AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of June 30, 2000
Among
THE FINANCIAL INSTITUTIONS FROM
TIME TO TIME PARTY HERETO,
as the Lenders,
---------------
BANK OF AMERICA, N.A.,
as the Lenders' Agent,
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OPTION CARE, INC.,
a Delaware corporation,
individually and as the Borrowers' Agent,
-----------------------------------------
and
OPTION CARE, INC.,
a Delaware corporation,
AND EACH OF THE SUBSIDIARIES OF
OPTION CARE, INC. FROM
TIME TO TIME PARTY HERETO,
as the Borrowers
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TABLE OF CONTENTS
1.DEFINITIONS...............................................................................................................1
1.1 Defined Terms..............................................................................................1
1.2 Accounting Terms..........................................................................................26
1.3 Interpretive Provisions...................................................................................27
▇.▇▇▇▇▇....................................................................................................................28
2.1. Total Facility............................................................................................28
2.2. Revolving Loans...........................................................................................28
2.3. Term Loans................................................................................................33
2.4. Automated Clearing House Transfers........................................................................36
2.5. The Borrowers'Agent.......................................................................................36
2.6. Defaulting Lender.........................................................................................37
3.INTEREST AND OTHER CHARGES...............................................................................................38
3.1. Interest..................................................................................................38
3.2 Conversion and Continuation Elections.....................................................................39
3.3 Maximum Interest Rate.....................................................................................41
3.4 Facility Fee..............................................................................................41
4.PAYMENTS AND PREPAYMENTS.................................................................................................42
4.1 Revolving Loans...........................................................................................42
4.1A Term Loans................................................................................................42
4.2 Place and Form of Payments; Extension of Time.............................................................43
4.3 Application and Reversal of Payments......................................................................43
4.4 INDEMNITY FOR RETURNED PAYMENTS...........................................................................44
5.BOOKS AND RECORDS; MONTHLY STATEMENTS....................................................................................44
6.TAXES, YIELD PROTECTION AND ILLEGALITY...................................................................................44
6.1 Taxes.....................................................................................................44
6.2 Illegality................................................................................................45
6.3 Increased Costs and Reduction of Return...................................................................46
6.4 Funding Losses............................................................................................46
6.5 Inability to Determine Rates..............................................................................47
6.6 Survival..................................................................................................47
7.COLLATERAL...............................................................................................................47
7.1 Grant of Security Interest................................................................................47
7.2 Perfection and Protection of Security Interest............................................................48
7.3 Location of Collateral....................................................................................49
7.4 Title to, Liens on, and Sale and Use of Collateral........................................................49
7.5 [Reserved]................................................................................................50
7.6 Access and Examination....................................................................................50
7.7 Insurance.................................................................................................50
7.8 Collateral Reporting......................................................................................51
7.9 Accounts..................................................................................................52
7.10 Collection of Accounts; Payments..........................................................................54
7.11 Inventory.................................................................................................56
7.12 Equipment.................................................................................................56
7.13 Material Contracts........................................................................................56
7.14 Documents, Instruments, and Chattel Paper.................................................................57
7.15 Right to Cure.............................................................................................57
7.16 Power of Attorney.........................................................................................58
7.17 Lender's Rights, Duties, and Liabilities..................................................................58
7.18 [Reserved]................................................................................................59
7.19 License for use of Software and Other Intellectual Property...............................................59
8.BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES........................................................................59
8.1 Books and Records.........................................................................................59
8.2 Financial and Other Information...........................................................................59
8.3 Notices to Lenders and the Lenders'Agent..................................................................62
9.GENERAL WARRANTIES AND REPRESENTATIONS...................................................................................63
9.1 Authorization, Validity, and Enforceability of this Agreement and the Loan Documents......................63
9.2 Validity and Priority of Security Interest................................................................64
9.3 Organization and Qualification............................................................................64
9.4 Corporate Name; Prior Transactions........................................................................64
9.5 Subsidiaries and Affiliates...............................................................................64
9.6 Financial Statements and Plan.............................................................................65
9.7 Trust Reimbursement and Security Agreement................................................................65
9.8 Solvency..................................................................................................65
9.9 Debt......................................................................................................65
9.10 Distributions.............................................................................................65
9.11 Title to Property.........................................................................................65
9.12 Adequate Assets...........................................................................................66
9.13 Real Property; Leases.....................................................................................66
9.14 Proprietary Rights........................................................................................66
9.15 Trade Names and Terms of Sale.............................................................................66
9.16 Litigation................................................................................................66
9.17 Restrictive Agreements....................................................................................66
9.18 Labor Disputes............................................................................................66
9.19 Environmental Laws........................................................................................67
9.20 Health Care Laws..........................................................................................68
9.21 No Violation of Law......................................................................................69
9.22 No Default...............................................................................................69
9.23 ERISA Compliance.........................................................................................69
9.24 Taxes....................................................................................................70
9.25 Use of Proceeds..........................................................................................70
9.26 Private Offerings........................................................................................70
9.27 Broker's Fees............................................................................................70
9.28 Government Regulation....................................................................................70
9.29 No Material Adverse Change...............................................................................70
9.30 Disclosure...............................................................................................70
9.31 Fixed Charge Coverage....................................................................................70
10.AFFIRMATIVE AND NEGATIVE COVENANTS......................................................................................71
10.1. Taxes and Other Obligations..............................................................................71
10.2 Corporate Existence and Good Standing....................................................................71
10.3 Compliance with Law and Agreements.......................................................................71
10.4 Maintenance of Property and Insurance....................................................................71
10.5 Environmental Laws.......................................................................................71
10.6 Health Care Laws.........................................................................................72
10.7 ERISA....................................................................................................72
10.8 Mergers, Consolidations or Sales.........................................................................72
10.9 Distributions............................................................................................72
10.10 Transactions Having a Material Adverse Effect............................................................72
10.11 Guaranties...............................................................................................73
10.12 Debt.....................................................................................................73
10.13 Prepayment...............................................................................................73
10.14 Transactions with Affiliates.............................................................................73
10.15 Business Conducted.......................................................................................73
10.16 Liens....................................................................................................73
10.17 Sale and Leaseback Transactions..........................................................................73
10.18 New Subsidiaries.........................................................................................74
10.19 Restricted Investments...................................................................................74
10.20 Capital Expenditures.....................................................................................74
10.21 Fixed Charge Coverage....................................................................................74
10.22 Debt Ratio...............................................................................................74
10.23 Rolling 4-Quarter Total Debt to Operating Cash Flow Ratio................................................74
10.24 Loan Documents...........................................................................................74
10.25 Further Assurances.......................................................................................75
11.CONDITIONS PRECEDENT....................................................................................................75
11.1 Conditions Precedent to Making of Initial Loans..........................................................75
11.2 Conditions Precedent to Each Loan........................................................................77
12.DEFAULT.................................................................................................................78
12.1 Events of Default........................................................................................78
13.REMEDIES................................................................................................................80
14.TERM AND TERMINATION....................................................................................................81
15.MISCELLANEOUS...........................................................................................................82
15.1 Cumulative Remedies; No Prior Recourse to Collateral.....................................................82
15.2 No Implied Waivers.......................................................................................82
15.3 Severability.............................................................................................83
15.4 Governing Law............................................................................................83
15.5 Consent to Jurisdiction and Venue; Service of Process....................................................83
15.6 Waiver of Jury Trial.....................................................................................83
15.7 Survival of Representations and Warranties...............................................................84
15.8 Other Security and Guaranties............................................................................84
15.9 Fees and Expenses........................................................................................84
15.10 Notices..................................................................................................85
15.11 Indemnification..........................................................................................86
15.12 Waiver of Notices........................................................................................87
15.13 Binding Effect; Assignments; Participations..............................................................88
15.14 Modification.............................................................................................90
15.15 Counterparts.............................................................................................90
15.16 Captions.................................................................................................91
15.17 Right of Set-Off.........................................................................................91
15.18 [Reserved]...............................................................................................91
15.19 Additional Borrowers.....................................................................................91
15.20 Joint and Several Liability..............................................................................91
15.21 Effect on Existing Loan and Security Agreement...........................................................93
15.22 Obligations of Lenders...................................................................................93
16.THE AGENT...............................................................................................................93
16.1 Appointment and Authorization............................................................................93
16.2 Delegation of Duties.....................................................................................93
16.3 Liability of the Lenders'Agent Related Persons...........................................................94
16.4 Reliance by the Lenders'Agent............................................................................94
16.5 Notice of Default........................................................................................94
16.6 Credit Decision..........................................................................................94
16.7 Indemnification..........................................................................................95
16.8 Lenders' Agent in Individual Capacity....................................................................95
16.9 Successor Agent..........................................................................................96
16.10 Withholding Tax..........................................................................................96
16.11 Collateral Matters.......................................................................................97
16.12 Restrictions on Actions by Lenders; Sharing of Payments..................................................98
16.13 Agency for Perfection....................................................................................99
16.14 Payments by the Lenders'Agent to Lenders.................................................................99
16.15 Concerning the Collateral and the Related Loan Documents.................................................99
16.16 Field Audit and Examination Reports; Disclaimer by Lenders...............................................99
16.17 Relation Among Lenders..................................................................................100
16.18 Assignment and Purchase of Pro Rata Share...............................................................100
SCHEDULES
Schedule 7.3 Location of Collateral
Schedule 9.4 Corporate Name; Prior Transactions
Schedule 9.5 Subsidiaries and Affiliates
Schedule 9.9 Debt
Schedule 9.13 Real Property; Leases
Schedule 9.14 Proprietary Rights
Schedule 9.15 Trade Names
EXHIBITS
Exhibit A Form of Account Debtor Notice
Exhibit B Additional Borrower Agreement
Exhibit C Additional Borrower Consent Notice
Exhibit D Commitments
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of June 30,
2000 (this "AGREEMENT"), among the financial institutions listed on the
signature pages hereof as Lenders (such financial institutions, together with
their respective successors and assigns, are referred to each individually as a
"LENDER" and collectively as the "LENDERS"), Bank of America, N.A., with an
office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as the
Lenders' Agent, Option Care, Inc., a Delaware corporation, with offices at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, individually ("OPTION
CARE") and as the Borrowers' Agent, and Option Care and each of Option Care's
Subsidiaries from time to time party hereto (Option Care and such Subsidiaries
party hereto being referred to herein individually as a "BORROWER" and
collectively as the "BORROWERS").
W I T N E S S E T H
WHEREAS, certain of the parties hereto are parties to that certain Loan
and Security Agreement dated as of February 5, 1999, as amended by that certain
First Amendment dated as of September 1, 1999 (as so amended, the "EXISTING LOAN
AND SECURITY AGREEMENT");
WHEREAS, BankAmerica Business Credit, Inc. ("BABC") was the original
"lender" under the Existing Loan and Security Agreement;
WHEREAS, through a series of events all of BABC's right, title and
interest in, to and under the Existing Loan and Security Agreement and the
"collateral" referred to therein have been transferred to Bank of America, N.A.;
and
WHEREAS, the Borrowers and the Borrowers' Agent have requested the
Lenders and the Lenders' Agent to amend and restate the Existing Loan and
Security Agreement, and the Lenders and the Lenders' Agent are willing to amend
and restate the Existing Loan and Security Agreement, subject to the terms and
conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree to amend the Existing Loan and Security Agreement as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein:
"ACCOUNT" means, with respect to any Option Care Person, such Option
Care Person's right to payment for a sale or lease and delivery of goods or
rendition of services, including without limitation health care goods and
services.
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account.
"ACCOUNT DEBTOR NOTICE" means a notice to an Account Debtor
substantially in the form of EXHIBIT A, it being understood that Account Debtor
Notices shall be sent only to Account Debtors described in clause (p) of the
definition of "Eligible Account".
"ACH TRANSACTIONS" means all debts, liabilities, and obligations now or
hereafter owing from a Borrower to the Bank arising from or related to cash
management services including the automatic clearing house transfer of funds by
the Bank for the account of a Borrower pursuant to agreement or overdrafts.
"ADDITIONAL AUTHORIZED INDIVIDUAL" has the meaning set forth in SECTION
2.5(c).
"ADDITIONAL BORROWER AGREEMENT" is defined in SECTION 15.19.
"ADDITIONAL BORROWER CONSENT NOTICE" is defined in SECTION 15.19.
(i) "ADJUSTED CASH FLOW" means, with respect to any fiscal period of
Option Care, the net income of Option Care after provision for income taxes
for such fiscal period, as determined on a consolidated basis in accordance
with GAAP and reported on the Financial Statements for such period LESS,
without duplication, all Distributions permitted hereunder and made by Option
Care during such fiscal period, all regularly scheduled principal
installments of Debt for borrowed money which were actually paid by the
Option Care Persons during such fiscal period, and Capital Expenditures
permitted hereunder and which were actually made by the Option Care Persons
during such fiscal period determined in accordance with GAAP and reported on
the Financial Statements for such period; PLUS the depreciation and
amortization expense deducted in determining such net income for such fiscal
period and other non-cash expenses deducted in computing such net income.
(a) "ADJUSTED NET EARNINGS FROM OPERATIONS" means, with respect to any
fiscal period of Option Care, the net income of Option Care after provision
for income taxes for such fiscal period, as determined on a consolidated
basis in accordance with GAAP and reported on the Financial Statements for
such period, excluding, without duplication, any and all of the following
included in such net income: gain or loss arising from the sale of capital
assets (other than durable medical equipment sold in the ordinary course of
business or consistent with the practice of the Option Care Persons as such
practice existed prior to the Closing Date); gain arising from any write-up
in the book value of any asset; earnings of any corporation, substantially
all the assets of which have been acquired by an Option Care Person in any
manner, to the extent realized by such other corporation prior to the date of
acquisition; earnings of any Person that is not consolidated with Option Care
in accordance with GAAP, unless (and only to the extent) such earnings shall
actually have been received by Option Care or a consolidated Subsidiary in
the form of distributions of cash or cash equivalents; earnings of any Person
to which assets of an Option Care Person shall have been sold, transferred or
disposed of, or into which an Option Care Person shall have been merged, or
which has been a party with an Option Care Person to
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any consolidation or other form of reorganization, prior to the date of such
transaction; gain arising from the acquisition of debt or equity securities
of an Option Care Person or from cancellation or forgiveness of Debt; (g)
amortization of goodwill and related intangibles; and (h) gain or loss
arising from extraordinary items, as determined in accordance with GAAP, or
from any other non-recurring transaction.
"ADJUSTED TANGIBLE ASSETS" means all of the assets of Option Care or
its consolidated Subsidiaries except: (a) deferred assets, other than prepaid
insurance and prepaid taxes; (b) patents, copyrights, trademarks, trade
names, franchises, goodwill, and other similar intangibles; (c) Restricted
Investments (other than accounts receivable and inventory acquired as part of
any acquisition permitted by this Agreement); (d) unamortized debt discount
and expense; (e) assets of any such Person constituting Intercompany
Accounts; and (f) fixed assets to the extent of any write-up in the book
value thereof resulting from a revaluation effective after February 5, 1999.
"ADJUSTED TANGIBLE NET WORTH" means, at any date: (a) the book value
(after deducting related depreciation, obsolescence, amortization, valuation,
and other proper reserves as determined in accordance with GAAP) at which the
Adjusted Tangible Assets would be shown on a balance sheet of Option Care at
such date prepared on a consolidated basis in accordance with GAAP, LESS (b)
the amount at which the liabilities of Option Care would be shown on such
balance sheet at such date prepared on a consolidated basis in accordance
with GAAP, including as liabilities all reserves for contingencies and other
potential liabilities which would be required to be shown on such balance
sheet as determined in accordance with GAAP.
"AFFILIATE" means: (a) a Person which, directly or indirectly,
controls, is controlled by or is under common control with, an Option Care
Person; (b) a Person which beneficially owns or holds, directly or
indirectly, ten percent or more of any class of voting stock of an Option
Care Person; (c) a Person in which ten percent of any class of the voting
stock is beneficially owned or held, directly or indirectly, by an Option
Care Person; or (d) a joint venture in which an Option Care Person is a
participant or in which an Option Care Person has made an investment. The
term control (including the terms "controlled by" and "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 the Person in
question.
"ANNIVERSARY DATE" means each anniversary of the Closing Date.
"APPLICABLE LIBOR TERM LOAN MARGIN" means the applicable
percentage set forth below under the heading "Applicable LIBOR Term
Loan Margin":
ROLLING 4-QUARTER TOTAL DEBT TO OPERATING APPLICABLE LIBOR TERM LOAN MARGIN
----------------------------------------------------------------------------------------------
CASH FLOW RATIO
---------------
Greater than 2.25 to 1 Three and one-half percent (3.5%)
3
Greater than 2.0 to 1, but less than Three and thirty-five one-hundredths
or equal to 2.25 to 1 of one percent (3.35%)
Less than or equal to 2.0 to 1 Three and twenty one-hundredths
of one percent (3.20%)
"ASSIGNEE" has the meaning specified in SECTION 15.13.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in
SECTION 15.13.
"AVAILABILITY" means at any time the lesser of:
(a) Twenty-five million dollars ($25,000,000) (the "MAXIMUM
REVOLVING CREDIT LINE"), or
(b) The sum of (i) eighty-five percent (85%) of the Expected
Net Receivables (excluding Unbilled Accounts), plus (ii) seventy-five
percent (75%) of the Expected Net Receivables which are Unbilled
Accounts, plus (iii) the lesser of (x) fifty percent (50%) of the value
of Eligible Inventory and (y) one million five hundred thousand dollars
($1,500,000); PROVIDED, HOWEVER, that at all times Availability shall
be reduced by the sum of:
(A) the unpaid balance of Revolving Loans at that time;
(B) the amount of all unapplied cash (i.e., Collections not
yet applied to Accounts);
(C) the Offset Reserve;
(D) any reserve which the Lenders' Agent in its reasonable
discretion, based upon the customary credit and collateral
standards of the Lenders' Agent as modified from time to
time, deems necessary or desirable to maintain (i) in
respect of any Lien for delinquent taxes applicable to any
Borrower, or (ii) in respect of accrued interest on the
Revolving Loans; and
(E) all other reserves which the Lenders' Agent in its
reasonable discretion, based upon the customary credit and
collateral standards of the Lenders' Agent as modified from
time to time, deems necessary or desirable to maintain with
respect to any Borrower's account, including, without
limitation, (i) any amounts which the Lenders' Agent or any
Lender may be obligated to pay in the future for the
account of any Borrower, (ii) in respect of any Borrower's
ability to ▇▇▇▇ and collect Accounts or (iii) any
Borrower's ability to prepare and provide timely and
accurate reporting to the Lenders' Agent. If the Lenders'
Agent sends a
4
notice to the Borrowers' Agent to the effect that the
Lenders' Agent shall maintain a reserve contemplated by this
clause (E), then the Borrowers' Agent shall have the right to
terminate this Agreement in accordance with and subject to the
terms of SECTION 14(b).
"BANK" means Bank of America, N.A., a national banking association, or
any successor entity thereto.
"BLOCKED ACCOUNT" means a bank account subject to a Blocked Account
Agreement.
"BLOCKED ACCOUNT AGREEMENT" means an agreement among one or more
Option Care Persons, the Lenders' Agent and a Blocked Account Bank, as the
same may be amended, amended and restated or otherwise modified from time to
time in accordance with its terms.
"BLOCKED ACCOUNT BANK" means a bank that is acceptable to the
Majority Lenders. As of the Closing Date, Northern is acceptable to the
Majority Lenders; PROVIDED that if the Majority Lenders determine that
Northern is no longer able to perform the functions (including, without
limitation, the ability to follow the Lender's instructions) of a Blocked
Account Bank in a manner which is reasonably satisfactory to the Majority
Lenders, then the Majority Lenders may so notify the Borrowers' Agent and,
upon such notice, the parties hereto shall cooperate in good faith to appoint
a new Blocked Account Bank and to take all other actions which, in the
reasonable judgment of the Majority Lenders, are necessary in connection
therewith to fulfill the terms of this Agreement (including SECTION 7.10).
"BORROWER" is defined in the preamble.
"BORROWERS' AGENT" is defined in SECTION 2.5(a).
"BORROWING" means a borrowing hereunder consisting of one or more
Loans made on the same day (a) by the Lenders to one or more Borrowers, (b)
by the Bank to one or more Borrowers in the case of a Non-Ratable Loan or (c)
by the Lenders' Agent to one or more Borrowers in the case of a Lenders'
Agent Advance.
"BORROWING BASE CERTIFICATE" means a certificate, in form and
substance reasonably satisfactory to the Lenders' Agent, signed by the Chief
Executive Officer, the Chief Financial Officer or the Secretary of the
Borrowers' Agent (or by an Additional Authorized Individual). A Borrowing
Base Certificate shall be a Mid-Month Borrowing Base Certificate or a Final
Borrowing Base Certificate.
"BUSINESS DAY" means (a) any day that is not a Saturday, Sunday, or
a day on which banks in Charlotte, North Carolina or Chicago, Illinois, are
required or permitted to be closed, and (b) with respect to all notices,
determinations, fundings and payments in connection with the LIBOR Rate or
LIBOR Rate Loans, any day that is a Business Day pursuant to clause
5
(a) above and that is also a day on which trading in Dollars is carried on by
and between banks in the London interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Public Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling any
bank.
"CAPITAL EXPENDITURES" means, for any period, all payments due
during such period (whether or not paid) in respect of the cost of any fixed
asset or improvement, or replacement, substitution, or addition thereto,
which has a useful life of more than one year, including, without limitation,
those costs arising in connection with the direct or indirect acquisition of
such assets by way of increased product or service charges or offset items or
in connection with Capital Leases.
"CAPITAL LEASE" means, with respect to any Option Care Person, any
lease of Property by such Option Care Person that, in accordance with GAAP,
should be reflected as a capital lease on the balance sheet of such Option
Care Person.
"CHAMPUS" means the Civilian Health and Medical Program of the
Uniformed Services.
"CHAMPVA" means the Civilian Health and Medical Program of Veterans
Affairs.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning given to such term in SECTION 7.1.
"COLLECTIONS" means all cash, funds, checks, notes, instruments,
warrants and any other form of remittance tendered by an Account Debtor in
payment (in whole or part) of an Account.
"COMMITMENT" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"COMMITMENT" on Exhibit D to this Agreement or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of SECTION 15.13, as such
Commitment may be adjusted from time to time in accordance with the
provisions of SECTION 15.13, and "COMMITMENTS" means, collectively, the
aggregate amount of the commitments of all of the Lenders.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in
6
any form or condition, polychlorinated biphenyls ("PCBs"), or other substance
or material, the handling, release, or possession of which is regulated to
protect health, safety or the environment, or any constituent of any such
substance, material or waste.
(a) "CONTRACTUAL RIGHTS" means, collectively, all of the rights and
remedies of any Option Care Person under, and all moneys and claims for money
due or to become due to any Option Care Person under, any contracts or
agreements and any and all amendments, supplements, extensions, and renewals
thereof including, without limitation, all rights and claims of any Option
Care Person now or hereafter existing: under any insurance, indemnities,
warranties, and guarantees provided for or arising out of or in connection
with the foregoing contracts or agreements; for any damages arising out of or
for breach or default under or in connection with the foregoing contracts or
agreements; to all other amounts from time to time paid or payable under or
in connection with the foregoing contracts or agreements; or to exercise or
enforce any and all covenants, remedies, powers and privileges thereunder.
"CONVERSION/CONTINUATION DATE" has the meaning specified in
SECTION 3.2(b).
"DATE OF SERVICE" means, with respect to an Account, a date on which
services or goods giving rise to such Account or any portion thereof were
rendered or provided.
"DEBT" means, with respect to any Option Care Person at any time:
(a) all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances,
notes or other similar instruments, and any accrued interest, fees and
charges relating thereto; (ii) under profit payment agreements or similar
agreements; (iii) with respect to letters of credit issued for such Person's
account; (iv) to pay the deferred purchase price of Property or services,
including, without limitation, "earnout arrangements", except unsecured
accounts payable and accrued expenses arising in the ordinary course of
business which in each case are less than 60 days past due; or (v) Capital
Lease obligations; (b) all indebtedness, obligations or other liabilities of
such Person or others secured by a Lien on any Property of such Person,
whether or not such indebtedness, obligations or liabilities are assumed by
such Person, all as of such time; (c) all indebtedness, obligations or other
liabilities of such Person in respect of any foreign exchange contract or
interest hedge agreement, net of liabilities owed to such Person thereunder
by the counterparties thereon; (d) all capital stock of such Person subject
(upon the occurrence of any contingency or otherwise) to mandatory
redemption; (e) all obligations and liabilities under Guaranties; and (f) all
other Obligations.
"DEFAULTING LENDER" means a Lender that has failed to make a Loan on
any Funding Date (until such failure has been cured).
"DILUTION PERCENTAGE" has the meaning set forth in SECTION 7.8
"DISTRIBUTION" means, in respect of any corporation: (a) the payment
or making of any dividend or other distribution of Property in respect of
capital stock (including in respect of any options or warrants for such
stock) of such corporation, other than distributions in capital
7
stock of the same class; or (b) the redemption or other acquisition by such
corporation of any capital stock (or options or warrants for such stock) of
such corporation.
"DOL" means the United States Department of Labor or any successor
department or agency.
"DOLLARS" and "$" means dollars constituting lawful currency of the
United States.
"EBITDA" means, with respect to any fiscal period, the Adjusted Net
Earnings from Operations for such fiscal period plus all Interest Expense,
federal and state income taxes, depreciation, and amortization deducted from
revenue in determining such Adjusted Net Earnings from Operations.
"ELIGIBLE ACCOUNTS" means those Accounts which are not ineligible as
the basis for Revolving Loans, based on the following criteria and on such
other criteria of eligibility ("OTHER CRITERIA") as the Lenders' Agent may
from time to time establish in its reasonable commercial discretion upon at
least three days' prior written notice to the Borrowers' Agent provided that
if the Lenders' Agent establishes Other Criteria then the Borrowers' Agent
shall have the right to terminate this Agreement in accordance with and
subject to the terms of SECTION 14(b). Without intending to limit the
Lenders' Agent's discretion to establish Other Criteria, Eligible Accounts
shall NOT include any Account:
(a) with respect to which more than 150 days have elapsed
since the Invoice Date; or
(b) with respect to which any of the representations,
warranties, covenants, and agreements contained in this Agreement are not or
have ceased to be complete and correct or have been breached; or
(c) with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the payment
of money has been received, presented for payment and returned uncollected
for any reason; or
(d) as to which any one or more of the following events has
occurred with respect to the Account Debtor on such Account: the filing by or
against the Account Debtor of a request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or similar laws
of the United States, any state or territory thereof, or any foreign
jurisdiction, now or hereafter in effect; the making of any general
assignment by the Account Debtor for the benefit of creditors; the
appointment of a receiver or trustee for the Account Debtor or for any of the
assets of the Account Debtor, including, without limitation, the appointment
of or taking possession by a "custodian," as defined in the Federal
Bankruptcy Code; the institution by or against the Account Debtor of any
other type of insolvency proceeding (under bankruptcy laws or insurance laws
or otherwise) or of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against, or winding up of affairs of,
the Account Debtor; the sale, assignment, or transfer of all or any material
part of the assets of the Account Debtor; the
8
nonpayment generally by the Account Debtor of its debts as they become due;
or the cessation of the business of the Account Debtor as a going concern; or
(e) owed by an Account Debtor which does not maintain its
chief executive office in the United States or is not organized under the
laws of the United States or any state or commonwealth thereof; or
(f) owed by an Account Debtor which is an Affiliate of any
Borrower; or
(g) as to which either (x) the perfection, enforceability, or
validity of the Security Interest in such Account, or (y) the right or
ability of the Lenders' Agent to obtain direct payment to the Lenders' Agent
of the Proceeds of such Account (other than, in the case of this clause (y),
an Account payable by a Government Account Debtor), is governed by any
federal, state, or local statutory requirements other than those of the UCC;
or
(h) which is evidenced by a promissory note, warrant or other
instrument or by chattel paper; or
(i) if fifty percent (50%) or more of the aggregate dollar
amount of outstanding Accounts owed at such time by the Account Debtor to any
Borrower is classified by any Borrower as "not in good standing"; or
(j) which arises out of a sale made, or service performed,
outside of the ordinary course of the business of the Borrower which
originated such Receivable; or
(k) with respect to which the goods giving rise to such
Account have not been delivered to and accepted by the applicable patient or
the services giving rise to such Account have not been performed by a
Borrower, and, if applicable, accepted by the applicable patient, or the
applicable patient revokes its acceptance of such durable medical equipment
which is unrelated to infusion therapy services; or
(l) which is not subject to a first priority and perfected
security interest in favor of the Lenders' Agent; or
(m) which arises under a healthcare capitation contract or
similar arrangement under which a Borrower receives payments (i) in advance
of providing the applicable goods and services or (ii) without regard to
whether a Borrower provides any goods or services; PROVIDED that if a
capitation contract or similar arrangement includes provisions for a Borrower
to be paid on a "fee for service" basis, then the related Accounts, to the
extent they represent the right to payment on such "fee for service" basis,
shall not be excluded as Eligible Accounts solely because of this clause (m);
or
9
(n) to the extent such Account is a Self-Pay Account; or
(o) as to which at least than 60 days have elapsed since any
Date of Service and such Account was an Unbilled Account on such 60th day; or
(p) owed by an Account Debtor which is an insurance company or health
maintenance organization or other Person which is paid premiums in a manner
which is the same as or similar to an insurance company or health maintenance
organization if such Account Debtor has not received an Account Debtor
Notice; provided that this clause (p) shall apply commencing thirty (30) days
after the Closing Date; or
(q) which represents a right of payment under a servicing
contract; or
(r) unless such Account is denominated in Dollars; or
(s) (i) if the goods (other than durable medical equipment) or
services giving rise to such Account were not authorized by a physician's
prescription, or (ii) the Account Debtor (other than a Self-Pay Account
Debtor) informs any Option Care Person (whether by EOB or otherwise) that
such goods or services were not medically necessary (and the applicable
contract or applicable law provides that payment for such goods or services
may or shall be denied on the grounds that such goods or services were not
medically necessary); or
(t) to the extent that the fees charged for the services or
goods constituting the basis for such Account exceed limitations imposed by
applicable law, regulation or contract; or
(u) which is not owned free and clear of all Liens (other
than Permitted Liens) by the Borrower which originated such Account; or
(v) which represents a royalty or other right to receive a
franchise payment from any franchisee of any Option Care Person; or
(w) which represents amounts due in respect of a "settlement"
with respect to Medicare or Medicaid relating to the filing of a "cost
report"; or
(x) which represents a right to payment for a sale or lease
and delivery of computer software or hardware or rendition of services
pertaining to computer software or hardware.
If any Account at any time ceases to be an Eligible Account by reason
of any of the foregoing exclusions or any failure to meet any Other Criteria,
then such Account shall promptly be excluded from the calculation of Eligible
Accounts.
10
No Accounts owed to Option Care of Oklahoma, Inc. or owed to Option Rx,
Inc. (which is changing its name to OptionMed, Inc.) shall be Eligible Accounts
unless (i) such Accounts satisfy the requirements of the definition of Eligible
Accounts, and (ii) the Lenders' Agent shall have sent the Borrowers' Agent a
notice permitting such Accounts to be Eligible Accounts.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank, commercial finance
company or other asset based lender, having total assets in excess of one
billion dollars ($1,000,000,000); (b) any Lender listed on the signature
pages of this Agreement (or any Lender which has become a party hereto
pursuant to an Assignment and Acceptance); (c) any affiliate of any Lender;
and (d) if an Event of Default exists, any Person reasonably acceptable to
the Lenders' Agent.
"ELIGIBLE INVENTORY" means Inventory, valued at the lower of cost
(determined on a first-in, first-out basis) or market, that constitutes raw
materials or first quality finished goods and that: (a) is not, in the
reasonable opinion of the Lenders' Agent, slow moving, obsolete or
unmerchantable; (b) is located at Premises owned or leased by a Borrower or
on Premises otherwise reasonably acceptable to the Majority Lenders,
PROVIDED, HOWEVER, that Inventory located on Premises leased to any Borrower
shall not be Eligible Inventory unless such Borrower shall have delivered to
the Lenders' Agent a written waiver or subordination, duly executed on behalf
of the appropriate landlord and in form and substance acceptable to the
Majority Lenders, of all Liens which the landlord for such Premises may be
entitled to assert against such Eligible Inventory; (c) is subject to the
first priority perfected security interest of the Lenders' Agent (and,
without limiting the foregoing, UCC financing statements and amendments
thereof shall have been filed against the applicable Option Care Person in
all filing offices designated by the Lenders' Agent from time to time); (d)
is not work-in-process, spare parts, packaging and shipping materials,
supplies, ▇▇▇▇-and-hold Inventory, returned or defective Inventory, or
Inventory delivered to any Borrower on consignment; and (e) the Lenders'
Agent, in the exercise of its reasonable discretion, deems eligible as the
basis for Revolving Loans based on such reasonable collateral and credit
criteria as the Lenders' Agent may from time to time establish. If any
Inventory at any time ceases to be Eligible Inventory, such Inventory shall
promptly be excluded from the calculation of Eligible Inventory.
Notwithstanding the foregoing, no Inventory shall be considered to be
Eligible Inventory unless and until the following conditions shall have been
met: (i) the Lenders' Agent shall have completed a field examination of the
Borrowers' Inventory, and the results of such field examination shall be
satisfactory to the Lenders' Agent; and (ii) all steps that are deemed
necessary or appropriate by the Lenders' Agent to create or perfect the
Security Interest of the Lenders' Agent in the Inventory shall have been
completed to the satisfaction of the Lenders' Agent.
No Inventory owned by Option Care of Oklahoma, Inc. or owned by Option
Rx, Inc. (which is changing its name to OptionMed, Inc.) shall be Eligible
Inventory unless (i) such Inventory satisfies the requirements of the definition
of Eligible Inventory, and (iii) the Lenders' Agent shall have sent the
Borrowers' Agent a notice permitting such Inventory to be Eligible Inventory.
11
"ENVIRONMENTAL LAWS" means all present and future federal,
state and local laws, rules, regulations, ordinances, programs,
permits, guidance, orders and consent decrees relating to health,
safety, hazardous substances, and environmental matters applicable to
any Option Care Person's business and facilities (whether or not owned
by it). Such laws and regulations include but are not limited to the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.,
as amended; the Comprehensive Environmental Response Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., as amended; the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., as amended; the
Clean Water Act, 33 U.S.C. Section 466 et seq., as amended; the Clean
Air Act, 42 U.S.C. Section 7401 et seq., as amended; state and federal
lien and environmental cleanup programs; and U.S. Department of
Transportation regulations.
(a) "ENVIRONMENTAL LIEN" means a Lien in favor of any Public Authority
for any liability under any Environmental Laws, or damages arising
from, or costs incurred by such Public Authority in response to, a
Release or threatened Release of a Contaminant into the environment.
"EOB" means the explanation of benefits, remittance advice or
other record that is provided by an Account Debtor explaining how it
determined the amount it shall or shall not pay with respect to an
Account of which it is the Account Debtor.
"EQUIPMENT" means machinery, equipment, furniture,
furnishings, fixtures, and other tangible personal property (except
Inventory), including, without limitation, data processing hardware and
software, motor vehicles, aircraft, dies, tools, jigs, and office
equipment, whether owned or leased, and all rights and interests with
respect thereto under such leases (including, without limitation,
options to purchase); together with all present and future additions
and accessions thereto, replacements therefor, component and auxiliary
parts and supplies used or to be used in connection therewith, and all
substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto; wherever any
of the foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is a member of a controlled group or under common
control with any Option Care Person within the meaning of Section
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA EVENT" means, with respect to any Option Care Person,
any ERISA Affiliate or any Pension Plan, the occurrence of any of the
following: (a) a Reportable Event; (b) a withdrawal by a substantial
employer (as defined in Section 4001(a)(12) of ERISA) subject to
Section 4063 of ERISA; (c) a cessation of operations which is treated
as a withdrawal under
12
Section 4062(e) of ERISA; (d) a complete or partial withdrawal under
Section 4203 or 4205 of ERISA from a Multiemployer Plan; (e) a
notification that a Multiemployer Plan is in reorganization under
Section 4242 of ERISA; (f) the filing of a notice of intent to
terminate a Pension Plan under 4041 of ERISA; (g) the treatment of
an amendment of a Pension Plan as a termination under 4041 of ERISA;
(h) the termination of a Multiemployer Plan under Section 4041A of
ERISA; (i) the commencement of proceedings by the PBGC to terminate
a Pension Plan under 4042 of ERISA; (j) an event or condition which
would reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, a Pension Plan; or (k) the imposition of any
material liability under Title IV of ERISA, other than PBGC premiums
due but not delinquent under Section 4007 of ERISA.
"EVENT" means any event or condition which, with notice, the
passage of time, the happening of any other condition or event, or any
combination thereof, would constitute an Event of Default.
"EVENT OF DEFAULT" has the meaning specified in SECTION 12.1.
"EXISTING LOAN AND SECURITY AGREEMENT" has the meaning set
forth in the recitals.
"EXPECTED NET RECEIVABLES" means the amount of the Net Amount
of Eligible Accounts reasonably expected by the Lenders' Agent to be
collected within 180 days from Invoice Date.
"FACILITY FEE" has the meaning specified in SECTION 3.4.
"FEDERAL BANKRUPTCY CODE" or "BANKRUPTCY CODE" means the
Bankruptcy code of the United States of America codified in Title 11 of
the United States Code.
"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 Bank on such day on such transactions as determined by
the Lenders' Agent.
"FINAL BORROWING BASE CERTIFICATE" means a Borrowing Base
Certificate reflecting actual information as of the end of the month
preceding the month in which such Final Borrowing Base Certificate is
to be delivered pursuant to SECTION 7.8.
13
"FINANCIAL STATEMENTS" means, according to the context in
which it is used, the financial statements contained in Option Care's
Form 10-Q for the quarterly period ended March 31, 2000, any financial
statements required to be given to the Lenders pursuant to SECTIONS
8.2(a), (b) or (c), or any combination thereof.
"FISCAL YEAR" means each Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of each Borrower shall end
on December 31, 2000.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means at any particular time generally accepted
accounting principles as in effect at such time in the United States.
"GOVERNMENT ACCOUNT DEBTOR" means the United States of
America, any state, any political subdivision of a state and any agency
or instrumentality of the United States of America or any state,
political subdivision or fiscal intermediary thereof (including any
insurance company or other Person acting solely in its capacity as a
Medicare or Medicaid intermediary) that is obligated to make any
payments under (i) Medicare or Medicaid or (ii) with respect to
Accounts representing amounts owing under any other program established
by federal or state law that provides for payments for health care
goods or services to be made to providers thereof (including CHAMPUS
and CHAMPVA).
"GOVERNMENT OFFSET" means any amount determined by a
Government Account Debtor, or any agent or governmental agency acting
on behalf of a Government Account Debtor or governmental agency, to
constitute an overpayment made to any Option Care Person with respect
to an Account and that is to be paid to such Government Account Debtor
by any Option Care Person or is to be offset against amounts then due
to any Option Care Person from such Government Account Debtor,
including any amounts determined by HCFA or any agent acting on behalf
thereof.
"GUARANTY" by any Person means all obligations of such Person
which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligation of any other Person (the
"guaranteed obligations"), or assure or in effect assure the holder of
the guaranteed obligations against loss in respect thereof, including,
without limitation, any such obligations incurred through an agreement,
contingent or otherwise: (a) to purchase the guaranteed obligations or
any Property constituting security therefor; (b) to advance or supply
funds for the purchase or payment of the guaranteed obligations or to
maintain a working capital or other balance sheet condition; or (c) to
lease Property or to purchase any debt or equity securities or other
Property or services.
"HCFA" means the Health Care Financing Administration or any
successor thereto.
14
"HEALTH CARE LAWS" means any and all federal, state and local
laws and regulations governing the licensure, certification, good
standing, accreditation and approval of the provision of health care
goods and services provided by any Option Care Person or any of its
Subsidiaries, including but not limited to laws and regulations
relating to licensure of operation, certificates of need, certificates
of operations, insurance, fraud and abuse, kickbacks, false claims,
physician self-referral arrangements, Medicaid, Medicare, CHAMPUS,
CHAMPVA, the federal Food, Drug & Cosmetic Act (FDCA) and the Food and
Drug Administration.
"INTERCOMPANY ACCOUNTS" means all assets and liabilities,
however arising, which are due to any Option Care Person from, which
are due from any Option Care Person to, or which otherwise arise from
any transaction by any Option Care Person with, any Affiliate of such
Option Care Person.
"INTEREST EXPENSE" means, with respect to any period, the
consolidated gross interest expense of Option Care and its Subsidiaries
for such period determined on a consolidated basis in accordance with
GAAP.
"INTEREST PERIOD" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as a LIBOR Rate Loan, and ending on the date one, two, three
or six months thereafter as selected by the Borrowers' Agent in its
Notice of Borrowing or Notice of Conversion/Continuation; PROVIDED,
HOWEVER, that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be
extended to the following Business Day unless the result of
such extension would be to carry such Interest Period into
another calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(iii) no Interest Period shall extend beyond the
Stated Termination Date.
"INTEREST RATE" means each or any of the interest rates set
forth in SECTION 3.1.
"INVENTORY" means inventory, goods and merchandise, wherever
located, to be furnished under any contract of service or held for sale
or lease, all raw materials, work-in-process, finished goods, returned
goods, and materials and supplies of any kind, nature or description,
and all documents of title or other documents representing them.
15
"INVOICE DATE" means, with respect to an Account, the date on
which any Option Care Person first submitted a claim to an Account
Debtor (other than a Self-Pay Account Debtor) with regard to such
Account. For avoidance of doubt, if an Option Care Person submits a
claim in respect of an Account to an Account Debtor and such claim is
not paid in full (the "INITIAL CLAIM"), and the Option Care Person then
submits a claim in respect of such Account to another Account Debtor,
the Initial Claim shall be treated as the "claim" for purposes of the
first sentence of this definition of Invoice Date.
"IRS" means the Internal Revenue Service or any successor
agency.
"LATEST PLAN" means: (a) on the Closing Date and thereafter
until the Lenders receive new projections pursuant to SECTION 8.2(f),
Option Care's projections dated November 1, 1999, a true, complete and
correct copy of which was provided by Option Care to the Lenders prior
to the Closing Date; and (b) thereafter, the business plan most
recently received by the Lenders pursuant to SECTION 8.2(f).
"LENDER" and "LENDERS" have the meanings specified in the
introductory paragraph hereof and shall include the Lenders' Agent to
the extent of any Lenders' Agent Advance outstanding and the Bank to
the extent of any Non-Ratable Loan outstanding; PROVIDED that no such
Lenders' Agent Advance or Non-Ratable Loan shall be taken into account
in determining any Lender's Pro Rata Share.
"LENDERS' AGENT" means the Bank, solely in its capacity as
agent for the Lenders, and any successor agent.
"LENDERS' AGENT ADVANCES" has the meaning specified in SECTION
2.2(f).
"LENDERS' AGENT'S LIENS" means the Liens in the Collateral
granted to the Lenders' Agent, for the benefit of the Lenders, the Bank
or the Lenders' Agent pursuant to this Agreement, the other Loan
Documents or any other agreement or instrument.
"LENDERS' AGENT'S RELATED PERSONS" means, collectively, the
Lenders' Agent, the affiliates of the Lenders' Agent, and the officers,
directors, employees, agent and attorneys-in-fact of the Lenders' Agent
and such affiliates.
"LIBOR INTEREST PAYMENT DATE" means, with respect to a LIBOR
Rate Loan, the last day of each Interest Period applicable to such
Loan.
"LIBOR INTEREST RATE DETERMINATION DATE" means each date of
calculating the LIBOR Rate for purposes of determining the interest
rate with respect to an Interest Period. The LIBOR Interest Rate
Determination Date for any LIBOR Rate Loan shall be the second Business
Day prior to the first day of the related Interest Period for such
LIBOR Rate Loan.
16
"LIBOR RATE" means, for any Interest Period, with respect to
LIBOR Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/1000th of 1.0%)
determined as follows:
LIBOR Rate = LIBOR
---------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day
for any Interest Period the maximum reserve percentage
(expressed as a decimal, rounded upward to the next 1/100th
of 1.0%) in effect on such day (whether or not applicable to
any Lender) under regulations issued from time to time by
the Board of Governors of the Federal Reserve for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve
requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum
(rounded upward to the next 1/16 of 1%) notified to the
Lenders' Agent by the Bank as the rate of interest at which
United States Dollar deposits in the approximate amount of
the Loan to be made or continued as, or converted into, a
LIBOR Rate Loan and having a maturity comparable to such
Interest Period would be offered by the Bank's applicable
lending office to major banks in the London interbank market
at their request at approximately 11:00 a.m. (London time)
two Business Days prior to the commencement of such Interest
Period.
"LIBOR RATE LOANS" means, collectively, the LIBOR Revolving
Loans and the LIBOR Term Loans.
"LIBOR REVOLVING LOAN" means a Revolving Loan during any
period in which it bears interest based on the LIBOR Rate.
"LIBOR TERM LOAN" means a Term Loan during any period in which
it bears interest based on the LIBOR Rate.
"LIEN" means any mortgage or deed of trust, pledge,
hypothecation, assignment, deposit arrangement, lien, charge, claim,
security interest, easement or encumbrance, or preference, priority or
other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, any lease or title
retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or
agreement to give or file, any financing statement perfecting a
security interest under the UCC or comparable law of any jurisdiction),
regardless of whether any of the foregoing is consensual or arises by
operation of law or otherwise is non-consensual.
17
"LOANS" means, collectively, all loans and advances provided
for in SECTION 2.
"LOAN DOCUMENTS" means this Agreement, each Blocked Account
Agreement, each Additional Borrower Agreement, the Account Debtor
Notices, the Borrowing Base Certificates, the Pledge Agreements, the
Trademark Security Agreements, and all other agreements, letters of
credit, notices, promissory notes, instruments, and documents
heretofore, now or hereafter evidencing, securing, guaranteeing or
otherwise relating to the Obligations, the Collateral, the Security
Interest, or any other aspect of the transactions contemplated by this
Agreement.
"LOCKBOX" means a lockbox or post office box which is subject
to a Blocked Account Agreement.
"MAJORITY LENDERS" means at any date of determination the
Lender or Lenders whose Pro Rata Share or Pro Rata Shares aggregate
more than sixty-five percent (65%), as such percentage is determined
under the definition of Pro Rata Share set forth herein.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
any of the following: (a) the Collateral, (b) the complete and timely
repayment of the Obligations, (c) the rights of any Lender or of the
Lenders' Agent under any Loan Document, (d) the Property, business,
performance, operations, prospects, or condition (financial or
otherwise) of all Option Care Persons, taken as a whole, or (e) without
limiting the foregoing, the ability of all Option Care Persons, taken
as a whole, to perform their obligations under the Loan Documents in a
manner which is reasonably satisfactory to the Majority Lenders.
"MAXIMUM RATE" has the meaning specified in SECTION 3.3.
"MAXIMUM REVOLVING CREDIT LINE" has the meaning specified in
clause (a) of the definition of Availability.
"MEDICAID" means the medical assistance program established by
Title XIX of the Social Security Act.
"MEDICAID ACCOUNT" means an Account representing a claim
payable under Medicaid.
"MEDICARE" means the health insurance program established by
Title XVIII of the Social Security Act.
"MID-MONTH BORROWING BASE CERTIFICATE" means a Borrowing Base
Certificate reflecting estimated information (based on good faith,
reasonable estimates by the Borrowers'
18
Agent) as of the fifteenth day of the month in which such Mid-Month
Borrowing Base Certificate is to be delivered pursuant to SECTION 7.8.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA to which any Option Care Person or any
ERISA Affiliate makes, is making, made, or was at any time during the
current year or the immediately preceding six (6) years obligated to
make contributions.
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means, with respect to any
Eligible Accounts, the gross amount of such Eligible Accounts less
sales, excise or similar taxes, and less discounts, claims and credits
at any time issued, owing, granted, outstanding, available or claimed
in respect of such Eligible Accounts (including without limitation
discounts, claims and allowances based on any fee schedule, discount
formula, cost-based reimbursement or other adjustment or limitation
required by the related Account Debtors) and disregarding interest, if
any, payable by the related Account Debtors.
"NON-RATABLE LOAN" and "NON-RATABLE LOANS" have the meanings
specified in SECTION 2.2(e).
"NORTHERN" means The Northern Trust Company.
"NOTICE OF BORROWING" means a written notice from the
Borrowers' Agent to the Lenders' Agent with respect to a Borrowing.
"NOTICE OF CONVERSION/CONTINUATION" has the meaning specified
in SECTION 3.2(b).
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations (monetary or otherwise), covenants, duties,
and Debt owing by any Option Care Person to the Lenders' Agent or any
Lender, whether or not arising under this Agreement, whether or not
evidenced by any note or other instrument or document, whether arising
from an extension of credit, opening of a letter of credit, acceptance,
loan, guaranty, indemnification or otherwise, whether direct or
indirect (including, without limitation, those acquired by assignment
from others, and any participation by any Lender in any Option Care
Person's debts owing to others), absolute or contingent, due or to
become due, primary or secondary, as principal or guarantor, and
including, without limitation, all interest, charges, expenses, fees,
attorneys' fees, filing fees and any other sums chargeable to any
Option Care Person hereunder or under another Loan Document.
"OBLIGATIONS" includes, without limitation, all debts, liabilities and
obligations now or hereafter owing from any Option Care Person to the
Lenders' Agent or any Lender arising from or related to (i) ACH
Transactions pursuant to the indemnity provided in SECTION 2.4, or (ii)
any payment made by any Lender or the Lenders' Agent to a Blocked
Account Bank pursuant to a Blocked Account Agreement.
19
"OFFSET RESERVE" means, with respect to all Accounts and
Account Debtors (other than Self-Pay Account Debtors), the result (but
not less than zero) of (a) the sum of the amounts which such Account
Debtors have requested or directed any Option Care Person to pay, or as
to which any such Account Debtors have notified any Option Care Person
that such Account Debtors shall withhold, setoff or recoup from any
Option Care Person, in respect of actual or alleged overpayments by any
such Account Debtor in respect of any Account, plus (b) the aggregate
amount which any Option Care Person is indebted to such Account Debtors
arising from the fact that an Account Debtor, in addition to being an
Account Debtor, has an additional relationship with any Option Care
Person (e.g., an Option Care Person is a tenant or customer of a Person
that is an Account Debtor), minus (c) the amount paid by any Option
Care Person to Account Debtors described in clause (a) as a refund of
the overpayments contemplated by clause (a); PROVIDED that no amount
relating to a Government Account Debtor shall be included in clause (a)
of this definition unless (i) such Government Account Debtor has
requested payment from an Option Care Person with respect to any actual
or alleged overpayment by such Government Account Debtor or (ii) such
Government Account Debtor, without sending prior request for payment to
an Option Care Person, is or has been withholding, setting-off or
recouping from an Option Care Person in respect of any actual or
alleged overpayment by such Government Account Debtor to an Option Care
Person.
"OPERATING CASH FLOW" means, as of the last day of any fiscal
quarter of Option Care, the result of: (i) EBITDA for the four
consecutive fiscal quarters of Option Care ending on such last day;
plus (ii) the Specified Bad Debt Expense Amount for such four fiscal
quarters; less (iii) the Capital Expenditures of Option Care and its
Subsidiaries during such four fiscal quarters.
"OPTION CARE" is defined in the preamble.
"OPTION CARE PERSON" means any of (a) Option Care (both
individually and in its capacity as the Borrowers' Agent), (b) Option
Care as a Borrower, and (c) any other Borrower, and "Option Care
Persons" means, collectively, all of such Persons.
"OTHER CRITERIA" has the meaning set forth in the definition
of Eligible Accounts.
"OTHER TAXES" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Documents.
"PARTICIPATING LENDER" means any Person that shall have been
granted the right by any Lender to participate in the financing
provided by such Lender under this Agreement and that shall have
entered into a participation agreement in form and substance
satisfactory to such Lender.
20
"PAYMENT ACCOUNT" means a bank account maintained in the name
of the Lenders' Agent on terms and with a bank acceptable to the
Lenders' Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which any Option Care
Person or an ERISA Affiliate sponsors, maintains, or to which it makes,
is making, or is obligated to make contributions or, in the case of a
Multiemployer Plan, has made contributions at any time during the
current year or the immediately preceding six (6) plan years.
"PERMITTED LIENS" means:
(a) Liens for taxes not yet delinquent or Liens for taxes in
an amount not to exceed two hundred fifty thousand dollars ($250,000)
being contested in good faith by appropriate proceedings diligently
pursued, provided that a reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made therefor on the
applicable Financial Statements and that a stay of enforcement of any
such Lien is in effect;
(b) the Lenders' Agent's Liens;
(c) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of business of
any Option Care Person and not in connection with the borrowing of
money, for sums not yet delinquent or which are being contested in good
faith and by proper proceedings diligently pursued, provided that a
reserve or other appropriate provision, if any, required by GAAP shall
have been made therefor on the applicable Financial Statements and a
stay of enforcement of any such Lien is in effect;
(d) Liens in favor of any Person if such Liens are
subordinated to the Security Interest in a manner acceptable to the
Lenders' Agent pursuant to an agreement, in form and substance
satisfactory to the Lenders' Agent, among the Lenders' Agent, such
Person and, if the Lenders' Agent so requires, one or more Option Care
Persons;
(e) Liens arising from cash deposits in connection with
workers' compensation or other unemployment insurance incurred in the
ordinary course of business of an Option Care Person;
21
(f) Liens created by deposits of cash to secure performance of
bids, tenders, leases (to the extent permitted under this Agreement),
or trade contracts, incurred in the ordinary course of business of an
Option Care Person and not in connection with the borrowing of money;
(g) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which has not yet expired,
or in respect of which an Option Care Person is in good faith
prosecuting an appeal or proceeding for a review, and in respect of
which a stay of execution pending such appeal or proceeding for review
has been secured; and
(h) purchase money security interests in equipment and liens
of lessors under Capital Leases to the extent that the acquisition or
lease of the underlying asset was permitted under SECTION 10.11, the
security interest or lien only encumbers the asset purchased or leased,
and so long as the security interest or lien only secures the purchase
price of the asset.
"PERSON" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, limited
liability company, association, corporation, Public Authority, or any
other entity.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which any Option Care Person or an ERISA Affiliate
sponsors or maintains or to which any Option Care Person or an ERISA
Affiliate makes, is making, or is obligated to make contributions and
includes any Pension Plan.
"PLEDGE AGREEMENTS" is defined in SECTION 11.1.
"PREMISES" means the land identified by addresses on SCHEDULE
9.13 together with all buildings, improvements, and fixtures thereon
and all tenements, hereditaments, and appurtenances belonging or in any
way appertaining thereto, and which constitutes all of the real
property in which any Option Care Person has any interests on the
Closing Date.
"PROCEEDS" means all products and proceeds of any Collateral,
and all proceeds of such proceeds and products, including, without
limitation, all Collections, cash and credit balances, all payments
under any indemnity, warranty, or guaranty payable with respect to any
Collateral, all awards for taking by eminent domain, all proceeds of
fire or other insurance, and all money and other Property obtained as a
result of any claims against third parties or any legal action or
proceeding with respect to Collateral.
"PROPERTY" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
22
"PROPRIETARY RIGHTS" means all licenses, franchises, permits,
patents, patent rights, copyrights, works which are the subject matter
of copyrights, trademarks, trade names, trade styles, patent and
trademark applications and licenses and rights thereunder, including
without limitation those patents, trademarks and copyrights referred to
on SCHEDULE 9.14, and all other rights under any of the foregoing, all
extensions, renewals, reissues, divisions, continuations, and
continuations-in-part of any of the foregoing, and all rights to ▇▇▇
for past, present, and future infringement of any of the foregoing;
inventions, trade secrets, formulae, processes, compounds, drawings,
designs, blueprints, surveys, reports, manuals, and operating
standards; goodwill; customer and other lists in whatever form
maintained; and trade secret rights, copyright rights, rights in works
of authorship, and contract rights relating to computer software
programs, in whatever form created or maintained.
"PRO RATA SHARE" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of
such Lender's Commitment and the denominator of which is the sum of the
amounts of all of the Lenders' Commitments, or if no Commitments are
outstanding, a fraction (expressed as a percentage), the numerator of
which is the amount of Obligations owed to such Lender and the
denominator of which is the aggregate amount of the Obligations owed to
the Lenders, in each case giving effect to a Lender's participation in
Non-Ratable Loans and Lenders' Agent Advances.
"PUBLIC AUTHORITY" means the government of any country or
sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or any department, agency, public
corporation or other instrumentality of any of the foregoing and,
without limiting the foregoing, any official, attorney, employee, agent
or "ombudsman", whether elected, appointed or otherwise employed or
retained, by any of the foregoing.
"RECEIVABLES" means all Accounts (whether or not earned by
performance), including without limitation Accounts owed to any Option
Care Person by any of its Subsidiaries or Affiliates, together with all
interest, late charges, penalties, collection fees, and other sums
which shall be due and payable in connection with any Account; proceeds
of any letters of credit naming any Option Care Person as beneficiary;
contract rights; chattel paper; instruments; documents; investment
property; royalty fees and other payments from franchisees; general
intangibles; tort claims; contract claims; choses in action; causes of
action; tax refunds; tax refund claims; Reversions and other amounts
payable to any Option Care Person from or with respect to any Plan;
interests in or claims under any policy of insurance; and all forms of
obligations owing to any Option Care Person (including, without
limitation, in respect of loans, advances, and extensions of credit by
any Option Care Person to its Subsidiaries and Affiliates); guarantees
and other security for any of the foregoing; goods represented by or
the sale, lease or delivery of which gave rise to any of the foregoing;
merchandise returned to or repossessed by any Option Care Person and
rights of stoppage in transit, replevin, and reclamation; and other
rights or remedies of an unpaid vendor, lienor, or secured party.
23
"RECORDS" means books, documents, EOBs, instruments, files and other
records (including without limitation computer programs, tapes and disks)
that evidence an Account or are otherwise necessary or desirable to collect
an Account.
"REFERENCE RATE" means the rate of interest publicly announced from
time to time by the Bank in Charlotte, North Carolina as its "prime rate"
(the "prime rate" being a rate set by the Bank based upon various factors
including the Bank's costs and desired return, general economic conditions,
and other factors, and is used as a reference point for pricing some loans,
some of which may be priced at, above, or below such announced rate). Any
changes in the prime rate announced by the Bank shall take effect on the day
specified in the public announcement of such change. Each Interest Rate based
upon the Reference Rate shall be adjusted simultaneously with any change in
the Reference Rate.
"REFERENCE RATE LOANS" means, collectively, the Reference Rate
Revolving Loans and the Reference Rate Term Loans.
"REFERENCE RATE REVOLVING LOAN" means a Revolving Loan during any
period in which it bears interest based on the Reference Rate.
"REFERENCE RATE TERM LOAN" means a Term Loan during any period in
which it bears interest based on the Reference Rate.
"RELEASE" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of
a Contaminant into the indoor or outdoor environment or into or out of any
real estate or other property, including the movement of Contaminants through
or in the air, soil, surface water, groundwater or real estate or other
property.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"REQUIREMENT OF LAW" means any law (statutory or common), treaty,
rule or regulation or determination of an arbitrator or of a Public Authority.
"RESTRICTED INVESTMENT" means any acquisition of Property by any
Option Care Person or any of its Subsidiaries in exchange for cash or other
Property, whether in the form of an acquisition of stock, debt security, or
other indebtedness or obligation, or the purchase or acquisition of any other
Property, or a loan, advance, capital contribution, or subscription, except
acquisitions of the following: (a) fixed assets to be used in the business of
any Option Care Person or any of its Subsidiaries, so long as the acquisition
costs thereof constitute Capital Expenditures permitted hereunder; (b) goods
held for sale or lease or to be used in the rendition of services by any
Option Care Person and its Subsidiaries, in each case in the ordinary course
of
24
business; (c) direct obligations of the United States of America, or any
agency thereof, or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof; (d) certificates of deposit maturing within one year
from the date of acquisition, bankers acceptances, Eurodollar bank deposits,
or overnight bank deposits, in each case issued by, created by, or with a
bank or trust company organized under the laws of the United States or any
state thereof having capital and surplus aggregating at least $100,000,000;
and (e) commercial paper given the highest rating by S&P or ▇▇▇▇▇'▇ and
maturing not more than 270 days from the date of creation thereof. For
avoidance of doubt, any acquisition by any Option Care Person of any
franchise or franchisee, any interest in a franchise or a franchisee or any
Property of a franchisee shall constitute a Restricted Investment.
"REVERSIONS" means any funds which may become due to any Option Care
Person in connection with the termination of any Plan or other employee
benefit plan.
"REVOLVING LOANS" has the meaning specified in SECTION 2.2 and
includes each Lenders' Agent Advance and Non-Ratable Loan.
"ROLLING 4-QUARTER TOTAL DEBT TO OPERATING CASH FLOW RATIO" means,
as of any date of determination, the ratio of:
(a) the average daily outstanding debt of Option Care on a
consolidated basis, determined in accordance with GAAP, during the four
consecutive fiscal quarters of Option Care ending on or prior to such date of
determination, to
(b) the sum of the Operating Cash Flow for such four consecutive
fiscal quarters.
"S&P" means Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc.
"SECURITY INTEREST" means the Lenders' Agent's Liens.
"SELF-PAY ACCOUNT" means (i) the "co-pay" or "deductible" portion of
an Account payable by a Self-Pay Account Debtor, or (ii) the entire Account
when the entire amount is payable by a Self-Pay Account Debtor.
"SELF-PAY ACCOUNT DEBTOR" means an individual "natural" person.
"SETTLEMENT" has the meaning specified in SECTION 2.2(g).
"SETTLEMENT DATE" has the meaning specified in SECTION 2.2(g).
25
"SOLVENT" means when used with respect to any Person that at the
time of determination:
(i) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount
of any contingent liability shall be computed as the amount that, in light of
all the facts and circumstances existing at such time, represents the amount
that can reasonably be expected to become an actual or matured liability.
"SPECIFIED BAD DEBT EXPENSE AMOUNT" means for any period of four
consecutive fiscal quarters, the excess, if any, of (i) the amount of "bad
debt expense" of Option Care and its Subsidiaries on a consolidated basis for
such period over (ii) three percent (3%) of the "net revenues" of Option Care
and its Subsidiaries on a consolidated basis for such period; provided that
for any period of four consecutive fiscal quarters ending with the last
fiscal quarter of any Fiscal Year (commencing with the Fiscal Year ending
December 31, 1999), the Specified Bad Debt Expense Amount shall be zero if
the "actual writeoffs" of Option Care and its Subsidiaries on a consolidated
basis for such period do not exceed three percent (3%) of the "net revenues"
of Option Care and its Subsidiaries on a consolidated basis for such period.
"STATED TERMINATION DATE" has the meaning specified in SECTION 14.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business
entity of which more than fifty percent (50%) of the voting stock or other
equity interests (in the case of Persons other than corporations), is owned
or controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of an Option Care Person.
"TAXES" means any and all present or future taxes, assessments,
levies, imposts, impositions, deductions, charges or withholdings, and all
liabilities with respect thereto,
26
excluding, in the case of each Lender and the Lenders' Agent, such taxes
(including income taxes or franchise taxes) as are imposed on or measured by
the net income of any Lender or the Lenders' Agent by the jurisdiction (or
any political subdivision thereof) under the laws of which such Lender or the
Lenders' Agent, as the case may be, is organized or maintains a lending
office.
"TERM LOAN" and "TERM LOANS" have the meanings specified in
SECTION 2.3(a).
"TERM LOAN COMMITMENT" means fifteen million dollars ($15,000,000).
"TERM LOAN DRAW PERIOD" means the period commencing on the Closing
Date and ending on the first Anniversary Date.
"TERMINATION FEE" means the result of (a) (x) four hundred
twenty-five thousand dollars ($425,000) if this Agreement is terminated on or
prior to the first Anniversary Date, and (y) two hundred eighty-seven
thousand five hundred dollars ($287,500) if this Agreement is terminated
after the first Anniversary Date but prior to the Stated Termination Date,
less (b) without duplication, any prepayment fee received by the Lenders'
Agent pursuant to Section 4.1A(b).
"TOTAL FACILITY" has the meaning specified in SECTION 2.1.
"TRADEMARK SECURITY AGREEMENTS" has the meaning specified in
SECTION 11.1.
"UCC" means the Uniform Commercial Code (or any successor statute)
as now or hereafter in effect in the State of Illinois or in any other state
the laws of which are required to be applied in connection with the issue of
perfection of security interests.
"UNBILLED ACCOUNT" means an Account as to which an Option Care
Person, to the best of its knowledge, has not submitted to the related
Account Debtor (other than a Self-Pay Account Debtor) those necessary claim
forms, other documentation and information required in order for such Account
Debtor to make payment of such Account.
"UNUSED LINE FEE" has the meaning specified in SECTION 3.1(c).
"UNUSED TERM LOAN AMOUNT" means the result of (a) the Term Loan
Commitment minus (b) the aggregate initial amount of all Borrowings
consisting of Term Loans. Without limiting the generality of the foregoing,
the Unused Term Loan Amount shall not be increased by repayments of Term
Loans.
1.2 ACCOUNTING TERMS. Any accounting term used in this Agreement
shall have, unless otherwise specifically provided herein, the meaning
customarily given in accordance with GAAP, and all financial computations
hereunder shall be computed, unless
27
otherwise specifically provided herein, in accordance with GAAP as
consistently applied and using the same method for inventory valuation as
used in the preparation of the Financial Statements.
1.3 INTERPRETIVE PROVISIONS. (a) All other undefined terms contained
in this Agreement shall, unless the context indicates otherwise, have the
meanings provided for by the UCC to the extent the same are used or defined
therein.
(b) Wherever appropriate in the context, terms used herein in the
singular also include the plural, and VICE VERSA, and each masculine,
feminine, or neuter pronoun shall also include the other genders.
(c) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(d) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including,"
the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(e) Unless specified herein, references herein to times of day
are to Chicago time.
(f) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments, amendments and restatements
and other modifications thereto, but only to the extent such amendments,
amendments and restatements and other modifications are not prohibited by the
terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute
or regulation.
(g) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and
shall each be performed in accordance with its terms.
(h) This Agreement and the other Loan Documents are the result of
negotiations among, and have been reviewed by counsel to, each of the parties
hereto and thereto
28
and are the products of all parties. Accordingly, neither this Agreement nor
any other Loan Document shall be construed against any Lender or against the
Lenders' Agent merely because of the involvement of any Lender or the
Lenders' Agent in the preparation of this Agreement or any other Loan
Documents.
2. LOANS.
2.1 TOTAL FACILITY. Subject to all of the terms and conditions
of this Agreement, the Lenders severally agree to make available a total
credit facility of up to forty million dollars ($40,000,000) (the "TOTAL
FACILITY") for the Borrowers' use from time to time during the term of this
Agreement. The Total Facility shall be comprised of: (a) revolving line of
credit up to the limits of the Availability, consisting of Revolving Loans as
described in SECTION 2.2; and (b) the Term Loans as described in SECTION 2.3.
2.2 REVOLVING LOANS.
(a) AMOUNTS. Subject to the satisfaction of the
conditions precedent set forth in SECTION 11.1 and SECTION 11.2, as
applicable, each Lender severally agrees, upon request of the Borrowers'
Agent from time to time, to make revolving loans (the "REVOLVING LOANS") to
the Borrowers in amounts not to exceed (except for the Bank with respect to
Non-Ratable Loans and except for the Lenders' Agent with respect to Lenders'
Agent's Advances) such Lender's Pro Rata Share of the Availability calculated
on a consolidated basis with respect to all Option Care Persons. The Lenders,
however, in their unanimous discretion, may elect, with the consent of the
Borrowers' Agent, to make Revolving Loans in excess of the Availability on
one or more occasions, but if they do so, neither the Lenders' Agent nor the
Lenders shall be deemed thereby to have changed the limits of the
Availability or to be obligated to exceed the limits of the Availability on
any other occasion. If the unpaid balance of the Revolving Loans exceeds the
Availability (with Availability determined for this purpose without
subtracting the unpaid balance of the Revolving Loans) then any Lender may
refuse to make or otherwise restrict Revolving Loans on such terms as such
Lender determines until such excess has been eliminated, subject to the
Lenders' Agent's authority, in its sole discretion, to make Lenders' Agent
Advances. The Lenders' Agent shall charge all Revolving Loans and other
Obligations of an Option Care Person to a loan account of Option Care
maintained with the Lenders' Agent (and all references in this Agreement to
the "loan account" of Option Care shall be references to such account). All
Revolving Loans shall be requested by and advanced to the Borrowers' Agent.
All fees, commissions, costs, expenses, and other charges under or pursuant
to the Loan Documents, and all payments made and out-of-pocket expenses
incurred by any Lender or by the Lenders' Agent pursuant to the Loan
Documents, shall be charged as Revolving Loans to the loan account of Option
Care as of the date due or the date paid or incurred by such Lender or by the
Lenders' Agent, as the case may be.
(b) PROCEDURE FOR BORROWING.
(i) Each Borrowing of a Revolving Loan shall be made
upon an irrevocable Notice of Borrowing from the Borrowers' Agent to the
Lenders' Agent, which Notice of Borrowing must be received by the Lenders'
Agent not later than (1) 12:00 noon,
29
Chicago time, three Business Days prior to the requested Funding Date in the
case of LIBOR Rate Loans and (2) 12:00 noon, Chicago time, on the requested
Funding Date in the case of Reference Rate Loans, specifying:
(A) that the requested Loan is a
Revolving Loan;
(B) the amount of such Borrowing
which, in the case of LIBOR Revolving Loans, shall be in an amount not less
than one million dollars ($1,000,000) and in an integral multiple of one
hundred thousand dollars ($100,000) in excess thereof;
(C) the requested Funding Date,
which shall be a Business Day;
(D) whether the Revolving Loans
requested are to be Reference Rate Revolving Loans or LIBOR Revolving Loans
(and if not specified, it shall be deemed a request for a Reference Rate
Revolving Loan); and
(E) the duration of the Interest
Period if the requested Revolving Loans are to be LIBOR Revolving Loans. If
such a Notice of Borrowing fails to specify the duration of the Interest
Period for any Borrowing comprised of LIBOR Revolving Loans, such Interest
Period shall be one month.
(ii) After giving effect to any
Borrowing (whether in respect of Revolving Loans or Term Loans), there may
not be more than five different Interest Periods in effect.
(c) AGENT'S ELECTION. Promptly after
receipt of a Notice of Borrowing pursuant to SECTION 2.2(b), the Lenders'
Agent shall elect, in its discretion, (i) to have the terms of SECTION 2.2(d)
apply to such requested Borrowing, or (ii) to request the Bank to make a
Non-Ratable Loan pursuant to the terms of SECTION 2.2(e) in the amount of the
requested Borrowing; PROVIDED, HOWEVER, that if the Bank declines in its sole
discretion to make a Non-Ratable Loan pursuant to SECTION 2.2(e), the
Lenders' Agent shall elect to have the terms of SECTION 2.2(d) apply to such
requested Borrowing.
(d) MAKING OF REVOLVING LOANS. (i) In
the event that the Lenders' Agent shall elect to have the terms of this
SECTION 2.2(d) apply to a requested Borrowing as described in SECTION 2.2(c),
then promptly after receipt of a Notice of Borrowing pursuant to SECTION
2.2(b), the Lenders' Agent shall notify the Lenders by telecopy, telephone or
other similar form of transmission, of the requested Borrowing. Subject to
satisfaction of the conditions set forth in SECTION 11.1 and SECTION 11.2, as
applicable, each Lender shall make the amount of such Lender's Pro Rata Share
of the requested Borrowing available to the Lenders' Agent in immediately
available funds, to such account of the Lenders' Agent as the Lenders' Agent
may designate, not later than 2:00 p.m., Chicago time, on the Funding Date
applicable
30
thereto. After the Lenders' Agent's receipt of the proceeds of such Revolving
Loans, the Lenders' Agent shall make the proceeds of such Revolving Loans
available to the Borrowers' Agent on the applicable Funding Date by
transferring same day funds equal to the proceeds of such Revolving Loans
received by the Lenders' Agent to the account of the Borrowers' Agent,
designated in writing by the Borrowers' Agent to the Lenders' Agent and
acceptable to the Lenders' Agent; PROVIDED, HOWEVER, that the amount of
Revolving Loans so made on any date shall in no event exceed the Availability
on such date.
(ii) Unless the Lenders' Agent
receives notice from a Lender on or prior to the Closing Date or, with
respect to any Borrowing after the Closing Date, at least one Business Day
prior to the date of such Borrowing, that such Lender shall not make
available as and when required hereunder to the Lenders' Agent the amount of
that Lender's Pro Rata Share of such Borrowing, the Lenders' Agent may assume
that each Lender has made such amount available to the Lenders' Agent in
immediately available funds on the Funding Date and the Lenders' Agent may
(but shall not be so required), in reliance upon such assumption, make
available to the Borrowers' Agent on such date a corresponding amount. If and
to the extent any Lender shall not have made its full amount in respect of a
Revolving Loan available to the Lenders' Agent in immediately available funds
and the Lenders' Agent in such circumstances has made available to the
Borrowers' Agent such amount, that Lender shall on the Business Day following
such Funding Date make such amount available to the Lenders' Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice by the Lenders' Agent submitted to any Lender with respect to amounts
owing under this subsection shall be conclusive, absent manifest error. If
such amount is so made available, such payment to the Lenders' Agent shall
constitute such Lender's Revolving Loan for all purposes of this Agreement.
If such amount is not made available to the Lenders' Agent on the Business
Day following the Funding Date, the Lenders' Agent shall notify the
Borrowers' Agent of such failure to fund and, upon demand by the Lenders'
Agent, the Borrowers' Agent shall pay such amount to the Lenders' Agent for
the Lenders' Agent's account, together with interest thereon for each day
elapsed since the date of such Borrowing, at a rate per annum equal to the
Interest Rate applicable at the time to the Revolving Loans comprising such
Borrowing. The failure of any Lender to make any Revolving Loan on any
Funding Date shall not relieve any other Lender of any obligation hereunder
to make a Revolving Loan on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to make the Revolving Loan to
be made by such other Lender on any Funding Date.
(e) MAKING OF NON-RATABLE LOANS. (i) In
the event the Lenders' Agent shall elect, with the consent of the Bank, to
have the terms of this SECTION 2.2(e) apply to a requested Borrowing as
described in SECTION 2.2(d), the Bank shall make a Revolving Loan in the
amount of such Borrowing (any such Revolving Loan made solely by the Bank
pursuant to this SECTION 2.2(e) being referred to as a "NON-RATABLE LOAN" and
such Revolving Loans being referred to collectively as "NON-RATABLE LOANS")
on the Funding Date applicable thereto by transferring same day funds to an
account of the Borrowers' Agent, designated in writing by the Borrowers'
Agent and acceptable to the Lenders' Agent. Each Non-Ratable Loan shall be
31
subject to all the terms and conditions applicable to other Revolving Loans
except that all payments thereon shall be payable to the Bank solely for its
own account (and for the account of the holder of any participation interest
with respect to such Revolving Loan). The Lenders' Agent shall not request
the Bank to make any Non-Ratable Loan if (A) the Lenders' Agent shall have
received written notice from any Lender that one or more of the applicable
conditions precedent set forth in SECTION 11.1 or SECTION 11.2, as
applicable, shall not be satisfied on the requested Funding Date for the
applicable Borrowing, or (B) the requested Borrowing would exceed the
Availability on such Funding Date. The Lenders' Agent shall not otherwise be
required to determine whether the applicable conditions precedent set forth
in SECTION 11.1 or SECTION 11.2, as the case may be, have been satisfied or
the requested Borrowing would exceed the Availability on the Funding Date
applicable thereto prior to making, in its sole discretion, any Non-Ratable
Loan.
(ii) The Non-Ratable Loans shall be
secured by the Lenders' Agent's Liens in and to the Collateral, shall
constitute Revolving Loans and Obligations hereunder, and shall bear interest
at the rate applicable to the Revolving Loans from time to time.
(f) LENDERS' AGENT ADVANCES. (i) Subject
to the limitations set forth in the provisos contained in this SECTION
2.2(f), the Lenders' Agent is hereby authorized by the Option Care Persons
and the Lenders, from time to time in the Lenders' Agent's sole discretion,
(A) after the occurrence of a Default or an Event of Default, or (B) at any
time that any of the other applicable conditions precedent set forth in
SECTION 11.1 or SECTION 11.2, as the case may be, have not been satisfied, to
make Reference Rate Revolving Loans to the Borrowers on behalf of the Lenders
which the Lenders' Agent, in its reasonable business judgment, deems
necessary or desirable (1) to preserve or protect the Collateral, or any
portion thereof, (2) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (3) to pay any other amount
chargeable to any Option Care Person pursuant to the terms of this Agreement,
including costs, fees and expenses as described in SECTION 15.9 (any of the
advances described in this SECTION 2.2(f) being hereinafter referred to as
"LENDERS' AGENT ADVANCES").
(ii) The Lenders' Agent Advances
shall be repayable on demand and secured by the Lenders' Agent's Liens in and
to the Collateral, shall constitute Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to Reference Rate
Revolving Loans from time to time. The Lenders' Agent shall notify each
Lender in writing of each such Lenders' Agent Advance.
(g) SETTLEMENT. It is agreed that each
Lender's funded portion of the Revolving Loans is intended by the Lenders to
be equal at all times to such Lender's Pro Rata Share of the outstanding
Revolving Loans. Notwithstanding such agreement, the Lenders' Agent, the
Bank, and the other Lenders agree (which agreement shall not be for the
benefit of or enforceable by any Option Care Person) that in order to
facilitate the administration of this Agreement and the other Loan Documents,
settlement among them as to the Revolving Loans,
32
the Non-Ratable Loans and the Lenders' Agent Advances shall take place on a
periodic basis in accordance with the following provisions:
(i) The Lenders' Agent shall request
settlement ("SETTLEMENT") with the Lenders on at least a weekly basis, or on
a more frequent basis if so determined by the Lenders' Agent, (A) on behalf
of the Bank, with respect to each outstanding Non-Ratable Loan, (B) for
itself, with respect to each Lenders' Agent Advance, and (C) with respect to
collections received, in each case, by notifying the Lenders of such
requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 2:00 p.m. (Chicago
time) on the date of such requested Settlement (the "SETTLEMENT DATE"). Each
Lender (other than the Bank, in the case of Non-Ratable Loans and the
Lenders' Agent in the case of Lenders' Agent Advances) shall make the amount
of such Lender's Pro Rata Share of the outstanding principal amount of the
Non-Ratable Loans and Lenders' Agent Advances with respect to which
Settlement is requested available to the Lenders' Agent, to such account of
the Lenders' Agent as the Lenders' Agent may designate, not later than 3:00
p.m. (Chicago time), on the Settlement Date applicable thereto, which may
occur before or after the occurrence or during the continuation of a Default
or an Event of Default and whether or not the applicable conditions precedent
set forth in SECTION 11.1 or SECTION 11.2, as the case may be, have then been
satisfied. Such amounts made available to the Lenders' Agent shall be applied
against the amounts of the applicable Non-Ratable Loan or Lenders' Agent
Advance and, together with the portion of such Non-Ratable Loan or Lenders'
Agent Advance representing the Bank's Pro Rata Share thereof, shall
constitute Revolving Loans of such Lenders. If any such amount is not made
available to the Lenders' Agent by any Lender on the Settlement Date
applicable thereto, the Lenders' Agent shall (A) on behalf of the Bank, with
respect to each outstanding Non-Ratable Loan, and (B) for itself, with
respect to each Lenders' Agent Advance be entitled to recover such amount on
demand from such Lender together with interest thereon at the Federal Funds
Rate for the first three (3) days from and after the Settlement Date and
thereafter at the Interest Rate then applicable to the Revolving Loans.
(ii) Notwithstanding the foregoing,
not more than one (1) Business Day after demand is made by the Lenders' Agent
(whether before or after the occurrence of a Default or an Event of Default
and regardless of whether the Lenders' Agent has requested a Settlement with
respect to a Non-Ratable Loan or Lenders' Agent Advance), each other Lender
(A) shall irrevocably and unconditionally purchase and receive from the Bank
or the Lenders' Agent, as applicable, without recourse or warranty, an
undivided interest and participation in such Non-Ratable Loan or Lenders'
Agent Advance equal to such Lender's Pro Rata Share of such Non-Ratable Loan
or Lenders' Agent Advance and (B) if Settlement has not previously occurred
with respect to such Non-Ratable Loans or Lenders' Agent Advances, upon
demand by the Bank or the Lenders' Agent, as applicable, shall pay to the
Bank or the Lenders' Agent, as applicable, as the purchase price of such
participation an amount equal to one hundred percent (100%) of such Lender's
Pro Rata Share of such Non-Ratable Loans or Lenders' Agent Advances. If such
amount is not in fact made available to the Lenders' Agent by any Lender, the
Lenders' Agent shall be entitled to recover such amount on demand from such
Lender together
33
with interest thereon at the Federal Funds Rate for the first three (3) days
from and after such demand and thereafter at the Interest Rate then
applicable to Reference Rate Revolving Loans.
(iii) From and after the date, if
any, on which any Lender purchases an undivided interest and participation in
any Non-Ratable Loan or Lenders' Agent Advance pursuant to clause (ii) above,
the Lenders' Agent shall promptly distribute to such Lender such Lender's Pro
Rata Share of all payments of principal and interest and all proceeds of
Collateral received by the Lenders' Agent in respect of such Non-Ratable Loan
or Lenders' Agent Advance.
(iv) Between Settlement Dates, the
Lenders' Agent, to the extent no Lenders' Agent Advances are outstanding, may
pay over to the Bank any payments received by the Lenders' Agent, which in
accordance with the terms of this Agreement would be applied to the reduction
of the Revolving Loans, for application to the Bank's Revolving Loans
including Non-Ratable Loans. If, as of any Settlement Date, collections
received since the then immediately preceding Settlement Date have been
applied to the Bank's Revolving Loans (other than to Non-Ratable Loans or
Lenders' Agent Advances in which such Lender has not yet funded its purchase
of a participation pursuant to clause (ii) above), as provided for in the
previous sentence, the Bank shall pay to the Lenders' Agent for the account
of the Lenders, to be applied to the outstanding Revolving Loans of such
Lenders, an amount such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.
During the period between Settlement Dates, the Bank with respect to
Non-Ratable Loans, the Lenders' Agent with respect to Lenders' Agent
Advances, and each Lender with respect to the Revolving Loans other than
Non-Ratable Loans and Lenders' Agent Advances, shall be entitled to interest
at the applicable rate or rates payable under this Agreement on the actual
average daily amount of funds employed by the Bank, the Lenders' Agent and
the other Lenders.
(h) NOTATION. The Lenders' Agent shall
record on its books the principal amount of the Revolving Loans owing to each
Lender, including the Non-Ratable Loans owing to the Bank, and the Lenders'
Agent Advances owing to the Lenders' Agent, from time to time. In addition,
each Lender is authorized, at such Lender's option, to note the date and
amount of each payment or prepayment of principal of such Lender's Revolving
Loans in its books and records, including computer records, such books and
records constituting presumptive evidence, absent manifest error, of the
accuracy of the information contained therein. Failure by any Lender or the
Lenders' Agent to make any such recordation or notation shall not affect the
obligations of any Option Care Person under this Agreement or under any other
Loan Document.
(i) LENDERS' FAILURE TO PERFORM. All
Revolving Loans (other than Non-Ratable Loans and Lenders' Agent Advances)
shall be made by the Lenders simultaneously and in accordance with their Pro
Rata Shares. It is understood that (i) no Lender shall be responsible for any
failure by any other Lender to perform its obligation to make any Revolving
Loans hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result
34
of any failure by any other Lender to perform its obligation to make any
Revolving Loans hereunder, (ii) no failure by any Lender to perform its
obligation to make any Revolving Loans hereunder shall excuse any other
Lender from its obligation to make any Revolving Loans hereunder, and (iii)
the obligations of each Lender hereunder shall be several, not joint and
several.
2.3 TERM LOANS.
(a) AMOUNTS. Subject to the satisfaction
of the conditions precedent set forth in SECTION 11.1 and SECTION 11.2, as
applicable, each Lender severally agrees to make term loans (any such term
loan being referred to as a "TERM LOAN" and such term loans being referred to
collectively as the "TERM LOANS") to the Borrowers, in an amount equal to
such Lender's Pro Rata Share of the Unused Term Loan Amount.
(b) PROCEDURE FOR BORROWING.
(i) Each Borrowing of a Term Loan
shall be made upon an irrevocable Notice of Borrowing from the Borrowers'
Agent to the Lenders' Agent, which notice must be received by the Lenders'
Agent not later than (1) 12:00 noon, Chicago time, three Business Days prior
to the requested Funding Date in the case of LIBOR Rate Loans and (2) 12:00
noon, Chicago time, on the requested Funding Date in the case of Reference
Rate Loans, specifying:
(A) that the requested Loan is a
Term Loan;
(B) the amount of such Borrowing
which, in the case of LIBOR Term Loans, shall be in an amount not less than
five hundred thousand dollars ($500,000) and in an integral multiple of one
hundred thousand dollars ($100,000) in excess thereof;
(C) the requested Funding Date,
which shall be a Business Day;
(D) whether the Term Loans
requested are to be Reference Rate Term Loans or LIBOR Term Loans (and if not
specified, it shall be deemed a request for a Reference Rate Term Loan); and
(E) the duration of the Interest
Period if the requested Term Loans are to be LIBOR Term Loans. If such a
Notice of Borrowing fails to specify the duration of the Interest Period for
any Borrowing comprised of LIBOR Term Loans, such Interest Period shall be
one month.
(ii) After giving effect to any
Borrowing (whether in respect of Term Loans or Revolving Loans), there may
not be more than five different Interest Periods in effect.
35
(c) MAKING OF TERM LOANS. (i) Promptly after receipt of a Notice of
Borrowing pursuant to SECTION 2.3(b), the Lenders' Agent shall notify the
Lenders by telecopy, telephone or other similar form of transmission, of the
requested Borrowing. Subject to satisfaction of the conditions precedent set
forth in SECTION 11.1 and SECTION 11.2, as applicable, each Lender shall make
the amount of such Lender's Pro Rata Share of the requested Borrowing
available to the Lenders' Agent in immediately available funds, to such
account of the Lenders' Agent as the Lenders' Agent may designate, not later
than 2:00 p.m., Chicago time, on the Funding Date applicable thereto. After
the Lenders' Agent's receipt of the proceeds of such Term Loans, the Lenders'
Agent shall make the proceeds of such Term Loans available to the Borrowers'
Agent on the applicable Funding Date by transferring same day funds equal to
the proceeds of such Term Loans received by the Lenders' Agent to the account
of the Borrowers' Agent, designated in writing by the Borrowers' Agent to the
Lenders' Agent and acceptable to the Lenders' Agent; PROVIDED, HOWEVER, that
the amount of Term Loans so made on any date shall in no event exceed the
Unused Term Loan Amount on such date.
(ii) Unless the Lenders' Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that
such Lender shall not make available as and when required hereunder to the
Lenders' Agent the amount of that Lender's Pro Rata Share of such Borrowing,
the Lenders' Agent may assume that each Lender has made such amount available
to the Lenders' Agent in immediately available funds on the Funding Date and
the Lenders' Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Borrowers' Agent on such date a
corresponding amount. If and to the extent any Lender shall not have made its
full amount in respect of a Term Loan available to the Lenders' Agent in
immediately available funds and the Lenders' Agent in such circumstances has
made available to the Borrowers' Agent such amount, that Lender shall on the
Business Day following such Funding Date make such amount available to the
Lenders' Agent, together with interest at the Federal Funds Rate for each day
during such period. A notice by the Lenders' Agent submitted to any Lender
with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
the Lenders' Agent shall constitute such Lender's Term Loan for all purposes
of this Agreement. If such amount is not made available to the Lenders' Agent
on the Business Day following the Funding Date, the Lenders' Agent shall
notify the Borrowers' Agent of such failure to fund and, upon demand by the
Lenders' Agent, the Borrowers' Agent shall pay such amount to the Lenders'
Agent for the Lenders' Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum equal
to the Interest Rate applicable at the time to the Term Loans comprising such
Borrowing. The failure of any Lender to make any Term Loan on any Funding
Date shall not relieve any other Lender of any obligation hereunder to make a
Term Loan on such Funding Date, but no Lender shall be responsible for the
failure of any other Lender to make the Term Loan to be made by such other
Lender on any Funding Date.
36
(d) NOTATION. The Lenders' Agent shall record on its books the principal amount
of the Term Loans owing to each Lender, from time to time. In addition, each
Lender is authorized, at such Lender's option, to note the date and amount of
each payment or prepayment of principal of such Lender's Term Loans in its books
and records, including computer records, such books and records constituting
presumptive evidence, absent manifest error, of the accuracy of the information
contained therein. Failure by any Lender or the Lenders' Agent to make any such
recordation or notation shall not affect the obligations of any Option Care
Person under this Agreement or any of the other Loan Documents.
(e) LENDERS' FAILURE TO PERFORM. All Term Loans shall be made by the Lenders
simultaneously and in accordance with their Pro Rata Shares. It is understood
that (i) no Lender shall be responsible for any failure by any other Lender to
perform its obligation to make any Term Loans hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligation to make any Term Loans hereunder,
(ii) no failure by any Lender to perform its obligation to make any Term Loans
hereunder shall excuse any other Lender from its obligation to make any Term
Loans hereunder, and (iii) the obligations of each Lender hereunder shall be
several, not joint and several.
2.4 AUTOMATED CLEARING HOUSE TRANSFERS. Each Borrower may request and the
Lenders' Agent may, in its sole and absolute discretion, arrange for such
Borrower to obtain from the Bank ACH Transactions. Each Borrower agrees to
indemnify and hold the Lenders' Agent harmless from any and all obligations now
or hereafter owing by the Lenders' Agent to the Bank arising from or related to
such ACH Transactions pursuant to the indemnity referred to in clause (c) below.
Each Borrower agrees to pay the Bank all amounts owing to the Bank pursuant to
ACH Transactions. In the event any Borrower shall not have paid to the Bank such
amounts, the Lenders' Agent shall pay such amounts to the Bank and such amounts
when paid by the Lenders' Agent shall constitute a Revolving Loan which shall be
deemed to have been requested by the Borrowers' Agent. Each Borrower
acknowledges and agrees that the obtaining of ACH Transactions from the Bank (a)
is in the sole and absolute discretion of the Bank, (b) is subject to all rules
and regulations of the Bank, and (c) is due to the Bank relying on the indemnity
of the Lenders' Agent to the Bank with respect to obligations of such Borrower
to the Bank in connection with the ACH Transactions.
2.5 THE BORROWERS' AGENT.
(a) Each Borrower hereby irrevocably appoints, designates and authorizes Option
Care as the agent and attorney-in-fact of such Borrower (Option Care, in such
capacity for all of the Borrowers, being referred to as the "BORROWERS' AGENT")
to give and receive notices, statements, requests and instructions on such
Borrower's behalf under this Agreement and any other Loan Document and otherwise
communicate on such Borrower's behalf with the Lenders' Agent, and, without
limiting the foregoing, to take such action on such Borrower's behalf under the
provisions of this Agreement and each other Loan Document and to exercise such
powers and perform such duties as are delegated to the Borrowers' Agent by the
terms of this Agreement or any other Loan Document, together with such powers as
are incidental thereto. Option Care hereby accepts such appointment, designation
and authorization.
37
(b) Without limiting the foregoing, the Lenders' Agent may give notices,
statements, requests and instructions to any Borrower through the Borrowers'
Agent and may accept and act upon any notices, statements, requests and
instructions given by the Borrowers' Agent, and each such notice, statement,
request and instruction shall be binding upon the Borrowers. Notwithstanding
such appointment, designation, and authorization, the Lenders' Agent may also
deal directly with, and give and receive notices, statements, requests and
instructions to and from, any Borrower, provided that the Lenders' Agent shall
promptly give notice of any such communications with any Borrower to the
Borrowers' Agent. Any communications transmitted by the Lenders' Agent to a
Borrower shall be sent to such Borrower in care of Option Care at the address of
Option Care determined in accordance with SECTION 15.10. If conflicting
instructions are received from an Option Care Person and from the Borrowers'
Agent, the notice, statement, request or instruction of the Borrowers' Agent
shall prevail.
(c) The Borrowers' Agent may execute any of its duties under this Agreement or
any other Loan Document by or through any of, but none other than, its Chief
Executive Officer, Chief Financial Officer or Secretary. Notwithstanding the
foregoing, but subject to the conditions specified in the proviso to this
sentence, the Borrowers' Agent may authorize other agents, officers or employees
of the Borrowers' Agent (such other agents, officers or employees being referred
to collectively as the "ADDITIONAL AUTHORIZED INDIVIDUALS" and individually as
an "ADDITIONAL AUTHORIZED INDIVIDUAL") to sign and submit a Notice of Borrowing
or sign and submit a Notice of Conversion/Continuation; provided that no Person
shall be considered to be an Additional Authorized Individual unless the
Lenders' Agent shall have received (i) a written list of such Additional
Authorized Individuals and their respective signatures, and the Lenders' Agent
shall have acknowledged receipt of such list in writing, and (ii) a resolution
of the board of directors of the Borrowers' Agent specifically identifying such
Additional Authorized Individuals or authorizing one or more officers of the
Borrowers' Agent to designate Additional Authorized Individuals, it being
understood and agreed that the list and resolutions described in clauses (i) and
(ii) shall be in form and substance reasonably satisfactory to the Lenders'
Agent and shall be certified by the Secretary of the Borrowers' Agent pursuant
to a certificate which is in form and substance reasonably satisfactory to the
Lenders' Agent.
(d) The Borrowers' Agent shall promptly forward to (i) the Lenders and the
Lender' Agent and (ii) the Borrowers, as appropriate, all notices, documents,
certificates, financial statements and reports received by it in the performance
of its duties hereunder.
(e) The Borrowers' Agent shall perform its duties hereunder and under the other
Loan Documents on behalf of the Borrowers. All actions of the Borrowers' Agent
shall in each case bind all the Borrowers, whether or not any such action has
been duly authorized by such Borrowers.
38
2.6 DEFAULTING LENDER. The Lenders' Agent shall not be obligated to transfer
to a Defaulting Lender any payments made by any Option Care Person to the
Lenders' Agent for the Defaulting Lender's benefit; nor shall a Defaulting
Lender be entitled to the sharing of any payments hereunder. Amounts payable
to a Defaulting Lender shall instead be paid to or retained by the Lenders'
Agent. With respect to payments on Revolving Loans, the Lenders' Agent may
hold and, in its discretion, re-lend to the Borrowers the amount of all such
payments received or retained by it for the account of such Defaulting
Lender. Any amounts so re-lent to the Borrowers shall bear interest at the
rate applicable to Reference Rate Revolving Loans and for all other purposes
of this Agreement shall be treated as if they were Revolving Loans.
Notwithstanding any other part of this Agreement, for purposes of voting or
consenting to matters with respect to the Loan Documents and determining Pro
Rata Shares, a Defaulting Lender shall be deemed not to be a "Lender". Until
a Defaulting Lender cures its failure to fund its Pro Rata Share of any
Borrowing (A) such Defaulting Lender shall not be entitled to any portion of
the Unused Line Fee and (B) the Unused Line Fee shall accrue in favor of the
Lenders which have funded their respective Pro Rata Shares of the applicable
requested Borrowing and shall be allocated among such performing Lenders
ratably based upon their relative Commitments. This Section shall remain
effective with respect to such Lender until such time as the Defaulting
Lender shall no longer be in default of any of its obligations under this
Agreement. The terms of this Section shall not be construed to increase or
otherwise affect the Commitment of any Lender, or relieve or excuse the
performance by any Option Care Person of its duties and obligations hereunder.
3. INTEREST AND OTHER CHARGES.
3.1 INTEREST.
(a) All Obligations shall bear interest on the unpaid principal amount thereof
from the date made until paid in full in cash at a rate determined by reference
to the Reference Rate or the LIBOR Rate and SECTIONS 3.1(a)(i), (ii), (iii) or
(iv), as applicable, but not to exceed the Maximum Rate. Subject to the
provisions of SECTION 3.2, any of the Loans may be converted into, or continued
as, Reference Rate Loans or LIBOR Rate Loans in the manner provided in SECTION
3.2. If at any time Loans are outstanding with respect to which notice has not
been delivered to the Lenders' Agent in accordance with the terms of this
Agreement specifying the basis for determining the interest rate applicable
thereto, then those Loans shall be Reference Rate Loans and shall bear interest
at a rate determined by reference to the Reference Rate until notice to the
contrary has been given to the Lenders' Agent in accordance with this Agreement
and such notice has become effective. Except as otherwise provided herein, the
Obligations shall bear interest as follows:
(i) For all Obligations (other than LIBOR
Revolving Loans, LIBOR Term Loans and Reference Rate Term Loans), at a
fluctuating per annum rate equal to the Reference Rate;
(ii) For all LIBOR Revolving Loans, at a
per annum rate equal to the LIBOR Rate determined for the applicable Interest
Period PLUS two and one-eighth percent (2.125%);
39
(iii) For all LIBOR Term Loans, at a per
annum rate equal to the LIBOR Rate determined for the applicable Interest
Period PLUS the Applicable LIBOR Term Loan Margin; and
(iv) For all Reference Rate Term Loans,
at a fluctuating per annum rate equal to the Reference Rate PLUS one percent
(1%).
Each change in the Reference Rate shall be reflected in the interest
rate described in clauses (i) and (iv) above as of the effective date of such
change. All interest charges in respect of the Obligations shall be computed on
the basis of a year of three hundred sixty (360) days and actual days elapsed.
All interest on the Obligations shall be payable to the Lenders on the first day
of each month hereafter, and, with respect to a LIBOR Rate Loan, on the last day
of each Interest Period relating thereto.
(b) If any Event of Default occurs, then, from the date such Event of Default
occurs until it is cured or waived, or if not cured or waived until all
Obligations are paid and performed in full, then the Borrowers shall pay
interest on the unpaid Obligations at a per annum rate two percent (2%) greater
than the rate of interest otherwise specified herein.
(c) UNUSED LINE FEE. For every month during the term of this Agreement, the
Borrowers shall pay the Lenders' Agent, for the account of the Lenders, in
accordance with their Pro Rata Shares, a fee (the "UNUSED LINE FEE") in an
amount equal to one-quarter of one percent (0.25%) per annum, MULTIPLIED BY the
average daily amount by which the Maximum Revolving Credit Line exceeds the
average daily outstanding amount of Revolving Loans during such month, with the
outstanding amount of Revolving Loans calculated for this purpose by applying
payments immediately upon receipt. Such a fee, if any, shall be calculated on
the basis of a year of three hundred sixty (360) days and actual days elapsed,
and shall be payable to the Lenders on the first day of each month and on the
termination of this Agreement, in each case, with respect to the prior month or
portion thereof.
3.2 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrowers' Agent may, upon irrevocable written notice to the Lenders and
the Lenders' Agent in accordance with SUBSECTION 3.2(b):
(i) elect, as of any Business Day, in the
case of Reference Rate Revolving Loans to convert any such Loans (or
any part thereof) in an amount that is not less than one million
dollars ($1,000,000), or that is in an integral multiple of one
hundred thousand dollars ($100,000) in excess thereof, into LIBOR
Revolving Loans; or
(ii) elect, as of the last day of the
applicable Interest Period, to continue any LIBOR Revolving Loans
having Interest Periods expiring on such day (or any part thereof)
in an amount that is not less than one million dollars ($1,000,000),
or
40
that is in an integral multiple of one hundred thousand dollars
($100,000) in excess thereof;
PROVIDED, that if at any time the aggregate amount of LIBOR Revolving Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than two million five hundred thousand dollars
($2,500,000), such LIBOR Revolving Loans shall automatically convert into
Reference Rate Revolving Loans, and on and after such date the right of the
Borrowers' Agent to continue such Loans as, and convert such Loans into, LIBOR
Revolving Loans, as the case may be, shall terminate.
The Borrowers' Agent may, upon irrevocable written notice
to the Lenders and the Lenders' Agent in accordance with SUBSECTION 3.2(b):
(i) elect, as of any Business Day, in the
case of Reference Rate Term Loans to convert any such Loans (or any
part thereof) (A) during the Term Loan Draw Period, in an amount
that is not less than five hundred thousand dollars ($500,000) or
that is an integral multiple of one hundred thousand dollars
($100,000) in excess thereof, and (B) after the Term Loan Draw
Period, in an amount that is not less than one million dollars
($1,000,000) or that is an integral multiple of one hundred thousand
dollars ($100,000) in excess thereof, into LIBOR Term Loans; or
(ii) elect, as of the last day of the
applicable Interest Period, to continue any LIBOR Term Loans having
Interest Periods expiring on such day (or any part thereof) (A)
during the Term Loan Draw Period, in an amount that is not less than
five hundred thousand dollars ($500,000) or that is an integral
multiple of one hundred thousand dollars ($100,000) in excess
thereof, and (B) after the Term Loan Draw Period, in an amount that
is not less than one million dollars ($1,000,000) or that is an
integral multiple of one hundred thousand dollars ($100,000) in
excess thereof;
PROVIDED, that if at any time the aggregate amount of LIBOR Term Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than (A) five hundred thousand dollars ($500,000) during
the Term Loan Draw Period, and (B) one million dollars ($1,000,000) after the
Term Loan Draw Period, such LIBOR Term Loans shall automatically convert into
Reference Rate Term Loans, and on and after such date the right of the
Borrowers' Agent to continue such Loans as, and convert such Loans into, LIBOR
Term Loans, as the case may be, shall terminate.
(b) The Borrowers' Agent shall deliver a written notice of conversion or
continuation ("NOTICE OF CONVERSION/CONTINUATION") to be received by the Lenders
and the Lenders' Agent not later than 12:00 noon, Chicago time, at least three
Business Days in advance of the date of conversion or continuation (the
"CONVERSION/CONTINUATION DATE"), if the Loans are to be converted into or
continued as LIBOR Rate Loans and specifying:
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(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be
converted or continued;
(C) the type of Loans resulting from the
proposed conversion or continuation; and
(D) the duration of the requested Interest
Period, PROVIDED, HOWEVER, the Borrowers' Agent may not select an Interest
Period with respect to any portion of the LIBOR Term Loans which extends
beyond an installment payment date for the LIBOR Term Loans unless, after
giving effect to such election, the portion of the LIBOR Term Loans subject
to Interest Periods ending prior to such installment payment date is equal to
or greater than the principal due on such installment payment date.
(c) If upon the expiration of any Interest Period
applicable to LIBOR Rate Loans, the Borrowers' Agent has failed to select
timely a new Interest Period to be applicable to LIBOR Rate Loans or if any
Event or Event of Default then exists, the Borrowers' Agent shall be deemed
to have elected to convert such LIBOR Rate Loans into Reference Rate Loans
effective as of the expiration date of such Interest Period.
(d) All conversions and continuations shall be made
ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) During the existence of an Event, the Majority
Lenders shall have the right to decline to permit a Loan to be converted into
or continued as a LIBOR Rate Loan. During the existence of an Event of
Default, the Borrowers' Agent shall not elect to have a Loan converted into
or continued as a LIBOR Rate Loan.
(f) After giving effect to any conversion or
continuation of Loans (whether Term Loans or Revolving Loans), there may not
be more than five different Interest Periods in effect.
3.3 MAXIMUM INTEREST RATE. In no event shall any interest rate
provided for hereunder exceed the maximum rate permissible for corporate
borrowers under applicable law for loans of the type provided for hereunder
(the "MAXIMUM RATE"). If, in any month, any interest rate, absent such
limitation, would have exceeded the Maximum Rate, then the interest rate for
that month shall be the Maximum Rate, and, if in future months, that interest
rate would otherwise be less than the Maximum Rate, then that interest rate
shall remain at the Maximum Rate until such time as the amount of interest
paid hereunder equals the amount of interest which would have been paid if
the same had not been limited by the Maximum Rate. In the event that, upon
payment in full of the Obligations, the total amount of interest paid or
accrued under the
42
terms of this Agreement is less than the total amount of interest which
would, but for this SECTION 3.3, have been paid or accrued if the interest
rates otherwise set forth in this Agreement had at all times been in effect,
then the Borrowers shall, to the extent permitted by applicable law, pay the
Lenders' Agent, for the account of the Lenders, an amount equal to the excess
of (a) the lesser of (i) the amount of interest which would have been charged
if the Maximum Rate had, at all times, been in effect or (ii) the amount of
interest which would have accrued had the interest rates otherwise set forth
in this Agreement, at all times, been in effect over (b) the amount of
interest actually paid or accrued under this Agreement. In the event that a
court determines that the Lenders' Agent or any Lender has received interest
and other charges hereunder in excess of the Maximum Rate, such excess shall
be deemed received on account of, and shall automatically be applied to
reduce, the Obligations other than interest, in the inverse order of
maturity, and if there are no Obligations outstanding, the Lenders' Agent or
such Lender shall refund to the applicable Borrowers such excess.
3.4 FACILITY FEE. The Borrowers shall pay the Lenders' Agent on
the Closing Date, for the account of the Lenders, in accordance with their
respective Pro Rata Shares, a facility fee in the amount of one hundred fifty
thousand hundred dollars ($150,000) (the "FACILITY FEE"), less twenty-five
thousand dollars ($25,000) previously paid as a commitment fee by Option Care
in respect thereof pursuant to the letter dated May 3, 2000 from Banc of
America Commercial Finance Corporation to Option Care.
4. PAYMENTS AND PREPAYMENTS.
4.1 REVOLVING LOANS. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid
interest thereon, upon the termination of this Agreement for any reason. In
addition, and without limiting the generality of the foregoing, the Borrowers
shall pay to the Lenders' Agent, for the account of the Lenders, on demand,
the amount by which the unpaid principal balance of the Revolving Loans at
any time exceeds the Availability at such time (determined for this purpose
as if the amount of the Revolving Loans were zero) regardless of whether any
Lender elected to make Revolving Loans in excess of the Availability;
provided that if the unpaid principal balance of the Revolving Loans so
exceeds the Availability solely because the Lenders' Agent established Other
Criteria, then the Borrowers shall pay to the Lenders' Agent, within two days
after demand by the Lenders' Agent, the amount of such excess.
4.1A TERM LOANS.
(a) The Borrowers shall repay the outstanding principal
balance of the Term Loans in equal quarterly installments of principal, based
on a four (4) year amortization schedule. The first installment payment of
principal on the Term Loans shall be due on the first day of the first month
following the month in which the Term Loan Draw Period ends, with further
installment payments being due on the first day of each third month
thereafter, with a final balloon payment of the remaining outstanding
principal of the Term Loans being due on the Stated Termination Date.
(b) The Borrowers may prepay the principal of the Term
Loans in whole or in part, at any time and from time to time upon (a) at
least five (5) Business Days' prior
43
written notice to the Lenders' Agent and the Lenders, and (b) payment of,
with respect to any LIBOR Term Loans to be prepaid prior to the expiration
date of the Interest Period applicable thereto, the amounts described in
SECTION 6.4. All voluntary prepayments of the principal of the Term Loans
shall be accompanied by the payment of all accrued but unpaid interest on the
Term Loans to the date of prepayment. Any voluntary prepayment under this
Section of less than all of the outstanding principal of the Term Loans shall
be applied to the installments of principal of the Term Loans in the inverse
order of maturity. Amounts paid or prepaid in respect of the Term Loans may
not be reborrowed. If the date of any prepayment of a Term Loan occurs on or
prior to the first Anniversary Date, the Borrowers shall pay the Lenders'
Agent, for the account of the Lenders based on their Pro Rata Shares, an
early prepayment fee equal to two percent (2%) of the amount of such
prepayment. If the date of any prepayment of a Term Loan occurs after the
first Anniversary Date, the Borrowers shall pay to the Lenders' Agent, for
the account of the Lenders based on their Pro Rata Shares, an early
prepayment fee equal to one and one-half percent (1.5%) of the amount of such
prepayment.
(c) The Borrowers shall repay the entire unpaid principal
balance of the Term Loans, and all accrued but unpaid interest thereon, on
the Stated Termination Date. In connection with any such repayment, if any
LIBOR Term Loans are prepaid prior to the expiration date of the Interest
Period applicable thereto, the Borrowers shall pay to the Lenders the amounts
described in SECTION 6.4.
4.2 PLACE AND FORM OF PAYMENTS; EXTENSION OF TIME.
(a) All payments of principal, interest, and other sums due
to any Lender or the Lenders' Agent shall be made in Dollars (without setoff,
recoupment or counterclaim) at such Person's address determined in accordance
with SECTION 15.10 (except for payments to be made to the Lenders' Agent for
the account of the Lenders, which shall be made to the Lenders' Agent at the
Lenders' Agent's address so determined). Except for Proceeds received
directly by the Lenders' Agent, all such payments shall be made in
immediately available funds.
(b) Upon the Lenders' Agent's receipt of funds that are
payable to a Lender, the Lenders' Agent shall promptly distribute to such
Lender, pursuant to the applicable wire transfer instructions received from
such Lender in writing, such funds as such Lender may be entitled to receive,
subject to a Settlement delay as provided for in SECTION 2.2(g).
(c) Payments applied to Loans in accordance with SECTION
4.3 shall be apportioned ratably among the Lenders (according to the unpaid
principal balance of the Loans to which such payments relate held by each
Lender) and payments of the fees shall, as applicable, be apportioned ratably
among the Lenders.
(d) If any payment of principal, interest, or other sum to
be made hereunder becomes due and payable on a day other than a Business Day,
the due date of such
44
payment shall be extended to the next succeeding Business Day and interest
thereon shall be payable at the applicable interest rate during such
extension.
(e) Unless the Lenders' Agent receives notice from the
Borrowers' Agent prior to the date on which any payment is due to the Lenders
that the Borrowers' Agent will not make such payment in full as and when
required, the Lenders' Agent may assume that the Borrowers' Agent has made
such payment in full to the Lenders' Agent on such date in immediately
available funds and the Lenders' Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent the
Borrowers' Agent has not made such payment in full to the Lenders' Agent,
each Lender shall repay to the Lenders' Agent on demand such amount
distributed to such Lender, together with interest thereon at the Federal
Funds Rate for each day from the date such amount is distributed to such
Lender until the date repaid.
4.3 APPLICATION AND REVERSAL OF PAYMENTS. The Lenders' Agent
shall determine in its sole discretion the order and manner in which Proceeds
of Collateral and other payments that the Lenders' Agent receives are applied
to the Loans, interest thereon, and the other Obligations, and each Lender
and each Option Care Person hereby irrevocably waives the right to direct the
application of any such Proceeds or payments. The Lenders' Agent shall have
the continuing and exclusive right to apply and reverse and reapply any and
all such Proceeds and payments to any portion of the Obligations.
4.4 INDEMNITY FOR RETURNED PAYMENTS. IF AFTER RECEIPT OF ANY
PAYMENT WHICH IS APPLIED TO THE PAYMENT OF ALL OR ANY PART OF THE
OBLIGATIONS, ANY LENDER OR THE LENDERS' AGENT IS FOR ANY REASON COMPELLED TO
SURRENDER SUCH PAYMENT TO ANY PERSON BECAUSE SUCH PAYMENT IS INVALIDATED,
DECLARED FRAUDULENT, SET ASIDE, DETERMINED TO BE VOID OR VOIDABLE AS A
PREFERENCE, IMPERMISSIBLE SETOFF, OR A DIVERSION OF TRUST FUNDS, OR FOR ANY
OTHER REASON, THEN: THE OBLIGATIONS OR PART THEREOF INTENDED TO BE SATISFIED
SHALL BE REVIVED AND CONTINUE AND THIS AGREEMENT SHALL CONTINUE IN FULL FORCE
AS IF SUCH PAYMENT HAD NOT BEEN RECEIVED BY ANY LENDER OR THE LENDERS' AGENT
AND EACH OPTION CARE PERSON SHALL BE LIABLE TO PAY TO EACH LENDER AND THE
LENDERS' AGENT AND HEREBY DOES INDEMNIFY EACH LENDER AND THE LENDERS' AGENT
AND HOLD EACH LENDER AND THE LENDERS' AGENT HARMLESS FOR THE AMOUNT OF SUCH
PAYMENT SURRENDERED. The provisions of this SECTION 4.4 shall be and remain
effective notwithstanding any contrary action which may have been taken by
any Lender or the Lenders' Agent in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the rights of the
Lenders and the Lenders' Agent under this Agreement and shall be deemed to
have been conditioned upon such payment having become final and irrevocable.
The provisions of this SECTION 4.4 shall survive the termination of this
Agreement.
5. BOOKS AND RECORDS; MONTHLY STATEMENTS. Each Option Care Person
agrees that the books and records of each Lender and the Lenders' Agent
showing the Obligations and the transactions pursuant to this Agreement and
the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute evidence thereof
45
(absent manifest error), irrespective of whether any Obligation is also
evidenced by a promissory note or other instrument. The Lenders' Agent shall
provide to the Borrowers' Agent a monthly statement of Loans, payments, and
other transactions pursuant to this Agreement. Such statement shall be deemed
correct, accurate, and binding on the Option Care Persons and as an account
stated (except for reversals and reapplications of payments made as provided
in SECTION 4.3 and corrections of errors discovered by the Lenders' Agent),
unless the Borrowers' Agent notifies the Lenders' Agent in writing to the
contrary within sixty (60) days after such statement is given to the
Borrowers' Agent. In the event a timely written notice of objections is given
by the Borrowers' Agent, only the items to which exception is expressly made
shall be considered to be disputed by the Option Care Persons.
6. TAXES, YIELD PROTECTION AND ILLEGALITY.
6.1 TAXES.
(a) Any and all payments by any Option Care Person to each
Lender and to the Lenders' Agent under this Agreement and any other Loan
Document shall be made free and clear of, and without deduction or
withholding for any Taxes. In addition, the Option Care Persons shall pay all
Other Taxes.
(b) Each Option Care Person agrees to indemnify and hold
harmless each Lender and the Lenders' Agent for the full amount of Taxes or
Other Taxes (including any Taxes or Other Taxes imposed by any jurisdiction
on amounts payable under this Section) paid by any Lender or the Lenders'
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. A Lender or the
Lenders' Agent shall make payments of Other Taxes only in the event that
either (i) an Event of Default has occurred; or (ii) in the event that such
Other Taxes remain delinquent for more than thirty (30) days after the
Lenders' Agent has provided notice thereof to the Borrowers' Agent. Payment
under this indemnification shall be made within thirty (30) days after the
date any Lender or the Lenders' Agent makes written demand therefor.
(c) If any Option Care Person shall be required by law to
deduct or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Lender or the Lenders' Agent, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including
deductions and withholdings applicable to additional sums payable under this
Section) such Lender or the Lenders' Agent, as the case may be, receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made;
(ii) such Option Care Person shall make such deductions
and withholdings;
(iii) such Option Care Person shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
46
(iv) such Option Care Person shall also pay to each
Lender or to the Lenders' Agent for the account of such Lender at the time
interest is paid, all additional amounts which such Lender specifies as
necessary to preserve the after tax yield such Lender would have received if
such Taxes or Other Taxes had not been imposed.
(d) Within 60 days after the date of any payment by any
Option Care Person of Taxes or Other Taxes referred to in clause (c) above,
such Option Care Person shall furnish the Lenders' Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
payment reasonably satisfactory to the Lenders' Agent, which such
satisfactory evidence shall include, without limitation, canceled checks.
6.2 ILLEGALITY.
(a) If any Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Public Authority has asserted
that it is unlawful, for any Lender or its applicable lending office to make
LIBOR Rate Loans, then, on notice thereof by such Lender to the Borrowers'
Agent and the Lenders' Agent, any obligation of such Lender to make LIBOR
Rate Loans shall be suspended until such Lender notifies the Borrowers' Agent
and the Lenders' Agent that the circumstances giving rise to such
determination no longer exist.
(b) If any Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, then, upon demand by such Lender to the Borrowers' Agent
(with a copy to the Lenders' Agent), each Borrower shall prepay in full all
of the LIBOR Rate Loans of such Lender relating to such Borrower and then
outstanding, together with interest accrued thereon and amounts required
under SECTION 6.4, either on the last day of the Interest Period thereof, if
such Lender may lawfully continue to maintain such LIBOR Rate Loans to such
day, or immediately, if such Lender may not lawfully continue to maintain
such LIBOR Rate Loans. If any Borrower is required to so prepay any LIBOR
Rate Loan, then concurrently with such prepayment, such Borrower shall borrow
from such Lender, in the amount of such repayment, a Reference Rate Loan.
6.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If any Lender determines that, due to either (i) the
introduction of or any change in the interpretation of any law or regulation
or (ii) the compliance by such Lender with any guideline or request from any
central bank or other Public Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining any LIBOR Rate Loans, then the
Borrowers shall be liable for, and, upon demand by such Lender from time to
time to the Borrowers' Agent (with a copy to the Lenders' Agent), shall pay
to such Lender additional amounts as are sufficient to compensate such Lender
for such increased costs.
(b) If any Lender shall have determined that (i) the introduction of
any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Public Authority
charged with the interpretation or administration thereof, or (iv)
47
compliance by such Lender or any corporation or other entity controlling such
Lender with any Capital Adequacy Regulation, affects or would affect the amount
of capital, reserves, or special deposits required or expected to be maintained
by such Lender or any corporation or other entity controlling such Lender and
(taking into consideration such Lender's or such corporation's or other
entity's policies with respect to capital adequacy and such Lender's desired
return on capital) determines that the amount of such capital, reserves, or
special deposits is increased as a consequence of its loans, credits or
obligations under this Agreement, then each Borrower shall be liable for, and,
upon demand of such Lender from time to time to the Borrowers' Agent (with a
copy to the Lenders' Agent), shall pay to such Lender, additional amounts
sufficient to compensate such Lender for such increase. Notwithstanding the
foregoing, all such amounts shall be subject to the provisions of SECTION 3.3.
6.4 FUNDING LOSSES. The Borrowers shall reimburse each Lender and hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of:
(a) the failure of any Borrower to make on a timely basis any payment
of principal of any LIBOR Rate Loan;
(b) the failure of any Borrower to borrow, continue or convert a Loan
after the Borrowers' Agent has given (or is deemed to have given) a Notice of
Borrowing or a Notice of Conversion/Continuation;
(c) the prepayment or other payment (including after acceleration
thereof) of any LIBOR Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
6.5 INABILITY TO DETERMINE RATES. If the Lenders' Agent determines that
for any reason adequate and reasonable means do not exist for determining the
LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR
Rate Loan, or that the LIBOR Rate for any requested Interest Period with
respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect
the cost to the Lenders of funding such Loan, the Lenders' Agent shall so
notify the Borrowers' Agent. Thereafter, the obligation of the Lenders to make
or maintain LIBOR Rate Loans hereunder shall be suspended until the Lenders'
Agent revokes such notice in writing. Upon receipt of such notice, the
Borrowers' Agent may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrowers' Agent does not
revoke such Notice, the Lenders shall make, convert or continue the Loans, as
proposed by the Borrowers' Agent, in the amount specified in the applicable
notice submitted by the Borrowers' Agent, but such Loans shall be made,
converted or continued as Reference Rate Loans instead of LIBOR Rate Loans.
6.6 SURVIVAL. The agreements and obligations of the Option Care Persons in
SECTIONS 6.1 through 6.6 shall survive the payment of all other Obligations.
7. COLLATERAL.
7.1 GRANT OF SECURITY INTEREST.
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(a) As security for the payment and performance of all of the Obligations,
each Option Care Person hereby grants to the Lenders' Agent, for the benefit of
the Lenders and the Lenders' Agent, a continuing security interest in, lien on,
and assignment of all of such Option Care Person's right, title and interest
in, to and under (but none of such Option Care Person's obligations under) all
of the following, in each case wherever located and whether now owned or
existing or hereafter arising or acquired: (i) all Receivables, Inventory,
Equipment, Contractual Rights, Proprietary Rights, Lockboxes, Blocked Accounts,
Payment Accounts, and Proceeds; (ii) all moneys, securities and other property
and the Proceeds thereof, now or hereafter held or received by, or in transit
to, any Lender or the Lenders' Agent from or for any Option Care Person,
whether for safekeeping, pledge, custody, transmission, collection or
otherwise, including, without limitation, all of the deposit accounts, credits,
and balances of any Option Care Person with any Lender or with the Lenders'
Agent and all claims of any Option Care Person against any Lender or the
Lenders' Agent at any time existing; (iii) all deposit accounts with any
financial institutions (including without limitation Northern) with which any
Option Care Person maintains deposits; (iv) the Loan Documents; (v) all
fixtures; (vi) all capital stock or other equity interests in or issued by any
Subsidiary of any Option Care Person or in or issued by any other Person listed
on a schedule to a Pledge Agreement; (vii) any other Property (including
without limitation all checks, monies and other items on deposit from time to
time in any Lockbox or Blocked Account); and (viii) all books, Records and
other Property relating to or referring to any of the foregoing, including,
without limitation, all books, records, ledger cards, data processing records,
computer software and other property and general intangibles at any time
evidencing or relating to the Receivables, Inventory, Equipment, Contractual
Rights, Proprietary Rights, Proceeds, or other items referred to above (all of
the foregoing, and all other property in which the Lenders' Agent may at any
time be granted a Lien, being herein collectively referred to as the
"COLLATERAL"). The Lenders' Agent shall have all of the rights of a secured
party with respect to the Collateral under the UCC and other applicable laws
(except to the extent, if any, prohibited by applicable law).
(b) All Obligations shall constitute a single loan secured by the
Collateral. The Lenders' Agent may, in its sole discretion, (i) exchange,
waive, or release any of the Collateral, (ii) after the occurrence of an Event
of Default, apply Collateral and direct the order or manner of sale thereof as
the Lenders' Agent may determine, and (iii) after the occurrence of an Event of
Default, settle, compromise, collect, or otherwise liquidate any Collateral in
any manner, all without affecting the Obligations or the right of the Lenders'
Agent to take any other action with respect to any other Collateral.
7.2 PERFECTION AND PROTECTION OF SECURITY INTEREST. Each Option Care
Person shall, at its expense, perform all steps requested by the Lenders' Agent
at any time and from time to time to perfect, maintain, protect, and enforce
the Security Interest including, without limitation: (a) executing and filing
UCC financing or continuation statements, and amendments thereof, in form and
substance satisfactory to the Lenders' Agent; (b) delivering to the Lenders'
Agent the original certificates of title for motor vehicles with the Security
Interest properly endorsed thereon; (c) delivering to the Lenders' Agent the
originals of all instruments, documents, and chattel paper, and all other
Collateral of which the Lenders' Agent determines it should have physical
possession in order to perfect and protect the Security Interest therein, duly
endorsed or assigned to the Lenders' Agent without restriction; (d) delivering
to the Lenders'
49
Agent warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued; (e) executing and
delivering to the Lenders' Agent a security agreement relating to the
Reversions in form and substance satisfactory to the Lender; (f) delivering to
the Lenders' Agent all letters of credit on which such Option Care Person is
named beneficiary; and (g) taking such other steps as are deemed necessary or
appropriate by the Lenders' Agent to maintain the Security Interest, including,
without limitation, transferring Inventory to warehouses designated by the
Lenders' Agent from time to time (unless prohibited by a federal, state or
local statute or regulation governing the business of such Option Care Person,
in which case the applicable Inventory shall be transferred by such Option Care
Person, after notice with respect thereto by such Option Care Person to the
Lenders' Agent, in compliance with applicable statutes and regulations). To the
extent permitted by applicable law, the Lenders' Agent may file, without any
Option Care Person's signature, one or more financing statements disclosing the
Security Interest. Each Option Care Person agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement or of a financing
statement is sufficient as a financing statement. If any Collateral is at any
time in the possession or control of any warehouseman, bailee or any of the
agents or processors of any Option Care Person, then such Option Care Person
shall notify the Lenders' Agent thereof and shall notify such Person of the
Security Interest in such Collateral and, upon the request of the Lenders'
Agent, instruct such Person to hold all such Collateral for the account of the
Lenders' Agent subject to the instructions of the Lenders' Agent. If at any
time any Collateral is located on any Premises that are not owned by an Option
Care Person, other than equipment located at a patient's premises, then, at the
request of the Lenders' Agent, each Option Care Person shall use reasonable
efforts to obtain written waivers, in form and substance satisfactory to the
Lenders' Agent, of all present and future Liens to which the owner or lessor or
any mortgagee of such Premises may be entitled to assert against the
Collateral. From time to time, each Option Care Person shall, upon request of
the Lenders' Agent, execute and deliver confirmatory written instruments
pledging to the Lenders' Agent, for the benefit of the Lenders and the Lenders'
Agent, the Collateral, but an Option Care Person's failure to do so shall not
affect or limit the Security Interest or the other rights of the Lenders' Agent
in and to the Collateral. So long as this Agreement is in effect and until all
Obligations have been fully satisfied, the Security Interest shall continue in
full force and effect in all Collateral (whether or not deemed eligible for the
purpose of calculating the Availability or as the basis for any advance, loan,
extension of credit, or other financial accommodation).
Without limiting the generality of the foregoing: (i) each Borrower
which is not a party to a Pledge Agreement acknowledges the terms of such
Pledge Agreement and agrees to comply with such terms as if it were a party to
such Pledge Agreement; and (ii) each Borrower which is an "Issuer", as defined
in the applicable Pledge Agreement, shall register the pledge effected by such
Pledge Agreement on the books of such Borrower.
7.3 LOCATION OF COLLATERAL. Each Option Care Person represents and
warrants to the Lenders and the Lenders' Agent that as of the Closing Date: (a)
the chief executive office of such Option Care Person is located (and at all
times since February 5, 1998, the chief executive office of such Option Care
Person has been located) at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇; (b) SCHEDULE 7.3 hereto is a correct and complete list of the
location of the books and records of such Option Care Person, the locations of
the Collateral (other than equipment located at a patient's premises), and the
locations of all of its other places
50
of business; and (c) SCHEDULE 7.3 correctly identifies any of such facilities
and locations that are not owned by the Option Care Persons and sets forth the
names of the owners and lessors or sub-lessors of such facilities and
locations. Each Option Care Person covenants and agrees that it shall not
maintain any Collateral at any location other than those listed on SCHEDULE
7.3, and, with the exception of equipment located at a patient's premises, it
shall not otherwise change or add to any of such locations, unless it gives the
Lenders' Agent written notice thereof within thirty (30) days after such change
in or addition of location, and executes any and all UCC financing statements
and other documents that the Lenders' Agent requests in connection therewith.
7.4 TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Each Option Care
Person represents and warrants to, and each Option Care Person covenants with,
the Lenders and the Lenders' Agent that: (a) all Collateral is and shall
continue to be owned by the Option Care Persons free and clear of all Liens
whatsoever, except for the Security Interest and other Permitted Liens; (b) the
Security Interest is not and shall not be subject to any prior Lien; (c) each
Option Care Person shall use, store, and maintain the Collateral with all
reasonable care and shall use the Collateral for lawful purposes only; and (d)
no Option Care Person shall, without the prior written approval of the Lenders,
sell, lease, or dispose of or permit the sale or disposition of the Collateral
or any portion thereof, except for sales of Inventory in the ordinary course of
business and as permitted by SECTION 7.12. The inclusion of Proceeds in the
Collateral shall not be deemed the consent of the Lenders to any sale or other
disposition of the Collateral except as expressly permitted herein.
7.5 [Reserved].
7.6 ACCESS AND EXAMINATION. The Lenders' Agent, accompanied by any Lender
which so elects, may at all reasonable times and from time to time (not to
exceed four times each year, absent a continuing Event of Default) have access
to, examine, audit, make extracts from and inspect the records, files, and
books of account of the Option Care Persons and the Collateral and may discuss
the affairs of the Option Care Persons with the officers and management of the
Option Care Persons, except to the extent prohibited by applicable statutes or
regulations with respect to patients' records. Each Option Care Person shall
deliver to the Lenders' Agent any instrument necessary for the Lenders' Agent
to obtain records from any service bureau maintaining records for any Option
Care Person. The Lenders' Agent may, and at the direction of the Majority
Lenders shall, at the reasonable expense of the Option Care Persons, make
copies of all of the books and records of the Option Care Persons, or require
the Option Care Persons to deliver such copies to the Lenders' Agent. The
Lenders' Agent may, without expense to the Lenders' Agent or the Lenders, use
such of the personnel, supplies, and Premises of the Option Care Persons as may
be reasonably necessary and appropriate for maintaining or enforcing the
Security Interest. The Lenders' Agent shall have the right, at any time, in
name of the Lenders' Agent or in the name of a nominee of the Lenders' Agent,
to verify the validity, amount or any other matter relating to the Accounts,
Inventory or other Collateral, by mail, telephone, or otherwise.
7.7 INSURANCE. The Option Care Persons shall insure the Collateral against
loss or damage by fire with extended coverage, theft, burglary, pilferage, loss
in transit, and such other hazards as the Lenders' Agent shall specify, in
amounts, under policies and by insurers acceptable to the Lenders' Agent. The
Option Care Persons shall cause the Lenders' Agent to be named in each such
policy as secured party and loss payee or additional insured, in a manner
acceptable to the Lenders' Agent. Each policy of insurance shall contain a
clause or
51
endorsement requiring the insurer to give not less than thirty (30) days' prior
written notice to the Lenders' Agent in the event of cancellation of the policy
for any reason other than for failure to pay premiums when due, and requiring
the insurer to give not less than ten (10) days' prior written notice to the
Lenders' Agent in the event of cancellation of the policy for failure to pay
premiums when due. Each Option Care Person shall also pay all premiums for such
insurance when due, and shall deliver to the Lenders' Agent certificates of
insurance and, if requested, photocopies of the policies.
If the Option Care Persons fail to pay such fees or to procure such
insurance or the premiums therefor when due, the Lenders' Agent may (but shall
not be required to) do so and charge the costs thereof to the loan account of
Option Care as a Revolving Loan. The insurance referred to in the preceding
sentence may, but need not, protect the interests of the Option Care Persons.
The coverage purchased by the Lenders' Agent hereunder may not pay any claim
made by any Option Care Person or any claim that is made against any Option
Care Person in connection with the Collateral. The Option Care Persons may
later cancel any insurance purchased by the Lenders' Agent hereunder, but only
after providing the Lenders' Agent with evidence that the Option Care Persons
have obtained insurance as required by this Agreement. If the Lenders' Agent
purchases insurance for the Collateral, each Option Care Person shall be
responsible for the costs of such insurance, including interest and any other
charges that the Lenders' Agent may impose in connection with the placement of
such insurance, until the effective date of the cancellation or expiration of
such insurance. The costs of the insurance may be added to the total
outstanding Obligations. The costs of the insurance obtained by the Lenders'
Agent hereunder may be more than the cost of insurance that the Option Care
Persons may be able to obtain on their own.
Each Option Care Person shall promptly notify the Lenders of each
instance of any loss, damage, or destruction to the Collateral in excess of one
hundred thousand dollars ($100,000) or arising from its use, whether or not
covered by insurance. The Option Care Persons shall apply all insurance
proceeds contemplated by this SECTION 7.7 to the reduction of the Obligations;
provided that, prior to the occurrence of an Event of Default, an Option Care
Person may use such proceeds, or any part thereof, to replace, repair, restore
or rebuild the Collateral in a diligent and expeditious manner with materials
and workmanship of substantially the same quality as existed before the loss,
damage or destruction. Following the occurrence and during the continuance of
an Event of Default, the Lenders' Agent shall have the right but not the
obligation to collect all insurance proceeds directly (other than proceeds of
insurance which the Lenders' Agent procured pursuant to this SECTION 7.7, which
may be collected directly by the Lenders' Agent regardless of whether an Event
of Default exists); provided that any insurance proceeds that the Lenders'
Agent collects pursuant to this SECTION 7.7 shall be applied in accordance with
SECTION 4.3.
7.8 COLLATERAL REPORTING. The Borrowers' Agent shall provide the Lenders'
Agent with the following documents and information at the following times in
form satisfactory to the Lenders' Agent: (a) on a monthly basis, a schedule of
cash received; (b) upon request by the Lenders' Agent, copies of invoices, EOBs
(and any similar correspondence from any Account Debtor which is or which at
any time has been an Account Debtor of an Eligible Account), credit memos, and
shipping and delivery documents no later than ten Business Days following such
written request (except to the extent that delivery of the foregoing violates
52
applicable law); (c) monthly agings and reconciliations of accounts receivable
to be delivered no later than the twentieth day of each month respecting the
immediately preceding month (including detail as to applications of collections
thereon); (d) upon request by the Lenders' Agent, monthly reports as to
"dilutions", including as to the Dilution Percentage for each month and each
calendar quarter, not later than the twentieth day of each month respecting the
immediately preceding month and calendar quarter; (e) upon request by the
Lenders' Agent, monthly reports pertaining to the cash collections in respect
of Accounts as to which more than 120 days have elapsed since Invoice Date, not
later than the twentieth day of each month respecting the immediately preceding
month; (f)(x) during the third week of each month, a Mid-Month Borrowing Base
Certificate for such month, and (y) on the twentieth day of each month (or, if
such day is not a Business Day, on the next Business Day), a Final Borrowing
Base Certificate with respect to the immediately preceding month; (g) monthly
reports of the Inventory balance (by location), to be delivered no later than
the twentieth day of each month respecting the immediately preceding month; (h)
upon reasonable request by the Lenders' Agent, monthly detailed inventory
reports; (i) upon request by the Lenders' Agent, copies of purchase orders,
invoices, and delivery documents for Inventory and Equipment acquired by any
Borrower; (j) such other reports as to the Collateral (including without
limitation reports as to adjusting entries) as the Lenders' Agent shall request
from time to time; and (k) certificates of an officer of the Borrowers' Agent
certifying as to the foregoing; provided that reports delivered pursuant to
clause (c) or clause (e), and the Final Borrowing Base Certificate delivered
pursuant to clause (f), during January of each year may be delivered up to five
Business Days later than the applicable day specified in such clauses.
If (x) an Event of Default has occurred, or (y) as of the end of any
two consecutive calendar quarters the Dilution Percentage (defined below) for
the twelve month period ending as of the end of each such calendar quarter
exceeds seven and one-half percent (7.5%), then, upon request from the Lenders'
Agent, the Lenders' Agent shall have the right to retain the services of a
collateral monitoring company (at the expense of the Option Care Persons) to
review, monitor and report on Accounts and collections in such manner as may be
required by the Lenders' Agent from time to time. If any of the records or
reports of the Option Care Persons with respect to the Collateral are prepared
by an accounting service or other agent, each Option Care Person hereby
authorizes such service or agent to deliver such records, reports, and related
documents to the Lenders.
As used herein, "DILUTION PERCENTAGE" means, on any date of
determination, the percentage identified as such in the most recent monthly
report as to "dilutions" referred to in clause (d) of the first paragraph of
this SECTION 7.8 provided by the Borrowers' Agent to the Lenders on or prior to
such date of determination. The Dilution Percentage for any period shall be
calculated as a fraction, the numerator of which is the aggregate amount of
non-cash credits (i.e., reductions) to the accounts receivable of the Option
Care Persons during such period and the denominator of which is the gross
revenues of the Option Care Persons during such period. The Borrowers' Agent
shall not change the method by which it calculates the Dilution Percentage (or
by which it calculates any component thereof) without the prior written consent
of the Lenders.
7.9 ACCOUNTS.
53
(a) Each Option Care Person hereby represents and warrants to
the Lenders and the Lenders' Agent and covenants with the Lenders and the
Lenders' Agent that: (i) each existing Account represents, and each future
Account shall represent, a BONA FIDE sale or lease and delivery of goods by
an Option Care Person, or rendition of services by an Option Care Person, in
the ordinary course of business of an Option Care Person; (ii) each existing
Account is, and each future Account shall be, at the time any such Account
arose and at the time any such Account is billed, for a liquidated amount
payable by the Account Debtor thereon on the terms set forth in the invoice
therefor or in the schedule thereof delivered to the Lenders, without offset,
deduction, defense, or counterclaim, other than discounts required by law or
contract, and corrections of billing errors, in the ordinary course of
business of an Option Care Person; (iii) no payment shall be received with
respect to any Account, and no credit, discount, extension, or agreement
therefor shall be granted on any Account, except as reported to the Lenders
and the Lenders' Agent in accordance with this Agreement; (iv) each copy of
an invoice or claim form delivered to any Lender or the Lenders' Agent by an
Option Care Person shall be a genuine copy of the original invoice or claim
form sent to the Account Debtor named therein; (v) all goods described in any
invoice or claim form representing a sale of goods shall have been delivered
to the applicable patient and all services of any Option Care Person
described in any invoice or claim form shall have been performed; (vi) each
of the Accounts and the related contracts is in full force and effect and
represents and constitutes a legal, valid and binding obligation of the
related Account Debtor, enforceable against such Account Debtor in accordance
with its terms; (vii) promptly following notice from an Account Debtor as to
an earlier overpayment by such Account Debtor to any Option Care Person, such
Option Care Person has made all payments to such Account Debtor which are
necessary to prevent such Account Debtor from offsetting such overpayment
against any amount which such Account Debtor owes on the Accounts (however,
each Lender acknowledges that notwithstanding said payments, offsets may and
do nonetheless occur); (viii) no direction of any Option Care Person or any
other Person is in effect directing Account Debtors (A) to remit payments in
respect of the Accounts other than to a Lockbox or a Blocked Account or (B)
to remit EOBs in respect of the Accounts to any Person or address other than
to an Option Care Person at its chief executive office; and (ix) during the
one year prior to the Closing Date, no Option Care Person has been subject to
any Government Offset involving in excess of fifty thousand dollars
($50,000). As of the date of each Borrowing, each Option Care Person is
unaware of any potential Government Offset involving in excess of fifty
thousand dollars ($50,000) for any single Governmental Offset and in excess
of two hundred thousand dollars ($200,000) for all such Government Offsets
that has not been disclosed by such Option Care Person to the Lenders in
writing prior to that date. All of the Medicaid and Medicare reports required
to be filed by any Option Care Person for all reporting periods have been
filed with the applicable Government Account Debtor, or HCFA designated
agents or agents of such Government Account Debtor. At all times on and after
the thirtieth day following the Closing Date, each Option Care Person hereby
represents and warrants to the Lenders and the Lenders' Agent that Account
Debtor Notices, signed by the Borrowers, have been delivered to all of the
Account Debtors of the type referred to in clause (p) of the definition of
Eligible Account.
(b) No Option Care Person shall re-date any invoice, claim
form or sale or make sales on extended dating or extend or modify any Account
(other than to correct billing errors in the ordinary course of business).
Each Lender acknowledges that if an Account Debtor which is the "primary"
payor does not pay a claim in full or denies such claim, an Option
54
Care Person may send a separate invoice to an Account Debtor which is a
"secondary" payor. If any Option Care Person becomes aware of any matter that
is reasonably likely to materially adversely affect any Account Debtor (other
than a Self-Pay Account Debtor), including information regarding the Account
Debtor's creditworthiness, such Option Care Person shall promptly so advise
the Lenders' Agent.
(c) No Option Care Person shall accept any note, warrant or
other instrument (except a check or other instrument for the immediate
payment of money, subject to compliance with SECTION 7.10) with respect to
any Account (other than a Self-Pay Account) without the written consent of
the Lenders' Agent. If the Lenders' Agent consents to the acceptance of any
such note, warrant or other instrument, it shall be considered as evidence of
the Account and not payment thereof, and the Option Care Persons shall
promptly deliver such note, warrant or instrument to the Lenders' Agent
appropriately endorsed. Regardless of the form of presentment, demand, notice
of dishonor, protest, and notice of protest with respect thereto, the Option
Care Persons shall remain liable thereon until such note, warrant or
instrument is paid in full. Notwithstanding the foregoing, any Option Care
Person may accept a note (i) from a franchisee or (ii) as payment solely for
the provision of computer software, provided that such Option Care Person
shall (i) promptly notify the Lenders' Agent that it has accepted any such
note, and (ii) upon request by the Lenders' Agent, promptly deliver such note
to the Lenders' Agent appropriately endorsed.
(d) Each Option Care Person shall notify the Lenders promptly
of (i) all disputes and claims (other than as to discounts required by law or
contract, and corrections of billing errors, in the ordinary course of
business) with Persons which are Account Debtors, involving in excess of
fifty thousand dollars ($50,000) for any single dispute or claim and in
excess of two hundred thousand dollars ($200,000) for all such disputes and
claims, whether any such Person is acting in its capacity as an Account
Debtor or in its individual capacity (e.g., as a landlord or supplier of an
Option Care Person); and (ii) all alleged or asserted Government Offsets
involving in excess of fifty thousand dollars ($50,000) for any single
Government Offset and in excess of two hundred thousand dollars ($200,000)
for all such Government Offsets. No discount, credit or allowance shall be
granted with respect to any Eligible Account to any Account Debtor (other
than in respect of Self-Pay Accounts) without the consent of the Majority
Lenders, which consent shall not be unreasonably withheld, except for: (i)
discounts required by law or contract, and corrections of billing errors, in
the ordinary course of business; and (ii) any other discount which does not
exceed fifty thousand dollars ($50,000), provided that the aggregate amount
of discounts permitted pursuant to this clause (ii) during any calendar year
shall not exceed five hundred thousand dollars ($500,000). The Lenders' Agent
may at all times following the occurrence and during the continuance of an
Event of Default hereunder settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which the Lenders' Agent considers
reasonable and, in all cases, the Lenders' Agent shall credit the loan
account of Option Care with only the net amounts received by the Lenders'
Agent in payment of any Accounts.
(e) If an Account Debtor returns any Inventory to any Option
Care Person when no Event of Default exists, then such Option Care Person
shall promptly determine the reason for such return and shall issue a credit
memorandum to the Account Debtor in the
55
appropriate amount. Each Option Care Person shall immediately report to the
Lenders any return involving an amount in excess of fifty thousand dollars
($50,000). Each such report shall indicate the reasons for the returns and
the locations and condition of the returned Inventory. In the event any
Account Debtor returns Inventory to any Option Care Person when an Event of
Default exists, such Option Care Person shall: (i) hold the returned
Inventory in trust for the Lenders' Agent; (ii) segregate all returned
Inventory from all of its other Property; (iii) dispose of the returned
Inventory solely according to the written instructions of the Lenders' Agent;
and (iv) not issue any credits or allowances with respect thereto without the
prior written consent of the Majority Lenders. All returned Inventory shall
remain subject to the Security Interest. Whenever any Inventory is returned
for which an Account had been created, such related Account shall be deemed
ineligible to the extent of such returned Inventory, and Availability shall
be adjusted accordingly.
7.10 COLLECTION OF ACCOUNTS; PAYMENTS.
(a) Each Option Care Person shall (and all invoices and claim
forms with respect to the Accounts shall) instruct all Account Debtors to
make all payments only to a Lockbox or a Blocked Account (each Lender
acknowledges that payments by patients made at the time that a patient is
receiving goods and services at a facility of an Option Care Person would not
be invoiced to such patient). If, notwithstanding such instructions, any
Option Care Person receives any Proceeds of Accounts, it shall receive such
payments as the trustee for the Lenders' Agent, and shall immediately deliver
such payments to the Lenders' Agent in their original form duly endorsed in
blank or deposit them into a Lockbox, Blocked Account or a Payment Account,
as the Lenders' Agent may direct; PROVIDED, HOWEVER, that each Option Care
Person may maintain a separate account with a local financial institution
(each a "LOCAL ACCOUNT") for the deposit of walk-in payments from patients
and walk-in payments for durable medical equipment from customers; provided,
further, that (i) each Option Care Person shall deposit such walk-in payments
in a Local Account not later than the first Business Day after receiving such
walk-in payments, (ii) each Option Care Person shall cause all available
amounts in such Local Accounts to be transferred by wire transfer or
automated clearinghouse transfer to a Blocked Account during the last week of
each month, and (iii) no Option Care Person shall withdraw any funds on
deposit in any Local Account or permit funds on deposit in any Local Account
to be transferred other than in accordance with this sentence (provided that
this clause (iii) shall not prevent the Option Care Persons from writing
checks on a Local Account for the sole purpose of refunding some or all of
such walk-in payments to the Person or Persons who made such walk-in
payments). Except as otherwise provided under applicable law with respect to
Accounts owed by Government Account Debtors, all collections received in any
such Lockbox, Blocked Account or Payment Account or directly by any Option
Care Person or the Lenders' Agent, and all funds in any Lockbox, Blocked
Account or Payment Account or other account to which such collections are
deposited, shall be the sole property of the Lenders' Agent and subject to
the sole control of the Lenders' Agent and shall be applied by the Lenders'
Agent subject to and in accordance with the terms of SECTION 4.3. The
Lenders' Agent or the designee of the Lenders' Agent may, at any time after
the occurrence of an Event of Default, notify Account Debtors that the
Accounts have been assigned to the Lenders' Agent and of the Security
Interest therein, and may collect them directly (except to the extent
prohibited under applicable law with respect to Accounts owed by Government
Account Debtors) and charge the collection costs and expenses to the loan
account of Option Care as a Revolving Loan. At the request of
56
the Lenders' Agent, each Option Care Person shall execute and deliver to the
Lenders' Agent such documents as the Lenders' Agent shall require to grant
the Lenders' Agent access to any post office box, lockbox or bank account in
which collections of Accounts are received or deposited.
(b) Upon the occurrence of (i) an Event or Event of Default,
or (ii) the Availability at any time (calculated for this purpose without
giving effect to clause (b)(iii) of the definition of Availability) being
less than ten percent (10%) of the Availability at such time (calculated for
this purpose without subtracting the unpaid balance of the Revolving Loans,
and without giving effect to clause (b)(iii) of the definition of
Availability), and upon notice from the Lenders' Agent to the Blocked Account
Bank, in accordance with the Blocked Account Agreement, the Blocked Account
Bank shall remit, by automatic standing wire transfer, on a daily basis, all
available amounts in the Blocked Accounts to or at the direction of the
Lenders' Agent. Such amounts shall be applied in accordance with SECTION 4.3.
(c) All payments received by the Lenders' Agent on account of
Accounts or other Collateral (including Proceeds) shall be the sole property
of the Lenders' Agent and subject to the sole control of the Lenders' Agent
and shall be applied by the Lenders' Agent subject to and in accordance with
the terms of SECTION 4.3. If such payments are received by the Lenders' Agent
at or prior to 1:00 p.m., Chicago time, on any Business Day, such payments
shall be credited to the loan accounts of the Borrowers (conditional upon
final collection) on such Business Day. If such payments are received by the
Lenders' Agent after 1:00 p.m., Chicago time, on any Business Day, such
payments shall be credited to the loan account of Option Care (conditional
upon final collection) on the next Business Day.
(d) In the event the Borrowers repay all of the Obligations
upon the termination of this Agreement, other than through the receipt by the
Lenders' Agent of payments on account of Accounts or Proceeds of other
Collateral, such payment shall be credited (conditional upon final
collection) to the loan account of Option Care in accordance with SECTION
7.10(c).
(e) If sales of Inventory are made or services are rendered
for cash in excess of ten thousand dollars ($10,000) in the aggregate, each
Option Care Person, not later than the first Business Day of the following
week, shall (i) deliver to the Lenders' Agent the original checks, cash, or
other forms of payment which such Option Care Person receives, or (ii)
deposit such forms of payment into a Lockbox, a Blocked Account, a Payment
Account or a Local Account, as the Lenders' Agent may direct, in accordance
with the provisions of SECTION 7.10(a).
7.11 INVENTORY. Each Option Care Person represents and warrants to
the Lenders and the Lenders' Agent that all of the Inventory is and shall be
held for sale or lease, or is to be furnished in connection with the
rendition of services in the ordinary course of such Option Care Person's
business, and is and shall be fit for such purposes. Each Option Care Person
shall keep the Inventory in good and marketable condition, at its own
expense. No Option Care Person shall, without prior written notice to the
Lenders, acquire or accept any Inventory on consignment or approval. Each
Option Care Person agrees that all Inventory shall
57
be produced in accordance with the Federal Fair Labor Standards Act of 1938,
as amended, and all rules, regulations, and orders thereunder. Each Option
Care Person shall maintain an inventory reporting system at all times. Each
Option Care Person shall conduct a physical count of the Inventory at least
once per Fiscal Year, and at such other times as the Lenders' Agent
reasonably requests (provided that unless an Event of Default has occurred
and is continuing, the Lenders' Agent shall not request such a count more
than twice each year), and shall promptly, upon completion, supply the
Lenders' Agent with a copy of such count accompanied by a report of the value
of such Inventory (valued at the lower of cost, on a first-in, first-out
basis, or market value). No Option Care Person shall, without the prior
written consent of the Lenders, sell any Eligible Inventory on a
▇▇▇▇-and-hold, guaranteed sale, sale and return, sale on approval,
consignment, or other repurchase or return basis. Each Option Care Person
further represents and warrants to the Lenders and the Lenders' Agent that
none of the Inventory is or shall be located on real estate which is
designated as `flood prone' or a `flood risk area', as defined by the Flood
Disaster Protection Act of 1973, except for Inventory located in Miami,
Florida. The Option Care Persons represent and warrant to the Lenders and the
Lenders' Agent that the Option Care Persons have obtained, and the Option
Care Persons hereby covenant and agree with the Lenders and the Lenders'
Agent to maintain, flood insurance with respect to all Inventory located in
Miami, Florida, with such flood insurance to be maintained in accordance with
the provisions of SECTION 7.7.
7.12 EQUIPMENT. Each Option Care Person represents and warrants to
the Lenders and the Lenders' Agent that all of the Equipment used or held for
use in the business of an Option Care Person is adequate for its current use,
except that portion of Equipment that is currently under repair. Each Option
Care Person shall keep and maintain such Equipment (or cause such Equipment
to be kept and maintained) in good operating condition and repair (ordinary
wear and tear excepted) and shall make all necessary replacements thereof.
7.13 MATERIAL CONTRACTS. Each Option Care Person shall fully perform
all of its obligations under each of the contracts and agreements to which it
is a party and shall enforce all of its rights and remedies thereunder, in
each case, as it deems appropriate in its business judgment; PROVIDED,
HOWEVER, no Option Care Person shall take any action or fail to take any
action with respect to any such contract or agreement that would cause the
termination of any Material Contract except in the ordinary course of
business of such Option Care Person. As used in this SECTION 7.13, "MATERIAL
CONTRACT" means any contract or agreement to which an Option Care Person is a
party if such contract or agreement involves amounts paid or payable to or by
an Option Care Person in excess of ten thousand dollars ($10,000) during any
calendar year. No Option Care Person shall, without the prior written consent
of the Majority Lenders, modify, amend, supplement, compromise, satisfy,
waive, release, terminate or discharge any Material Contract, the Contractual
Rights relating to any Material Contract, or any collateral securing the
same, except in the ordinary course of business of such Option Care Person.
Each Option Care Person shall notify the Lenders in writing, promptly after
it becomes aware thereof, of any event or fact which could reasonably be
expected to give rise to a claim by it for indemnification under any Material
Contract and shall diligently pursue such right and report to the Lenders on
all further developments with respect thereto, provided that the notification
and reporting requirements set forth in this sentence shall not apply except
to the extent that such a claim for indemnification is made outside of the
ordinary course of business of such Option Care Person. Each Option Care
Person shall remit directly to the Lenders' Agent, for application to the
Obligations in such order as the Lenders' Agent determines, all amounts
received by such Option
58
Care Person as indemnification or otherwise pursuant to any contract or
agreement relating to Contractual Rights. If an Event of Default exists, then
the Lenders' Agent may directly enforce such right in its own name or in the
name of an Option Care Person and may enter into such settlements or other
agreements with respect thereto as the Lenders' Agent determines. All amounts
thereby recovered by the Lenders' Agent, after deducting the costs and
expenses of the Lenders' Agent in connection therewith, shall be applied to
the Obligations in such order as the Lenders' Agent determines. In any suit,
proceeding or action brought by the Lenders' Agent under any contract or
agreement relating to a Contractual Right for any sum owing thereunder or to
enforce any provision thereof, each Option Care Person shall indemnify and
hold the Lenders and the Lenders' Agent harmless from and against all
expense, loss or damage suffered by reason of any defense, setoff,
counterclaim, recoupment, or reduction of liability whatsoever of the obligor
thereunder arising out of a breach by any Option Care Person of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing from any Option Care Person to or in favor of
such obligor or its successors. All such obligations of any Option Care
Person shall be and remain enforceable only against such Option Care Person
and shall not be enforceable against any Lender or the Lenders' Agent.
Notwithstanding any provision hereof to the contrary, each Option Care Person
shall at all times remain liable to observe and perform all of its duties and
obligations under each contract or agreement relating to Contractual Rights
and the exercise of any rights by any Lender or the Lenders' Agent with
respect to the Collateral shall not release any Option Care Person from any
of such duties and obligations. The Lenders and the Lenders' Agent shall not
be obligated to perform or fulfill any of duties or obligations under any
contract or agreement relating to Contractual Rights or to make any payment
thereunder or to make any inquiry as to the nature or sufficiency of any
payment or Property received by any of them thereunder or the sufficiency of
performance by any party thereunder, or to present or file any claim, or to
take any action to collect or enforce any performance or payment of any
amounts due.
7.14 DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. Each Option Care
Person represents and warrants to the Lenders and the Lenders' Agent, and
covenants with the Lenders and the Lenders' Agent, that: (a) all documents,
instruments, and chattel paper describing, evidencing, or constituting
Collateral, and all signatures and endorsements thereon, are and shall be
complete, valid, and genuine; and (b) all goods evidenced by such documents,
instruments, and chattel paper are and shall be owned by the Option Care
Person free and clear of all Liens other than Permitted Liens.
7.15 RIGHT TO CURE. The Lenders' Agent may, in its sole discretion,
and shall at the direction of the Majority Lenders, at any time, pay any
amount or do any act required of any Option Care Person hereunder to
preserve, protect, maintain or enforce the Security Interest, which any
Option Care Person fails to pay or do, including, without limitation, payment
of any judgment against any Option Care Person, any insurance premium, any
warehouse charge, any landlord's claim, and any other obligation giving rise
to any Lien upon or with respect to the Collateral. All payments that the
Lenders' Agent makes under this SECTION 7.15 and all out-of-pocket costs and
expenses that the Lenders' Agent pays or incurs in connection with any action
taken by it hereunder shall be charged to the loan account of Option Care as
a Revolving Loan. Any payment made or other action taken by the Lenders'
Agent under this SECTION 7.15 shall be without prejudice to any right to
assert an Event of Default hereunder.
7.16 POWER OF ATTORNEY. Each Option Care Person hereby appoints the
Lenders' Agent and the designees of the Lenders' Agent as such Option Care
Person's attorney,
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subject to the provisions of applicable law, with power: (a) to endorse such
Option Care Person's name on any checks, notes, acceptances, money orders, or
other forms of payment or security that come into the possession of any Lender
or the Lenders' Agent; (b) to sign such Option Care Person's name on any
invoice, ▇▇▇▇ of lading, or other document of title relating to any Collateral,
on drafts against customers, on assignments of Accounts, on notices of
assignment, UCC financing statements and other public records, on verifications
of Accounts and on notices to Account Debtors and to file any such financing
statements by electronic means with or without a signature as authorized or
required by applicable law or filing procedure; (c) to notify the post office
authorities, when an Event of Default exists, to change the address for
delivery of such Option Care Person's mail to an address designated by the
Lenders' Agent and to receive, open and review (but not to dispose of, and in
each instance promptly forward to Option Care) all mail addressed to such
Option Care Person; (d) when an Event of Default exists, to send requests for
verification of Accounts to Account Debtors; and (e) to do all things necessary
to carry out this Agreement; provided that to the extent that applicable law
prohibits the Lenders' Agent from collecting any payment directly from a
Government Account Debtor, the Lenders' Agent shall not collect such payment
directly from such Government Account Debtor. Each Option Care Person ratifies
and approves all acts of such attorney. Neither the Lenders' Agent nor any
other such attorney, as the case may be, shall be liable for any acts or
omissions or for any error of judgment or mistake of fact or law absent gross
negligence or wilful misconduct on the part of the Lenders' Agent or such
attorney, as the case may be. This power, being coupled with an interest, is
irrevocable until this Agreement has been terminated and the Obligations have
been fully satisfied.
7.17 LENDER'S RIGHTS, DUTIES, AND LIABILITIES. Each Option Care Person
assumes all responsibility and liability arising from or relating to the use,
sale, or other disposition of the Collateral. The Obligations shall not be
affected by any failure of any Lender or the Lenders' Agent to take any steps
to perfect the Security Interest or to collect or realize upon the Collateral,
nor shall loss of or damage to the Collateral release any Option Care Person
from any of the Obligations. Following the occurrence of an Event of Default,
the Lenders' Agent may (but shall not be required to), and at the direction of
the Majority Lenders shall, without notice to or consent from any Option Care
Person, ▇▇▇ upon or otherwise collect, extend the time for payment of, modify
or amend the terms of, compromise or settle for cash, credit, or otherwise upon
any terms, grant other indulgences, extensions, renewals, compositions, or
releases, and take or omit to take any other action with respect to the
Collateral, any security therefor, any agreement relating thereto, any
insurance applicable thereto, or any Person liable directly or indirectly in
connection with any of the foregoing, without discharging or otherwise
affecting the liability of any Option Care Person for the Obligations or under
this Agreement or any other agreement now or hereafter existing between any
Lender and any Option Care Person or between the Lenders' Agent and any Option
Care Person; provided that to the extent that applicable law prohibits the
Lenders' Agent from collecting any payment directly from a Government Account
Debtor, the Lenders' Agent shall not collect such payment directly from such
Government Account Debtor.
7.18 [Reserved]
7.19 LICENSE FOR USE OF SOFTWARE AND OTHER INTELLECTUAL PROPERTY. Except to
the extent prohibited by applicable law, each Option Care Person hereby grants
the Lenders' Agent a non-exclusive, royalty-free license (with the right to
sublicense) to use, without payment or royalty of any kind, all books,
documents, EOBs, instruments, files, records, computer software
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programs, tapes, disks, data bases, processes and materials used by such Option
Care Person to operate its business (including the collection or other
liquidation of Accounts and other items covered by the definition of
Collateral), which license shall be irrevocable so long as any of the
Obligations remain outstanding or this Agreement is in effect; PROVIDED that
the Lenders' Agent shall not use such license unless an Event of Default
exists; and PROVIDED, FURTHER, that should the consent of any licensor of any
Option Care Person to such grant of the license described herein be required,
each Option Care Person (upon the request of the Lenders' Agent) shall use its
best efforts to obtain the consent of such third-party licensor and, in the
absence of obtaining such consent, shall, upon request of the Lenders' Agent,
download all information required to operate its business (including
information required to collect or otherwise liquidate Collateral) contained in
such licensed computer software programs, tapes, disks, data bases, processes
and materials in a format which is accessible by the Lenders' Agent or
otherwise print out such information.
8. BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.
8.1 BOOKS AND RECORDS. Each Option Care Person shall maintain, at all
times, correct and complete books, records and accounts in which complete,
correct and timely entries are made of its transactions in accordance with GAAP
consistent with those applied in the preparation of the Financial Statements.
Each Option Care Person shall, by means of appropriate entries, reflect in such
accounts and in all Financial Statements proper liabilities and reserves for
all taxes and proper provision for depreciation and amortization of Property
and bad debts, all in accordance with GAAP. Each Option Care Person shall
maintain at all times books and records pertaining to the Collateral in such
detail, form, and scope as any Lender or the Lenders' Agent shall reasonably
require, including without limitation, records of: (a) all payments received
and all credits and extensions granted with respect to the Accounts; (b) the
return, rejection, repossession, stoppage in transit, loss, damage, or
destruction of any Inventory; and (c) all other dealings affecting the
Collateral which would reasonably be expected to have a Material Adverse Effect.
8.2 FINANCIAL AND OTHER INFORMATION. Each Option Care Person shall
promptly furnish to each Lender or its agents and the Lenders' Agent all such
information as such Lender or the Lenders' Agent shall from time to time
reasonably request through the Borrowers' Agent, and notify its auditors and
accountants that each Lender, its agents and the Lenders' Agent is authorized
by each Option Care Person to obtain such information directly from them.
Without limiting the foregoing, each Option Care Person shall furnish to the
Lenders through the Borrowers' Agent, in such detail as any Lender or the
Lenders' Agent shall request, the following:
(a) As soon as available, but in any event not later than 105 days after
the close of each Fiscal Year, a copy of Option Care's annual report on Form
10-K filed with the Securities and Exchange Commission or, if Option Care is no
longer required to file an annual report on Form 10-K with the Securities and
Exchange Commission, consolidated and consolidating audited balance sheets, and
statements of operation, and stockholders equity and cash flows for Option Care
and its consolidated Subsidiaries for such Fiscal Year, and the accompanying
notes thereto, setting forth in each case in comparative form figures for the
previous Fiscal Year, all in reasonable detail, fairly presenting the financial
position and the results of operations of Option Care and its consolidated
Subsidiaries as at the date thereof and for the Fiscal Year then ended, and
prepared in accordance with GAAP. Such statements shall be examined in
accordance with generally accepted auditing standards and accompanied by a
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report thereon unqualified as to scope by independent certified public
accountants selected by Option Care and reasonably satisfactory to the Lenders.
(b) As soon as available, but in any event not later than 50 days after
the close of each fiscal quarter other than the fourth quarter of a Fiscal
Year, a copy of Option Care's quarterly report on Form 10-Q filed with the
Securities and Exchange Commission or, if Option Care is no longer required to
file quarterly reports on Form 10-Q with the Securities and Exchange
Commission, consolidated and consolidating unaudited balance sheets of Option
Care and its consolidated Subsidiaries as at the end of such quarter, and
consolidated and consolidating unaudited statements of income and cash flows
for Option Care and its consolidated Subsidiaries for such quarter and for the
period from the beginning of the Fiscal Year to the end of such quarter,
together with the accompanying notes, if any, thereto, all in reasonable
detail, fairly presenting the financial position and results of operation of
Option Care and its consolidated Subsidiaries as at the date thereof and for
such periods, prepared in accordance with GAAP consistent with the audited
Financial Statements required pursuant to SECTION 8.2(a). Such statements shall
be certified to be fairly stated in all material respects by the chief
financial or accounting officer of Option Care, subject to normal year-end
adjustments.
(c) As soon as available, but in any event not later than 30 days after
the end of each month, consolidated and consolidating unaudited balance sheets
of Option Care and its consolidated Subsidiaries as at the end of such month,
and consolidated and consolidating unaudited statements of income and expenses
for Option Care and its consolidated Subsidiaries for such month and for the
period from the beginning of the Fiscal Year to the end of such month, all in
reasonable detail, fairly presenting the financial position and results of
operation of Option Care and its consolidated Subsidiaries as at the date
thereof and for such periods, and prepared in accordance with GAAP consistent
with the audited Financial Statements required pursuant to SECTION 8.2(a). Such
statements shall be certified to be correct by the chief financial or
accounting officer of Option Care, subject to normal year-end adjustments, if
any.
(d) With each of the audited Financial Statements delivered pursuant to
SECTION 8.2(a), a certificate of the independent certified public accountants
that examined such statements to the effect that they have reviewed and are
familiar with the Loan Documents and that, in examining such Financial
Statements, they did not become aware of any fact or condition which then
constituted an Event or Event of Default under SECTION 10.20, 10.21, 10.22 or
10.23, except for those, if any, described in reasonable detail in such
certificate.
(e) With each of the annual audited and quarterly unaudited Financial
Statements delivered pursuant to SECTIONS 8.2(a) and 8.2(b), a certificate of
the chief executive or chief financial officer of Option Care (i) setting forth
in reasonable detail the calculations required to establish that each Option
Care Person was in compliance with its covenants set forth in SECTIONS 10.20,
10.21, 10.22 and 10.23 during the period covered in such Financial Statements,
and (ii) stating that, except as explained in reasonable detail in such
certificate, (A) all of the representations and warranties of each Option Care
Person contained in this Agreement and the other Loan Documents are correct and
complete as at the date of such certificate as if made at such time, (B) no
Event or Event of Default then exists or existed during the period covered by
such Financial Statements. If such certificate discloses that a representation
or
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warranty is not correct or complete, or that a covenant has not been complied
with, or that an Event or Event of Default existed or exists, such certificate
shall set forth what action the applicable Option Care Person has taken or
proposes to take with respect thereto.
(f) No sooner than 90 days prior to the beginning of, and not later than
January 30 of, each Fiscal Year (beginning with Fiscal Year commencing January
1, 2000), consolidated and consolidating projected balance sheets, statements
of income and expense, and statements of cash flow for Option Care and its
Subsidiaries on a consolidated basis as at the end of and for each month of
such Fiscal Year.
(g) Within 50 days after the end of each fiscal quarter, a report of the
Capital Expenditures of Option Care and its Subsidiaries for such quarter and,
if Option Care is no longer required to file quarterly reports on Form 10-Q
with the Securities and Exchange Commission, a statement of cash flow for
Option Care and its Subsidiaries for the period from the beginning of the then
current Fiscal Year to the end of such quarter, prepared in accordance with
GAAP consistent with the audited Financial Statements required pursuant to
SECTION 8.2(a).
(h) Promptly after their preparation, copies of any and all proxy
statements, financial statements, and reports which Option Care makes available
to its stockholders.
(i) Promptly after the filing of any regular, periodic or special
reports (other than those delivered pursuant to a different clause of this
SECTION 8.2), registration statement, prospectus or any amendment to any of the
foregoing by Option Care or any of its Subsidiaries with the Securities and
Exchange Commission, copies of each such report, registration statement,
prospectus or amendment.
(j) Promptly after filing with the PBGC, DOC, or IRS, a copy of each
annual report or other filing or notice filed with respect to each Plan of any
Option Care Person or any ERISA Affiliate with the PBGC, DOL, or IRS.
(k) Such additional information as any Lender or the Lenders' Agent may
from time to time reasonably request regarding the financial and business
affairs of any Option Care Person or any Subsidiary, including, without
limitation: (i) projections of future operations on both a consolidated and
consolidating basis; and (ii) the status and prospects of all outstanding
litigation and proceedings affecting any Option Care Person or any officer of
any Option Care Person and the terms and conditions of any settlements
involving any Option Care Person or any officer of any Option Care Person. The
obligations of the Option Care Persons pursuant to this clause (k) shall be
limited to the extent that complying with such obligations (x) is prohibited by
(i) applicable law, (ii) a governmental agency or (iii) a contractual
restriction (except that this clause (iii) shall not apply to litigation,
proceedings or settlements) or (y) would result in a complete waiver of the
attorney-client privilege with respect to the matters disclosed.
8.3 NOTICES TO LENDERS AND THE LENDERS' AGENT. Each Option Care Person
shall notify the Lenders and the Lenders' Agent in writing through the
Borrowers' Agent, of the following matters at the following times:
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(a) Immediately after becoming aware of the existence of any Event or
Event of Default.
(b) Immediately after becoming aware that the holder of any capital
stock having a value of not less than one hundred thousand dollars ($100,000)
issued by any Option Care Person has taken any legal action, or that the holder
of any Debt of any Option Care Person in excess of two hundred thousand dollars
($200,000) has given notice or taken any action, with respect to a claimed
default.
(c) Immediately after becoming aware of any material adverse change in
the Property, business, performance, operations, prospects, or condition
(financial or otherwise) of any Option Care Person.
(d) Immediately after becoming aware of any pending or threatened
action, suit, proceeding, or counterclaim by any Person, or any pending or
threatened investigation by a Public Authority, or any actual or potential
Government Offset, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
(e) Immediately after becoming aware of any pending or threatened
strike, work stoppage, material unfair labor practice claim, or other material
labor dispute affecting any Option Care Person or any of its Subsidiaries.
(f) Immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Public Authority applicable to any
Option Care Person, any Subsidiary, or their respective Properties which could
reasonably be expected to have a Material Adverse Effect.
(g) Immediately after becoming aware of any violation by any Option Care
Person of Environmental Law (which violation could reasonably be expected to
have a Material Adverse Effect) or immediately upon receipt of any notice that
a Public Authority has asserted that any Option Care Person is not in
compliance with Environmental Laws or that its compliance is being investigated.
(h) Thirty (30) days prior to any Option Care Person (x) changing its
name or the address of its chief executive office, (y) entering into any merger
or consolidation or (z) taking any other action which could result in the
Security Interest ceasing to be a first priority perfected security interest in
favor of the Lenders' Agent.
(i) Immediately after becoming aware of any ERISA Event, accompanied by
any materials required to be filed with the PBGC with respect thereto;
immediately after any Option Care Person's receipt of any notice concerning the
imposition of any withdrawal liability under Section 4042 of ERISA with respect
to a Plan; immediately upon the establishment of any Pension Plan not existing
at February 5, 1999 or the commencement of contributions by any Option Care
Person to any Pension Plan to which any Option Care Person was not contributing
at February 5, 1999; and immediately upon becoming aware of any other
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event or condition regarding a Plan or regarding compliance by any Option Care
Person or an ERISA Affiliate with ERISA, which could have a Material Adverse
Effect.
(j) Immediately upon becoming aware of any delinquent taxes of any
Option Care Person which, individually or in the aggregate, exceed two hundred
fifty thousand dollars ($250,000).
Each notice given under this SECTION 8.3 shall describe the subject
matter thereof in reasonable detail and shall set forth the action that the
Option Care Persons have taken or propose to take with respect thereto.
The foregoing shall not limit the obligations of the Option Care
Persons to give other notices under this Agreement, including without
limitation to notify the Lenders in accordance with SECTION 7.9(d) as to
disputes and claims and alleged or asserted Government Offsets.
9. GENERAL WARRANTIES AND REPRESENTATIONS.
Each Option Care Person continuously warrants and represents to the
Lenders and the Lenders' Agent, at all times during the term of this Agreement
and until all Obligations have been satisfied, that, except as hereafter
disclosed to and accepted by the Majority Lenders and the Lenders' Agent in
writing:
9.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS AGREEMENT AND THE
LOAN DOCUMENTS. Each Option Care Person has the corporate power and authority
to execute, deliver and perform this Agreement and the other Loan Documents, to
incur the Obligations, and to grant the Security Interest. Each Option Care
Person has taken all necessary corporate action (including, without limitation,
obtaining approval of its stockholders, if necessary) to authorize its
execution, delivery, and performance of this Agreement and the other Loan
Documents to which it is a party. No consent, approval, or authorization of, or
declaration or filing with, any Public Authority, and no consent of any other
Person, is required in connection with the execution, delivery, and performance
of this Agreement and the other Loan Documents by any Option Care Person,
except for those already duly obtained. This Agreement and the other Loan
Documents to which it is a party have been duly executed and delivered by each
Option Care Person and constitute the legal, valid and binding obligations of
each Option Care Person, enforceable against it in accordance with their
respective terms without defense, setoff, or counterclaim. The execution,
delivery, and performance of this Agreement and the other Loan Documents by
each Option Care Person do not and shall not conflict with, or constitute a
violation or breach of, or constitute a default under, or result in the
creation or imposition of any Lien upon the Property of any Option Care Person
or any of its Subsidiaries (except as contemplated by this Agreement and the
other Loan Documents) by reason of the terms of (a) any mortgage, lease,
agreement, or instrument to which any Option Care Person or any of its
Subsidiaries is a party or which is binding upon it, (b) any judgment, law,
statute, rule or governmental regulation applicable to any Option Care Person
or any of its Subsidiaries, or (c) the certificate or articles of incorporation
or bylaws of any Option Care Person or any of its Subsidiaries.
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9.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions of
this Agreement and the other Loan Documents create legal and valid Liens on
all the Collateral in favor of the Lenders' Agent for the benefit of the
Lenders' Agent and the Lenders, and when all proper filings, recordings, and
other actions necessary to perfect such Liens have been made or taken, such
Liens shall constitute perfected and continuing Liens on all the Collateral,
having priority over all other Liens on the Collateral and enforceable
against each Option Care Person and all other Persons.
9.3 ORGANIZATION AND QUALIFICATION. Each Option Care Person: (a) is
duly incorporated and organized and validly existing in good standing under
the laws of the state of its incorporation; (b) is qualified to do business
as a foreign corporation and is in good standing in all jurisdictions in
which the failure to be so qualified and in good standing could reasonably be
expected to result in a Material Adverse Effect; and (c) has all requisite
power and authority to conduct its business and to own its Property.
9.4 CORPORATE NAME; PRIOR TRANSACTIONS. The corporate name of each
Option Care Person is set forth on its signature page to this Agreement (or,
in the case of a Person which becomes a Borrower pursuant to an Additional
Borrower Agreement, set forth on its signature page to such Additional
Borrower Agreement), and, except as set forth on SCHEDULE 9.4, such Option
Care Person has not used any other corporate name during the past five years,
it being understood that Option Rx, Inc. is in the process of changing its
name to OptionMed, Inc. Since January 1, 1998, no Option Care Person has:
been known by or used any doing business as or fictitious name, or been a
party to any merger or consolidation, or acquired all or substantially all of
the assets of any Person, or acquired any of its Property out of the ordinary
course of business, or been subject to any event, occurrence or proceeding of
the type contemplated by any of CLAUSE (f), CLAUSE (g), CLAUSE (h), or
CLAUSE (i) of SECTION 12.1, except as set forth on SCHEDULE 9.4.
9.5 SUBSIDIARIES AND AFFILIATES. SCHEDULE 9.5 is a correct and
complete list as of the Closing Date of the name and relationship to each
Option Care Person of each and all of its Subsidiaries and other Affiliates.
Since the Closing Date, each Option Care Person has notified the Lenders as
to the name and relationship to such Option Care Person of any other Person
which became a Subsidiary or other Affiliate of such Option Care Person after
the Closing Date. The Option Care Persons or the applicable Subsidiary of
Option Care Persons are the only record and beneficial owner of all of the
shares of capital stock, partnership interests or other ownership interests
of each of the Subsidiaries, except as specified in SCHEDULE 9.5 or as
specified in such notification. There are no proxies, irrevocable or
otherwise, with respect to such shares, partnership interests or ownership
interests, and no equity securities of any of such Subsidiaries are or may
become required to be issued by reason of any options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for,
shares of any capital stock of, partnership interests or ownership interests
in any such Subsidiary, and there are no contracts, commitments,
understandings or arrangements by which any such Subsidiary is or may become
bound to issue additional shares of its capital stock, securities convertible
into or exchangeable for such shares, partnership interests or any other
ownership interests. All of such shares, partnership interests or ownership
interests so owned by each Option Care Person are owned by such Option Care
Person free and clear of any Liens other than Permitted Liens. Each
Subsidiary is (a) duly incorporated or formed, and duly organized and validly
existing in good standing under the laws of its state of incorporation set
forth on SCHEDULE 9.5, and (b) qualified to do business as a
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foreign corporation or partnership and in good standing in each jurisdiction
in which the failure to be so qualified could result in a Material Adverse
Effect.
9.6 FINANCIAL STATEMENTS AND PLAN.
(a) Option Care has delivered to the Lenders the audited
consolidated balance sheet and related consolidated statements of operations,
cash flows, and changes in stockholders equity for Option Care and its
Subsidiaries as of December 31, 1999 and for the Fiscal Year then ended,
accompanied by the report thereon of Option Care's independent certified
public accountants, KPMG Peat Marwick LLP. Option Care has also delivered to
the Lenders the Form 10-Q of Option Care for the quarterly period ended March
31, 2000. All such financial statements have been prepared in accordance with
GAAP and present accurately and fairly Option Care's financial position as at
the dates thereof and its results of operations for the periods then ended.
(b) The Latest Plan represents Option Care's best estimate of
the future financial performance of Option Care and its Subsidiaries for the
periods set forth therein. The Latest Plan has been prepared on the basis of
the assumptions set forth therein, which Option Care believes are fair and
reasonable in light of current and reasonably foreseeable business conditions.
(c) During the past three (3) years, Option Care has not
discharged or replaced its independent certified public accountants, and such
accountants have not resigned as such, except as disclosed by Option Care to
the Lenders.
9.7 TRUST REIMBURSEMENT AND SECURITY AGREEMENT. The Trust
Reimbursement and Security Agreement (as defined in the Existing Loan and
Security Agreement) has been terminated and, accordingly, such Trust
Reimbursement and Security Agreement is no longer in effect.
9.8 SOLVENCY. Each Option Care Person is Solvent prior to and after
giving effect to the making of each Loan.
9.9 DEBT. Except as disclosed in SCHEDULE 9.9, no Option Care Person
has any Debt, except as permitted by SECTION 10.12.
9.10 DISTRIBUTIONS. Except as disclosed in writing to the Lenders,
since September 30, 1998, no Distribution has been declared, paid, or made
upon or in respect of any capital stock or other securities of Option Care.
9.11 TITLE TO PROPERTY. Except for Property which an Option Care
Person leases, each Option Care Person has good, indefeasible, and
merchantable title to all of its Property including, without limitation, the
assets reflected on the most recent Financial Statements delivered to the
Lenders, except as disposed of since the date thereof in the ordinary course
of business.
9.12 ADEQUATE ASSETS. Each Option Care Person possesses adequate assets
for the conduct of its business.
9.13 REAL PROPERTY; LEASES. SCHEDULE 9.13 contains a correct and
complete list, as of the Closing Date, of all real property owned by any Option
Care Person, all leases and subleases of real or personal property by any Option
Care Person as lessee or sublessee, and all leases and subleases of real or
personal property by any Option Care Person as lessor or sublessor. Since the
Closing Date, each Option Care Person has notified the Lenders as to all
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other real property acquired by such Option Care Person, and all leases and
subleases of real property (and all leases or subleases of personal property
involving payments by any Option Care Person during any Fiscal Year in excess
of two hundred fifty thousand dollars ($250,000), entered into by any Option
Care Person after the Closing Date. Each of such leases and subleases is
valid and enforceable in accordance with its terms and is in full force and
effect and no default by any party to any such lease or sublease exists.
9.14 PROPRIETARY RIGHTS. SCHEDULE 9.14 contains a correct and
complete list, as of the Closing Date, of all the Proprietary Rights of each
Option Care Person. Since the Closing Date, each Option Care Person has
notified the Lenders as to all other Proprietary Rights of which such Option
Care Person became the owner after the Closing Date. None of the Proprietary
Rights are subject to any licensing agreement or similar arrangement except
as set forth on SCHEDULE 9.14 or in such notification. To the best knowledge
of each Option Care Person, none of such Proprietary Rights infringe on or
conflict with any other Person's Property and no other Person's Property
infringes on or conflicts with the Proprietary Rights. The Proprietary Rights
described on SCHEDULE 9.14 or in such notification constitute all of the
Property of such type necessary to the current conduct of the business of
each Option Care Person.
9.15 TRADE NAMES AND TERMS OF SALE. All trade names or styles under
which any Borrower shall sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on
SCHEDULE 9.15. Each Borrower bills each Account Debtor having outstanding
Accounts at least once each calendar month. No Borrower redates any invoice or
claim form after such invoice or claim form has been sent to an Account Debtor.
Each Lender acknowledges that if an Account Debtor which is the "primary" payor
does not pay a claim in full or denies such claim, an Option Care Person may
send a separate invoice to an Account Debtor which is a "secondary" payor.
9.16 LITIGATION. There is no pending or, to the best knowledge of any
Option Care Person, threatened action, suit, proceeding, or counterclaim by any
Person, or investigation by any Public Authority, or any basis for any of the
foregoing, which would reasonably be expected to result in a Material Adverse
Effect.
9.17 RESTRICTIVE AGREEMENTS. No Option Care Person is a party to any
contract or agreement, or is subject to any charter or other corporate
restriction, which affects its ability to execute, deliver, and perform the Loan
Documents, or which could otherwise reasonably be expected to result in a
Material Adverse Effect.
9.18 LABOR DISPUTES. As of the Closing Date: (a) there is no collective
bargaining agreement or other labor contract covering employees of any Option
Care Person or any of its Subsidiaries; (b) no such collective bargaining
agreement or other labor contract is scheduled to expire during the term of this
Agreement; (c) no union or other labor organization is seeking to organize, or
to be recognized as, a collective bargaining unit of employees of any Option
Care Person or any of its Subsidiaries or for any similar purpose; and (d) there
is no pending or, to the best knowledge of any Option Care Person, threatened
strike, work stoppage, material unfair labor practice claim, or other material
labor dispute against or affecting any Option Care Person, or any of its
Subsidiaries or their respective employees. Since the Closing Date, each Option
Care Person has notified the Lenders as to any matters covered by clause (a),
(b), (c) or (d) of the previous sentence which first arose or existed after the
Closing Date.
9.19 ENVIRONMENTAL LAWS.
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(a) Each Option Care Person and its Subsidiaries have
complied in all material respects with all Environmental Laws applicable to
its Premises and business, and no Option Care Person or any of its
Subsidiaries or any of its present Premises or operations, or any of its past
property or operations, is subject to any enforcement order from or liability
agreement with any Public Authority or private Person respecting (i)
compliance with or violation of any Environmental Law or (ii) any potential
liabilities and costs or remedial action arising from the Release or
threatened Release of a Contaminant. For purposes of this SECTION 9.19,
"Premises" means an area or areas leased by an Option Care Person or a
Subsidiary of an Option Care Person.
(b) Each Option Care Person and its Subsidiaries have
obtained all permits necessary for their current operations under
Environmental Laws, and all such permits are valid and each Option Care
Person and its Subsidiaries are in compliance with all terms and conditions
of such permits.
(c) No Option Care Person or any of its Subsidiaries, or, to
the best knowledge of any Option Care Person, any of its predecessors in
interest, has in violation of applicable law stored, treated or disposed of
any Contaminant on any Premises, as defined pursuant to 40 CFR Part 261 or
any equivalent Environmental Law.
(d) No Option Care Person or any of its Subsidiaries has
received any summons, complaint, order or similar written notice that it is
not currently in compliance with, or that any Public Authority is
investigating its compliance with, any Environmental Laws or that it is or
may be liable to any other Person as a result of a Release or threatened
Release of a Contaminant.
(e) To the best knowledge of each Option Care Person, none of
the present or past operations of any Option Care Person or any of its
Subsidiaries is the subject of any investigation by any Public Authority
evaluating whether any remedial action is needed to respond to a Release or
threatened Release of a Contaminant.
(f) To the best knowledge of each Option Care Person there is
not now, nor has there ever been on or in the Premises:
(i) any underground storage tanks or surface impoundments,
(ii) any asbestos-containing material, or
(iii) any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electrical transformers or other equipment.
(g) No Option Care Person or any of its Subsidiaries has
filed any notice under any applicable requirement of Environmental Law
reporting a spill or accidental and unpermitted release or discharge of a
Contaminant into the environment.
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(h) No Option Care Person or any of its Subsidiaries has
entered into any negotiations or settlement agreements with any Person
(including, without limitation, the prior owner of its property) imposing
material obligations or liabilities on any Option Care Person or any of its
Subsidiaries with respect to any remedial action in response to the Release
of a Contaminant or environmentally related claim.
(i) None of the products manufactured, distributed or sold by
any Option Care Person or any of its Subsidiaries contains
asbestos-containing material.
(j) No Environmental Lien has attached to any Premises of any
Option Care Person or any of its Subsidiaries.
9.20 HEALTH CARE LAWS.
(a) Each Option Care Person and its Subsidiaries have
complied in all material respects with all Health Care Laws applicable to its
business, and no Option Care Person or any of its Subsidiaries or any of its
present operations, nor its past operations, is subject to any action, order
from or agreement respecting (i) to the best knowledge of each Option Care
Person, compliance with any Health Care Law or (ii) to the best knowledge of
each Option Care Person, any potential liabilities under Health Care Laws.
(b) Each Option Care Person and its Subsidiaries have
obtained all licenses, permits, accreditations, certifications and approvals
necessary for their current operations under Health Care Laws, and all such
licenses, permits, accreditations, certifications and approvals are in good
standing, and each Option Care Person and its Subsidiaries are in compliance
with all material terms and conditions thereof.
(c) No Option Care Person or any of its Subsidiaries has
received any summons, complaint, subpoena, order or other notice that it is
not currently in compliance with any Health Care Laws or that it is or may be
liable to any other Person under or in connection with any Health Care Laws
(unless, with respect to any such order (which is not a judicial order) or
any such other notice such Option Care Person is in the process of
remediating such noncompliance in accordance with any applicable cure or
remediation plan or period set forth in such order or notice).
(d) To the best knowledge of each Option Care Person, none of
the present or past operations of any Option Care Person or any of its
Subsidiaries is the subject of any investigation by any Public Authority
concerning alleged or potential violations of Health Care Laws.
(e) No Option Care Person or any of its Subsidiaries has
entered into any negotiations or settlement agreements with any Person which
impose or could impose material obligations or liabilities on any Option Care
Person or any of its Subsidiaries with respect to any Health Care Law.
9.21 NO VIOLATION OF LAW. No Option Care Person is in violation of
any law, statute, regulation, ordinance, judgment, order, or decree
applicable to it which violation could reasonably be expected to result in a
Material Adverse Effect.
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9.22 NO DEFAULT. No Option Care Person is in default with respect to
any note, indenture, loan agreement, mortgage, lease, deed, or other agreement
to which any Option Care Person is a party or bound, which default could
reasonably be expected to result in a Material Adverse Effect.
9.23 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all respects with the
applicable provisions of ERISA, the Code and other federal or state law,
except where any failure to comply would not reasonably be expected to have a
Material Adverse Effect. Each Plan which is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS
or is maintained in the form of a standardized prototype plan which has
received a favorable opinion letter or a favorable notification letter from
the IRS, and to the best knowledge of each Option Care Person, nothing has
occurred which would materially affect its reliance on such determination
letter, opinion letter or notification letter, except where any failure to
rely would not reasonably be expected to have a Material Adverse Effect. Each
Option Care Person and each ERISA Affiliate have made all required
contributions to any Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code, except where any failure to contribute
would not reasonably be expected to have a Material Adverse Effect, has been
made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Public
Authority, with respect to any Plan which has resulted or could reasonably be
expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect
to any Plan which has resulted in or could reasonably be expected to have a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any material unfunded liability; (iii) no
Option Care Person or any ERISA Affiliate has incurred, or reasonably expects
to incur, any material liability under Title IV of ERISA with respect to any
Pension Plan (other than premiums due and not delinquent under Section 4007
of ERISA); (iv) no Option Care Person or any ERISA Affiliate has incurred, or
reasonably expects to incur, any material liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA, would
result in such liability) under Section 4201 or 4243 of ERISA with respect to
a Multiemployer Plan; and (v) no Option Care Person or any ERISA Affiliate
has engaged in a transaction that could subject any Person to Section 4069 or
4212(c) of ERISA.
9.24 TAXES. Each Option Care Person and its Subsidiaries have filed all
tax returns and other reports required to be filed and have paid all Taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets that are otherwise due and payable, except
for those Taxes, assessments, fees and other governmental charges which are
being contested in good faith by appropriate proceedings diligently pursued.
9.25 USE OF PROCEEDS. None of the transactions contemplated in this
Agreement or any other Loan Document (including the use of proceeds from the
Loans) shall violate or result in the violation of any law, rule or regulation,
including Section 7 of the
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Securities Exchange Act of 1934, as amended, or any regulations issued
pursuant thereto, including the regulations of the Board of Governors of the
Federal Reserve System ("Federal Reserve Board"), 12 CFR, Chapter II. No
Option Care Person owns or intends to carry or purchase any "margin stock"
within the meaning of the regulations of the Federal Reserve Board. The
Option Care Persons shall use the proceeds of Term Loans solely for
acquisitions permitted by SECTION 10.19. Except as permitted by SECTION
10.19, no Option Care Person has used proceeds of the Loans to invest in any
Restricted Investments.
9.26 PRIVATE OFFERINGS. No Option Care Person has, directly or
indirectly, offered the Loans for sale to, or solicited offers to buy part
thereof from, or otherwise approached or negotiated with respect thereto with
any prospective purchaser other than the Lenders. No Option Care Person or
any Person acting on its behalf has offered or shall offer the Loans or any
part thereof or any similar securities for issue or sale to or solicit any
offer to acquire any of the same from anyone so as to bring the issuance
thereof within the provisions of Section 5 of the Securities Act of 1933, as
amended.
9.27 BROKER'S FEES. No Person is entitled to any brokerage or
finder's fee with respect to the transactions described in this Agreement.
9.28 GOVERNMENT REGULATION. No Option Care Person or any of its
Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Investment Company Act of
1940, or any other Requirement of Law that limits its ability to incur
indebtedness or its ability to enter into or consummate the transactions
contemplated in this Agreement and the other Loan Documents.
9.29 NO MATERIAL ADVERSE CHANGE. No material adverse change has
occurred in the Property, business, performance, operations, prospects or
condition (financial or otherwise) of any Option Care Person since December
31, 1999.
9.30 DISCLOSURE. Neither this Agreement nor any Borrowing Base
Certificate, report, notice, document or statement furnished to any Lender or
the Lenders' Agent by or on behalf of any Option Care Person under this
Agreement or any other Loan Document contains any untrue statement of a
material fact or omits to state any material fact necessary in order to make
the statements contained herein or therein not misleading.
9.31 FIXED CHARGE COVERAGE. As of December 31, 1998, the ratio of
(a) the sum of (i) EBITDA for the four consecutive fiscal quarters ending on
December 31, 1998, plus (ii) the Specified Bad Debt Expense Amount for such
four fiscal quarters TO (b) the sum of (i) Interest Expense for such four
fiscal quarters, (ii) Capital Expenditures of Option Care and its
Subsidiaries during such four fiscal quarters, (iii) payments by any Option
Care Person during such four fiscal quarters in respect of earnout
obligations related to the buyback of franchises by any Option Care Person,
(iv) actual payments of taxes during such four fiscal quarters, and (v)
principal payments which any Option Care Person was required to make on Debt
for borrowed money during such four fiscal quarters, which Debt had an
original term of at least one year, was not less than 1.1 to 1.
10. AFFIRMATIVE AND NEGATIVE COVENANTS. Each Option Care Person
covenants that, so long as any of the Obligations remain outstanding or this
Agreement is in effect:
10.1 TAXES AND OTHER OBLIGATIONS. Each Option Care Person and
each of its Subsidiaries shall: (a) file when due all tax returns and other
reports which it is required to file, pay, or provide for the payment, when
due, of all Taxes, fees, assessments and other governmental charges against
it or upon its Property, income, and franchises, make all required
72
withholding and other tax deposits, and establish adequate reserves for the
payment of all such items, and shall provide to the Lenders and the Lenders'
Agent, upon request, satisfactory evidence of its timely compliance with the
foregoing; and (b) pay when due all Debt owed by it and perform and discharge
in a timely manner all other obligations undertaken by it; PROVIDED, HOWEVER,
that each Option Care Person and its Subsidiaries need not pay any tax, fee,
assessment, governmental charge, or Debt, or perform or discharge any other
obligation, that it is contesting in good faith by appropriate proceedings
diligently pursued.
10.2 CORPORATE EXISTENCE AND GOOD STANDING. Each Option Care
Person shall maintain its corporate existence and its qualification and good
standing in all states necessary to conduct its business and own its
Property, except where the failure to remain qualified and in good standing
could not reasonably be expected to result in a Material Adverse Effect, and
shall obtain and maintain all material licenses, permits, franchises and
governmental authorizations necessary to conduct its business and own its
Property.
10.3 COMPLIANCE WITH LAW AND AGREEMENTS. Each Option Care Person
and each of its Subsidiaries shall comply in all material respects with the
terms and provisions of each judgment, law, statute, rule, and governmental
regulation applicable to it and each contract, mortgage, lien, lease,
indenture, order, instrument, agreement, or document to which it is a party
or by which it is bound.
10.4 MAINTENANCE OF PROPERTY AND INSURANCE. Each Option Care
Person and each of its Subsidiaries shall: (a) maintain all of its Property
necessary and useful in its business in good operating condition and repair,
ordinary wear and tear excepted; and (b) in addition to the insurance
required by SECTION 7.7, maintain with financially sound and reputable
insurers such other insurance with respect to its Property and business
against casualties and contingencies of such types and in such amounts as is
customary for Persons of established reputation engaged in the same or a
similar business and similarly situated, naming the Lenders' Agent, at its
request, as additional insured under each such policy.
10.5 ENVIRONMENTAL LAWS. Each Option Care Person shall conduct
its business in full compliance with all Environmental Laws applicable to it,
including, without limitation, those relating to the generation, handling,
use, storage, and disposal of Contaminants. Each Option Care Person shall
take (and shall cause each of its Subsidiaries to take) prompt and
appropriate action to respond to and remediate any non-compliance with
Environmental Laws, and shall regularly report to the Lenders' Agent on such
response and remediation. Without limiting the generality of the foregoing,
whenever any Option Care Person gives any notice pursuant to SECTION 8.3(g)
the Option Care Persons shall, at the request of the Majority Lenders and the
Lenders' Agent and the expense of the Option Care Persons: (a) cause an
independent environmental engineer acceptable to the Lenders and the
Borrowers' Agent to conduct such tests of the site where the noncompliance or
alleged non-compliance with Environmental Laws has occurred and to prepare
and deliver to the Lenders a report setting forth the results of such tests,
a proposed plan for responding to any environmental problems described
therein, and an estimate of the costs thereof; and (b) provide to the Lenders
a supplemental report of such engineer whenever the scope of the
environmental problems, or the Option Care Person's response thereto or the
estimated costs thereof, shall change.
10.6 HEALTH CARE LAWS. Each Option Care Person and each of its
Subsidiaries shall conduct its business in all material respects in
compliance with all Health Care Laws applicable to it. Each Option Care
Person and its Subsidiaries shall take prompt and appropriate action to
respond to and remediate any non-compliance with any Health Care Law. Each
Option
73
Care Person and each of its Subsidiaries shall promptly report to the
Lender on any such non-compliance and any such response and remediation in
each case if such non-compliance or such response and remediation is
reasonably likely to have a Material Adverse Effect.
10.7 ERISA. Each Option Care Person shall cause each Plan, which
has been designated to be so, to be qualified within the meaning of Section
401(a) of the Code and to be administered in all respects in compliance with
Section 401(a) of the Code, except where any such failure to comply would not
reasonably be expected to have a Material Adverse Effect. Each Option Care
Person shall cause each Plan to be administered in all respects in compliance
with ERISA, except where any such failure to comply would not reasonably be
expected to have a Material Adverse Effect.
10.8 MERGERS, CONSOLIDATIONS OR SALES. Without the prior written
consent of the Majority Lenders and the Lenders' Agent, no Option Care Person
or any of its Subsidiaries shall enter into any transaction of merger,
reorganization, or consolidation, or transfer, sell, assign, lease, or
otherwise dispose of all or any part of its Property, or wind up, liquidate
or dissolve, or acquire or purchase any Person or substantially all of the
assets of any Person or agree to do any of the foregoing, except: (i) sales
of Inventory in the ordinary course of its business; (ii) sales of Equipment
permitted under SECTION 7.12; and (iii) the grant or termination of a
franchise (provided that acquisitions of franchises are covered by SECTION
10.19).
10.9 DISTRIBUTIONS. Except as permitted by SECTION 10.14, no
Option Care Person or any of its Subsidiaries shall directly or indirectly
declare or make, or incur any liability to make, any Distribution, except
Distributions to a Borrower by a Subsidiary wholly owned by such Borrower.
10.10 TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT. No Option
Care Person or any of its Subsidiaries shall enter into any transaction after
the Closing Date which is reasonably likely to have a Material Adverse Effect.
10.11 GUARANTIES. No Option Care Person or any of its Subsidiaries
shall make, issue or become liable on any Guaranty, except Guaranties in
favor of the Lenders' Agent and endorsements of instruments for deposit, and
except for Guaranties of Debt otherwise expressly permitted hereunder.
10.12 DEBT. No Option Care Person or any of its Subsidiaries shall
incur or maintain any Debt, other than: (a) the Obligations; (b) trade
payables and contractual obligations to suppliers and customers incurred in
the ordinary course of business; (c) other Debt existing on the Closing Date
and reflected (x) in the financial statements contained in Option Care's Form
10-Q for the quarterly period ending September 30, 1998, or (y) in SCHEDULE
9.9; (d) accruals required in connection with any Plan; (e) any "earnout
arrangements" pertaining to the purchase of a business by any Option Care
Person; and (f) other unsecured Debt in an aggregate amount not to exceed two
hundred fifty thousand dollars ($250,000) at any one time outstanding.
10.13 PREPAYMENT. No Option Care Person or any of its Subsidiaries
shall voluntarily prepay any Debt, except: (a) prepayments of the Obligations
in accordance with their terms; (b) prepayments not exceeding two hundred
fifty thousand dollars ($250,000) in the aggregate from and after the Closing
Date; (c) otherwise with the prior written consent of the Majority Lenders.
10.14 TRANSACTIONS WITH AFFILIATES. Except as set forth below, no
Option Care Person or any of its Subsidiaries shall: (a) sell, transfer,
distribute, or pay any money or Property to any Affiliate, (b) lend or
advance money or Property to any Affiliate, (c) invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or
indebtedness or any Property
74
of any Affiliate, or (d) become liable on any Guaranty of the indebtedness,
dividends, or other obligations of any Affiliate. Notwithstanding the
foregoing, if no Event of Default has occurred and is continuing, each Option
Care Person and its Subsidiaries may engage in transactions with Affiliates
(including the payment by Option Care of (i) an annual consulting fee of two
hundred thousand dollars ($200,000) to EJ Financial Enterprises, Inc.
pursuant to the consulting agreement between Option Care and EJ Financial
Enterprises, Inc. and (ii) a salary of two hundred thousand dollars
($200,000) to ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇ in his capacity as Chairman of Option Care)
in the ordinary course of business in amounts and upon terms fully disclosed
to the Lenders' Agent and no less favorable to each Option Care Person and
its Subsidiaries than would obtain in a comparable arm's length transaction
with a third party who is not an Affiliate.
10.15 BUSINESS CONDUCTED. No Option Care Person or any of its
Subsidiaries shall engage, directly or indirectly, in any line of business
other than the businesses in which such Option Care Person and its
Subsidiaries are engaged on the Closing Date.
10.16 LIENS. No Option Care Person or any of its Subsidiaries
shall create, incur, assume, or permit to exist any Lien on any Property now
owned or hereafter acquired by any of them, except Permitted Liens.
10.17 SALE AND LEASEBACK TRANSACTIONS. Except with the prior
written consent of the Majority Lenders, no Option Care Person or any of its
Subsidiaries shall, directly or indirectly, enter into any arrangement with
any Person providing for such Option Care Person or any such Subsidiary to
lease or rent Property that such Option Care Person or Subsidiary has or
shall sell or otherwise transfer to such Person.
10.18 NEW SUBSIDIARIES. Except with the prior written consent of
the Majority Lenders, no Option Care Person shall, directly or indirectly,
organize or acquire any Subsidiary other than those listed on SCHEDULE 9.5.
10.19 RESTRICTED INVESTMENTS. Except with the prior written
consent of the Majority Lenders, no Option Care Person or any of its
Subsidiaries shall make any Restricted Investment; PROVIDED that without such
consent, one or more Option Care Persons may acquire one or more franchisees
of any Option Care Person if (i) each such franchisee is such a franchisee on
the Closing Date, (ii) the aggregate amount of consideration paid or payable
for the acquisition of any such franchisee (whether at the time of such
acquisition or at any other time) is not more than five hundred thousand
dollars ($500,000), and (iii) the aggregate amount of consideration paid or
payable for all acquisitions contemplated by this proviso (whether at the
time of any such acquisition or any other time) is not more than one million
dollars ($1,000,000).
10.20 CAPITAL EXPENDITURES. Except with the prior written consent
of the Majority Lenders, the aggregate amount of all Capital Expenditures by
Option Care and its Subsidiaries during any calendar year (beginning with
January 1, 1999) shall not exceed one million dollars ($1,000,000).
10.21 FIXED CHARGE COVERAGE. As of the last day of each fiscal
quarter of Option Care, Option Care shall maintain a ratio of
(a) the sum of the Operating Cash Flow for such four fiscal
quarters TO
(b) the sum of (i) the Interest Expense for such four fiscal
quarters, (ii) payments by any Option Care Person during such four fiscal
quarters in respect of earnout obligations related to the buyback of
franchises by any Option Care Person, (iii) actual payments of taxes during
such four fiscal quarters, and (iv) principal payments which any Option Care
75
Person was required to make on Debt for borrowed money during such four
fiscal quarters, which Debt had an original term of at least one year, of not
less than one and three-quarters (1.75) to one (1).
10.22 DEBT RATIO. Option Care shall not permit the ratio of debt
of Option Care on a consolidated basis (determined in accordance with GAAP)
to Adjusted Tangible Net Worth to exceed five (5) to one (1).
10.23 ROLLING 4-QUARTER TOTAL DEBT TO OPERATING CASH FLOW RATIO.
Option Care shall not permit the Rolling 4-Quarter Total Debt to Operating
Cash Flow Ratio as of the end of any fiscal quarter of Option Care to exceed
two and one-half (2.5) to one (1).
10.24 LOAN DOCUMENTS. No Option Care Person shall enter into or
permit to exist any amendment, modification, termination, supplement,
compromise, satisfaction, release, discharge or waiver of any Loan Document
without the prior written consent of the Lender. Except as otherwise provided
in this Agreement, no Option Care Person shall sell, assign, pledge or
otherwise transfer any of its rights or obligations under any Loan Document
without the prior written consent of the Lender.
10.25 FURTHER ASSURANCES. Each Option Care Person shall execute
and deliver, or cause to be executed and delivered, to each Lender and the
Lenders' Agent such documents, financing statements, instruments and
agreements, and shall take or cause to be taken such actions, as such Lender
or the Lenders' Agent may, from time to time, request to carry out the terms
and conditions of this Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, following the occurrence and during
the continuance of an Event of Default, the Lenders' Agent may in its
discretion request from time to time (and upon the direction of the Majority
Lenders, the Lenders' Agent shall request from time to time), the Borrowers'
Agent to obtain, and from and after any such request (except to the extent
prohibited by applicable law or regulation) the Option Care Persons shall
cooperate in good faith with the Lenders and the Lenders' Agent in order to
obtain, one or more court orders directing one or more Government Account
Debtors to make payments on Accounts directly to the Lenders' Agent.
11. CONDITIONS PRECEDENT.
11.1 CONDITIONS PRECEDENT TO MAKING OF INITIAL LOANS. The Lenders
shall not be obligated to make the initial Loans on or after the Closing
Date, unless the following conditions precedent have been satisfied in a
manner satisfactory to the Lenders and the Lenders' Agent:
(a) REPRESENTATIONS OF EACH OPTION CARE PERSON AND
WARRANTIES; COVENANTS. The representations and warranties contained in this
Agreement and the other Loan Documents shall be true, correct and complete;
each Option Care Person shall have performed and complied with all covenants,
agreements, and conditions contained herein and in the other Loan Documents
which are required to have been performed or complied with.
(b) SECRETARY'S CERTIFICATE. Each Lender shall have
received a certificate of the Secretary or Assistant Secretary of each Option
Care Person certifying (i) the certificate of incorporation referred to in
SECTION 11.1(c), (ii) the by-laws of such Option Care Person, (iii) a copy of
the resolutions of the board of directors of such Option Care Person
approving this Agreement and the other Loan Documents and the transactions
contemplated
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hereby and thereby and (iv) the names and true signatures of the officers of
such Option Care Person authorized to sign the Loan Documents (on which
certificate each Lender and the Lenders' Agent conclusively may rely until
such time as such Lender and the Lenders' Agent receives a revised
certificate meeting the requirements hereof).
(c) CERTIFICATE OF INCORPORATION. Each Lender shall have
received the certificate of incorporation of each Option Care Person
certified by the Secretary of State of the state of incorporation of such
Person.
(d) LEGAL OPINIONS. Each Lender shall have received legal
opinions from Heroux, Clingen, Callow, Wolfe and ▇▇▇▇▇▇▇, counsel to Option
Care Persons, in form and substance satisfactory to the Lenders and their
counsel.
(e) UCC MATTERS. Each Lender shall have received
acknowledgment copies of UCC financing statements filed on or before the date
hereof (including, if requested by any Lender, amendments or assignments of
existing UCC financing statements), or other similar instruments or
documents, as may be necessary or, in the opinion of the Lenders, desirable
under the UCC or any comparable law of all appropriate jurisdictions to
perfect the Lenders' Agent's Liens.
(f) FINANCIAL STATEMENTS AND BUSINESS PLAN. Each Lender
shall have received Option Care's audited financial statements for Fiscal
Year 1999, and Option Care's business plan for Fiscal Year 2000, in each case
in form and substance satisfactory to the Lenders.
(g) PLEDGE AGREEMENTS. Each Lender shall have received
amendments and restatements of the pledge agreements delivered by Option
Care, Rehab Options, Inc. and Option Care Enterprises, Inc. pursuant to the
Existing Loan and Security Agreement, each in form and substance satisfactory
to the Lenders (such amended and restated pledge agreements, as amended,
amended and restated or otherwise modified from time to time, being referred
to individually as a "PLEDGE AGREEMENT" and collectively as the "PLEDGE
AGREEMENTS"), signed by the parties thereto, whereby such pledgors pledge to
the Lenders' Agent all of the capital stock or membership interests, as the
case may be, issued by the Borrowers (other than Option Care). The Lenders'
Agent shall have received all certificates representing the shares of stock
pledged under the Pledge Agreements together with undated, signed stock
powers, in form and substance satisfactory to the Lenders, relating thereto.
(h) TRADEMARK SECURITY AGREEMENTS. Each Lender shall have
received an amendment and restatement of the trademark security agreements
provided pursuant to the Existing Loan and Security Agreement by Option Care,
Inc., a California corporation, Management by Information, Inc., and Cordesys
Healthcare Management, Inc., in form and substance satisfactory to the
Lenders (such amended and restated trademark security agreements, as amended,
amended and restated or otherwise modified from time to time, being referred
to individually as a "TRADEMARK SECURITY AGREEMENT" and collectively as the
"TRADEMARK SECURITY AGREEMENTS"), signed by the parties thereto.
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(i) LITIGATION. There shall exist no action, suit, investigation,
litigation, or proceeding pending or to the knowledge of any Option Care Person
threatened in any court or before any arbitrator or governmental
instrumentality that in the reasonable judgment of any Lender (x) would
reasonably be expected to have a material adverse effect on the business,
condition (financial or otherwise), operations, performance, or properties of
any Option Care Person or which could impair the ability of any Option Care
Person to perform satisfactorily under this Agreement or (y) would reasonably
be expected to materially and adversely affect the transactions contemplated
hereby. Each Lender shall be satisfied with the prospects of all outstanding
litigation and proceedings affecting any Option Care Person and the terms and
conditions of any settlements involving any Option Care Person.
(j) CORPORATE STRUCTURE. Each Lender shall be satisfied with each Option
Care Person's corporate structure and ownership of Accounts and other assets.
(k) BLOCKED ACCOUNT AGREEMENT. Each Lender shall have received an
amendment and restatement of the Blocked Account Agreement delivered in
connection with the Existing Loan and Security Agreement, signed by the parties
thereto, which shall be the Amended and Restated Lockbox/Blocked Account
Agreement among Northern, the Lenders' Agent and the Option Care Persons.
(l) FACILITY FEE. The Lenders' Agent shall have received payment of the
Facility Fee.
(m) PAYMENT OF FEES AND EXPENSES. Option Care shall have paid, to the
extent invoiced, the fees and expenses of the Lenders' Agent's outside counsel,
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, and all other fees and expenses of the Lenders incurred
in connection with any of the Loan Documents and the transactions contemplated
thereby (including the allocated costs of in-house counsel for non-duplicative
work).
(n) REQUIRED APPROVALS. The Lenders shall have received certified copies
of all consents or approvals of any Public Authority or other Person which any
Lender determines is required in connection with the transactions contemplated
by this Agreement.
(o) NO MATERIAL ADVERSE CHANGE. No material adverse change shall have
occurred, as determined by the Lenders in their sole discretion, in the
business, operations, profits, prospects, or financial condition of any Option
Care Person or in the Collateral since February 29, 2000, and Option Care shall
have met, from March 1, 2000 to the Closing Date, the Latest Plan, and the
Lenders shall have received a certificate from Option Care to such effect.
(p) PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement, all exhibits and schedules to this
Agreement, and all documents contemplated in connection with this Agreement,
shall be satisfactory in form and substance to the Lenders and their respective
counsel.
(q) EXCESS AVAILABILITY. Upon making the first Revolving Loans on or
after the Closing Date (including Revolving Loans made to finance any fee or
otherwise as
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reimbursement for fees, costs and expenses then payable under this Agreement)
and with all obligations of the Option Care Persons current, the Availability
shall exist in an amount of at least three million five hundred thousand
dollars ($3,500,000).
(r) DELIVERY OF DOCUMENTS. The Option Care Persons shall have delivered,
or caused to be delivered, to each Lender such other certifications, good
standing certificates, documents (including, without limitation, evidence of
the federal taxpayer identification number of each Option Care Person),
instruments, promissory notes, and agreements as such Lender may request in
connection herewith, duly executed by all parties thereto other than such
Lender, and in form and substance satisfactory to such Lender and its counsel.
11.2 CONDITIONS PRECEDENT TO EACH LOAN. The obligation of the Lenders to
make each Loan shall be subject to the conditions precedent that:
(a) on the date of any such Loan the following statements shall be
true, and the acceptance by any Borrower of any extension of credit shall be
deemed to be a statement, representation and warranty to the effect that (i)
the representations and warranties contained in this Agreement and the other
Loan Documents are correct in all material respects on and as of the date of
such Loan as though made on and as of such date, except to the extent the
Lenders' Agent and the Lenders have been notified by such Borrower that any
representation or warranty is not correct and the Majority Lenders have
explicitly waived in writing compliance with such representation or warranty
and (ii) no Event or Event of Default has occurred and is continuing, or would
result from such Loan; and
(b) the Lender shall have received the most recent Borrowing Base
Certificate delivered pursuant to SECTION 7.8 by 9:00 a.m., Chicago time, on
the date on which such Loan is made.
12. DEFAULT.
12.1 EVENTS OF DEFAULT. It shall constitute an event of default ("EVENT OF
DEFAULT") if any one or more of the following shall occur for any reason:
(a) any Option Care Person shall (i) fail to make payment of principal
on any Loan when due, or (ii) fail to make payment of interest, fees or any
other Obligation when due (and, in the case of this clause (ii), such failure
shall continue for a period of two (2) days after the date on which the
Lenders' Agent notifies any Option Care Person of any such failure);
(b) any representation or warranty made (or deemed made pursuant to
SECTION 11.2) by any Option Care Person in this Agreement, any of the other
Loan Documents, any Financial Statement, or any certificate furnished by any
Option Care Person or any Subsidiary at any time to any Lender or the Lenders'
Agent shall prove to be untrue in any material respect as of the date when
made, deemed made, or furnished;
(c) any Option Care Person shall (i) fail to comply with any of the
covenants set forth in any of SECTIONS 7.1 through 7.19, 8.1, 8.2, 8.3, 10.6,
10.8 through 10.24, or (ii) fail to comply with any of the covenants set forth
in any of SECTIONS 10.1, 10.2, 10.3, 10.4(b),
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10.5, 10.7, or 10.25 (if such failure specified this clause (ii) shall have
existed for more than five (5) days after the earlier to occur of (x) the date
that any Option Care Person discovers, or reasonably should have discovered,
any such failure and (y) the date on which the Lenders' Agent notifies any
Option Care Person of any such failure); PROVIDED, HOWEVER, that to the extent
that any covenant in SECTION 8.2 or 8.3 specifies the number of days within
which any Option Care Person must comply with any reporting requirement
therein, such failure shall have existed for the number of days specified in
such covenant, plus three (3) days;
(d) any Option Care Person shall fail to comply with any of the other
terms, covenants or agreements contained in this Agreement, the other Loan
Documents, or any other agreement entered into at any time to which any Option
Care Person and the Lenders' Agent are party and such failure shall continue
for a period of ten (10) days after the earlier to occur of (i) the date on
which the Lenders' Agent notifies any Option Care Person of any such failure
and (ii) the date on which any Option Care Person discovers, or reasonably
should have discovered, any such failure, or if any such Loan Document or
agreement shall terminate (other than in accordance with its terms or with the
written consent of the Majority Lenders and the Lenders' Agent) or become void
or unenforceable without the written consent of the Majority Lenders and the
Lenders' Agent; or any Person shall contest in any manner the validity or
enforceability of this Agreement or any of the other Loan Documents or shall
deny that any Option Care Person has any further liability or obligation
thereunder;
(e) any Option Care Person shall fail to make any payment when due in
respect of any Debt (other than the Obligations) in an aggregate amount in
excess of two hundred fifty thousand dollars ($250,000) beyond any period of
grace or cure provided with respect thereto;
(f) any Option Care Person or any Subsidiary of any Option Care Person
shall: (i) file a voluntary petition in bankruptcy or file a voluntary petition
or an answer or otherwise commence any action or proceeding seeking
reorganization, arrangement or readjustment of its debts or for any other
relief under the Federal Bankruptcy Code, as amended, or under any other
bankruptcy or insolvency act or law, state or federal, now or hereafter
existing, or consent to, approve of, or acquiesce in, any such petition, action
or proceeding; (ii) apply for or acquiesce in the appointment of a receiver,
assignee, liquidator, sequestrator, custodian, trustee or similar officer for
it or for all or any part of its Property; (iii) make an assignment for the
benefit of creditors; or (iv) admit its inability, or be unable generally, to
pay its debts as they become due;
(g) an involuntary petition shall be filed or an action or proceeding
otherwise commenced seeking reorganization, arrangement or readjustment of the
debts of any Option Care Person or any Subsidiary of any Option Care Person or
for any other relief under the Federal Bankruptcy Code, as amended, or under
any other bankruptcy or insolvency act or law, state or federal, now or
hereafter existing, and thirty (30) days shall pass from the date of such
filing or commencement;
(h) a receiver, assignee, liquidator, sequestrator, custodian, trustee
or similar officer for any Option Care Person or any Subsidiary of any Option
Care Person or for all
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or any part of their Property shall be appointed involuntarily; or a warrant of
attachment, execution or similar process shall be issued against any part of
the Property of any Option Care Person or any Subsidiary of any Option Care
Person;
(i) any Option Care Person shall file a certificate of dissolution under
applicable state law or shall be liquidated, dissolved or wound-up or shall
commence or have commenced against it any action or proceeding for dissolution,
winding-up or liquidation, or shall take any corporate action in furtherance
thereof;
(j) all or any material part of the Property of any Option Care Person
shall be nationalized, expropriated or condemned, seized or otherwise
appropriated, or custody or control of such Property or of any Option Care
Person shall be assumed by any Public Authority or any court of competent
jurisdiction at the instance of any Public Authority and, in either case, the
result thereof would have a Material Adverse Effect, except where contested in
good faith by proper proceedings diligently pursued where a stay of enforcement
is in effect;
(k) one or more final judgments for the payment of money aggregating in
excess of two hundred fifty thousand dollars ($250,000) shall be rendered
against any Option Care Person or any Subsidiary of any Option Care Person and
such Option Care Person or such Subsidiary shall fail to discharge the same
within thirty (60) days from the date of notice of entry thereof or to appeal
therefrom;
(l) any loss, theft, damage or destruction of any item or items of
Collateral occurs which: (i) materially and adversely affects the operation of
any Option Care Person's business or (ii) is material in amount and is not
adequately covered by insurance;
(m) any event or condition shall occur or exist with respect to a Plan
that could, in the reasonable judgment of the Majority Lenders, subject any
Option Care Person or any Subsidiary of any Option Care Person to any tax,
penalty or liability under ERISA, the Code or otherwise which in the aggregate
is material in relation to the business, performance, operations, Property,
prospects or condition (financial or otherwise) of any Option Care Person;
(n) there occurs any material adverse change in the business,
performance, operations, Property, prospects or condition (financial or
otherwise) of any Option Care Person, which change would reasonably be expected
to have a Material Adverse Effect; or
(o) any Option Care Person shall: (i) withdraw or attempt to withdraw
any funds or other items on deposit in any Lockbox or any Blocked Account; (ii)
direct or attempt to direct a Blocked Account Bank not to make, or to cease
making, transfers of any funds or other items (x) from a Lockbox to a Blocked
Account, or (y) from a Blocked Account to the Lenders' Agent or at the
direction of the Lenders' Agent; or (iii) without limiting the foregoing, give
a "Revocation Order" (as defined in the applicable Blocked Account Agreement)
to a Blocked Account Bank.
13. REMEDIES.
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(a) If an Event of Default has occurred and is continuing, the Lenders'
Agent may in its discretion, and shall, at the direction of the Majority
Lenders, without notice to or demand on any Option Care Person, do one or more
of the following at any time or times and in any order: (i) reduce the
Availability or one or more of the elements thereof; (ii) restrict the amount
of or refuse to permit Loans to be made; (iii) terminate this Agreement; (iv)
declare any or all Obligations to be immediately due and payable (PROVIDED,
HOWEVER, that upon the occurrence of any Event of Default described in SECTIONS
12.1(f), 12.1(g), 12.1(h) or 12.1(i), all Obligations shall automatically
become immediately due and payable); and (v) pursue any other rights and
remedies under the Loan Documents and applicable law.
(b) If an Event of Default has occurred and is continuing: (i) the
Lenders' Agent shall have for the benefit of the Lenders and the Lenders'
Agent, in addition to all other rights of the Lenders and the Lenders' Agent,
the rights and remedies of a secured party under the UCC; (ii) the Lenders'
Agent may, at any time, take possession of the Collateral and keep it on the
Premises of any Option Care Person, at no cost to the Lenders' Agent or the
Lenders, or remove any part of it to such other place or places as the Lenders'
Agent may desire, and each Option Care Person shall, upon the demand of the
Lenders' Agent, at the expense of the Option Care Persons, assemble the
Collateral and make it available to the Lenders' Agent at a place reasonably
convenient to the Lenders' Agent; and (iii) the Lenders' Agent may sell and
deliver any Collateral at public or private sales, for cash, upon credit or
otherwise, at such prices and upon such terms as the Lenders' Agent deems
advisable, in its sole discretion, and may, if the Lenders' Agent deems it
reasonable, postpone or adjourn any sale of the Collateral by an announcement
at the time and place of sale or of such postponed or adjourned sale without
giving a new notice of sale. Without in any way requiring notice to be given in
the following manner, each Option Care Person agrees that any notice by the
Lenders' Agent of sale, disposition or other intended action hereunder or in
connection herewith, whether required by the UCC or otherwise, shall constitute
reasonable notice to such Option Care Person if such notice is mailed by
registered or certified mail, return receipt requested, postage prepaid, or is
delivered personally against receipt, at least five (5) days prior to such
action to the Borrowers' Agent at the address for notices to the Borrowers'
Agent determined in accordance with SECTION 15.10. If any Collateral is sold on
terms other than payment in full at the time of sale, no credit shall be given
against the Obligations until the Lenders' Agent receives payment, and if the
buyer defaults in payment, the Lenders' Agent may resell the Collateral without
further notice to any Option Care Person. In the event the Lenders' Agent seeks
to take possession of all or any portion of the Collateral by judicial process,
each Option Care Person irrevocably waives: (a) the posting of any bond, surety
or security with respect thereto which might otherwise be required; (b) any
demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (c) any requirement that the Lenders or the
Lenders' Agent retain possession and not dispose of any Collateral until after
trial or final judgment. Each Option Care Person agrees that the Lenders and
the Lenders' Agent have no obligation to preserve rights to the Collateral or
marshal any Collateral for the benefit of any Person. The Lenders' Agent is
hereby granted a license or other right to use, without charge, each Option
Care Person's labels, patents, copyrights, name, trade secrets, trade names,
trademarks, and advertising matter, or any similar property, in completing
production of, advertising or selling any Collateral, and each Option Care
Person's rights under all licenses and all franchise agreements shall inure to
the benefit of the Lenders' Agent. The proceeds of sale shall be applied first
to all expenses of sale,
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including attorney's fees, and second, in whatever order the Lenders' Agent
elects, to all Obligations. The Lenders' Agent shall return any excess to the
Option Care Persons or such other Person as shall be legally entitled thereto
and the Option Care Persons shall remain liable for any deficiency.
(c) Each Option Care Person hereby waives (i) all rights to notice and
hearing prior to the exercise by the Lenders' Agent of the rights of the
Lenders' Agent to repossess the Collateral without judicial process following
the occurrence of an Event of Default or to replevy, attach or levy upon the
Collateral without notice or hearing following the occurrence of an Event of
Default, and (ii) all rights of set-off and counterclaim against the Lenders
and the Lenders' Agent.
14. TERM AND TERMINATION.
(a) This Agreement shall terminate, without premium or penalty, on
February 5, 2002 (the "STATED TERMINATION DATE") unless earlier terminated as
provided in this Section.
(b) The Borrowers' Agent may also terminate this Agreement at any time
prior to the Stated Termination Date or during any renewal term if all of the
following conditions have been satisfied: (i) it gives the Lenders' Agent at
least fifteen (15) days' prior written notice of termination; (ii) it pays and
performs (or causes to be paid and performed) all Obligations on or prior to
the effective date of termination; and (iii) it pays the Termination Fee (or
causes the Termination Fee to be paid) to the Lenders' Agent, for the account
of the Lenders, based on their Pro Rata Shares, on or prior to the effective
date of termination, which payment shall be in addition to the fees required by
SECTION 6.4; PROVIDED, HOWEVER, that the Borrowers' Agent shall not be
obligated to pay the Termination Fee if the reason for termination of this
Agreement is that (I) the Bank (or any Affiliate thereof) has provided a
revolving loan facility to the Borrowers which completely refinances the credit
facility provided for in this Agreement; (II) the Lenders' Agent sends a notice
to the Borrowers' Agent establishing Other Criteria; or (III) the Lenders'
Agent sends a notice to the Borrowers' Agent to the effect that the Lenders'
Agent shall maintain a reserve pursuant to clause (E) of the definition of
Availability; PROVIDED, FURTHER, HOWEVER, that notwithstanding clauses (II) and
(III) of the preceding proviso, the Borrowers' Agent shall be required to pay
the Termination Fee (or to cause the Termination Fee to be paid) if either: (x)
the Borrowers' Agent fails to provide written notice to the Lenders' Agent of
its intent to terminate this Agreement within fifteen (15) days after (i) the
Lenders' Agent sends a notice to the Borrowers' Agent establishing Other
Criteria or (ii) the Lenders' Agent sends a notice to the Borrowers' Agent to
the effect that the Lenders' Agent shall maintain a reserve pursuant to clause
(E) of the definition of Availability; or (y) the Borrowers' Agent fails to pay
and perform (or fails to cause to be paid and performed) all Obligations on or
prior to the ninetieth (90th) day following the end of the fifteen (15) day
period referred to in clause (x) of this proviso.
(c) The Lenders' Agent may, and at the direction of the Majority Lenders
the Lenders' Agent shall, also terminate this Agreement without notice while an
Event of Default exists; provided that no Termination Fee shall be payable
solely as a result of a termination pursuant to this sentence.
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(d) Upon the effective date of termination of this Agreement for
any reason whatsoever, all Obligations shall become immediately due and
payable.
(e) Notwithstanding the termination of this Agreement, until all
Obligations are paid and performed in full, each of the Lenders' Agent and
the Lenders shall retain all its rights and remedies hereunder (including,
without limitation, in all then existing and after-arising Collateral).
15. MISCELLANEOUS.
15.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration in this Agreement or any other Loan Document of the Lenders'
Agent's rights and remedies is not intended to be exclusive, and such rights
and remedies are in addition to and not by way of limitation of any other
rights or remedies that the Lenders' Agent may have under the UCC or other
applicable law. The Lenders' Agent shall have the right, in its sole
discretion, to determine which rights and remedies are to be exercised and in
which order. The exercise of one right or remedy under or in connection with
this Agreement or any other Loan Document shall not preclude the exercise of
any others, all of which shall be cumulative. The Lenders' Agent may, without
limitation, proceed directly against any Option Care Person to collect the
Obligations without any prior recourse to the Collateral.
15.2 NO IMPLIED WAIVERS. No act, failure or delay by the Lenders'
Agent or any Lender under or in connection with this Agreement or any other
Loan Document shall constitute a waiver of any of its rights and remedies. No
single or partial waiver by the Lenders' Agent or any Lender of any provision
of this Agreement or any other Loan Document, or of breach or default
hereunder or thereunder, or of any right or remedy which the Lenders' Agent
or any Lender may have, shall operate as a waiver of any other provision,
breach, default, right or remedy or of the same provision, breach, default,
right or remedy on a future occasion. No waiver by the Lenders' Agent or any
Lender shall affect its rights to require strict performance of this
Agreement or any other Loan Document.
15.3 SEVERABILITY. Whenever possible, each provision of this
Agreement and each other Loan Document shall be interpreted in such a manner
as to be effective and valid under applicable law, but if any provision of
this Agreement or any other Loan Document shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement or such other Loan
Document.
15.4 GOVERNING LAW. This Agreement and each other Loan Document
shall be deemed to have been made in the State of Illinois and shall be
governed by and interpreted in accordance with the laws of such state, except
that no doctrine of choice of law shall be used to apply the laws of any
other state or jurisdiction.
15.5 CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS. Each
Option Care Person agrees that, in addition to any other courts that may have
jurisdiction under applicable laws, any action or proceeding to enforce or
arising out of this Agreement or any of the other Loan Documents may be
commenced in the courts of the State of Illinois, or in the United States
District Court for the Northern District of Illinois, and each Option Care
Person consents and submits in advance to such jurisdiction and agrees that
venue shall be proper in such courts on any such matter. The choice of forum
set forth in this section shall not be deemed to preclude the enforcement of
any judgment obtained in such forum, or the taking of any action under this
84
Agreement to enforce the same, in any appropriate jurisdiction. Each Option
Care Person hereby waives personal service of process and agrees that a
summons and complaint commencing an action or proceeding in any such court
shall be properly served and shall confer personal jurisdiction if served by
registered or certified mail to the Borrowers' Agent, at the address for
notices to the Borrowers' Agent determined in accordance with SECTION 15.10.
Should any Option Care Person fail to appear or answer any summons,
complaint, process or papers so served within thirty (30) days after the
mailing or other service thereof, it shall be deemed in default and an order
or judgment may be entered against it as demanded or prayed for in such
summons, complaint, process or papers.
15.6 WAIVER OF JURY TRIAL. EACH OPTION CARE PERSON HEREBY WAIVES
TRIAL BY JURY, RIGHTS OF SETOFF, AND THE RIGHT TO IMPOSE COUNTERCLAIMS IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT
OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS OR THE
COLLATERAL, OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO OR
THERETO, OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING, BETWEEN OR AMONG
THE OPTION CARE PERSONS, THE LENDERS AND THE LENDERS' AGENT. EACH OPTION CARE
PERSON CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
15.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Option Care Persons contained in this
Agreement shall survive the execution, delivery, and acceptance thereof by
the parties, notwithstanding any investigation by any Lender or its agents or
the Lenders' Agent or its agents, until the later of (a) the termination of
this Agreement and (b) payment and performance in full of all of the
Obligations.
15.8 OTHER SECURITY AND GUARANTIES. The Lenders' Agent may,
without notice or demand and without affecting the Obligations, from time to
time: (a) take from any Person and hold collateral (other than the
Collateral) for the payment of all or any part of the Obligations and
exchange, enforce or release such collateral or any part thereof; and (b)
accept and hold any endorsement or guaranty of payment of all or any part of
the Obligations and release or substitute any such endorser or guarantor, or
any Person who has given any Lien in any other collateral as security for the
payment of all or any part of the Obligations, or any other Person in any way
obligated to pay all or any part of the Obligations.
15.9 FEES AND EXPENSES. The Option Care Persons agree to pay the
Lenders and the Lenders' Agent on demand (whether or not any transaction
contemplated by this Agreement is consummated) all costs and expenses that
any Lender or the Lenders' Agent pays or incurs in connection with the
negotiation, preparation, consummation, administration, enforcement, and
termination of this Agreement and the other Loan Documents, including,
without limitation: (a) attorneys' and paralegals' fees and disbursements of
counsel to any Lender or the Lenders' Agent (including, without limitation, a
reasonable estimate of the allocable cost of in-house counsel and staff for
non-duplicative work); (b) costs and expenses including attorneys' and
paralegals' fees and disbursements (including, without limitation, a
reasonable estimate of the allocable cost of in-house counsel and staff for
non-duplicative work) for any amendment, supplement, waiver, consent, or
subsequent closing in connection with any Loan Document and the transactions
contemplated thereby; (c) costs and expenses of lien and title searches and
title insurance; (d) Taxes, fees and other charges for filing UCC financing
statements and amendments and continuations thereof, and other actions to
perfect, protect, and
85
continue the Security Interest; (e) sums paid or incurred to pay any amount
or take any action required of any Option Care Person under the Loan
Documents that such Option Care Person fails to pay or take; (f) costs of
review, due diligence, appraisals, audits, inspections, and verifications of
the Collateral and the operations of any Option Care Person, including,
without limitation, travel, lodging, meals, and other expenses, together with
an allocated "charge" per day for each auditor employed or utilized by the
Lenders' Agent for any such purpose (such "charge" per day to be specified
from time to time by the Lenders' Agent but, absent an Event of Default, the
aggregate "charges" per day during any calendar quarter shall not exceed
$5,000 per calendar quarter, it being understood that said $5,000 cap does
not cover or limit the other costs and expenses referred to in this clause
(f)); (g) costs and expenses of forwarding loan proceeds, collecting checks
and other items of payment, and establishing and maintaining Payment Accounts
and lock boxes; (h) costs and expenses of preserving and protecting the
Collateral (including without limitation costs and expenses relating to
SECTIONS 7.16 and 7.17); and (i) costs and expenses including attorneys' and
paralegals' fees and disbursements (including, without limitation, a
reasonable estimate of the allocable cost of in-house counsel and staff) paid
or incurred to obtain payment of the Obligations, enforce the Security
Interest, sell or otherwise realize upon the Collateral, and otherwise
enforce the provisions of any Loan Document (including without limitation
costs and expenses relating to SECTIONS 7.16 and 7.17), or to defend any
claims made or threatened against any Lender or the Lenders' Agent arising
out of the transactions contemplated by this Agreement or any other Loan
Document (including without limitation, preparations for and consultations
concerning any such matters). The foregoing shall not be construed to limit
any other provisions of the Loan Documents regarding costs and expenses to be
paid by any Option Care Person. All of the foregoing costs and expenses shall
be charged to the loan account of Option Care as Revolving Loans.
15.10 NOTICES. Except as otherwise expressly provided herein or in
an Exhibit hereto, all notices, demands, and requests that any party hereto
is required or elects to give to any other party hereto shall be in writing,
shall be delivered personally against receipt, or sent by recognized
overnight courier services, or sent by facsimile transmission, or mailed by
registered or certified mail, return receipt requested, postage prepaid, and
shall be addressed to the party to be notified as follows:
If to the Lenders' Agent Bank of America, N.A.
or to the Bank or to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 11th Floor
Bank of America, N.A., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
as Lender: Attention: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: 312/974-8833
with a copy to: Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department, IL1-231-07-17
Facsimile: 312/974-8013
If to LaSalle Bank LaSalle Bank National Association
National Association: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
86
Facsimile: 312/904-6457
with a copy to: LaSalle Bank National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Legal Department
Facsimile: 312/904-6457
If to Option Care: Option Care, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Facsimile: 847/615-1795
with a copy to: Option Care, Inc.
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: 847/615-9345
and
Heroux, Clingen, Callow, Wolfe & ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: 630/871-9869
or to such other address as each party may designate for itself by like notice.
Any such notice, demand, or request shall be deemed given when received if
personally delivered or sent by overnight courier or facsimile transmission, or
when deposited in the United States mails, postage paid, if sent by registered
or certified mail.
15.11 INDEMNIFICATION.
(a) EACH OPTION CARE PERSON HEREBY INDEMNIFIES, DEFENDS AND
HOLDS EACH LENDER, THE LENDERS' AGENT, AND THE RESPECTIVE DIRECTORS,
OFFICERS, AGENTS, EMPLOYEES AND COUNSEL OF EACH LENDER AND OF THE LENDERS'
AGENT, HARMLESS FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES,
LIABILITIES, DEFICIENCIES, JUDGMENTS, PENALTIES OR EXPENSES IMPOSED ON,
INCURRED BY OR ASSERTED AGAINST ANY OF THEM, WHETHER DIRECT, INDIRECT OR
CONSEQUENTIAL ARISING OUT OF OR BY REASON OF ANY LITIGATION, INVESTIGATIONS,
CLAIMS, OR PROCEEDINGS (WHETHER BASED
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ON ANY FEDERAL, STATE OR LOCAL LAWS OR OTHER STATUTES OR REGULATIONS,
INCLUDING, WITHOUT LIMITATION, SECURITIES, ENVIRONMENTAL, OR COMMERCIAL LAWS
AND REGULATIONS, UNDER COMMON LAW OR AT EQUITY, OR ON CONTRACT OR OTHERWISE)
COMMENCED OR THREATENED, WHICH ARISE OUT OF OR ARE IN ANY WAY BASED UPON THE
NEGOTIATION, PREPARATION, EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE OR
ADMINISTRATION OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY UNDERTAKING
OR PROCEEDING RELATED TO ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR ANY
ACT, OMISSION TO ACT, EVENT OR TRANSACTION RELATED OR ATTENDANT THERETO,
INCLUDING, WITHOUT LIMITATION, AMOUNTS PAID IN SETTLEMENT, COURT COSTS, AND
THE FEES AND EXPENSES OF COUNSEL INCURRED IN CONNECTION WITH ANY SUCH
LITIGATION, INVESTIGATION, CLAIM OR PROCEEDING AND FURTHER INCLUDING, WITHOUT
LIMITATION, ALL LOSSES, DAMAGES (INCLUDING CONSEQUENTIAL DAMAGES), EXPENSES
OR LIABILITIES SUSTAINED BY ANY LENDER OR THE LENDERS' AGENT IN CONNECTION
WITH ANY ENVIRONMENTAL INSPECTION, MONITORING, SAMPLING, OR CLEANUP OF THE
ENCUMBERED REAL ESTATE REQUIRED OR MANDATED BY ANY ENVIRONMENTAL LAW (ALL OF
THE LOSSES, CLAIMS, DAMAGES, LIABILITIES, DEFICIENCIES, JUDGMENTS, PENALTIES,
FEES, EXPENSES, AMOUNTS PAID IN SETTLEMENT AND COURT COSTS REFERRED TO ABOVE
IN THIS PARAGRAPH (A) BEING REFERRED TO COLLECTIVELY AS THE "INDEMNIFIED
LIABILITIES"); PROVIDED, HOWEVER, THAT THE OPTION CARE PERSONS SHALL NOT
INDEMNIFY A PARTICULAR LENDER, ITS DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND
COUNSEL FROM SUCH DAMAGES RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF SUCH PARTICULAR LENDER, ITS DIRECTORS, OFFICERS, AGENTS,
EMPLOYEES AND COUNSEL.
(b) Each Option Care Person hereby indemnifies, defends and
holds harmless the Lender from any loss or liability directly or indirectly
arising out of the use, generation, manufacture, production, storage,
release, threatened release, discharge, disposal or presence of a Hazardous
Substance. This indemnity shall apply whether the Hazardous Substance is on,
under or about any Option Care Person's property or operations or property
leased to any Option Care Person. The indemnity includes but is not limited
to attorneys' fees (including the reasonable estimate of the allocated cost
of in-house counsel and staff). The indemnity extends to the Lender, its
parent, subsidiaries and all of their directors, officers, employees, agents,
successors, attorneys and assigns. "Hazardous Substances" means any
substance, material or waste that is or becomes designated or regulated as
"toxic," "hazardous," "pollutant," or "contaminant" or a similar designation
or regulation under any federal, state or local law (whether under common
law, statute, regulation or otherwise) or judicial or administrative
interpretation of such, including without limitation petroleum or natural gas.
(c) Without limiting the foregoing, if, by reason of any suit or
proceeding of any kind, nature, or description against any Option Care Person
or by any Option Care Person or any other Person against any Lender or the
Lenders' Agent, which in the sole discretion of such
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Lender or the Lenders' Agent makes it advisable for such Lender or the
Lenders' Agent to seek counsel for protection and preservation of its liens
and security assets, or to defend its own interest, such expenses and counsel
fees shall be allowed to such Lender and the Lenders' Agent. To the extent
that the undertaking to indemnify, pay and hold harmless set forth in this
SECTION 15.11 may be unenforceable because it is violative of any law or
public policy, each Option Care Person shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all indemnified matters incurred by each Lender or the
Lenders' Agent. The indemnity contained in this SECTION 15.11 shall survive
the payment of the Obligations and the termination of this Agreement. All of
the foregoing costs and expenses shall be part of the Obligations and secured
by the Collateral.
(d) Without limiting the foregoing, the Option Care Persons
shall reimburse each Lender and the Lenders' Agent on demand for any amount
paid by such Lender or the Lenders' Agent to a Blocked Account Bank pursuant
to a Blocked Account Agreement.
15.12 WAIVER OF NOTICES. Unless otherwise expressly provided
herein, each Option Care Person waives presentment, protest and notice of
demand or dishonor and protest as to any instrument, as well as any and all
other notices to which it might otherwise be entitled. No notice to or demand
on any Option Care Person which a Lender or the Lenders' Agent may elect to
give shall entitle any Option Care Person to any or further notice or demand
in the same, similar or other circumstances.
15.13 BINDING EFFECT; ASSIGNMENTS; PARTICIPATIONS. (a) The
provisions of this Agreement shall be binding upon and inure to the benefit
of the respective representatives, successors and assigns of the parties
hereto; PROVIDED, HOWEVER, that no interest in this Agreement may be assigned
by any Option Care Person without the prior written consent of the Lenders
and the Lenders' Agent.
(b) Any Lender may, with the written consent of the Lenders'
Agent (which consent shall not be unreasonably withheld), assign and delegate
to one or more Eligible Assignees (PROVIDED that no consent of the Lenders'
Agent shall be required in connection with any assignment and delegation by a
Lender to an affiliate of such Lender) (each an "ASSIGNEE") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Lender hereunder, in a minimum amount of five million
dollars ($5,000,000) (PROVIDED that, unless an assignor Lender has assigned
and delegated all of its Loans and Commitments, no such assignment and/or
delegation shall be permitted unless, after giving effect thereto, such
assignor Lender retains a Commitment in a minimum amount of five million
dollars ($5,000,000); PROVIDED, HOWEVER, that the Borrowers' Agent and the
Lenders' Agent may continue to deal solely and directly with such Lender in
connection with the interest so assigned to an Assignee until (i) written
notice of such assignment, together with payment instructions, addresses and
related information with respect to the Assignee, shall have been given to
the Borrowers' Agent and the Lenders' Agent by such Lender and the Assignee;
(ii) such Lender and its Assignee shall have delivered to the Borrowers'
Agent and the Agent an assignment and acceptance in form and substance
reasonably satisfactory to such Lender, such Assignee and the Lenders' Agent
("ASSIGNMENT AND ACCEPTANCE"); and (iii) the assignor Lender or Assignee has
paid to the Lenders' Agent a processing fee in the amount of three thousand
dollars ($3,000).
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(c) From and after the date that the Lenders' Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder and under the other Loan Documents have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement and the
other Loan Documents (and in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto or the attachment, perfection, or priority of any Lien granted
by the Option Care Persons to the Lenders' Agent or any Lender in the
Collateral; (ii) such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any Option
Care Person or the performance or observance by any Option Care Person of any
of its obligations under this Agreement or any other Loan Document; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Lenders'
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement; (v)
such Assignee appoints and authorizes the Lenders' Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement as are
delegated to the Lenders' Agent by the terms hereof, together with such powers,
including the discretionary rights and incidental powers, as are reasonably
incidental thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(e) Immediately upon satisfaction of the requirements of SECTION
15.13(b), this Agreement shall be deemed to be amended to the extent, but only
to the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The Commitment
allocated to each Assignee shall reduce the Commitment of the assigning Lender
PRO TANTO.
(f) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons not Affiliates of any Option Care
Person (a "PARTICIPANT") participating interests in any Loans, the Commitment
of that Lender and the other interests of
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that Lender (the "originating Lender") hereunder and under the other Loan
Documents; PROVIDED, HOWEVER, that (i) the originating Lender's obligations
under this Agreement shall remain unchanged, (ii) the originating Lender shall
remain solely responsible for the performance of such obligations, (iii) the
Borrowers' Agent and the Lenders' Agent shall continue to deal solely and
directly with the originating Lender in connection with the originating
Lender's rights and obligations under this Agreement and the other Loan
Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any modification,
rescission, waiver, release or amendment with respect to this Agreement or any
other Loan Document, and all amounts payable by the Borrowers' Agent or the
Lenders' Agent hereunder shall be determined as if such Lender had not sold
such participation; except that, if amounts outstanding under this Agreement
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence of an Event of Default, each Participant shall be
deemed to have the right of setoff in respect of its participating interest in
amounts owing under this Agreement to the same extent and subject to the same
limitation as if the amount of its participating interest were owing directly
to it as a Lender under this Agreement.
(g) Notwithstanding any other provision in this Agreement, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Board or U.S.
Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve may enforce
such pledge or security interest in any manner permitted under applicable law.
15.14 MODIFICATION. This Agreement is intended by the parties hereto to be
the final, complete, and exclusive expression of the agreement between them.
This Agreement supersedes any and all prior oral or written agreements relating
to the subject matter hereof and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no oral
agreements between the parties. No modification, rescission, waiver, release,
or amendment of any provision of this Agreement (including the Schedules and
Exhibits hereto) shall be made, except by a written agreement signed by the
Majority Lenders (or by the Lenders' Agent at the written request of the
Majority Lenders) and the Option Care Persons and then any such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no such modification,
rescission, waiver, release or amendment shall, unless in writing and signed by
all the Lenders and the Option Care Persons and acknowledged by the Lenders'
Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document;
(c) reduce the principal of, or the rate of interest specified herein
on any Loan, or any fees or other amounts payable hereunder or under any other
Loan Document;
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(d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which is required for the Lenders or any
of them to take any action hereunder;
(e) increase any of the percentages set forth in the definition of
Availability;
(f) amend this Section or any provision of this Agreement providing
for consent or other action by all Lenders or by the Majority Lenders;
(g) release Collateral other than as permitted by the terms of this
Agreement;
(h) change the definitions of "Majority Lenders"; or
(i) increase the Maximum Revolving Credit Line or the Term Loan
Commitment.
15.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
15.16 CAPTIONS. The captions contained in this Agreement or any other Loan
Document (including without limitation the table of contents and the exhibits
and schedules hereto or thereto) are for convenience only, are without
substantive meaning and should not be construed to modify, enlarge, or restrict
any provision.
15.17 RIGHT OF SET-OFF. In addition to any rights and remedies of the
Lenders provided under this Agreement or any other Loan Document or under
applicable law, whenever an Event of Default exists, each Lender is hereby
authorized at any time and from time to time, without prior notice to any
Option Care Person, any such notice being waived by each Option Care Person 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) at any time held and
other indebtedness at any time owing by such Lender or any affiliate of such
Lender to or for the credit or the account of any Option Care Person against
any and all of the Obligations owing to such Lender, whether or not then due
and payable without prior notice to each Option Care Person, any such notice
being waived by any Option Care Person to the fullest extent permitted by law.
Each Lender agrees to notify the Borrowers' Agent and the Lenders' Agent
promptly after any such setoff and application made by such Lender; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity of
such setoff and application. NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL
EXERCISE ANY RIGHT OF SET-OFF, BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT
ACCOUNT OR PROPERTY OF ANY OPTION CARE PERSON HELD OR MAINTAINED BY SUCH LENDER
WITHOUT THE PRIOR WRITTEN UNANIMOUS CONSENT OF THE LENDERS.
15.18 [Reserved].
15.19 ADDITIONAL BORROWERS. Any Subsidiary wholly owned by Option Care (or
wholly owned by any Subsidiary of Option Care) that is not a Borrower party
hereto on the Closing Date may become a Borrower party to this Agreement upon
the satisfaction of the
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following conditions: (a) such Subsidiary and Option Care shall have signed and
delivered to the Lenders an agreement substantially in the form of EXHIBIT B
hereto (an "ADDITIONAL BORROWER AGREEMENT"); (b) each Lender shall have
received such other documents, agreements, instruments and opinions as it may
reasonably request in connection with such Subsidiary becoming a Borrower,
which shall be in form and substance reasonably satisfactory to such Lender,
including without limitation items of the type delivered pursuant to SECTION
11.1; (c) each Lender shall have had a reasonable period of time to conduct
(and to cause one or more of its agents or representatives to conduct) due
diligence with respect to such Subsidiary, such Subsidiary and the Option Care
Persons shall have fully cooperated with the Lenders and such agents and
representatives in connection with such due diligence, and the results of such
due diligence are satisfactory to the Lenders; (d) such Subsidiary shall be in
the same line of business that one or more of the Borrowers were engaged in on
the Closing Date; and (e) the Lenders shall have sent the Borrowers' Agent a
notice substantially in the form of EXHIBIT C hereto (an "ADDITIONAL BORROWER
CONSENT NOTICE").
15.20 JOINT AND SEVERAL LIABILITY. (a) The Borrowers shall be jointly and
severally liable for all Loans and other amounts due to the Lenders and the
Lenders' Agent under this Agreement, regardless of which Borrower actually
receives Loans or other extensions of credit hereunder or the amount of such
Loans received or the manner in which the Lender accounts for such Loans or
other extensions of credit on its books and records. Each Borrower's
Obligations with respect to Loans made to it, and each Borrower's Obligations
arising as a result of the joint and several liability of the Borrowers
hereunder with respect to Loans made to the other Borrowers hereunder, shall be
separate and distinct obligations, but all such Obligations shall be primary
obligations of such Borrower.
(b) Each Borrower's Obligations arising as a result of the joint and
several liability of such Borrower hereunder with respect to Loans or other
extensions of credit made to the other Borrowers hereunder shall, to the
fullest extent permitted by law, be absolute and unconditional irrespective of
(i) the validity, legality, enforceability, avoidance or subordination of the
Obligations of any other Borrower or of any promissory note or other document
evidencing all or any part of the Obligations of any other Borrower, (ii) the
absence of any attempt to collect the Obligations from any other Borrower, any
other guarantor, or any other security therefor, or the absence of any other
action to enforce the same, (iii) the waiver, consent, extension, forbearance
or granting of any indulgence by any Lender or the Lenders' Agent with respect
to any Obligations or any provision of any instrument evidencing the
Obligations of any other Borrower, or any part thereof, or any other agreement
now or hereafter executed by any other Borrower and delivered to any Lender or
the Lenders' Agent, (iv) the failure by any Lender or the Lenders' Agent to
take any steps to perfect and maintain its security interest in, or to preserve
its rights to, any security or collateral for the Obligations of any other
Borrower, (v) the election of any Lender or of the Lenders' Agent, in any
proceeding instituted under the Federal Bankruptcy Code, of the application of
Section 1111(b)(2) of the Federal Bankruptcy Code, (vi) any borrowing or grant
of a security interest by any other Borrower, as debtor-in-possession, under
Section 364 of the Federal Bankruptcy Code, (vii) the disallowance of all or
any portion of the Lender's claim(s) for the repayment of the Obligations of
any other Borrower under Section 502 of the Federal Bankruptcy Code, or (viii)
any other events, conditions or circumstances which might constitute a legal or
equitable discharge or defense of a guarantor or of a surety or of any
Borrower. With respect to any Borrower's Obligations arising as a result of the
joint and several liability of the Borrowers hereunder with respect to Loans or
other extensions or credit
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made to any other Borrower hereunder, each Borrower waives, until all of the
Obligations shall have been paid in full and this Agreement shall have been
terminated, any right to enforce any right of subrogation or any remedy which
any Lender or the Lenders' Agent now has or may hereafter have against any
Borrower, any endorser or any guarantor of all or any part of the Obligations,
and any benefit of, and any right to participate in, any security or collateral
given to any Lender or the Lenders' Agent to secure payment of the Obligations
or any other liability of any Borrower to the Lender.
(c) Upon any Event of Default, the Lenders' Agent may proceed
directly and at once, without notice, against any Borrower to collect and
recover the full amount, or any portion of, the Obligations, without first
proceeding against any other Borrower or any other Person, or against any
security or collateral for the Obligations. Each Borrower consents and agrees
that neither the Lender nor the Lenders' Agent shall be under any obligation to
marshal any assets in favor of any Borrower or against or in payment of any or
all of the Obligations.
(d) Notwithstanding the other provisions of this Agreement, each
Option Care Person shall be liable under this Agreement only for the maximum
amount of such liability that can hereby be incurred without rendering its
obligations under this Agreement voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater amount.
15.21 EFFECT ON EXISTING LOAN AND SECURITY AGREEMENT. This Agreement
amends and restates the Existing Loan and Security Agreement effective as of
the date of this Agreement. This Agreement shall not effect a novation of the
obligations of the parties to the Existing Loan and Security Agreement, but
instead shall be merely a restatement and, where applicable, an amendment of
the terms governing such obligations. The parties hereto hereby affirm, ratify
and confirm all transactions pursuant to the Existing Loan and Security
Agreement.
15.22 OBLIGATIONS OF LENDERS. The obligations of the Lenders under this
Agreement or any other Loan Document shall be several and not joint.
16. THE AGENT.
16.1 APPOINTMENT AND AUTHORIZATION. Each Lender hereby designates and
appoints the Bank as the Lenders' Agent under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes the Lenders' Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. The
Lenders' Agent agrees to act as such on the express conditions contained in
SECTIONS 16.1 through 16.17. The provisions of SECTIONS 16.1 through 16.17
applicable to the Lenders' Agent are solely for the benefit of the Lenders'
Agent, and the Lenders and the Option Care Persons shall have no rights as a
third party beneficiary of any of the provisions contained herein.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Lenders' Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Lenders' Agent have or be deemed to have any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Lenders' Agent. Without limiting the
generality of the foregoing
94
sentence, the use of the term "agent" in this Agreement with reference to the
Lenders' Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Lenders' Agent shall have and may use its sole discretion with respect to
exercising or refraining from exercising any discretionary rights or taking or
refraining from taking any actions which the Lenders' Agent is expressly
entitled to take or assert under this Agreement and the other Loan Documents,
including (a) the determination of the applicability of ineligibility criteria
with respect to the determination of the Eligible Accounts, (b) the making of
Lenders' Agent Advances pursuant to SECTION 2.2, and (c) the exercise of
remedies pursuant to this Agreement and any other Loan Document, and any action
so taken or not taken shall be deemed consented to by the Lenders.
16.2 DELEGATION OF DUTIES. The Lenders' Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Lenders' Agent shall not be responsible
for the negligence or misconduct of any agent or attorney-in-fact that it
selects as long as such selection was made without gross negligence or willful
misconduct.
16.3 LIABILITY OF THE LENDERS' AGENT RELATED PERSONS. None of the Lenders'
Agent Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of the Lenders for any recital, statement, representation or warranty made by
any Option Care Person or any Subsidiary or Affiliate of the any Option Care
Person, or any officer thereof, contained in this Agreement or in any other
Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Lenders' Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Option Care Person or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Lenders' Agent Related Person shall be under any obligation to
any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the properties, books or records of any
Option Care Person or any of the Subsidiaries or Affiliates of any Option Care
Person.
16.4 RELIANCE BY THE LENDERS' AGENT. The Lenders' Agent shall be entitled
to rely, and shall be fully protected in relying, upon any writing, resolution,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to any Option Care Person), independent accountants and other experts
selected by the Lenders' Agent. The Lenders' Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate and, if it so requests, it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
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The Lenders' Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
16.5 NOTICE OF DEFAULT. The Lenders' Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
unless the Lenders' Agent shall have received written notice from a Lender or
the Borrowers' Agent referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." The
Lenders' Agent shall notify the Lenders of its receipt of any such notice.
The Lenders' Agent shall take such action with respect to such Default or
Event of Default as may be requested by the Majority Lenders in accordance
with this Agreement; PROVIDED, HOWEVER, that unless and until the Lenders'
Agent has received any such request, the Lenders' 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.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the Lenders'
Agent Related Persons has made any representation or warranty to it, and that
no act by the Lenders' Agent hereinafter taken, including any review of the
affairs of any Option Care Person and any Affiliates of any Option Care
Person, shall be deemed to constitute any representation or warranty by any
Lenders' Agent-Related Person to any Lender. Each Lender represents to the
Lenders' Agent that it has, independently and without reliance upon any
Lenders' Agent-Related Person and based on such documents and information as
it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition
and creditworthiness of the Option Care Persons and the Affiliates of the
Option Care Persons, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrowers. Each Lender also
represents that it shall, independently and without reliance upon any
Lenders' Agent-Related Person and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit
analysis, appraisals and decisions in taking or not taking action under this
Agreement and the other Loan Documents, and to make such investigations as it
deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of the Option
Care Persons. Except for any documents expressly herein required to be
furnished to the Lenders by the Lenders' Agent, the Lenders' Agent shall not
have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Option Care Persons
which may come into the possession of any of the Lenders' Agent Related
Persons.
16.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Lenders shall indemnify upon demand the Lenders'
Agent Related Persons (to the extent not reimbursed by or on behalf of the
Option Care Persons and without limiting the obligation of the Option Care
Persons to do so), pro rata based on their Pro Rata Shares, from and against
any and all Indemnified Liabilities as such term is defined in SECTION 15.11
(including any amounts paid by the Lenders' Agent under or in connection with
a Blocked Account Agreement); PROVIDED, HOWEVER, that no Lender shall be
liable for the payment to the Lenders' Agent Related Persons of any portion
of such Indemnified Liabilities resulting solely from the gross negligence or
willful misconduct of a Lenders' Agent Related Person. Without limitation of
the foregoing, each Lender shall reimburse the Lenders' Agent upon demand for
its
96
ratable share of any costs or out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Lenders' Agent in connection with
the preparation, execution, delivery, administration, modification, amendment
or enforcement (whether through negotiations, legal proceedings or otherwise)
of, or legal advice in respect of rights or responsibilities under, this
Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Lenders' Agent is not reimbursed
for such expenses by or on behalf of the Option Care Persons. The undertaking
in this Section shall survive the payment of all Obligations hereunder and
the resignation or replacement of the Lenders' Agent.
16.8 LENDERS' AGENT IN INDIVIDUAL CAPACITY. The Bank and its Affiliates
may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind
of banking, trust, financial advisory, underwriting or other business with
any Option Care Person and the Affiliates of any Option Care Person as though
the Bank were not the Lenders' Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, the Bank or its Affiliates may receive information regarding the
Option Care Persons and Affiliates of the Option Care Persons (including
information that may be subject to confidentiality obligations in favor of an
Option Care Person or an Affiliate of an Option Care Person) and acknowledge
that the Lenders' Agent and the Bank shall be under no obligation to provide
such information to them. With respect to its Loans, the Bank shall have the
same rights and powers under this Agreement as any other Lender and may
exercise the same as though it were not the Lenders' Agent, and the terms
"Lender" and "Lenders" include the Bank in its individual capacity.
16.9 SUCCESSOR AGENT. The Lenders' Agent may resign as Lenders' Agent
upon sixty (60) days' notice to the Lenders and the Borrower, such
resignation to be effective upon the acceptance of a successor agent to its
appointment as Lenders' Agent. In the event the Bank sells all of its
Commitment and Loans as part of a sale, transfer or other disposition by the
Bank of substantially all of its loan portfolio, the Bank shall resign as
Lenders' Agent and such purchaser or transferee shall become the successor
Lenders' Agent hereunder. If the Lenders' Agent resigns under this Agreement,
subject to the proviso in the preceding sentence, the Majority Lenders shall
appoint from among the Lenders a successor agent for the Lenders. If no
successor agent is appointed prior to the effective date of the resignation
of the Lenders' Agent, the Lenders' Agent may appoint, after consulting with
the Lenders and the Borrowers' Agent, a successor agent from among the
Lenders. Upon the acceptance of its appointment as successor agent hereunder,
such successor agent shall succeed to all the rights, powers and duties of
the retiring Lenders' Agent and the term "Lenders' Agent" shall mean such
successor agent and the retiring Lenders' Agent's appointment, powers and
duties as Lenders' Agent shall be terminated. After any retiring Lenders'
Agent's resignation hereunder as Lenders' Agent, the provisions of SECTIONS
16.1 through 16.17 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Lenders' Agent under this Agreement.
16.10 WITHHOLDING TAX. (a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441
or 1442 of the Code, such Lender agrees with and in favor of the Lenders'
Agent, to deliver to the Lenders' Agent:
(i) if such Lender claims an exemption from, or a reduction of,
withholding tax under a United States of America tax treaty, properly completed
IRS Form W-8BEN before the payment of any interest in the first calendar year
and before the payment of
97
any interest in each third succeeding calendar year during which interest may be
paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States of America withholding tax because it
is effectively connected with a United States of America trade or business of
such Lender, two properly completed and executed copies of IRS Form W-8ECI
before the payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which interest
may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States of America as a condition to
exemption from, or reduction of, United States of America withholding tax.
Such Lender agrees to promptly notify the Lenders' Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States of America tax treaty by providing IRS
Form W-8BEN and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations owing to such Lender, such
Lender agrees to notify the Lenders' Agent of the percentage amount in which
it is no longer the beneficial owner of Obligations of the Borrowers to such
Lender. To the extent of such percentage amount, the Lenders' Agent shall
treat such Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender claiming exemption from United States of America
withholding tax by filing IRS Form W-8ECI with the Lenders' Agent sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations owing to such Lender, such Lender agrees to undertake sole
responsibility for complying with the withholding tax requirements imposed by
Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Lenders' Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation
required by subsection (a) of this Section are not delivered to the Lenders'
Agent, then the Lenders' Agent may withhold from any interest payment to such
Lender not providing such forms or other documentation an amount equivalent
to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States of America or other jurisdiction asserts a claim that the Lenders'
Agent did not properly withhold tax from amounts paid to or for the account
of any Lender (because the appropriate form was not delivered, was not
properly executed, or because such Lender failed to notify the Lenders' Agent
of a change in circumstances which rendered the exemption from, or reduction
of, withholding tax ineffective, or for any other reason) such Lender shall
indemnify the Lenders' Agent fully for all amounts paid, directly or
indirectly, by the Lenders' Agent as tax or
98
otherwise, including penalties and interest, and including any taxes imposed
by any jurisdiction on the amounts payable to the Lenders' Agent under this
Section, together with all costs and expenses (including fees and
disbursements of counsel). The obligation of the Lenders under this
subsection shall survive the payment of all Obligations and the resignation
or replacement of the Lenders' Agent.
16.11 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize the Lenders' Agent, at
its option and in its sole discretion, to release any Lenders' Agent's Lien
upon any Collateral (i) upon the termination of the Commitments and payment
and satisfaction in full by Borrowers of all Loans and all other Obligations;
(ii) constituting property being sold or disposed of if the Borrowers' Agent
certifies to the Lenders' Agent that the sale or disposition is made in
compliance with the terms of this Agreement (and the Lenders' Agent may rely
conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Borrowers owned no interest at the time
the Lien was granted or at any time thereafter; or (iv) constituting property
leased to a Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement. Except as provided above, the
Lenders' Agent shall not release any of the Lenders' Agent's Liens without
the prior written authorization of the Lenders; PROVIDED that the Lenders'
Agent may, in its discretion, release the Lenders' Agent's Liens on
Collateral valued in the aggregate not in excess of one hundred thousand
dollars ($100,000) during any one year period without the prior written
authorization of the Lenders. Upon request by the Lenders' Agent or the
Borrowers' Agent at any time, the Lenders shall confirm in writing the
Lenders' Agent's authority to release any Lenders' Agent's Liens upon
particular types or items of Collateral pursuant to this SECTION 16.11.
(b) Upon receipt by the Lenders' Agent of any authorization
required pursuant to clause (a) above from the Lenders of the Lenders'
Agent's authority to release any Lenders' Agent's Liens upon particular types
or items of Collateral, and upon at least five (5) Business Days prior
written request by the Borrowers' Agent, the Lenders' Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as
may be necessary to evidence the release of the Lenders' Agent's Liens upon
such Collateral; PROVIDED, HOWEVER, that (i) the Lenders' Agent shall not be
required to execute any such document on terms which, in the Lenders' Agent's
opinion, would expose the Lenders' Agent to liability or create any
obligation or entail any consequence other than the release of such Liens
without recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of any Borrower in respect of)
all interests retained by any Borrower, including the proceeds of any sale,
all of which shall continue to constitute part of the Collateral.
(c) The Lenders' Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by any
Borrower or is cared for, protected or insured or has been encumbered, or
that the Lenders' Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or
under any duty of care, disclosure or fidelity, or to continue exercising,
any of the rights, authorities and powers granted or available to the
Lenders' Agent pursuant to any of the Loan Documents, it being understood
99
and agreed that in respect of the Collateral, or any act, omission or event
related thereto, the Lenders' Agent may act in any manner it may deem
appropriate, in its sole discretion given the Lenders' Agent's own interest
in the Collateral in its capacity as one of the Lenders and that the Lenders'
Agent shall have no other duty or liability whatsoever to any Lender as to
any of the foregoing.
16.12 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS. (a) Each of
the Lenders agrees that it shall not, without the express consent of all
Lenders, and that it shall, to the extent it is lawfully entitled to do so,
upon the request of all Lenders, set off against the Obligations, any amounts
owing by such Lender to the Borrowers or any accounts of the Borrowers now or
hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by the Lenders'
Agent, take or cause to be taken any action to enforce its rights under this
Agreement or against any Option Care Person, including the commencement of
any legal or equitable proceedings, to foreclose any Lien on, or otherwise
enforce any security interest in, any of the Collateral.
(b) If at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations of the Borrowers to such Lender
arising under, or relating to, this Agreement or the other Loan Documents,
except for any such proceeds or payments received by such Lender from the
Lenders' Agent pursuant to the terms of this Agreement, or (ii) payments from
the Lenders' Agent in excess of such Lender's ratable portion of all such
distributions by the Lenders' Agent, such Lender shall promptly (1) turn the
same over to the Lenders' Agent, in kind, and with such endorsements as may
be required to negotiate the same to the Lenders' Agent, or in same day
funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions
of this Agreement, or (2) purchase, without recourse or warranty, an
undivided interest and participation in the Obligations owed to the other
Lenders so that such excess payment received shall be applied ratably as
among the Lenders in accordance with their Pro Rata Shares; PROVIDED,
HOWEVER, that if all or part of such excess payment received by the
purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to
such purchasing party, but without interest except to the extent that such
purchasing party is required to pay interest in connection with the recovery
of the excess payment.
16.13 AGENCY FOR PERFECTION. Each Lender hereby appoints each other Lender
as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC can be perfected only
by possession. Should any Lender (other than the Lenders' Agent) obtain
possession of any such Collateral, such Lender shall notify the Lenders'
Agent thereof, and, promptly upon the Lenders' Agent's request therefor shall
deliver such Collateral to the Lenders' Agent or in accordance with the
Lenders' Agent's instructions.
16.14 PAYMENTS BY THE LENDERS' AGENT TO LENDERS. All payments to be made
by the Lenders' Agent to the Lenders shall be made by bank wire transfer or
internal transfer of immediately available funds to each Lender pursuant to
wire transfer instructions delivered in writing to the Lenders' Agent on or
prior to the Closing Date (or if such Lender is an Assignee, in the
applicable Assignment and Acceptance), or pursuant to such other wire
transfer instructions as each party may designate for itself by written
notice to the Lenders' Agent.
100
Concurrently with each such payment, the Lenders' Agent shall identify
whether such payment (or any portion thereof) represents principal or
interest on the Revolving Loans, Term Loans or otherwise.
16.15 CONCERNING THE COLLATERAL AND THE RELATED LOAN DOCUMENTS. Each
Lender authorizes and directs the Lenders' Agent to enter into this Agreement
and the other Loan Documents, for the ratable benefit and obligation of the
Lenders' Agent and the Lenders. Each Lender agrees that any action taken by
the Lenders' Agent or Majority Lenders, as applicable, in accordance with the
terms of this Agreement or the other Loan Documents, and the exercise by the
Lenders' Agent or the Majority Lenders, as applicable, of their respective
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
16.16 FIELD AUDIT AND EXAMINATION REPORTS; DISCLAIMER BY LENDERS. Each
Lender:
(a) shall be deemed to have requested that the Lenders' Agent
furnish such Lender, promptly after it becomes available, a copy of each
field audit or examination report (each a "REPORT" and collectively,
"REPORTS") prepared by the Lenders' Agent;
(b) expressly agrees and acknowledges that neither the Bank nor the
Lenders' Agent (i) makes any representation or warranty as to the accuracy of
any Report, or (ii) shall be liable for any information contained in any
Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Lenders' Agent or the Bank or
other party performing any audit or examination shall inspect only specific
information regarding the Option Care Persons and shall rely significantly
upon the books and records of the Option Care Persons, as well as on
representations of the personnel of the Option Care Persons;
(d) agrees to keep all Reports confidential and strictly for its
internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold the Lenders' Agent
harmless from any action the indemnifying Lender may take or conclusion the
indemnifying Lender may reach or draw from any Report in connection with any
loans or other credit accommodations that the indemnifying Lender has made or
may make to the Borrower, or the indemnifying Lender's participation in, or
the indemnifying Lender's purchase of, a loan or loans of the Borrowers; and
(ii) to pay and protect, and indemnify, defend and hold the Lenders' Agent
harmless from and against, the claims, actions, proceedings, damages, costs,
expenses and other amounts (including fees and disbursements of counsel)
incurred by the Lenders' Agent preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
16.17 RELATION AMONG LENDERS. The Lenders are not partners or
co-venturers, and no Lender shall be liable for the acts or omissions of, or
(except as otherwise set forth herein in case of the Lenders' Agent)
authorized to act for, any other Lender.
16.18 ASSIGNMENT AND PURCHASE OF PRO RATA SHARE. On the Closing Date, Bank
of America, N.A. agrees to assign to LaSalle Bank National Association, and
LaSalle Bank
101
National Association agrees to purchase from Bank of America, N.A., LaSalle
Bank National Association's Pro Rata Share of Loans (and interest thereon)
existing under the Existing Loan and Security Agreement. Such payment shall
be made in immediately available funds in Dollars to an account to be
specified by Bank of America, N.A. This assignment shall be made without any
representation, warranty or recourse whatsoever.
[SIGNATURES FOLLOW]
102
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
BANK OF AMERICA, N.A., as a Lender and as
the Lenders' Agent
By:
--------------------------------------
Vice President
1
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By:
--------------------------------------
Name:
Title:
2
OPTION CARE, INC., individually and as the
Borrowers' Agent
By:
--------------------------------------
Name:
Title:
By:
------
Name:
Title:
BORROWERS:
OPTION CARE, INC.
By:
------
Name:
Title:
By:
------
Name:
Title:
OPTION CARE ENTERPRISES, INC., a Delaware
corporation
By:
------
Name:
Title:
By:
------
Name:
Title:
3
OPTION CARE ENTERPRISES, INC., a
Pennsylvania corporation
By:
------
Name:
Title:
OPTION CARE, INC., a California corporation
By:
------
Name:
Title:
MANAGEMENT BY INFORMATION, INC.
By:
------
Name:
Title:
OPTION CARE HOME HEALTH OF
CALIFORNIA, INC.
By:
------
Name:
Title:
4
OPTION CARE HOSPICE, INC.
By:
------
Name:
Title:
NORTH COUNTY HOME I.V., INC.
By:
------
Name:
Title:
OPTION HOME HEALTH, INC.
By:
------
Name:
Title:
HOME CARE OF COLUMBIA, INC.
By:
------
Name:
Title:
OPTION CARE OF DENVER, INC.
By:
------
Name:
Title:
OPTION CARE HOME HEALTH, L.L.C.
5
By:
------
Name:
Title:
By:
--------------------------------------
Name:
Title:
REHAB OPTIONS, INC.
By:
------
Name:
Title:
CORDESYS HEALTHCARE MANAGEMENT, INC.
By:
------
Name:
Title:
OPTION CARE OF OKLAHOMA, INC.
By:
------
Name:
Title:
OPTION RX, INC.
6
By:
------
Name:
Title:
7
EXHIBIT A
to Amended and Restated Loan and Security Agreement
FORM OF ACCOUNT DEBTOR NOTICE
[Letterhead of Borrower]
_____________, 20__
CERTIFIED MAIL;
RETURN RECEIPT REQUESTED
[Name and address of Account Debtor]
To Whom It May Concern:
We are pleased to announce that we have entered into a revolving loan
agreement with Bank of America, N.A., the other lenders party thereto from time
to time, and Bank of America, N.A., as agent for those lenders (in such
capacity, together with its successors and assigns in such capacity, the
"Agent"). In connection with that agreement, we have granted a continuing
security interest to the Agent in our existing and future receivables and other
amounts which you may owe us from time to time.
Such security interest will continue in effect until such time as the
Agent otherwise notifies you in writing. We hereby revoke any notice we may have
given you previously with regard to any security interest granted (or transfer
made) by us to any person or entity other than the Agent.
If you have any questions about this notice or anything else, please
contact the undersigned.
Very truly yours,
[NAME OF BORROWER]
8
By:
Name:
Title:
EXHIBIT B
to Amended and Restated Loan and Security Agreement
FORM OF ADDITIONAL BORROWER AGREEMENT
Bank of America, N.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
LaSalle National Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Re: Amended and Restated Loan and Security Agreement dated as of
June [ ], 2000 (as amended, amended and restated or otherwise
modified from time to time, the "LOAN AND SECURITY AGREEMENT")
among the Lenders from time to time party thereto, Bank of
America, N.A., as the Lenders' Agent, Option Care, Inc.,
individually and as the Borrowers' Agent, and Option Care,
Inc. and the Subsidiaries of Option Care, Inc. from time to
time party thereto, as the Borrowers
Ladies and Gentlemen:
This Additional Borrower Agreement is dated as of [ ] and is made and
delivered pursuant to Section 15.19 of the Loan and Security Agreement, and
reference is made thereto for full particulars of the matters described herein.
All capitalized terms defined in the Loan and Security Agreement and used in
this Additional Borrower Agreement without definition shall have the meanings
assigned to them in the Loan and Security Agreement.
Each of ______________ (the "ADDITIONAL BORROWER") and the
Borrowers' Agent hereby confirms, represents and warrants to the Lenders and
the Lenders' Agent that the Additional Borrower is a wholly-owned Subsidiary
of Option Care or a wholly-owned Subsidiary of one of the Subsidiaries of
Option Care.
The parties hereto hereby agree that from and after the effective
date specified in the Additional Borrower Consent Notice relating to the
Additional Borrower, the Additional Borrower shall be a "Borrower" party to the
Loan and Security Agreement and, without limiting the foregoing, shall have all
of the rights, obligations, duties and liabilities of a Borrower thereunder. The
Additional Borrower confirms its acceptance of, and consents to, all
representations and warranties, covenants, and other terms and provisions of the
Loan and Security Agreement; PROVIDED, HOWEVER, that the Schedules to the Loan
and Security Agreement are hereby supplemented with the information set forth in
Annex A attached hereto. [Annex A should be attached to the executed Additional
Borrower Agreement] Without limiting the
generality of the foregoing, and without limiting SECTION 7.1 of the Loan and
Security Agreement: as security for the payment and performance of all of the
Obligations, the Additional Borrower hereby grants to the Lenders' Agent a
continuing security interest in, lien on, and assignment of all of the
Additional Borrower's right, title and interest in, to and under (but none of
the Additional Borrower's obligations under) the Collateral, in each case
wherever located and whether now existing or hereafter arising or acquired.
This Additional Borrower Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Additional
Borrower Agreement to be duly executed and delivered by their duly authorized
officers as of the day and year first above written.
[NAME OF ADDITIONAL BORROWER]
Name:
Title:
OPTION CARE, INC.,
as the Borrowers' Agent
Name:
Title:
Name:
Title:
EXHIBIT C
to Amended and Restated Loan and Security Agreement
ADDITIONAL BORROWER CONSENT NOTICE
[Date]
Option Care, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Re: Additional Borrower Agreement dated [ ] (the "ADDITIONAL
BORROWER AGREEMENT") between [name of Additional Borrower]
(the "ADDITIONAL BORROWER") and Option Care, Inc., as the
Borrowers' Agent
Ladies and Gentlemen:
We have received the Additional Borrower Agreement and the other
related items contemplated by SECTION 15.19 of the Loan and Security Agreement
referred to therein. Please be advised that we consent to the Additional
Borrower becoming a Borrower party to, and agree that the Additional Borrower
shall become a Borrower party to, such Loan and Security Agreement, effective as
of [ ].
Very truly yours,
BANK OF AMERICA, N.A., as a Lender
By: ______________________________
Name:
Title:
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: ______________________________
Name:
Title:
EXHIBIT D
to Amended and Restated Loan and Security Agreement
COMMITMENTS
Name Of Lender Amount Of Commitment
-------------- --------------------
Bank of America, N.A. Twenty-five million dollars ($25,000,000)
LaSalle Bank National Association Fifteen million dollars ($15,000,000)