Exhibit 10.1
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▇▇▇▇▇▇ MEDICAL GROUP, INC.
▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC.
Credit Agreement
Dated as of August 1, 2001
The Chase Manhattan Bank
as Administrative Agent,
Collateral Agent and Issuing Bank
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▇.▇. ▇▇▇▇▇▇ Securities Inc.
as Bookrunner and Lead Arranger
Credit Suisse First Boston
as Co-Syndication Agent
U.S. Bank National Association
as Co-Syndication Agent
[LOGO OF JPMORGAN]
CREDIT AGREEMENT dated as of August 1, 2001,
among ▇▇▇▇▇▇ MEDICAL GROUP, INC., a Delaware
corporation, ▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC., a
Delaware corporation, the LENDERS from time to time
party hereto, THE CHASE MANHATTAN BANK, a New York
banking corporation, as administrative agent and
collateral agent for such lenders and as issuing
bank, and CREDIT SUISSE FIRST BOSTON and U.S. BANK
NATIONAL ASSOCIATION, as Co-Syndication Agents.
The parties hereto agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Defined Terms . As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are bearing interest at a
rate determined by reference to the Alternate Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest Period
multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means The Chase Manhattan Bank, in its capacity as
administrative agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire in the
form of Exhibit A hereto or such other form as may be supplied by the
Administrative Agent.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Agents" means the Administrative Agent and the Collateral Agent.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" means, with respect to any Revolving Lender, the
percentage of the total Revolving Commitments represented by such Lender's
Revolving Commitment. If the Revolving Commitments have terminated or expired,
the Applicable
Percentages shall be determined based upon the Revolving Commitments most
recently in effect, giving effect to any assignments.
"Applicable Rate" means, for any day with respect to any ABR Loan or
Eurodollar Loan, as the case may be, the applicable rate per annum set forth
below under the caption "Eurodollar Spread" or "ABR Spread", as the case may be,
based upon the Leverage Ratio as of the most recent determination date:
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Leverage Ratio ABR Spread Eurodollar Spread
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Category 1 1.25% 2.25%
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Greater than or equal to
2.00 to 1.00
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Category 2 1.00% 2.00%
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Greater than or equal to
1.00 to 1.00 but less than
2.00 to 1.00
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Category 3 0.75% 1.75%
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Less than 1.00 to 1.00
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For purposes of the foregoing, (i) the Leverage Ratio shall be determined as of
the end of each fiscal quarter of Holdings' fiscal year based upon the
consolidated financial statements of Holdings delivered pursuant to Section
5.01(a) or (b) and (ii) each change in the Applicable Rate resulting from a
change in the Leverage Ratio shall be effective during the period commencing on
and including the date of delivery to the Administrative Agent of such
consolidated financial statements indicating such change and ending on the date
immediately preceding the effective date of the next such change; provided that
the Leverage Ratio shall be deemed to be in Category 1 (A) at any time that an
Event of Default described in paragraph (a) or (b) of Article VII has occurred
and is continuing or (B) if the Borrower fails to deliver the consolidated
financial statements required to be delivered by it pursuant to Section 5.01(a)
or (b), during the period from the expiration of the time for delivery thereof
until such consolidated financial statements are delivered.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.04), and accepted by the Administrative Agent, in the form
of Exhibit B or any other form approved by the Administrative Agent.
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrower" means ▇▇▇▇▇▇ Medical Technology, Inc., a Delaware corporation.
"Borrowing" means Loans of the same Class and Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
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"Borrowing Request" means a request by the Borrower for a Borrowing in
accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
remain closed; provided that, when used in connection with a Eurodollar Loan,
the term "Business Day" shall also exclude any day on which banks are not open
for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" means, for any period, (a) the additions to
property, plant and equipment and other capital expenditures of the Borrower and
the Subsidiaries that are (or would be) set forth in a consolidated statement of
cash flows of the Borrower for such period prepared in accordance with GAAP and
(b) Capital Lease Obligations incurred by the Borrower and the Subsidiaries
during such period.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Change in Control" means any of the following events:
(a) (i) the Sponsor and its Affiliates shall fail to own and have the
right to vote shares representing more than 30% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of
Holdings or (ii) any Person or group (within the meaning of the Securities
Exchange Act of 1934 and the rules of the Securities and Exchange
Commission thereunder as in effect on the Effective Date) other than the
Permitted Investors becomes, directly or indirectly, the beneficial owner
of a percentage of shares representing the aggregate ordinary voting power
represented by the issued and outstanding capital stock of Holdings that is
greater than the percentage of such shares owned by the Permitted
Investors;
(b) (i) occupation of a majority of the seats (other than vacant
seats) on the board of directors of Holdings or the Borrower by Persons who
were neither (x) nominated by the board of directors of Holdings or the
Borrower, as the case may be, nor (y) appointed by directors so nominated
or (ii) the occurrence of any change in control or similar event (however
denominated) with respect to Holdings or the Borrower under and as defined
in any other indenture or agreement in respect of Material Indebtedness to
which Holdings, the Borrower or a Subsidiary is a party; or
(c) Holdings shall cease to directly own 100% of the issued and
outstanding capital stock of the Borrower.
"Change in Law" means (a) the adoption of any law, rule or regulation after
the Effective Date, (b) any change in any law, rule or regulation or in the
interpretation or application thereof by any Governmental Authority after the
Effective Date or (c) compliance by any Lender
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or the Issuing Bank (or, for purposes of Section 2.14(b), by any lending office
of such Lender or by such Lender's or the Issuing Bank's holding company, if
any) with any request, guideline or directive (whether or not having the force
of law) of any Governmental Authority made or issued after the Effective Date.
"Class", when used in reference to any Loan or Borrowing, refers to whether
such Loan, or the Loans comprising such Borrowing, are Revolving Loans or Term
Loans and, when used in reference to any Commitment, refers to whether such
Commitment is a Revolving Commitment or Term Commitment.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Co-Investor" means the Vertical Fund Associates, L.P., a Delaware limited
partnership.
"Collateral" means any and all "Collateral" as defined in any Security
Document.
"Collateral Agent" means The Chase Manhattan Bank, in its capacity as
collateral agent for the Lenders hereunder.
"Commitment" means a Revolving Commitment or Term Commitment or any
combination thereof (as the context requires).
"Consolidated Assets" means the total assets of Holdings, the Borrower and
the Subsidiaries, based on Holding's consolidated balance sheet as determined in
accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the interest
expense, whether paid or payable in cash, in kind or otherwise (including the
interest component in respect of Capital Lease Obligations) by Holdings, the
Borrower and the Subsidiaries during such period, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Cash Interest Expense" means, for any period, the interest
expense, to the extent paid or payable in cash (including the interest component
in respect of Capital Lease Obligations) by Holdings, the Borrower and the
Subsidiaries during such period, determined on a consolidated basis in
accordance with GAAP.
"Consolidated EBITDA" means, for any period, Consolidated Net Income for
such period, plus, without duplication and to the extent deducted from revenues
in determining Consolidated Net Income for such period, the sum of (a) the
aggregate amount of Consolidated Interest Expense for such period, (b) the
aggregate amount of income tax expense for such period, (c) all amounts
attributable to depreciation and amortization for such period, (d) other
non-cash charges, including (i) extraordinary, nonrecurring or restructuring
charges, (ii) non-cash charges with respect to stock based compensation and
(iii) non-cash charges related to inventory step-ups in connection with
acquisitions, during such period (but excluding all other write-downs of assets
and any non-cash charge that requires an accrual of a cash reserve for
anticipated cash charges for any period) and (e) non-recurring charges incurred
in connection with the Transactions, minus, to the extent added in determining
such Consolidated Net Income, (i) any interest income and (ii) any non-cash
income or gain.
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"Consolidated Fixed Charges" means, for any period, the sum of (a)
Consolidated Cash Interest Expense for such period, (b) Capital Expenditures for
such period and (c) scheduled principal payments of long-term Indebtedness
(whether or not made) during such period; provided, however, that (i) Capital
Expenditures for the purchase or manufacture of Loaner Instruments in an
aggregate amount not to exceed $20,000,000 during any fiscal year and (ii) any
Capital Expenditure financed with the proceeds of Indebtedness incurred under
Section 6.01(a)(v) shall not be included in the calculation of Consolidated
Fixed Charges.
"Consolidated Net Income" means, for any period, net income or loss of
Holdings, the Borrower and the Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded from such net income or loss (a) the income or loss of any Person in
which any other Person (other than Holdings, the Borrower or any of the
Subsidiaries or any director holding qualifying shares in compliance with
applicable law) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Holdings, the Borrower or any
of the Subsidiaries by such Person during such period, (b) the income (or loss)
of any Person accrued prior to the date it becomes a Subsidiary or is merged
into or consolidated with Holdings, the Borrower or any of the Subsidiaries or
the date that Person's assets are acquired by Holdings, the Borrower or any of
the Subsidiaries, (c) any after-tax gains or losses attributable to sales of
assets out of the ordinary course of business and (d) to the extent not included
in clauses (a) through (c) above, any extraordinary or unusual and non-recurring
gains or non-cash extraordinary or unusual and non-recurring losses.
"Continuing Shareholders" means California Public Employees' Retirement
System and its Affiliates and Princes Gate Investors, L.P. and its Affiliates.
"Control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"Controlling" and "Controlled" have meanings correlative thereto.
"Cremascoli" means ▇▇▇▇▇▇ Medical Europe SA, a societe anonyme organized
under laws of the Republic of France.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 3.06.
"Distribution Contract" means the Distribution Contract dated as of
February 26, 1997, between the Borrower and Ebos Group Limited.
"dollars" or "$" refers to lawful money of the United States of America.
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
Subsidiary.
"Effective Date" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
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"Environmental Laws" means all laws, rules, regulations, codes, ordinances,
orders, decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the environment, preservation or reclamation of natural resources, the
management, release or threatened release of any Hazardous Material or to public
health.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of Holdings, the Borrower or any Subsidiary directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
that, together with the Borrower, is treated as a single employer under Section
414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section 414 of
the Code.
"ERISA Event" means (a) any "reportable event", as defined in Section 4043
of ERISA or the regulations issued thereunder with respect to a Plan (other than
an event for which the 30-day notice period is waived); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator appointed by or on behalf of the PBGC of any notice relating to an
intention to terminate any Plan or Plans or to appoint a trustee to administer
any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of
any liability with respect to the withdrawal or partial withdrawal from any Plan
or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate
of any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in Article VII.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender, the Issuing Bank or any other recipient of any payment to be made by or
on account of any obligation of the Borrower hereunder, (a) income, capital,
branch profits, franchise or other similar taxes imposed on (or measured by) its
net or gross income, capital or profits by the United States of America or any
state or political subdivision thereof, or by the jurisdiction or any state
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or political subdivision thereof under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located (provided, however,
that no Lender shall be deemed to be located in any jurisdiction solely as a
result of receiving any payment under or taking any action related to any Loan),
and (b) in the case of a Foreign Lender (other than an assignee pursuant to a
request by the Borrower under Section 2.18(b)), any withholding tax (i) that is
in effect and would apply to amounts payable to such Foreign Lender at the time
such Foreign Lender becomes a party to this Agreement (or designates a new
lending office) except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of such new lending office (or
assignment), to receive additional amounts from the Borrower with respect to any
withholding tax pursuant to Section 2.16(a), or (ii) that is attributable to
such Foreign Lender's failure to comply with 2.16(e).
"Existing Credit Agreements" means (a) the Credit Agreement dated as of
December 7, 1999, as amended, among Holdings, the Borrower, the lenders party
thereto, The Chase Manhattan Bank, as administrative agent and collateral agent,
Chase Manhattan Bank, Paris Branch, as the local facilities lender, and Bank of
America, N.A., as syndication agent, and (b) the Credit Agreement dated as of
December 22, 1999, as amended, among Cremascoli, the lenders party thereto,
Chase Manhattan Bank, Paris Branch, The Chase Manhattan Bank, as U.S.
administrative agent and U.S. collateral agent, and Bank of America, N.A., as
U.S. syndication agent.
"Family Group" means, for any individual, such individual's estate, spouse,
ancestors and descendants of grandparents (in each case, whether natural, by
marriage or adopted) and any trust solely for the benefit of such individual or
such individual's spouse, ancestors and descendants of grandparents (in each
case, whether natural, by marriage or adopted).
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer", of any Person, means the chief financial officer,
principal accounting officer, treasurer or controller of such Person.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is located. For purposes of
this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Foreign Subsidiary" means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States of America or any State thereof
or the District of Columbia.
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"French Pledge Agreements" means the French Pledge Agreements,
substantially in the form of Exhibit D, between the Borrower and the Collateral
Agent for the benefit of the Secured Parties.
"GAAP" means generally accepted accounting principles in the United States
of America.
"Governmental Authority" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"Granting Bank" has the meaning sent forth in Section 9.04(h).
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term "Guarantee" shall not include endorsements
for collection or deposit in the ordinary course of business. For the purpose of
determining compliance with Sections 6.01(a)(iv) and 6.04(e), the liability of
any guarantor with respect to any Guarantee of Indebtedness shall be the lesser
of (i) the stated amount of such Indebtedness (plus any interest, fees and
expenses to the extent not paid when due) and (ii) the maximum amount of
liability of the guarantor permitted by the terms of such Guarantee.
"Guarantee and Collateral Agreement" means the Guarantee and Collateral
Agreement, substantially in the form of Exhibit C, among Holdings, the Borrower,
the Subsidiary Guarantors, if any, and the Collateral Agent for the benefit of
the Secured Parties.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all substances or wastes of any nature that are regulated, restricted
or subject to any prohibition by, under or pursuant to any Environmental Law as
a "hazardous waste", "hazardous substance", "toxic pollutant", "special waste",
"dangerous waste", "infectious waste", "medical waste", "hazardous air
pollutant", "hazardous water pollutant", specifically including any pesticide,
petroleum or petroleum distillate, asbestos or asbestos-containing materials,
polychlorinated biphenyls and radon gas.
"Hedging Agreement" means any interest rate protection agreement, foreign
currency exchange agreement, commodity price protection agreement or other
interest or currency exchange rate or commodity price hedging arrangement.
"Holdings" means ▇▇▇▇▇▇ Medical Group, Inc., a Delaware corporation.
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"Incremental Revolving Facility Amount" means, at any time, the excess, if
any, of (a) $20,000,000 over (b) the aggregate increase in the Revolving
Commitments established prior to such time pursuant to Section 2.19.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, including
bonds posted to secure payments of judgments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed (it being understood that the amount of such Indebtedness shall be
deemed to be the lesser of (x) the stated amount of such Indebtedness and (y)
the fair market value of the assets subject to such Lien), (f) all Guarantees by
such Person of Indebtedness of others, (g) all Capital Lease Obligations of such
Person, (h) all obligations, contingent or otherwise, of such Person as an
account party in respect of letters of credit and letters of guaranty and (i)
all obligations, contingent or otherwise, of such Person in respect of bankers'
acceptances. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intellectual Property" has the meaning assigned to such term in the
Guarantee and Collateral Agreement.
"Interest Election Request" means a request by the Borrower to convert or
continue a Revolving Borrowing or Term Borrowing in accordance with Section
2.06.
"Interest Payment Date" means (a) with respect to any ABR Loan, the last
day of each March, June, September and December, and (b) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day prior to the last
day of such Interest Period that occurs at intervals of three months' duration
after the first day of such Interest Period.
"Interest Period" means with respect to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Borrower may elect; provided, that (a) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (b) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of
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a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"IPO" means the underwritten initial public offering of 7,500,000 shares of
common stock of Holdings pursuant to its Registration Statement (No. 333-59732)
dated June 20, 2001, as amended from time to time.
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as the
issuer of Letters of Credit hereunder, and its successors in such capacity as
provided in Section 2.04(c). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"Italian Receivables Subsidiary" means any subsidiary of Cremascoli
organized under the laws of the Republic of Italy.
"Italian Receivables Program" means the sale of accounts receivable by the
Italian Receivables Subsidiary in a manner and scale consistent with past
practice and any amendment, modification or replacement of such program;
provided that any such amendment, modification or replacement shall not be
materially adverse to the interests of the Lenders and shall also be subject to
the prior written approval of the Administrative Agent.
"Japanese Pledge Agreement" means the Japanese Pledge Agreement,
substantially in the form of Exhibit E hereto, between the Borrower and the
Collateral Agent for the benefit of the Secured Parties.
"LC Disbursement" means a payment made by the Issuing Bank pursuant to a
Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time plus (b) the aggregate
amount of all LC Disbursements that have not yet been reimbursed by or on behalf
of the Borrower at such time. The LC Exposure of any Revolving Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lender Affiliate" means (a) with respect to any Lender, (i) an Affiliate
of such Lender or (ii) any entity (whether a corporation, partnership, trust or
otherwise) that is engaged in making, purchasing, holding or otherwise investing
in bank loans and similar extensions of credit in the ordinary course of its
business and is administered or managed by a Lender or an Affiliate of such
Lender and (b) with respect to any Lender that is a fund which invests in bank
loans and similar extensions of credit, any other fund that invests in bank
loans and similar extensions of credit and is managed by the same investment
advisor as such Lender or by an Affiliate of such investment advisor.
"Lenders" means the Persons listed on Schedule 2.01 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to Section
2.04.
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"Leverage Ratio" means, on any date, the ratio of (a) Total Debt as of such
date to (b) Consolidated EBITDA for the period of four consecutive fiscal
quarters of Holdings most recently ended on or prior to such date.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, as the rate for dollar deposits with a
maturity comparable to such Interest Period. In the event that such rate is not
available at such time for any reason, then the "LIBO Rate" with respect to such
Eurodollar Borrowing for such Interest Period shall be the rate at which dollar
deposits of $5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means this Agreement, the Guarantee and Collateral
Agreement and the other Security Documents.
"Loaner Instrument" means any surgical instrument owned by the Borrower or
any Subsidiary which is made available to physicians for use in surgical
procedures to implant products manufactured or distributed by the Borrower.
"Loan Parties" means Holdings, the Borrower and the Subsidiary Guarantors.
"Loans" means the loans made by the Lenders to the Borrower pursuant to
this Agreement.
"Material Adverse Effect" means a material adverse effect, after taking
into account any applicable insurance and any applicable indemnification (to the
extent the provider of such insurance or indemnification has the financial
ability to support its obligations with respect thereto and is not disputing or
refusing to acknowledge such obligations), on (a) the business, operations,
property, condition (financial or otherwise) or prospects of Holdings, the
Borrower and the Subsidiaries taken as a whole, (b) the ability of the Loan
Parties to perform any of their material obligations under the Loan Documents or
(c) the rights of or benefits available to the Lenders under the Loan Documents
taken as a whole.
"Material Indebtedness" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Hedging Agreements,
of any one or more of Holdings, the Borrower and the Subsidiaries in an
aggregate principal amount exceeding $5,000,000. For purposes of determining
Material Indebtedness, the "principal amount" of the
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obligations of Holdings, the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that Holdings, the Borrower or such Subsidiary
would be required to pay if such Hedging Agreement were terminated at such time.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgage" means a mortgage, deed of trust, assignment of leases and rents
or other security document, substantially in the form of Exhibit D (subject to
any changes which may be required under applicable local laws), granting a Lien
on any Mortgaged Property to secure the Obligations.
"Mortgaged Property" means each parcel of real property and improvements
thereto with respect to which a Mortgage is granted pursuant to Section 5.12 or
5.13.
"Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA.
"Net Proceeds" means, with respect to any event (a) the cash proceeds
received in respect of such event including (i) any cash received in respect of
any non-cash proceeds, but only as and when received, (ii) in the case of a
casualty, insurance proceeds, and (iii) in the case of a condemnation or similar
event, condemnation awards and similar payments, net of (b) the sum of (i) all
reasonable fees and out-of-pocket expenses (including appraisals, and legal,
title and recording tax expenses and commissions) paid by Holdings, the Borrower
and the Subsidiaries to third parties (other than Affiliates) in connection with
such event, (ii) in the case of a sale or other disposition of an asset
(including pursuant to a casualty or condemnation), the amount of all payments
required to be made by Holdings, the Borrower and the Subsidiaries as a result
of such event to repay Indebtedness (other than Loans) secured by such asset or
otherwise subject to mandatory prepayment as a result of such event, (iii) the
amount of all taxes (including sales and value added taxes and including taxes
payable in connection with the transfer of funds to Holdings, the Borrower or
any of the Subsidiaries in connection with a prepayment pursuant to this
Agreement) paid (or reasonably estimated to be payable) by Holdings, the
Borrower and the Subsidiaries, and (iv) the amount of any reserves (whether or
not contained in an escrow or other similar arrangements) established by
Holdings, the Borrower and the Subsidiaries to fund contingent liabilities
reasonably estimated to be payable, in each case during the year that such event
occurred or the next succeeding year and that are directly attributable to such
event (as determined reasonably and in good faith by the chief financial officer
of the Borrower).
"Obligations" has the meaning assigned to such term in the Guarantee and
Collateral Agreement.
"Other Taxes" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Loan Document or from the execution, delivery or
enforcement of, or otherwise with respect to, any Loan Document; provided,
however, in no event shall the term "Other Taxes" include Excluded Taxes.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA and any successor entity performing similar functions.
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"Perfection Certificate" means a certificate in the form of Annex 1 to the
Security Agreement or any other form approved by the Collateral Agent.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes, assessments and other governmental
charges that are not yet due or, if due, are (i) not delinquent or (ii) are
being contested in compliance with Section 5.05;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like Liens imposed by law, arising in the ordinary course of
business and securing obligations that are not overdue by more than 45 days
or are being contested in compliance with Section 5.05;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations (or to obtain letters of credit for the
foregoing purposes);
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature, in each case in the ordinary course
of business;
(e) judgment liens in respect of judgments that do not constitute an
Event of Default under clause (k) of Article VII;
(f) easements, licenses, covenants, zoning and building restrictions,
rights-of-way and similar encumbrances on real property imposed by law or
arising in the ordinary course of business that do not secure any monetary
obligations and do not materially detract from the value of the affected
property or interfere with the ordinary conduct of business of the Borrower
or any Subsidiary; and
(g) liens arising by virtue of any statutory or common law provision
relating to banker's liens, rights of setoff or similar rights as to
deposit accounts or other funds maintained with a creditor depository
institution;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness (other than a lien specified in paragraph (g) of this
definition).
"Permitted Investors" means the Sponsor and its Affiliates, the Co-Investor
and the Continuing Shareholders.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency or instrumentality thereof to the extent such
obligations are backed by the full faith and credit of the United States of
America), in each case maturing within one year from the date of
acquisition thereof;
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(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the
highest credit rating obtainable from S&P or from Moody's;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts
issued or offered by, any domestic office of any commercial bank organized
under the laws of the United States of America or any State thereof which
has a combined capital and surplus and undivided profits of not less than
$500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause
(c) above; and
(e) shares of money market mutual or similar funds having assets in
excess of $500,000,000 and which invest substantially all of their assets
in investments satisfying the requirements of clauses (a) through (d) of
this definition.
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Plan" means any employee pension benefit plan (other than a Multiemployer
Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code
or Section 302 of ERISA, and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Prepayment Event" means:
(a) any sale, transfer or other disposition (including pursuant to a
sale and leaseback transaction) of any property or asset of Holdings, the
Borrower or any Subsidiary, other than dispositions permitted under Section
6.05 (provided that the disposition of the Specified Distribution Facility
shall constitute a Prepayment Event to the extent the Net Proceeds thereof
are not used to purchase, lease, construct or otherwise acquire a similar
facility written 300 days of the disposition thereof);
(b) any issuance by Holdings, the Borrower or any Subsidiary of any
equity interest in Holdings, the Borrower or any Subsidiary or the receipt
by Holdings, the Borrower or any Subsidiary of any capital contribution, in
each case, after the Effective Date, other than (i) any such issuance of
equity interests to, or receipt of any such capital contribution from,
Holdings, the Borrower or a Subsidiary, (ii) any issuance of directors'
qualifying shares, (iii) other issuances by Holdings of its common stock or
preferred stock (other than Redeemable Preferred Stock) resulting in
aggregate Net Proceeds not exceeding $10,000,000 in the aggregate, and (iv)
issuances by Holdings of its common stock pursuant to the exercise of
employee and distributor stock options or warrants not to exceed $2,000,000
during any fiscal year of Holdings;
(c) any casualty or other insured damage to, or any taking under power
of eminent domain or by condemnation or similar proceeding of, any property
or asset of Holdings, the Borrower or any Subsidiary, but only to the
extent that the Net Proceeds
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therefrom have not been applied to acquire other Productive Assets within
270 days after such event; or
(d) the incurrence by Holdings, the Borrower or any Subsidiary of any
Indebtedness of the type described in clause (a) or (b) of the definition
thereof, other than Indebtedness permitted by Section 6.01.
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by The Chase Manhattan Bank as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Productive Assets" means assets of a kind used or usable by the Borrower
and the Subsidiaries in the Borrower's business or any Related Business.
"Redeemable Preferred Stock" means preferred stock that by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is one year after the Term Maturity Date; provided that preferred stock
that is redeemable at the option of the holder in connection with a change of
control or a sale of substantially all of the issuer's assets shall not, solely
by virtue of such provisions, be deemed to be "Redeemable Preferred Stock".
"Register" has the meaning set forth in Section 9.04.
"Related Business" means any business which is the same as or related,
ancillary or complimentary to the business of Holdings, the Borrower or any
Subsidiary on the Effective Date, as reasonably determined by the board of
directors of Holdings or the Borrower.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, trustees, employees,
agents and advisors of such Person and such Person's Affiliates.
"Required Lenders" means, at any time, Lenders having Revolving Exposures,
Term Loans and unused Commitments representing at least a majority of the sum of
the total Revolving Exposures, outstanding Term Loans and unused Commitments at
such time.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
capital stock of Holdings, the Borrower or any Subsidiary, or any payment
(whether in cash, securities or other property), including any sinking fund or
similar deposit, on account of the purchase, redemption, retirement,
acquisition, cancelation or termination of any such shares of capital stock of
Holdings, the Borrower or any Subsidiary or any option, warrant or other right
to acquire any such shares of capital stock of Holdings, the Borrower or any
Subsidiary.
"Revolving Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Commitments.
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"Revolving Commitment" means, with respect to each Lender, the commitment,
if any, of such Lender to make Revolving Loans and to acquire participations in
Letters of Credit hereunder, expressed as an amount representing the maximum
aggregate amount of such Lender's Revolving Exposure hereunder, as such
commitment may be (a) reduced from time to time pursuant to Section 2.07, (b)
reduced or increased from time to time pursuant to assignments by or to such
Lender pursuant to Section 9.04 and (c) increased from time to time pursuant to
Section 2.19. The initial amount of each Lender's Revolving Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Revolving Commitment, as applicable. The
initial aggregate amount of the Lenders' Revolving Commitments is $40,000,000.
"Revolving Exposure" means, with respect to any Lender at any time, the sum
of the outstanding principal amount of such Lender's Revolving Loans and its LC
Exposure at such time.
"Revolving Lender" means a Lender with a Revolving Commitment or, if the
Revolving Commitments have terminated or expired, a Lender with Revolving
Exposure.
"Revolving Loan" means a Loan made pursuant to clause (b) of Section 2.01.
"Revolving Maturity Date" means August 1, 2006.
"S&P" means Standard & Poor's Rating Service.
"Secured Parties" has the meaning assigned to such term in the Guarantee
and Collateral Agreement.
"Security Documents" means the Guarantee and Collateral Agreement, the
French Pledge Agreements, the Japanese Pledge Agreement, and each other security
agreement or other instrument of document executed and delivered pursuant to
Section 5.12 or 5.13 to secure any of the Obligations.
"SPC" has the meaning set forth in Section 9.04(h).
"Significant Subsidiary" means any Subsidiary that would be a "Significant
Subsidiary" of Holdings within the meaning of Rule 1-02 under Regulation S-X
promulgated by the U.S. Securities and Exchange Commission, as in effect on the
Effective Date.
"Specified Distribution Facility" means the Borrower's distribution
facility located at ▇▇▇▇▇ ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇.
"Sponsor" means Warburg, ▇▇▇▇▇▇ Equity Partners, L.P., a Delaware limited
partnership and any successor thereto.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board). Eurodollar Loans shall be deemed to constitute
eurocurrency funding and to be subject to such reserve requirements without
benefit of or credit
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for proration, exemptions or offsets that may be available from time to time to
any Lender under such Regulation D or any comparable regulation. The Statutory
Reserve Rate shall be adjusted automatically on and as of the effective date of
any change in any reserve percentage.
"Subordinated Debt" means subordinated Indebtedness of Holdings having a
maturity date of December 22, 2006.
"subsidiary" means, with respect to any Person (the "parent") at any date,
any corporation, limited liability company, partnership, association or other
entity the accounts of which would be consolidated with those of the parent in
the parent's consolidated financial statements if such financial statements were
prepared in accordance with GAAP as of such date, as well as any other
corporation, limited liability company, partnership, association or other entity
(a) of which securities or other ownership interests representing more than 50%
of the equity or more than 50% of the ordinary voting power or, in the case of a
partnership, more than 50% of the general partnership interests are, as of such
date, owned, controlled or held, or (b) that is, as of such date, otherwise
Controlled, by the parent or one or more subsidiaries of the parent or by the
parent and one or more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Subsidiary Guarantor" means each Subsidiary of the Borrower listed on
Schedule 1.01(a) and each other Subsidiary that is or becomes a party to the
Guarantee and Collateral Agreement.
"Taxes" means any and all present or future taxes, levies, imposts, duties,
deductions, charges or withholdings imposed by any Governmental Authority.
"Term Commitment" means, with respect to each Lender, the commitment, if
any, of such Lender to make a Term Loan hereunder, expressed as an amount
representing the maximum principal amount of the Term Loan to be made by such
Lender hereunder, as such commitment may be (a) reduced from time to time
pursuant to Section 2.07 and (b) reduced or increased from time to time pursuant
to assignments by or to such Lender pursuant to Section 9.04. The initial amount
of each Lender's Term Commitment is set forth on Schedule 2.01, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Term Commitment, as applicable. The initial aggregate amount of the Lenders'
Term Commitments is $20,000,000.
"Term Lender" means a Lender with a Term Commitment or an outstanding Term
Loan.
"Term Loan" means a Loan made pursuant to clause (a) of Section 2.01.
"Term Maturity Date" means August 1, 2006.
"Total Debt" means, as of any date of determination, without duplication,
the aggregate principal amount of Indebtedness of Holdings, the Borrower and the
Subsidiaries outstanding as of such date, determined on a consolidated basis in
accordance with GAAP (other than Indebtedness of the type referred to in clause
(h) of the definition of the term "Indebtedness", except to the extent of any
unreimbursed drawings thereunder).
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"Transactions" means (a) the execution, delivery and performance by each
Loan Party of the Loan Documents to which it is to be a party, the borrowing of
the Loans, the use of the proceeds thereof and the issuance of the Letters of
Credit, (b) the consummation of the IPO and the use of the proceeds thereof and
(c) the refinancing of the Existing Credit Agreements and the Subordinated Debt
outstanding on or before the Effective Date.
"Transition Distribution Agreement" means the Transition Distribution
Agreement dated as of June 13, 2001 between the Borrower and Century Medical,
Inc.
"Type", when used in reference to any Loan or Borrowing, refers to whether
the rate of interest on such Loan, or on the Loans comprising such Borrowing, is
determined by reference to the Adjusted LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Classification of Loans and Borrowings. For purposes of this
Agreement, Loans may be classified and referred to by Class (e.g., a "Revolving
Loan") or by Type (e.g., a "Eurodollar Loan") or by Class and Type (e.g., a
"Eurodollar Revolving Loan"). Borrowings also may be classified and referred to
by Class (e.g., a "Revolving Borrowing") or by Type (e.g., a "Eurodollar
Borrowing") or by Class and Type (e.g., a "Eurodollar Revolving Borrowing").
SECTION 1.03. Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower and
Holdings request an amendment to any provision hereof to eliminate the effect of
any change occurring after the Effective Date in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in
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effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments. Subject to the terms and conditions set forth
herein, each Lender agrees, severally and not jointly, (a) to make a Term Loan
to the Borrower on the Effective Date in a principal amount not exceeding its
Term Commitment and (b) to make Revolving Loans to the Borrower and to acquire
participations in Letters of Credit issued hereunder from time to time during
the Revolving Availability Period in an aggregate principal amount that will not
result in such Lender's Revolving Exposure exceeding such Lender's Revolving
Commitment. Within the foregoing limits and subject to the terms and conditions
set forth herein, the Borrower may borrow, prepay and reborrow Revolving Loans.
Amounts repaid in respect of Term Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings. (a) Each Loan shall be made as part of
a Borrowing consisting of Loans of the same Class and Type made by the Lenders
ratably in accordance with their respective Commitments of the applicable Class.
The failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; provided that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to Section 2.13, each Revolving Borrowing and Term Borrowing
shall be comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may
request in accordance herewith; provided that the Administrative Agent may, in
its sole discretion, require that all Borrowings made on the Effective Date be
ABR Borrowings. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Borrowing, such Borrowing shall be in an aggregate amount that is an integral
multiple of $1,000,000. At the time that each ABR Revolving Borrowing is made,
such Borrowing shall be in an aggregate amount that is not less than $250,000
and in integral multiples of $50,000; provided that an ABR Revolving Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Revolving Commitments or that is required to finance the reimbursement of
an LC Disbursement as contemplated by Section 2.04(a)(iv). Borrowings of more
than one Type and Class may be outstanding at the same time; provided that there
shall not at any time be more than a total of six Eurodollar Borrowings
outstanding.
(d) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request, or to elect to convert or continue, any
Borrowing if the Interest Period requested with respect thereto would end after
the Revolving Maturity Date or Term Maturity Date, as applicable.
SECTION 2.03. Requests for Borrowings. To request a Revolving Borrowing
or Term Borrowing, the Borrower shall notify the Administrative Agent of such
request by
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telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00 a.m.,
New York City time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 10:00 a.m., New
York City time, on the date of the proposed Borrowing. Each such telephonic
Borrowing Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Borrowing Request
in a form approved by the Administrative Agent and signed by the Borrower. Each
such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) whether the requested Borrowing is to be a Revolving
Borrowing or Term Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) the date of such Borrowing, which shall be a Business Day;
(iv) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(v) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(vi) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
Section 2.05.
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Revolving Borrowing, then the Borrower shall
be deemed to have selected an Interest Period of one month's duration. Promptly
following receipt of a Borrowing Request in accordance with this Section, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04. Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions set forth
herein, the Borrower may request the issuance of Letters of Credit for its own
account, in a form reasonably acceptable to the Administrative Agent and the
Issuing Bank, at any time and from time to time during the Revolving
Availability Period. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control. Each Letter of
Credit is subject to the following terms and conditions:
(i) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the
amendment, renewal or extension of an outstanding Letter of Credit),
the Borrower shall hand deliver or telecopy (or transmit by electronic
communication, if arrangements for doing so have been approved by the
Issuing Bank) to the Issuing Bank and the Administrative Agent
(reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of
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Credit, or identifying the Letter of Credit to be amended, renewed or
extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business Day), the date on which such
Letter of Credit is to expire (which shall comply with paragraph
(a)(ii) of this Section), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information
as shall be necessary to prepare, amend, renew or extend such Letter
of Credit. If requested by the Issuing Bank, the Borrower also shall
submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. The
Issuing Bank agrees that such terms and conditions shall not contain
any financial or operating covenants or require any Lien not otherwise
contemplated by this Agreement. A Letter of Credit shall be issued,
amended, renewed or extended only if (and upon issuance, amendment,
renewal or extension of each Letter of Credit the Borrower shall be
deemed to represent and warrant that), after giving effect to such
issuance, amendment, renewal or extension the LC Exposure shall not
exceed the total Revolving Commitments.
(ii) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on the earliest of (A) the date one
year after the date of the issuance of such Letter of Credit (or, in
the case of any renewal or extension thereof, one year after such
renewal or extension), (B) the expiry date of such Letter of Credit
and (C) the date that is five Business Days prior to the Revolving
Maturity Date.
(iii) Participations. By the issuance of a Letter of Credit (or
an amendment to a Letter of Credit increasing the amount thereof) and
without any further action on the part of the Issuing Bank or the
Lenders, the Issuing Bank hereby grants to each Revolving Lender, and
each Revolving Lender hereby acquires from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's
Applicable Percentage of the aggregate amount available to be drawn
under such Letter of Credit. In consideration and in furtherance of
the foregoing, each Revolving Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the
account of the Issuing Bank, such Lender's Applicable Percentage of
each LC Disbursement made by the Issuing Bank and not reimbursed by
the Borrower on the date due as provided in paragraph (a)(iv) of this
Section, or of any reimbursement payment required to be refunded to
the Borrower for any reason. Each Lender acknowledges and agrees that
its obligation to acquire participations pursuant to this paragraph in
respect of Letters of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the
occurrence and continuance of a Default or reduction or termination of
the Commitments, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.
(iv) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall
reimburse such LC Disbursement by paying to the Administrative Agent
an amount equal to such LC Disbursement not later than 12:00 noon, New
York City time, on the Business Day that the Borrower receives notice
of such LC Disbursement, if such notice is received prior to 10:00
a.m., New York City time, or the Business Day immediately following
the day that the Borrower receives such notice, if such
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notice is not received prior to such time on the day of receipt;
provided that the Borrower may, subject to the conditions to borrowing
set forth herein, request in accordance with Section 2.03 that such
payment be financed with an ABR Revolving Borrowing in an equivalent
amount and, to the extent so financed, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting
ABR Revolving Borrowing. If the Borrower fails to make such payment
when due, the Administrative Agent shall notify each Revolving Lender
of the applicable LC Disbursement, the payment then due from the
Borrower in respect thereof and such Lender's Applicable Percentage
thereof. Promptly following receipt of such notice, each Revolving
Lender shall pay to the Administrative Agent its Applicable Percentage
of the payment then due from the Borrower, in the same manner as
provided in Section 2.05 with respect to Loans made by such Lender
(and Section 2.05 shall apply, mutatis mutandis, to the payment
obligations of the Revolving Lenders), and the Administrative Agent
shall promptly pay to the Issuing Bank the amounts so received by it
from the Revolving Lenders. Promptly following receipt by the
Administrative Agent of any payment from the Borrower pursuant to this
paragraph, the Administrative Agent shall distribute such payment to
the Issuing Bank or, to the extent that Revolving Lenders have made
payments pursuant to this paragraph to reimburse the Issuing Bank,
then to such Lenders and the Issuing Bank as their interests may
appear. Any payment made by a Revolving Lender pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement (other
than the funding of ABR Revolving Loans as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its
obligation to reimburse such LC Disbursement.
(v) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (a)(iv) of this Section
shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever and irrespective of (A) any
lack of validity or enforceability of any Letter of Credit or this
Agreement, or any term or provision therein, (B) any draft or other
document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (C) payment by the Issuing Bank
under a Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit,
or (D) any other event or circumstance whatsoever, whether or not
similar to any of the foregoing, that might, but for the provisions of
this Section, constitute a legal or equitable discharge of, or provide
a right of setoff against, the Borrower's obligations hereunder. None
of the Administrative Agent, the Lenders, the Issuing Bank or any of
their Related Parties, shall have any liability or responsibility by
reason of or in connection with the issuance or transfer of any Letter
of Credit or any payment or failure to make any payment thereunder
(irrespective of any of the circumstances referred to in the preceding
sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication
under or relating to any Letter of Credit (including any document
required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the
control of the Issuing Bank; provided that the foregoing shall not be
construed to excuse the Issuing Bank from liability to the Borrower to
the extent of any direct damages (as opposed to consequential damages,
claims in respect of
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which are hereby waived by the Borrower to the extent permitted by
applicable law) suffered by the Borrower that are caused by the
Issuing Bank's failure to exercise care when determining whether
drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in
the absence of gross negligence or wilful misconduct on the part of
the Issuing Bank (as finally determined by a court of competent
jurisdiction), the Issuing Bank shall be deemed to have exercised care
in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the
Issuing Bank may, in its sole discretion, either accept and make
payment upon such documents without responsibility for further
investigation, regardless of any notice or information to the
contrary, or refuse to accept and make payment upon such documents if
such documents are not in strict compliance with the terms of such
Letter of Credit.
(vi) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to
represent a demand for payment under a Letter of Credit. The Issuing
Bank shall promptly notify the Administrative Agent and the Borrower
by telephone (confirmed by telecopy) of such demand for payment and
whether the Issuing Bank has made or will make an LC Disbursement
thereunder; provided that any failure to give or delay in giving such
notice shall not relieve the Borrower of its obligation to reimburse
the Issuing Bank and the Revolving Lenders with respect to any such LC
Disbursement.
(vii) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC
Disbursement in full on the date such LC Disbursement is made, the
unpaid amount thereof shall bear interest, for each day from and
including the date such LC Disbursement is made to but excluding the
date that the Borrower reimburses such LC Disbursement, at the rate
per annum then applicable to ABR Revolving Loans; provided that, if
the Borrower fails to reimburse such LC Disbursement when due pursuant
to paragraph (a)(iv) of this Section, then Section 2.12(c) shall
apply. Interest accrued pursuant to this paragraph shall be for the
account of the Issuing Bank, except that interest accrued on and after
the date of payment by any Revolving Lender pursuant to paragraph
(a)(iv) of this Section to reimburse the Issuing Bank shall be for the
account of such Lender to the extent of such payment.
(viii) Cash Collateralization. If any Event of Default shall
occur and be continuing, on the Business Day that the Borrower
receives notice from the Administrative Agent or the Required Lenders
(or, if the maturity of the Loans has been accelerated, Revolving
Lenders with LC Exposure representing greater than 50% of the total LC
Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the
Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the LC Exposure
as of such date plus any accrued and unpaid fees and interest thereon;
provided that the obligation to deposit such cash collateral shall
become effective immediately, and such deposit shall become
immediately due and payable, without demand or
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other notice of any kind, upon the occurrence of any Event of Default
with respect to the Borrower or Holdings described in clause (h) or
(i) of Article VII. Each such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of
the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal, over such account. Other
than any interest earned on the investment of such deposits, which
investments shall be made at the option and sole discretion of the
Administrative Agent and at the Borrower's risk and expense, such
deposits shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in such account. Moneys in such account
shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to
the extent not so applied, shall be held for the satisfaction of the
reimbursement obligations of the Borrower for the LC Exposure at such
time or, if the maturity of the Loans has been accelerated (but
subject to the consent of Revolving Lenders with LC Exposure
representing greater than 50% of the total LC Exposure), be applied to
satisfy other obligations of the Borrower under this Agreement. If the
Borrower is required to provide an amount of cash collateral hereunder
as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower
within three Business Days after all Events of Default have been cured
or waived.
(b) Replacement of the Issuing Bank. The Issuing Bank may be replaced at
any time by written agreement among the Borrower, the Administrative Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Administrative Agent
shall notify the Lenders of any such replacement of the Issuing Bank. At the
time any such replacement shall become effective, the Borrower shall pay all
unpaid fees accrued for the account of the replaced Issuing Bank pursuant to
Section 2.11(b) and (c). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term "Issuing
Bank" shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the replacement of an Issuing Bank hereunder, the replaced
Issuing Bank shall remain a party hereto and shall continue to have all the
rights and obligations of an Issuing Bank under this Agreement with respect to
Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
SECTION 2.05. Funding of Borrowings. (a) Each Lender shall make each Loan
to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Administrative Agent most recently designated by it for such purpose by
notice to the Lenders. The Administrative Agent will make such Loans available
to the Borrower by promptly crediting the amounts so received, in like funds, to
an account of the Borrower maintained with the Administrative Agent in New York
City and designated by the Borrower in the applicable Borrowing Request;
provided that ABR Revolving Loans made to finance the reimbursement of an LC
Disbursement as provided in Section 2.04(a)(iv) shall be remitted by the
Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with
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paragraph (a) of this Section and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of such Lender, the greater of the
Federal Funds Effective Rate and a rate determined by the Administrative Agent
in accordance with banking industry rules on interbank compensation or (ii) in
the case of the Borrower, the interest rate applicable to ABR Loans. If such
Lender pays such amount to the Administrative Agent, then such amount shall
constitute such Lender's Loan included in such Borrowing.
SECTION 2.06. Interest Elections. (a) Each Revolving Borrowing and Term
Borrowing initially shall be of the Type specified in the applicable Borrowing
Request and, in the case of a Eurodollar Borrowing, shall have an initial
Interest Period as specified in such Borrowing Request. Thereafter, the Borrower
may elect to convert such Borrowing to a different Type or to continue such
Borrowing and, in the case of a Eurodollar Borrowing, may elect Interest Periods
therefor, all as provided in this Section. The Borrower may elect different
options with respect to different portions of the affected Borrowing, in which
case each such portion shall be allocated ratably among the Lenders holding the
Loans comprising such Borrowing, and the Loans comprising each such portion
shall be considered a separate Borrowing.
(b) To make an election pursuant to this Section, the Borrower shall notify
the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall specify the
following information in compliance with Section 2.02 and paragraph (f) of this
Section:
(i) the Borrowing to which such Interest Election Request applies
and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing; and
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(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election Request
with respect to a Eurodollar Borrowing prior to the end of the Interest Period
applicable thereto, then, unless such Borrowing is repaid as provided herein, at
the end of such Interest Period such Borrowing shall be converted to an ABR
Borrowing. Notwithstanding any contrary provision hereof, if an Event of Default
has occurred and is continuing and the Administrative Agent, at the request of
the Required Lenders, so notifies the Borrower, then, so long as an Event of
Default is continuing (i) no outstanding Borrowing may be converted to or
continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
(f) A Borrowing of any Class may not be converted to or continued as a
Eurodollar Borrowing if after giving effect thereto (i) the Interest Period
therefor would commence before and end after a date on which any principal of
the Loans of such Class is scheduled to be repaid and (ii) the sum of the
aggregate principal amount of outstanding Eurodollar Borrowings of such Class
with Interest Periods ending on or prior to such scheduled repayment date plus
the aggregate principal amount of outstanding ABR Borrowings of such Class would
be less than the aggregate principal amount of Loans of such Class required to
be repaid on such scheduled repayment date.
SECTION 2.07. Termination and Reduction of Commitments. (a) Unless
previously terminated, (i) the Term Commitments shall terminate at 5:00 p.m.,
New York City time, on the Effective Date and (ii) the Revolving Commitments
shall terminate on the Revolving Maturity Date; provided, however, that all the
Commitments shall terminate at 3:00 p.m., New York City time, on August 15, 2001
if the Effective Date has not occurred by such date.
(b) The Borrower may at any time terminate, or from time to time reduce,
the Commitments of any Class; provided that (i) each reduction of the
Commitments of any Class shall be in an amount that is an integral multiple of
$1,000,000 and (ii) the Borrower shall not terminate or reduce the Revolving
Commitments if, after giving effect to any concurrent prepayment of the
Revolving Loans in accordance with Section 2.10, the sum of the Revolving
Exposures would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under paragraph (b) of this Section at least
three Business Days prior to the effective date of such termination or
reduction, specifying such election and the effective date thereof. Promptly
following receipt of any notice, the Administrative Agent shall advise the
Lenders of the contents thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided that a notice of termination of
the Revolving Commitments delivered by the Borrower may state that such notice
is conditioned upon the
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effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments of any Class shall be permanent.
Each reduction of the Commitments of any Class shall be made ratably among the
Lenders in accordance with their respective Commitments of such Class.
SECTION 2.08. Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay (i) to the Administrative Agent for the account
of each Lender the then unpaid principal amount of each Revolving Loan of such
Lender on the Revolving Maturity Date and (ii) to the Administrative Agent for
the account of each Lender the then unpaid principal amount of each Term Loan of
such Lender as provided in Section 2.09.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the Indebtedness of the Borrower to such Lender
resulting from each Loan made by such Lender, including the amounts of principal
and interest payable and paid to such Lender from time to time hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraph (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans of any Class made by it be evidenced
by a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) and
in a form approved by the Administrative Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09. Amortization of Term Loans . (a) Subject to adjustment
pursuant to paragraph (c) of this Section, the Borrower shall repay Term
Borrowings on each date set forth below in the aggregate principal amount equal
to the amount set forth opposite such date:
Date Amount
---- ------
June 30, 2002: $ 750,000
December 31, 2002: 2,000,000
June 30, 2003: 2,000,000
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Date Amount
---- ------
December 31, 2003: 2,000,000
June 30, 2004: 2,000,000
December 31, 2004: 2,500,000
June 30, 2005: 2,500,000
December 31, 2005: 2,500,000
June 30, 2006: 2,500,000
Term Maturity Date: $1,250,000
(b) To the extent not previously paid, all Term Loans shall be due and
payable on the Term Maturity Date.
(c) Any prepayment of a Term Borrowing shall be applied to reduce the
subsequent scheduled repayments of the Term Borrowings to be made pursuant to
this Section ratably; provided that any prepayment of a Term Borrowing made
pursuant to Section 2.10(a) may be applied, at the Borrower's option, first, to
reduce the scheduled repayments of the Term Borrowings to be made pursuant to
this Section during the succeeding 12 months, in order of maturity, and, second,
to reduce the remaining scheduled repayments of the Term Borrowings to be made
pursuant to this Section ratably.
(d) Prior to any repayment of any Term Borrowings hereunder, the Borrower
shall select the Borrowing or Borrowings to be repaid and shall notify the
Administrative Agent by telephone (confirmed by telecopy) of such selection not
later than 11:00 a.m., New York City time, three Business Days before the
scheduled date of such repayment; provided that each repayment of Term
Borrowings shall be applied to repay any outstanding ABR Term Borrowings before
any other Term Borrowings. Each repayment of a Borrowing shall be applied
ratably to the Loans included in the repaid Borrowing. Repayments of Term
Borrowings shall be accompanied by accrued interest on the amount repaid.
SECTION 2.10. Prepayment of Loans. (a) The Borrower shall have the right at
any time and from time to time to prepay any Borrowing in whole or in part,
subject to the requirements of this Section.
(b) In the event and on each occasion that any Net Proceeds are received by
or on behalf of Holdings, the Borrower or any Subsidiary in respect of any
Prepayment Event, the Borrower shall, immediately after such Net Proceeds are
received, prepay Term Borrowings in an aggregate amount equal to such Net
Proceeds; provided that in the case of any issuance by Holdings of its common
stock or preferred stock, (x) at a time when the Leverage Ratio shall be equal
to or more than 1.0 to 1.0, any prepayment otherwise required by this Section
2.10(b) shall be limited to 50% of the Net Proceeds of such issuance, and (y) at
a time when the Leverage Ratio shall be less than 1.0 to 1.0, no prepayment
under this Section 2.10(b) shall be required.
(c) Prior to any optional or mandatory prepayment of Borrowings hereunder,
the Borrower shall select the Borrowing or Borrowings to be prepaid and shall
specify such selection in the notice of such prepayment pursuant to paragraph
(d) of this Section; provided that each prepayment of Borrowings of any Class
shall be applied to prepay ABR Borrowings of such Class before any other
Borrowings of such Class.
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(d) The Borrower shall notify the Administrative Agent by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., New York City
time, three Business Days before the date of prepayment or (ii) in the case of
prepayment of an ABR Borrowing, not later than 11:00 a.m., New York City time,
one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date, the principal amount of each
Borrowing or portion thereof to be prepaid and, in the case of a mandatory
prepayment, a reasonably detailed calculation of the amount of such prepayment;
provided that, if a notice of optional prepayment is given in connection with a
conditional notice of termination of the Revolving Commitments as contemplated
by Section 2.07, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.07. Promptly following
receipt of any such notice, the Administrative Agent shall advise the Lenders of
the contents thereof. Each partial prepayment of any Borrowing shall be in an
amount that would be permitted in the case of an advance of a Borrowing of the
same Type as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by Section 2.12.
SECTION 2.11. Fees. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee equal to 0.375% per annum
on the daily unused amount of each Commitment of such Lender during the period
from and including the Effective Date to but excluding the date on which such
Commitment terminates. Accrued commitment fees shall be payable in arrears on
the last day of March, June, September and December of each year and on the date
on which each Commitment terminates, commencing on the first such date to occur
after the Effective Date. All commitment fees shall be computed on the basis of
a year of 360 days and shall be payable for the actual number of days elapsed
(including the first day but excluding the last day). For purposes of computing
commitment fees with respect to Revolving Commitments, a Revolving Commitment of
a Lender shall be deemed to be used to the extent of the outstanding Revolving
Loans and LC Exposure of such Lender.
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Rate as interest on Eurodollar Revolving Loans on the daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to unreimbursed
LC Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Revolving Commitment
terminates and the date on which such Lender ceases to have any LC Exposure, and
(ii) to the Issuing Bank a fronting fee, which shall accrue at the rate of 1/4
of 1% per annum on the daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of
termination of the Revolving Commitments and the date on which there ceases to
be any LC Exposure, as well as the Issuing Bank's standard fees (other than fees
payable as a percentage of the undrawn amount of the Letter of Credit) with
respect to the issuance, amendment, renewal or extension of any Letter of Credit
or processing of drawings thereunder. Participation fees and fronting fees
accrued through and including the last day of March, June, September and
December of each year shall be payable on the third Business Day following such
last day, commencing on the first such date to occur after the Effective Date;
provided that all such fees shall be payable on the date on which the Revolving
Commitments terminate and any such fees accruing after the date on which the
Revolving Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable
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within 10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the actual
number of days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its own
account, the fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
commitment fees and participation fees, to the Lenders entitled thereto. Fees
paid shall not be refundable under any circumstances.
SECTION 2.12. Interest. (a) The Loans comprising each ABR Borrowing shall
bear interest at the Alternate Base Rate plus the Applicable Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest at
the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing plus
the Applicable Rate.
(c) Notwithstanding the foregoing, if any principal of or interest on any
Loan or any fee or other amount payable by the Borrower hereunder is not paid
when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2% plus the
rate otherwise applicable to such Loan as provided in the preceding paragraphs
of this Section and (ii) in the case of any other amount, 2% plus the rate
applicable to ABR Revolving Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and, in the case of Revolving Loans, upon
termination of the Revolving Commitments; provided that (i) interest accrued
pursuant to paragraph (c) of this Section shall be payable on demand, (ii) in
the event of any repayment or prepayment of any Loan (other than a prepayment of
an ABR Revolving Loan prior to the end of the Revolving Availability Period),
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment and (iii) in the event of any
conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of 360
days, except that interest computed by reference to the Alternate Base Rate at
times when the Alternate Base Rate is based on the Prime Rate shall be computed
on the basis of a year of 365 days (or 366 days in a leap year), and in each
case shall be payable for the actual number of days elapsed (including the first
day but excluding the last day). The applicable Alternate Base Rate or Adjusted
LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13. Alternate Rate of Interest. If prior to the commencement of
any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination shall be
conclusive absent manifest error) that adequate and reasonable means do not
exist for ascertaining the Adjusted LIBO Rate for such Interest Period; or
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(b) the Administrative Agent is advised by the Required Lenders that
the Adjusted LIBO Rate for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (or Lender) of making or
maintaining their Loans (or its Loan) included in such Borrowing for such
Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.14. Increased Costs. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank, as the case may be, such
additional amount or amounts as will compensate such Lender or the Issuing Bank,
as the case may be, for such additional costs incurred or reduction suffered;
provided that any such increased cost attributable to Taxes shall be governed
solely by Section 2.16 hereof.
(b) If any Lender or the Issuing Bank determines that any Change in Law
regarding capital requirements has or would have the effect of reducing the rate
of return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence of
this Agreement or the Loans made by, or participations in Letters of Credit held
by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a level
below that which such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company could have achieved but for such Change in Law (taking
into consideration such Lender's or the Issuing Bank's policies and the policies
of such Lender's or the Issuing Bank's holding company with respect to capital
adequacy), then from time to time the Borrower will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the amount
or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower
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and shall be conclusive absent manifest error. The Borrower shall pay such
Lender or the Issuing Bank, as the case may be, the amount shown as due on any
such certificate within 10 days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; provided
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than 180 days prior to the date that such Lender or the Issuing Bank, as
the case may be, notifies the Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided further that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 180-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.15. Break Funding Payments. In the event of (a) the payment of
any principal of any Eurodollar Loan other than on the last day of an Interest
Period applicable thereto (including as a result of an Event of Default), (b)
the conversion of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto, (c) the failure to borrow, convert, continue or
prepay any Revolving Loan or Term Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under Section 2.10(e) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
Section 2.18, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be the excess, if any, of the
present value of (i) the amount of interest which would have accrued on the
principal amount of such Loan had such event not occurred, at the Adjusted LIBO
Rate that would have been applicable to such Loan, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period for such Loan), less (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.16. Taxes. (a) Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without deduction for any Indemnified Taxes or Other
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) the
Administrative Agent, Lender or Issuing Bank (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
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(b) In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender and
the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder or under
any other Loan Document (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto (other than any such penalties, interest and reasonable expenses to the
extent resulting from the gross negligence or willful misconduct of the
Administrative Agent, such Lender or the Issuing Bank), whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate containing a summary
calculation of the amount of such payment or liability delivered to the Borrower
by a Lender or the Issuing Bank, or by the Administrative Agent on its own
behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive absent
manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other
Taxes by the Borrower to a Governmental Authority, the Borrower shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment or other evidence of such
payment reasonably satisfactory to the Administrative Agent and which is
customarily issued by the applicable Governmental Authority.
(e) Any Foreign Lender that is entitled to an exemption from or reduction
of withholding tax under the law of the jurisdiction in which the Borrower is
located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law, such
properly completed and executed documentation prescribed by applicable law or
reasonably requested by the Borrower as will permit such payments to be made
without withholding or at a reduced rate, it being understood that a Foreign
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest" may, for
purposes of satisfying the foregoing requirement, deliver a Form W-8 BEN, or any
subsequent versions thereof or successors thereto (and, if such Lender delivers
a Form W-8 BEN, a certificate representing that such Lender is not a "bank" for
purposes of Section 881(c) of the Code, is not a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Borrower and is not a
controlled foreign corporation related to the Borrower (within the meaning of
Section 864(d)(4) of the Code)).
(f) If the Administrative Agent or any Lender receives a refund solely in
respect of Indemnified Taxes or Other Taxes, it shall pay over such refund to
the Borrower to the extent that it has already received indemnity payments or
additional amounts pursuant to this Section with respect to such Indemnified
Taxes or Other Taxes giving rise to the refund, net of all reasonable
out-of-pocket expenses and without interest (other than interest paid by the
relevant Governmental Authority with respect to such refund); provided, however,
that the Borrower shall, upon request of the Administrative Agent or such
Lender, repay such refund (plus penalties, interest or other charges imposed by
the relevant Governmental Authority (other than any such penalties, interest or
other charges to the extent resulting from the gross negligence or willful
misconduct of the Administrative Agent, such Lender or the Issuing Bank)) to the
Administrative Agent or such Lender if the Administrative Agent or such Lender
is required to repay such refund
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to such Governmental Authority. Nothing contained herein shall require the
Administrative Agent or such Lender to make its tax returns (or any other
information relating to its taxes which it deems confidential) available to the
Borrower or any other person.
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs.
(a) The Borrower shall make each payment required to be made by it hereunder or
under any other Loan Document (whether of principal, interest, fees or
reimbursement of LC Disbursements, or of amounts payable under Section 2.14,
2.15 or 2.16, or otherwise) prior to 12:00 noon, New York City time, on the date
when due, in immediately available funds, without set-off or counterclaim. Any
amounts received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, except payments to be made directly to the Issuing Bank as
expressly provided herein and except that payments pursuant to Sections 2.14,
2.15, 2.16 and 9.03 shall be made directly to the Persons entitled thereto and
payments pursuant to other Loan Documents shall be made to the Persons specified
therein. The Administrative Agent shall distribute any such payments received by
it for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment under any Loan Document shall be due
on a day that is not a Business Day, the date for payment shall be extended to
the next succeeding Business Day, and, in the case of any payment accruing
interest, interest thereon shall be payable for the period of such extension.
All payments under each Loan Document shall be made in dollars.
(b) If at any time insufficient funds are received by and available to the
Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or counterclaim
or otherwise, obtain payment in respect of any principal of or interest on any
of its Revolving Loans, Term Loans or participations in LC Disbursements
resulting in such Lender receiving payment of a greater proportion of the
aggregate amount of its Revolving Loans, Term Loans and participations in LC
Disbursements and accrued interest thereon than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Revolving Loans, Term Loans and
participations in LC Disbursements of other Lenders to the extent necessary so
that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Revolving Loans, Term Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to Holdings, the Borrower or any Subsidiary
or Affiliate thereof (as to which the provisions of this paragraph shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so
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under applicable law, that any Lender acquiring a participation pursuant to the
foregoing arrangements may exercise against the Borrower rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of the Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made by it
pursuant to Section 2.04(a)(iii) or (iv), 2.04(b)(iii) or (iv), 2.05(b), 2.17(d)
or 9.03(c), then the Administrative Agent may, in its discretion
(notwithstanding any contrary provision hereof), apply any amounts thereafter
received by the Administrative Agent for the account of such Lender to satisfy
such Lender's obligations under such Sections until all such unsatisfied
obligations are fully paid.
SECTION 2.18. Mitigation Obligations; Replacement of Lenders. (a) If any
Lender requests compensation under Section 2.14, or if the Borrower is required
to pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16, then such Lender shall use
reasonable efforts to designate a different lending office for funding or
booking its Loans hereunder or to assign its rights and obligations hereunder to
another of its offices, branches or affiliates, or to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 9.04), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment) if, in the judgment of such Lender,
such designation or assignment (i) would eliminate or reduce amounts payable
pursuant to Section 2.14 or 2.16, as the case may be, in the future and (ii)
would not subject such Lender to any unreimbursed cost or expense and would not
otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay
all reasonable costs and expenses incurred by any Lender in connection with any
such designation or assignment.
(b) If any Lender defaults in its obligation to fund Loans hereunder, or if
any Lender requests compensation under Section 2.14, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.16, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, within 5 days
after such notice, without recourse (in accordance with and subject to the
restrictions contained in Section 9.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent (and, if a Revolving Commitment is
being assigned, the Issuing Bank), which consent shall not unreasonably be
withheld or delayed and (ii) such Lender
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shall have received payment of an amount equal to the outstanding principal of
its Loans and participations in LC Disbursements, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts). A Lender shall not be required
to make any such assignment and delegation if, prior thereto, as a result of a
waiver by such Lender or otherwise, the circumstances entitling the Borrower to
require such assignment and delegation cease to apply.
SECTION 2.19. Increase in Revolving Credit Commitments. (a) The Borrower
may, by written notice to the Administrative Agent from time to time, request
that the aggregate Revolving Commitments be increased by an amount not to exceed
the Incremental Revolving Facility Amount at such time. The Administrative Agent
shall deliver a copy of each such request to each Revolving Lender. Such notice
shall set forth the amount of the requested increase in the aggregate Revolving
Commitments (which shall be in minimum increments of $5,000,000 and a minimum
amount of $10,000,000 or equal to the remaining Incremental Revolving Facility
Amount) and the date on which such increase is requested to become effective
(which shall be not less than 10 Business Days nor more than 60 days after the
date of such notice and which, in any event, must be prior to the Revolving
Maturity Date), and shall offer each Revolving Lender the opportunity to
increase its Revolving Commitment by its Applicable Percentage of the proposed
increased amount. Each Revolving Lender shall, by notice to the Borrower and the
Administrative Agent given not more than 10 days after the date of the
Administrative Agent's notice, either agree to increase its Revolving Commitment
by all or a portion of the offered amount (each Revolving Lender so agreeing
being an "Increasing Revolving Lender") or decline to increase its Revolving
Commitment (and any Revolving Lender that does not deliver such a notice within
such period of 10 days shall be deemed to have declined to increase its
Revolving Commitment) (each Revolving Lender so declining or being deemed to
have declined being a "Non-Increasing Revolving Lender"). In the event that, on
the 10th day after the Administrative Agent shall have delivered a notice
pursuant to the second sentence of this paragraph, the Revolving Lenders shall
have agreed pursuant to the preceding sentence to increase their Revolving
Commitments by an aggregate amount less than the increase in the aggregate
Revolving Commitments requested by the Borrower, the Borrower may arrange for
one or more banks or other entities (any such bank or other entity referred to
in this sentence being called an "Augmenting Revolving Lender"), which may
include any Lender, to extend a Revolving Commitment or increase its existing
Revolving Commitment in an aggregate amount equal to the unsubscribed amount;
provided that each Augmenting Revolving Lender, if not already a Revolving
Lender hereunder, shall be subject to the approval of the Administrative Agent
and the Issuing Bank (which approvals shall not be unreasonably withheld) and
the Borrower and each Augmenting Revolving Lender shall execute all such
documentation as the Administrative Agent shall reasonably specify to evidence
its Revolving Commitment and/or its status as a Revolving Lender hereunder. Any
increase in the aggregate Revolving Commitments may be made in an amount which
is less than the increase requested by the Borrower if the Borrower is unable to
arrange for, or chooses not to arrange for, Augmenting Revolving Lenders.
(b) Each of the parties hereto hereby agrees that the Administrative Agent
may take any and all actions as may be reasonably necessary to ensure that,
after giving effect to any increase in the aggregate Revolving Commitments
pursuant to this Section 2.19, the outstanding Revolving Loans (if any) are held
by the Revolving Lenders in accordance with their new Applicable Percentages.
This may be accomplished at the discretion of the Administrative Agent (i) by
requiring the outstanding Revolving Loans to be prepaid with the proceeds of a
new Revolving Borrowing, (ii) by causing Non-Increasing Revolving Lenders to
assign portions of their outstanding Revolving Loans to Increasing Revolving
Lenders and Augmenting Revolving
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Lenders, (iii) by permitting the Revolving Borrowings outstanding at the time of
any increase in the aggregate Revolving Commitments pursuant to this Section
2.19 to remain outstanding until the last days of the respective Interest
Periods therefor, even though the Revolving Lenders would hold such Revolving
Borrowings other than in accordance with their new Applicable Percentages, or
(iv) by any combination of the foregoing. Any prepayment or assignment described
in this paragraph (b) shall be subject to Section 2.15, but otherwise without
premium or penalty.
(c) Notwithstanding the foregoing, no increase in the aggregate Revolving
Commitments shall become effective under this Section 2.19 unless (i) on the
date of such increase, the conditions set forth in paragraphs (b) and (c) of
Section 4.02 shall be satisfied and the Administrative Agent shall have received
a certificate to that effect dated such date and executed by a Financial Officer
of the Borrower, and (ii) the Administrative Agent shall have received (with
sufficient copies for each of the Revolving Lenders) legal opinions, board
resolutions and other documents consistent with those delivered on the Closing
Date under paragraphs (b) and (c) of Section 4.01.
ARTICLE III
Representations and Warranties
------------------------------
Each of Holdings and the Borrower represents and warrants to the Lenders
that:
SECTION 3.01. Organization; Powers. Each of Holdings, the Borrower and the
Subsidiaries is duly organized, validly existing and in good standing, if
applicable, under the laws of the jurisdiction of its organization, has all
requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, if applicable, every jurisdiction
where failure to maintain such qualification would result in a Material Adverse
Effect.
SECTION 3.02. Authorization; Enforceability. The Transactions to be entered
into by each Loan Party are within such Loan Party's corporate powers and have
been duly authorized by all necessary corporate and, if required, stockholder
action. This Agreement has been duly executed and delivered by each of Holdings
and the Borrower and constitutes, and each other Loan Document to which any Loan
Party is to be a party, when executed and delivered by such Loan Party, will
constitute, a legal, valid and binding obligation of Holdings, the Borrower or
such Loan Party (as the case may be), enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in equity
or at law.
SECTION 3.03. Governmental Approvals; No Conflicts. The Transactions and
the making of each Loan (a) do not require any consent or approval of,
registration or filing with, or any other action by, any Governmental Authority,
except such as have been obtained or made and are in full force and effect and
except filings necessary to perfect Liens created under the Loan Documents, (b)
will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of Holdings, the Borrower or any of the
Subsidiaries or any order of any Governmental Authority, (c) will not violate or
result in a default under any indenture, agreement or other instrument binding
upon Holdings, the Borrower or any of the Subsidiaries or its assets, or give
rise to a right thereunder to require any payment to be made by Holdings, the
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Borrower or any of the Subsidiaries, and (d) will not result in the creation or
imposition of any Lien on any asset of Holdings, the Borrower or any of the
Subsidiaries, except Liens created under the Loan Documents.
SECTION 3.04. Financial Condition; No Material Adverse Change. (a) Holdings
has heretofore furnished to the Lenders its consolidated balance sheet and the
related consolidated statements of income, stockholders' equity and cash flows
(i) as of and for the fiscal years ended December 31, 1999 and December 31,
2000, reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, independent public accountants, and
(ii) as of and for each fiscal quarter of fiscal year 2001 ended more than 30
days prior to the Effective Date. Such financial statements present fairly, in
all material respects, the consolidated financial position and results of
operations and cash flows of Holdings as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments.
(b) Holdings has heretofore furnished to the Lenders its pro forma
consolidated balance sheet as of June 30, 2001, prepared giving effect to the
Transactions as if the Transactions had occurred on such date. Such pro forma
consolidated balance sheet (i) has been prepared in good faith based on
assumptions believed as of the Effective Date by Holdings and the Borrower to be
reasonable), (ii) is based on the best information available as of the Effective
Date to Holdings and the Borrower after due inquiry, (iii) accurately reflects
all adjustments necessary to give effect to the Transactions and (iv) presents
fairly, in all material respects, the pro forma financial position of Holdings,
the Borrower and the Subsidiaries as of June 30, 2001, as if the Transactions
had occurred on such date.
(c) Except as disclosed in the financial statements referred to above or
the notes thereto and except for the Disclosed Matters, after giving effect to
the Transactions, none of Holdings, the Borrower or the Subsidiaries has, as of
the Effective Date, any material contingent liabilities, unusual long-term
commitments or unrealized losses.
(d) Since December 31, 2000, there has been no material adverse change in
the business, operations, property, condition (financial or otherwise) or
prospects of Holdings, the Borrower and the Subsidiaries, taken as a whole.
SECTION 3.05. Properties. (a) Each of Holdings, the Borrower and the
Subsidiaries has good title to, or valid leasehold interests in, all of its real
and personal property material to its business (including its Mortgaged
Properties), except for Permitted Encumbrances and for minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes.
(b) Each of Holdings, the Borrower and the Subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by Holdings,
the Borrower and the Subsidiaries does not infringe upon the rights of any other
Person, except for any such infringements that, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(c) Schedule 3.05(a) sets forth the address of each real property that is
owned or leased by Holdings, the Borrower or any of the Subsidiaries as of the
Effective Date.
(d) As of the Effective Date, neither Holdings, the Borrower nor any of the
Subsidiaries has received notice of, or has actual knowledge of, any pending or
contemplated condemnation proceeding affecting any Mortgaged Property or any
sale or disposition thereof in
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lieu of condemnation. Neither any Mortgaged Property nor any interest therein is
subject to any right of first refusal, option or other contractual right of
third parties to purchase such Mortgaged Property or interest therein.
SECTION 3.06. Litigation and Environmental Matters. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of Holdings or the Borrower,
threatened against or affecting Holdings, the Borrower or any of the
Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect (other
than the Disclosed Matters) or (ii) that involve any of the Loan Documents or
the Transactions.
(b) Except for the Disclosed Matters and except with respect to any other
matters that, individually or in the aggregate, could not reasonably be expected
to result in a Material Adverse Effect, none of Holdings, the Borrower or any of
the Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received written notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the Effective Date, there has been no change in the status of the
Disclosed Matters that, individually or in the aggregate, has resulted in, or
materially increased the likelihood of, a Material Adverse Effect.
SECTION 3.07. Compliance with Laws and Agreements. Each of Holdings, the
Borrower and the Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08. Investment and Holding Company Status. None of Holdings, the
Borrower or any of the Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09. Taxes. Each of Holdings, the Borrower and the Subsidiaries
has timely filed or caused to be filed all material Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes that are being contested in good faith
by appropriate proceedings and for which Holdings, the Borrower or such
Subsidiary, as applicable, has set aside on its books adequate reserves or (b)
to the extent that the failure to do so could not reasonably be expected to
result in a Material Adverse Effect.
SECTION 3.10. ERISA. No ERISA Event has occurred or is reasonably expected
to occur that, when taken together with all other such ERISA Events for which
liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. As of the Effective Date, the present value
of all accumulated benefit obligations under each Plan (based on the assumptions
used for purposes of Statement of Financial Accounting Standards No. 87) did not
exceed by more than $500,000 the fair market value of the assets of such Plan,
and the present value of all accumulated benefit obligations of all underfunded
Plans
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(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not exceed by more than $500,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 3.11. Disclosure. Each of Holdings and the Borrower has disclosed
to the Lenders all agreements, instruments and corporate or other restrictions
to which Holdings, the Borrower or any of the Subsidiaries is subject, and all
other matters known to any of them, that, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect. No reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender in connection
with the negotiation of this Agreement or any other Loan Document or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) when taken as a whole contains any material misstatement of fact or
omits to state any material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided that, with respect to projected financial information, each of Holdings
and the Borrower represents only that such information was prepared in good
faith based upon assumptions believed to be reasonable at the time, it being
understood that actual results may differ from projections.
SECTION 3.12. Subsidiaries. Schedule 3.12 sets forth the name of,
jurisdiction of incorporation or organization and the ownership interest of
Holdings in the Borrower and the Borrower in each Subsidiary as of the Effective
Date.
SECTION 3.13. Insurance. Schedule 3.13 sets forth a description of all
insurance maintained by or on behalf of Holdings, the Borrower and the
Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in
respect of such insurance have been paid when due and payable.
SECTION 3.14. Labor Matters. As of the Effective Date, there are no
strikes, lockouts or slowdowns against Holdings, the Borrower or any Subsidiary
pending or, to the knowledge of Holdings or the Borrower, threatened. The hours
worked by and payments made to employees of Holdings, the Borrower and the
Subsidiaries have not been in violation of the Fair Labor Standards Act or any
other applicable Federal, state, local or foreign law dealing with such matters.
All payments due from Holdings, the Borrower or any Subsidiary, or for which any
claim may be made against Holdings, the Borrower or any Subsidiary, on account
of wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of Holdings, the Borrower or such
Subsidiary, except where any failure to make or accrue any such payment would
not violate applicable law or result in a Material Adverse Effect. The
consummation of the Transactions will not give rise to any right of termination
or right of renegotiation on the part of any union under any collective
bargaining agreement to which Holdings, the Borrower or any Subsidiary is bound.
SECTION 3.15. Solvency. Immediately after the consummation of the
Transactions to occur on or before the Effective Date and immediately following
the making of each Loan or the issuance of each Letter of Credit, and after
giving effect to the application of the proceeds of such Loans, (i) the fair
value of the assets of each Loan Party, at a fair valuation, will exceed its
debts and liabilities, subordinated, contingent or otherwise; (ii) the present
fair saleable value of the property of each Loan Party will be greater than the
amount that will be required to pay the probable liability of its debts and
other liabilities, subordinated, contingent or otherwise, as such debts and
other liabilities become absolute and matured; (iii) each Loan Party will be
able to pay its debts and liabilities, subordinated, contingent or otherwise, as
such debts and liabilities
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become absolute and matured; and (iv) each Loan Party will not have unreasonably
small capital with which to conduct the business in which it is engaged as such
business is now conducted and is proposed to be conducted following the
Effective Date.
SECTION 3.16. Security Documents. (a) Each of the French Pledge Agreements,
the Japanese Pledge Agreement, and the Guarantee and Collateral Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Guarantee and Collateral Agreement) the Pledged
Stock (as defined in the French Pledge Agreements) and the Shares (as defined in
the Japanese Pledge Agreement), when the portion of the Collateral constituting
"certificated securities" (as defined in the Uniform Commercial Code) and the
Pledge Stock and the Shares are delivered to the Collateral Agent, and the terms
of the French Pledge Agreements and the Japanese Pledge Agreement are complied
with, a fully perfected first priority Lien on, and security interest in, all
right, title and interest of the pledgor thereunder in such Collateral, Pledged
Stock, and Shares in each case prior and superior in right to any other Person
shall have been created. The Lenders hereby authorize the Collateral Agent to
act on their behalf in connection with any disposition pursuant to Article 2.2
of the Japanese Pledge Agreement of the shares pledged thereunder.
(b) The Guarantee and Collateral Agreement is effective to create in favor
of the Collateral Agent, for the ratable benefit of the Secured Parties, a
legal, valid and enforceable security interest in the Article 9 Collateral (as
defined in the Guarantee and Collateral Agreement) in which a security interest
may be created under Article 9 of New York Uniform Commercial Code and, when
financing statements in appropriate form are filed in the offices specified on
Schedule 6 to the Perfection Certificate, to the extent that a security interest
may be perfected by filing under Article 9 of the Uniform Commercial Code in
effect in the States where such offices are located, the Guarantee and
Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the grantors thereunder in such
Collateral, in each case prior and superior in right to any other Person, other
than with respect to Liens expressly permitted by the Guarantee and Collateral
Agreement.
(c) When the Guarantee and Collateral Agreement is filed and recorded in
the United States Patent and Trademark Office and the United States Copyright
Office, the security interest created thereunder shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in the Intellectual Property (as defined in the Guarantee and
Collateral Agreement) to the extent that a security interest may be perfected
under applicable law by filing, recording or registering a security agreement,
financing statement or analogous document in the United States Patent and
Trademark Office or the United States Copyright Office, as applicable, in each
case prior and superior in right to any other Person, other than with respect to
the rights of Persons pursuant to Liens expressly permitted by the Guarantee and
Collateral Agreement (it being understood that subsequent recordings in the
United States Patent and Trademark Office and the United States Copyright Office
may be necessary to perfect a lien on registered trademarks, trademark
applications and copyrights acquired by the Loan Parties after the date hereof).
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ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date. This Agreement and the Commitments of the
Lenders shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.02):
(a) The Administrative Agent (or its counsel) shall have received from
each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of this Agreement) that such party has signed a counterpart
of this Agreement.
(b) The Administrative Agent shall have received a favorable written
opinion (addressed to the Administrative Agent, the Issuing Bank and the
Lenders and dated the Effective Date) of (i) ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
counsel for Holdings and the Borrower, substantially in the form of Exhibit
F-1, (ii) French counsel to the Borrower, substantially in the form of
Exhibit F-2, (iii) Canadian counsel to the Borrower, substantially in the
form of Exhibit F-3, and (iv) Japanese counsel to the Borrower,
substantially in the form of Exhibit F-4. Holdings and the Borrower hereby
request such counsel to deliver such opinions.
(c) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably
request relating to the organization, existence and good standing of each
Loan Party, the authorization of the Transactions and any other legal
matters relating to the Loan Parties, the Loan Documents or the
Transactions, all in form and substance satisfactory to the Administrative
Agent and its counsel.
(d) The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the Effective Date, including, to
the extent invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by any Loan Party hereunder or under any
other Loan Document.
(e) Holdings shall have received not less than $86,250,000 in Net
Proceeds from the consummation of the IPO; all principal, interest, fees
and other amounts due or outstanding under the Existing Credit Agreements
shall have been paid in full, the commitments thereunder terminated and all
guarantees thereof released and discharged; and the Subordinated Debt shall
have been either repaid in full or converted into common stock of Holdings.
(f) All material consents and approvals required to be obtained from
any Governmental Authority or other Person in connection with the
Transactions shall have been obtained, and there shall be no action by or
before any Governmental Authority, actual or threatened, that could
reasonably be expected to restrain, prevent or impose materially burdensome
conditions on the Transactions.
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(g) The Collateral Agent shall have received counterparts of (i) the
Guarantee and Collateral Agreement signed on behalf of Holdings and the
Borrower, together with stock certificates representing all the outstanding
shares of capital stock of the Borrower and 65% of the outstanding shares
of voting stock of ▇▇▇▇▇▇ Medical Technology Canada Ltd. and ▇▇▇▇▇▇ Medical
Japan, K.K., (ii) the French Pledge Agreements signed on behalf of the
Borrower, together with declarations of pledge (declarations ▇▇ ▇▇▇▇) on
65% of the outstanding shares of voting stock of 2 Hip Holdings SAS and
▇▇▇▇▇▇ Cremascoli Orthotechnique SA, (iii) the Japanese Pledge Agreement
signed on behalf of the Borrower, together with stock certificates
representing 100% of the outstanding non-voting stock, if any, and 65% of
the outstanding voting stock of ▇▇▇▇▇▇ Medical Japan, K.K., (iv) promissory
notes evidencing all intercompany Indebtedness owed to any Loan Party by
Holdings, the Borrower or any Subsidiary as of the Effective Date and (v)
stock powers and instruments of transfer, endorsed in blank, with respect
to such stock certificates and promissory notes.
(h) The Collateral Agent shall have received the following:
(i) all documents and instruments, including Uniform Commercial
Code financing statements, required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to create
or perfect the Liens intended to be created under the Guarantee and
Collateral Agreement; and
(ii) a completed Perfection Certificate dated the Effective Date
and signed by an executive officer or Financial Officer of each of
Holdings and the Borrower, together with all attachments contemplated
thereby, including the results of a search of the Uniform Commercial
Code (or equivalent) filings made with respect to the Loan Parties in
the jurisdictions contemplated by the Perfection Certificate and
copies of the financing statements (or similar documents) disclosed by
such search and evidence reasonably satisfactory to the Collateral
Agent that the Liens indicated by such financing statements (or
similar documents) are permitted by Section 6.02 or have been
released.
(i) The Administrative Agent shall have received evidence satisfactory
to it that the insurance required by Section 5.07 is in effect.
(j) None of Holdings, the Borrower or any of the Subsidiaries shall
have outstanding any shares of preferred stock or any Indebtedness except
Indebtedness and preferred stock permitted under Section 6.01.
The Administrative Agent shall notify the Borrower and the Lenders of the
Effective Date, and such notice shall be conclusive and binding. Notwithstanding
the foregoing, the obligations of the Lenders hereunder shall not become
effective unless each of the foregoing conditions is satisfied (or waived
pursuant to Section 9.02) at or prior to 3:00 p.m., New York City time, on
August 15, 2001.
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SECTION 4.02. All Credit Events. The obligation of each Lender to make a
Loan on the occasion of any Borrowing, and of the Issuing Bank to issue, amend,
renew or extend any Letter of Credit, is subject to the satisfaction of the
following conditions:
(a) The representations and warranties of each Loan Party set forth in
the Loan Documents shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable (other than those which expressly relate to
a specified date).
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, no Default shall have occurred and be continuing.
(c) The Administrative Agent shall have received notice requesting a
Borrowing or the issuance of a Letter of Credit as required by Section 2.03
or 2.04(a)(i), as the case may be.
Each Borrowing and each issuance, amendment, renewal or extension of a
Letter of Credit shall be deemed to constitute a representation and
warranty by Holdings and the Borrower on the date thereof as to the matters
specified in paragraphs (a) and (b) of this Section.
ARTICLE V
Affirmative Covenants
---------------------
Until the Commitments have expired or been terminated and the principal of
and interest on each Loan and all fees payable hereunder shall have been paid in
full and all Letters of Credit shall have expired or terminated and all LC
Disbursements shall have been reimbursed, each of Holdings and the Borrower
covenants and agrees with the Lenders that:
SECTION 5.01. Financial Statements and Other Information. The Borrower will
furnish to the Administrative Agent and the Administrative Agent shall furnish
to each Lender:
(a) within 90 days after the end of each fiscal year of Holdings, its
audited consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such year, and
setting forth in each case in comparative form the figures for the previous
fiscal year, all reported on by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, or other independent
public accountants of recognized national standing (without a "going
concern" or like qualification or exception and without any material
qualification or material exception as to the scope of such audit) to the
effect that such consolidated financial statements present fairly in all
material respects the financial condition and results of operations of
Holdings, the Borrower and the Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied;
(b) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of Holdings, its consolidated balance sheet
and related statements
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of operations, stockholders' equity and cash flows as of the end of and for
such fiscal quarter and the then elapsed portion of the fiscal year, and
setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet,
as of the end of) the previous fiscal year, all certified by a Financial
Officer of the Borrower as presenting fairly in all material respects the
financial condition and results of operations of Holdings, the Borrower and
the Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, subject to normal year-end audit adjustments and the
absence of footnotes;
(c) concurrently with any delivery of financial statements under
clause (a) or (b) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with Sections 6.11 and 6.12
and (iii) stating whether any change in GAAP or in the application thereof
has occurred since the date of the Borrower's audited financial statements
referred to in Section 3.04 and, if any such change has occurred,
specifying the effect of such change on the financial statements
accompanying such certificate;
(d) concurrently with any delivery of financial statements under
clause (a) above, a certificate of the accounting firm that reported on
such financial statements stating whether they obtained knowledge during
the course of their examination of such financial statements of any Default
(which certificate may be limited to the extent required by accounting
rules or guidelines); provided that no such certificate shall be required
if each of Holdings and the Borrower has used its best efforts to obtain
the same and such accountants are unwilling to provide such a certificate
and other independent certified public accountants of recognized national
standing are unwilling to provide such a certificate;
(e) as soon as practicable, and in any event within 60 days after the
commencement of each fiscal year of Holdings, a detailed consolidated
budget for such fiscal year (including a projected consolidated balance
sheet and related statements of projected operations and cash flow as of
the end of and for such fiscal year) and, promptly when available, any
significant revisions of such budget;
(f) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
Holdings, the Borrower or any Subsidiary with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, as
the case may be; and
(g) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of
Holdings, the Borrower or any Subsidiary, or compliance with the terms of
any Loan Document, as the Administrative Agent or any Lender may reasonably
request.
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SECTION 5.02. Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting
Holdings, the Borrower or any Subsidiary that, if adversely determined,
could reasonably be expected to result in a Material Adverse Effect; and
(c) the occurrence of any ERISA Event that, alone or together with any
other ERISA Events that have occurred, could reasonably be expected to
result in liability of Holdings, the Borrower and the Subsidiaries in an
aggregate amount exceeding $5,000,000.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03. Information Regarding Collateral. (a) The Borrower will
furnish to the Administrative Agent prompt written notice of any change (i) in
any Loan Party's corporate name or in any trade name used to identify it in the
conduct of its business or in the ownership of its properties, (ii) in the
location of any Loan Party's chief executive office, its principal place of
business, any office in which it maintains books or records relating to
Collateral owned by it or any office or facility at which Collateral owned by it
is located (including the establishment of any such new office or facility) ;
provided that the notification requirement of this clause (ii) shall apply only
with respect to a new office or facility in Alabama, Connecticut, Mississippi or
Florida and only for so long as applicable law in such states requires the
filing of Uniform Commercial Code UCC-1 financing statements in the jurisdiction
where goods are located to perfect a security interest in such goods, (iii) in
any Loan Party's identity or corporate structure or (iv) in any Loan Party's
Federal Taxpayer Identification Number (if applicable). Each of Holdings and the
Borrower agrees not to effect or permit any change referred to in the preceding
sentence unless all filings have been made under the Uniform Commercial Code or
otherwise that are required in order for the Collateral Agent to continue at all
times following such change to have a valid, legal and perfected security
interest in all the Collateral. The Borrower also agrees promptly to notify the
Administrative Agent if any material portion of the tangible Collateral is
damaged or destroyed.
(b) Each year, at the time of delivery of annual financial statements with
respect to the preceding fiscal year pursuant to clause (a) of Section 5.01, the
Borrower shall deliver to the Administrative Agent a certificate of a Financial
Officer and the chief legal officer of each of Holdings and the Borrower setting
forth the information required pursuant to Section 2 of the Perfection
Certificate or confirming that there has been no change in such information
since the Effective Date or the date of the most recent certificate delivered
pursuant to this Section. Each certificate delivered pursuant to this Section
shall identify all registrations and applications for Intellectual Property of
any Loan Party in existence on the date thereof and not then listed on Schedule
III to the Guarantee and Collateral Agreement or previously so identified to the
Collateral Agent.
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SECTION 5.04. Existence; Conduct of Business. Each of Holdings and the
Borrower will, and will cause each of the Subsidiaries to, do or cause to be
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges, franchises,
patents, copyrights, trademarks and trade names used in the conduct of its
business; provided that the foregoing shall not prohibit any merger,
consolidation, liquidation or dissolution permitted under Section 6.03 and shall
not require any such action if the failure to take such action could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.05. Payment of Obligations. Each of Holdings and the Borrower
will, and will cause each of the Subsidiaries to, pay, settle or discharge (a)
all Taxes, assessments and governmental charges or levies imposed upon it, or
upon its income or profits, or upon any of its properties, before they shall
become delinquent, (b) all lawful claims (including claims for labor, materials
and supplies) which, if unpaid, might give rise to a Lien upon any of its
properties, and (c) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that none of Holdings,
the Borrower or any Subsidiary shall be required to pay any such Tax,
assessment, charge, levy, claim or Indebtedness which (x) is being contested in
good faith by appropriate proceedings and as to which adequate reserves therefor
have been established in accordance with GAAP, unless the failure to make any
such payment (i) would give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) would have a Material Adverse Effect or (y) if the
aggregate amount of such unpaid tax, assessment, charge, levy, claim or
Indebtedness does not exceed (i) on or prior to the first anniversary of the
Effective Date, $5,000,000 and (ii) after the first anniversary of the Effective
Date, the lesser of (A) 3% of Consolidated Assets calculated at the end of each
fiscal quarter and (B) $10,000,000 at any time outstanding (in each case taking
into account applicable insurances or indemnities to the extent the provider of
such insurance or indemnity has been notified thereof, has the financial ability
to support its obligations with respect thereto and is not disputing the same).
SECTION 5.06. Maintenance of Properties. Each of Holdings and the Borrower
will, and will cause each of the Subsidiaries to, keep and maintain all property
material to the conduct of its business in good working order and condition,
ordinary wear and tear excepted.
SECTION 5.07. Insurance. Each of Holdings and the Borrower will, and will
cause each of the Subsidiaries to, at all times maintain in full force and
effect, with financially sound and reputable insurance companies, insurance on
all property owned, occupied or controlled by it in at least such amounts
(including deductibles) and against at least such risks insured against in the
same general area by companies engaged in the same or a similar business and
such other insurance as may be required by law. Each of Holdings and the
Borrower will, and will cause each Subsidiary to, furnish to the Administrative
Agent, upon written request of the Administrative Agent, a summary of the
insurance carried together with certificates of insurance and other evidence of
such insurance, if any, naming the Administrative Agent as an additional insured
and/or loss payee. Without limiting the generality of the foregoing, each of
Holdings and the Borrower will, and will cause each of the Subsidiaries to,
maintain, with the same or other financially sound and reputable insurance
companies, the products liability insurance of Holdings, the Borrower and the
Subsidiaries as in existence on the Effective Date.
SECTION 5.08. Casualty and Condemnation. (a) The Borrower will furnish to
the Administrative Agent and the Lenders prompt written notice of any casualty
or other insured damage to any material portion of the tangible Collateral or
the commencement of any action or proceeding for the taking of any Collateral or
any part thereof or interest therein under power of eminent domain or by
condemnation or similar proceeding.
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(b) If any event described in paragraph (a) of this Section results in Net
Proceeds (whether in the form of insurance proceeds, condemnation award or
otherwise), the Administrative Agent is authorized to collect such Net Proceeds
and, if received by Holdings, the Borrower or any Subsidiary, such Net Proceeds
shall be paid over to the Administrative Agent; provided that (i) if the
aggregate Net Proceeds in respect of such event (other than proceeds of business
income insurance) are less than $1,000,000, such Net Proceeds shall be paid over
to the Borrower unless a Default has occurred and is continuing, and (ii) all
proceeds of business income insurance shall be paid over to the Borrower unless
a Default has occurred and is continuing. All such Net Proceeds retained by or
paid over to the Administrative Agent shall be held by the Administrative Agent
and released from time to time to pay the costs of repairing, restoring or
replacing the affected property in accordance with the terms of the applicable
Loan Document, subject to the provisions of the applicable Loan Document
regarding application of such Net Proceeds during a Default.
(c) If any Net Proceeds retained by or paid over to the Administrative
Agent as provided above continue to be held by the Administrative Agent on the
date that is 270 days after the occurrence of the event resulting in such Net
Proceeds, then such Net Proceeds shall be applied to prepay Term Borrowings as
provided in Section 2.10(b).
SECTION 5.09. Books and Records; Inspection and Audit Rights. Each of
Holdings and the Borrower will, and will cause each of the Subsidiaries to, keep
proper books of record and account in which full, true and correct entries are
made of all dealings and transactions in relation to its business and
activities. Each of Holdings and the Borrower will, and will cause each of the
Subsidiaries to, permit any representatives designated by the Administrative
Agent or any Lender, upon reasonable prior notice, to visit and inspect its
properties, to examine and make extracts from its books and records, and to
discuss its affairs, finances and condition with its officers and independent
accountants, all at such reasonable times and as often as reasonably requested
and, in the case of any Lender (other than the Administrative Agent or the
Collateral Agent or as provided in Section 9.03), at the sole expense of such
Lender.
SECTION 5.10. Compliance with Laws. Each of Holdings and the Borrower will,
and will cause each of the Subsidiaries to, comply with all laws, rules,
regulations and orders of any Governmental Authority applicable to it or its
property, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.11. Use of Proceeds and Letters of Credit. The proceeds of the
Term Loans, together with a portion of the proceeds of the IPO, will be used
only for repayment of the Existing Credit Agreements and the Subordinated Debt,
including any premium and accrued and unpaid interest thereon, and the payment
of fees and expenses related to the Transactions. The proceeds of the Revolving
Loans will be used only for general corporate purposes, including, without
limitation, litigation-related expenses, acquisitions and investments permitted
by Section 6.04 and the purchase of inventory and/or equipment by the Borrower
(or a Subsidiary of the Borrower) from Century Medical, Inc. pursuant to the
Transition Distribution Agreement or from Ebos Group Limited pursuant to the
Distribution Contract. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X. Letters of Credit
will be issued only for general corporate purposes.
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SECTION 5.12. Additional Subsidiaries. If any additional Subsidiary is
formed or acquired after the Effective Date, the Borrower will notify the
Administrative Agent and the Lenders thereof and (a) if such Subsidiary is a
Domestic Subsidiary, the Borrower will cause such Subsidiary to become a party
to the Guarantee and Collateral Agreement and each other applicable Security
Document within seven Business Days after such Subsidiary is formed or acquired
and promptly take such actions to create and perfect Liens on such Subsidiary's
assets to secure the Obligations as the Administrative Agent or the Required
Lenders shall reasonably request and (b) if any shares of capital stock or
Indebtedness of such Subsidiary are directly owned by or on behalf of any Loan
Party, the Borrower will pledge or cause to be pledged such shares and
promissory notes evidencing such Indebtedness to be pledged pursuant to the
Guarantee and Collateral Agreement within seven Business Days (or, in the case
of any Foreign Subsidiary, fourteen Business Days) after such Subsidiary is
formed or acquired (except that, except as otherwise provided by Section 5.13,
if such Subsidiary is a Foreign Subsidiary directly owned by the Borrower or a
Subsidiary Guarantor, shares of voting stock of such Foreign Subsidiary to be
pledged pursuant to the Guarantee and Collateral Agreement may be limited to 65%
of the outstanding shares of voting stock of such Foreign Subsidiary).
SECTION 5.13. Further Assurances. (a) Each of Holdings and the Borrower
will, and will cause each Loan Party to, execute any and all further documents,
financing statements, agreements and instruments, and take all such further
actions (including the filing and recording of financing statements, fixture
filings, mortgages, deeds of trust and other documents), which may be required
under any applicable law, or which the Administrative Agent or the Required
Lenders may reasonably request, to effectuate the transactions contemplated by
the Loan Documents or to grant, preserve, protect or perfect the Liens created
or intended to be created by the Loan Documents or the validity or priority of
any such Lien, all at the expense of the Loan Parties. Each of Holdings and the
Borrower also agrees to provide to the Administrative Agent, from time to time
upon request, evidence reasonably satisfactory to the Administrative Agent as to
the perfection and priority of the Liens created or intended to be created by
the Loan Documents.
(b) If any material assets (other than (i) assets constituting Collateral
under any Loan Document that become subject to the Lien of such Loan Document
upon acquisition thereof and (ii) certain de minimis assets that do not have a
fair market value in excess of, individually, $250,000 or, in the aggregate,
$1,000,000), including any real property or improvements thereto or any interest
therein, are acquired by any Loan Party after the Effective Date, Holdings and
the Borrower will, or will cause such Loan Party to, promptly notify the
Administrative Agent and the Lenders thereof, and, if requested by the
Administrative Agent or the Required Lenders, the Borrower will cause such
assets to be subjected to a Lien securing the Obligations and will take, and
cause the Subsidiary Guarantors to take, such actions as shall be necessary or
reasonably requested by the Administrative Agent to grant and perfect such
Liens, including actions described in paragraph (a) of this Section, all at the
expense of the Loan Parties. Without limiting the generality of the foregoing
and notwithstanding Section 5.12(b), if the Collateral Agent reasonably requests
the Borrower to pledge or to cause to be pledged more than 65% of the voting
stock of any directly owned Foreign Subsidiary or the capital stock of any
indirectly owned Foreign Subsidiary and such pledge may be accomplished without
violating applicable law or causing adverse tax consequences to Holdings or the
Borrower (in each case in the opinion of counsel to Holdings or the Borrower)
then the Borrower shall pledge such voting stock or cause such capital stock to
be pledged to the Collateral Agent for the benefit of the Secured Parties;
provided, however, that, following any such pledge described in this sentence,
if the Borrower notifies the Collateral Agent that the continued existence of
such pledge is reasonably likely to cause adverse tax consequences to Holdings
or the Borrower, then, so long as no Event
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of Default shall have occurred and be continuing, the Collateral Agent shall
promptly release such pledge to the extent necessary to eliminate such adverse
tax consequences.
(c) The Borrower will use commercially reasonable efforts to obtain (i) all
Bailee Letters and Cash Collateral Agreements (both as defined in the Guarantee
and Collateral Agreement) required under Sections 4.03(i) and 4.04(b) of the
Guarantee and Collateral Agreement, respectively and (ii) evidence of release of
all security interests granted pursuant to the Existing Credit Agreements (other
than security interests on Italian intellectual property rights), in the case of
both clause (i) and (ii) above within 45 days after the Effective Date. The
Borrower shall promptly forward such documents to the Administrative Agent upon
receipt.
ARTICLE VI
Negative Covenants
------------------
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, each of Holdings and the Borrower covenants and agrees
with the Lenders that:
SECTION 6.01. Indebtedness; Certain Equity Securities. (a) Each of Holdings
and the Borrower will not, and will not permit any Subsidiary to, create, incur,
assume or permit to exist any Indebtedness, except:
(i) Indebtedness created under the Loan Documents;
(ii) Indebtedness existing on the Effective Date and set forth in
Schedule 6.01 and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount
thereof or result in an earlier maturity date or decreased weighted
average life thereof;
(iii) Indebtedness of the Borrower to any Subsidiary and any
Subsidiary to the Borrower or any other Subsidiary; provided that
Indebtedness of any Subsidiary that is not a Loan Party to any Loan
Party shall be subject to Section 6.04;
(iv) Guarantees by (A) Holdings of Indebtedness of the Borrower
or any Subsidiary, (B) the Borrower of Indebtedness of any Subsidiary
and (C) any Subsidiary of Indebtedness of the Borrower or any other
Subsidiary; provided that the aggregate amount of Indebtedness of
Subsidiaries that are not Loan Parties that is Guaranteed by any Loan
Party shall be subject to the limitations set forth in Section
6.04(d)(ii);
(v) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the
acquisition thereof; provided that (A) such Indebtedness is incurred
prior to or within 90 days after such acquisition or the completion of
such
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construction or improvement and (B) the aggregate principal amount of
Indebtedness permitted by this clause (v) shall not exceed $10,000,000
at any time outstanding, and extensions, renewals and replacements of
any such Indebtedness that do not increase the outstanding principal
amount thereof;
(vi) Indebtedness of any Person that becomes a Subsidiary after
the Effective Date; provided that (A) such Indebtedness exists at the
time such Person becomes a Subsidiary and is not created in
contemplation of or in connection with such Person becoming a
Subsidiary and (B) the aggregate principal amount of Indebtedness
permitted by this clause (vi) shall not exceed $10,000,000 at any time
outstanding, and extensions, renewals and replacements of any such
Indebtedness that do not increase the principal amount thereof;
(vii) Indebtedness of the Italian Receivables Subsidiary in
connection with the Italian Receivables Program not to exceed
$6,000,000;
(viii) Indebtedness incurred (A) under Section 16(B) of the
Transition Distribution Agreement, (B) under Section 12.2 of the
Distribution Contract in connection with the termination of such
Contract, and (C) in connection with other repurchases of inventory
and/or equipment, in an aggregate principal amount not to exceed
$10,000,000;
(ix) Indebtedness incurred in connection with the posting of
court-ordered bonds to guarantee payments of judgments in an aggregate
amount not to exceed $5,000,000 at any time outstanding (it being
understood that the court-ordered bond posted in connection with the
Grisoni litigation and listed in Schedule 6.01 hereto, is permitted in
addition to the Indebtedness referred to in this clause (ix)); and
(x) other unsecured Indebtedness in an aggregate principal amount
not exceeding (A) on or prior to the first anniversary of the
Effective Date, $5,000,000 and (B) after the first anniversary of the
Effective Date, the lesser of (y) 3% of Consolidated Assets calculated
at the end of each fiscal quarter and (z) $10,000,000 at any time
outstanding.
(b) Holdings will not create, incur, assume or permit to exist any
Redeemable Preferred Stock; provided that Holdings may issue Redeemable
Preferred Stock to the extent such preferred stock, for the purposes of Section
6.01(a), is deemed to be Indebtedness of Holdings with an aggregate principal
amount equal to the stated value thereof.
(c) The Borrower will not, and will not permit any Subsidiary to, issue any
preferred stock or be or become liable in respect of any obligation (contingent
or otherwise) to purchase, redeem, retire, acquire or make any other payment
(other than Restricted Payments permitted under Section 6.07) in respect of any
shares of capital stock of Holdings, the Borrower or any Subsidiary or any
option, warrant or other right to acquire any such shares of capital stock;
provided, however, that nothing in this Section 6.01(c) shall prevent (i) the
Borrower or any Subsidiary from acquiring the equity securities of any
Subsidiary not owned by it if such purchase is otherwise permitted by this
Agreement, (ii) any Subsidiary from issuing preferred stock to the Borrower or
the Borrower from issuing preferred stock (other than Redeemable Preferred
Stock) to Holdings, so long as such preferred stock is pledged to the Collateral
Agent to secure the Obligations, to the extent required by the Loan Documents,
or (iii) any Subsidiary
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from issuing preferred stock to any third party; provided that for purposes of
Section 6.01(a), such preferred stock shall be deemed to be Indebtedness of such
Subsidiary with an aggregate principal amount equal to the stated value thereof.
SECTION 6.02. Liens. Each of Holdings and the Borrower will not, and
will not permit any Subsidiary to, create, incur, assume or permit to exist any
Lien on any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or rights in
respect of any thereof, except:
(a) Liens created under the Loan Documents or permitted under Section
4.04(e) of the Guarantee and Collateral Agreement;
(b) Permitted Encumbrances;
(c) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the Effective Date and set forth in Schedule 6.02;
provided that (A) such Lien shall not apply to any other property or asset
of the Borrower or any Subsidiary and (B) such Lien shall secure only those
obligations which it secures on the Effective Date and extensions, renewals
and replacements thereof that do not increase the outstanding principal
amount thereof;
(d) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the
Effective Date prior to the time such Person becomes a Subsidiary; provided
that (A) such Lien is not created in contemplation of or in connection with
such acquisition or such Person becoming a Subsidiary , as the case may be,
(B) such Lien shall not apply to any other property or assets of Holdings,
the Borrower or any Subsidiary and (C) such Lien shall secure only those
obligations which it secures on the date of such acquisition or the date
such Person becomes a Subsidiary, as the case may be and extensions,
renewals and replacements thereof that do not increase the outstanding
principal amount thereof;
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided that (A) such security
interests secure Indebtedness permitted by clause (v) of Section 6.01(a),
(B) such security interests and the Indebtedness secured thereby are
incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement and (C) such security
interests shall not apply to any other property or assets of Holdings, the
Borrower or any Subsidiary;
(f) Liens on the accounts receivables of the Italian Receivables
Subsidiary pursuant to the Italian Receivables Program; and
(g) Liens on inventory and/or equipment of ▇▇▇▇▇▇ Medical Japan, K.K.
or ▇▇▇▇▇▇ Medical Technology having an aggregate fair market value not to
exceed $10,000,000 securing Indebtedness incurred pursuant to (A) Section
16(B) of the Transition Distribution Agreement, (B) Section 12.2 of the
Distribution Contract in connection with the termination of such Contract,
and (C) in connection with other repurchases of inventory and/or equipment;
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provided that such Liens shall be limited to inventory and/or equipment
located outside the United States.
SECTION 6.03. Fundamental Changes. (a) Each of Holdings and the Borrower
will not, nor will it permit any Subsidiary to, merge into or consolidate with
any other Person, or permit any other Person to merge into or consolidate with
it, or liquidate or dissolve, except that, if at the time thereof and
immediately after giving effect thereto no Default shall have occurred and be
continuing (i) any Subsidiary may merge into the Borrower in a transaction in
which the Borrower is the surviving corporation, (ii) any Person (other than the
Borrower or Holdings) may merge into any Subsidiary in a transaction in which
the surviving entity is a Subsidiary and (iii) any Subsidiary may liquidate or
dissolve if the Borrower determines in good faith that such liquidation or
dissolution is in the best interests of the Borrower and is not materially
disadvantageous to the Lenders; provided that any such merger involving a Person
that is not a wholly owned Subsidiary immediately prior to such merger shall not
be permitted unless also permitted by Section 6.04.
(b) The Borrower will not, and will not permit any of the Subsidiaries to,
engage to any material extent in any trade or business other than a Related
Business. Holdings will not engage in any trade or business, or otherwise
conduct any business activity, other than the ownership of capital stock of the
Borrower and activities incidental thereto.
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.
Each of Holdings and the Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of Indebtedness or other securities (including any
option, warrant or other right to acquire any of the foregoing) of, make or
permit to exist any loans or advances to, Guarantee any obligations of, or make
or permit to exist any investment or any other interest in, any other Person, or
purchase or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments, loans or advances existing on the Effective Date and
set forth on Schedule 6.04;
(c) investments by (i) Holdings in the capital stock of the Borrower,
(ii) the Borrower in the capital stock of any Subsidiary (not including any
such Subsidiary that becomes a Subsidiary pursuant to such investment) and
(iii) any Subsidiary in the capital stock of any other Subsidiary (not
including any such Subsidiary that becomes a Subsidiary pursuant to such
investment); provided that (A) any such shares of capital stock held by a
Loan Party shall be pledged, if required, pursuant to the applicable Loan
Document (subject to the limitations applicable to voting stock of a
Foreign Subsidiary referred to in Section 5.12) and (B) the amount of
investments by Loan Parties in Subsidiaries that are not Loan Parties,
other than the sale, transfer or disposition of capital stock (or of
substantially all the assets) of ▇▇▇▇▇▇ Cremascoli Orthotechnique SA owned
by the Borrower to ▇▇▇▇▇▇ Medical Europe SA (directly or pursuant to an
initial transfer to 2 Hip Holdings SAS), together with the amount of all
outstanding loans or advances to such Subsidiaries (other than investments,
loans or advances
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listed on Schedule 6.04), shall not exceed 10% of Consolidated Assets at
the time of such investment, loan or advance and after giving effect
thereto;
(d) loans or advances made by the Borrower to any Subsidiary and made
by any Subsidiary to the Borrower or any other Subsidiary; provided that
(i) any such loans and advances made by a Loan Party in respect of
Indebtedness for borrowed money shall be evidenced by a promissory note
payable upon demand and pledged in accordance with Section 3.02(b) of the
Guarantee and Collateral Agreement and (ii) the outstanding amount of all
such loans and advances by Loan Parties to Subsidiaries that are not Loan
Parties, together with the amount of investments in such Subsidiaries
(other than investments, loans or advances listed on Schedule 6.04), shall
not exceed 10% of Consolidated Assets at the time of such loan or advance
and after giving effect thereto;
(e) Guarantees constituting Indebtedness permitted by Section
6.01(a)(iv);
(f) investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(g) investments received in consideration of sales or other
dispositions permitted under clause (g) of Section 6.05;
(h) loans or advances to employees and officers of the Borrower or any
Subsidiary in the ordinary course of business to provide for the payment of
reasonable expenses incurred by such persons in the performance of their
responsibilities to the Borrower or such Subsidiary or in connection with
any relocation;
(i) other investments payable in cash and/or capital stock, in an
aggregate amount not to exceed $20,000,000, provided the amount of such
investments payable in cash shall not exceed $10,000,000 in the aggregate;
and
(j) non-hostile acquisitions the consideration for which does not
exceed $16,000,000 per transaction and $50,000,000 in the aggregate.
SECTION 6.05. Asset Sales. Each of Holdings and the Borrower will not, and
will not permit any of the Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any capital stock of another Person, and the
Borrower will not, and each of Holdings and the Borrower will not permit any of
the Subsidiaries to, issue any additional shares of capital stock of the
Borrower or such Subsidiary or other ownership interest in the Borrower or such
Subsidiary, as the case may be, except issuances of preferred stock permitted by
Section 6.01(c)(ii) and (iii) and:
(a) sales of inventory, intellectual property rights, used or surplus
equipment and Permitted Investments, in each case in the ordinary course of
business;
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(b) sales, transfers and dispositions (including the issuance of
capital stock) to the Borrower or a Subsidiary; provided that the fair
market value of the assets subject to any such sales, transfers or
dispositions to a Subsidiary that is not a Loan Party, other than the sale,
transfer or disposition of capital stock (or of substantially all the
assets) of ▇▇▇▇▇▇ Cremascoli Orthotechnique SA owned by the Borrower to
▇▇▇▇▇▇ Medical Europe SA (directly or pursuant to an initial transfer to 2
Hip Holdings SAS), shall (i) be deemed an investment in such Subsidiary
subject to the limitations of Section 6.04, to the extent not compensated
at fair market value in cash, and (ii) be made in compliance with Section
6.08;
(c) sales, transfers or dispositions of assets constituting
investments permitted under Sections 6.04(g), (i) and (j);
(d) sales of accounts receivable of the Italian Receivables Subsidiary
in connection with the Italian Receivables Program;
(e) the sale, transfer and disposition of the Specified Distribution
Facility;
(f) sales, transfers and dispositions of Loaner Instruments; and
(g) sales, transfers and dispositions of assets not permitted by
clauses (a)- (f) above not to exceed $7,500,000 during any fiscal year of
Holdings;
provided that all sales, transfers, leases and other dispositions permitted
hereby shall be made for fair value and (other than sales, transfers and other
dispositions permitted under clause (b)) for at least 80% cash consideration
and/or pricing concessions the aggregate fair market value of which shall not
exceed $5,000,000.
SECTION 6.06. Hedging Agreements. Each of Holdings and the Borrower will
not, and will not permit any of the Subsidiaries to, enter into any Hedging
Agreement, other than Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which the Borrower or any Subsidiary is
exposed in the conduct of its business or the management of its liabilities.
SECTION 6.07. Restricted Payments; Certain Payments of Indebtedness. (a)
Each of Holdings and the Borrower will not, nor will it permit
any Subsidiary to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment, except (i) Holdings may declare and pay
dividends with respect to its capital stock payable solely in additional shares
of its capital stock (other than Redeemable Preferred Stock), (ii) Subsidiaries
may declare and pay dividends ratably with respect to their capital stock, (iii)
the Borrower or any Subsidiary may acquire the equity securities of any
Subsidiary not owned by it if such purchase is otherwise permitted by this
Agreement, (iv) Holdings and/or the Borrower may, collectively, make Restricted
Payments, not exceeding $10,000,000 during any fiscal year, pursuant to and in
accordance with stock option plans or other benefit plans for management,
directors or employees of Holdings, the Borrower and the Subsidiaries, provided
that any unused portion of such amount in any fiscal year (without giving effect
to this proviso) may be carried forward to the next fiscal year only and (v) the
Borrower may make Restricted Payments to Holdings in an amount necessary to
allow Holdings to pay any operating expenses of Holdings in an amount not to
exceed $250,000 per fiscal year of Holdings.
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(b) Each of Holdings and the Borrower will not, nor will it permit any
Subsidiary to, make or agree to pay or make, directly or indirectly, any payment
or other distribution (whether in cash, securities or other property) of or in
respect of principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancelation or termination of any Indebtedness, except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness, other than
payments in respect of subordinated Indebtedness prohibited by the
subordination provisions thereof;
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01;
(iv) payment of Indebtedness that becomes due as a result of the
sale or disposition (including pursuant to a casualty or condemnation)
of the property or assets securing such Indebtedness; and
(v) prepayments of intercompany Indebtedness issued by any
Foreign Subsidiary or any Loan Party to any Loan Party.
SECTION 6.08. Transactions with Affiliates. Each of Holdings and the
Borrower will not, nor will it permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business that are at prices and on terms and conditions not
less favorable to Holdings, the Borrower or such Subsidiary than could be
obtained on an arm's-length basis from unrelated third parties, (b) transactions
between or among Loan Parties (other than Holdings) not involving any other
Affiliate or unrelated third party (provided such transaction complies with the
requirements of Section 6.05), (c) contributions of capital from Holdings to the
Borrower, (d) any Restricted Payment permitted by Section 6.07, (e) loans or
advances to employees and officers of Holdings, the Borrower or any Subsidiary
in the ordinary course of business to provide for the payment of reasonable
expenses incurred by such persons in the performance of their responsibilities
to Holdings, the Borrower or such Subsidiary or in connection with any
relocation, (f) fees, compensation or employee benefit arrangements paid to and
indemnity provided on behalf of directors, officers or employees of Holdings,
the Borrower or any Subsidiary in the ordinary course of business and (g)
employment agreements (including customary benefits thereunder) entered into at
any time by Holdings, the Borrower or any Subsidiary in the ordinary course of
business, and (h) interest free loans made after the date hereof by the Borrower
to Foreign Subsidiaries consistent with past practice in an aggregate amount not
to exceed $15,000,000 at any time outstanding (provided (x) such loan is
permitted by Section 6.04 and (y) charging interest on such loan would result in
the incurrence of currency gains or losses on interest by the Borrower under
GAAP).
SECTION 6.09. Restrictive Agreements. Each of Holdings and the Borrower
will not, nor will it permit any Subsidiary to, directly or indirectly, enter
into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon the ability of any Subsidiary
to pay dividends or other distributions with respect to any shares of its
capital stock or to make or repay loans or advances to the Borrower or any other
Subsidiary or
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to Guarantee Indebtedness of the Borrower or any other Subsidiary; provided that
the foregoing shall not apply to (a) restrictions and conditions imposed by law
or by any Loan Document, (b) restrictions and conditions existing on the
Effective Date identified on Schedule 6.09 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (c) customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale (provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder), (d) customary net worth provisions
contained in leases and other similar agreements, (e) customary anti-assignment
provisions contained in leases, licenses and other similar agreements (provided
that each of Holdings and the Borrower will, and will cause each Subsidiary to,
use commercially reasonable efforts, whenever practicable, to obtain waivers or
releases of such provisions with respect to Liens created under the Loan
Documents) and (f) any provisions contained in any Indebtedness of a Person
existing at the time such Person becomes a Subsidiary (provided that (i) such
Indebtedness is not incurred in connection with, or in contemplation of, such
Person becoming a Subsidiary, (ii) such restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person
acquired and such Person's subsidiaries and (iii) such Indebtedness is otherwise
permitted to be incurred under this Agreement).
SECTION 6.10. Amendment of Material Documents. Each of Holdings and the
Borrower will not, nor will it permit any Subsidiary to, amend, modify or waive
any of its rights under its certificate of incorporation, by-laws or other
organizational documents.
SECTION 6.11. Leverage Ratio. Each of Holdings and the Borrower will not
permit the Leverage Ratio as of the last day of any period of four consecutive
fiscal quarters ending during any period set forth below to exceed the ratio set
forth below opposite such period:
Period Ratio
------ -----
Effective Date - September 30, 2002 2.5 to 1.0
October 1, 2002 - September 30, 2003 2.25 to 1.0
October 1, 2003 - September 30, 2004 1.75 to 1.0
thereafter 1.5 to 1.0
SECTION 6.12. Consolidated Fixed Charge Coverage Ratio. Each of Holdings
and the Borrower will not permit the ratio of (a) Consolidated EBITDA to (b)
Consolidated Fixed Charges as of the last day of any period of four consecutive
fiscal quarters ending during any period set forth below to be less than the
ratio set forth below opposite such period:
Period Ratio
------ -----
Effective Date - September 30, 2002 1.05 to 1.0
October 1, 2002 - September 30, 2003 1.1 to 1.0
October 1, 2003 - September 30, 2004 1.25 to 1.0
October 1, 2004 - September 30, 2005 1.5 to 1.0
thereafter 1.75 to 1.0
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SECTION 6.13. Fiscal Year. Each of Holdings and the Borrower will not
permit its fiscal year to end on any day other than December 31.
ARTICLE VII
Events of Default
-----------------
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the
same shall become due and payable, whether at the due date thereof or at a
date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement or any other Loan Document, when and
as the same shall become due and payable, and such failure shall continue
unremedied for a period of three Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of Holdings, the Borrower or any Subsidiary in or in connection with any
Loan Document or any amendment or modification thereof or waiver
thereunder, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof or waiver thereunder, shall prove to
have been incorrect in any material respect when made or deemed made;
(d) either Holdings or the Borrower shall fail to observe or perform
any covenant, condition or agreement contained in Section 5.02, 5.04 (with
respect to the existence of the Borrower) or 5.11 or in Article VI;
(e) any Loan Party shall fail to observe or perform any covenant,
condition or agreement contained in any Loan Document (other than those
specified in clause (a), (b) or (d) of this Article), and such failure
shall continue unremedied for a period of 30 days after notice thereof from
the Administrative Agent to the Borrower (which notice will be given at the
request of any Lender);
(f) Holdings, the Borrower or any Significant Subsidiary shall fail to
make any payment (whether of principal or interest and regardless of
amount) in respect of any Material Indebtedness, when and as the same shall
become due and payable within any applicable grace period;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both, but, solely in respect of Hedging Agreements, only after the lapse of
five days) the holder or holders of any Material Indebtedness or any
trustee or agent on its or their behalf to cause any Material Indebtedness
to become due, or to require the prepayment, repurchase, redemption or
defeasance thereof, prior to its scheduled maturity;
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provided that this clause (g) shall not apply to Indebtedness that becomes
due as a result of the sale or disposition (including pursuant to a
casualty or condemnation) of the property or assets securing such
Indebtedness or to provisions requiring the offer to purchase outstanding
Indebtedness in the event of a sale of assets of Holdings, the Borrower or
the Subsidiaries;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of Holdings, the Borrower or any Significant Subsidiary
or its debts, or of a substantial part of its assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect or (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for Holdings, the
Borrower or any Significant Subsidiary or for a substantial part of its
assets, and, in any such case, such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any of
the foregoing shall be entered;
(i) Holdings, the Borrower or any Significant Subsidiary shall (i)
voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to contest
in a timely and appropriate manner, any proceeding or petition described in
clause (h) of this Article, (iii) apply for or consent to the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for Holdings, the Borrower or any Significant Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make
a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing;
(j) Holdings, the Borrower or any Significant Subsidiary shall become
unable, admit in writing its inability or fail generally to pay its debts
as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $5,000,000 (to the extent not adequately covered by
insurance proceeds as to which the insurance company has acknowledged
coverage pursuant to a writing reasonably satisfactory to the
Administrative Agent) shall be rendered against Holdings, the Borrower, any
Significant Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 45 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of Holdings, the
Borrower or any Significant Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse
Effect;
(m) any Lien purported to be created under any Loan Document shall
cease to be, or shall be asserted by any Loan Party not to be, a valid and
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perfected Lien on any Collateral having a value in excess of $500,000 on
which a Lien may be perfected pursuant to such Loan Document under
applicable law, with the priority required by the applicable Loan Document,
except (i) as a result of the sale or other disposition of the applicable
Collateral in a transaction permitted under the Loan Documents or (ii) as a
result of the failure of the Administrative Agent to maintain possession of
any stock certificates, promissory notes or other instruments delivered to
it under any Loan Document; or
(n) a Change in Control shall occur;
then, and in every such event (other than an event with respect to Holdings or
the Borrower described in clause (h) or (i) of this Article), and at any time
thereafter during the continuance of such event, with the consent of the
Required Lenders, the Administrative Agent may, and at the request of the
Required Lenders, the Administrative Agent shall, by notice to the Borrower,
take either or both of the following actions, at the same or different times:
(i) terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to Holdings or the Borrower
described in clause (h) or (i) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all fees and other obligations of the
Borrower accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.
ARTICLE VIII
The Administrative Agent and the Collateral Agent
-------------------------------------------------
Each of the Lenders and the Issuing Bank hereby irrevocably appoints The
Chase Manhattan Bank as Administrative Agent and Collateral Agent (for purposes
of this Article VIII, collectively, the "Agent") and authorizes the Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Agent by the terms of the Loan Documents, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Agent hereunder shall have the same rights and
powers in its capacity as a Lender as any other Lender and may exercise the same
as though it were not the Agent, and such bank and its Affiliates may accept
deposits from, lend money to and generally engage in any kind of business with
Holdings, the Borrower or any Subsidiary or other Affiliate thereof as if it
were not the Agent hereunder.
The Agent shall not have any duties or obligations except those expressly
set forth in the Loan Documents. Without limiting the generality of the
foregoing, (a) the Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Agent shall not have any duty to take any discretionary action or exercise any
discretionary powers, except discretionary rights and powers expressly
contemplated by the Loan Documents that the Agent is required to exercise in
writing by the
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Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02), and (c) except
as expressly set forth in the Loan Documents, the Agent shall not have any duty
to disclose, and shall not be liable for the failure to disclose, any
information relating to Holdings, the Borrower or any of the Subsidiaries that
is communicated to or obtained by the bank serving as Agent or any of its
Affiliates in any capacity. The Agent shall not be liable to any Lender for any
action taken or not taken by it with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided in Section 9.02) or in the absence
of its own gross negligence or wilful misconduct. The Agent shall not be deemed
to have knowledge of any Default unless and until written notice thereof is
given to the Agent by Holdings, the Borrower or a Lender, and the Agent shall
not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with any Loan
Document, (ii) the contents of any certificate, report or other document
delivered thereunder or in connection therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth in any Loan Document, (iv) the validity, enforceability, effectiveness or
genuineness of any Loan Document or any other agreement, instrument or document,
or (v) the satisfaction of any condition set forth in Article IV or elsewhere in
any Loan Document, other than to confirm receipt of items expressly required to
be delivered to the Agent.
The Agent shall be entitled to rely upon, and shall not incur any liability
for relying upon, any notice, request, certificate, consent, statement,
instrument, document or other writing believed by it to be genuine and to have
been signed or sent by the proper Person. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon. The Agent
may consult with legal counsel (who may be counsel for Holdings or the
Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
The Agent may perform any and all its duties and exercise its rights and
powers by or through any one or more sub-agents appointed by the Agent. The
Agent and any such sub-agent may perform any and all its duties and exercise its
rights and powers through their respective Related Parties. The exculpatory
provisions of the preceding paragraphs shall apply to any such sub-agent and to
the Related Parties of each Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
Subject to the appointment and acceptance of a successor to the Agent as
provided in this paragraph, the Agent may resign at any time by notifying the
Lenders, the Issuing Bank and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor. So long as no
Default or Event of Default shall have occurred and be continuing, the
appointment of a new Agent shall require the consent of the Borrower (which
consent shall not be unreasonably withheld). If no successor shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within 30 days after the retiring Agent gives notice of its resignation, then
the retiring Agent may, on behalf of the Lenders and the Issuing Bank, appoint a
successor Agent which shall be a bank with an office in New York, New York, or
an Affiliate of any such bank, having a combined capital and surplus of at least
$250,000,000. Upon the acceptance of its appointment as Agent hereunder by a
successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Agent shall be the same as those
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payable to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Agent's resignation hereunder, the provisions of this
Article and Section 9.03 shall continue in effect for the benefit of such
retiring Agent, its sub-agents and their respective Related Parties in respect
of any actions taken or omitted to be taken by any of them while it was acting
as Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agent or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement, any other Loan Document or related agreement or any
document furnished hereunder or thereunder.
The Persons listed on the cover of this Agreement as "Syndication Agent" or
"Documentation Agent" shall have no rights, powers, obligations, liabilities,
responsibilities or duties under this Agreement other than those applicable to
it as a Lender. Without limiting the foregoing sentence, neither the Syndication
Agent nor the Documentation Agent shall have, or be deemed to have, any
fiduciary relationship with any other Lender. Each Lender acknowledges that it
has not relied, and will not rely, on the Syndication Agent or the Documentation
Agent in deciding to enter into this Agreement or in taking or not taking any
action hereunder.
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or to Holdings, to it at ▇▇▇▇▇▇ Medical
Technology, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention
of General Counsel (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇; with a copy to ▇▇▇▇▇▇▇
▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention
of ▇▇▇▇▇▇ ▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇);
(b) if to the Administrative Agent, the Collateral Agent or the
Issuing Bank, to The Chase Manhattan Bank, Loan and Agency Services Group,
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention
of ▇▇▇▇ ▇▇▇▇▇▇ (Telecopy No. (▇▇▇) ▇▇▇-▇▇▇▇); and
(c) if to any other Lender, to it at its address (or telecopy number)
set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other
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communications given to any party hereto in accordance with the provisions of
this Agreement shall be deemed to have been given on the date of receipt.
SECTION 9.02. Waivers; Amendments. (a) No failure or delay by any Agent,
the Issuing Bank or any Lender in exercising any right or power hereunder or
under any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of any Agent, the Issuing Bank and the Lenders hereunder and under
the other Loan Documents are cumulative and are not exclusive of any rights or
remedies that they would otherwise have. No waiver of any provision of any Loan
Document or consent to any departure by any Loan Party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether any Agent, any
Lender or the Issuing Bank may have had notice or knowledge of such Default at
the time.
(b) Neither this Agreement nor any other Loan Document nor any provision
hereof or thereof may be waived, amended or modified except, in the case of this
Agreement, pursuant to an agreement or agreements in writing entered into by
Holdings, the Borrower and the Required Lenders or, in the case of any other
Loan Document, pursuant to an agreement or agreements in writing entered into by
the Collateral Agent or the Administrative Agent, as the case may be, and the
Loan Party or Loan Parties that are parties thereto, in each case with the
consent of the Required Lenders; provided that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change Section 2.17(b) or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) change any of the provisions of this Section or the
definition of "Required Lenders" or any other provision of any Loan Document
specifying the number or percentage of Lenders (or Lenders of any Class)
required to waive, amend or modify any rights thereunder or make any
determination or grant any consent thereunder, without the written consent of
each Lender (or each Lender of such Class, as the case may be), (vi) release any
Loan Party from its Guarantee under any Loan Document (except as expressly
provided in such Loan Document), or limit its liability in respect of such
Guarantee, without the written consent of each Lender, (vii) release all or
substantially all of the Collateral from the Liens of the Loan Documents,
without the written consent of each Lender, or (viii) change any provisions of
any Loan Document in a manner that by its terms adversely affects the rights in
respect of payments due to Lenders holding Loans of any Class differently than
those holding Loans of any other Class, without the written consent of Lenders
holding a majority in interest of the outstanding Loans and unused Commitments
of each affected Class; provided further that (A) no such agreement shall amend,
modify or otherwise affect the rights or duties of any Agent or the Issuing Bank
without the prior written consent of such Agent or the Issuing Bank, as the case
may be, and (B) any waiver, amendment or modification of this Agreement that by
its terms affects the rights or duties under this Agreement of a single Class of
Lenders (but not any other Class of Lenders) may be
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effected by an agreement or agreements in writing entered into by Holdings, the
Borrower and requisite percentage in interest of the affected Class of Lenders.
SECTION 9.03. Expenses; Indemnity; Damage Waiver. (a) Holdings and the
Borrower, jointly and severally, shall pay (i) all reasonable out-of-pocket
expenses incurred by any Agent and its Affiliates, including the reasonable
fees, charges and disbursements of counsel for any Agent, in connection with the
syndication of the credit facilities provided for herein, the preparation and
administration of the Loan Documents or any amendments, modifications or waivers
of the provisions thereof (whether or not the transactions contemplated hereby
or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by any Agent, the Issuing Bank or any
Lender, including the fees, charges and disbursements of any counsel for any
Agent, the Issuing Bank or any Lender, in connection with the enforcement or
protection of its rights in connection with the Loan Documents, including its
rights under this Section, or in connection with the Loans made or Letters of
Credit issued hereunder, including all such out-of-pocket expenses incurred
during any workout, restructuring or negotiations in respect of such Loans or
Letters of Credit.
(b) Holdings and the Borrower, jointly and severally, shall indemnify each
Agent, the Issuing Bank and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of any Loan Document or any other agreement or instrument
contemplated hereby, the performance by the parties to the Loan Documents of
their respective obligations thereunder or the consummation of the Transactions
or any other transactions contemplated hereby, (ii) any Loan or Letter of Credit
or the use of the proceeds therefrom (including any refusal by the Issuing Bank
to honor a demand for payment under a Letter of Credit if the documents
presented in connection with such demand do not strictly comply with the terms
of such Letter of Credit), (iii) any actual or alleged presence or release of
Hazardous Materials on or from any Mortgaged Property or any other property
owned or operated by Holdings, the Borrower or any of the Subsidiaries, or any
Environmental Liability related in any way to Holdings, the Borrower or any of
the Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses are determined by a court of competent jurisdiction by final
and nonappealable judgment to have resulted from the gross negligence or wilful
misconduct of such Indemnitee or any Related Party of such Indemnitee.
(c) To the extent that Holdings and the Borrower fail to pay any amount
required to be paid by them to any Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to such Agent or the
Issuing Bank, as the case may be, such Lender's pro rata share (determined as of
the time that the applicable unreimbursed expense or indemnity payment is
sought) of such unpaid amount; provided that the unreimbursed expense or
indemnified loss, claim, damage, liability or related expense, as the case may
be, was incurred by or asserted against any Agent or the Issuing Bank in its
capacity as such. For purposes hereof, a Lender's "pro rata share" shall be
determined based upon its share of the sum of the total Revolving Exposures,
outstanding Term Loans and unused Commitments at the time.
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(d) To the extent permitted by applicable law, each of Holdings and the
Borrower shall not assert, and each hereby waives, any claim against any
Indemnitee, on any theory of liability, for special, indirect, consequential or
punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or
instrument contemplated hereby, the Transactions, any Loan or Letter of Credit
or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable not later than 10
days after written demand therefor setting forth a computation of the amount due
and reasonable supporting documentation.
SECTION 9.04. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that each of Holdings
and the Borrower may not assign or otherwise transfer any of its rights or
obligations hereunder without the prior written consent of each Lender (and any
attempted assignment or transfer by Holdings or the Borrower without such
consent shall be null and void). Nothing in this Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby (including any
Affiliate of the Issuing Bank that issues any Letter of Credit) and, to the
extent expressly contemplated hereby, the Related Parties of each of the Agents,
the Issuing Bank and the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it); provided that (i) except in
the case of an assignment to a Lender or a Lender Affiliate, each of the
Borrower and the Administrative Agent (and, in the case of an assignment of all
or a portion of a Revolving Commitment, the Issuing Bank) must give their prior
written consent to such assignment (which consent shall not be unreasonably
withheld), (ii) except in the case of an assignment to a Lender or a Lender
Affiliate or an assignment of the entire remaining amount of the assigning
Lender's Commitment or Loans, the amount of the Commitment or Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Borrower and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, except that this
clause (iii) shall not be construed to prohibit the assignment of a
proportionate part of all the assigning Lender's rights and obligations in
respect of one Class of Commitments or Loans, (iv) the parties to each
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with a processing and recordation fee of $3,500, and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and provided further that
any consent of the Borrower otherwise required under this paragraph shall not be
required if an Event of Default under clause (a), (b), (h) or (i) of Article VII
has occurred and is continuing. Subject to acceptance and recording thereof
pursuant to paragraph (d) of this Section, from and after the effective date
specified in each Assignment and Acceptance the assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such Assignment and
Acceptance, have the rights and obligations of a Lender under this Agreement,
and the assigning Lender thereunder shall, to the extent of the interest
assigned by such Assignment and Acceptance, be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all of the
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assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.03). Any assignment or transfer by a
Lender of rights or obligations under this Agreement that does not comply with
this paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Loans and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and Holdings, the Borrower, the Agents, the
Issuing Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by Holdings, the Borrower, the Issuing Bank and any
Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower, the Agents or the
Issuing Bank, sell participations to one or more banks or other entities (a
"Participant") in all or a portion of such Lender's rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans owing
to it); provided that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) Holdings, the
Borrower, the Agents, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents;
provided that such agreement or instrument may provide that such Lender will
not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, each of
Holdings and the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15 and 2.16 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section; provided that the amount payable to the seller of the
participation and the Participant in the aggregate shall not exceed the amount
which would otherwise be payable had a participation not been sold. To the
extent permitted by law, each Participant also shall be entitled to the benefits
of Section 9.08 as though it were a Lender; provided that such Participant
agrees to be subject to Section 2.17(c) as though it were a Lender.
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(f) A Participant shall not be entitled to receive any greater payment
under Section 2.14 or 2.16 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. Subject to the preceding sentence, a Participant that
would be a Foreign Lender if it were a Lender shall not be entitled to the
benefits of Section 2.16 unless the Borrower is notified of the participation
sold to such Participant and such Participant agrees, for the benefit of the
Borrower, to comply with Section 2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank, and this Section shall not apply to any such pledge or assignment
of a security interest; provided that no such pledge or assignment of a security
interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(h) Notwithstanding anything to the contrary contained herein, any Lender
(a "Granting Bank") may grant to a special purpose funding vehicle (an "SPC"),
identified as such in writing from time to time by the Granting Bank to the
Administrative Agent and the Borrower, the option to provide to the Borrower all
or any part of any Loan that such Granting Bank would otherwise be obligated to
make to the Borrower pursuant to this Agreement; provided that (i) nothing
herein shall constitute a commitment by any SPC to make any Loan, (ii) if an SPC
elects not to exercise such option or otherwise fails to provide all or any part
of such Loan, the Granting Bank shall be obligated to make such Loan pursuant to
the terms hereof, (iii) such Granting Bank's obligations under this Agreement
and the Loan Documents shall remain unchanged, (iv) such Granting Bank shall
remain solely responsible to the other parties hereto for the performance of all
rights and obligations under this Agreement, (v) the Borrower and the Lenders
shall continue to deal solely and directly with such Granting Bank in connection
with such Granting Bank's rights and obligations under this Agreement, (vi) such
Granting Bank shall retain the sole right to approve any amendment,
modification, or waiver of any provisions of this Agreement, (vii) the granting
of such option shall not constitute an assignment to or participation of such
SPC of or in the Granting Bank's rights and obligations under this Agreement and
(viii) such SPC shall not become a Lender hereunder as a result of the granting
of such option. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Bank to the same extent, and as if, such Loan were
made by such Granting Bank. Each party hereto hereby agrees that no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement (all
liability for which shall remain with the Granting Bank). In addition, each
party hereto hereby agrees (which agreement shall survive the termination of
this Agreement) that, prior to the date that is one year and one day after the
payment in full of all outstanding commercial paper or other senior indebtedness
of any SPC, it will not institute against, or join any other person in
instituting against, such SPC any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings or any other proceeding under any
bankruptcy or similar law. Notwithstanding anything to the contrary contained in
this Agreement, any SPC may (i) with notice to, but without the prior written
consent of, the Borrower and the Agent and without paying any processing fee
therefor, collaterally assign all or a portion of its interests in any Loans to
the Granting Bank or to any financial institution providing liquidity and/or
credit support to or for the account of such SPC to support the funding or
maintenance of Loans and (ii) disclose on a confidential basis any non-public
information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC. The provisions of this paragraph (h) shall survive the termination of this
Agreement and may not be amended with respect to any SPC without the written
consent of such SPC.
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SECTION 9.05. Survival. All covenants, agreements, representations and
warranties made by the Loan Parties in the Loan Documents and in the
certificates or other instruments delivered in connection with or pursuant to
this Agreement or any other Loan Document shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of the Loan Documents and the making of any Loans and issuance of any
Letters of Credit, regardless of any investigation made by any such other party
or on its behalf and notwithstanding that any Agent, the Issuing Bank or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VIII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06. Counterparts; Integration; Effectiveness. This Agreement may
be executed in counterparts (and by different parties hereto on different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement, the other
Loan Documents and any separate letter agreements with respect to fees payable
to the Agents constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in Section 4.01, this Agreement shall become effective when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the parties hereto, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. Delivery of an executed counterpart of a
signature page of this Agreement by telecopy shall be effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 9.07. Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its Affiliates is hereby authorized
at any time and from time to time, to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other obligations at any time owing
by such Lender or Affiliate to or for the credit or the account of the Borrower
against any of and all the obligations of the Borrower now or hereafter existing
under this Agreement held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement and although such
obligations may be unmatured. The rights of each Lender under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process.
(a) THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND
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GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
(b) Each of Holdings and the Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to any Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that any Agent, the Issuing Bank or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or any other
Loan Document against either Holdings or the Borrower or its properties in the
courts of any jurisdiction.
(c) Each of Holdings and the Borrower hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement or
any other Loan Document in any court referred to in paragraph (b) of this
Section. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.01. Nothing in this Agreement or
any other Loan Document will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
SECTION 9.10. Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO
(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
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SECTION 9.12. Confidentiality. Each of the Agents, the Issuing Bank and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its and its Affiliates'
directors, officers, employees and agents, including accountants, legal counsel
and other advisors in connection with the administration of the Loans and
Commitments (it being understood that the Persons to whom such disclosure is
made will be informed of the confidential nature of such Information and
instructed to keep such Information confidential), (b) to the extent requested
by any regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other party
to this Agreement, (e) in connection with the exercise of any remedies hereunder
or any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (f) subject to a
written agreement containing provisions substantially the same as those of this
Section, to any assignee of or Participant in, or any prospective assignee of or
Participant in, any of its rights or obligations under this Agreement, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
becomes available to any Agent, the Issuing Bank or any Lender on a
nonconfidential basis from a source other than the Borrower or Holdings. For the
purposes of this Section, "Information" means all information received from the
Borrower or Holdings relating to Holdings, the Borrower or their respective
businesses, other than any such information that is available to any Agent, the
Issuing Bank or any Lender on a nonconfidential basis prior to disclosure by
Holdings or the Borrower; provided that, in the case of information received
from Holdings or the Borrower after the Effective Date, such information is
clearly identified at the time of delivery as confidential or contains business
plans or projections. The Lenders shall use all information supplied by or on
behalf of Holdings or the Borrower under this Agreement and the other Loan
Documents solely in connection with the Loan Documents the Obligations and/or in
dealing with its other credits with Holdings, the Borrower or the Subsidiaries.
Any Person required to maintain the confidentiality of Information as provided
in this Section shall be considered to have complied with its obligation to do
so if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Effective Rate to the date of
repayment, shall have been received by such Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
▇▇▇▇▇▇ MEDICAL GROUP, INC.,
By: By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
▇▇▇▇▇▇ MEDICAL TECHNOLOGY, INC.,
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
THE CHASE MANHATTAN BANK, as a Lender,
as Administrative Agent, Collateral
Agent and Issuing Bank,
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
CREDIT SUISSE FIRST BOSTON,
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
U.S. BANK NATIONAL ASSOCIATION,
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
-----------
SECTION 1.01. Defined Terms..................................................1
SECTION 1.02. Classification of Loans and Borrowings........................18
SECTION 1.03. Terms Generally...............................................18
SECTION 1.04. Accounting Terms; GAAP........................................18
ARTICLE II
The Credits
-----------
SECTION 2.01. Commitments...................................................19
SECTION 2.02. Loans and Borrowings..........................................19
SECTION 2.03. Requests for Borrowings.......................................19
SECTION 2.04. Letters of Credit.............................................20
SECTION 2.05. Funding of Borrowings.........................................24
SECTION 2.06. Interest Elections............................................25
SECTION 2.07. Termination and Reduction of Commitments......................26
SECTION 2.08. Repayment of Loans; Evidence of Debt..........................27
SECTION 2.09. Amortization of Term Loans....................................27
SECTION 2.10. Prepayment of Loans...........................................28
SECTION 2.11. Fees..........................................................29
SECTION 2.12. Interest......................................................30
SECTION 2.13. Alternate Rate of Interest....................................30
SECTION 2.14. Increased Costs...............................................31
SECTION 2.15. Break Funding Payments........................................32
SECTION 2.16. Taxes.........................................................32
SECTION 2.17. Payments Generally; Pro Rata Treatment; Sharing of Set-offs...34
SECTION 2.18. Mitigation Obligations; Replacement of Lenders................35
SECTION 2.19. Increase in Revolving Credit Commitments......................36
ARTICLE III
Representations and Warranties
------------------------------
SECTION 3.01. Organization; Powers..........................................37
SECTION 3.02. Authorization; Enforceability.................................37
SECTION 3.03. Governmental Approvals; No Conflicts..........................37
Contents, p. 2
SECTION 3.04. Financial Condition; No Material Adverse Change...............38
SECTION 3.05. Properties....................................................38
SECTION 3.06. Litigation and Environmental Matters..........................39
SECTION 3.07. Compliance with Laws and Agreements...........................39
SECTION 3.08. Investment and Holding Company Status.........................39
SECTION 3.09. Taxes.........................................................39
SECTION 3.10. ERISA.........................................................39
SECTION 3.11. Disclosure....................................................40
SECTION 3.12. Subsidiaries..................................................40
SECTION 3.13. Insurance.....................................................40
SECTION 3.14. Labor Matters.................................................40
SECTION 3.15. Solvency......................................................40
SECTION 3.16. Security Documents............................................41
ARTICLE IV
Conditions
----------
SECTION 4.01. Effective Date................................................42
SECTION 4.02. All Credit Events.............................................44
ARTICLE V
Affirmative Covenants
---------------------
SECTION 5.01. Financial Statements and Other Information....................44
SECTION 5.02. Notices of Material Events....................................46
SECTION 5.03. Information Regarding Collateral..............................46
SECTION 5.04. Existence; Conduct of Business................................47
SECTION 5.05. Payment of Obligations........................................47
SECTION 5.06. Maintenance of Properties.....................................47
SECTION 5.07. Insurance.....................................................47
SECTION 5.08. Casualty and Condemnation.....................................47
SECTION 5.09. Books and Records; Inspection and Audit Rights................48
SECTION 5.10. Compliance with Laws..........................................48
SECTION 5.11. Use of Proceeds and Letters of Credit.........................48
SECTION 5.12. Additional Subsidiaries.......................................49
SECTION 5.13. Further Assurances............................................49
ARTICLE VI
Negative Covenants
------------------
SECTION 6.01. Indebtedness; Certain Equity Securities.......................50
SECTION 6.02. Liens.........................................................52
SECTION 6.03. Fundamental Changes...........................................53
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions.....53
SECTION 6.05. Asset Sales...................................................54
Contents, p. 3
SECTION 6.06. Hedging Agreements............................................55
SECTION 6.07. Restricted Payments; Certain Payments of Indebtedness.........55
SECTION 6.08. Transactions with Affiliates..................................56
SECTION 6.09. Restrictive Agreements........................................56
SECTION 6.10. Amendment of Material Documents...............................57
SECTION 6.11. Leverage Ratio................................................57
SECTION 6.12. Consolidated Fixed Charge Coverage Ratio......................57
SECTION 6.13. Fiscal Year...................................................58
ARTICLE VII
Events of Default............................................................58
ARTICLE VIII
The Administrative Agent and the Collateral Agent ...........................60
ARTICLE IX
Miscellaneous
-------------
SECTION 9.01. Notices.......................................................62
SECTION 9.02. Waivers; Amendments...........................................63
SECTION 9.03. Expenses; Indemnity; Damage Waiver............................64
SECTION 9.04. Successors and Assigns........................................65
SECTION 9.05. Survival......................................................68
SECTION 9.06. Counterparts; Integration; Effectiveness......................68
SECTION 9.07. Severability..................................................68
SECTION 9.08. Right of Setoff...............................................68
SECTION 9.09. Governing Law; Jurisdiction; Consent to Service of Process....68
SECTION 9.10. Waiver of Jury Trial..........................................69
SECTION 9.11. Headings......................................................69
SECTION 9.12. Confidentiality...............................................70
SECTION 9.13. Interest Rate Limitation......................................70
Contents, p. 4
SCHEDULES:
Schedule 1.01(a) Subsidiary Guarantors
Schedule 2.01 Commitments
Schedule 3.05(a) Real Property
Schedule 3.06 Disclosed Matters
Schedule 3.12 Subsidiaries
Schedule 3.13 Insurance
Schedule 6.01 Existing Indebtedness
Schedule 6.02 Existing Liens
Schedule 6.04 Investments
Schedule 6.09 Existing Restrictions
EXHIBITS:
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Guarantee and Collateral Agreement
Exhibit D Form of French Pledge Agreement
Exhibit E Form of Japanese Pledge Agreement
Exhibit F-1 Form of Opinion of Borrower's Counsel
Exhibit F-2 Form of Opinion of Borrower's French Counsel
Exhibit F-3 Form of Opinion of Borrower's Canadian Counsel
Exhibit F-4 Form of Opinion of Borrower's Japanese Counsel