the
Borrower which the Borrower proves were caused by (a) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
a Letter of Credit comply with the terms of such Letter of Credit or (B) the
Issuing Bank's
-39-
45
willful failure to make lawful payment under any Letter of Credit after the
presentation to it of a draft and certificate strictly complying with the terms
and conditions of such Letter of Credit.
In furtherance and not in limitation of the foregoing, the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Borrowing. The obligation
of each Bank to make its initial Advance as part of the initial Borrowing and of
the Issuing Bank to issue the initial Letters of Credit is subject to the
conditions precedent that:
(a) The Borrower, each Bank, and the Agent shall have duly and validly
executed originals of this Agreement and delivered them to the Agent;
(b) The Agent shall have received the following duly executed by all
the parties thereto, in form and substance satisfactory to the Agent, (except
for the Notes) in sufficient copies for each Bank:
(i) the Notes dated as of the Effective Date payable to the order
of each of the Banks, respectively and the Swing Note dated as of the
Effective Date payable to the order of the Agent;
(ii) a Guaranty executed by each of the Borrower's Subsidiaries;
(iii) a Pledge Agreement executed by the Borrower pledging 100% of
the capital stock of its Subsidiaries, together with the stock
certificates pledged in accordance with the Pledge Agreement and stock
powers executed in blank corresponding to such stock certificates;
(iv) evidence of arrangements by the Borrower for the payment of
all recording, documentation or stamp taxes due in connection with the
filing and recordation of the Security Documents;
(v) a certificate from the chief executive officer, president, or
chief financial officer of the Borrower dated as of the Effective Date
stating that as of such date (a) all representations and warranties of
the Borrower set forth in this Agreement are true and correct in all
material respects and (B) no Default has occurred and is continuing;
-40-
46
(vi) copies, each certified as of the date of this Agreement by a
Responsible Officer of each Credit Party (a) of the resolutions of the
Board of Directors of such Credit Party authorizing the execution and
delivery of each Credit Document to which such Credit Party is a party
and (B) of the certificate of incorporation and bylaws of such Credit
Party, as the case may be;
(vii) a certificate of a Responsible Officer of each Credit Party
dated as of the date of this Agreement certifying as of such date the
names and true signatures of officers of such Credit Party authorized
to sign the Credit Documents to which such Credit Party is a party;
(viii) a favorable opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇,
counsel to the Credit Parties, dated as of the date of this Agreement,
in form and substance satisfactory to the Agent; and
(ix) such other documents, governmental certificates, agreements,
licenses, lien searches and information as the Agent or any Bank may
reasonably request.
(c)The Borrower shall have completed the acquisition of the Acquired
Business in accordance with the terms and conditions of the Purchase Agreement
contemporaneously with the making of the initial Borrowing without any material
modification thereto or waiver of any material term or condition thereof.
(d) The Borrower shall have paid (i) to the Agent for its account and
the account of the Arranger the fees required by Section 2.03(b) to be paid as
of the Effective Date and (ii) to the Agent for its account and the account of
the Banks, as appropriate, the costs and expenses required by Section 9.04 to be
paid as of the Effective Date.
(e) No Default or Event of Default shall have occurred and be
continuing.
(f) The representations and warranties contained in Article IV and in
each other Credit Document shall be true and correct in all material respects.
(g) The Agent shall have received the audited consolidating financial
statements of the Borrower for the fiscal years ending 1996, 1997, and 1998,
including the balance sheets and statements of operations, stockholders' equity
and cash flow audited by independent public accountants of recognized national
standing and, for the fiscal quarters ending June 30, 1998, September 30, 1998,
and December 31, 1998, the unaudited balance sheet and statements of operations
and cash flow, in all cases prepared in conformity with GAAP.
-41-
47
(h) (i) Since September 30, 1998, no Material Adverse Change shall have
occurred, and (ii) no material adverse change shall have occurred in the
financial or capital markets generally which the Agent or the Arranger in its
sole discretion deems material in connection with the syndication of this
Agreement.
(i) As of the date of this Agreement, there is no pending or, to the
best knowledge of the Borrower, threatened action or proceeding affecting the
Borrower or any of its Subsidiaries before any court, Governmental Authority or
arbitrator, which would reasonably be expected to cause a Material Adverse
Change or which purports to affect the legality, validity, binding effect or
enforceability of this Agreement or any other Credit Document or the
consummation of any of the transactions contemplated hereby or thereby.
(j) As of the date of this Agreement, the Credit Parties shall be in
compliance with all existing financial obligations.
(k) The Agent shall have received information satisfactory to it
regarding litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt agreements,
property ownership, environmental matters, contingent liabilities, and
management of the Credit Parties.
(l) The Agent shall have received information satisfactory to it and
the Lenders confirming that (i) the Credit Parties are taking all necessary and
appropriate steps to ascertain the extent of, and to quantify and successfully
address, business and financial risks facing the Credit Parties as a result of
the "Year 2000 Problem" (that is, the risk that computer applications used by
the Credit Parties or the Acquired Business or any of its Subsidiaries (or
suppliers, vendors, or customers) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), including risks resulting from the failure of key
vendors and customers of the Credit Parties to successfully address the Year
2000 Problem, and (b) the Credit Parties' material computer applications will,
and the Borrower has taken all reasonable steps to obtain assurances from its
key vendors and suppliers that their material computer applications will, on a
timely basis, adequately address the Year 2000 Problem (that is, be "Year 2000
Compliant"), except to the extent that the failure to be Year 2000 Compliant
would not cause a Material Adverse Change.
Section 3.02. Conditions Precedent to all Borrowings. The obligation of
each Bank to fund an Advance on the occasion of each Borrowing and of the
Issuing Bank to issue or increase any Letter of Credit and of the Agent to fund
a Swing Loan shall be subject to the further conditions precedent that on the
date of such Borrowing, the issuance or increase of such Letter of Credit, or
the making of such Swing Loan:
-42-
48
(a) the following statements shall be true (and each of the giving of
the applicable Notice of Borrowing or Notice of Swing Loan Request or Prepayment
and the acceptance by the Borrower of the proceeds of such Borrowing or Swing
Loan or the issuance or increase of such Letter of Credit shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
or Swing Loan or the issuance or increase of such Letter of Credit, such
statements are true):
(i) for other than a Borrowing in connection with a Notice of
Continuation or Conversion, the representations and warranties
contained in Article IV and those in each other Credit Document (other
than representations and warranties that are expressly made as of a
specific date) are correct in all material respects on and as of the
date of such Borrowing or Swing Loan or the issuance or increase of
such Letter of Credit, before and after giving effect to such Borrowing
or Swing Loan or to the issuance or increase of such Letter of Credit
and to the application of the proceeds from such Borrowing or such
Swing Loan, as though made on and as of such date and
(ii) no Default has occurred and is continuing or would result
from such Borrowing or from the application of the proceeds therefrom
or from the making of such Swing Loan or from the issuance or increase
of such Letter of Credit; and
(b) the Agent shall have received such other approvals, opinions or
documents deemed necessary or desirable by any Bank as a result of circumstances
occurring after the date of this Agreement, as any Bank through the Agent may
reasonably request.
Section 3.03. Determinations Under Sections 3.01 and 3.02. For purposes
of determining compliance with the conditions specified in Sections 3.01 and
3.02, each Bank shall be deemed to have consented to, approved or accepted or to
be satisfied with each document or other matter required thereunder to be
consented to or approved by or acceptable or satisfactory to the Banks unless an
officer of the Agent responsible for the transactions contemplated by the Credit
Documents shall have received written notice from such Bank prior to the
Borrowings hereunder specifying its objection thereto and such Bank shall not
have made available to the Agent such Bank's ratable portion of such Borrowings.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
-43-
49
Section 4.01. Corporate Existence; Subsidiaries. The Borrower is a
corporation duly organized, validly existing, and in good standing under the
laws of Delaware and in good standing and qualified to do business in each
jurisdiction where its ownership or lease of property or conduct of its business
requires such qualification and where a failure to be qualified would reasonably
be expected to cause a Material Adverse Change. Each Subsidiary of the Borrower
is a corporation duly organized, validly existing, and in good standing under
the laws of its jurisdiction of incorporation and in good standing and qualified
to do business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification and where a failure to be
qualified would reasonably be expected to cause a Material Adverse Change. The
Borrower has no Subsidiaries other than (a) the Subsidiaries listed on the
attached Schedule 4.01 and (b) those which have, after the Effective Date,
complied with the requirements of Section 5.08. Schedule 4.01 lists the
jurisdiction of incorporation and the address of the principal office of each
Subsidiary of the Borrower existing on the date of this Agreement.
Section 4.02. Corporate Power. The execution, delivery, and performance
by each Credit Party of the Credit Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby (a) are within
such Credit Party's corporate powers, (b) have been duly authorized by all
necessary corporate action, (c) do not contravene (i) such Credit Party's
certificate or articles, as the case may be, of incorporation or by-laws or (ii)
any law or any contractual restriction binding on or affecting such Credit
Party, the contravention of which would reasonably be expected to cause a
Material Adverse Change and (d) will not result in or require the creation or
imposition of any Lien prohibited by this Agreement. At the time of each
Borrowing, such Borrowing and the use of the proceeds of such Borrowing will be
within the Borrower's corporate ▇▇▇▇▇▇, ▇▇▇▇ have been duly authorized by all
necessary corporate action, (a) will not contravene (i) the Borrower's
certificate of incorporation or by-laws or (ii) any law or any contractual
restriction binding on or affecting the Borrower the contravention of which
would reasonably be expected to cause a Material Adverse Change and (b) will not
result in or require the creation or imposition of any Lien prohibited by this
Agreement.
Section 4.03. Authorization and Approvals. No authorization or approval
or other action by, and no notice to or filing with, any Governmental Authority
or any other Person (each a "Filing") is required for the due execution,
delivery and performance by the Credit Parties of the Credit Documents or the
consummation of the transactions contemplated thereby, except (a) Filings
necessary in order to obtain and maintain perfection of Liens, (b) Filings
necessary in connection with the conduct of the Borrower's business required to
be made after any date this representation is made or deemed made, (c) Filings
necessary in connection with the exercise of remedies under the Credit
Documents, (d) such other Filings as have been obtained or made, (e) Filings
related to environmental matters, ERISA matters, labor matters, securities laws,
taxes and intellectual property required to be made after any date this
representation is made or deemed made, and (f) Filings required to maintain
corporate and similar standing and existence required to be made after any date
this representation is made or deemed made. At the time of each Borrowing, no
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority or any other Person will be required for such
Borrowing or the use of the proceeds of such Borrowing.
-44-
50
Section 4.04. Enforceable Obligations. Each Credit Document has been
duly executed and delivered by each Credit Party which is a party to it. Each
Credit Document is the legal, valid, and binding obligation of each Credit Party
which is a party to it, enforceable against such Credit Party in accordance with
its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium, or similar law affecting
creditors' rights generally and by general principles of equity (whether
considered in proceeding at law or in equity).
Section 4.05. Financial Statements. (a) The audited balance sheet of
the Borrower and its Subsidiaries as at March 31, 1998, and the related
statements of operations, stockholders' equity, and cash flow of the Borrower
and its Subsidiaries for the fiscal year then ended, copies of which have been
furnished to each Bank, and the balance sheet of the Borrower and its
Subsidiaries as at December 31, 1998, and the related statements of operations
and cash flow of the Borrower and its Subsidiaries for the nine months then
ended, duly certified by an authorized financial officer of the Borrower, copies
of which have been furnished to each Bank, fairly present, subject, in the case
of such balance sheets as at December 31, 1998 and the statements of operations
and cash flow for the nine months then ended, to year-end audit adjustments and
absence of footnotes, the financial condition of the Borrower and its
Subsidiaries as at such dates and the results of the operations of the Borrower
and its Subsidiaries for the periods ended on such dates, and such balance
sheets and statements of operations, stockholders' equity, and cash flow were
prepared in accordance with GAAP.
(b) Since March 31, 1998, no Material Adverse Change has occurred.
Section 4.06. Ownership and Liens. Each Credit Party has title to, or a
valid leasehold interest in, all of the Property used in its business, including
as of the date of this Agreement the Property reflected in the December 1998
financial statements referred to in Section 4.05 (other than Property sold since
such date), and none of the Property owned or leased by any Credit Party is
subject to any Lien except Permitted Liens.
Section 4.07. True and Complete Disclosure. No representation,
warranty, or other statement made by any Credit Party (or on behalf of any
Credit Party) in this Agreement or any other Credit Document contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which they were made as of the date of this Agreement the
effect of which would reasonably be expected to cause a Material Adverse Change.
There is no fact known to any Responsible Officer of the Borrower on the date of
this Agreement and on the Effective Date that has not been disclosed to the
Agent which would reasonably be expected to cause a Material Adverse Change. All
projections, estimates, and pro forma financial information furnished by the
Borrower or on behalf
-45-
51
of the Borrower were prepared on the basis of assumptions, data, information,
tests, or conditions believed to be reasonable at the time such projections,
estimates, and pro forma financial information were furnished.
Section 4.08. Litigation. Except as otherwise disclosed to the Banks in
writing, there is no pending or, to the best knowledge of the Borrower,
threatened action or proceeding affecting the Borrower or any of its
Subsidiaries before any court, Governmental Agency or arbitrator, which would
reasonably be expected to cause a Material Adverse Change or which purports to
affect the legality, validity, binding effect or enforceability of this
Agreement, any Note, the Swing Note, or any other Credit Document or the
consummation of any of the transactions contemplated hereby or thereby.
Section 4.09. Use of Proceeds. The proceeds of Advances and Swing Loans
may be used by the Borrower only for working capital, for Capital Expenditures,
and for general corporate purposes, including for acquisitions. The Borrower is
not engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulation U). No proceeds of any
Advance or any Swing Loan will be used to purchase or carry any margin stock in
violation of Regulation T, U or X.
Section 4.10. Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 4.11. Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "Subsidiary company" of
a "holding company", or an "affiliate" of a "holding company" or of a
"Subsidiary company" of a "holding company", within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 4.12. Taxes. Each of the Borrower and each of its Subsidiaries
has filed or caused to be filed all tax returns required by law to be filed and
has paid or caused to be paid all taxes, assessments and other governmental
charges levied upon or in respect of any of its Properties, other than taxes the
validity or amount of which are being contested in good faith by the Borrower or
such Subsidiary by appropriate proceedings and for which the Borrower or such
Subsidiary shall have set aside on its books adequate reserves in accordance
with GAAP. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of taxes for all fiscal periods are adequate, and
there is not unpaid assessment for additional taxes for any fiscal period or any
basis therefor.
Section 4.13. Pension Plans. No Termination Event has occurred with
respect to any Plan, and each Plan has complied with and been administered in
all material respects in accordance with applicable provisions of ERISA and the
Code. No "accumulated funding deficiency" (as defined in
-46-
52
Section 302 of ERISA) has occurred and there has been no excise tax imposed
under Section 4971 of the Code. To the knowledge of any Responsible Officer of
the Borrower, no Reportable Event has occurred with respect to any Multiemployer
Plan, and each Multiemployer Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. The present
value of all benefits vested under each Plan (based on the assumptions used to
fund such Plan) did not, as of the last annual valuation date applicable
thereto, exceed the value of the assets of such Plan allocable to such vested
benefits in any amount that would reasonably be expected to cause a Material
Adverse Change. Neither the Borrower nor any member of the Controlled Group has
had a complete or partial withdrawal from any Multiemployer Plan for which there
is any material withdrawal liability. As of the most recent valuation date
applicable thereto, neither the Borrower nor any member of the Controlled Group
has received notice that any Multiemployer Plan is insolvent or in
reorganization. Based upon GAAP existing as of the date of this Agreement and
current factual circumstances, the Borrower has no reason to believe that the
annual cost during the term of this Agreement to the Borrower or any of its
Subsidiaries for post-retirement benefits to be provided to the current and
former employees of the Borrower or any of its Subsidiaries under welfare
benefit plans (as defined in Section 3(1) of ERISA) could, in the aggregate,
reasonably be expected to cause a Material Adverse Change.
Section 4.14. Insurance. The Borrower and each of its Subsidiaries
carry insurance with reputable insurers in respect of such of their respective
Properties, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar businesses or, self-insure
to the extent that is customary for Persons of similar size engaged in similar
businesses.
Section 4.15. No Burdensome Restrictions; No Defaults.
(a) No Credit Party is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction or provision of applicable Legal Requirement
which would reasonably be expected to cause a Material Adverse Change. No Credit
Party is in default under or with respect to any contract, agreement, lease or
other instrument to which such Credit Party is a party and which would
reasonably be expected to cause a Material Adverse Change. To the knowledge of
each Responsible Officer of the Borrower, no Credit Party has received any
notice of default under any contract, agreement, lease or other instrument to
which such Credit Party is a party which is continuing or which, if not cured,
would reasonably be expected to cause a Material Adverse Change.
(b) No Default has occurred and is continuing.
Section 4.16. Environmental Condition.
(a) The Credit Parties, taken as a whole, (i) have obtained all
Environmental Permits necessary for the ownership and operation of their
respective material Properties and the conduct of
-47-
53
their respective businesses; (ii) have been and are in compliance with all terms
and conditions of such Environmental Permits and with all other material
requirements of applicable Environmental Laws of which the failure to comply
would reasonably be expected to cause a Material Adverse Change; (iii) have not
received notice of any violation or alleged violation of any Environmental Law
or Environmental Permit the violation of which would reasonably be expected to
cause a Material Adverse Change; and (iv) are not subject to any Environmental
Claim known to any Credit Party, which Environmental Claim would reasonably be
expected to cause a Material Adverse Change.
(b) To the knowledge of any Responsible Officer of the Borrower, none
of the present or previously owned or operated Property of the Borrower or of
any of its present or former Subsidiaries, wherever located, (i) has been placed
on or, to any Credit Party's knowledge, proposed to be placed on the National
Priorities List, the Comprehensive Environmental Response Compensation Liability
Information System list, or their state or local analogs, or have been otherwise
designated or listed as a potential site for removal, remediation, cleanup,
closure, restoration, reclamation, or other response activity under any
Environmental Laws; (ii) is subject to a Lien, arising under or in connection
with any Environmental Laws, that attaches to any revenues or to any Property
owned or operated by the Borrower or any of its Subsidiaries, wherever located,
which Lien would reasonably be expected to cause a Material Adverse Change; or
(iii) to any Credit Party's knowledge, has been the site of any Release of
Hazardous Substances or Hazardous Wastes from present or past operations which
has caused at the site or at any third-party site any condition that has
resulted in or would reasonably be expected to result in the need for Response
that would cause a Material Adverse Change.
(c) Without limiting the foregoing, the present and, to the best
knowledge of any Responsible Officer of the Borrower, future liability, if any,
of the Credit Parties, taken as a whole, which would reasonably be expected to
arise in connection with requirements under Environmental Laws will not result
in a Material Adverse Change.
Section 4.17. Permits, Licenses, etc. The Credit Parties possess all
permits, licenses, patents, patent rights or licenses, trademarks, trademark
rights, trade names rights and copyrights which are material to the conduct of
its business. The Credit Parties manage and operate their businesses in
accordance with all applicable Legal Requirements which the failure to so manage
or operate would reasonably be expected to cause a Material Adverse Change.
Section 4.18. Security Interests. On the Effective Date, all
governmental actions and all other filings, recordings, registrations, third
party consents, and other actions which are necessary to create and perfect the
Liens provided for in the Security Documents will have been made, obtained, and
taken in all relevant jurisdictions, or satisfactory arrangements will have been
made for all governmental actions and all other filings, recordings,
registrations, third party consents, and other actions which are necessary to
create and perfect the Liens provided for in the Security Documents to be made,
obtained, or taken in all relevant jurisdictions.
-48-
54
Section 4.19. Compliance with Laws, Material Agreements. No Credit
Party is in violation of any Legal Requirement the failure to comply with which
would reasonably be expected to cause a Material Adverse Change. No Credit Party
is in violation of any provision of any Material Agreement to which it is a
party, and the execution and delivery of this Agreement and the Credit Documents
and the consummation of the transactions contemplated thereunder shall not
result in any breach of any provisions of, or constitute a default under, any
Material Agreement, except any violation, breach, or default which could not
reasonably be expected to result in a Material Adverse Change.
Section 4.20. Year 2000. The Borrower has (a) completed a review and
assessment of all areas within its and each of its Subsidiaries' and the
Acquired Business' and its Subsidiaries' business and operations (including
those affected by suppliers, vendors, and customers) that could be adversely
affected by the Year 2000 Problem (as defined in Section 3.01(l)), (b) developed
a plan and timeline for addressing on a timely basis, but in any event before
July 1, 1999, the Year 2000 Problem, and (c) to date, implemented that plan
substantially in accordance with that timetable. Based on the foregoing, the
Borrower believes that all computer applications (including those of its
suppliers, vendors, and customers) that are material to its or any of its
Subsidiaries' or the Acquired Business' or any of its Subsidiaries' business and
operations are reasonably expected on a timely basis, but in any event before
July 1, 1999, to be Year 2000 Compliant (as defined in Section 3.01(l)), except
to the extent that a failure to do so could not reasonably be expected to result
in a Material Adverse Change.
Section 4.21. Regulatory Matters. Without limiting the representations
and warranties included in Section 4.19, the Borrower represents and warrants
the following, to the extent that the inaccuracy of any of the following would
reasonably be expected to cause a Material Adverse Change:
(a) FDA Regulations. No Credit Party is in violation of any regulation
or policy of the U.S. Food and Drug Administration, including those regulating
controlled substances and regulating promotional activities performed on behalf
of sponsors of medical products.
(b) Anti-Remuneration Laws. No Credit Party is in violation of any
state or federal law or regulation (including Medicare and Medicaid laws)
regulating the payment or receipt of remuneration to induce the referral of
patients or the purchase of items or services.
(c) ERISA Regulation. No Credit Party is in violation of any ERISA
provision imposing a fiduciary obligation with regard to employee pension and
health benefit plans, including self-funded corporate health plans, with which
such Credit Party has contracted to provide services.
-49-
55
(d) Consumer Protection Laws. No Credit Party is in violation of any
state or federal law regulating "drug switching programs" or requiring
disclosure to physicians or patients of the financial relationships between
pharmacies and pharmacy benefit management companies when seeking to change a
prescription from one drug to another.
(e) Network Access Laws. No Credit Party is in violation of any state
or federal law which regulates such Credit Party's ability to limit access to
pharmacy provider networks or to remove network providers, or "any willing
provider" legislation.
(f) Plan Design Restrictions. No Credit Party is in violation of any
state or federal law prohibiting such Credit Party from implementing certain
restrictive design features, such as requiring members of a health benefit plan
to use network providers or failing to provide coverage for certain benefits or
conditions, or "freedom of choice" legislation.
(g) Licensure Laws. No Credit Party is in violation of any state law
requiring registration or licensure with a state agency of companies that
provide utilization review services.
(h) Drug Price Legislation. No Credit Party is in violation of any
state or federal law regulating drug prices, discounts, or incentives.
(i) Financial Risk Plan Regulation. No Credit Party is in violation of
any state or federal law which requires the establishment of reserves or the
demonstration of financial responsibility by companies which accept material
financial risk in providing benefits under a health benefit plan, including but
not limited to insurance laws, HMO laws, and limited prepaid health service plan
laws.
(j) Mail Pharmacy Regulation. No Credit Party is in violation of any
state law (i) requiring an out-of-state mail service pharmacy (a) to register
with the board of pharmacy or similar regulatory body in the state or (B) to
comply with the laws of a state into which the mail service pharmacy dispenses
medication or (ii) otherwise affecting such Credit Party's mail service
operations.
(k) Controlled Substance Regulation. No Credit Party is in violation of
any state or federal law regulating the production, distribution, sale, storage,
or safeguarding of controlled substances.
Section 4.22. Net Worth. As of the date of this Agreement, the
Borrower's Net Worth is greater than or equal to $58,000,000.00.
-50-
56
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note, the Swing Note, or any amount under any Credit
Document shall remain unpaid, any Letter of Credit shall remain outstanding, or
any Bank shall have any Commitment hereunder, the Borrower agrees, unless the
Majority Banks shall otherwise consent in writing, to comply with the following
covenants.
Section 5.01. Compliance with Laws, Material Agreements, Etc. The
Borrower will comply, and cause each of its Subsidiaries to comply, with all
Legal Requirements of which the failure to comply would reasonably be expected
to cause a Material Adverse Change. Without limiting the generality and coverage
of the foregoing, the Borrower shall comply, and shall cause each of its
Subsidiaries to comply, in all material respects, with all Material Agreements,
Environmental Laws, and, in all material respects, all laws, regulations, or
directives with respect to equal employment opportunity and employee safety in
all jurisdictions in which the Borrower, or any of its Subsidiaries do business;
provided, however, that this Section 5.01 shall not prevent the Borrower, or any
of its Subsidiaries from, in good faith and with reasonable diligence,
contesting the validity or application of any such laws or regulations by
appropriate legal proceedings.
Section 5.02. Maintenance of Insurance. The Borrower will maintain, and
cause each of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as are usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the Borrower or
such Subsidiary operates, provided that the Borrower or such Subsidiary may
self-insure to the extent and in the manner normal for similarly situated
companies of like size, type and financial condition that are part of a group of
companies under common control.
Section 5.03. Preservation of Corporate Existence, Etc. The Borrower
will preserve and maintain, and cause each of its Subsidiaries to preserve and
maintain, its corporate existence, rights, franchises and privileges in the
jurisdiction of its incorporation, and qualify and remain qualified, and cause
each such Subsidiary to qualify and remain qualified, as a foreign corporation
in each jurisdiction in which qualification is necessary or desirable in view of
its business and operations or the ownership of its properties, and, in each
case, where failure to qualify or preserve and maintain its rights and
franchises would reasonably be expected to cause a Material Adverse Change;
provided, however, that nothing contained in this Section 5.03 shall prevent any
transaction permitted by Section 6.05.
Section 5.04. Payment of Taxes, Etc. The Borrower will pay and
discharge, and cause each of its Subsidiaries to pay and discharge, before the
same shall become delinquent and which the failure to timely pay or discharge
would reasonably be expected to cause a Material Adverse Change,
-51-
57
(a) all taxes, assessments and governmental charges or levies imposed upon it or
upon its income or profits or Property that are material in amount, prior to the
date on which penalties attach thereto and (b) all lawful claims that are
material in amount which, if unpaid, might by law become a Lien upon its
Property; provided, however, that neither the Borrower nor any such Subsidiary
shall be required to pay or discharge any such tax, assessment, charge, levy, or
claim which is being contested in good faith and by appropriate proceedings, and
with respect to which reserves in conformity with GAAP have been provided.
Section 5.05. Visitation Rights; Environmental Inspections.
(a) At any reasonable time and from time to time and so long as any
visit or inspection will not interfere unreasonably with any Credit Party's
operations, upon reasonable notice, the Borrower will, and will cause its
Subsidiaries to, permit the Agent and any Bank or any of its agents or
representatives thereof, to examine and make copies of and abstracts from the
records and books of account of, and visit and inspect at its reasonable
discretion the properties of, any such Credit Party, to discuss the affairs,
finances, and accounts of any such Credit Party with any of its respective
officers or directors.
(b) If any event or series of events causes the Credit Parties to spend
more than $1,000,000.00 in the aggregate in connection with corrective action,
including, without limitation, any necessary cleanup, removal, or remediation of
Hazardous Substances or Hazardous Waste, for failure to comply with any
Environmental Law (other than Environmental Laws described in clause (d) of the
definition of Environmental Laws), then, at the Majority Banks' written request,
the Borrower shall at its expense (such expense being reasonably acceptable to
the Borrower) contract for the services of Persons to enter upon the Credit
Parties' properties to perform environmental site assessments for the purpose of
determining whether there exists any Environmental condition that would result
in a similar liability, cost, or expense to the Borrower or any of its
Subsidiaries under any of the conditions necessitating the corrective measures
described above. The scope of any such environmental assessment shall be subject
to the Borrower's consent, which consent shall not be unreasonably withheld.
Such site assessments shall be performable only at selected properties for which
the requesting Banks shall have demonstrable evidence of being similarly
affected as the affected properties, and which have the same or similar physical
or operational characteristics as the affected properties such that the selected
properties would be reasonably expected to have the same or similar conditions
as those causing the incurrence of the costs referred to above. Such
environmental assessments shall remain confidential and shall not be disclosed
to any third party except as permitted by Section 9.08.
-52-
58
Section 5.06. Reporting Requirements. The Borrower will furnish to the
Agent and each Bank:
(a) Defaults. As soon as possible and in any event within five days
after the occurrence of each Default known to a Responsible Officer of the
Borrower or any of its Subsidiaries which is continuing on the date of such
statement, a statement of an authorized financial officer of the Borrower
setting forth the details of such Default and the actions which the Borrower has
taken and proposes to take with respect thereto;
(b) Quarterly Financials. As soon as available and in any event not
later than 45 days after the end of each of the first three quarters of each
fiscal year of the Borrower, the consolidated balance sheet of the Borrower and
its Subsidiaries as of the end of such quarter and the consolidated statements
of operations and cash flow of the Borrower and its Subsidiaries, for such
quarterly period and for the portion of the fiscal year ending with such period,
in each case setting forth in comparative form the figures for the preceding
fiscal year (if such figures were prepared for the preceding fiscal year), all
in reasonable detail and certified as presenting fairly the financial condition
of the Borrower and the results of operations, but subject to omission of
complete footnotes and changes resulting from year-end adjustments, by an
authorized financial officer of the Borrower as having been prepared in
accordance with GAAP, together with a compliance certificate duly executed by
the president, chief executive officer, chief financial officer, or the
treasurer of the Borrower in substantially the form of the attached Exhibit H
and together with a comparison, comparing the results against the Borrower's
budget for the period;
(c) Annual Financials. As soon as available and in any event not later
than 90 days after the end of each fiscal year of the Borrower and its
Subsidiaries, the consolidated balance sheet of the Borrower and its
Subsidiaries as of the close of such year, and the statements of operations,
stockholders' equity, and cash flow of the Borrower and its Subsidiaries, for
such fiscal year, in each case setting forth in comparative form the figures for
the preceding fiscal year, all in reasonable detail and accompanied by a report
thereon by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP or another firm of independent certified public
accountants of recognized national standing selected by the Borrower and
acceptable to the Agent, containing an opinion to the effect that such
consolidated financial statements have been prepared in accordance with GAAP
consistently applied and present fairly the financial conditions of the Borrower
and its Subsidiaries and the result of their operations and that the examination
by such accountants in connection with their report upon such financial
statements has been made in accordance with generally accepted auditing
standards, and that such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such accounting
firm, a Default has occurred and is continuing, a statement as to the nature
thereof, together with a compliance certificate duly executed by the president,
chief executive officer, chief financial officer, or the treasurer of the
Borrower in substantially the form of the attached Exhibit H;
-53-
59
(d) Annual Budgets. Promptly and in any event within 30 days after the
beginning of each fiscal year, a budget for the Borrower on a consolidated basis
and certified by the chief financial officer of the Borrower, including
projected Capital Expenditures, together with supporting assumptions, all in
reasonable detail and reasonably satisfactory in scope to the Agent;
(e) Other Reports. Promptly and in any event within 15 days after the
sending or filing thereof, copies of all financial statements and reports sent
by the Borrower or any Subsidiary to shareholders generally and copies of all
debt offering statements, press releases and other statements made available
generally by the Borrower or any Subsidiary to the public concerning material
developments in the business of the Borrower or any Subsidiary;
(f) Termination Events. As soon as possible and in any event (i) within
30 days after the Borrower knows or has reason to know that any Termination
Event described in clause (a) of the definition of Termination Event with
respect to any Plan has occurred, and (ii) within 10 days after any Responsible
Officer of the Borrower knows or has reason to know that any other Termination
Event with respect to any Plan has occurred, a statement of the chief financial
officer of the Borrower describing such Termination Event and the action, if
any, which the Borrower or such Affiliate proposes to take with respect thereto;
(g) Termination of Plans. Promptly and in any event within two Business
Days after the knowledge of any Responsible Officer of the Borrower of receipt
thereof by the Borrower or any member of the Controlled Group from the PBGC,
copies of each notice received by the Borrower or any such member of the
Controlled Group of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan;
(h) Other ERISA Notices. Promptly and in any event within five Business
Days after the knowledge of any Responsible Officer of the Borrower of receipt
thereof by the Borrower or any member of the Controlled Group from a
Multiemployer Plan sponsor, a copy of each notice received by the Borrower or
any member of the Controlled Group concerning the imposition of withdrawal
liability pursuant to Section 4202 of ERISA in an amount that could reasonably
be expected to cause a Material Adverse Change;
(i) Environmental Notices. Promptly upon the knowledge of any
Responsible Officer of the Borrower of receipt thereof by the Borrower or any of
its Subsidiaries, a copy of any form of notice, summons or citation received
from the EPA, or any other Governmental Authority directly engaged in protection
of the Environment, concerning (i) material violations or alleged material
violations of Environmental Laws, which seeks to impose liability therefor and
which, based upon information reasonably available to the Borrower at the time
or after such violation, would reasonably be expected to cause a Material
Adverse Change, (ii) any action or omission on the part of the Borrower or any
of its Subsidiaries in connection with Hazardous Waste or Hazardous Substances
which, based upon information reasonably available to the Borrower at the time
of such
-54-
60
receipt, would reasonably cause a Material Adverse Change, (iii) any notice of
potential responsibility under CERCLA, or (iv) concerning the filing of a Lien
other than a Permitted Lien upon, against or in connection with the Borrower,
its present or former Subsidiaries, or any of their leased or owned material
Property, wherever located;
(j) Material Changes. Prompt written notice of any condition or event
of which any Responsible Officer of the Borrower has knowledge, which condition
or event has resulted or may reasonably be expected to result in (i) a Material
Adverse Change or (ii) a breach of or noncompliance with any term, condition, or
covenant of any contract to which the Borrower or any of its Subsidiaries is a
party or by which they or their properties may be bound, which breach or
noncompliance would reasonably be expected to cause a Material Adverse Change;
(k) Disputes, etc. Prompt written notice of any claims, litigation,
proceedings, or disputes, or to the knowledge of any Responsible Officer of the
Borrower threatened, or affecting the Borrower, or any of its Subsidiaries
which, if adversely determined, could reasonably be expected to cause a Material
Adverse Change; and
(l) Other Information. Such other information respecting the business
or Properties, or the condition or operations, financial or otherwise, of the
Borrower, or any of its Subsidiaries, as any Bank through the Agent may from
time to time reasonably request.
Section 5.07. Maintenance of Property. Borrower shall, and shall cause
each of its Subsidiaries to, (a) maintain their material owned, leased, or
operated property, equipment, buildings and fixtures in good condition, repair
and working order, and supplied with all necessary equipment, and make all
necessary repairs, renewals, replacements, betterments, and improvements
thereto, all as may be reasonably necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times,
and (b) not knowingly or willfully permit the commission of waste or other
injury, or the occurrence of pollution, contamination or any other condition in,
on or about the owned or operated property involving the Environment that would
reasonably be expected to cause a Material Adverse Change.
Section 5.08. New Subsidiaries. Upon the creation of any new Subsidiary
or the investment in a venture permitted by this Agreement the Borrower will
cause (a) such Subsidiary to execute and deliver to each Bank a Guaranty and
such evidence of corporate authority to enter into such Guaranty as the Agent
may reasonably request and (b) the stockholder of such new Subsidiary or the
owner of the Borrower's interest in the venture to execute a Pledge Agreement
pledging 100% of the Borrower and its Subsidiaries' interests in the capital
stock or other equity interests of such new Subsidiary and such venture and such
evidence of corporate authority to enter into such Pledge Agreement as the Agent
may reasonably request, along with share certificates pledged thereby and
appropriately executed stock powers in blank.
-55-
61
Section 5.09. Security. The Borrower agrees that at all times before
the termination of this Agreement and the payment in full of the Credit
Obligations, the Agent shall have an Acceptable Security Interest in the
Collateral to secure the performance and payment of the Credit Obligations.
Section 5.09. Books and Records. The Borrower will keep, and will cause
each Subsidiary to keep, adequate and proper records and books of account in
which full and correct entries will be made of its dealings, business and
affairs, so that the financial statements of the Borrower may be prepared in
accordance with GAAP.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note, the Swing Note, or any amount under any Credit
Document shall remain unpaid, any Letter of Credit remain outstanding, or any
Bank shall have any Commitment, the Borrower agrees, unless the Majority Banks
otherwise consent in writing, to comply with the following covenants.
Section 6.01. Debt. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, assume, suffer to exist, or in any manner become or
be liable in respect of, any Debt except Permitted Debt.
Section 6.02. Liens, Etc. The Borrower will not create, assume, incur,
or suffer to exist, or permit any of its Subsidiaries to create, assume, incur,
or suffer to exist, any Lien on the Property of the Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or assign any right to
receive income, except Permitted Liens.
Section 6.03. Restricted Payments. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make any Restricted Payment except
Restricted Payments made by any of the Borrower's Subsidiaries to the Borrower
or by the Borrower to any of its wholly-owned Subsidiaries.
Section 6.04. Agreements Restricting Liens and Distributions. The
Borrower will not, nor will it permit any of its Subsidiaries to, enter into or
be party to any agreement (other than a Credit Document) which (a) except with
respect to specific property encumbered to secure payment of Debt related to
such property, imposes restrictions greater than those under this Agreement upon
the creation or assumption of any Lien upon its properties, revenues or assets,
whether now owned or hereafter acquired or (b) limits Restricted Payments to or
any advance by any of the Borrower's Subsidiaries to the Borrower.
-56-
62
Section 6.05. Merger or Consolidation; Asset Sales. The Borrower will
not, and will not permit any of its Subsidiaries to:
(a) merge or consolidate with or into any other Person, except that (i)
the Borrower may merge with any of its wholly-owned Subsidiaries, (ii) any of
the Borrower's wholly-owned Subsidiaries may merge with another of the
Borrower's wholly-owned Subsidiaries, and (iii) a merger used to consummate a
Permitted Acquisition may occur, provided that immediately after giving effect
to any such proposed transaction no Default would exist and, in the case of any
such merger to which a Credit Party is a party, such Credit Party is the
surviving corporation or such surviving corporation has assumed such Credit
Party' obligations under the Credit Documents in a manner reasonably acceptable
to the Agent.
(b) sell, lease, transfer, or otherwise dispose of any assets other
than (i) sales of inventory in the ordinary course of business, (ii)
dispositions of assets outside the ordinary course of business to any Person
other than a Credit Party for an aggregate consideration (whether in cash,
Property, assumption of Debt, or issuance of equity) of $5,000,000.00 or less
for each such sale or related series of sales and for which at least 70% of the
purchase price received by the Credit Parties is in Dollars and in cash, (iii)
dispositions of assets outside the ordinary course of business not otherwise
permitted by (ii) above in an aggregate amount for any fiscal year not to exceed
$500,000.00, (iv) dispositions of equipment no longer used or useful in the
Credit Parties' business, and (v) Permitted Investments.
Section 6.06. Permitted Investments. The Borrower will not, and will
not permit any of its Subsidiaries to, make or permit to exist any loans,
advances, or capital contributions to, or make any investment in, or purchase or
commit to purchase any stock or other securities or evidences of indebtedness of
or interests in any Person, except Permitted Investments.
Section 6.07. Affiliate Transactions. Except as expressly permitted
elsewhere in this Agreement, the Borrower will not, and will not permit any of
its Subsidiaries to, make, directly or indirectly: (a) any investment in any
Affiliate (other than a wholly-owned Subsidiary of the Borrower) (a "Restricted
Affiliate"); (b) any transfer, sale, lease, assignment or other disposal of any
assets to any Restricted Affiliate or any purchase or acquisition of assets from
any Restricted Affiliate; or (c) any arrangement or other transaction directly
or indirectly with or for the benefit of any Restricted Affiliate (including
without limitation, guaranties and assumptions of obligations of an Affiliate);
provided that the Credit Parties may enter into any arrangement or other
transaction with any Restricted Affiliate if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Credit Parties as the monetary or business consideration which it would obtain
in a comparable arm's length transaction with a Person not a Restricted
Affiliate.
Section 6.08. Compliance with ERISA. The Borrower will not, and will
not permit any of its Subsidiaries to, (a) terminate any Plan so as to result in
any material (in the opinion of the Majority Banks) liability of the Borrower or
any of its Affiliates to the PBGC or (b) permit to exist
-57-
63
any occurrence of any Reportable Event (as defined in Title IV of ERISA), or any
other event or condition, which presents a material (in the opinion of the
Majority Banks) risk of such a termination by the PBGC of any Plan under Section
4042 of ERISA.
Section 6.09. Maintenance of Ownership of Subsidiaries. Except for
issuances, sales or other dispositions to the Borrower or a wholly-owned
Subsidiary of the Borrower, the Borrower will not, and will not permit any of
its Subsidiaries to, sell or otherwise dispose of any shares of capital stock of
any of the Borrower's Subsidiaries or permit any Subsidiary to issue, sell, or
otherwise dispose of any shares of its capital stock or the capital stock of any
of the Borrower's Subsidiaries.
Section 6.10. Fixed Coverage Ratio. The Borrower will not permit the
ratio of (a) EBITDA plus Lease Expense to (b) its Fixed Charges as of the end of
any fiscal quarter for the four fiscal quarters then ended to be less than 3.25
to 1.0. For the fiscal quarters ending June 30, 1999, September 30, 1999, and
December 31, 1999 the foregoing ratio shall be calculated for the one, two, and
three fiscal quarter period, respectively, ending on such dates.
Section 6.11. Leverage Ratio. The Borrower will not permit its Leverage
Ratio
(a) as of the last day of any fiscal quarter ending on or prior to
September 30, 1999 to be greater than 3.0 to 1.0 and
(b) as of the last day of the fiscal quarter ending December 31, 1999
to be greater than 2.5 to 1.0.
Section 6.12. Minimum Net Worth. The Borrower's Net Worth at any time
shall not be less than (i) for the period commencing on the Effective Date and
ending June 30, 1999, $55,000,000.00 and (ii) for each fiscal quarter
thereafter, (a) $55,000,000.00 plus (B) 75% of the cumulative Net Income for
each fiscal quarter beginning with the fiscal quarter beginning July 1, 1999, if
Net Income is positive for such quarter, but without reductions for fiscal
quarters during which Net Income is negative plus (C) 85% of the Net Cash
Proceeds from the sale of capital stock, warrants, or options to purchase
capital stock or other equity interests, and other equity interests of Borrower
or any Credit Party since the Effective Date plus (D) 85% of any increase in Net
Worth from the conversion of any Debt to equity, without duplication of the
preceding clause (C), the issuance of any capital stock, warrants, or options to
purchase capital stock or other equity interest, and other equity interests, and
any other transaction the effect of which is to increase the Borrower's Net
Worth.
Section 6.13. Capital Expenditures. The Borrower shall not, and shall
not permit any of its Subsidiaries to, make any Capital Expenditure (other than
Capital Expenditures that are part of a Permitted Acquisition) which when
aggregated with all other Capital Expenditures (other than Capital Expenditures
that are part of a Permitted Acquisition) during any fiscal year would exceed
$10,000,000.00.
-58-
64
ARTICLE VII
DEFAULT AND REMEDIES
Section 7.01. Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" under any Credit Document:
(a) Payment. The Borrower shall fail to (i) pay any principal of any
Note, the Swing Note or any Reimbursement Obligation when due or (ii) pay any
interest on any Note or the Swing Note, or any fee or other amount payable
hereunder or under any other Credit Document within three Business Days of when
the same becomes due and payable;
(b) Representation and Warranties. Any representation or warranty made
or deemed to be made (i) by the Borrower in this Agreement or in any other
Credit Document, (ii) by the Borrower (or any of its officers) in connection
with this Agreement or any other Credit Document, or (iii) by any Subsidiary in
any Credit Document shall prove to have been incorrect in any material respect
when made or deemed to be made;
(c) Covenant Breaches. (i) The Borrower shall (a) fail to perform or
observe any covenant contained in Article VI of this Agreement or (B) fail to
perform or observe any other term or covenant set forth in this Agreement or in
any other Credit Document which is not covered by clause (i)(a) above or any
other provision of this Section 7.01 if such failure shall remain unremedied for
10 Business Days after the earlier of (1) written notice of such default shall
have been given to the Borrower by the Agent or any Bank, or (2) a Responsible
Officer of the Borrower's actual knowledge of such default or (ii) any Credit
Party shall fail to perform or observe any covenant made by it in any Credit
Document to which it is a party and such failure shall remain unremedied for 10
Business Days after the earlier of (a) written notice of such default shall have
been given to the Borrower by the Agent or any Bank, or (B) a Responsible
Officer of the Borrower's actual knowledge of such default;
(d) Cross-Defaults. (i) The Borrower or any Credit Party shall fail to
pay any principal of or premium or interest on its Debt which is outstanding in
a principal amount of at least $1,000,000.00 individually or when aggregated
with all such Debt of the Borrower or the Credit Parties so in default (but
excluding Debt evidenced by the Notes and the Swing Note) when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument
relating to such Debt; (ii) any other event shall occur or
-59-
65
condition shall exist under any agreement or instrument relating to Debt which
is outstanding in a principal amount of at least $1,000,000.00 individually or
when aggregated with all such Debt of the Credit Parties so in default, and
shall continue after the applicable grace period, if any, specified in such
agreement or instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Debt prior to
the stated maturity thereof; or (iii) any such Debt shall be declared to be due
and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment or prepayments contractually required from proceeds received
upon the sale of any Property);
(e) Insolvency. The Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against the
Borrower or any of its Subsidiaries seeking to adjudicate it bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against the Borrower
or any such Subsidiary, either such proceeding shall remain undismissed for a
period of 30 days or any of the actions sought in such proceeding shall occur;
or the Borrower or any of its Subsidiaries shall take any corporate action to
authorize any of the actions set forth above in this paragraph (e);
(f) Judgments. Any judgment or order for the payment of money in excess
of $1,000,000.00 (reduced for purposes of this paragraph for the amount in
respect of such judgment or order that a reputable insurer has acknowledged as
being payable under any valid and enforceable insurance policy) shall be
rendered against the Borrower or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 30 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect;
(g) Termination Events. Any Termination Event with respect to a Plan
shall have occurred, and, 30 days after notice thereof shall have been given to
the Borrower by the Agent, (i) such Termination Event shall have created and
caused to be continuing a material risk of Plan termination or liability for
withdrawal from the Plan as a substantive employer and (ii) the then present
value of such Plan's vested benefits exceeds the then current value of assets
accumulated in such Plan by more than the amount of $1,000,000.00 (or in the
case of a Termination Event involving the withdrawal of a "substantial employer"
(as defined in Section 4001(a)(2) of ERISA), the withdrawing employer's
proportionate share of such excess shall exceed such amount);
(h) Plan Withdrawals. The Borrower or any member of the Controlled
Group as employer under a Multiemployer Plan shall have made a complete or
partial withdrawal from such
-60-
66
Multiemployer Plan and the plan sponsor of such Multiemployer Plan shall have
notified such withdrawing employer that such employer has incurred a withdrawal
liability in an annual amount exceeding $1,000,000.00;
(i) Guaranties. Any Guaranty shall at any time and for any reason other
than according to its terms cease to be in full force and effect or shall be
contested by any party thereto; or any Guarantor shall deny it has any liability
or obligation under its Guaranty;
(j) Security Documents. Any Security Document shall at any time and for
any reason cease to create the Lien on the property purported to be subject to
such agreement in accordance with the terms of such agreement and, if such
deficiency can be cured, such Credit Party has failed to cure such deficiency
after demand by the Agent, or cease to be in full force and effect, or shall be
contested by any Credit Party which is a party thereto; or
(k) Change in Control. A Change in Control shall occur.
Section 7.02. Optional Acceleration of Maturity. If any Event of
Default (other than an Event of Default pursuant to paragraph (e) of Section
7.01) shall have occurred and be continuing, then, and in any such event,
(a) the Agent (i) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Borrower, declare the obligation of each Bank
to make Advances and the obligation of the Issuing Bank to issue, increase, or
extend Letters of Credit to be terminated, whereupon the same shall forthwith
terminate, and (ii) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Borrower, declare the Notes and the Swing Note,
all interest thereon, the Reimbursement Obligations, and all other amounts
payable under this Agreement to be forthwith due and payable, whereupon the
Notes and the Swing Note, all such interest, all such Reimbursement Obligations
and all such amounts shall become and be forthwith due and payable in full,
without presentment, demand, protest or further notice of any kind (including,
without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are hereby expressly waived by the Borrower;
(b) the Borrower shall, on demand of the Agent at the request or with
the consent of the Majority Banks, deposit with the Agent into the Cash
Collateral Account an amount of cash equal to the Letter of Credit Exposure as
security for the Obligations to the extent the Reimbursement Obligations are not
otherwise paid at such time; and
(c) the Agent shall at the request of, or may with the consent of, the
Majority Banks proceed to enforce its rights and remedies under the Security
Documents, the Guaranties, or any other Credit Document for the ratable benefit
of the Banks by appropriate proceedings.
-61-
67
Section 7.03. Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph (e) of Section 7.01 shall occur,
(a) the obligation of each Bank to make Advances and the obligation of
the Issuing Bank to issue, increase, or extend Letters of Credit shall
immediately and automatically be terminated and the Notes, the Swing Note, all
interest on the Notes and the Swing Note, all Reimbursement Obligations, and all
other amounts payable under this Agreement shall immediately and automatically
become and be due and payable in full, without presentment, demand, protest or
any notice of any kind (including, without limitation, any notice of intent to
accelerate or notice of acceleration), all of which are hereby expressly waived
by the Borrower;
(b) the Borrower shall deposit with the Agent into the Cash Collateral
Account an amount of cash equal to the outstanding Letter of Credit Exposure as
security for the Obligations to the extent the Reimbursement Obligations are not
otherwise paid at such time; and
(c) the Agent shall at the request of, or may with the consent of, the
Majority Banks proceed to enforce its rights and remedies under the Security
Documents, the Guaranties, or any other Credit Document for the ratable benefit
of the Banks by appropriate proceedings.
Section 7.04. Cash Collateral Account.
(a) Pledge. The Borrower hereby pledges, and grants to the Agent for
the benefit of the Banks, a security interest in all funds held in the Cash
Collateral Account from time to time and all proceeds thereof, as security for
the payment of the Obligations, including all Reimbursement Obligations owing to
the Issuing Bank or any other Bank due and to become due from the Borrower to
the Issuing Bank or any other Bank under this Agreement in connection with the
Letters of Credit. Nothing in this Section 7.04, however, shall either obligate
the Agent to require any funds to be deposited in the Cash Collateral Account or
limit the right of the Agent, which it may exercise at any time and from time to
time, to release to the Borrower any funds held in the Cash Collateral Account
pursuant to the other provisions of this Section 7.04.
(b) Application against Reimbursement Obligations; Release of Funds.
The Agent may, at any time or from time to time apply funds then held in the
Cash Collateral Account to the payment of any Reimbursement Obligations owing to
the Issuing Bank, in such order as the Agent may elect, as shall have become or
shall become due and payable by the Borrower to the Issuing Bank under this
Agreement in connection with the Letters of Credit. So long as no Event of
Default referred to in paragraph (a) or (e) of Section 7.01 shall have occurred
and be continuing, the Agent will release to the Borrower at the Borrower's
written request funds held in the Cash Collateral Account in an amount up to but
not exceeding the excess, if any (immediately prior to the release of any such
funds), of (i) the total amount of funds held in the Cash Collateral Account
over (ii) the Letter of Credit Exposure.
-62-
68
(c) Duty of Care. The Agent shall exercise reasonable care in the
custody and preservation of any funds held in the Cash Collateral Account and
shall be deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own property, it
being understood that the Agent shall not have any responsibility for taking any
necessary steps to preserve rights against any parties with respect to any such
funds.
Section 7.05. Non-exclusivity of Remedies. No remedy conferred upon the
Agent is intended to be exclusive of any other remedy, and each remedy shall be
cumulative of all other remedies existing by contract, at law, in equity, by
statute or otherwise.
Section 7.06. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Bank (and each of its affiliates) is
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, but excluding deposits that such Bank
knows or, with reasonable inquiry should know, are held by the Borrower in a
fiduciary capacity for the benefit of others) at any time held and other
indebtedness at any time owing by such Bank (or any of its affiliates) to or for
the credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement and the Note held
by such Bank, irrespective of whether such Bank shall have made any demand under
this Agreement or such Note and although such obligations may be unmatured. Each
Bank agrees promptly to notify the Borrower after any such set-off and
application made by such Bank; provided, however, that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of each Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that such Bank may
have.
Section 7.07. Application of Payments. Prior to an Event of Default,
all payments made hereunder shall be applied as directed by the Borrower, but
such payments are subject to the terms of this Agreement, including the
application of prepayments according to Section 2.07. During the existence of an
Event of Default, all payments and collections shall be applied to the Credit
Obligations in accordance with Section 2.10 first to any reimbursements and
indemnifications due to the Banks, then ratably to any accrued and unpaid
interest and fees due to the Banks, then to the outstanding principal balance of
the Swing Loans, then ratably to the outstanding principal balance of the
Advances and the Reimbursement Obligations.
ARTICLE VIII
THE AGENT AND THE ISSUING BANK
-63-
69
Section 8.01. Appointment, Powers, and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Credit Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Credit Documents, together with such other powers as are reasonably incidental
thereto. The Agent (which term as used in this sentence and in Section 8.05 and
the first sentence of Section 8.06 shall include its affiliates and its own and
its affiliates' officers, directors, employees, and agents): (a) shall not have
any duties or responsibilities except those expressly set forth in this
Agreement and shall not be a trustee or fiduciary for any Bank; (b) shall not be
responsible to the Banks for any recital, statement, representation, or warranty
(whether written or oral) made in or in connection with any Credit Document or
any certificate or other document referred to or provided for in, or received by
any of them under, any Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, or sufficiency of any Credit
Document, or any other document referred to or provided for therein or for any
failure by any Credit Party or any other Person to perform any of its
obligations thereunder; (c) shall not be responsible for or have any duty to
ascertain, inquire into, or verify the performance or observance of any
covenants or agreements by any Credit Party or the satisfaction of any condition
or to inspect the property (including the books and records) of any Credit Party
or any of its Subsidiaries or affiliates; (d) shall not be required to initiate
or conduct any litigation or collection proceedings under any Credit Document;
and (e) shall not be responsible for any action taken or omitted to be taken by
it under or in connection with any Credit Document, except for its own gross
negligence or willful misconduct. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Section 8.02. Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice, instrument, writing, or other communication
(including, without limitation, any thereof by telephone or telecopy) reasonably
believed by it to be genuine and correct and to have been signed, sent or made
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel (including counsel for any Credit Party), independent
accountants, and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the holder thereof for all purposes of this
Agreement unless and until the Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 9.06. As to any matters not
expressly provided for by this Agreement, the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks, and such instructions
shall be binding on all of the Banks; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to personal liability
or that is contrary to any Credit Document or applicable law or unless it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking any such
action.
-64-
70
Section 8.03. Defaults. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless the Agent
has received written notice from a Bank or the Borrower specifying such Default
or Event of Default and stating that such notice is a "Notice of Default". In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Banks.
The Agent shall (subject to Section 8.02) take such action with respect to such
Default or Event of Default as shall reasonably be directed by the Majority
Banks, provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Banks.
Section 8.04. Rights as Bank. With respect to its Commitment and the
Advances made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as the
Agent, and the term "Bank" or "Banks" shall, unless the context otherwise
indicates, include the Agent in its individual capacity. NationsBank (and any
successor acting as Agent) and its affiliates may (without having to account
therefor to any Bank) accept deposits from, lend money to, make investments in,
provide services to, and generally engage in any kind of lending, trust, or
other business with any Credit Party or any of its Subsidiaries or affiliates as
if it were not acting as Agent, and NationsBank (and any successor acting as
Agent) and its affiliates may accept fees and other consideration from any
Credit Party or any of its Subsidiaries or affiliates for services in connection
with this Agreement or otherwise without having to account for the same to the
Banks.
Section 8.05. Indemnification. The Banks agree to indemnify the Agent
(to the extent not reimbursed under Section 9.07, but without limiting the
obligations of the Borrower under such Section) ratably in accordance with their
respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses (including
attorneys' fees), or disbursements of any kind and nature whatsoever that may be
imposed on, incurred by or asserted against the Agent (including by any Bank) in
any way relating to or arising out of any Credit Document or the transactions
contemplated thereby or any action taken or omitted by the Agent under any
Credit Document (including any of the foregoing arising from the negligence of
the Agent); provided that no Bank shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Person to be indemnified. Without limitation of the foregoing, each Bank agrees
to reimburse the Agent promptly upon demand for its ratable share of any costs
or expenses payable by the Borrower under Section 9.04, to the extent that the
Agent is not promptly reimbursed for such costs and expenses by the Borrower;
provided, however that upon recovery of any or all of such costs and expenses by
the Agent from the Borrower, the Agent shall remit to each Bank its ratable
share of such amounts so recovered. The agreements contained in this Section
shall survive payment in full of the Advances and all other amounts payable
under this Agreement.
-65-
71
Section 8.06. Non-Reliance on Agent and Other Banks. Each Bank agrees
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Credit Parties and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Credit
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition, or
business of any Credit Party or any of its Subsidiaries or affiliates that may
come into the possession of the Agent or any of its affiliates.
Section 8.07. Resignation of Agent and Issuing Bank. The Agent and the
Issuing Bank may resign at any time by giving notice thereof to the Banks and
the Borrower. Upon any such resignation, the Majority Banks shall have the right
to appoint a successor Agent or Issuing Bank (in each case, so long as no
Default has occurred and is continuing, subject to the consent of the Borrower
which shall not be unreasonably withheld). If no successor Agent or Issuing Bank
shall have been so appointed by the Majority Banks and shall have accepted such
appointment within 30 days after the retiring Agent's or Issuing Bank's giving
of notice of resignation, then the retiring Agent or Issuing Bank may, on behalf
of the Banks, appoint a successor Agent or Issuing Bank (in each case, so long
as no Default has occurred and is continuing, subject to the consent of the
Borrower which shall not be unreasonably withheld) which shall be an Eligible
Assignee and, in the case of the Issuing Bank, a Bank. Upon the acceptance of
any appointment as Agent or Issuing Bank hereunder by a successor, such
successor shall thereupon succeed to and become vested with all the rights,
powers, discretion, privileges, and duties of the retiring Agent or Issuing
Bank, and the retiring Agent or Issuing Bank shall be discharged from its duties
and obligations hereunder and under the other Credit Documents, except that the
retiring Issuing Bank shall remain the Issuing Bank with respect to any Letters
of Credit issued by it and outstanding on the effective date of its resignation
and the provisions affecting the Issuing Bank with respect to such Letters of
Credit shall inure to the benefit of the retiring Issuing Bank until the
termination of all such Letters of Credit. After any retiring Agent's or Issuing
Bank's resignation hereunder as Agent or Issuing Bank, the provisions of this
Article VIII shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent or Issuing Bank.
ARTICLE IX
MISCELLANEOUS
-66-
72
Section 9.01. Amendments, Etc. No amendment or waiver of any provision
of this Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any other Credit Party therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Majority Banks and the Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Banks and the Borrower, do any of the following:
(a) waive any of the conditions specified in Section 3.01 or 3.02, (b) increase
the Commitments of the Banks, (c) reduce the principal of, or interest on, the
Notes or the Swing Note or any fees or other amounts payable hereunder or under
any other Credit Document, (d) postpone any date fixed for any payment of
principal of, or interest on, the Notes or the Swing Note or any fees or other
amounts payable hereunder, (e) change the number of Banks which shall be
required for the Banks or any of them to take any action hereunder or under any
other Credit Document, (f) amend Section 2.12 or this Section 9.01, (g) release
any Collateral or any Credit Party from its obligations under any Credit
Document to which it is a party, except pursuant to the terms of the applicable
Credit Document; or (h) amend the definition of "Majority Banks"; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent or the Issuing Bank in addition to the Banks required above
to take such action, affect the rights or duties of the Agent or the Issuing
Bank, as the case may be, under this Agreement or any other Credit Document.
Section 9.02. Notices, Etc. All notices and other communications shall
be in writing (including telecopy or telex) and mailed, telecopied, telexed,
hand delivered or delivered by a nationally recognized overnight courier, if to
the Borrower or to a Guarantor, at the Borrower's address at ▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Mr. ▇▇▇▇▇
▇▇▇▇▇▇▇▇ (telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇); if to any Bank,
at its Applicable Lending Office specified opposite its name on Schedule
1.01(a); if to the Agent or the Issuing Bank, at its address at ▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Mr. ▇▇▇▇▇ ▇▇▇▇▇▇, Vice President
(telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇); and if a Notice of
Borrowing, a Notice of Swing Loan Request or Prepayment, or a Notice of
Conversion or Continuation, to the Agent at the Applicable Lending Office for
the Agent specified opposite its name on Schedule 1.01(a), or, as to each party,
at such other address or teletransmission number as shall be designated by such
party in a written notice to the other parties. All such notices and
communications shall, when mailed, telecopied, telexed, hand-delivered, or
delivered by overnight courier, be effective three days after deposited in the
mails, when telecopy transmission is completed, when confirmed by telex
answer-back or when delivered, respectively, except that notices and
communications to the Agent pursuant to Article II or VIII shall not be
effective until received by the Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any Bank,
the Agent, or the Issuing Bank to exercise, and no delay in exercising, any
right hereunder or under any Note or the Swing Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right preclude any
other or further exercise thereof or the exercise of any other right. The
remedies provided in this Agreement are cumulative and not exclusive of any
remedies provided by law.
-67-
73
Section 9.04. Costs and Expenses. The Borrower agrees to pay on demand
all costs and expenses of the Agent in connection with the syndication,
preparation, execution, delivery, administration, modification, and amendment of
this Agreement, the other Credit Documents, and the other documents to be
delivered hereunder, including, without limitation, the reasonable fees and
expenses of counsel for the Agent (including the cost of internal counsel) with
respect thereto and with respect to advising the Agent as to its rights and
responsibilities under the Credit Documents. The Borrower further agrees to pay
on demand all costs and expenses of the Agent, the Issuing Bank and the Banks,
if any (including, without limitation, reasonable attorneys' fees and expenses
and the cost of internal counsel), in connection with the enforcement (whether
through negotiations, legal proceedings, or otherwise) of the Credit Documents
and the other documents to be delivered hereunder. Without prejudice to the
survival of any other agreement of the Borrower hereunder, the agreements and
obligations of the Borrower contained in this Section 9.04 shall survive the
payment in full of the Advances and all other amounts payable under this
Agreement.
Section 9.05. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent, and when the
Agent shall have, as to each Bank, either received a counterpart of this
Agreement executed by such Bank or been notified by such Bank that such Bank has
executed it and thereafter shall be binding upon and inure to the benefit of the
Borrower, the Agent, the Issuing Bank, and each Bank and their respective
successors and assigns, except that the Borrower shall not have the right to
assign its rights or delegate its duties under this Agreement or any interest in
this Agreement without the prior written consent of each Bank.
Section 9.06. Bank Assignments and Participations.
(a) Assignments. Each Bank may assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Advances, its Note, and its
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Bank or an
assignment of all of a Bank's rights and obligations under this
Agreement, any such partial assignment shall be in an amount equal to
at least $5,000,000.00 and in integral multiples of $1,000,000.00 in
excess thereof;
(iii) each such assignment by a Bank shall be of a constant, and
not varying, percentage of all of its rights and obligations under this
Agreement and the Notes (other than
-68-
74
rights of reimbursement and indemnity arising before the effective date
of such assignment) and shall be of an equal pro rata share of the
Assignor's interest in the Revolving Credit Advances, Letter of Credit
Exposure, and Commitments; and
(iv) the parties to such assignment shall execute and deliver to
the Agent for its acceptance an Assignment and Acceptance in the form
of the attached Exhibit A, together with any Note subject to such
assignment and a processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance and
payment of the processing fee, the assignee thereunder shall be a party to this
Agreement and, to the extent of such assignment, have the obligations, rights,
and benefits of a Bank hereunder and the assigning Bank shall, to the extent of
such assignment, relinquish its rights and be released from its obligations
under this Agreement. Upon the consummation of any assignment pursuant to this
Section, the assignor, the Agent and the Borrower shall make appropriate
arrangements so that, if required, new Notes are issued to the assignor and the
assignee. If the assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall deliver to the Borrower and the
Agent certification as to exemption from deduction or withholding of Taxes in
accordance with Section 2.11.
(b) The Register. The Agent shall maintain a copy of each Assignment
and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Banks and the Commitment of, and
principal amount of the Advances owing to, each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Banks may
treat each Person whose name is recorded in the Register as a Bank hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(c) Procedures. Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form of
Exhibit A, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Participations. Each Bank may sell participations to one or more
Persons in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and its Advances); provided,
however, that (i) such Bank's obligations under this Agreement shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
to this Agreement for the performance of such obligations, (iii) the participant
shall be entitled to the benefit of the yield protection provisions contained in
Section 2.09 and the right of set-off contained in Section 7.06, and (iv) the
Borrower shall continue to deal solely and directly
-69-
75
with such Bank in connection with such Bank's rights and obligations under this
Agreement, and such Bank shall retain the sole right to enforce the obligations
of the Borrower relating to its Advances and its Note and to approve any
amendment, modification, or waiver of any provision of this Agreement (other
than amendments, modifications, or waivers decreasing the amount of principal of
or the rate at which interest is payable on such Advances or Note, extending any
scheduled principal payment date or date fixed for the payment of interest on
such Advances or Note, or extending its Commitment).
(e) Federal Reserve Bank. Notwithstanding any other provision set forth
in this Agreement, any Bank may at any time assign and pledge all or any portion
of its Advances and its Note to any Federal Reserve Bank as collateral security
pursuant to Regulation A and any Operating Circular issued by such Federal
Reserve Bank. No such assignment shall release the assigning Bank from its
obligations hereunder.
(f) Confidentiality. Any Bank may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of such Bank from time
to time to assignees and participants (including prospective assignees and
participants), subject, however, to the provisions of Section 9.08.
Section 9.07. INDEMNIFICATION. THE BORROWER AGREES TO INDEMNIFY AND
HOLD HARMLESS THE AGENT, THE ISSUING BANK, THE ARRANGER, AND EACH BANK AND EACH
OF THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AGENTS,
AND ADVISORS (EACH AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL CLAIMS,
DAMAGES, LOSSES, LIABILITIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT
LIMITATION, (A) REASONABLE ATTORNEYS' FEES, INCLUDING THE ALLOCATED COST OF
INTERNAL COUNSEL, AND (B) SETTLEMENT COSTS) THAT MAY BE INCURRED BY OR ASSERTED
OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN
CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION
WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN
CONNECTION THEREWITH) THE CREDIT DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED
HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE ADVANCES (INCLUDING
ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED PARTY),
EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS
FOUND IN A FINAL ORDER OR JUDGMENT BY A COURT OF COMPETENT JURISDICTION OR OTHER
TRIBUNAL OR ARBITRATION PANEL (OR, IF SUCH FINAL ORDER OR JUDGMENT IS LATER
REVERSED, BY A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION) OR BY AGREEMENT TO HAVE (A) RESULTED PRIMARILY FROM AN INDEMNIFIED
PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OR (B) ARISEN OUT OF
-70-
76
A CLAIM AMONG INDEMNIFIED PARTIES AND THEIR STOCKHOLDERS. IN THE CASE OF AN
INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN THIS
SECTION 9.07 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY THE BORROWER, ITS
DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR ANY OTHER PERSON
OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. EACH PARTY TO THIS AGREEMENT
AGREES NOT TO ASSERT ANY CLAIM AGAINST THE BORROWER OR ANY OF ITS SUBSIDIARIES,
THE AGENT, THE ISSUING BANK, THE ARRANGER, ANY BANK, ANY OF THEIR AFFILIATES, OR
ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS, AND
ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR
PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE CREDIT DOCUMENTS,
ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE
PROCEEDS OF THE ADVANCES.
Section 9.08. Confidentiality. The Agent and each Bank (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by or on behalf of the Borrower or any of its Subsidiaries
pursuant to this Agreement that is marked confidential; provided that nothing
herein shall prevent any Lending Party from disclosing such information (a) to
any other Lending Party or any affiliate of any Lending Party, or any officer,
director, employee, agent, or advisor of any Lending Party or affiliate of any
Lending Party, (b) to any other Person if reasonably incidental to the
administration of the credit facility provided herein, (c) as required by any
law, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) that is or becomes available to the public or that is or becomes available
to any Lending Party other than as a result of a disclosure by any Lending Party
prohibited by this Agreement, (g) in connection with any litigation to which
such Lending Party or any of its affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.
Section 9.09. Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties to this Agreement in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement.
Section 9.10. Survival of Representations, etc. All representations and
warranties contained in this Agreement or made in writing by or on behalf of the
Borrower in connection herewith shall survive the execution and delivery of this
Agreement and the Credit Documents, the making of the
-71-
77
Advances and any investigation made by or on behalf of the Banks, none of which
investigations shall diminish any Bank's right to rely on such representations
and warranties. All obligations of the Borrower provided for in Sections 2.08,
2.09, 2.11(c), 9.04 and 9.07 and of the Agent and the Banks provided for in
Section 9.08 (but only for one year after repayment in full of the Obligations)
shall survive any termination of this Agreement and repayment in full of the
Obligations.
Section 9.11. Severability. In case one or more provisions of this
Agreement or the other Credit Documents shall be invalid, illegal or
unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
not be affected or impaired thereby.
Section 9.12. Business Loans. The Borrower warrants and represents that
the Loans evidenced by the Notes are and shall be for business, commercial,
investment or other similar purposes and not primarily for personal, family,
household or agricultural use, as such terms are used in Chapter One ("Chapter
One") of the Texas Credit Code. At all such times, if any, as Chapter One shall
establish a Maximum Rate, the Maximum Rate shall be the "indicated rate ceiling"
(as such term is defined in Chapter One) from time to time in effect.
-72-
78
Section 9.13. Usury Not Intended. It is the intent of the Borrower and
each Bank in the execution and performance of this Agreement and the other
Credit Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances and Swing Loans of
each Bank including such applicable laws of the State of Texas, if any, and the
United States of America from time to time in effect. In furtherance thereof,
the Banks and the Borrower stipulate and agree that none of the terms and
provisions contained in this Agreement or the other Credit Documents shall ever
be construed to create a contract to pay, as consideration for the use,
forbearance or detention of money, interest at a rate in excess of the Maximum
Rate and that for purposes of this Agreement "interest" shall include the
aggregate of all charges which constitute interest under such laws that are
contracted for, charged or received under this Agreement; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
taken, reserved, charged, received or paid on the Advances, include amounts
which by applicable law are deemed interest which would exceed the Maximum Rate,
then such excess shall be deemed to be a mistake and each Bank receiving same
shall credit the same on the principal of its Notes (or if such Notes shall have
been paid in full, refund said excess to the Borrower). In the event that the
maturity of the Notes are accelerated by reason of any election of the holder
thereof resulting from any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest may never include more than the Maximum Rate and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the applicable Notes (or, if the
applicable Notes shall have been paid in full, refunded to the Borrower of such
interest). In determining whether or not the interest paid or payable under any
specific contingencies exceeds the Maximum Rate, the Borrower and the Banks
shall to the maximum extent permitted under applicable law amortize, prorate,
allocate and spread in equal parts during the period of the full stated term of
the Notes all amounts considered to be interest under applicable law at any time
contracted for, charged, received or reserved in connection with the
Obligations. The provisions of this Section shall control over all other
provisions of this Agreement or the other Credit Documents which may be in
apparent conflict herewith.
Section 9.14. Governing Law. This Agreement and the other Credit
Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York.
Section 9.15. Waiver of Jury. EACH OF THE BORROWER, THE OTHER CREDIT
PARTIES, THE BANKS, THE AGENT, AND THE ISSUING BANK HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, A
LOAN AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE LOAN AGREEMENT EXCEEDS
$50,000.00 IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN AGREEMENT IS IN WRITING
AND SIGNED BY THE PARTY TO BE BOUND OR THAT PARTY'S AUTHORIZED REPRESENTATIVE.
-73-
79
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO
THE PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN LOAN
AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO THE LOAN AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT
DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG THE
PARTIES (AND SUPERSEDE THE COMMITMENT LETTER DATED MAY 3, 1999) AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
-74-
80
EXECUTED as of the day first above written.
BORROWER:
ADVANCE PARADIGM, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
AGENT:
NATIONSBANK, N.A.
By:
--------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
BANKS:
COMMITMENT NATIONSBANK, N.A.
$30,000,000.00
By:
--------------------------------
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
-75-
81
COMMITMENT BANK ONE, TEXAS, N.A.
$30,000,000.00
By:
--------------------------------
Name:
-------------------------------
Title:
------------------------------
COMMITMENT CHASE BANK OF TEXAS,
$15,000,000.00 NATIONAL ASSOCIATION
By:
--------------------------------
Name:
------------------------------
Title:
------------------------------
-76-