1
CREDIT AGREEMENT
by and among
CAPSTONE PHARMACY SERVICES, INC.,
THE BANKS NAMED HEREIN
and
BANKERS TRUST COMPANY,
as the Agent
Dated as of December 6, 1996
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION......................................................... 1
1.01 DEFINED TERMS.................................................................................... 1
1.02 PRINCIPLES OF CONSTRUCTION....................................................................... 18
SECTION 2. AMOUNT AND TERMS OF CREDIT......................................................................... 18
2.01 THE REVOLVING LOANS.............................................................................. 18
2.02 THE SWING LINE LOANS............................................................................. 21
2.03 [RESERVED]....................................................................................... 23
2.04 DISBURSEMENT OF FUNDS............................................................................ 23
2.05 NOTES .......................................................................................... 24
2.06 INTEREST ON THE LOANS............................................................................ 24
2.07 INCREASED COSTS; TAXES........................................................................... 28
2.08 USE OF PROCEEDS.................................................................................. 31
2.09 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS............................................... 32
2.10 LETTERS OF CREDIT................................................................................ 37
SECTION 3. FEES............................................................................................... 45
3.01 FEES .......................................................................................... 45
SECTION 4. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; PAYMENTS................................................ 46
4.01 SCHEDULED REDUCTIONS IN REVOLVING LOAN COMMITMENTS............................................... 46
4.02 PREPAYMENTS; VOLUNTARY AND MANDATORY REDUCTIONS IN REVOLVING
LOAN COMMITMENTS.......................................................................... 47
4.03 APPLICATION OF PREPAYMENTS....................................................................... 48
4.04 GENERAL PROVISIONS REGARDING PAYMENTS............................................................ 49
SECTION 5. CONDITIONS PRECEDENT............................................................................... 50
5.01 CONDITIONS TO EFFECTIVENESS...................................................................... 50
5.02 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT.................................................... 54
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS......................................................... 55
6.01 CORPORATE STATUS................................................................................. 55
6.02 CORPORATE POWER AND AUTHORITY.................................................................... 56
6.03 NO VIOLATION..................................................................................... 56
6.04 GOVERNMENTAL APPROVALS........................................................................... 57
6.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED LIABILITIES;
ETC....................................................................................... 57
6.06 LITIGATION....................................................................................... 58
6.07 TRUE AND COMPLETE DISCLOSURE..................................................................... 58
6.08 USE OF PROCEEDS; MARGIN REGULATIONS.............................................................. 58
6.09 TAX RETURNS AND PAYMENTS......................................................................... 58
6.10 COMPLIANCE WITH ERISA............................................................................ 58
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6.11 CAPITALIZATION................................................................................... 59
6.12 SUBSIDIARIES..................................................................................... 59
6.13 COMPLIANCE WITH STATUTES, ETC.................................................................... 59
6.14 INVESTMENT COMPANY ACT........................................................................... 59
6.15 PUBLIC UTILITY HOLDING COMPANY ACT............................................................... 60
6.16 LABOR RELATIONS.................................................................................. 60
6.17 PATENTS, LICENSES, FRANCHISES AND FORMULAS....................................................... 60
6.18 NO MATERIAL ADVERSE CHANGE....................................................................... 61
6.19 FRAUD AND ABUSE.................................................................................. 61
6.20 TITLE TO PROPERTIES; LIENS....................................................................... 63
6.21 JOINT VENTURES................................................................................... 63
6.22 ACCOUNTS RECEIVABLE COLLATERAL................................................................... 63
SECTION 7. AFFIRMATIVE COVENANTS.............................................................................. 63
7.01 INFORMATION COVENANTS............................................................................ 63
7.02 BOOKS, RECORDS AND INSPECTIONS................................................................... 66
7.03 MAINTENANCE OF PROPERTY, INSURANCE............................................................... 67
7.04 CORPORATE FRANCHISES............................................................................. 67
7.05 COMPLIANCE WITH STATUTES, ETC.................................................................... 67
7.06 ERISA .......................................................................................... 68
7.07 END OF FISCAL YEARS; FISCAL QUARTERS............................................................. 68
7.08 PERFORMANCE OF OBLIGATIONS....................................................................... 69
7.09 PAYMENT OF TAXES AND CLAIMS...................................................................... 69
7.10 LICENSING........................................................................................ 69
7.11 FURTHER ASSURANCES; NEW SUBSIDIARIES............................................................. 69
7.12 ACCOUNTS RECEIVABLE.............................................................................. 70
SECTION 8. NEGATIVE COVENANTS................................................................................. 70
8.01 LIENS .......................................................................................... 70
8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.; ACQUISITIONS........................................ 72
8.03 DIVIDENDS........................................................................................ 74
8.04 INDEBTEDNESS..................................................................................... 74
8.05 ADVANCES, INVESTMENTS AND LOANS.................................................................. 76
8.06 TRANSACTIONS WITH AFFILIATES..................................................................... 78
8.07 CAPITAL EXPENDITURES............................................................................. 78
8.08 LEVERAGE RATIO................................................................................... 78
8.09 MINIMUM CONSOLIDATED NET WORTH................................................................... 78
8.10 MINIMUM INTEREST COVERAGE RATIO.................................................................. 79
8.11 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-
LAWS AND CERTAIN OTHER AGREEMENTS; ETC.................................................... 79
8.12 RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER DISTRIBUTIONS..................................... 80
8.13 BUSINESS......................................................................................... 80
8.14 TRANSFER OF COPYRIGHTS, PATENTS AND TRADEMARKS................................................... 80
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8.15 JOINT VENTURES................................................................................... 80
8.16 COLLECTION BANK AGREEMENTS....................................................................... 81
8.17 INACTIVE SUBSIDIARIES............................................................................ 81
SECTION 9. EVENTS OF DEFAULT.................................................................................. 81
9.01 PAYMENTS......................................................................................... 81
9.02 REPRESENTATIONS, ETC............................................................................. 81
9.03 COVENANTS........................................................................................ 81
9.04 DEFAULT UNDER OTHER AGREEMENTS................................................................... 81
9.05 BANKRUPTCY, ETC.................................................................................. 82
9.06 ERISA .......................................................................................... 82
9.07 CREDIT DOCUMENTS................................................................................. 83
9.08 CHANGES OF CONTROL............................................................................... 83
9.09 JUDGMENTS........................................................................................ 83
9.10 GOVERNMENTAL POLICIES............................................................................ 84
9.11 LOSS OF LICENSES................................................................................. 84
SECTION 10. THE AGENT......................................................................................... 85
10.01 APPOINTMENT..................................................................................... 85
10.02 NATURE OF DUTIES................................................................................ 85
10.03 LACK OF RELIANCE ON THE AGENT................................................................... 85
10.04 CERTAIN RIGHTS OF THE AGENT..................................................................... 86
10.05 RELIANCE........................................................................................ 86
10.06 INDEMNIFICATION................................................................................. 86
10.07 THE AGENT IN ITS INDIVIDUAL CAPACITY............................................................ 86
10.08 HOLDERS......................................................................................... 87
10.09 RESIGNATION BY THE AGENT AND THE SWING LINE BANK................................................ 87
SECTION 11. MISCELLANEOUS..................................................................................... 88
11.01 PAYMENT OF EXPENSES, ETC........................................................................ 88
11.02 RIGHT OF SETOFF................................................................................. 88
11.03 NOTICES......................................................................................... 89
11.04 BENEFIT OF AGREEMENT............................................................................ 89
11.05 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT................................... 89
11.06 NO WAIVER; REMEDIES CUMULATIVE.................................................................. 92
11.07 PAYMENTS PRO RATA............................................................................... 92
11.08 CALCULATIONS; COMPUTATIONS...................................................................... 93
11.09 GOVERNING LAW; WAIVER OF JURY TRIAL............................................................. 93
11.10 CONFIDENTIALITY................................................................................. 94
11.11 COUNTERPARTS.................................................................................... 94
11.12 HEADINGS DESCRIPTIVE............................................................................ 94
11.13 AMENDMENT OR WAIVER............................................................................. 94
11.14 SURVIVAL........................................................................................ 97
11.15 DOMICILE OF LOANS............................................................................... 97
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11.16 INTEGRATION..................................................................................... 97
11.17 SECURED OBLIGATIONS............................................................................. 97
SCHEDULES
SCHEDULE 1.01(a) Pro Rata Shares, Revolving Commitments
SCHEDULE 6.05 Undisclosed Liabilities
SCHEDULE 6.06 Litigation
SCHEDULE 6.11 Rights With Respect to Capital Stock
SCHEDULE 6.12 Subsidiaries, Inactive Subsidiaries
SCHEDULE 6.13 Statutory Noncompliance
SCHEDULE 6.17 Trademarks
SCHEDULE 6.18 Material Adverse Changes
SCHEDULE 6.21 Joint Ventures
SCHEDULE 7.03 Insurance
SCHEDULE 8.01(iii) Permitted Liens
SCHEDULE 8.01(xvi) Existing Financing Statements
SCHEDULE 8.04(ii) Existing Indebtedness
EXHIBITS
EXHIBIT A Form of Notice of Revolver Borrowing
EXHIBIT B Form of Notice of Swing Line Borrowing
EXHIBIT C Form of Notice of Conversion/Continuation
EXHIBIT D Form of Notice of Issuance of Letter of Credit
EXHIBIT E-1 Form of Revolving Note
EXHIBIT E-2 Form of Swing Line Note
EXHIBIT F Form of Subsidiary Guaranty
EXHIBIT G Form of Borrower Pledge Agreement
EXHIBIT H Form of Subsidiary Pledge Agreement
EXHIBIT I Form of Borrower Security Agreement
EXHIBIT J Form of Subsidiary Security Agreement
EXHIBIT K Form of Trademark Security Agreement
EXHIBIT L Form of Subordination Agreement
EXHIBIT M Form of Collection Bank Agreement
EXHIBIT N Form of Concentration Bank Agreement
EXHIBIT O Form of Assignment and Acceptance Agreement
EXHIBIT P Form of Compliance Certificate
EXHIBIT Q Form of Opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ &
Manner, P.C., Counsel to Borrower
EXHIBIT R Form of Opinion of Kronish, Lieb, Weiner &
▇▇▇▇▇▇▇ LLP, Counsel to Borrower
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CAPSTONE PHARMACY SERVICES, INC.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of December 6, 1996 and entered into
by and among CAPSTONE PHARMACY SERVICES, INC. (the "BORROWER"), a corporation
organized and existing under the laws of Delaware, BANKERS TRUST COMPANY and THE
FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each a "BANK" and,
collectively, the "BANKS"), and BANKERS TRUST COMPANY, acting in the manner and
to the extent described in Section 10 (in such capacity, the "AGENT").
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in Section 1.01 of this Agreement.
RECITALS
WHEREAS, the Borrower desires to obtain senior bank financing to
refinance the amounts outstanding under the Existing Credit Agreement, to
provide capital for general corporate purposes and for making Acquisitions;
WHEREAS, the Banks desire to provide such senior bank financing to the
Borrower for such purposes in the form of a revolving credit facility; and
WHEREAS, the Agent desires to perform the services and to act on behalf
of Banks as set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and agreements,
provisions and covenants herein contained, the Borrower, the Banks and the Agent
agree as follows:
SECTION 1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION.
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ACCOUNTS RECEIVABLE" means all accounts receivable pledged as
Collateral.
"ACQUISITION" or "ACQUISITIONS" means any acquisitions by purchase or
otherwise by Borrower or any of its Wholly-Owned Subsidiaries of the capital
stock of, or all
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(or substantially all) of the assets of, any Person or any division of such
Person permitted pursuant to Section 8.02(iv).
"ACTIVE SUBSIDIARIES" means those Subsidiaries of Borrower identified on
SCHEDULE 6.12 as being active.
"ADJUSTED EURODOLLAR RATE" means, for any Interest Rate Determination
Date, the rate (rounded upward to the next highest one hundredth of one percent)
obtained by dividing (i) the Eurodollar Rate for that date by (ii) a percentage
equal to 100% minus the stated maximum rate of all reserves required to be
maintained against "EUROCURRENCY LIABILITIES" as specified in Regulation D of
the Board of Governors of the Federal Reserve System (or against any other
category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Rate Loans is determined or any category of
extensions of credit or other assets that includes loans by a non-United States
office of a bank to United States residents).
"AFFECTED BANK" means any Bank affected by any of the events described
in Section 2.09(b) or (c).
"AFFILIATE" means, with respect to any Person, any other Person (other
than an individual) directly or indirectly controlling, controlled by, or under
direct or indirect common control with, such Person; provided, however, that for
purposes of Section 8.06, an Affiliate of the Borrower shall include any Person
(including an individual) that directly or indirectly owns more than 10% of the
Borrower and any officer or director of the Borrower or any such Person. A
Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.
"AGENT" has the meaning assigned to that term in the first paragraph of
this Agreement and shall include any successor to the Agent appointed pursuant
to Section 10.09.
"AGREEMENT" means this Credit Agreement, as it may be amended, amended
and restated, supplemented or otherwise modified from time to time.
"APPLICABLE BASE MARGIN" means, as of any date of determination, a
percentage per annum as shown below determined by the Leverage Ratio then in
effect; provided that, if the Borrower has failed to provide a Margin Rate
Determination Certificate within the most recent period set forth in Section
5.01 or 7.01, the Applicable Base Margin shall be 0.50% per annum:
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LEVERAGE RATIO APPLICABLE
BASE
MARGIN
x 0.75 0.00%
0.75 < x < 1.50 0.00%
1.50 < x < 2.00 0.00%
2.00 < x < 2.50 0.25%
2.50 < x < 2.75 0.50%
"APPLICABLE EURODOLLAR MARGIN" means, as of any date of determination, a
percentage per annum as shown below determined by the Leverage Ratio then in
effect; provided that, if the Borrower has failed to provide a Margin Rate
Determination Certificate within the most recent period set forth in Section
5.01 or 7.01, the Applicable Eurodollar Margin shall be 1.50% per annum:
LEVERAGE RATIO APPLICABLE
EURODOLLAR
MARGIN
x 0.75 0.50%
0.75 < x < 1.50 0.75%
1.50 < x < 2.00 1.00%
2.00 < x < 2.50 1.25%
2.50 < x < 2.75 1.50%
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance Agreement
entered into by a Bank and an Eligible Assignee, and accepted by the Agent and
the Borrower, substantially in the form annexed hereto as EXHIBIT O.
"BANK" has the meaning assigned to that term in the first paragraph of
this Agreement and shall include each successor and assignee pursuant to Section
11.05.
"BANKRUPTCY CODE" has the meaning assigned to that term in Section 9.05.
"BASE LENDING RATE" means, at any time, the higher of, (a) the Prime
Rate and (b) the rate that is 1/2 of 1% in excess of the Federal Funds Effective
Rate.
"BASE RATE LOANS" means Loans maintained or made by the Banks bearing
interest at rates determined by reference to the Base Lending Rate as provided
in Section 2.06.
"BORROWER" has the meaning assigned to that term in the first paragraph
of
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this Agreement.
"BORROWER PLEDGE AGREEMENT" means the Borrower Pledge Agreement executed
and delivered by the Borrower and the Agent pursuant to Section 5.01 of this
Agreement, substantially in the form annexed hereto as EXHIBIT G, as such
Borrower Pledge Agreement may be amended, amended and restated, supplemented or
otherwise modified from time to time.
"BORROWER SECURITY AGREEMENT" means the Borrower Security Agreement
executed and delivered by the Borrower and the Agent pursuant to Section 5.01 of
this Agreement, substantially in the form annexed hereto as EXHIBIT I, as such
Borrower Security Agreement may be amended, amended and restated, supplemented
or otherwise modified from time to time.
"BUSINESS DAY" means any day except Saturday, Sunday and any day that
shall be in New York City a legal holiday or a day on which banking institutions
are authorized or required by law or other government action to close.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States or any political subdivision of any such state or any public
instrumentality thereof, in each case maturing within one year after such date
and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Rating Services ("S&P") or ▇▇▇▇▇'▇
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Bank or by any commercial
bank organized under the laws of the United States or any state thereof or the
District of Columbia that (a) is at least "adequately capitalized" (as defined
in the regulations of its primary Federal banking regulator) and (b) has Tier 1
capital (as defined in such regulations) of not less than $100,000,000; and (v)
shares of any money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (i) and
(ii) above, (b) has net assets of not less than $500,000,000, and (c) has the
highest rating then obtainable from either S&P or Moody's.
"CERTIFICATE OF EXEMPTION" has the meaning assigned to that term in
Section 2.09(g)(iii).
"CLOSING DATE" means December 6, 1996 provided that all of the
conditions set forth in Section 5.01 of this Agreement shall have been satisfied
or waived.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
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"COLLATERAL" means all the personal and mixed property made subject to a
Lien pursuant to the Credit Documents.
"COLLECTION BANK AGREEMENTS" means any Collection Bank Agreements
executed on or after the Closing Date between the Borrower or any of its
Subsidiaries and the financial institutions into which the proceeds of Accounts
Receivable of such of the Borrower or its Subsidiaries are deposited,
substantially in the form annexed hereto as EXHIBIT M, as such agreements may be
amended, amended and restated, supplemented or otherwise modified from time to
time.
"COMMITMENTS" means the commitments of Banks to make Loans as set forth
in Sections 2.01 and 2.02.
"COMMITMENT FEE PERCENTAGE" means, as of any date of determination, a
percentage per annum determined by the Leverage Ratio then in effect as
specified below:
LEVERAGE RATIO APPLICABLE
COMMITMENT FEE
PERCENTAGE
x 2.50 0.250%
x > 2.50 0.375%
The Commitment Fee Percentage shall equal 0.375% per annum if the Borrower has
failed to provide a Margin Rate Determination Certificate within the most recent
period set forth in Section 5.01 or 7.01.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
annexed hereto as EXHIBIT P delivered to the Agent and Banks by the Borrower
under Section 7.01(f).
"CONCENTRATION BANK AGREEMENT" means a Concentration Bank Agreement
substantially in the form annexed hereto as EXHIBIT N, entered into by and among
the Borrower, the Active Subsidiaries, the Agent and one of the Banks, as the
concentration bank, and delivered to the Agent and Banks by the Borrower.
"CONSOLIDATED ADJUSTED EBITDA" means Consolidated EBITDA of the Borrower
and its Subsidiaries at the end of any period of determination and shall be
calculated on a pro forma basis, in accordance with the balance sheets and
related statements of operations provided under Section 7.01(k), as if any
Acquisition that occurred during such period and any related Divestiture had
taken place on the first day of such period.
"CONSOLIDATED EBIT" means, as to any Person and for any period, the
Consolidated Net Income of such Person and its Subsidiaries for such period,
before
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interest expense and provision for taxes and without giving effect to (i) any
extraordinary gains (or extraordinary noncash losses) and (ii) gains (or losses)
from sales of assets (other than sales of inventory in the Ordinary Course of
Business) to the extent that the gain or loss from all such sales is, in the
aggregate, greater than $500,000 for the immediately prior four-quarter period.
"CONSOLIDATED EBITDA" means, as to any Person and for any consecutive
four-quarter period, the Consolidated EBIT of such Person and its Subsidiaries
and Joint Ventures for such period, adjusted by (i) adding thereto the amount of
all amortization of intangibles and depreciation that was deducted in arriving
at such Consolidated EBIT for such period and (ii) excluding therefrom amounts
attributable to (x) minority interests held by third Persons and/or their
Subsidiaries, (y) the portion of Consolidated EBIT attributable to operations
sold or disposed of in Divestitures during such period if the Consolidated
EBITDA associated with such operations exceeds $250,000, and (z) Joint Ventures
that remain invested in such Joint Ventures and are not distributed to the
Borrower.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to capitalized interest and capital
leases in accordance with generally accepted accounting principles consistently
applied) of the Borrower and its Subsidiaries on a consolidated basis with
respect to all outstanding Indebtedness of the Borrower and its Subsidiaries,
including, without limitation, all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts referred to in Section 3 payable to the Agent and Banks on or before the
Closing Date.
"CONSOLIDATED NET INCOME" means, as to any Person and for any period,
the net income (or loss) of such Person and its Subsidiaries, after provisions
for taxes, on a consolidated basis for such period taken as a single accounting
period determined in conformity with generally accepted accounting principles
consistently applied.
"CONSOLIDATED NET WORTH" means, as to any Person, the Net Worth of such
Person and its Subsidiaries determined on a consolidated basis without deduction
for any minority interests in any corporation, association, general partnership
or joint venture (including Joint Ventures).
"CONSOLIDATED SUBSIDIARIES" means, as to any Person, all Subsidiaries of
such Person that are consolidated with such Person for financial reporting
purposes in accordance with generally accepted accounting principles
consistently applied.
"CONTINGENT OBLIGATION" means, as to any Person, (A) any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of
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assuring the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (iv) otherwise to assure
or hold harmless the holder of such primary obligation against loss in respect
thereof; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business; and (B) any obligations of such Person under any Interest
Rate Agreement. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"CREDIT DOCUMENTS" means this Agreement, each Note, the Letters of
Credit, the Subsidiary Guaranty, the Borrower Pledge Agreement, the Subsidiary
Pledge Agreement, the Borrower Security Agreement, the Subsidiary Security
Agreement, the Collection Bank Agreements, the Concentration Bank Agreement and
the Trademark Security Agreement.
"DEFAULT" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DIVESTITURE" means the resale of any assets or property acquired in any
Acquisition within one year of such Acquisition.
"DOLLARS" and "$" means the lawful money of the United States of
America.
"ELIGIBLE ASSIGNEE" means (i) (A) a commercial bank organized under the
laws of the United States or any state thereof; (B) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; (C) a commercial bank organized under the laws of any other
country or a political subdivision thereof; provided that (x) such bank is
acting through a branch or agency located in the United States or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; and (D) any other entity that is an "accredited investor" (as defined
in Regulation D under the Securities Act of 1933, as amended) that extends
credit or buys loans as one of its businesses including, but not limited to,
insurance companies, mutual funds and lease financing companies, and (ii) any
Bank and any Affiliate of any Bank or the Issuing Bank; provided that no
Affiliate of the Borrower shall be an Eligible Assignee.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement, and to any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA AFFILIATE" means any person (as defined in Section 3(9) of ERISA)
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that together with the Borrower or any of its Subsidiaries would be a member of
the same "CONTROLLED GROUP" within the meaning of Section 414(b), (m), (c) and
(o) of the Code.
"EURODOLLAR RATE" means, for any Interest Rate Determination Date, the
arithmetic average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of
the offered quotation, if any, to first class banks in the Eurodollar market by
Bankers Trust Company for Dollar deposits of amounts in immediately available
funds comparable to the principal amount of the Eurodollar Rate Loan of the
Agent for which the Eurodollar Rate is being determined with maturities
comparable to the Interest Period for which such Eurodollar Rate will apply as
of approximately 10:00 A.M. (New York time) two Business Days prior to the
commencement of such Interest Period.
"EURODOLLAR RATE LOANS" means Loans bearing interest at rates determined
by reference to the Eurodollar Rate as provided in Section 2.06.
"EURODOLLAR RATE TAXES" has the meaning assigned to that term in Section
2.09(g)(i).
"EVENT OF DEFAULT" has the meaning assigned to that term in Section 9.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement dated as
of May 19, 1995 by and among Borrower, Creditanstalt-Bankverein, as agent, and
the lenders identified therein, as it may have been amended, restated or
otherwise modified through the date hereof.
"EXISTING INDEBTEDNESS" has the meaning assigned to that term in Section
8.04(ii).
"FDA" means the United States Food and Drug Administration.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by the Agent.
"FEES" means all amounts payable pursuant to or referred to in Section
3.01.
"FISCAL YEAR" means the fiscal year of the Borrower and its Subsidiaries
(other than Joint Ventures) ending on December 31 of each calendar year.
"FOREIGN BANK" has the meaning assigned to that term in Section
2.09(g)(iii).
"FUNDING DATE" means the date of the funding of a Loan or the date of
the issuance of a Letter of Credit, as applicable.
14
"GOVERNMENT ACTS" has the meaning assigned to such term in Section
2.10(h).
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"GUARANTOR SUBSIDIARY" means each of the Active Subsidiaries and each
Subsidiary that executes a Subsidiary Guaranty pursuant to Section 7.11(b),
which constitute all of the Subsidiaries of the Borrower (other than the
Inactive Subsidiaries), each of which is a party to a Subsidiary Guaranty,
Subsidiary Security Agreement, Subsidiary Pledge Agreement and Collection Bank
Agreements (to the extent required by Section 8.16).
"INACTIVE SUBSIDIARIES" means those Subsidiaries of Borrower identified
on SCHEDULE 6.12 as being inactive.
"INDEBTEDNESS" means, as to any Person, without duplication, (i) all
indebtedness (including principal, fees and charges) of such Person for borrowed
money or for the deferred purchase price of property or services (other than
trade payables incurred in the Ordinary Course of Business), (ii) the maximum
undrawn amount of or maximum unreimbursed amount under all letters of credit
issued for the account of such Person and all drafts drawn thereunder, (iii) all
liabilities secured by any Lien on any property owned by such Person, whether or
not such liabilities have been assumed by such Person; provided that liabilities
that are nonrecourse to the credit of the Borrower and its Subsidiaries, shall
be deemed to constitute Indebtedness only in an amount equal to the lesser of
(a) the fair market value (on the date of determination of Indebtedness for
purposes of this Agreement) of such property or (b) the amount of such
liabilities, (iv) the aggregate amount required to be capitalized under
generally accepted accounting principles under leases under which such Person is
the lessee, (v) all Contingent Obligations of such Person and (vi) the total
redemption price (including, without limitation, the liquidation preference, par
value, premium and accrued dividends) of any preferred stock of such Person with
a mandatory redemption date prior to the Termination Date.
"INTEREST PAYMENT DATE" means, (i) with respect to any Eurodollar Rate
Loan having an Interest Period of one, two or three months, the last day of the
Interest Period applicable to such Loan or, (ii) in the case of any Eurodollar
Rate Loan having an Interest Period of six months, (a) the date that is three
months after the initial date of the Interest Period applicable to such Loan and
(b) the last day of the Interest Period applicable to such Loan.
"INTEREST PERIOD" means any period applicable to a Loan as determined
pursuant to Section 2.06(b).
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement or other similar agreement or arrangement designed
to protect
15
the Borrower against fluctuations in interest rates.
"INTEREST RATE DETERMINATION DATE" means each date for calculating the
Eurodollar Rate for purposes of determining the interest rate in respect of an
Interest Period. The Interest Rate Determination Date shall be the second
Business Day prior to the first day of the related Interest Period for a
Eurodollar Rate Loan.
"ISSUING BANK" means Bankers Trust Company or its Affiliate or any
successor Bank or its Affiliate in the capacity of issuer of Letters of Credit
pursuant to Section 2.10.
"JOINT VENTURE" means a single-purpose corporation, partnership, joint
venture or other similar legal arrangement (whether created pursuant to contract
or conducted through a separate legal entity) now or hereafter formed by the
Borrower or any of its Subsidiaries with another Person (other than the Borrower
or any of its Subsidiaries) in order to conduct a common venture or enterprise
with such other Person.
"LENDING OFFICE" means, with respect to each Bank, the office of such
Bank specified opposite its signature below as its lending office or such other
office of such Bank as such Bank may from time to time specify as such to the
Borrower and the Agent.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means any of the standby
letters of credit issued (or deemed issued under Section 2.10(a)) or to be
issued by the Issuing Bank for the account of the Borrower pursuant to Section
2.10 and for the purposes described in Section 2.08(b); provided that,
notwithstanding anything to the contrary contained herein, any such letter of
credit may be issued by an Affiliate of the Issuing Bank; provided, further,
that to the extent that a letter of credit is issued by an Affiliate of the
Issuing Bank, such Affiliate shall, for all purposes under this Agreement, the
Credit Documents and all other instruments and documents referred to herein and
therein be deemed to be the "ISSUING BANK" with respect to such letter of
credit.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the sum
of (i) the maximum aggregate amount that is or at any time thereafter may become
available for drawing under all Letters of Credit then outstanding plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Bank and not theretofore reimbursed by the Borrower.
"LETTER OF NON-EXEMPTION" has the meaning assigned to that term in
Section 2.09(g)(iii).
"LEVERAGE RATIO" means the ratio of Total Debt to Consolidated Adjusted
EBITDA on the date of the most recent Margin Rate Determination Certificate.
"LIEN" means any mortgage, pledge, hypothecation, assignment for
security, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, any agreement to give
any security interest and any lease having substantially the same effect as any
of the
16
foregoing).
"LOAN" or "LOANS" means one or more of the Revolving Loans or the Swing
Line Loans.
"MARGIN RATE DETERMINATION CERTIFICATE" means an Officers' Certificate
of the Borrower setting forth in reasonable detail the Total Debt and the
Consolidated Adjusted EBITDA as of the date on which such Officers' Certificate
is delivered pursuant to Section 7.01(j) of this Agreement with the financial
statements required pursuant to Section 7.01(a) or (b) of this Agreement.
"MARGIN STOCK" has the meaning provided in Regulation U of the Board of
Governors of the Federal Reserve System.
"NET WORTH" means, as to any Person, the sum of its capital stock,
capital in excess of par or stated value of shares of its capital stock,
retained earnings/(deficit) and any other account that, in accordance with
generally accepted accounting principles consistently applied, constitutes
stockholders' equity, excluding any treasury stock.
"NOTES" means one or more of the Revolving Notes or the Swing Line Note.
"NOTICE OF REVOLVER BORROWING" means a notice substantially in the form
of EXHIBIT A annexed hereto with respect to a proposed Revolving Loan.
"NOTICE OF SWING LINE BORROWING" means a notice substantially in the
form of EXHIBIT B annexed hereto with respect to a proposed Swing Line Loan.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT C annexed hereto with respect to a proposed conversion or
continuation of a Loan.
"NOTICE OF ISSUANCE OF LETTER OF CREDIT" means a notice in the form of
EXHIBIT D annexed hereto with respect to a proposed issuance of a Letter of
Credit.
"NOTICE OFFICE" means the office of the Agent located at One Bankers
Trust Plaza, 130 Liberty Street, 14th Floor, New York, New York 10006, Attn:
▇▇▇▇▇▇ ▇▇▇▇, in each case with a copy to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ ▇▇▇▇, or such other office or offices as
the Agent may hereafter designate in writing as such to the other parties
hereto.
"OBLIGATIONS" means all amounts owing to the Agent or any Bank pursuant
to the terms of this Agreement or any other Credit Document.
"OFFICERS' CERTIFICATE" means, as applied to any corporation,
association or joint venture, a certificate executed on behalf of such
corporation, association or joint venture, by the Chairman of the Board (if an
officer), the Chief Executive Officer, the President or one of its Vice
Presidents and by the Chief Financial Officer or the Chief Accounting Officer or
the Treasurer or an Assistant Treasurer of such corporation or the managing
partner (or Person with equivalent authority) of such association or joint
venture;
17
provided that every Officers' Certificate with respect to the compliance with a
condition precedent to the making of any Loans or issuance of any Letters of
Credit hereunder shall include (i) a statement that the officer or officers or
managing partner (or Person with equivalent authority) making or giving such
Officers' Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto, (ii) a statement that,
in the opinion of the signers, they have made or have caused to be made such
examination or investigation as is necessary to enable them to express an
informed opinion as to whether or not such condition has been complied with, and
(iii) a statement as to whether, in the opinion of the signers, such condition
has been complied with.
"ORDINARY COURSE OF BUSINESS" means, in respect of any transaction
involving the Borrower or any Subsidiary of the Borrower, the ordinary course of
such Person's business, as conducted by any such Person in accordance with past
practice (including, without limitation, such Person's past practice of
consultation with legal counsel) and undertaken by such Person in good faith and
not for purposes of evading any covenant or restriction in any Credit Document.
"OSHA" means the United States Occupational Safety and Health
Administration.
"PAYMENT OFFICE" means the office of the Agent located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Commercial Loan Division Ref:
Capstone Pharmacy, or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA or any successor thereto.
"PERMITTED LIENS" has the meaning assigned to that term in Section
8.01(iii).
"PERSON" means any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"PERFORMANCE PLAN" has the meaning assigned to that term in Section
7.01(d).
"PLAN" means any multiemployer plan or single-employer plan as defined
in Section 4001 of ERISA, that is maintained or contributed to, or at any time
during the five calendar years preceding the date of this Agreement was
maintained or contributed to, by the Borrower or by a Subsidiary of the Borrower
or an ERISA Affiliate.
"PREMIER" means PremierPharmacy, Inc., a Delaware corporation.
"PREMIER NOTES" means, in connection with the acquisition of
Compuscript, Inc. by Premier, (i) that certain Amended and Restated
Nonnegotiable Promissory Note dated as of November 1, 1993 in the amount of
$1,451,879 executed by Premier in favor of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇; (ii) that certain Amended and Restated
18
Nonnegotiable Promissory Note dated as of November 1, 1993 in the amount of
$318,728 executed by Premier in favor of ▇▇▇▇ ▇. ▇▇▇▇▇; and (iii) any earn-out
payments to be made by Premier to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇ ▇.
▇▇▇▇▇.
"PRIME RATE" means the rate that Bankers Trust Company announces from
time to time as its prime lending rate, and the Prime Rate shall change when and
as such prime lending rate changes. The Prime Rate is a reference rate and does
not necessarily represent the lowest or best rate actually charged to any
customer. Bankers Trust Company may make commercial loans or other loans at
rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means the percentage obtained by dividing (x) the
Revolving Loan Exposure of that Bank by (y) the aggregate Revolving Loan
Exposure of all Banks as the applicable percentage may be adjusted by
assignments permitted pursuant to Section 11.05. The initial Pro Rata Share of
each Bank is set forth opposite the name of that Bank in SCHEDULE 1.01(A)
annexed hereto and SCHEDULE 1.01(A) shall be amended and the Banks' Pro Rata
Shares shall be adjusted from time to time to give effect to the addition of any
new Banks and any reallocations among existing Banks necessary to reflect
assignments pursuant to Section 11.05. The sum of the Pro Rata Shares of all
Banks at any date of determination shall equal 100%
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
Section 2.02(c).
"REPORTABLE EVENT" means an event described in Section 4043(b) of ERISA
with respect to a Plan as to which the 30-day notice requirement has not been
waived by the PBGC.
"REQUIRED BANKS" means Banks having or holding 51% or more of the sum of
the aggregate Revolving Loan Exposure of all Banks.
"REVOLVING LOAN COMMITMENT" or "REVOLVING LOAN COMMITMENTS" means the
commitment or commitments of a Bank or Banks to make Revolving Loans as set
forth in Section 2.01(a).
"REVOLVING LOAN EXPOSURE" means, with respect to any Bank as of any date
of determination (i) prior to the termination of the Revolving Loan Commitments,
that Bank's Revolving Loan Commitment and (ii) after the termination of the
Revolving Loan Commitments, the sum of (a) the aggregate outstanding principal
amount of the Revolving Loans of that Bank plus (b) in the event that Bank is
the Issuing Bank, the aggregate Letter of Credit Usage in respect of all Letters
of Credit issued by that Bank (in each case net of any participations purchased
by other Banks in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount of all participations purchased by
that Bank in any outstanding Letters of Credit or any unreimbursed drawings
under any Letters of Credit plus (d) in the case of Swing Line Bank, the
aggregate outstanding principal amount of all Swing Line Loans (net of any
participations therein purchased by other Banks) plus (e) the aggregate amount
of all participations purchased by that Bank in any outstanding Swing Line
Loans.
19
"REVOLVING LOANS" means the Revolving Loans made by the Banks on or
after the Closing Date pursuant to Section 2.01(a). The term "Revolving Loan"
shall not include Swing Line Loans.
"REVOLVING NOTES" means the promissory notes of the Borrower issued in
favor of the Banks pursuant to Section 2.05 to evidence the Revolving Loans,
substantially in the form annexed hereto as EXHIBIT E-1, as they may be amended,
supplemented or otherwise modified from time to time.
"SEC" has the meaning assigned to that term in Section 7.01(h).
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"SUBORDINATION AGREEMENTS" means any Subordination Agreement executed
and delivered among the Borrower, the Agent and certain holders of the Unsecured
Seller Debt, substantially in the form annexed hereto as EXHIBIT L.
"SUBSIDIARY" means, as to any Person, (i) any corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency which has not occurred by the date of
determination) is at the time owned by such Person and/or one or more
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Subsidiaries of such
Person has more than a 50% equity interest at the time.
"SUBSIDIARY GUARANTY" means a Guaranty Agreement executed and delivered
by each Guarantor Subsidiary for the benefit of the Agent pursuant to Section
5.01 and Section 7.11 of this Agreement, substantially in the form annexed
hereto as EXHIBIT F, as such Guaranty Agreement may be amended, amended and
restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY PLEDGE AGREEMENT" means a Subsidiary Pledge Agreement
executed and delivered by the Agent and each Guarantor Subsidiary pursuant to
Section 5.01 and Section 7.11 of this Agreement substantially in the form
annexed hereto as EXHIBIT H, as such Subsidiary Pledge Agreement may be amended,
amended and restated, supplemented or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means a Subsidiary Security Agreement
executed and delivered by the Agent and each Guarantor Subsidiary pursuant to
Section 5.01 and Section 7.11 of this Agreement substantially in the form
annexed hereto as EXHIBIT J, as such Subsidiary Security Agreement may be
amended, amended and
20
restated, supplemented or otherwise modified from time to time.
"SWING LINE LOAN COMMITMENT" has the meaning assigned to that term in
Section 2.02(a).
"SWING LINE BANK" means Bankers Trust Company in its capacity as the
holder of the Swing Line Loan Commitment and any entity that assumes Bankers
Trust Company's rights and obligations with respect thereto pursuant to Section
11.05.
"SWING LINE LOAN" means one or more of the Loans made by the Swing Line
Bank pursuant to Section 2.02(a). The term "Swing Line Loan" shall not include
Revolving Loans.
"SWING LINE NOTE" means (i) the promissory note of the Borrower issued
pursuant to Section 2.05 on the Closing Date and (ii) any promissory note issued
by the Borrower to any successor Agent and Swing Line Bank pursuant to the last
sentence of Section 10.09(d), in each case substantially in the form of EXHIBIT
E-2 annexed hereto, as they may be amended, supplemented or otherwise modified
from time to time.
"SYMPHONY" means Symphony Pharmacy Services, Inc., a Delaware
corporation, predecessor to Symphony Acquisition Co., a Delaware corporation.
"TARGET" means the Person to be acquired, or the Person whose assets are
to be acquired, in any Acquisition.
"TAX" or "TAXES" means any present or future tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected, withheld or
assessed; provided that "TAX ON THE OVERALL NET INCOME" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction (whether local,
state, federal or foreign) in which that Person's principal office (and/or, in
the case of a Bank, its lending office) is located or in which that Person is
deemed to be doing business on all or part of the net income, profits or gains
of that Person (whether worldwide, or only insofar as such income, profits or
gains are considered to arise in or to relate to a particular jurisdiction, or
otherwise).
"TERMINATION DATE" means the earlier of (a) December 1, 2001 and (b) the
date upon which the Revolving Loan Commitments are terminated pursuant to
Section 4.03 or Section 9.
"TOTAL DEBT" means all Indebtedness of the Borrower and its Subsidiaries
on a consolidated basis outstanding on any date of determination, including,
without limitation, any Indebtedness incurred or to be incurred on such date in
connection with an Acquisition, but excluding Indebtedness with respect to
Letters of Credit and Interest Rate Agreements.
"TOTAL REVOLVING LOAN COMMITMENTS" means, as at any date of
determination, the aggregate principal amount of all Revolving Loan Commitments
then outstanding.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
21
date of determination, the sum of (i) the aggregate principal amount of all
outstanding Revolving Loans plus (ii) the Letter of Credit Usage plus (iii) the
aggregate principal amount of all Swing Line Loans outstanding at such time;
provided that Total Utilization of Revolving Loan Commitments shall be
determined without duplication of Revolving Loans, the proceeds of which are
used simultaneously to refund other Revolving Loans or Swing Line Loans.
"TRADEMARK SECURITY AGREEMENT" means a Trademark Security Agreement (i)
executed and delivered by the Borrower, the Agent and each Guarantor Subsidiary
which is a Guarantor Subsidiary on the Closing Date pursuant to Section 5.01 of
this Agreement and (ii) executed and delivered by the Agent and each Guarantor
Subsidiary which is not a Guarantor Subsidiary on the Closing Date pursuant to
Section 7.11 of this Agreement, in each case substantially in the form annexed
hereto as EXHIBIT K, as such Trademark Security Agreement may be amended,
amended and restated, supplemented or otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"UNFUNDED CURRENT LIABILITY" means, as to any Plan, the amount, if any,
by which the present value of the accrued benefits under such Plan as of the
close of its most recent plan year determined in accordance with Section 412 of
the Code exceeds the fair market value of the assets allocable thereto.
"UNSECURED SELLER DEBT" means the Indebtedness represented by the
Indebtedness permitted by Section 8.04(xii).
"WHOLLY-OWNED SUBSIDIARY" means, as to any Person, (i) any corporation
100% of whose capital stock is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
1.02 PRINCIPLES OF CONSTRUCTION.
(a) All references to sections, schedules and exhibits are to
sections, schedules and exhibits in or to this Agreement unless otherwise
specified. The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement.
(b) All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in
conformity with those used in the preparation of the financial statements
referred to in Sections 6.05(a). Except in connection with the preparation of
the financial statements and other information required to be delivered by the
Borrower to the Banks pursuant to Sections 7.01(a), (b), (d), (e) and (h),
calculations made with respect to the definitions, covenants and other
provisions of this Agreement shall give effect to adjustments in component
amounts required or permitted by Accounting Principles Board Opinions Nos. 16
and 17 as a result of any Acquisition.
22
SECTION 2. AMOUNT AND TERMS OF CREDIT.
2.01 THE REVOLVING LOANS.
(a) THE REVOLVING LOANS. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower set forth herein, each Bank hereby severally agrees, subject to the
limitations set forth below with respect to the maximum amount of Revolving
Loans permitted to be outstanding from time to time, to make Revolving Loans to
the Borrower from time to time during the period from the Closing Date through
but excluding the Termination Date in an amount not exceeding its Pro Rata Share
of the difference between the (i) aggregate Revolving Loan Commitments (as
defined below) then in effect and (ii) the sum of (a) the aggregate principal
amount of Swing Line Loans then outstanding (excluding Swing Line Loans to be
repaid with the proceeds of such Revolving Loans) and (b) the Letter of Credit
Usage for the purposes identified in Section 2.08. Each Bank's commitment to
maintain and make Revolving Loans to the Borrower pursuant to this Section
2.01(a) is hereby called its "REVOLVING LOAN COMMITMENT" and such commitments of
all the Banks in the aggregate are herein called the "REVOLVING LOAN
COMMITMENTS." The initial amount of each Bank's Revolving Loan Commitment is set
forth in SCHEDULE 1.01(A) and the aggregate initial amount of all Revolving Loan
Commitments is $125,000,000. The amount of the Revolving Loan Commitments shall
be reduced by the amount of all reductions thereof made pursuant to Sections
4.01, 4.02, 4.03 or 9 through the date of determination. In no event shall the
aggregate principal amount of the Revolving Loans from any Bank outstanding at
any time exceed the amount of its Revolving Loan Commitment then in effect. Each
Bank's Revolving Loan Commitment shall expire on the Termination Date and all
Revolving Loans and all other amounts owed hereunder with respect to the
Revolving Loans, the Revolving Loan Commitments, or otherwise (including,
without limitation, any cash deposit required under Section 2.10(a) with respect
to any Letter of Credit having an expiration date subsequent to the Termination
Date) shall be paid in full no later than that date.
Notwithstanding the foregoing provisions of this Section 2.01(a) and the
provisions of Section 2.01(b), the extensions of credit under the Revolving Loan
Commitments shall be subject to the following limitations in the amounts and
during the periods indicated:
(i) The amount otherwise available for borrowing under the Revolving
Loan Commitments as of any time of determination (other than to reimburse the
Issuing Bank for the amount of any drawings under any Letter of Credit
honored by the Issuing Bank and not theretofore reimbursed by the Borrower or
to reimburse the Swing Line Bank for the amount of any Swing Line Loans
outstanding) shall be reduced by the Letter of Credit Usage and the aggregate
principal amount of the Swing Line Loans then outstanding as of such time of
determination;
(ii) In no event shall the Total Utilization of Revolving Loan
Commitments exceed the Total Revolving Loan Commitments then in effect; and
(iii) Anything contained in this Agreement to the contrary
notwithstanding,
23
the Revolving Loans and the Revolving Loan Commitments shall be subject to
the limitation that for 30 consecutive days during any twelve- month period
the Revolving Loan Commitments must exceed the Total Utilization of Revolving
Loan Commitments by at least $10,000,000.
Subject to Section 2.09(d), all Revolving Loans under this Agreement
shall be made by the Banks simultaneously and proportionately to their
respective Pro Rata Shares, it being understood that no Bank shall be
responsible for any default by any other Bank in that other Bank's obligation to
make Revolving Loans hereunder nor shall the Revolving Loan Commitment of any
Bank be increased or decreased as a result of the default by any other Bank in
that other Bank's obligation to make Revolving Loans hereunder. Amounts borrowed
by the Borrower under this Section 2.01(a) may be repaid and, to but excluding
the Termination Date, reborrowed.
(a) NOTICE OF REVOLVER BORROWING. Subject to Section 2.01(a),
whenever the Borrower desires to borrow Revolving Loans under this Section 2.01,
it shall deliver to the Agent at its Notice Office a Notice of Revolver
Borrowing no later than 12:00 Noon (New York time) one Business Day in advance
of the proposed Funding Date (in the case of a requested Base Rate Loan) and
three Business Days in advance of the proposed Funding Date (in the case of a
requested Eurodollar Rate Loan). The Notice of Revolver Borrowing shall specify
(i) the proposed Funding Date (which shall be a Business Day), (ii) the amount
of the proposed borrowing and that the proposed borrowing shall be a Revolving
Loan, (iii) in the case of any Revolving Loans requested to be made on or within
thirty days after the Closing Date, that such Revolving Loans shall initially be
Base Rate Loans (unless the Agent otherwise consents in writing), (iv) in the
case of Revolving Loans requested to be made more than thirty days after the
Closing Date, whether such Revolving Loans are initially to consist of Base Rate
Loans or Eurodollar Rate Loans or a combination thereof, (v) if such Revolving
Loans, or any portion thereof, are initially to be Eurodollar Rate Loans, the
amounts thereof and the initial Interest Periods therefor and (vi) that the
Total Utilization of Revolving Loan Commitments (after giving effect to the
Revolving Loans then requested) will not exceed the Total Revolving Loan
Commitments then in effect. Unless made pursuant to Section 2.10(c), Revolving
Loans shall be made in an aggregate minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount. Revolving Loans may be continued
as or converted into Base Rate Loans and Eurodollar Rate Loans in the manner
provided in Section 2.06(d); provided that unless the Agent otherwise consents
in writing, the Revolving Loans made during the period from and including the
Closing Date through the date which is thirty days after the Closing Date may
not be converted until more than thirty days after the Closing Date. In lieu of
delivering the above-described Notice of Revolver Borrowing, the Borrower may
give the Agent telephonic notice by the required time of any proposed borrowing
of Revolving Loans under this Section 2.01; provided that such notice shall be
promptly confirmed in writing by delivery of a Notice of Revolver Borrowing to
the Agent on or prior to the Funding Date of the requested Revolving Loans.
Neither the Agent nor any Bank shall incur any liability to the Borrower
in acting upon any telephonic notice referred to above that the Agent believes
in good faith to have been given by a duly authorized officer or other person
authorized to borrow on behalf of the Borrower or for otherwise acting in good
faith under this Section 2.01 and upon funding of Revolving Loans by the Banks
in accordance with this Agreement pursuant to
24
any such telephonic notice, the Borrower shall have effected Revolving Loans
hereunder.
Except as provided in Section 2.09(d), a Notice of Revolver Borrowing
for a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be
irrevocable on and after the related Interest Rate Determination Date, and the
Borrower shall be bound to make a borrowing in accordance therewith.
2.02 THE SWING LINE LOANS.
(a) The Swing Line Bank hereby agrees, subject to the limitations
set forth below with respect to the maximum amount of Swing Line Loans permitted
to be outstanding from time to time and subject to the other terms and
conditions hereof, to make a portion of the Revolving Loan Commitments available
to the Borrower from time to time during the period from the Business Day
immediately following the Closing Date to but excluding the second day prior to
the Termination Date by making Swing Line Loans to the Borrower in an aggregate
amount not exceeding the amount of the Swing Line Loan Commitment (as defined
below) to be used for the purposes identified in Section 2.08(a),
notwithstanding the fact that such Swing Line Loans, when aggregated with the
Swing Line Bank's outstanding Revolving Loans may exceed its Revolving Loan
Commitment. The Swing Line Bank's commitment to make Swing Line Loans to the
Borrower pursuant to this Section 2.02(a) is herein called its "SWING LINE LOAN
COMMITMENT," and the original amount of the Swing Line Loan Commitment is
$5,000,000 and may not be increased without the consent of the Swing Line Bank
and the Required Banks. Amounts borrowed under this Section 2.02(a) may be
repaid and reborrowed to but excluding the second day prior to the Termination
Date on which second day all Swing Line Loans and all other amounts owed
hereunder with respect to the Swing Line Loans shall be paid in full by the
Borrower.
Anything contained in this Agreement to the contrary notwithstanding,
the Swing Line Loans and the Swing Line Loan Commitment shall be subject to the
following limitations in the amounts and during the periods indicated:
(i) in no event shall the Total Utilization of Revolving Loan
Commitments exceed the Total Revolving Loan Commitments then in effect;
(ii) any reduction of the Revolving Loan Commitments made pursuant to
Section 4.01 and Section 4.02 that reduces the aggregate Revolving Loan
Commitments to an amount less than the then current amount of the Swing Line
Loan Commitment shall result in an automatic corresponding reduction of the
Swing Line Loan Commitment to the amount of the Revolving Loan Commitments,
as so reduced, without any further action on the part of the Swing Line Bank;
and
(iii) Anything contained in this Agreement to the contrary
notwithstanding, the Swing Line Loans and the Swing Line Loan Commitment
shall be subject to the limitation that for 30 consecutive days during any
twelve-month period the Revolving Loan Commitments must exceed the Total
Utilization of Revolving Loan Commitments by at least $10,000,000.
(b) Whenever the Borrower desires that the Swing Line Bank make a
25
Swing Line Loan under Section 2.02(a), it shall deliver to the Swing Line Bank a
Notice of Swing Line Borrowing no later than 12:00 Noon (New York City time) on
the proposed Funding Date (which shall be a Business Day). The Notice of Swing
Line Borrowing shall specify (i) the proposed Funding Date, (ii) the amount of
the Swing Line Loan requested (which shall be in the amount of $100,000 and
integral multiples of $10,000 in excess thereof) and (iii) that the Total
Utilization of Revolving Loan Commitments (after giving effect to the proposed
borrowing) does not exceed the Total Revolving Loan Commitments then in effect.
In lieu of delivering the above-described Notice of Swing Line Borrowing, the
Borrower may give the Agent telephonic notice by the required time of any
proposed borrowing of Swing Line Loans under this Section 2.02; provided that
such notice shall be promptly confirmed in writing by delivery of a Notice of
Swing Line Borrowing to the Agent on or prior to the Funding Date of the
requested Loans, which Notice of Swing Line Borrowing may be given by facsimile.
(c) With respect to any Swing Line Loans that have not been
voluntarily prepaid by the Borrower pursuant to Section 4.02, the Swing Line
Bank may at any time (without regard to whether an Event of Default has occurred
and is continuing) in its sole and absolute discretion, deliver to each Bank
(with a copy to the Borrower), no later than 12:00 Noon (New York City time) at
least one Business Day in advance of the proposed Funding Date, a notice (which
shall be deemed to be a Notice of Revolver Borrowing given by the Borrower)
requesting Banks to make Revolving Loans that are Base Rate Loans on such
Funding Date in an aggregate amount equal to the amount of such Swing Line Loans
(the "REFUNDED SWING LINE LOANS") outstanding on the date such notice is given
that the Swing Line Bank requests the Banks to prepay. Each Bank (other than the
Swing Line Bank) shall make the amount of its Revolving Loan available to the
Agent by depositing the amount thereof in same day funds at the Agent's Payment
Office on the next Business Day. Anything contained in this Agreement to the
contrary notwithstanding, (i) the proceeds of such Revolving Loans made by the
Banks other than the Swing Line Bank shall be delivered immediately to the Swing
Line Bank (and not to the Borrower) and applied to repay a corresponding portion
of the Refunded Swing Line Loans and (ii) on the day such Revolving Loans are
made, the Swing Line Bank's Pro Rata Share of the Refunded Swing Line Loans
shall be deemed to be paid with the proceeds of a Revolving Loan made by the
Swing Line Bank and such portion of the Swing Line Loans deemed to be so paid
shall no longer be outstanding as Swing Line Loans and shall no longer be due
under the Swing Line Note of the Swing Line Bank but shall be outstanding as
Revolving Loans and shall be due under the Revolving Note of the Swing Line Bank
in its capacity as a Bank. If any portion of any such amount paid (or deemed to
be paid) to the Swing Line Bank should be recovered by or on behalf of the
Borrower from the Swing Line Bank in bankruptcy, by assignment for the benefit
of creditors or otherwise, the loss of the amount so recovered shall be shared
ratably among all the Banks in the manner contemplated by Section 11.07.
If, as a result of any bankruptcy or similar proceeding with respect to
the Borrower, Revolving Loans are not made pursuant to this Section 2.02(c) in
an amount sufficient to repay any amounts owed to the Swing Line Bank in respect
of any outstanding Swing Line Loans or if the Swing Line Bank shall so request
each Bank for any reason, the Swing Line Bank shall be deemed to have sold
without recourse or representation or warranty, and each Bank shall be deemed to
have purchased and hereby agrees to purchase, a participation in such
outstanding Swing Line Loans in an amount equal to its Pro Rata Share of the
unpaid amount thereof together with accrued interest thereon. Upon
26
one Business Day's notice from the Swing Line Bank, each Bank (other than the
Swing Line Bank) shall deliver to the Swing Line Bank an amount equal to its
respective participation in same day funds at the Agent's Payment Office. In the
event any such Bank fails to make available to the Swing Line Bank the amount of
such Bank's participation as provided in this paragraph, the Swing Line Bank
shall be entitled to recover such amount on demand from such Bank together with
interest thereon at the Base Lending Rate in effect from time to time.
Anything contained herein to the contrary notwithstanding, the
obligation of each Bank (other than the Swing Line Bank) to make Revolving Loans
for the purpose of repaying any Refunded Swing Line Loans pursuant to the second
preceding paragraph and each such Bank's obligation to purchase a participation
in any unpaid Swing Line Loans pursuant to the immediately preceding paragraph
shall be absolute and unconditional and shall not be affected by any
circumstance, including without limitation (a) any set-off, counterclaim,
recoupment, defense or other right that such Bank may have against the Swing
Line Bank, the Borrower or any other Person for any reason whatsoever; (b) the
occurrence or continuance of an Event of Default; (c) any adverse change in the
business, operations, properties, assets, condition (financial or otherwise), or
prospects of the Borrower or any of its Subsidiaries; (d) any breach of this
Agreement by any party hereto; or (e) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing; provided, however,
that no Bank shall have any obligation to make a Revolving Loan for the purpose
of repaying, or to purchase any participation in, any Swing Line Loan to the
extent such Swing Line Loan increased the Total Utilization of Revolving Loan
Commitments (after giving effect to the repayment of any Loans with the proceeds
of such Swing Line Loan) and was made even though the Swing Line Bank had actual
knowledge that the conditions to making such Swing Line Loan were not satisfied.
2.03 [RESERVED].
2.04 DISBURSEMENT OF FUNDS. Promptly after receipt of a Notice of
Revolver Borrowing (or telephonic notice thereof) pursuant to Section 2.01(b),
but no later than 4:00 p.m. (New York time) on the date of such receipt, the
Agent shall notify each Bank of the proposed borrowing. Each Bank shall make the
amount of its applicable Loan available to the Agent, in same day funds, at its
Payment Office not later than 12:00 Noon (New York time) on the Funding Date.
Upon satisfaction or waiver of the conditions precedent specified in Section 5,
as applicable, the Agent shall make the proceeds of such Loans available to the
Borrower on such Funding Date by causing an amount of same day funds equal to
the proceeds of all such Loans received by the Agent to be credited to the
account of the Borrower at such office of the Agent.
Unless the Agent shall have been notified by any Bank in writing prior
to any Funding Date in respect of any Loans that such Bank does not intend to
make available to the Agent such Bank's applicable Loan on such Funding Date
(which such notice, if so received by the Agent, promptly shall be communicated
to the Borrower), the Agent may assume that such Bank has made such amount
available to the Agent on such Funding Date and the Agent in its sole discretion
may, but shall not be obligated to, make available to the Borrower a
corresponding amount on such Funding Date. If such corresponding amount is not
in fact made available to the Agent by such Bank, the Agent shall be entitled to
recover such corresponding amount on demand from such Bank together with
interest
27
thereon, for each day from such Funding Date until the date such amount is paid
to the Agent, at the customary rate set by the Agent for the correction of
errors among banks for three Business Days and thereafter at the Base Lending
Rate. If such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent promptly shall notify the Borrower, and the
Borrower immediately shall pay such corresponding amount to the Agent. Nothing
in this Section 2.04 shall be deemed to relieve any Bank from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that the Borrower
may have against any Bank as a result of any default by such Bank hereunder.
2.05 NOTES. On the Closing Date, the Borrower shall execute and
deliver (i) to each Bank (or to the Agent for that Bank) a Revolving Note
substantially in the form of EXHIBIT E-1 to evidence that Bank's Revolving
Loans, in the principal amount of that Bank's Revolving Loan Commitment and with
other appropriate insertions and (ii) to the Swing Line Bank a Swing Line Note
substantially in the form of EXHIBIT E-2 annexed hereto to evidence the Swing
Line Bank's Swing Line Loans, in the principal amount of the Swing Line Loan
Commitment and with other appropriate insertions. Each Bank will note on its
internal records the amount of each Loan made by it and each payment in respect
thereof and, prior to any transfer of any of its Notes, will endorse on the
reverse side thereof the outstanding principal amount of the Loans evidenced
thereby. Failure to make any such notation shall not affect the Borrower's
obligations in respect of such Loans.
2.06 INTEREST ON THE LOANS.
(a) RATE OF INTEREST. Subject to the provisions of Sections 2.06(e)
and 2.09(g), each Loan shall bear interest on the unpaid principal amount
thereof from the date made through maturity (whether by acceleration or
otherwise) at a rate determined by reference to, (i) if a Revolving Loan, the
Base Lending Rate or the Adjusted Eurodollar Rate, (ii) if a Swing Line Loan,
the Base Lending Rate. The applicable basis for determining the rate of interest
for Revolving Loans shall be selected by the Borrower initially at the time a
Notice of Revolver Borrowing is given pursuant to Section 2.01(b). The basis for
determining the interest rate with respect to any Revolving Loan may be changed
from time to time pursuant to Section 2.06(d). If on any day a Revolving Loan is
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the rate of interest, then for that day that Loan shall bear interest determined
by reference to the Base Lending Rate.
(i) The Revolving Loans shall bear interest through maturity as
follows:
(a) if a Base Rate Loan, then at the sum of the Base Lending
Rate plus the Applicable Base Margin; and
(b) if a Eurodollar Rate Loan, then at the sum of the
Adjusted Eurodollar Rate plus the Applicable Eurodollar Margin;
(ii) The Swing Line Loans shall bear interest at a per annum
rate equal to the Base Lending Rate plus the Applicable Base Margin less the
Commitment Fee Percentage then in effect.
28
On the Closing Date and until a subsequent Margin Rate Determination
Certificate is delivered to the Agent, the Applicable Eurodollar Margin and the
Applicable Base Margin shall be determined in accordance with the Leverage Ratio
set forth in the Margin Rate Determination Certificate delivered by the Borrower
to the Agent pursuant to Section 5.01(e). Upon delivery of any subsequent Margin
Rate Determination Certificate by the Borrower to the Agent pursuant to Section
7.01(j), the Applicable Eurodollar Margin and the Applicable Base Margin shall
automatically be adjusted in accordance with the Leverage Ratio set forth
therein, such adjustment to become effective on the Business Day next succeeding
the Business Day on which the Agent received such Margin Rate Determination
Certificate.
(b) INTEREST PERIODS. In connection with each Eurodollar Rate Loan,
the Borrower shall elect an interest period (each an "INTEREST PERIOD") to be
applicable to such Loan, which Interest Period shall be either a one, two, three
or six-month period; provided that:
(i) the initial Interest Period for any Loan shall commence on the
Funding Date of such Loan;
(ii) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided that if any Interest Period would otherwise expire on
a day that is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day;
(iv) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month;
(v) no Interest Period with respect to any Loan shall extend beyond
the Termination Date;
(vi) there shall be no more than ten (10) Eurodollar Rate Loans with
different maturities outstanding at any time.
(c) INTEREST PAYMENTS. Subject to Section 2.06(e), interest shall be
payable on the Loans as follows:
(i) interest on each Base Rate Loan shall be payable quarterly in
arrears on and to the first Business Day of each March, June, September and
December, commencing on March 1, 1997;
(ii) interest on each Eurodollar Rate Loan shall be payable in
arrears on and to (but not including) each Interest Payment Date applicable
to that Loan, upon
29
any prepayment of that Loan (to the extent accrued on the amount being
prepaid) and at maturity; and
(iii) interest on each Swing Line Loan shall be payable quarterly in
arrears on and to the first Business Day of each March, June, September and
December.
Notwithstanding anything in clauses (i) and (iii) of this Section
2.06(c) to the contrary, in the event that any Swing Line Loans or any Revolving
Loans that are Base Rate Loans are prepaid pursuant to Section 4.02, interest
accrued on such Swing Line Loans or Revolving Loans through the date of such
prepayment shall be payable on the next succeeding Interest Payment Date
applicable to Base Rate Loans (or, if earlier, upon the final termination for
any reason of the Revolving Loan Commitments).
(d) CONVERSION OR CONTINUATION. Subject to the provisions of Section
2.09, the Borrower shall have the option (i) to convert at any time all or any
part of the outstanding Revolving Loans from Revolving Loans bearing interest at
a rate determined by reference to one basis to Revolving Loans bearing interest
at a rate determined by reference to an alternative basis, or (ii) upon the
expiration of any Interest Period applicable to a Eurodollar Rate Loan, to
continue all or any portion of such Loan as a Eurodollar Rate Loan and the
succeeding Interest Period(s) of such continued Loan shall commence on the last
day of the Interest Period of the Loan to be continued; provided, however, Base
Rate Loans may only be converted to Eurodollar Rate Loans, and Eurodollar Rate
Loans may only be continued, in amounts equal to $1,000,000 and integral
multiples of $100,000 in excess of that amount; provided further, Eurodollar
Rate Loans may only be converted into Base Rate Loans on the expiration date of
an Interest Period applicable thereto; provided further that no outstanding Loan
may be continued as, or be converted into, a Eurodollar Rate Loan when any
Default or Event of Default has occurred and is continuing; and provided further
that Base Rate Loans made during the period from and including the Closing Date
through the date thirty days after the Closing Date may not be converted to
Eurodollar Rate Loans prior to thirty-one days after the Closing Date, unless
the Agent otherwise consents in writing.
The Borrower shall deliver a Notice of Conversion/Continuation to the
Agent no later than 12:00 Noon (New York time) at least two Business Days in
advance of the proposed conversion/continuation date (in the case of a
conversion to a Base Rate Loan), and at least three Business Days in advance of
the proposed conversion/continuation date (in the case of a conversion to, or a
continuation of, a Eurodollar Rate Loan). A Notice of Conversion/Continuation
shall certify (i) the proposed conversion/continuation date (which shall be a
Business Day), (ii) the amount of the Loan to be converted/continued, (iii) the
nature of the proposed conversion/continuation, (iv) in the case of a conversion
to, or a continuation of, a Eurodollar Rate Loan, the requested Interest Period,
and (v) that no Default or Event of Default has occurred and is continuing. In
lieu of delivering the above-described Notice of Conversion/Continuation, the
Borrower may give the Agent telephonic notice by the required time of any
proposed conversion/continuation under this Section 2.06(d); provided that such
notice shall be promptly confirmed in writing by delivery of a Notice of
Conversion/Continuation to the Agent on or before the proposed
conversion/continuation date.
Neither the Agent nor any Bank shall incur any liability to the Borrower
in
30
acting upon any telephonic notice referred to above that the Agent believes in
good faith to have been given by a duly authorized officer or other person
authorized to act on behalf of the Borrower or for otherwise acting in good
faith under this Section 2.06(d) and upon conversion/continuation by the Agent
in accordance with this Agreement, pursuant to any telephonic notice the
Borrower shall have effected such conversion or continuation, as the case may
be, hereunder.
Except as provided in Section 2.09(d), a Notice of Conversion/
Continuation for conversion to, or continuation of, a Eurodollar Rate Loan (or
telephonic notice in lieu thereof) shall be irrevocable on and after the related
Interest Rate Determination Date, and the Borrower shall be bound to convert or
continue in accordance therewith.
(e) POST MATURITY INTEREST. Upon the occurrence and during the
continuation of any Event of Default, the outstanding principal amount of all
Loans and, to the extent permitted by applicable law, any interest payments
thereon not paid when due and any fees and other amounts then due and payable
hereunder, shall thereafter bear interest (including post-petition interest in
any proceeding under the Bankruptcy Code or other applicable bankruptcy laws)
payable upon demand at a rate that is 2.00% per annum in excess of the interest
rate otherwise payable under this Agreement with respect to the applicable Loans
(or, in the case of any such fees and other amounts, at a rate that is 2.00% per
annum in excess of the interest rate otherwise payable under this Agreement for
Base Rate Loans); provided that, in the case of Eurodollar Rate Loans, upon the
expiration of the Interest Period in effect at the time any such increase in
interest rate is effective, such Eurodollar Rate Loans shall thereupon become
Base Rate Loans and thereafter bear interest payable upon demand at a rate that
is 2.00% per annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans. The payment or acceptance of the increased rate
provided by this Section 2.06(e) shall not constitute a waiver of any Event of
Default or an amendment to this Agreement or otherwise prejudice or limit any
rights or remedies of the Agent or any Bank.
(f) COMPUTATION OF INTEREST. Interest on the Loans shall be computed
on the basis of a 360-day year and the actual number of days elapsed in the
period during which it accrues. In computing interest on any Revolving Loan (or
any loan from the Swing Line Bank to a Bank under Section 2.02(c)), the date of
the making of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar
Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate
Loan, shall be included; and the date of payment of such Loan or the expiration
date of an Interest Period applicable to such Loan, or with respect to a Base
Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of
such Base Rate Loan to such Eurodollar Rate Loan, shall be excluded; provided
that if a Loan is repaid on the same day on which it is made, one day's interest
shall be paid on that Loan.
2.07 INCREASED COSTS; TAXES.
(a) INCREASED COSTS. If any Bank shall determine that the adoption
of any applicable law, rule or regulation concerning capital adequacy or any
applicable change therein, or any change in interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or
31
administration thereof, or compliance by such Bank (or its Lending Office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, in each
case occurring after the Closing Date, has or will have the effect of reducing
the rate of return on such Bank's capital as a consequence of its obligation to
make a Loan hereunder to a level below that which such Bank could have achieved
but for such adoption, change or compliance (taking into consideration such
Bank's policies with respect to capital adequacy) by any amount deemed by such
Bank to be material, then from time to time, within fifteen (15) days after
demand by such Bank, the Borrower shall pay to such Bank such additional amounts
as shall compensate such Bank for such reduction. Each Bank shall promptly
notify the Borrower of any of the matters set forth in the preceding sentence. A
certificate as to additional amounts owed any such Bank, showing in reasonable
detail the basis for the calculation thereof, submitted in good faith to the
Borrower and the Agent by such Bank shall be presumed to be correct.
(b) WITHHOLDING OF TAXES.
(i) Payments to Be Free and Clear. All sums payable by the Borrower
under this Agreement and the other Credit Documents shall be paid free and
clear of and (except to the extent required by law) without any deduction or
withholding on account of any Tax (other than franchise taxes and Taxes on
the overall net income of any Bank) imposed, levied, collected, withheld or
assessed by or within the United States of America or any political
subdivision in or of the United States of America or any other jurisdiction
from or to which a payment is made by or on behalf of the Borrower or by any
federation or organization of which the United States of America or any such
jurisdiction is a member at the time of payment.
(ii) Grossing-up of Payments. If the Borrower or any other Person is
required by law to make any deduction or withholding on account of any such
Tax from any sum paid or payable by the Borrower to the Agent or any Bank
under any of the Credit Documents:
(A) the Borrower shall notify the Agent of any such
requirement or any change in any such requirement as soon as the
Borrower becomes aware of it;
(B) the Borrower shall pay any such Tax before the date on
which penalties attach thereto, such payment to be made (if the
liability to pay is imposed on the Borrower) for its own account or (if
that liability is imposed on the Agent or such Bank, as the case may be)
on behalf of and in the name of the Agent or such Bank;
(C) the sum payable by the Borrower in respect of which the
relevant deduction, withholding or payment is required shall be
increased to the extent necessary to ensure that, after the making of
that deduction, withholding or payment, the Agent or such Bank, as the
case may be, receives on the due date a net sum equal to what it would
have received had no such deduction, withholding or payment been
required or made; and
32
(D) within 30 days after paying any sum from which it is
required by law to make any deduction or withholding, and within 30 days
after the due date of payment of any Tax that it is required by clause
(B) above to pay, the Borrower shall deliver to the Agent evidence
satisfactory to the other affected parties of such deduction,
withholding or payment and of the remittance thereof to the relevant
taxing or other authority;
provided that no such additional amount shall be required to be paid to any Bank
under clause (C) above except to the extent that any change, after the date
hereof (in the case of each Bank listed on the signature pages hereof) or after
the date of the assignment under Section 11.05 by which such Bank became a Bank
(in the case of each other Bank), in any such requirement for a deduction,
withholding or payment as is mentioned therein shall result in an increase in
the rate of such deduction, withholding or payment from that in effect at the
date of this Agreement or at the date of such assignment, as the case may be, in
respect of payments to such Bank.
(iii) Alternatives. Notwithstanding the provisions of Section
2.07(b)(ii), in lieu of paying a Bank such additional moneys as are required by
Section 2.07(b)(ii), the Borrower may exercise any one of the following options:
(A) If the requirement to make a deduction or withholding of
a Tax referred to in Section 2.07(b)(ii) relates only to Eurodollar Rate
Loans then being requested by the Borrower pursuant to a Notice of
Revolver Borrowing or a Notice of Conversion/Continuation, the Borrower
may by giving notice (by telephone promptly confirmed in writing) to the
Agent (who shall promptly give similar notice to each other Bank) no
later than the date immediately prior to the date on which such
Eurodollar Rate Loans are to be made, withdraw that Notice of Revolver
Borrowing or Notice of Conversion/Continuation and the Eurodollar Rate
Loans then being requested shall be made by the Banks as Base Rate
Loans; or
(B) If the requirement to make a deduction or withholding of
a Tax referred to in Section 2.07(b)(ii) relates only to Eurodollar Rate
Loans outstanding at the time the requirement is discovered, upon
written notice to the Agent and each Bank, the Borrower may terminate
the obligations of the Banks to make or maintain Loans as, and to
convert Loans into, Eurodollar Rate Loans and, in such event, the
Borrower shall at the end of the then current Interest Period, convert
all of the Eurodollar Rate Loans into Base Rate Loans in the manner
contemplated by Section 2.06(d) but without satisfying the advance
notice requirements therein in which case the Borrower must take the
actions referred to in Section 2.07(b)(ii) until such conversion; or
(C) If the requirement to make a deduction or withholding of
a Tax referred to in Section 2.07(b)(ii) relates to Loans other than
Eurodollar Rate Loans, the Borrower may notify each Bank to which such
requirement relates that the Borrower will not make the payments
required under Section
33
2.07(b)(ii)(C) with respect to such Loans at the end of the 30 day
period described below and each such Bank will have 30 days in which to
notify the Agent (which will notify the Borrower) that it will continue
as a Bank under this Agreement without such payments or that it refuses
so to continue, and, if any such Bank refuses to continue, (i) the
Borrower shall pay to such Bank, on a date 15 days after notice of such
refusal is made, all interest and fees and other amounts due and owing
to such Bank including amounts due under Section 2.07(b)(ii) through the
end of such 30 day period (and, to the extent such Bank is the Issuing
Bank, any Letters of Credit shall be returned to the Issuing Bank marked
"cancelled" or Cash shall be deposited with the Issuing Bank in an
amount equal to the maximum amount that may at any time be drawn on such
Letters of Credit) on such date and the principal amount of all such
Loans of such Bank or (ii) another financial institution that is an
Eligible Assignee, shall purchase for cash such Loans of such Bank and
become a Bank for all purposes under this Agreement and assume all
obligations of such Bank pursuant to an Assignment and Acceptance that
shall have become effective pursuant to Section 11.05.
2.08 USE OF PROCEEDS.
(a) LOANS. The proceeds of the Loans shall be applied by the
Borrower (i) to repay all outstanding indebtedness under the Existing Credit
Agreement; (ii) for the general corporate purposes of the Borrower and its
Subsidiaries, which may include, without limitation, (x) the reimbursement of
the Issuing Bank of any amounts drawn under any Letter of Credit as provided in
Section 2.10(c), (y) the reimbursement of the Swing Line Bank of any Swing Line
Loans as provided in Section 2.02(c) and (z) payment of any fees and expenses
associated with the Loans; and (iii) for making Acquisitions.
(b) LETTERS OF CREDIT. The Letters of Credit shall be used for the
purpose of supporting (i) workers' compensation liabilities of the Borrower or
its Subsidiaries, (ii) the obligations of the Borrower or its Subsidiaries to
third party insurers arising (x) by virtue of the laws of any jurisdiction
requiring third party insurers and (y) in lieu of payments in cash of insurance
obligations or (iii) performance, payment, deposit or surety obligations of the
Borrower or its Subsidiaries, in any case if required by law or governmental
rule or regulation, by any landlord under any real estate lease, or by custom
and practice in the business of the Borrower and its Subsidiaries.
(c) MARGIN REGULATIONS. No portion of the proceeds of any borrowing
under this Agreement shall be used by the Borrower to purchase or carry any
Margin Stock in any manner that might cause the borrowing or the application of
such proceeds to violate Regulation G, Regulation T, Regulation U or Regulation
X of the Board of Governors of the Federal Reserve System or any other
regulation of the Board or to violate the Securities Exchange Act of 1934, in
each case as in effect on the date or dates of such borrowing and such use of
proceeds.
2.09 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.
Notwithstanding any other provision of this Agreement, the following
provisions shall govern with respect to Eurodollar Rate Loans as to the matters
covered:
34
(a) DETERMINATION OF INTEREST RATE. As soon as practicable after 10:00
A.M. (New York time) on each Interest Rate Determination Date, the Agent shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply to
the Eurodollar Rate Loans for which an interest rate is then being determined
for the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the Borrower and each Bank.
(b) SUBSTITUTED RATE OF BORROWING. If on any Interest Rate Determination
Date any Bank (including the Agent) shall have determined (which determination
shall be final and conclusive and binding upon all parties but, with respect to
the following clauses (i) and (ii)(B), shall be made only after consultation
with the Borrower and the Agent) that:
(i) by reason of any changes arising after the date of this Agreement
affecting the Eurodollar market or affecting the position of that Bank in
such market, adequate and fair means do not exist for ascertaining the
applicable interest rate by reference to the Eurodollar Rate with respect to
the Eurodollar Rate Loans as to which an interest rate determination is then
being made; or
(ii) by reason of (A) any change after the date hereof in any applicable
law or governmental rule, regulation or order (or any interpretation thereof
and including the introduction of any new law or governmental rule,
regulation or order) or (B) other circumstances affecting that Bank or the
Eurodollar market or the position of that Bank in such market (such as for
example, but not limited to, official reserve requirements required by
Regulation D of the Board of Governors of the Federal Reserve System to the
extent not given effect in the Eurodollar Rate), the Eurodollar Rate shall
not represent the effective pricing to that Bank for Dollar deposits of
comparable amounts for the relevant period;
then, and in any such event, that Bank shall be an Affected Bank and it shall
promptly (and in any event as soon as possible after being notified of a
borrowing, conversion or continuation) give notice (by telephone promptly
confirmed in writing) to the Borrower and the Agent (which notice the Agent
shall promptly transmit to each other Bank) of such determination. Thereafter,
the Borrower shall pay to the Affected Bank, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as the Affected Bank in its sole
discretion shall reasonably determine) as shall be required to cause the
Affected Bank to receive interest with respect to its Eurodollar Rate Loans for
the Interest Period following that Interest Rate Determination Date at a rate
per annum equal to 1.00% per annum in excess of the effective pricing to the
Affected Bank for Dollar deposits to make or maintain its Eurodollar Rate Loans.
A certificate as to additional amounts owed the Affected Bank, showing in
reasonable detail the basis for the calculation thereof, submitted in good faith
to the Borrower and the Agent by the Affected Bank shall be presumed to be
correct.
(c) REQUIRED TERMINATION AND PREPAYMENT. If on any date any Bank
shall have reasonably determined (which determination shall be final and
conclusive and binding upon all parties) that the making or continuation of its
Eurodollar Rate Loans has
35
become unlawful or impossible by reason of compliance by that Bank in good faith
with any law, governmental rule, regulation or order (whether or not having the
force of law and whether or not failure to comply therewith would be unlawful),
then, and in any such event, that Bank shall be an Affected Bank and it shall
promptly give notice (by telephone promptly confirmed in writing) to the
Borrower and the Agent (which notice the Agent shall promptly transmit to each
other Bank) of that determination. Subject to the prior withdrawal of a Notice
of Revolver Borrowing or a Notice of Conversion/Continuation or prepayment of
the Eurodollar Rate Loans of the Affected Bank as contemplated by the following
Section 2.09(d), the obligation of the Affected Bank to make or maintain its
Eurodollar Rate Loans during any such period shall be terminated at the earlier
of the termination of the Interest Period then in effect or when required by law
and the Borrower shall no later than the termination of the Interest Period in
effect at the time any such determination pursuant to this Section 2.09(c) is
made or, earlier, when required by law, repay or prepay the Eurodollar Rate
Loans of the Affected Bank, together with all interest accrued thereon.
(d) OPTIONS OF THE BORROWER. In lieu of paying an Affected Bank such
additional moneys as are required by Section 2.09(b) or the prepayment of an
Affected Bank required by Section 2.09(c), the Borrower may exercise any one of
the following options:
(i) If the determination by an Affected Bank relates only to Eurodollar
Rate Loans then being requested by the Borrower pursuant to a Notice of
Revolver Borrowing or a Notice of Conversion/Continuation, the Borrower may
by giving notice (by telephone promptly confirmed in writing) to the Agent
(who shall promptly give similar notice to each other Bank) no later than
the date immediately prior to the date on which such Eurodollar Rate Loans
are to be made, withdraw that Notice of Revolver Borrowing or Notice of
Conversion/Continuation and the Eurodollar Rate Loans then being requested
shall be made by the Banks as Base Rate Loans; or
(ii) Upon written notice to the Agent and each Bank, the Borrower may
terminate the obligations of the Banks to make or maintain Loans as, and to
convert Loans into, Eurodollar Rate Loans and in such event, the Borrower
shall, prior to the time any payment pursuant to Section 2.09(c) is required
to be made or, if the provisions of Section 2.09(b) are applicable, at the
end of the then current Interest Period, convert all of the Eurodollar Rate
Loans into Base Rate Loans in the manner contemplated by Section 2.06(d) but
without satisfying the advance notice requirements therein.
(e) COMPENSATION. The Borrower shall compensate each Bank, upon
written request by that Bank (which request shall set forth in reasonable detail
the basis for requesting such amounts), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss (including interest paid)
sustained by that Bank in connection with the re-employment of such funds), that
such Bank may sustain: (i) if for any reason (other than a default by that Bank)
a borrowing of any Eurodollar Rate Loan does not occur on a date specified
therefor in a Notice of Revolver Borrowing, a Notice of Conversion/Continuation
or a telephonic request for borrowing or conversion/continuation or a successive
Interest Period does not commence after notice therefor is given pursuant to
Section 2.06(d), (ii) if any prepayment of any of its Eurodollar Rate Loans
occurs on a date that is not the last day of an Interest Period applicable to
that Loan, (iii) if any
36
prepayment of any of its Eurodollar Rate Loans is not made on any date specified
in a notice of prepayment given by the Borrower, or (iv) as a consequence of any
other default by the Borrower to repay its Eurodollar Rate Loans when required
by the terms of this Agreement.
(f) QUOTATION OF EURODOLLAR RATE. Anything herein to the contrary
notwithstanding, if on any Interest Rate Determination Date the Agent is as a
matter of general practice not quoting rates to first class banks in the
Eurodollar market for the offering of Dollars for deposit with maturities
comparable to the Interest Period and in amounts comparable to the Eurodollar
Rate Loans requested, the Agent shall contact the other Banks, if any, for their
quotes for rates to first class banks in the Eurodollar market with respect to
the requested Eurodollar Rate Loan, such other Banks to be contacted in
decreasing order of their respective Pro Rata Shares (and in alphabetical order
in the case of two or more Banks having the same Pro Rata Shares). In the event
that none of the Banks are making Eurodollar quotes in the applicable amount and
with the applicable maturity, the Agent shall give the Borrower and each Bank
prompt notice thereof and the Loans requested shall be made as Base Rate Loans.
(g) EURODOLLAR RATE TAXES. The Borrower agrees that:
(i) Promptly upon notice from any Bank to the Borrower, the Borrower
will pay, prior to the date on which penalties attach thereto, all present
and future income, stamp and other taxes, levies, or costs and charges
whatsoever imposed, assessed, levied or collected on or in respect of a Loan
solely as a result of the interest rate being determined by reference to the
Eurodollar Rate and/or the provisions of this Agreement relating to the
Eurodollar Rate and/or the recording, registration, notarization or other
formalization of any thereof and/or any payments of principal, interest or
other amounts made on or in respect of a Loan when the interest rate is
determined by reference to the Eurodollar Rate (all such taxes, levies, costs
and charges being herein collectively called "EURODOLLAR RATE TAXES");
provided, however, that Eurodollar Rate Taxes shall not include any other
Taxes. The Borrower shall also pay such additional amounts equal to increases
in Taxes payable by that Bank which increases are attributable to payments
made by the Borrower described in the immediately preceding sentence or this
sentence. A certificate as to additional amounts owed by the Borrower
pursuant to this clause (i), showing in reasonable detail the basis for the
calculation thereof, submitted in good faith to the Borrower and the Agent by
any Bank shall be presumed to be correct. Promptly after the date on which
payment of any such Eurodollar Rate Tax is due pursuant to applicable law,
the Borrower will, at the request of that Bank, furnish to that Bank
evidence, in form and substance satisfactory to that Bank, that the Borrower
has met its obligations under this Section 2.09(g).
(ii) The Borrower will indemnify each Bank against, and reimburse
each Bank on demand for, any Eurodollar Rate Taxes, as determined by that
Bank in its good faith discretion; provided that such Bank shall provide the
Borrower with appropriate receipts for any payments or reimbursements made by
the Borrower pursuant to this clause (ii) of Section 2.09(g).
(iii) Each Bank organized under the laws of a jurisdiction outside of
the
37
United States (referred to in this Section 2.09(g) as a "FOREIGN BANK") as to
which payments to be made hereunder or under the Notes are exempt from United
States withholding tax or are subject to such tax at a reduced rate under an
applicable statute or tax treaty shall provide to the Borrower and the Agent
(x) a properly completed and executed Internal Revenue Service Form 4224 or
Form 1001 or other applicable form, certificate or document prescribed by the
Internal Revenue Service of the United States certifying as to such Foreign
Bank's entitlement to such exemption or reduced rate with respect to payments
to be made to such Foreign Bank hereunder and under the Notes (referred to in
this Section 2.09(g) as a "CERTIFICATE OF EXEMPTION") or (y) a letter from
such Foreign Bank stating that it is not entitled to any such exemption or
reduced rate (referred to in this Section 2.09(g) as a "LETTER OF
NON-EXEMPTION"). Each Foreign Bank shall provide such a Certificate of
Exemption or a Letter of Non-Exemption before the Closing Date. Each Foreign
Bank that becomes a Bank pursuant to an Assignment and Acceptance that has
become effective pursuant to Section 11.05 shall provide a Certificate of
Exemption or a Letter of Non-Exemption on the date such Foreign Bank becomes
a Bank. Until the Borrower and the Agent have received from such Foreign Bank
a Certificate of Exemption, the accuracy of which shall be reasonably
satisfactory to the Borrower, the Borrower shall, subject to its obligations
under Sections 2.09(g)(i), 2.09(g)(ii) and 2.09(i), be entitled to withhold
taxes from such payments to such Foreign Bank at the statutory rate
applicable to amounts to be paid hereunder to such Foreign Bank.
(iv) Notwithstanding anything to the contrary contained in this
Section 2.09(g), the Borrower shall not be required to pay any amounts
pursuant to this Section 2.09(g) to any Foreign Bank unless such Foreign Bank
has provided to the Borrower, within 60 days after the receipt by such
Foreign Bank of a written request therefor, either a Certificate of Exemption
or a Letter of Non-Exemption.
(h) BOOKING OF EURODOLLAR RATE LOANS. Any Bank may make, carry or
transfer Eurodollar Rate Loans at, to, or for the account of, any of its branch
offices or the office of an Affiliate of that Bank.
(i) INCREASED COSTS. Except as provided in Section 2.09(b) with
respect to certain determinations on Interest Rate Determination Dates, if,
after the date hereof by reason of, (x) the introduction of or any change
(including, without limitation, any change by way of imposition or increase of
reserve requirements) in, or in the interpretation of, any law or regulation, or
(y) the compliance with any guideline or request from any central bank or other
governmental authority or quasi-governmental authority exercising control over
banks or financial institutions generally (whether or not having the force of
law):
(i) any Bank (or its applicable lending office) shall be subject to
any tax, duty or other charge with respect to its Eurodollar Rate Loans or
its obligation to make Eurodollar Rate Loans, or shall change the basis of
taxation of payments to any Bank of the principal of or interest on its
Eurodollar Rate Loans or its obligation to make Eurodollar Rate Loans (except
for changes in the rate of tax on the overall net income of such Bank or its
applicable lending office imposed by the jurisdiction (whether local, state,
federal or foreign) in which such Bank's principal executive office or
applicable lending office is located); or
38
(ii) any reserve (including, without limitation, any imposed by the
Board of Governors of the Federal Reserve System), special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Bank's applicable lending office shall be imposed or deemed
applicable or any other condition affecting its Eurodollar Rate Loans or its
obligation to make Eurodollar Rate Loans shall be imposed on any Bank or its
applicable lending office or the interbank Eurodollar market,
and as a result thereof there shall be any increase in the cost to such Bank of
agreeing to make or making, funding or maintaining Eurodollar Rate Loans, or
there shall be a reduction in the amount received or receivable by that Bank or
its applicable lending office, then the Borrower shall from time to time, upon
written notice from and demand by that Bank (with a copy of such notice and
demand to the Agent), pay to the Agent for the account of that Bank, within five
Business Days after receipt of such notice and demand, additional amounts
sufficient to indemnify that Bank against such increased cost or reduced amount.
A certificate as to the amount of such increased cost or reduced amount,
submitted to the Borrower and the Agent by that Bank, shall be presumed to be
correct. Any payments to be made by the Borrower under Sections 2.09(b), 2.09(g)
or 2.09(i) are to be without duplication.
(j) ASSUMPTIONS CONCERNING FUNDING OF EURODOLLAR RATE LOANS.
Calculation of all amounts payable to a Bank under this Section 2.09 shall be
made as though that Bank had actually funded its relevant Eurodollar Rate Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of that Eurodollar Rate Loan and having a
maturity comparable to the relevant Interest Period and through the transfer of
such Eurodollar deposit from an offshore office of that Bank to a domestic
office of that Bank in the United States of America; provided, however, that
each Bank may fund each of its Eurodollar Rate Loans in any manner it sees fit
and the foregoing assumption shall be utilized only for the calculation of
amounts payable under this Section 2.09.
(k) EURODOLLAR RATE LOANS AFTER DEFAULT. Unless the Agent and the
Required Banks shall otherwise agree, after the occurrence of and during the
continuance of a Default or an Event of Default, the Borrower may not elect to
have a Revolving Loan be made or maintained as, or converted to, a Eurodollar
Rate Loan after the expiration of any Interest Period then in effect for that
Revolving Loan.
(l) AFFECTED BANKS' OBLIGATION TO MITIGATE. Each Bank agrees that,
as promptly as practicable after it becomes aware of the occurrence of an event
or the existence of a condition that would cause it to be an Affected Bank under
Section 2.09(b) or 2.09(c) or that would entitle such Bank to receive payments
under Section 2.09(g) or 2.09(i), it will, to the extent not inconsistent with
such Bank's internal policies, use reasonable efforts to make, fund or maintain
the affected Eurodollar Rate Loans of such Bank through another lending office
of such Bank if as a result thereof the additional moneys which would otherwise
be required to be paid to such Bank pursuant to Section 2.09(b), 2.09(g) or
2.09(i) would be materially reduced or the illegality or other adverse
circumstances which would otherwise require prepayment of such Loans pursuant to
Section 2.09(c) would cease to exist, and if, as determined by such Bank in its
sole discretion, the making, funding or
39
maintaining of such Loans through such other lending office would not otherwise
materially adversely affect such Loans or such Bank. The Borrower hereby agrees
to pay all reasonable expenses incurred by any Bank in utilizing another lending
office of such Bank pursuant to this Section 2.09(l).
2.10 LETTERS OF CREDIT.
(a) LETTERS OF CREDIT. In addition to the Borrower requesting that
the Banks make Revolving Loans pursuant to Section 2.01(a) and that Swing Line
Bank make Swing Line Loans pursuant to Section 2.01(b), the Borrower may
request, in accordance with the provisions of this Section 2.10, on and after
the Closing Date to and excluding the Termination Date, that the Issuing Bank
issue Letters of Credit for the account of the Borrower for the purposes
specified in Section 2.08(b); provided that the Borrower shall not request that
the Issuing Bank issue (and the Issuing Bank shall not issue):
(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the Total
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $10,000,000; or
(iii) any Letter of Credit if, after giving effect to the issuance,
the Total Utilization of Revolving Loan Commitments would violate the
limitation that for 30 consecutive days during any twelve-month period the
Revolving Loan Commitments must exceed the Total Utilization of Revolving
Loan Commitments by at least $10,000,000.
In no event shall the Issuing Bank issue any Letter of Credit having an
expiration date later than the Termination Date or the date that is one year
after the issuance thereof except as expressly provided herein; provided,
however, that the Issuing Bank may agree to extend any Letter of Credit
automatically annually for a period not to exceed one year. If the Issuing Bank,
in its sole discretion, determines to issue a Letter of Credit expiring after
the scheduled Termination Date, the Borrower shall be required on the third
Business Day immediately preceding the Termination Date to deposit with the
Issuing Bank cash collateral for the repayment of any drawings under such Letter
of Credit, such deposit to be in an amount equal to the maximum amount that may
be drawn under such Letter of Credit and to be upon such terms and conditions as
such Bank may require. The issuance of any Letter of Credit in accordance with
the provisions of this Section 2.10 shall require the satisfaction of each
condition set forth in Section 5.02; provided, however, that the obligation of
the Issuing Bank to issue any Letter of Credit is subject to the condition that
(i) the Issuing Bank believed in good faith that all conditions under this
Section 2.10(a) and Section 5.02 to the issuing of such Letter of Credit were
satisfied at the time such Letter of Credit was issued or (ii) the satisfaction
of any such condition not satisfied had been waived by the Required Banks prior
to or at the time such Letter of Credit was issued; provided further that the
Issuing Bank shall be entitled to rely, and shall be fully protected in relying,
upon any communication, instrument or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons,
including, without limitation, an Officers' Certificate from the Borrower as to
the satisfaction of the conditions
40
under Section 5.02 in determining the satisfaction of any conditions to the
issuance of any Letter of Credit or the Total Utilization of Revolving Loan
Commitments or Letter of Credit Usage then in effect.
Immediately upon the issuance of each Letter of Credit, each Bank shall
be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing
Bank a participation in such Letter of Credit and drawings thereunder in an
amount equal to such Bank's Pro Rata Share of the maximum amount that is or at
any time may become available to be drawn thereunder. If the Issuing Bank issues
a Letter of Credit having an expiration date after the scheduled Termination
Date, such participations shall expire without further action by any Bank on the
scheduled Termination Date.
Each Letter of Credit supporting the payment of Indebtedness may provide
that the Issuing Bank may (but shall not be required to) pay the beneficiary
thereof upon the occurrence of a Default or an Event of Default and the
acceleration of the maturity of the Loans or, if payment is not then due to the
beneficiary, provide for the deposit of funds in an account in the name of the
Issuing Bank to secure payment to the beneficiary and that any funds so
deposited shall be paid to the beneficiary of the Letter of Credit if conditions
to such payment are satisfied or returned to the Agent for distribution to the
Banks (or, if all Obligations shall have been indefeasibly paid in full, to the
Borrower) if no payment to the beneficiary has been made and the final date
available for drawings under the Letter of Credit has passed. Each payment or
deposit of funds by the Issuing Bank as provided in this paragraph shall be
treated for all purposes of this Agreement as a drawing duly honored by the
Issuing Bank under the related Letter of Credit.
(b) NOTICE OF ISSUANCE. Whenever the Borrower desires to cause the
Issuing Bank to issue a Letter of Credit, it shall deliver to the Issuing Bank
and the Agent a Notice of Issuance of Letter of Credit in the form of EXHIBIT D
no later than 1:00 P.M. (New York time) at least four Business Days in advance
of the proposed date of issuance or such shorter time as may be acceptable to
the Issuing Bank. The Notice of Issuance of Letter of Credit shall specify (i)
the proposed date of issuance (which shall be a Business Day), (ii) the face
amount of the Letter of Credit, (iii) the expiration date of the Letter of
Credit, (iv) the name and address of the beneficiary, (v) such other documents
or materials as the Issuing Bank may reasonably request, and (vi) a precise
description of the documents and the verbatim text of any certificate to be
presented by the beneficiary which, if presented by the beneficiary prior to the
expiration date of the Letter of Credit, would require the Issuing Bank to make
payment under the Letter of Credit; provided that the Issuing Bank, in its sole
judgment, may require changes in any such documents and certificates. In
determining whether to pay any Letter of Credit, the Issuing Bank shall be
responsible only to use reasonable care to determine that the documents and
certificates required to be delivered under that Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit. Promptly upon the issuance of a Letter of Credit, the Issuing
Bank shall notify each other Bank of the issuance and the amount of each such
other Bank's respective participation therein determined in accordance with
Section 2.10(a) and such notice shall be accompanied by a copy of such issued
Letter of Credit.
(c) PAYMENT OF AMOUNTS DRAWN UNDER OR NECESSARY TO COLLATERALIZE
LETTERS OF CREDIT. In the event (i) the beneficiary of any Letter of Credit
makes a drawing
41
thereunder or (ii) the Borrower is required under Section 2.10(a) to cash
collateralize any Letter of Credit, the Issuing Bank immediately shall notify
the Borrower and the Agent, and the Borrower shall reimburse the Issuing Bank or
make a deposit with the Issuing Bank, as appropriate, on the day on which such
drawing is honored or such cash collateral deposit is required in an amount in
same day funds equal to the amount of such drawing or, in the case of such a
deposit, the maximum amount that may be drawn under the applicable Letter of
Credit; provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless prior to 1:00 P.M. (New York time) on the date such
drawing is honored or the date the Borrower is required to make such required
deposit of cash collateral, as applicable, (A) the Borrower shall have notified
the Issuing Bank and the Agent that the Borrower intends to reimburse the
Issuing Bank for the amount of such drawing or to make such deposit with funds
other than the proceeds of Revolving Loans or (B) the Borrower shall have
delivered a Notice of Revolver Borrowing requesting Revolving Loans that are
Base Rate Loans in an amount equal to the amount of such drawing or deposit, the
Borrower shall be deemed to have given a Notice of Revolver Borrowing to the
Agent requesting the Banks to make Revolving Loans that are Base Rate Loans on
the date on which such drawing is honored or on which such deposit is required
in an amount equal to the amount of such drawing or deposit, and (ii) if so
requested by the Agent, the Banks shall, on the date of such drawing or required
deposit, make Revolving Loans that are Base Rate Loans in the amount of such
drawing or required deposit, the proceeds of which shall be applied directly by
the Agent to reimburse the Issuing Bank for the amount of such drawing or to
make a deposit with the Issuing Bank in the amount of such required deposit; and
provided further that, if for any reason proceeds of Revolving Loans are not
received by the Issuing Bank on such date in an amount equal to the amount of
such drawing or deposit, the Borrower shall reimburse or make a deposit with the
Issuing Bank, on the Business Day immediately following the date of such drawing
or such deposit, in an amount in same day funds equal to the excess of the
amount of such drawing or deposit over the amount of such Revolving Loans, if
any, that are so received, plus accrued interest on such amount at the rate set
forth in Section 2.10(e)(ii).
(d) PAYMENT BY THE BANKS. If the Borrower shall fail to reimburse
the Issuing Bank, for any reason, as provided in Section 2.10(c) (including,
without limitation, reimbursement by the making of Revolving Loans by the Banks
pursuant to the terms of Section 2.10(c)) in an amount equal to the amount of
any drawing honored by the Issuing Bank under a Letter of Credit issued by it,
the Issuing Bank promptly shall notify each Bank of the unreimbursed amount of
such drawing and of such Bank's respective participation therein based on such
Bank's Pro Rata Share. Each Bank shall make available to the Issuing Bank an
amount equal to its respective participation, in same day funds, at the office
of the Issuing Bank specified in such notice, not later than 1:00 P.M. (New York
time) on the Business Day after the date notified by the Issuing Bank. If any
Bank fails to make available to the Issuing Bank the amount of such Bank's
participation in such Letter of Credit as provided in this Section 2.10(d), the
Issuing Bank shall be entitled to recover such amount on demand from such Bank
together with interest at the customary rate set by the Issuing Bank for the
correction of errors among banks for one Business Day and thereafter at the Base
Lending Rate. Nothing in this Section 2.10 shall be deemed to prejudice the
right of any Bank to recover from the Issuing Bank any amounts made available by
such Bank to the Issuing Bank pursuant to this Section 2.10(d) if it is
determined in a final judgment by a court of competent jurisdiction that the
payment with respect to a Letter of Credit by the Issuing Bank in respect of
which payment was made by such Bank constituted
42
gross negligence or willful misconduct on the part of the Issuing Bank. The
Issuing Bank shall distribute to each other Bank that has paid all amounts
payable by it under this Section 2.10(d) with respect to any Letter of Credit
issued by the Issuing Bank such other Bank's Pro Rata Share of all payments
received by the Issuing Bank from the Borrower or pursuant to the last paragraph
of Section 2.10(a), in each case, in reimbursement of drawings honored by the
Issuing Bank under such Letter of Credit when such payments are received.
(e) COMPENSATION. The Borrower agrees to pay the following amounts
to the Issuing Bank with respect to each Letter of Credit issued by it:
(i) a letter of credit fee equal to: (x) the Applicable Eurodollar
Margin per annum (to be distributed to all the Banks according to their
respective Pro Rata Shares) plus (y) the greater of (A) 0.25% per annum
(calculated on the basis of a 360-day year and the actual number of days
elapsed) of the maximum amount available from time to time to be drawn under
such Letter of Credit and (B) $500, which amounts payable under clauses (A)
and (B) shall be payable to the Issuing Bank quarterly in arrears on and to
the first Business Day of each March, June, September and December;
(ii) with respect to drawings made under any Letter of Credit,
interest, payable on demand, on the amount paid by the Issuing Bank in
respect of each such drawing from the date of the drawing through the date
such amount is reimbursed by the Borrower (including any such reimbursement
out of the proceeds of Revolving Loans pursuant to Section 2.10(c)) at a rate
that is equal to the sum of the Base Lending Rate and the Applicable Base
Margin; provided that if such amount is not paid on demand, such amount shall
bear interest thereafter at a rate that is equal to 2.00% per annum in excess
of the interest rate otherwise payable under this Agreement for Base Rate
Loans which such rate shall not thereafter be increased pursuant to Section
2.06(e); and
(iii) with respect to the issuance, amendment or transfer of each
Letter of Credit and each drawing made thereunder, documentary and processing
charges in accordance with the Issuing Bank's standard schedule for such
charges in effect at the time of such issuance, amendment, transfer or
drawing, as the case may be, or as otherwise agreed to by the Issuing Bank.
Promptly upon receipt by the Issuing Bank of any amount described in
clauses (i) or (ii) of this Section 2.10(e) (other than amounts specifically
designated for distribution to the Issuing Bank) with respect to a Letter of
Credit, the Issuing Bank shall distribute to each Bank its Pro Rata Share of
such amount.
(f) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to
reimburse the Issuing Bank for drawings made under the Letters of Credit issued
by it and to repay any Revolving Loans made by the Banks pursuant to Section
2.10(c) and the obligations by the Banks under Section 2.10(d) shall be
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement under all circumstances including, without limitation,
the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit;
43
(ii) the existence of any claim, set-off, defense or other right that
the Borrower may have at any time against a beneficiary or any transferee of
any Letter of Credit (or any persons or entities for whom any such transferee
may be acting), the Agent, any Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between the
Borrower and the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect; provided that the Issuing Bank shall use
reasonable care to determine that the documents and certificates required to
be delivered under any Letter of Credit have been delivered and that they
comply on their face with the requirements of that Letter of Credit;
(iv) payment by the Issuing Bank under any Letter of Credit against
presentation of a demand, draft or certificate or other document that does
not comply with the terms of such Letter of Credit; provided that the Issuing
Bank shall use reasonable care to determine that the documents and
certificates required to be delivered under any Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit;
(v) any adverse change in the business, operations, property,
assets, condition (financial or otherwise) or prospects of the Borrower or
any of its Subsidiaries;
(vi) any breach of this Agreement or any other Credit Document by the
Borrower or any of its Subsidiaries, the Agent or any Bank (other than the
Issuing Bank);
(vii) any other circumstance or happening whatsoever, that is similar
to any of the foregoing; or
(viii) the fact that a Default or an Event of Default shall have
occurred and be continuing;
provided that the Borrower shall not be required to pay any such amounts to the
extent they arise from the gross negligence or willful misconduct of the Issuing
Bank (as determined by a court of competent jurisdiction).
(g) ADDITIONAL PAYMENTS. IF by reason of:
(i) any change in any applicable law, regulation, rule, decree or
regulatory requirement or any change in the interpretation or application by
any judicial or regulatory authority of any law, regulation, rule, decree or
regulatory requirement, in each case occurring after the Closing Date; or
44
(ii) compliance by the Issuing Bank or any Bank with any direction,
request or requirement (whether or not having the force of law) announced or
issued after the Closing Date by any governmental or monetary authority,
including, without limitation, any announcements or issuances under
Regulation D of the Board of Governors of the Federal Reserve System;
THEN:
(i) the Issuing Bank or any Bank shall be subject to any tax, levy,
charge or withholding of any nature or to any variation thereof or to any
penalty with respect to the maintenance or fulfillment of its obligations
under this Section 2.10, whether directly or by such being imposed on or
suffered by the Issuing Bank or any Bank;
(ii) any reserve, special deposit, premium, FDIC assessment, capital
adequacy or similar requirement is or shall be applicable, imposed or
modified in respect of any Letters of Credit issued by the Issuing Bank or
participations therein purchased by any Bank; or
(iii) there shall be imposed on the Issuing Bank or any Bank any other
condition regarding this Section 2.10, any Letter of Credit or any
participation therein;
AND the result of the foregoing is to directly or indirectly increase the cost
to the Issuing Bank or any Bank of issuing, making or maintaining any Letter of
Credit or of purchasing or maintaining any participation therein, or to reduce
the amount receivable in respect thereof by the Issuing Bank or any Bank, THEN
and in any such case the Issuing Bank or such Bank may, at any time within a
reasonable period after the additional cost is incurred or the amount received
is reduced, notify the Borrower and the Agent, and the Borrower shall pay within
five Business Days of the date of such notice such amounts as the Issuing Bank
or such Bank may specify to be necessary to compensate the Issuing Bank or such
Bank for such additional cost or reduced receipt, together with interest on such
amount from the date demanded until payment in full thereof at a rate equal at
all times to the Base Lending Rate plus 2.00% per annum. The determination by
the Issuing Bank or any Bank, as the case may be, of any amount due pursuant to
this Section 2.10(g) as set forth in a certificate setting forth the calculation
thereof in reasonable detail, shall be presumed to be correct.
(h) INDEMNIFICATION; NATURE OF THE ISSUING BANK'S DUTIES. In
addition to amounts payable as elsewhere provided in this Section 2.10, the
Borrower hereby agrees to protect, indemnify, pay and save harmless the Issuing
Bank from and against any and all claims, demands, liabilities, damages, losses,
costs, charges and expenses (including reasonable attorneys' fees and reasonable
allocated costs of internal counsel) that the Issuing Bank may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of any
Letter of Credit, other than as a result of gross negligence or willful
misconduct of the Issuing Bank or the Issuing Bank's failure to use reasonable
care to determine that the documents and certificates required to be delivered
under such Letter of Credit had been delivered and that they complied on their
face with the requirements of that Letter of Credit as determined by a court of
competent jurisdiction or (ii) the failure of the Issuing Bank to honor a
drawing under any Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called
45
"GOVERNMENT ACTS"). Each Bank, proportionately to its Pro Rata Share, severally
agrees to indemnify the Issuing Bank to the extent the Issuing Bank shall not
have been reimbursed by the Borrower or its Subsidiaries, for and against any of
the foregoing claims, demands, liabilities, damages, losses, costs, charges and
expenses to which the Issuing Bank is entitled to reimbursement from the
Borrower.
As between the Borrower and the Issuing Bank, the Borrower assumes all
risks of the acts and omissions of, or misuse of the Letters of Credit issued by
the Issuing Bank by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank shall not
be responsible (absent gross negligence or willful misconduct (as determined by
a court of competent jurisdiction)): (i) for the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of such Letters of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) for the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
such Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (iii) for failure of the beneficiary of any such Letter of Credit to
comply fully with conditions required in order to draw upon such Letter of
Credit; (iv) for errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (v) for errors in interpretation of technical terms;
(vi) for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of Credit or of the
proceeds thereof; (vii) for the misapplication by the beneficiary of any such
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of the
Issuing Bank, including, without limitation, any Government Acts. None of the
above shall affect, impair, or prevent the vesting of any of the Issuing Bank's
rights or powers hereunder; provided that, notwithstanding the foregoing, the
Issuing Bank shall use reasonable care to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit.
In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by the Issuing
Bank under or in connection with the Letters of Credit issued by it or the
related certificates, if taken or omitted in good faith and absent gross
negligence or willful misconduct of the Issuing Bank (as determined by a court
of competent jurisdiction), shall not put the Issuing Bank under any resulting
liability to the Borrower.
Notwithstanding anything to the contrary contained in this Section
2.10(h), the Borrower shall have no obligation to indemnify the Issuing Bank in
respect of any liability incurred by the Issuing Bank arising solely out of the
gross negligence or willful misconduct of the Issuing Bank as determined by a
court of competent jurisdiction, or out of the wrongful dishonor by the Issuing
Bank of a proper demand for payment made under the Letters of Credit; provided
that the Issuing Bank shall use reasonable care to determine that the documents
and certificates required to be delivered under any Letter of Credit have been
delivered and that they comply on their face with the requirements of that
Letter of Credit.
46
(i) COMPUTATION OF INTEREST. Interest payable pursuant to this
Section 2.10 shall be computed on the basis of a 360-day year and the actual
number of days elapsed in the period during which it accrues.
SECTION 3. FEES.
3.01 FEES.
(a) COMMITMENT FEE. The Borrower agrees to pay to the Agent, for
distribution to each Bank in proportion to its Pro Rata Share, commitment fees
for the period from and including the Closing Date to but excluding the
Termination Date equal to the average of the daily unused portion of the
Revolving Loan Commitments multiplied by the Commitment Fee Percentage per
annum, such commitment fees to be calculated on the basis of a 360-day year and
the actual number of days elapsed and to be payable quarterly in arrears on and
to the first Business Day of each March, June, September and December commencing
on March 1, 1997 and upon the termination of the Revolving Loan Commitments.
Anything contained in this Agreement to the contrary notwithstanding,
for the purposes of calculating the commitment fees payable by the Borrower
pursuant to this Section 3.01(b), the "UNUSED PORTION OF THE REVOLVING LOAN
COMMITMENTS," as of any date of determination, after giving effect to any
scheduled principal reduction made on such date, shall be an amount equal to the
aggregate amount of the Revolving Loan Commitments as of such date minus the
aggregate principal amount of all outstanding Revolving Loans and the Letter of
Credit Usage on such date, and the unused portion of the Revolving Loan
Commitments shall not be reduced by (i) reason of the Borrower's inability to
satisfy the conditions precedent set forth in Section 5 and consequent inability
to borrow Loans hereunder or (ii) the aggregate principal amount of all
outstanding Swing Line Loans.
(b) OTHER FEES. The Borrower agrees to pay to the Agent such other
fees in the amounts and at the times separately agreed upon between the Borrower
and the Agent.
SECTION 4. PREPAYMENTS AND REDUCTIONS IN COMMITMENTS; PAYMENTS.
4.01 SCHEDULED REDUCTIONS IN REVOLVING LOAN COMMITMENTS. The
Revolving Loan Commitments shall be permanently reduced on the dates and in the
amounts set forth below:
47
Scheduled Reduction of
Date Revolving Loan Commitments
---- --------------------------
December 1, 1998 $10,000,000
March 1, 1999 $8,750,000
June 1, 1999 $8,750,000
September 1, 1999 $8,750,000
December 1, 1999 $8,750,000
March 1, 2000 $10,000,000
June 1, 2000 $10,000,000
September 1, 2000 $10,000,000
December 1, 2000 $10,000,000
March 1, 2001 $10,000,000
June 1, 2001 $10,000,000
September 1, 2001 $10,000,000
December 1, 2001 $10,000,000
The scheduled reductions of the Revolving Loan Commitments set forth in
this Section 4.01 shall be reduced in connection with any voluntary or mandatory
reductions of the Revolving Loan Commitments in accordance with Section 4.03(e).
4.02 PREPAYMENTS; VOLUNTARY AND MANDATORY REDUCTIONS IN REVOLVING
LOAN COMMITMENTS.
(a) VOLUNTARY PREPAYMENTS. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part from time to
time on the following terms and conditions: (i) the Borrower shall deliver to
the Agent at its Notice Office prior notice of its intent to prepay the Loans
and the amount of such prepayment no later than 12:00 Noon (New York time) one
Business Day in advance of the proposed prepayment date (in the case of a Base
Rate Loan) and three Business Days in advance of the proposed prepayment date
(in the case of a Eurodollar Rate Loan), which notice the Agent shall promptly
transmit to each of the Banks, (ii) Eurodollar Rate Loans may be prepaid only on
the expiration of the Interest Period applicable thereto and (iii) the Borrower
may prepay Swing Line Loans at any time in full or in part without notice or
penalty (Swing Line Loans prepaid after 12:00 Noon (New York time) shall be
charged interest through and including the date of such prepayment). Any such
voluntary prepayment shall be applied as specified in Section 4.03(a).
(b) VOLUNTARY REDUCTIONS OF REVOLVING LOAN COMMITMENTS. The Borrower
shall have the right, at any time and from time to time, to terminate in whole
or permanently reduce in part, without premium or penalty, the Revolving Loan
Commitments in an amount up to the amount by which the Total Revolving Loan
Commitments exceed the Total Utilization of Revolving Loan Commitments. The
Borrower shall give not less than three Business Days' prior written notice to
the Agent designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any partial reduction. Promptly after
receipt of a notice of such termination or partial reduction, the Agent shall
notify each Bank of the proposed termination or reduction. Such termination or
partial reduction of the Revolving Loan
48
Commitments shall be effective on the date specified in the Borrower's notice
and shall reduce the Revolving Loan Commitment of each Bank proportionately to
its Pro Rata Share. Any such partial reduction of the Revolving Loan Commitments
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$100,000 in excess of that amount unless the remaining amount of the Revolving
Loan Commitments is less than $1,000,000 in which case such reduction shall be
in the amount of the then remaining Revolving Loan Commitments.
(c) MANDATORY PREPAYMENTS AND MANDATORY REDUCTIONS OF REVOLVING LOAN
COMMITMENTS. The Loans shall be prepaid and/or the Revolving Loan Commitments
shall be permanently reduced in the amounts and under the circumstances set
forth below, all such prepayments and/or reductions to be applied as set forth
below or as more specifically provided in Section 4.03:
(i) Prepayments and Reductions Due to Issuance of Debt
Securities. No later than the first Business Day following the date of
receipt by the Borrower or any of its Wholly-Owned Subsidiaries of the
cash proceeds (net of underwriting discounts and commissions and other
reasonable costs associated therewith) from the issuance of any debt
Securities of the Borrower or any of its Wholly-Owned Subsidiaries,
respectively, the Borrower shall prepay the Loans and/or the Revolving
Loan Commitments shall be permanently reduced in an aggregate amount
equal to 100% of such net cash proceeds. Concurrently with any
prepayment of the Loans and/or reduction of the Revolving Loan
Commitments pursuant to this Section 4.02(c)(i), the Borrower shall
deliver to Agent an Officers' Certificate demonstrating the calculation
of the net cash proceeds that gave rise to such prepayment and/or
reduction. In the event that the Borrower shall subsequently determine
that the actual net cash proceeds were greater than the amount set forth
in such Officers' Certificate, the Borrower shall promptly make an
additional prepayment of the Loans (and/or, if applicable, the Revolving
Loan Commitments shall be permanently reduced) in an amount equal to the
amount of such excess, and the Borrower shall concurrently therewith
deliver to Agent an Officers' Certificate demonstrating the derivation
of the additional net cash proceeds resulting in such excess.
(ii) Prepayments Due to Reductions or Restrictions of
Revolving Loan Commitments. The Borrower shall from time to time prepay
first the Swing Line Loans and second the Revolving Loans to the extent
necessary to give effect to the limitations set forth in Sections
2.01(a) and 2.02(a).
4.03 APPLICATION OF PREPAYMENTS.
(a) APPLICATION OF VOLUNTARY PREPAYMENTS BY TYPE OF LOANS AND
49
ORDER OF MATURITY. Any voluntary prepayments pursuant to Section 4.02(a) shall
be applied as specified by the Borrower in the applicable notice of prepayment;
provided that in the event the Borrower fails to specify the Loans to which any
such prepayment shall be applied, such prepayment shall be applied first to
repay outstanding Swing Line Loans to the full extent thereof and second to
repay outstanding Revolving Loans to the full extent thereof.
(b) APPLICATION OF MANDATORY PREPAYMENTS BY TYPE OF LOANS. Any
amount (the "APPLIED AMOUNT") required to be applied as a mandatory prepayment
of the Loans and/or a reduction of the Revolving Loan Commitments pursuant to
Section 4.02(c)(i) shall be applied first to prepay the Swing Line Loans to the
full extent thereof and to permanently reduce the Revolving Loan Commitments by
the amount of such prepayment and second, to the extent of any remaining portion
of the Applied Amount, to prepay the Revolving Loans to the full extent thereof
and to further permanently reduce the Revolving Loan Commitments by the amount
of such prepayment, and third, to the extent of any remaining portion of the
Applied Amount, to further permanently reduce the Revolving Loan Commitments to
the full extent thereof.
(c) APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND EURODOLLAR
RATE LOANS. Any prepayment of the Revolving Loans shall be applied first to Base
Rate Loans to the full extent thereof before application to Eurodollar Rate
Loans, in each case in a manner which minimizes the amount of any payments
required to be made by the Borrower pursuant to Section 2.09(e).
(d) APPLICATION OF PREPAYMENTS TO PRINCIPAL AND INTEREST. All
payments in respect of the principal amount of any Loan shall include payment of
accrued interest on the principal amount being repaid or prepaid, and all such
payments (and, in any event, any payments in respect of any Loan on a date when
interest is due and payable with respect to such Loan) shall be applied to the
payment of interest before application to principal.
(e) APPLICATION OF UNSCHEDULED REDUCTIONS OF REVOLVING LOAN
COMMITMENTS. Any reductions of the Revolving Loan Commitments pursuant to
Section 4.02(b) and Section 4.02(c) shall be applied to reduce on a pro rata
basis each scheduled reduction in the Revolving Loan Commitments set forth in
Section 4.01 that is remaining at the time of such reduction in the Revolving
Loan Commitments; provided that each such scheduled reduction in the Revolving
Loan Commitments shall be reduced in a minimum amount of $100,000 and in
integral multiples of $10,000 in excess thereof and any remaining amount to be
applied to the scheduled reductions in the Revolving Loan Commitments shall be
applied to the last scheduled reduction.
4.04 GENERAL PROVISIONS REGARDING PAYMENTS.
(a) METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made (i)
subject to the second paragraph of Section 4.04(c), in the case of any Swing
Line
50
Loan to the Swing Line Bank, and (ii) to the Agent for the account of the Bank
or the Banks entitled thereto not later than 1:00 P.M. (New York time), on the
date when due and shall be made in Dollars in immediately available funds at the
Payment Office of the Agent. Whenever any payment to be made hereunder or under
any Note shall be stated to be due on a day that is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder or under any Note or of the commitment or other fees
hereunder, as the case may be; provided, however, that if the day on which
payment relating to a Eurodollar Rate Loan is due is not a Business Day but is a
day of the month after which no further Business Day occurs in that month, then
the due date thereof shall be the next preceding Business Day. The Borrower and
the Swing Line Bank shall give the Agent prompt notice of each Swing Line Loan
and any payment thereof. All voluntary prepayments shall be made in an aggregate
minimum amount of $100,000 and integral multiples of $10,000 in excess of that
amount.
(b) NET PAYMENTS. All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
(c) APPORTIONMENT OF PAYMENTS. Aggregate principal and interest
payments shall be apportioned among all outstanding Loans to which such payments
relate, and such payments shall be apportioned ratably to the Banks,
proportionately to the Banks' respective Pro Rata Shares, except in the case of
payments with respect to a Swing Line Loan, which shall be paid only to the
Swing Line Bank. The Agent promptly shall distribute to each Bank at its primary
address set forth below its name on the appropriate signature page hereof or
such other address as any Bank may request its share of all such payments
received by the Agent and the commitment and loan fees of such Bank when
received by the Agent pursuant to Section 3.01.
Anything contained in this agreement to the contrary notwithstanding,
upon the occurrence and during the continuance of any Event of Default specified
in Section 9 or after the acceleration of the maturity of the Loans and the
other amounts referred to in Section 9 or termination of the Revolving Loan
Commitments, all payments relating to the Loans and the other Obligations shall
be made to the Agent for the account of the Banks and all amounts received by
the Agent that are to be applied to the payment of the Obligations shall be
distributed first to the Swing Line Bank to the extent of the unpaid principal
of, and accrued interest on, Swing Line Loans and second to the Banks in such a
manner that each Bank receives its Pro Rata Share of such amounts based on the
outstanding principal amounts of all Revolving Loans then outstanding and the
amount of all other Obligations then payable.
SECTION 5. CONDITIONS PRECEDENT.
5.01 CONDITIONS TO EFFECTIVENESS. This Agreement shall become effective
only upon satisfaction of all of the following conditions:
51
(a) EXECUTION OF AGREEMENT; CREDIT DOCUMENTS; NOTES. The Agent shall
have received: (i) an original of this Agreement (whether the same or different
copies) duly executed by the Borrower, each Bank and the Agent, (ii) an original
Revolving Note made to the order of each Bank duly executed by the Borrower in
the amount, maturity and as otherwise provided herein, (iii) an original Swing
Line Note made to the order of the Swing Line Bank duly executed by the
Borrower, and (iv) to the extent not already received, signed copies of the
other Credit Documents (whether the same or different copies) duly executed by
the parties thereto.
(b) NO DEFAULT; REPRESENTATION AND WARRANTIES; MATERIAL ADVERSE
CHANGES. All representations and warranties of the Borrower and its Subsidiaries
set forth in this Agreement and in each of the other Credit Documents shall be
true, correct and complete in all material respects on and as of the Closing
Date and after giving effect to the transactions contemplated to occur on such
date, and the Borrower shall have delivered to the Agent an Officer's
Certificate, dated as of the Closing Date, signed by the President or Vice
President of the Borrower, and attested to by the Secretary or any Assistant
Secretary of the Borrower, in form and substance satisfactory to the Agent, to
the effect that on and as of the Closing Date and after giving effect to the
transactions contemplated to occur on such date, (i) no Default or Event of
Default shall have occurred and be continuing, (ii) all representations and
warranties contained herein and in the other Credit Documents are true, correct
and complete in all material respects and (iii) no material adverse change has
occurred in the business, operations, properties, assets or condition (financial
or otherwise) or prospects of any of the Borrower and its Subsidiaries taken as
whole since December 31, 1995.
(c) CORPORATE DOCUMENTS; PROCEEDINGS.
(i) On the Closing Date, the Agent shall have received a
certificate, dated the Closing Date, signed by the President or Vice President
of the Borrower, and attested to by the Secretary or any Assistant Secretary of
the Borrower, in form and substance satisfactory to the Agent, certifying (A)
resolutions of the Board of Directors of the Borrower authorizing and approving
this Agreement, the Notes, the other Credit Documents and the transactions
contemplated hereby, (B) the signatures and incumbency of the Borrower's
officers executing this Agreement, the Notes, any other Credit Documents to
which the Borrower is a party and the documents, instruments or other
certificates to be delivered in connection with this Agreement and the other
Credit Documents, and (C) the Certificate of Incorporation and By-Laws of the
Borrower together with copies of the Certificate of Incorporation and By-Laws of
the Borrower and the resolutions of the Borrower referred to in such
certificate.
(ii) On the Closing Date, the Agent shall have received a
52
certificate, dated the Closing Date, signed by the President or Vice President
of each of the Borrower's Subsidiaries party to any Credit Document, and
attested to by the Secretary or any Assistant Secretary of such Subsidiary, in
form and substance satisfactory to the Agent, certifying (A) the resolutions
adopted by the Board of Directors of such Subsidiary approving and authorizing
the Subsidiary Guaranty, the Subsidiary Security Agreement, the Subsidiary
Pledge Agreement, the Trademark Security Agreement and the transactions
contemplated thereby and by this Agreement, (B) the signatures and incumbency of
the officers of such Subsidiary executing the Credit Documents to which such
Subsidiary is a party and the documents, instruments or other certificates to be
delivered in connection with this Agreement and the other Credit Documents, and
(C) the Articles or Certificate of Incorporation or other charter documents and
By-Laws of such Subsidiary, together with copies of the Articles or Certificate
of Incorporation or other charter documents and By-Laws of such Subsidiary and
the resolutions of such Subsidiary referred to in such certificate.
(iii) On the Closing Date, the Agent shall have received
copies of the Articles or Certificate of Incorporation or other charter
documents of each of the Borrower and each of the Borrower's Subsidiaries party
to any Credit Document, certified as of a recent date prior to delivery by the
Secretary of State of its jurisdiction of incorporation, together with a good
standing certificate from its jurisdiction of incorporation dated a recent date
prior to delivery.
(iv) All corporate, partnership and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Credit Documents shall be satisfactory in form and
substance to the Banks, and the Agent shall have received all information and
copies of all documents and papers, including records of corporate proceedings
and governmental approvals, if any, that any Bank reasonably may have requested
in connection therewith, such documents and papers as appropriate to be
certified by proper corporate, partnership or governmental authorities.
(d) PERFECTION OF SECURITY INTERESTS. The Borrower and the Active
Subsidiaries shall have taken or caused to be taken such actions in such a
manner so that the Agent has or maintains a valid and perfected first priority
security interest in all Collateral (subject to Liens consented to by the
Required Banks with respect to such Collateral and other Liens permitted by
Section 8.01) encumbered or to be encumbered under the Credit Documents. Such
actions shall include, without limitation: (i) the delivery, to the extent not
theretofore delivered, pursuant to the applicable Credit Documents by the
Borrower and the Active Subsidiaries of such certificates (which certificates
shall be registered in the name of the Agent or properly endorsed in blank for
transfer or accompanied by irrevocable undated stock powers duly endorsed in
blank, all in form and substance satisfactory to the Agent) representing all of
the capital stock required to be pledged pursuant to the Credit Documents; (ii)
the delivery, to the extent not theretofore delivered, pursuant to the
applicable Credit Documents by the
53
Borrower and the Active Subsidiaries of such promissory notes (which promissory
notes shall be endorsed to the order of the Agent, all in form and substance
satisfactory to the Agent) representing all of the pledged debt required to be
pledged pursuant to the Credit Documents; (iii) the delivery, to the extent not
theretofore delivered, to the Agent of Uniform Commercial Code financing
statements executed by the Borrower and the Active Subsidiaries as to the
Collateral granted by the Borrower and the Active Subsidiaries for all
jurisdictions as may be necessary or desirable to perfect the Agent's security
interest in such Collateral; and (iv) evidence reasonably satisfactory to the
Agent that all other filings (including, without limitation, filings with the
United States Patent and Trademark Office), recordings and other actions the
Agent deems necessary or advisable to establish, preserve and perfect the first
priority Liens (subject to Liens permitted under this Agreement or consented to
by the Required Banks with respect to such Collateral) granted to the Agent in
personal and mixed property shall have been made.
(e) MARGIN RATE DETERMINATION CERTIFICATE. The Borrower shall have
delivered a Margin Rate Determination Certificate calculated using consolidated
financial statements of the Borrower dated September 30, 1996.
(f) PAYMENT OF FEES. The Borrower shall have paid the Fees required
by Section 3.01 to be paid on or prior to the Closing Date.
(g) FINANCIAL STATEMENTS. The Agent and the Banks shall have
received (i) audited consolidated balance sheets (and the related consolidated
statements of operations and statements of changes in stockholders' equity) of
(x) the Borrower and its Consolidated Subsidiaries for the fiscal years ended
February 28, 1994 and 1995 and the ten-month period ended December 31, 1995 and
(y) Symphony for the fiscal years ended December 31, 1994 and 1995; and (ii)
unaudited consolidated balance sheets (and the related consolidated statements
of operations and statements of changes in stockholders' equity) of the Borrower
and its Consolidated Subsidiaries for the nine-month period ended September 30,
1996.
(h) EXISTING AND CONTINUING INDEBTEDNESS.
(i) The Agent shall have received evidence, in form and substance
satisfactory to it, of (x) the termination of the Existing Credit Agreement and
(y) the payment by Borrower of all amounts and obligations due under the
Existing Credit Agreement.
(ii) The Existing Indebtedness that shall remain outstanding after
the Closing Date shall be as set forth on SCHEDULE 8.04(II) annexed hereto, and
the Borrower shall have delivered to the Agent an Officers' Certificate to such
effect.
(i) SATISFACTION OF CONDITIONS TO FUNDING. All conditions precedent
to the making of Loans and the issuance of Letters of Credit described in
Section
54
5.02 shall be satisfied on and as of the Closing Date with respect to
the Revolving Loans and Swing Line Loans, if any, to be made, and the
Letters of Credit to be issued, on such date.
(j) OPINIONS OF COUNSEL. On the Closing Date, the Agent
shall have received from: (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & Manner,
P.C., counsel to the Borrower, an opinion substantially in the form
annexed hereto as EXHIBIT Q; and (ii) Kronish, Lieb, Weiner & ▇▇▇▇▇▇▇
LLP, counsel to Borrower, an opinion substantially in the form annexed
hereto as EXHIBIT R; in each case addressed to each of the Banks and
dated the date of delivery, covering such matters incident to the
transactions contemplated herein as the Agent may reasonably request.
(k) ENVIRONMENTAL MATTERS. The Agent and the Banks shall
have received reports and other information, in form, scope and
substance satisfactory to the Agent and the Banks, concerning any
environmental liabilities of Borrower and its Subsidiaries.
All the Notes, certificates, legal opinions and other documents
and papers referred to in this Section 5, unless otherwise specified, shall be
delivered to the Agent for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and shall be
satisfactory in form and substance to the Banks.
5.02 CONDITIONS TO ALL LOANS AND LETTERS OF CREDIT. The
obligations of the Banks to make Revolving Loans, the Swing Line Bank to make
Swing Line Loans and the Issuing Bank to issue Letters of Credit on each Funding
Date are subject to the following further conditions precedent:
(a) The Agent or Issuing Bank shall have received, in
accordance with the provisions of Sections 2.01(b) or 2.10(b), as the
case may be, before that Funding Date, an originally executed Notice of
Revolver Borrowing or Notice of Issuance of Letter of Credit, as the
case may be (or, in the case of a Swing Line Loan, the Swing Line Bank
shall have received an executed Notice of Swing Line Borrowing), in each
case signed by the Chief Executive Officer, the Chief Financial Officer
or the Treasurer of the Borrower or by any officer of the Borrower
designated by the Board of Directors of the Borrower or any of the
above-described officers on behalf of the Borrower in writing delivered
to the Agent. The obligation of the Issuing Bank to issue any Letter of
Credit is subject to the further condition precedent that on or before
the date of issuance of such Letter of Credit, the Issuing Bank shall
have received, in accordance with the provisions of Section 2.10(b), all
other information specified in Section 2.10(b) and such other documents
as the Issuing Bank reasonably may require in connection with the
issuance of such Letter of Credit.
(b) As of the Funding Date:
55
(i) The representations and warranties contained herein
shall be true, correct and complete in all material respects on and as
of that Funding Date to the same extent as though made on and as of that
date taking into account any amendments to the Schedules or Exhibits
hereto as a result of any disclosures made by the Borrower to the Agent
and the Banks after the Closing Date approved by the Agent and the
Required Banks in their reasonable discretion;
(ii) No event shall have occurred and be continuing or would
result from the consummation of the borrowing contemplated by such
Notice of Revolver Borrowing or the issuance of such Letter of Credit
that would constitute a Default or an Event of Default;
(iii) The Borrower shall have performed in all material
respects all agreements and satisfied all conditions that this Agreement
provides shall be performed by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Bank (or,
in the case of a Swing Line Loan, the Swing Line Bank) from making the
Revolving Loans or the Issuing Bank from issuing the Letter of Credit
(or, in the case of a Swing Line Loan, making a Swing Line Loan); and
(v) The making of the Loans or the issuing of the Letter of
Credit requested on such Funding Date shall not violate any law,
including, without limitation, Regulation G, Regulation T, Regulation U
or Regulation X of the Board of Governors of the Federal Reserve System.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Banks to enter into this Agreement and to maintain and make the
Loans, the Borrower makes the following representations, warranties and
agreements, which shall survive the execution and delivery of this Agreement and
the Notes and the making of the Loans:
6.01 CORPORATE STATUS. Each of the Borrower and the Active
Subsidiaries (i) is a duly organized and validly existing corporation,
partnership or association, as the case may be, in good standing under the laws
of the jurisdiction of its incorporation, (ii) has the power and authority to
own its property and assets and to transact the business in which it is engaged
and (iii) is duly qualified as a foreign corporation, partnership or
association, as the case may be, and in good standing in each jurisdiction where
its ownership, leasing or operation of property or the conduct of its business
requires such qualification, except if the failure to be so qualified could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole. None of the Inactive
Subsidiaries conducts any
56
business or owns any assets that are, in the aggregate, material to the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole. None of the
Borrower and any of the Subsidiaries owns, actively uses or claims any rights to
any registered service ▇▇▇▇, trademark or tradename (other than those listed in
Schedule I to the Trademark Security Agreement).
6.02 CORPORATE POWER AND AUTHORITY. The Borrower and each of its
Subsidiaries has the corporate, partnership or other power to execute, deliver
and perform the terms and provisions of each of the Credit Documents to which it
is a party and has taken all necessary corporate, partnership or other action to
authorize the execution, delivery and performance by it of each of such Credit
Documents. The Borrower and each of its Subsidiaries has duly executed and
delivered each of the Credit Documents to which it is party, and each of such
Credit Documents constitutes the legal, valid and binding obligation of the
Borrower or such Subsidiary, as the case may be, enforceable against the
Borrower or such Subsidiary, as the case may be, in accordance with its terms
except as the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting creditors' rights
generally and by general equitable principles (regardless of whether the issue
of enforceability is considered in a proceeding in equity or at law). The
Borrower and each Subsidiary making any Acquisition shall have the corporate,
partnership or other power to consummate such Acquisition upon the consummation
thereof, on the terms set forth in any applicable purchase agreement, agreement
of merger or other operative agreement. Upon the consummation of any
Acquisition, such Acquisition shall have been duly authorized by all necessary
action of the Borrower and any of its Subsidiaries participating therein.
6.03 NO VIOLATION. Neither the execution, delivery or performance by
the Borrower or a Subsidiary of the Borrower of the Credit Documents to which it
is a party, nor compliance by it with the terms and provisions of any such
Credit Documents, nor the consummation of any Acquisition, upon the consummation
thereof, (i) will contravene any provision of any law, statute, rule or
regulation or any order, writ, injunction or decree of any court or governmental
instrumentality (except, in the case of the consummation of any Acquisition, as
could not reasonably be expected to have a material adverse effect on the
business, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole), (ii) will
conflict or be inconsistent with or result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under (except,
in the case of the consummation of any Acquisition, as could not reasonably be
expected to have a material adverse effect on the business, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole), or result in the creation or imposition of
(or the obligation to create or impose) any Lien (other than Liens permitted
under Section 8.01) upon any of the property or assets of the Borrower or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement, loan agreement or any other agreement, contract or
instrument to which the Borrower or any of its Subsidiaries is a party or by
which it or
57
any of its property or assets is bound or to which it may be subject or (iii)
will violate any provision of the Certificate of Incorporation or By-Laws (or
other documents of formation and governance, as the case may be) of the Borrower
or any of its Subsidiaries.
6.04 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made prior to the Closing Date), or exemption
by, any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance by the Borrower or any of its Subsidiaries of any
Credit Document to which the Borrower or any of such Subsidiaries is a party,
(ii) the legality, validity, binding effect or enforceability of any such Credit
Document or (iii) any Acquisition, except filings, approvals and authorizations
that shall have been made or obtained prior to the consummation of such
Acquisition or for which arrangements shall have been made for the subsequent
issuance thereof within four weeks of the closing of such Acquisition (or, if an
additional period is necessary such additional period as is satisfactory to the
Agent) except, in any case, filings, approvals and authorizations that could not
reasonably be expected to have a material adverse effect on the business,
operations, properties, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
6.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; ETC.
(a) The financial statements delivered to the Banks pursuant to
Section 5.01(g) present fairly the consolidated financial condition of the
Borrower and its Consolidated Subsidiaries and, to Borrower's knowledge, of
Symphony as at the respective dates thereof and the consolidated results of
operations and changes in financial condition of the Borrower and its
Consolidated Subsidiaries and, to Borrower's knowledge, of Symphony for each of
the periods covered thereby, subject (in the case of any unaudited interim
financial statements) to changes resulting from normal year-end adjustments. All
such consolidated financial statements have been prepared in accordance with
generally accepted accounting principles and practices consistently applied
(subject, in the case of such unaudited consolidated financial statements, to
ordinary year-end adjustments and footnotes).
(b) Except as fully reflected in the financial statements described
in Section 6.05(a) or in SCHEDULE 6.05, there were as of the Closing Date no
liabilities or obligations with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) that, either individually or in aggregate,
would be material to the Borrower and its Subsidiaries taken as a whole. Except
as set forth in SCHEDULE 6.05, as of the Closing Date the Borrower does not know
of any basis for the assertion against the Borrower or any of its Subsidiaries
of any liability or obligation of any nature whatsoever that is not fully
reflected in the financial statements described in Section 6.05(a) that, either
58
individually or in the aggregate, would be material to the Borrower and its
Subsidiaries taken as a whole.
6.06 LITIGATION. Except as set forth on SCHEDULE 6.06, there is no
action, suit or arbitration or other proceeding pending or, to the best
knowledge of the Borrower, threatened with respect to (i) any Credit Document,
(ii) any tax return, (iii) any Acquisition that has been consummated, if any, or
(iv) any other matter that, if adversely determined, is reasonably likely to
materially and adversely affect the business, operations, property, assets,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
6.07 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as
a whole) heretofore or contemporaneously furnished by the Borrower or on behalf
of the Borrower with its knowledge in writing to any Bank (including, without
limitation, all information contained in the Credit Documents) for purposes of
or in connection with this Agreement or any transaction contemplated herein
(including, without limitation, any Acquisition) is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of the
Borrower in writing to any Bank will be, true and accurate in all material
respects on the date as of which such information is dated and not incomplete by
omitting to state any fact necessary to make such information (taken as a whole)
not materially misleading at such time in light of the circumstances under which
such information was provided.
6.08 USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of the Loans
and any Letters of Credit have been and will be used by the Borrower for the
purposes set forth in Section 2.08; provided that no part of the proceeds of any
Loan or any Letter of Credit was or will be used by the Borrower to purchase or
carry any Margin Stock or to extend credit to others for the purpose of
purchasing or carrying any Margin Stock. Neither the making of any Loan or the
issuance of any Letter of Credit nor the use of the proceeds thereof will
violate or be inconsistent with the provisions of Regulations G, T, U or X of
the Board of Governors of the Federal Reserve System.
6.09 TAX RETURNS AND PAYMENTS. Each of the Borrower and its
Subsidiaries has filed all tax returns required to be filed by it and has paid
all income taxes payable by it that have become due pursuant to such tax returns
and all other taxes and assessments payable by it that have become due, other
than those not yet delinquent, those being contested in good faith and those
listed on SCHEDULE 6.06.
6.10 COMPLIANCE WITH ERISA. Each Plan is in substantial compliance
with ERISA; no Plan is insolvent or in reorganization; no Plan has an Unfunded
Current Liability, no Plan has an accumulated or waived funding deficiency or
permitted decreases in its funding standard account within the meaning of
Section 412 of the Code; neither the Borrower nor any Subsidiary of the Borrower
nor ERISA Affiliate has incurred any material liability to or on account of a
Plan pursuant to Sections 502(c), (i) or (l), 515, 4062, 4063, 4064, 4071, 4201
or 4204 of ERISA or Chapter 43 of the Code or expects to incur any liability
under any of the foregoing sections; no
59
proceedings have been instituted to terminate any Plan; no condition exists that
presents a material risk to the Borrower or any of its Subsidiaries of incurring
a liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; no Lien imposed under the Code or ERISA on the assets of the
Borrower or any of its Subsidiaries exists or is likely to arise on account of
any Plan; the Borrower and its Subsidiaries may terminate contributions to any
other employee benefit plans maintained by them without incurring any material
liability to any Person interested therein; and no Plan has received notice from
the Internal Revenue Service of the failure of such Plan to qualify under
Section 401(a) of the Code.
6.11 CAPITALIZATION. The authorized capital stock of the Borrower
consists of 50 million shares of common stock, $0.01 par value per share, of
which 31,104,889 shares were issued and outstanding as of November 4, 1996 and
500,000 shares of preferred stock, $0.01 par value per share, of which none are
issued and outstanding. All such outstanding shares have been duly and validly
issued, are fully paid and non-assessable. The Borrower does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock except as described on SCHEDULE 6.11 or as issued under any
employee stock option plan of the Borrower and reported to the Agent each fiscal
quarter.
6.12 SUBSIDIARIES. On the Closing Date, the corporations listed on
SCHEDULE 6.12 and the associations or joint ventures listed on SCHEDULE 6.21 are
the only Subsidiaries of the Borrower. SCHEDULE 6.12 and SCHEDULE 6.21 correctly
set forth, as of the Closing Date, the percentage ownership (direct and
indirect) of the Borrower in each class of capital stock or partnership
interests of each of its Subsidiaries and also identify the direct owner
thereof.
6.13 COMPLIANCE WITH STATUTES, ETC. Except as disclosed on SCHEDULE
6.13, each of the Borrower and its Subsidiaries is in compliance with all
applicable statutes, regulations and orders of, and all applicable restrictions
imposed by, all governmental bodies, domestic or foreign, in respect of the
conduct of its business and the ownership of its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls and the delivery of and payment for pharmaceutical and
healthcare goods and services of the type provided by the Borrower and its
Subsidiaries), except such noncompliances as could not, in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects of
the Borrower and its Subsidiaries taken as a whole.
6.14 INVESTMENT COMPANY ACT. Neither the Borrower nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
60
6.15 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Borrower nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
6.16 LABOR RELATIONS. Neither the Borrower nor any of its
Subsidiaries nor, to the best of the Borrower's knowledge at the time of any
Acquisition, the Target of such Acquisition, is engaged in any unfair labor
practice that would (upon giving effect to such Acquisition) have a material
adverse effect on the Borrower and its Subsidiaries taken as a whole. There is
(i) no significant unfair labor practice complaint pending or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries or, to the best knowledge of the Borrower at the time of any
Acquisition, the Target of such Acquisition, before the National Labor Relations
Board, and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending or, to
the best knowledge of the Borrower, threatened against the Borrower or any of
its Subsidiaries or, to the best of knowledge of the Borrower at the time of any
Acquisition, the Target of such Acquisition, (ii) no significant strike, labor
dispute, slowdown or stoppage pending or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower at the time of any Acquisition, the Target of such
Acquisition, and (iii) to the best knowledge of the Borrower, no union
representation question existing with respect to the employees of the Borrower
or any of its Subsidiaries and, to the best knowledge of the Borrower, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as would not (upon giving effect to such Acquisition) have a
material adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
6.17 PATENTS, LICENSES, FRANCHISES AND FORMULAS. Except as set forth
on SCHEDULE 6.17, each of the Borrower and the Active Subsidiaries owns all the
patents, trademarks, permits, service marks, trade names, copyrights, licenses,
franchises and formulas, or rights with respect to the foregoing, and has
obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business. Except as set forth on
SCHEDULE 6.17, no proceedings, claims, actions or oppositions have been
instituted or are pending or, to the best of the Borrower's and its
Subsidiaries' knowledge, after due inquiry, are threatened that challenge the
validity of the Borrower's or its Subsidiaries' use of such patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises and
formulas, or rights with respect to the foregoing, that would result in a
material adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
6.18 NO MATERIAL ADVERSE CHANGE. Except as set forth on SCHEDULE
6.18, since December 31, 1995, there has been no material adverse change in the
61
business, operations, properties, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole other than
change due to action expressly permitted by the terms of this Agreement.
6.19 FRAUD AND ABUSE. Except as disclosed on SCHEDULE 6.13, the
Borrower and its Subsidiaries, and, to the knowledge of the Borrower and its
Subsidiaries after reasonable inquiry, their respective officers and directors,
and persons who provide professional services under agreements with the Borrower
or any of its Subsidiaries have been and are in material compliance with federal
Medicare and Medicaid statutes, 42 U.S.C. ▇▇.▇▇. 1320a-7, 1320a-7(a), 1320a-7b
and 1395nn, as amended, and the regulations promulgated thereunder or related
state and local statutes and regulations and rules of professional conduct, and
have not at anytime:
(i) knowingly and willfully made or caused to be made a false
statement or representation of a material fact in any application for any
benefit or payment;
(ii) knowingly and willfully made or caused to be made any false
statement or representation of a material fact for use in determining rights
to any benefit or payment;
(iii) presented or caused to be presented a claim for reimbursement
for services under Medicare or Medicaid, or other state health care programs
that is for an item or service that is known or should be known to be (a) not
provided as claimed, or (b) false or fraudulent;
(iv) failed to disclose knowledge by a claimant of the occurrence of
any event affecting the initial or continued right to any benefit or payment
on its own behalf or on behalf of another, with intent fraudulently to secure
such benefit or payment;
(v) knowingly and willfully illegally offered, paid, solicited or
received any remuneration (including any kickback, bribe, or rebate),
directly or indirectly, overtly or covertly, in cash or in kind (a) in return
for referring an individual to a person for the furnishing or arranging for
the furnishing of any item or service for which payment may be made in whole
or in part by Medicare or Medicaid, or other state health care programs, or
(b) in return for purchasing, leasing or ordering or arranging for or
recommending purchasing, leasing or ordering any good, facility, service, or
item for which payment may be made in whole or in part by Medicare or
Medicaid or other state health care programs;
(vi) knowingly made a payment, directly or indirectly, to a physician
as an inducement to reduce or limit services to individuals who are under the
direct care of the physician and who are entitled to benefits under Medicare
or Medicaid, or other state health care programs;
62
(vii) provided to any person information that is known or should be
known to be false or misleading that could reasonably be expected to
influence the decision when to discharge a hospital in-patient from the
hospital;
(viii) knowingly and willfully made or caused to be made or induced or
sought to induce the made of any false statement or representation (or
omitted to state a fact required to be stated therein or necessary to make
the statements contained therein not misleading) of a material fact with
respect to (a) the conditions or operations of a facility in order that the
facility may qualify for Medicare or Medicaid or other state health care
program certification, or (b) information required to be provided under ss.
1124A of the Social Security Act (42 U.S.C. ss.1320a-3);
(ix) knowingly and willfully (a) charged for any Medicaid service,
money or other consideration at a rate in excess of the rates established by
the state, or (b) for services covered (in whole or in part) by Medicaid,
charged, solicited, accepted or received, in addition to amounts paid by
Medicaid, any gift, money, donation or other consideration (other than a
charitable, religious or philanthropic contribution from an organization or
from a person unrelated to the patient) (y) as a precondition of treating the
patient, or (z) as a requirement for the patient's continued treatment;
(x) completed Certificates of Medical Necessity on behalf of
physicians in violation of the Health Care Financing Administration's
carrier directives prohibiting home health care providers from so doing;
(xi) violated the federal Food, Drug and Cosmetic Act and the
so-called "pharmacy exemption" contained therein and the FDA's Compliance
Policy Guide Number 7132.16 entitled "Manufacture, Distribution, and
Promotion of Adulterated, Misbranded, or Unapproved New Drugs for Human Use
by State-Licensed Pharmacies;" or
(xii) violated the FDA's guidelines or OSHA regulations including
those in connection with any oxygen filling stations maintained or operated
by the Borrower or any of its Subsidiaries and 29 C.F.R. 1910, 1030
Occupational Exposure to Bloodborne Pathogens;
such that the actions or inactions in the foregoing clauses (i) through (xii),
individually or in the aggregate, would have a material adverse effect on the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries, taken as a whole.
6.20 TITLE TO PROPERTIES; LIENS. The Borrower and its Subsidiaries
have good, sufficient and legal title to all of their respective properties and
assets reflected in the most recent financial statements delivered pursuant to
Section 5.01(g), except for assets disposed of since the date of such financial
statements in the Ordinary Course
63
of Business or as otherwise permitted under Section 8.02. Except as permitted by
this Agreement, all such properties and assets are free and clear of Liens.
6.21 JOINT VENTURES. Except as set forth on SCHEDULE 6.21, the
Borrower and its Subsidiaries are not party to any Joint Venture other than
Joint Ventures permitted under Section 8.05(vi).
6.22 ACCOUNTS RECEIVABLE COLLATERAL. The Accounts Receivable and any
related reimbursement contracts with the payor of such Accounts Receivable have
not been satisfied, subordinated or rescinded in any manner (other than
settlements in the Ordinary Course of Business with payors of such Accounts
Receivable reached to facilitate collection); such Accounts Receivable were
created through the provision of services or merchandise supplied by either (a)
the Borrower and its Subsidiaries and the related charges were usual, customary
and reasonable, or (b) a Target of an Acquisition prior to such Acquisition and
the Borrower believes, after due investigation, that the related charges were
usual, customary and reasonable; such Accounts Receivable are owned by the
Borrower and its Subsidiaries free and clear of any adverse claim and the
Borrower and its Subsidiaries have the right to assign and transfer such
Accounts Receivable except as such assignment or transfer would be prohibited by
Section 1815(c) of the Social Security Act, 42 U.S.C. ss. 1395g(c) and the
regulations promulgated thereunder; and there are no procedures or
investigations pending or threatened before any Governmental Authority seeking a
determination or ruling that might affect the validity or enforceability of a
material portion of such Accounts Receivable subject to the review or
jurisdiction of such Governmental Authority.
SECTION 7. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees that
on and after the Closing Date and until the Loans and the Notes, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full and all Letters of Credit are cancelled, expired or otherwise
provided for to the satisfaction of the Issuing Bank:
7.01 INFORMATION COVENANTS. The Borrower will furnish to each Bank:
(a) QUARTERLY FINANCIAL STATEMENTS. Within 60 days (or 105 days in
the case of the fourth fiscal quarter) after the close of each quarterly
accounting period in each Fiscal Year, the consolidated balance sheets of the
Borrower and its Consolidated Subsidiaries as at the end of such quarterly
period and the related consolidated statements of operations and statements
of changes in stockholders' equity for the elapsed portion of the Fiscal Year
ended with the last day of such quarterly period and for such quarterly
period and setting forth comparative figures for the related periods in the
prior Fiscal Year for the statements of operations and cash flows, all of
which shall be certified by the Chief Executive Officer or the Chief
Financial Officer of the Borrower, subject to
64
normal year-end audit adjustments and, promptly, commencing with the quarter
ended December 31, 1996, the financial review provided quarterly to the Board
of Directors of the Borrower.
(b) ANNUAL FINANCIAL STATEMENTS. Within 105 days after the close of
each Fiscal Year, the consolidated balance sheets of the Borrower and its
Consolidated Subsidiaries as at the end of such Fiscal Year and the related
consolidated statements of operations and statements of changes in
stockholders' equity for such Fiscal Year, in each case setting forth
comparative figures for the preceding fiscal year and certified, in the case
of the consolidated financial statements, without qualification by
independent certified public accountants of recognized national standing
reasonably acceptable to the Required Banks (initially ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP),
together with a report of such accounting firm stating that in the course of
its regular audit of the financial statements of the Borrower, which audit
was conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge of any Default or Event of Default
related to accounting or financial reporting matters that has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or
Event of Default has occurred and is continuing, a statement as to the nature
thereof.
(c) MANAGEMENT LETTERS. Promptly after the Borrower's receipt
thereof, a copy of any "management letter" received by the Borrower from its
certified public accountants.
(d) PERFORMANCE PLAN. On or before February 15 of each year
(beginning February 15, 1997), a performance plan (a "PERFORMANCE PLAN") for
such year (in each case including forecast consolidated statements of income
and sources and uses of cash and balance sheets) prepared by the Borrower for
each quarter of each Fiscal Year beginning with the quarter ending March 31,
1997 and for the elapsed portion of such Fiscal Year ended with the last day
of each quarter accompanied by the statement of the Chief Executive Officer
or the Chief Financial Officer of the Borrower to the effect that, to the
best of such officer's knowledge, the Performance Plan is a reasonable
estimate and forecast for the period covered thereby.
(e) PERFORMANCE REPORTS. Within 60 days after the end of each fiscal
quarter (or 105 days after the end of the Fiscal Year), a performance report,
in a form reasonably satisfactory to the Banks, containing consolidated
balance sheets for the Borrower and its Subsidaries as a whole as at the end
of that quarter and the related consolidated statements of operations and
cash flows for the quarter and the elasped portion of the Fiscal Year ended,
and comparing actual results of operations and financial position to that
forecast in the Performance Plan for the quarter and for the elasped portion
of the Fiscal Year ended with the last day of that quarter, as the case may
be, setting forth comparative figures for related periods in the prior Fiscal
Year and stating the
65
reasons for any variance between the actual results of operations, financial
position and cash flows and forecasted results of operations, financial
position and cash flows and explanations of the variances that are adverse
to the Borrower or any of its Subsidiaries. Such performance report shall
also contain a statement of receivables (including an aging report) held by
the Borrower and its Subsidiaries as a whole.
(f) COMPLIANCE CERTIFICATES. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b) and the
quarterly performance reports provided for in Section 7.01(e), a Compliance
Certificate of the Chief Executive Officer or the Chief Financial Officer of
the Borrower to the effect that, to the best of such officer's knowledge, no
Default or Event of Default has occurred and is continuing or, if any Default
or Event of Default has occurred and is continuing, specifying the nature and
extent thereof, which Compliance Certificate also shall set forth the
calculations required to establish whether the Borrower was in compliance
with those provisions of Section 8 identified on the Compliance Certificate
at the end of such quarter, fiscal quarter or Fiscal Year, as the case may
be.
(g) NOTICE OF DEFAULT, LITIGATION OR HEALTH CARE COMPLIANCE.
Promptly, and in any event within three Business Days after any of the Chief
Executive Officer, Chief Financial Officer or Chief Operating Officer of the
Borrower obtains knowledge thereof, notice of (i) the occurrence of any event
that constitutes a Default or an Event of Default, (ii) any litigation or
governmental or arbitration proceeding pending (x) against the Borrower or
any of its Subsidiaries that could reasonably be expected to materially and
adversely affect the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries,
taken as a whole, or (y) with respect to any Credit Document or any
Acquisition then contemplated or already consummated by the Borrower or its
Subsidiaries, (iii) any material adverse changes in the status of any
litigation or other proceeding reported by the Borrower pursuant to Section
6.06 or this Section 7.01(g), (iv) any material claim, complaint, notice or
request for information received by the Borrower or any of its Subsidiaries
with respect to compliance with health care regulatory requirements relating
to the delivery of health care services of the type provided by the Borrower
and payment therefor (excluding malpractice claims), including, but not
limited to, any violation or alleged violation of any federal, state or local
statute, regulation, or ordinance relating to the delivery of medical
services and payment therefor, including, but not limited to, the
requirements set forth under federal Medicare and Medicaid statutes, 42
U.S.C. ▇▇.▇▇. 1320a-7, 1320a-7a, 1320a-7b and 1395nn, and the regulations
promulgated thereunder and related state or local statutes or regulations and
(v) any other event that could reasonably be expected to materially and
adversely affect the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries,
taken as a whole.
66
(h) OTHER REPORTS AND FILINGS. Promptly, copies of all financial
information, proxy materials and other information and reports, if any, that
the Borrower or any of its Subsidiaries shall file with the Securities and
Exchange Commission or any governmental agencies substituted therefor (the
"SEC").
(i) REPORTS OF ASSET TRANSFERS TO SUBSIDIARIES OR FORMATION OF JOINT
VENTURES. No later than 5 Business Days after (A) any transfer to any Joint
Venture or Subsidiary that is not a Guarantor Subsidiary of (i) any assets of
the Borrower or any of its Subsidiaries having a fair market value exceeding
$1,000,000 in the aggregate or (ii) any intangible assets material to the
business, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries and (B) the formation of any
Joint Venture or Subsidiary, the Borrower shall notify the Agent of the
nature of such transaction and the business purpose therefor.
(j) MARGIN RATE DETERMINATION CERTIFICATE. Concurrently with the
delivery of the financial statements required under Sections 7.01(a) and (b),
the Borrower shall deliver a Margin Rate Determination Certificate.
(k) ACQUISITION FINANCIALS. Within ten Business Days of any
Acquisition, an Officers' Certificate: (i) setting forth (w) the aggregate
consideration paid in such Acquisition, (x) any anticipated Divestitures, (y)
the amount of any notes representing Unsecured Seller Debt and (z) the amount
of Consolidated EBITDA of the Target and its Subsidiaries for each of the
immediately preceding four fiscal quarters that will be included by the
Borrower in its calculation of Consolidated Adjusted EBITDA under this
Agreement, which historical Consolidated EBITDA of the Target and its
Subsidiaries shall be based upon audited financial statements or shall be
otherwise reasonably satisfactory in substance to the Agent and the Required
Banks; and (ii) demonstrating compliance with the requirements of Section
8.02(iv); and (iii) attaching copies of the documentation regarding any
Unsecured Seller Debt.
(l) OTHER INFORMATION. From time to time, such other information or
documents (financial or otherwise) as any Bank reasonably may request.
7.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
accounting principles consistently applied and all requirements of law shall be
made of all dealings and transactions in relation to its business and
activities. The Borrower will, and will cause each of its Subsidiaries to,
permit officers and designated representatives of the Agent or any Bank to visit
and inspect, under guidance of officers of the Borrower or such Subsidiary, any
of the properties of the Borrower or such Subsidiary, and to examine the books
of record and account of the Borrower or such Subsidiary and discuss the
affairs, finances and accounts of the Borrower or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all at such
67
reasonable times and intervals, with such reasonable notice and to such
reasonable extent as the Agent or such Bank may request.
7.03 MAINTENANCE OF PROPERTY, INSURANCE. SCHEDULE 7.03 sets forth a
true and complete listing of all insurance maintained by the Borrower and its
Subsidiaries as of the Closing Date and the amounts of such insurance. The
Borrower will, and will cause each of its Subsidiaries to, (i) keep all property
useful and necessary in its business in good working order and condition, (ii)
maintain with financially sound and reputable insurance companies insurance on
all its property and its directors and officers in at least such amounts and
against at least such risks as are described in SCHEDULE 7.03; provided that the
Borrower and its Subsidiaries may self-insure against risks consistent with
standard industry practices for companies in the same or similar businesses, and
(iii) furnish to each Bank, within 45 days after the end of each Fiscal Year and
otherwise, upon written request, full information as to the insurance carried.
7.04 CORPORATE FRANCHISES. Except as permitted by Section 8.02, the
Borrower will, and will cause each of its Subsidiaries to, do or cause to be
done, all things necessary to preserve and keep in full force and effect its
existence and its material rights, franchises, licenses and patents; provided,
however, that nothing in this Section 7.04 shall prevent (a) the withdrawal by
the Borrower or any of its Subsidiaries of its qualification as a foreign
corporation, association or joint venture in any jurisdiction where such
withdrawal would not have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole or (b) the discontinuance of any
Subsidiary of the Borrower if such discontinuance would not have a material
adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
7.05 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business,
including, without limitation, the laws and regulations referred to in Section
6.19, and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
7.06 ERISA. (a) As soon as possible and, in any event, within 10 days
after the Borrower or any of its Subsidiaries or ERISA Affiliates knows or has
reason to know any of the following, the Borrower will deliver to each of the
Banks a certificate of the Chief Executive Officer or the Chief Financial
Officer of the Borrower setting forth details as to such occurrence and such
action, if any, that the Borrower, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed to
be given to or filed with or by the Borrower, the
68
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application may be or
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code with respect
to a Plan; that a Plan has been or may be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability giving rise to a Lien under ERISA or the Code; that
proceedings may be or have been instituted to terminate a Plan; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; that the Borrower, any of its Subsidiaries or
ERISA Affiliates will or may incur any liability (including any contingent or
secondary liability) to or on account of the termination of or withdrawal from a
Plan under Sections 4062, 4063, 4064, 4201 or 4204 of ERISA; that the Borrower,
any of its Subsidiaries or ERISA Affiliates will or may incur any liability
under Chapter 43 of the Code or under Sections 502(c), (i) or (1) or 4071 of
ERISA; that there exists a condition that presents a material risk to the
Borrower, any of its Subsidiaries or ERISA Affiliates of incurring a liability
to or on account of a Plan pursuant to the assertion of a material claim (other
than a routine claim for benefits) against any such Plan; or that any Plan has
been determined by the Internal Revenue Service to fail to qualify under Section
401(a) of the Code.
(b) The Borrower will deliver to each of the Banks a complete copy
of the annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service.
(c) In addition to any certificates or notices delivered to the
Banks pursuant to the clause (a) of this Section 7.06, copies of annual reports
and any other notices received by the Borrower or any of its Subsidiaries
required to be delivered to the Banks hereunder shall be delivered to the Banks
no later than 10 days after the later of the date such report or notice has been
filed with the Internal Revenue Service or the PBGC, given to Plan participants
or received by the Borrower or such Subsidiary.
7.07 END OF FISCAL YEARS; FISCAL QUARTERS. The Borrower shall cause
(i) each of its fiscal years, and the fiscal years of each of its Subsidiaries
other than Joint Ventures, to end on December 31 and (ii) each of its, and each
of its Subsidiaries', fiscal quarters to end on March 31, June 30, September 30
and December 31; provided that any Subsidiary acquired subsequent to the Closing
Date that has different fiscal year ends, fiscal quarter ends or both than those
set forth in this Section 7.07 shall conform such periods to those set forth
herein in the ordinary course consistent with past practice.
7.08 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performances as could not in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property,
69
assets, condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
7.09 PAYMENT OF TAXES AND CLAIMS. The Borrower will, and will cause
each of its Subsidiaries to, pay or cause to be paid all taxes, assessments and
other governmental charges imposed upon it or any of its properties or assets or
in respect of any of its franchises, business, income or property before any
material penalty accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums that have become
due and payable and that by law have or may become a material Lien upon any of
its properties or assets, prior to the time when any material penalty or fine
shall be incurred with respect thereto; provided that so long as no property or
assets (other than money for such charge or claim and the interest or penalty
accruing thereof) of the Borrower or any of its Subsidiaries is in danger of
being lost or forfeited as a result thereof, no such charge or claim need be
paid if it is being contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with generally accepted
accounting principles consistently applied shall have been made therefor.
7.10 LICENSING. The Borrower will and will cause each of its
Subsidiaries to be operated at all times in compliance in all material respects
with all federal, state and local statutes, regulations and ordinances relating
to the licensing of pharmaceutical and healthcare services of the type provided
by the Borrower.
7.11 FURTHER ASSURANCES; NEW SUBSIDIARIES.
(a) At any time and from time to time upon the request of the Agent,
the Borrower shall and shall cause each of its Wholly-Owned Subsidiaries to
execute and deliver such further documents and do such other acts and things as
the Agent reasonably may request in order to effect fully the purposes of this
Agreement and the other Credit Documents and to provide for payment of the
Obligations in accordance with the terms of this Agreement and the other Credit
Documents.
(b) In the event a Person becomes a Subsidiary of the Borrower
(other than as a Joint Venture) after the Closing Date, the Borrower shall,
within 10 Business Days of such event, cause such Subsidiary to execute and
deliver the Subsidiary Guaranty, the Subsidiary Security Agreement, the
Subsidiary Pledge Agreement, Collection Bank Agreements (to the extent required
by Section 8.16), the Trademark Security Agreement and such other agreements,
pledges, assignments, documents and certificates (including, without limitation,
any amendments to the Credit Documents) as may be necessary or desirable or as
the Agent may request and do such other acts and things as the Agent reasonably
may request in order to have such domestic Subsidiary guaranty and/or secure the
Obligations and effect fully the purposes of this Agreement and the other Credit
Documents and to provide for payment of the Obligations in accordance with the
terms of this Agreement and the other Credit Documents.
70
7.12 ACCOUNTS RECEIVABLE. The Borrower and its Subsidiaries will
submit all necessary documentation and supply all necessary information for
payment of all Accounts Receivable (other than settlements in the Ordinary
Course of Business with payors of such Accounts Receivable reached to facilitate
collection to the payor for each of such Accounts Receivable); will not
subordinate or rescind any of the Accounts Receivable; and will notify Agent
promptly if any procedures or investigations are pending or threatened before
any Governmental Authority seeking a determination or ruling that might
materially and adversely affect the validity or enforceability of a material
portion of such Accounts Receivable subject to the review or jurisdiction of
such Governmental Authority.
SECTION 8. NEGATIVE COVENANTS. The Borrower covenants and agrees that on
and after the Closing Date and until the Loans and the Notes, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full and all Letters of Credit are cancelled, expired or otherwise
provided for to the satisfaction of the Issuing Bank:
8.01 LIENS. The Borrower will not, and will not permit any of the
Active Subsidiaries to, create, incur, assume or permit to exist any Lien upon
or with respect to any property or assets (real or personal, tangible or
intangible) of the Borrower or any of the Active Subsidiaries, whether now owned
or hereafter acquired; provided that the provisions of this Section 8.01 shall
not prevent the creation, incurrence, assumption or existence of:
(i) Liens for taxes not yet due, or Liens for taxes being contested
in good faith and by appropriate proceedings for which adequate reserves have
been established the failure to pay which would not have a material adverse
effect on the business, operations, property, assets, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole;
(ii) Liens in respect of property or assets of the Borrower or any of
its Subsidiaries imposed by law, that were incurred in the Ordinary Course of
Business, such as carriers', warehousemen's and mechanics' liens and other
similar Liens arising in the Ordinary Course of Business and (x) that do not
in the aggregate materially detract from the value of property or assets
having a value individually or in the aggregate in excess of $50,000, or
materially impair the use thereof in the operation of the business of the
Borrower or any of its Subsidiaries or (y) that are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to any
such Lien;
(iii) Liens in existence on the Closing Date that are listed, and the
property subject thereto described, in SCHEDULE 8.01(III) (Liens described in
this clause (iii), "PERMITTED LIENS");
71
(iv) Liens in favor of the Agent;
(v) Liens relating to leases and subleases granted to others not
interfering in any material respect with the business of the Borrower or any
of the Active Subsidiaries;
(vi) Easements, rights-of-way, restrictions, minor defects or
irregularities of title and other similar charges or encumbrances not
interfering in any material respect with the Ordinary Course of Business of
the Borrower or any of the Active Subsidiaries;
(vii) Liens relating to any interest or title of a lessor under any
lease;
(viii) Liens relating to Interest Rate Agreements permitted under
Section 8.04(xi);
(ix) Liens relating to bankers' liens and other rights of setoff;
(x) Pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(xi) Liens on assets purchased using the proceeds of non-recourse
purchase money Indebtedness permitted by Section 8.04(ix);
(xii) Any attachment or judgment Lien not constituting an Event of
Default under Section 9.09;
(xiii) Any deposit arrangement, made in connection with a transaction
to secure performance of obligations in connection with such transaction, not
in excess (either individually or in the aggregate) of $2,000,000; provided
that such deposit arrangement terminated on the date upon which such
performance obligations are required to be discharged under the terms of the
document creating such deposit arrangement;
(xiv) Liens created to secure Indebtedness of the Borrower and the
Active Subsidiaries incurred after the Closing Date as permitted in
8.04(xiii);
(xv) Liens created to secure Indebtedness of the Target of any
Acquisition outstanding on the date of such Acquisition; provided that such
Liens were created prior to the date of such Acquisition and were not created
in contemplation of such Acquisition and provided that the aggregate amount
of such secured Indebtedness outstanding at any time shall not exceed
$10,000,000; and
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(xvi) Liens consisting of (A) those Uniform Commercial Code financing
statements listed on SCHEDULE 8.01(XVI) annexed hereto; provided that (1)
none of such financing statements shall secure any outstanding Indebtedness
and (2) as soon as practicable but in any event within sixty days after the
Closing Date, the Borrower shall take all action (including without
limitation the filing of termination statements with the appropriate filing
offices) necessary to terminate such financing statements, or (B) Uniform
Commercial Code financing statements relating to property or assets acquired
(whether in Acquisitions or otherwise) after the Closing Date, so long as (1)
none of such financing statements shall secure any outstanding Indebtedness
other than Indebtedness permitted by Section 8.04(x) and (2) as soon as
practicable but in any event within 30 days of the date of any such
acquisition, the Borrower shall take all action (including without limitation
the filing of termination statements with the appropriate filing offices)
necessary to terminate all such financing statements relating to property or
assets acquired in such acquisition unless such financing statement relates
to Indebtedness permitted by Section 8.04(x).
8.02 CONSOLIDATION, MERGER, SALE OF ASSETS, ETC.; ACQUISITIONS. The
Borrower will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the Ordinary Course of
Business) of any Person, or permit any of its Subsidiaries to do any of the
foregoing, except that:
(i) the Borrower and its Subsidiaries may, in the Ordinary Course of
Business, make sales of inventory, dispose of equipment and capital assets
that are obsolete or in need of replacement and make Divestitures of
equipment and capital assets;
(ii) the Borrower and its Subsidiaries may, in addition to any sales
permitted in clause (i) above, sell (by way of merger or otherwise) for cash
and/or promissory notes permitted under Section 8.05(viii), the stock,
property or assets of any of its Subsidiaries having an aggregate fair
market value (as reasonably determined by the board of directors of the
Person making the sale) not to exceed $5,000,000 in any calendar year
(without regard to clause (vi) of this Section 8.02);
(iii) any Subsidiary of the Borrower may sell, lease, transfer or
otherwise dispose of any of its property, business or assets to, or merge or
consolidate with or into (a) the Borrower or (b) any other domestic
Wholly-Owned Subsidiary of the Borrower, so long as such Wholly-Owed
Subsidiary is the surviving corporation, association or joint venture, and
in the case of any such
73
sale, lease transfer, disposition, merger or consolidation involving a
Guarantor Subsidiary, the Guarantor Subsidiary (or a Subsidiary of the
Borrower that is or will become a Guarantor Subsidiary on or before
consummation of such merger) is the surviving corporation;
(iv) the Borrower and its Wholly-Owned Subsidiaries may (without
regard to the limitations set forth in Section 8.07) acquire property and
assets of other Persons (including any assets or property acquired in any
Acquisition) if:
(a) the aggregate consideration paid by the Borrower or such
Subsidiaries consisting of cash or any assets of the Borrower or such
Subsidiaries (excluding any common stock of the Borrower issued, and the
proceeds of any Divestiture made, in connection with such Acquisition, but
including the principal amount of any Indebtedness described in Section
8.04(xii) incurred in connection with such Acquisition) does not exceed (if
valued at fair market value at the time of such Acquisition, as reasonably
determined by the board of directors of the Person making such Acquisition)
$20,000,000 per transaction (or series of related transactions) and
$40,000,000 in the aggregate over any twelve month period commencing with the
Closing Date (including in such calculation any consideration paid by the
Borrower to acquire any interest in a Joint Venture) when added to the
aggregate amount of all investments made pursuant to this Section 8.02(iv) in
such twelve-month period;
(b) the ratio of Total Debt to Consolidated Adjusted EBITDA,
calculated on a pro forma basis to give effect to such Acquisition, does not
exceed 2.75:1.00; and
(c) if such acquisition of property and assets is an
acquisition of stock, then such acquisition shall, except with respect to
Joint Ventures, result in the ownership by the Borrower or a Wholly-Owned
Subsidiary of a majority interest in the capital stock of the entity whose
stock is being acquired;
(v) the Borrower and its Subsidiaries may make capital expenditures
to the extent not in violation of Section 8.07; and
(vi) any Subsidiary of the Borrower may be dissolved if such
dissolution will not have a material adverse effect on the business,
operations, property, assets, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
8.03 DIVIDENDS.
(a) The Borrower will not declare or pay any dividends (other than
dividends that are payable solely to the holders of any class of stock of the
Borrower in shares of that class of stock), or return any capital, to its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders
74
as such, or redeem, retire, purchase or otherwise acquire, directly or
indirectly, for a consideration, any shares of any class of its capital stock
now or hereafter outstanding (or any options or warrants issued by the Borrower
with respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or permit any of its Subsidiaries to purchase or otherwise
acquire for a consideration any shares of any class of the capital stock of the
Borrower now or hereafter outstanding (or any options or warrants issued by the
Borrower with respect to its capital stock), except that the Borrower may
acquire stock options or restricted stock from its employees or former employees
in an aggregate amount not to exceed $100,000 in any calendar year.
(b) The Borrower will not permit any of its Subsidiaries to declare
or pay any dividends, or return any capital, to its stockholders or authorize or
make any other distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise acquire, directly
or indirectly, for a consideration, any shares of any class of its capital stock
now or hereafter outstanding (or any options or warrants issued by such
Subsidiary with respect to its capital stock), or set aside any funds for any of
the foregoing purposes, or permit any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of such Subsidiary now or hereafter outstanding (or any options or
warrants issued by such Subsidiary with respect to its capital stock), except
that any Subsidiary of the Borrower may pay dividends to the Borrower or any
Wholly-Owned Subsidiary of the Borrower and any Joint Venture may pay dividends
or make distributions in proportion to the ownership interests therein.
8.04 INDEBTEDNESS. The Borrower will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness of the Borrower and its Subsidiaries incurred under
the Credit Documents;
(ii) Indebtedness listed on SCHEDULE 8.04(II) ("EXISTING
INDEBTEDNESS") and Indebtedness incurred by the Borrower or any of its
Subsidiaries to renew or refinance the Existing Indebtedness of the Borrower
or such Subsidiary; provided that the new Indebtedness shall not exceed the
principal amount of the Existing Indebtedness so renewed or refinanced and
shall not contain any terms or conditions, taken as a whole, less favorable
to the Borrower and the Banks than the Existing Indebtedness being renewed or
refinanced;
(iii) accrued expenses and current trade accounts payable incurred in
the Ordinary Course of Business and obligations under trade letters of credit
incurred by the Borrower or any of its Subsidiaries in the Ordinary Course of
Business, that are to be repaid in full not more than one year after the date
on which such Indebtedness is originally incurred to finance the purchase of
goods by the Borrower or such Subsidiary;
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(iv) obligations under letters of credit incurred by the Borrower or
any of its Subsidiaries in the Ordinary Course of Business in support of
obligations incurred in connection with worker's compensation, unemployment
insurance and other social security legislation;
(v) Indebtedness incurred as a result of loans and advances
permitted under Section 8.05(ii)-(iv);
(vi) obligations under letters of credit incurred by the Borrower or
any of its Subsidiaries in the Ordinary Course of Business and to the extent
consistent with past practice in support of obligations under leases, bonds
posted for judgments being appealed or as a condition to bringing any action,
suit or other proceeding not to exceed $500,000 other than letters of credit
listed on SCHEDULE 8.04(II);
(vii) nonrecourse Indebtedness payable solely from and secured solely
by life insurance policies and annuities maintained by the Borrower and its
Subsidiaries for their respective officers, employees and directors;
(viii) surety bonds, performance bonds and other completion bonds in
the Ordinary Course of Business and consistent with past practice or as
required by law;
(ix) non-recourse purchase money Indebtedness not exceeding the
purchase price of the asset so purchased and secured solely by such asset;
(x) capitalized leases;
(xi) Interest Rate Agreements (and guaranties thereof) entered into
by the Borrower and its Subsidiaries with respect to Indebtedness in an
aggregate notional principal amount not to exceed $100,000,000;
(xii) the Borrower or any Active Subsidiary may become and remain
liable with respect to Unsecured Seller Debt owed to the Person selling the
capital stock or assets of any Target in any Acquisition permitted under
Section 8.02(iv); provided such Indebtedness (A) is unsecured, (B) either (x)
does not exceed 25% of the purchase price paid for such Target or (y) is
subordinated to the Indebtedness created by this Agreement pursuant to the
terms of a Subordination Agreement substantially in the form of EXHIBIT L,
and, in either case, if guaranteed by Borrower or any Subsidiary of the
Borrower, is guaranteed by a guarantee that is subordinate to, and under
which such guarantor does not have any obligation prior to the indefeasible
payment in full of, the Obligations and (C) does not at any time exceed
$35,000,000 in the aggregate for all Unsecured Seller Debt outstanding at any
time. The covenants, default provisions, remedies provisions, subordination
provisions and all other terms of
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such Unsecured Seller Debt shall be reasonably satisfactory in form and
substance to the Agent; provided that if the subordination provisions in the
documentation representing such Unsecured Seller Debt are substantially in
the form of EXHIBIT L such subordination provisions shall be deemed
satisfactory to the Agent; provided further that if the documentation
representing such Unsecured Seller Debt contains no covenants and no default
provisions other than default provisions with respect to defaults that arise
because of the bankruptcy of the issuer or guarantor of such debt and default
provisions with respect to defaults that arise because of the failure to pay
such Unsecured Seller Debt when due, such covenant and default provisions
shall be deemed satisfactory to the Agent;
(xiii) Indebtedness of the Borrower and its Subsidiaries incurred after
the Closing Date in an aggregate amount outstanding at any time not in excess
of $5,000,000;
(xiv) Indebtedness of the Target of any Acquisition outstanding on the
date of such Acquisition; provided that such Indebtedness was not incurred in
contemplation of such Acquisition; and
(xv) Contingent Obligations in respect of any guaranty by the
Borrower or a Subsidiary of the leasehold obligations of a Subsidiary.
8.05 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not, and will
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or purchase or acquire any stock or other ownership interest (other
than stock or ownership interests issued as part of the formation of a
Subsidiary of the Borrower for consideration not to exceed $50,000 in the
aggregate with respect to all such Subsidiaries and provided such Subsidiary
becomes a Guarantor Subsidiary within a reasonable time after such formation),
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may each acquire and hold
receivables owing to it, if created or acquired in the Ordinary Course of
Business and payable or dischargeable in accordance with customary trade
terms to the extent consistent with past practice;
(ii) loans and advances by any Subsidiary of the Borrower to the
Borrower; provided such loans or advances are at all times subordinated to
the Obligations of the Borrower on terms satisfactory to the Required Banks;
(iii) loans and advances by the Borrower to any Guarantor Subsidiary
(or, in connection with any Acquisition, any Subsidiary of the Borrower that
becomes a Guarantor Subsidiary on or before consummation of such Acquisition)
in the Ordinary Course of Business so long as after giving effect tp
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such loan or advance there shall not have occurred a Default or an Event of
Default;
(iv) loans and advances by any Guarantor Subsidiary to any other
Guarantor Subsidiary in the Ordinary Course of Business so long as after
giving effect to such loan or advance there shall not have occurred a Default
or Event of Default;
(v) the Borrower and its Subsidiaries may make new loans and
advances to officers, employees and agents in the Ordinary Course of Business
(for purposes other than purchasing stock or stock options or exercising
stock options) equal, in the aggregate for the Borrower and its Subsidiaries,
to no more than $600,000 at any one time outstanding and may make loans to
officers, directors and employees in connection with the purchase or exercise
of options for the Borrower's common stock, provided that no cash is
advanced;
(vi) the Borrower and its Subsidiaries may make equity investments in
other Persons engaged in the businesses in which the Borrower and its
Subsidiaries are engaged as of the Closing Date, in an aggregate amount that,
when added to the aggregate consideration paid to acquire assets and property
pursuant to Section 8.02(iv), does not exceed the amount specified in Section
8.02(iv); provided that the Borrower shall provide notice to the Agent of all
such investments in accordance with Section 7.01(i) and the aggregate book
value of all investments in all Joint Ventures shall not at any time exceed
30% of the aggregate book value of the equity of the Borrower; provided
further, that such equity investments shall, except with respect to Joint
Ventures, result in the ownership by the Borrower or such Subsidiary of a
majority interest in the capital stock of the entity issuing such equity;
(vii) the Borrower and its Subsidiaries may make and own investments
in Cash Equivalents; provided that such Cash Equivalents are not subject to
setoff rights in favor of the financial institution (other than a Bank)
issuing or selling any such Cash Equivalents arising from any banking
relationship of the Borrower and its Subsidiaries; and
(viii) investments consisting of promissory notes, in an aggregate
principal amount not to exceed $250,000 at any time outstanding, received as
part of the consideration in connection with sales of stock, property or
assets of any of its Subsidiaries permitted under Section 8.02(ii).
8.06 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the Ordinary Course of Business, with
any Affiliate of the Borrower, other than on terms and conditions substantially
as favorable to the Borrower or such Subsidiary as would be obtainable by the
Borrower or such Subsidiary at the time in a comparable arm's-length transaction
with a Person other than an Affiliate.
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8.07 CAPITAL EXPENDITURES. Except for expenditures made by the
Borrower and its Subsidiaries during any Fiscal Year to acquire assets in
Acquisitions, the Borrower will not, and will not permit any of its Subsidiaries
to, make any expenditure for fixed or capital assets (including, without
limitation, expenditures for product development and maintenance and repairs
that should be capitalized in accordance with generally accepted accounting
principles consistently applied and including capitalized lease obligations but
excluding any asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) during any Fiscal
Year set forth below that would cause the aggregate amount of all such
expenditures for the Borrower and its Subsidiaries to exceed the correlative
amount set forth below opposite such Fiscal Year:
FISCAL YEAR AMOUNT ($)
1996 2,500,000
1997 5,000,000
1998 8,000,000
1999 12,000,000
2000 14,000,000
2001 14,000,000
8.08 LEVERAGE RATIO. The Borrower shall not permit the ratio of Total
Debt to Consolidated Adjusted EBITDA for any consecutive four-fiscal quarter
period ending as of the last day of any fiscal quarter of the Borrower to be
more than 2.75:1.00.
8.09 MINIMUM CONSOLIDATED NET WORTH. The Borrower will not permit
Consolidated Net Worth of the Borrower and its Subsidiaries at any time to be
less than the sum of $150,000,000, plus 75% of Consolidated Net Income of the
Borrower and its Subsidiaries for each fiscal quarter in which Consolidated Net
Income is a positive number and which ends during the period from the Closing
Date to and including the end of the then most recently ended fiscal quarter of
the Borrower, plus 100% of any additions to Net Worth from any issuance of, or
any exercise of an option to purchase, or any conversion of any debt Securities
into, any equity Securities of the Borrower on or after the Closing Date.
8.10 MINIMUM INTEREST COVERAGE RATIO. The Borrower shall not permit
the ratio of (i) Consolidated EBITDA of the Borrower and its Subsidiaries to
(ii) Consolidated Interest Expense for any consecutive four-fiscal quarter
period ending
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as of the last day of any fiscal quarter of the Borrower occurring during any of
the periods set forth below to be less than the correlative ratio indicated:
MINIMUM
QUARTER ENDED INTEREST COVERAGE
RATIO
December 31, 1996 through September 30, 1998 4.00:1.00
December 31, 1998 through September 30, 2000 4.50:1.00
December 31, 2000 and thereafter 5.00:1.00
8.11 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATIONS OF
INDEBTEDNESS; MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN
OTHER AGREEMENTS; ETC. The Borrower will not, and will not permit any of its
Subsidiaries to, (i) make any voluntary or optional payment or prepayment on or
redemption or acquisition for value of (including, without limitation, by way of
depositing with the trustee with respect thereto money or securities before due
for the purpose of paying when due) any Indebtedness on which it is an obligor
which payment, prepayment or redemption or acquisition for value is in excess of
$100,000 per year in the aggregate except with respect to payments or
prepayments on or redemptions or acquisitions for value of the (A) Obligations
under the terms of this Agreement or (B) any Indebtedness for which failure to
make such payment, prepayment, redemption or acquisition for value would
constitute a violation of a law or regulation enacted, adopted or becoming
effective after the Closing Date, (C) any trade payables prepaid in the Ordinary
Course of Business to take advantage of favorable prepayment terms, or (D)
Indebtedness of the Target of any Acquisition permitted pursuant to Section
8.04(xiv), (ii) amend or modify, or permit the amendment or modification of, any
provision of any Indebtedness or of any agreement (including, without
limitation, any purchase agreement, indenture, loan agreement or security
agreement) relating to any of the foregoing other than amendments that (A) only
extend the maturity of or lower the interest rate on Indebtedness and amendments
of this Agreement permitted by its terms or (B) are immaterial and would not
have a material adverse effect on the business, operations, property, assets,
liabilities (contingent or otherwise), condition (financial or otherwise) or
prospects of the Borrower or and its Subsidiaries taken as a whole, or (iii)
amend, modify or change the Certificate or Articles of Incorporation (including,
without limitation, by the filing or modification of any certificate of
designation) or the By-Laws (or any other documents of formation and governance,
as the case may be) of the Borrower or any Subsidiary party to any of the Credit
Documents (except to reflect a name change previously noticed to the Agent,
except to amend the Certificate or Articles of Incorporation or the By-Laws of a
Target or a Subsidiary as the Borrower deems reasonably necessary, provided that
such amendment shall not adversely affect the Banks' position as creditors
hereunder).
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8.12 RESTRICTIONS ON SUBSIDIARY DIVIDENDS AND OTHER DISTRIBUTIONS.
The Borrower will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction, other than as set forth in this Agreement, on
the ability of any such Subsidiary to (a) pay dividends or make any other
distributions on its capital stock or any other interest or participation in its
profits owned by the Borrower or any Subsidiary of the Borrower, or pay any
Indebtedness owed to the Borrower or a Subsidiary of the Borrower, (b) make
loans or advances to the Borrower or (c) transfer any of its properties or
assets to the Borrower, except for such encumbrances or restrictions existing
under or by reasons of (i) applicable law, (ii) this Agreement, (iii) customary
provisions restricting subletting or assignment of any lease governing a
leasehold interest of the Borrower or a Subsidiary of the Borrower that exists
on the Closing Date and (iv) customary provisions restricting transactions with
affiliates of Persons party to a Joint Venture.
8.13 BUSINESS. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which it or any Subsidiary was engaged on the Closing Date and any
business directly related to such business.
8.14 TRANSFER OF COPYRIGHTS, PATENTS AND TRADEMARKS. The Borrower
will not, and will not permit any of its Subsidiaries to, transfer any of their
respective copyrights, licenses, patents, trademarks, permits, service marks,
trade names, franchises and formulas, or rights with respect to the foregoing,
except transfers to the Borrower or a Guarantor Subsidiary pursuant to licenses
granted in the Ordinary Course of Business that would not have a material
adverse effect on the business, operations, property, assets, condition
(financial or otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole.
8.15 JOINT VENTURES. The Borrower shall not, and shall not suffer or
permit any of its Subsidiaries to enter into any Joint Venture, other than in
the Ordinary Course of Business.
8.16 COLLECTION BANK AGREEMENTS. The Borrower shall not, and shall
not suffer nor permit any of its Subsidiaries that are not Joint Ventures to,
maintain any Deposit Account with an average daily balance in excess of $100,000
in any given month, with any financial institution that has not executed and
delivered to the Agent a Collection Bank Agreement. The Borrower shall not, and
shall not permit any of its Subsidiaries that are not Joint Ventures to,
maintain amounts in excess of $3,000,000 in the aggregate at any time
outstanding in Deposit Accounts that are not subject to Collection Bank
Agreements. The Borrower shall not, and shall not permit any of its Subsidiaries
that are not Joint Ventures to, deposit any amount into a Deposit Account that
is the subject of a Collection Bank Agreement that does not represent proceeds
of Collateral.
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8.17 INACTIVE SUBSIDIARIES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, transfer any asset to any Inactive Subsidiary
or permit any Inactive Subsidiary to conduct business unless and until such
Inactive Subsidiary becomes a Guarantor Subsidiary and executes a Subsidiary
Guaranty, Subsidiary Security Agreement, Subsidiary Pledge Agreement and
Collection Bank Agreements (to the extent required by Section 8.16).
SECTION 9. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT");
9.01 PAYMENTS. The Borrower shall (i) default in the payment when due
ofany principal of any Loan or any Note, (ii) default in the payment when due of
any amount payable to the Issuing Bank in reimbursement of any drawing under a
Letter of Credit, or (iii) default, and such default shall continue unremedied
for two Business Days, in the payment when due of interest on any Loan, any Fees
or any other amounts owing hereunder or under any Note; or
9.02 REPRESENTATIONS, ETC. Any representation, warranty or statement
made by the Borrower or any of its Subsidiaries herein or in any other Credit
Document or in any certificate delivered pursuant hereto or thereto shall prove
to be untrue in any material respect on the date as of which made or deemed
made; or
9.03 COVENANTS. The Borrower shall (i) default in the due performance
or observance by it of any term, covenant or agreement contained in Sections
2.01(a)(iii), 2.10(a)(iii), 7.01(g)(i) or Section 8 or (ii) default in the due
performance or observance by it of any term, covenant or agreement (other than
those referred to in Sections 9.01 and 9.02 and clause (i) of this Section 9.03)
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by the Agent; or
9.04 DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of its
Subsidiaries shall (i) default in any payment of Indebtedness in an aggregate
principal amount equal to or exceeding $1,000,000 (other than the Notes and the
Premier Notes) beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to Indebtedness in an aggregate principal amount equal to or
exceeding $2,500,000 (other than the Notes) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity; or Indebtedness of the Borrower or any
of its Subsidiaries, in an aggregate principal amount equal to or exceeding
$2,500,000, shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required
82
prepayment, prior to the stated maturity thereof; or
9.05 BANKRUPTCY, ETC. The Borrower or any of the Active Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "BANKRUPTCY," as now or hereafter in effect, or any
successor thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced
against the Borrower or any of the Active Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case (provided that the Borrower expressly authorizes the
Agent and each Bank to appear in any court conducting any such proceeding during
such 60 day period to preserve, protect and defend their rights under this
Agreement and the other Credit Documents); or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of the Borrower or any of the Active Subsidiaries; or the
Borrower or any of the Active Subsidiaries commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrower or any of the Active
Subsidiaries; or there is commenced against the Borrower or any of the Active
Subsidiaries any such proceeding that remains undismissed for a period of 60
days; or the Borrower or any of the Active Subsidiaries is adjudicated insolvent
or bankrupt, or any order of relief or other order approving any such case or
proceeding is entered; or the Borrower or any of the Active Subsidiaries suffers
any appointment of any custodian or the like for it or any substantial part of
its property to continue undischarged or unstayed for a period of 30 days; or
the Borrower or any of the Active Subsidiaries makes a general assignment for
the benefit of creditors; or any corporate, partnership or other action is taken
by the Borrower or any of the Active Subsidiaries for the purpose of effecting
any of the foregoing; or
9.06 ERISA. Any Plan shall fail to maintain the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code; any Plan is, shall have been or is likely to be terminated or the
subject of a termination proceeding under ERISA; any Plan shall have an Unfunded
Current Liability, or the Borrower or any of its Subsidiaries or ERISA
Affiliates has incurred or is likely to incur a liability to or on account of a
Plan under Sections 502(c), (i) or (l), 515, 4062, 4063, 4064, 4071, 4201 or
4204 of ERISA or Chapter 43 of the Code; and there shall result from any such
event or events the imposition of a Lien upon or the granting of a security
interest in the assets of the Borrower or any of its Subsidiaries, or a
liability or a material risk of incurring a liability to the PBGC or a Plan or a
trustee appointed under ERISA, that will have a material adverse effect upon the
business, operations, property, assets, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole; or
9.07 CREDIT DOCUMENTS. Any of the Credit Documents or any provision
thereof shall cease to be in full force and effect for any reason, other than
the satisfaction in full of all Obligations and the termination of this
Agreement, or is declared
83
to be null and void, or any Guarantor Subsidiary shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any of the Credit Documents to
which it is a party, or any Guarantor Subsidiary denies that it has any further
liability under any of the Credit Documents to which it is a party or gives
notice to such effect, or any junior creditor claims or asserts the invalidity
or unenforceability of any subordination provisions of any Unsecured Seller
Debt; or
9.08 CHANGES OF CONTROL. (i) Other than Counsel Corporation and its
Affiliates, any Person or two or more Persons acting in concert shall have
acquired beneficial ownership (within the meaning of the Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of securities of the
Borrower representing 20% or more of the combined voting power of all securities
of the Borrower entitled to vote in the election of directors; or (ii) during
any period of up to 12 consecutive months, commencing before or after the date
of this Agreement, individuals who at the beginning of such 12-month period were
directors of the Borrower (and individuals nominated by the vote of a majority
of the Board of Directors who either were members of the Board of Directors at
the beginning of such period or whose election was previously so approved) shall
cease for any reason to constitute a majority of the Board of Directors of the
Borrower; or (iii) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a contract or
arrangement that upon consummation shall result in its or their acquisition of
or control over, securities of the Borrower representing 20% or more of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors; or
9.09 JUDGMENTS. One or more judgments, decrees or arbitration awards
shall be entered against the Borrower or any of its Subsidiaries involving in
the aggregate for the Borrower and its Subsidiaries a liability (not paid or
fully covered by insurance as to which the insurer has acknowledged coverage in
writing) of $2,000,000 or more, and all such judgments, decrees or awards shall
not have been vacated, discharged or stayed or bonded pending appeal within 30
days after the entry thereof; or
9.10 GOVERNMENTAL POLICIES. Any change shall occur in state or
federal laws, rules or governmental regulations or budgetary allocations that
reasonably could be expected to have a material adverse effect on the business,
operations, properties, assets, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole; or
9.11 LOSS OF LICENSES. Any Governmental Authority shall finally
revoke or fail to renew any license, permit or franchise of the Borrower or the
Borrower shall for any reason lose any such license, permit or franchise or the
Borrower or any of the Active Subsidiaries shall suffer the imposition of any
restraining order, escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any license, permit or
franchise which event could reasonably be expected to have a material adverse
effect on the business, operations,
84
properties, assets, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole;
THEN, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower (provided, that, if an Event of
Default specified in Section 9.05 shall occur with respect to the Borrower, the
result which would occur upon the giving of written notice by the Agent to the
Borrower as hereafter shall occur automatically without the giving of any such
notice) declare the principal of and any accrued interest in respect of all
Loans and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower, and the obligation of each Bank to make any Loan and the
obligation of the Issuing Bank to issue any Letter of Credit shall thereupon
terminate; provided, that the foregoing shall not affect in any way the
obligations of the Banks to purchase participations from the Swing Line Bank in
any unpaid Swing Line Loans as provided in Section 2.02(c), or to purchase
participations from the Issuing Bank in the unreimbursed amount of any drawings
under any Letters of Credit as provided in Section 2.10(d). So long as any
Letter of Credit shall remain outstanding, any amounts received by the Agent
shall be held by the Agent, pursuant to such documentation as the Agent shall
request, as cash collateral for the obligation of the Borrower to reimburse the
Issuing Bank in the event of any drawing under any outstanding Letters of
Credit, and so much of such funds shall at all times remain on deposit as cash
collateral as aforesaid as shall equal the maximum amount available at any time
for drawing under all Letters of Credit (the "MAXIMUM AVAILABLE AMOUNT");
provided that in the event of cancellation or expiration of any Letter of Credit
or any reduction in the Maximum Available Amount, the Agent shall apply the
difference between the cash collateral held by the Agent immediately prior to
such cancellation, expiration or reduction and the Maximum Available Amount
immediately after such cancellation, expiration or reduction first to the
payment of any outstanding Obligations, and second to the payment to whomsoever
shall be lawfully entitled to receive such funds.
SECTION 10. THE AGENT.
10.01 APPOINTMENT. The Banks hereby designate Bankers Trust Company as
the Agent (for purposes of this Section 10, the term "AGENT" shall include
Bankers Trust Company in its capacity as the Agent pursuant to the other Credit
Documents) to act as specified herein and in the other Credit Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the Agent to
take such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Agent by the
terms hereof and thereof and such other
85
powers as are reasonably incidental thereto. The Agent may perform any of its
duties hereunder by or through its officers, directors, agents or employees.
10.02 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Agent nor any of its officers, directors,
agents or employees shall be liable for any action taken or omitted by it or
them hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Agent shall be mechanical and administrative in nature; the
Agent shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein.
10.03 LACK OF RELIANCE ON THE AGENT. Independently and without
reliance upon the Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of the Borrower and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or at any time or times thereafter.
The Agent shall not be responsible to any Bank or the holder of any Note for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of the Borrower or be required
to make any inquiry concerning either the performance or observance of any of
the terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of the Borrower or the existence or
possible existence of any Default or Event of Default.
10.04 CERTAIN RIGHTS OF THE AGENT. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Banks; and the Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks unless the
agreement of all Banks is required by the terms of this Agreement.
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10.05 RELIANCE. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Agent believed to be the proper Person, and, with respect to
all legal matters pertaining to this Agreement and any other Credit Document and
its duties hereunder and thereunder, upon advice of counsel selected by it.
10.06 INDEMNIFICATION. To the extent the Agent is not reimbursed and
indemnified by the Borrower, the Banks will reimburse and indemnify the Agent,
in proportion to their respective proportionate shares of the aggregate amount
of the Revolving Loan Commitments as of the date of determination, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Agent in performing its duties hereunder or under any other Credit
Document, or in any way relating to or arising out of this Agreement or any
other Credit Document; provided that no Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgment,
suits, costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct.
10.07 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to maintain and make Loans under this Agreement, the Agent shall have
the rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified herein;
and the term "BANKS," "REQUIRED BANKS," "HOLDERS OF NOTES" or any similar terms
shall, unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Borrower or any Affiliate of the Borrower as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Banks.
10.08 HOLDERS. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person who,
at the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
10.09 RESIGNATION BY THE AGENT AND THE SWING LINE BANK.
(a) The Agent may resign from the performance of all its functions
and duties hereunder and/or under the other Credit Documents at any time by
giving 15
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Business Days prior written notice to the Borrower and the Banks. Such
resignation shall take effect upon the appointment of a successor the Agent
pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor to the Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If no successor to the Agent has been appointed pursuant to
clause (b) above by the 15th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Banks shall thereafter perform all the duties of the Agent
hereunder and/or under any other Credit Document until such time, if any, as the
Banks appoint a successor to the Agent as provided above.
(d) Any resignation of the Agent pursuant to Section 10.09(a) shall
also constitute the resignation of Bankers Trust Company or its successor as
Swing Line Bank, and any successor Agent appointed pursuant to Section 10.09(b)
shall, upon its acceptance of such appointment, become the successor Swing Line
Bank for all purposes hereunder. In such event (i) the Borrower shall prepay any
outstanding Swing Line Loans made by the retiring or removed Agent in its
capacity as the Swing Line Bank, (ii) upon such prepayment, the retiring or
removed Agent and the Swing Line Bank shall surrender the Swing Line Note held
by it to the Borrower for cancellation, and (iii) the Borrower shall issue a new
Swing Line Note to the successor Agent and the Swing Line Bank substantially in
the form of EXHIBIT E-2 annexed hereto, in the principal amount of the Swing
Line Loan Commitment then in effect and with other appropriate insertions.
10.10 RELEASE OF COLLATERAL. Without further written consent or
authorization from Banks, Agent may execute any documents or instruments
necessary to release any Lien encumbering any item of Collateral that is the
subject of a sale or other disposition of assets permitted by this Agreement or
to which the Required Banks have otherwise consented.
SECTION 11. MISCELLANEOUS.
11.01 PAYMENT OF EXPENSES, ETC. The Borrower shall: (i) whether or not
the transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses (x) of the Agent (including, without
limitation, the reasonable fees and disbursements of O'Melveny & ▇▇▇▇▇ LLP,
special counsel to the Agent) in connection with the preparation, execution,
delivery and syndication of this Agreement and the other Credit Documents and
the documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto and (y) of the Agent and each of
the Banks in connection with the enforcement of this Agreement and the other
Credit Documents and the documents and instruments
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referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of O'Melveny & ▇▇▇▇▇ LLP, special counsel to the Agent,
and for each of the Banks whose counsel determines in good faith that joint
representation of such Bank along with the other Banks would or reasonably could
be expected to result in a conflict of interest under applicable laws or ethical
principles) and (z) of any consultants or accountants chosen by the Required
Banks, to investigate, test or review such matters relating to the Borrower and
its Subsidiaries as the Agent shall designate; provided that the fees of such
consultants or accountants shall be subject to the prior approval of the
Borrower, which approval shall not be unreasonably withheld; (ii) pay and hold
each of the Banks harmless from and against any and all present and future stamp
and other similar taxes with respect to the foregoing matters and save each of
the Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) indemnify the Agent and each Bank, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and disbursements
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of, any investigation, litigation or other proceeding (whether
or not the Agent or any Bank is a party thereto) related to the entering into
and/or performance of this Agreement or any other Credit Document or the use of
the proceeds of any Loans or Letters of Credit hereunder or the consummation of
any transactions contemplated herein or in any other Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel incurred in
connection with any such investigation, litigation or other proceeding (but
excluding any such liabilities, obligations, losses, etc., to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified).
11.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank (including without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the account
of the Borrower against and on account of the Obligations and liabilities of the
Borrower to such Bank under this Agreement or under any of the other Credit
Documents, including, without limitation, all interests in Obligations purchased
by such Bank pursuant to Section 11.05(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any other Credit
Document, irrespective of whether or not such Bank shall have made any demand
hereunder and although said Obligations, liabilities or claims, or any of them,
shall be contingent or unmatured.
11.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including
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telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to the Borrower, at its address
specified opposite its signature below; if to any Bank, at its office specified
opposite its signature below; and if to the Agent, at its Notice Office; or, as
to the Borrower or the Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each other
party, at such other address as shall be designated by such party in a written
notice to the Borrower and the Agent. In addition, a copy of all notices sent to
the Borrower or the Agent in accordance with Sections 7.01(g) or 9 shall also be
sent to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ & Manner, P.C., 1800 First American Center,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇ Manner, Esq., and
to O'Melveny & ▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. All such notices and communications shall, when
mailed, telegraphed, telexed, telecopied, or cabled or sent by overnight
courier, be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the Agent shall
not be effective until received by the Agent.
11.04 BENEFIT OF AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, that the Borrower may not
assign or transfer any of its rights or obligations hereunder without the prior
written consent of each Bank.
11.05 ASSIGNMENTS AND PARTICIPATIONS IN LOANS AND LETTERS OF CREDIT.
(a) GENERAL. Each Bank shall have the right at any time to (i) sell,
assign, transfer or negotiate to any Eligible Assignee, or (ii) sell
participations to any Eligible Assignee in, all or any part of any Loan or Loans
made by it or its Commitments or its Letters of Credit or participations therein
or any other interest herein or in any other Obligations owed to it; provided
that no such sale, assignment, transfer or participation shall, without the
consent of the Borrower, require the Borrower to file a registration statement
with the SEC, apply to qualify such assignment or participation of the Loans,
Letters of Credit or participations therein or the other Obligations under the
securities laws of any state or otherwise become subject to any federal or state
securities laws requirements with respect thereto; provided, further that no
such sale, assignment or transfer described in clause (i) above shall be
effective unless and until an Assignment and Acceptance effecting such sale,
assignment or transfer shall have been accepted by the Agent and recorded in the
Agent's records as provided in Section 11.05(b)(ii); provided, further that no
such sale, assignment, transfer or participation of any Letter of Credit or any
participation therein may be made separately from a sale, assignment, transfer
or participation of a corresponding interest in the Revolving Loans of the Bank
effecting such sale, assignment, transfer or participation; and provided,
further that, anything contained herein to the contrary notwithstanding, the
Swing Line Loan Commitment and the Swing Line Loans of the Swing Line Bank may
not be sold, assigned or transferred as described in clause (i) above to any
Person other than a successor Agent and the Swing Line Bank to the extent
contemplated by Section
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10.09(d). Except as otherwise provided in this Section 11.05, no Bank or the
Issuing Bank shall, as between the Borrower and such Bank or the Issuing Bank,
be relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or any granting of participations in,
all or any part of the Loans, the Commitments, Letters of Credit or
participations therein or the other Obligations owed to such Bank or the Issuing
Bank.
(b) ASSIGNMENTS.
(i) Amounts and Terms of Assignments. Each Loan, Loan Commitment,
Letter of Credit or participation therein or other Obligation may (A) be
assigned in any amount (of a constant and not a varying percentage) to
another Bank, or to an Affiliate of the assigning Bank or another Bank, with
the giving of notice to the Borrower and the Agent or (B) be assigned in an
amount of not less than $5,000,000 (or such lesser amount as shall constitute
the aggregate amount of the Loans, Commitments, Letters of Credit or
participations therein and other Obligations of the assigning Bank), to any
other Eligible Assignee with the giving of notice to the Borrower and the
Agent and with the consent of the Borrower and the Agent, in the case of an
assignment made by a Bank other than the Agent, or with the consent of the
Borrower, in the case of an assignment made by the Agent (which consent of
the Borrower and the Agent shall not be unreasonably withheld). To the extent
of any such assignment in accordance with this Section 11.05, the assigning
Bank shall be relieved of its obligations with respect to its Loans,
Commitments, Letters of Credit or participations therein. The parties to each
such assignment shall execute and deliver to the Agent, for its acceptance
and recording in its records, an Assignment and Acceptance, together with,
with respect to assignments that occur following the Closing Date, a
processing and recordation fee of $3,500, and such certificates, documents or
other evidence, if any, with respect to United States federal income tax
withholding matters as the assignee under such Assignment and Acceptance may
be required to deliver to the Agent pursuant to Section 2.09(g)(iii). Upon
such execution, delivery and acceptance, from and after the effective date
specified in such Assignment and Acceptance, (y) the assignee thereunder
shall be a party hereto and, to the extent that rights and obligations
hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Bank hereunder and (z)
the assigning Bank thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an assigning Bank's rights and
obligations under this Agreement, such Bank shall cease to be a party
hereto). The Commitments hereunder shall be modified to reflect the
Commitment of such assignee and any remaining Commitment of such assigning
Bank and new Notes shall, upon surrender of the assigning Bank's Note, be
issued to the assignee and to the assigning Bank, substantially in the form
of EXHIBIT E-1 annexed hereto with
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appropriate insertions, to reflect the new Commitments of the assignee and
the assigning Bank.
(ii) Acceptance by the Agent; Recordation in Records. Upon its
receipt of an Assignment and Acceptance executed by an assigning Bank and an
assignee representing that it is an Eligible Assignee, together with the
processing and recordation fee referred to in Section 11.05(b)(i) and any
certificates, documents or other evidence with respect to United States
federal income tax withholding matters that such assignee may be required to
deliver to the Agent pursuant to Section 2.09(g)(iii), the Agent shall,
if such Assignment and Acceptance has been completed and is in the form of
EXHIBIT O hereto and if the Agent and the Borrower have consented to the
assignment evidenced thereby (in each case to the extent such consent is
required pursuant to Section 11.05(b)(i)), (a) accept such Assignment and
Acceptance by executing a counterpart thereof as provided therein (which
acceptance shall evidence any required consent of the Agent to such
assignment), (b) record the information contained therein in its records, and
(c) give prompt notice thereof to the Borrower. The Agent shall maintain a
copy of each Assignment and Acceptance delivered to and accepted by it as
provided in this Section 11.05(b)(ii).
(c) PARTICIPATIONS. The holder of any participation, other than an
Affiliate of the Bank granting such participation, shall not be entitled to
require such Bank to take or omit to take any action hereunder except action
directly affecting (i) the extension of the scheduled final maturity of any Loan
allocated to such participation, (ii) a reduction of the principal amount of or
the rate of interest payable on any Loan or payments due in repayment of draws
under Letters of Credit allocated to such participation, and all amounts payable
by the Borrower hereunder shall be determined as if such Bank had not sold such
participation, (iii) the release of the Liens held by Agent on behalf of the
Banks with respect to all or substantially all of the Collateral, or (iv) a
reduction of the amount of any fees payable hereunder to the extent subject to
such participation. The Borrower hereby acknowledges and agrees that, only for
purposes of Sections 2.07, 2.09, 11.02 and 11.07(b), any participation will give
rise to a direct obligation of the Borrower to the participant and the
participant shall be considered to be a "Bank"; provided that no participant
shall be entitled to receive any greater amount pursuant to Section 2.07 or 2.09
than the transferor Bank would have been entitled to receive in respect of the
amount of the participation effected by such transferor Bank to such participant
had no such participation occurred.
(d) ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the
assignments and participations permitted under the foregoing provisions of this
Section 11.05, any Bank may assign and pledge all or any portion of its Loans,
the other Obligations owed to such Bank, and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A of the Board of Governors
of the Federal Reserve System and any operating circular issued by such Federal
Reserve Bank; provided that (i) no Bank shall, as between the Borrower and such
Bank, be relieved of any of its obligations hereunder as a result of any such
assignment and pledge and
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(ii) in no event shall such Federal Reserve Bank be considered to be a "Bank" or
be entitled to require the assigning Bank to take or omit to take any action
hereunder.
(e) INFORMATION. Each Bank and the Issuing Bank may furnish any
information concerning the Borrower and its Subsidiaries in the possession of
that Bank or the Issuing Bank from time to time to assignees and participants
(including prospective assignees and participants).
11.06 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part
of the Agent or any Bank or the holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower and the Agent or any Bank or the holder of any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, power or privilege hereunder or under any other Credit Document
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Credit Document expressly provided are
cumulative and not exclusive of any rights, powers or remedies which the Agent
or any Bank or the holder of any Note would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or any Bank or the holder of any Note to any
other or further action in any circumstances without notice or demand.
11.07 PAYMENTS PRO RATA.
(a) The Agent agrees that promptly after its receipt of each payment
from or on behalf of the Borrower in respect of any Obligations of the Borrower
hereunder, it shall distribute by the next Business Day such payment to the
Banks pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Banks agrees that (except as otherwise specifically
provided with respect to Swing Line Loans), if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), that is applicable to the payment of the principal of, or interest
on, the Loans, or under any Letter of Credit of a sum which with respect to the
related sum or sums received by other the Banks is in a greater proportion than
the total amount of such Obligation then owed and due to such Bank bears to the
total amount of such Obligation then owed and due to all of the Banks
immediately prior to such receipt, then such Bank receiving such excess payment
shall purchase for cash without recourse or warranty from the other the Banks an
interest in the Obligations of the Borrower to such the Banks in such amount as
shall result in a proportional participation by all the Banks in such amount;
provided, however, that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such
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recovery, but without interest.
11.08 CALCULATIONS; COMPUTATIONS. The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States consistently
applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Borrower to the Banks).
11.09 GOVERNING LAW; WAIVER OF JURY TRIAL; SERVICE OF PROCESS. THIS
AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. THE AGENT, THE BANKS AND THE
BORROWER HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT. The Borrower hereby agrees that service of all process in
any such proceeding in any such court may be made by registered or certified
mail, return receipt requested, to the Borrower at its address provided on the
signature pages hereto, such service being hereby acknowledged by the Borrower
to be sufficient for personal jurisdiction in any action against the Borrower in
any such court and to be otherwise effective and binding service in every
respect. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of the Agent or any Bank to
bring proceedings against the Borrower in the courts of any other jurisdiction.
11.10 CONFIDENTIALITY. Each Bank shall hold all non-public information
obtained pursuant to the requirements of this Agreement which has been
identified as confidential by the Borrower in accordance with such Bank's
customary procedures for handling confidential information of this nature and in
accordance with safe and sound banking practices, it being understood and agreed
by the Borrower that in any event a Bank may make disclosures to Affiliates of
such Bank or disclosures reasonably required by any bona fide assignee,
transferee or participant in connection with the contemplated assignment or
transfer by such Bank of any Loans or any participations therein or disclosures
required or requested by any governmental agency or representative thereof or
pursuant to legal process; provided that, unless specifically prohibited by
applicable law or court order, each Bank shall notify the Borrower of any
request by any governmental agency or representative thereof (other than any
such request in connection with any examination of the financial condition of
such Bank by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided, further that
in no event shall any Bank be obligated or required to return any materials
furnished by the Borrower or any of its Subsidiaries.
11.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts by
facsimile or otherwise, each of which when so executed and delivered shall be an
original, but all
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of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Agent.
11.12 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
11.13 AMENDMENT OR WAIVER.
A. No approval, consent, amendment or waiver of this Agreement or
any of the Credit Documents shall be effective unless it is in writing signed by
the Agent and the Required Banks; provided, however, that any such approval,
consent, amendment or waiver that (a) reduces the amount of any interest,
principal, fees or other amounts owing to any Bank hereunder, including, without
limitation, amounts payable under Section 4 (but excluding any waiver of any
increase in the interest rate applicable to the Loans pursuant to Section
2.06(e)); (b) releases any Person (except pursuant to any Divestitures and as
set forth in Section 8.02(ii), (iii) and (vi)) from all or any portion of its
liabilities under the Subsidiary Guaranty; (c) amends any provisions of this
Section 11.13; (d) reduces the percentage specified in the definition of the
term "REQUIRED BANKS" or changes the definition of "PRO RATA SHARE" (it being
understood that, with the consent of Required Banks, additional extensions of
credit pursuant to this Agreement may be made on substantially the same basis as
the extensions of the Commitments); (e) postpones the scheduled final maturity
date (but not the date of any scheduled installment of principal) of any of the
Loans or the date on which any interest or any fees are payable under this
Agreement or any of the Credit Documents; (f) releases all or substantially all
of the Collateral (except as set forth in Sections 8.02(i) or (ii) or 8.14, or
if the sale or disposition of such Collateral is permitted under any of the
Credit Documents), or (g) by the terms of any provision of this Agreement
requires the approval of all the Banks shall be effective only if it is in
writing signed by all the Banks directly affected; provided, further, that no
such approval, consent, amendment or waiver shall increase the Commitments of
any Bank over the amount thereof then in effect without the consent of such Bank
(it being understood that approvals, consents, amendments or waivers of
conditions precedent, covenants, defaults or events of default or of a mandatory
prepayment or reduction in the aggregate Commitments shall not constitute an
increase of the Commitment of any Bank); provided further that no amendment,
modification or waiver of any provision of this Agreement relating to Swing Line
Loans or the Swing Line Commitment shall be effective without the written
concurrence of the Swing Line Bank; and provided, further, that no amendment,
modification or waiver of any provision of Section 10 or of any other provision
of this Agreement expressly requiring the approval or concurrence of the Agent
shall be effective without the written concurrence of the Agent.
B. If in connection with any proposed approval, consent, amendment
or waiver with respect to any of the provisions of this Agreement as
contemplated by clauses (a) through (g) of the first proviso of Section 11.13A,
the consent of the Required Banks is obtained but the consent of one or more of
the other Banks whose
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consent is also required is not obtained, then the Borrower shall have the
right, so long as all non-consenting Banks whose individual consent is required
are treated as described in either clause (i) or (ii) below, to either (i)
replace each such non-consenting Bank or Banks with one or more Replacement
Banks (as defined in Section 11.13C) pursuant to Section 11.13C so long as at
the time of such replacement, each such Replacement Bank consents to the
proposed approval, consent, amendment or waiver, or (ii) terminate such
non-consenting Bank's Commitment and repay each outstanding Loan of such Bank,
in accordance with Section 4.02(b); provided that unless the Commitments that
are terminated, and the Loans that are repaid pursuant to the preceding clause
(ii) are immediately replaced in full at such time through the addition of new
Banks or the increase of the Commitments and/or outstanding Loans of existing
Banks (who in each case must specifically consent thereto), then in the case of
any action pursuant to the preceding clause (ii) the Required Banks (determined
before giving effect to the proposed action) shall specifically consent thereto;
provided, further, that in any event the Borrower shall not have the right to
replace a Bank, terminate its Commitment or repay its Loans solely as a result
of the exercise of such Bank's right (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 11.13A.
C. In the event of certain refusals by a Bank as provided in
Section 11.13B to consent to certain proposed approvals, amendments, consents or
waivers with respect to this Agreement which have been approved by the Required
Banks, the Borrower may, upon five Business Days' written notice to the Agent
(which notice the Agent shall promptly transmit to each of the Banks) repay all
Loans, together with accrued and unpaid interest, fees and other amounts owing
to such Bank (a "Replaced Bank") in accordance with, and subject to the
requirements of, said subsection 11.13B so long as (i) in the case of the
repayment of Revolving Loans of any Bank pursuant to this Section 11.13C the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment (at which time SCHEDULE 1.01(A) shall be deemed modified to reflect
the changed Revolving Loan Commitments) and (ii) in the case of the repayment of
Loans of any Bank the consents required by Section 11.13B in connection with the
repayment pursuant to this Section 11.13C have been obtained.
(a) At the time of any replacement pursuant to this subsection
11.13C, the lender replacing such Replaced Bank (the "Replacement Bank")
shall enter into one or more assignment agreements, in form and substance
satisfactory to the Agent, pursuant to which the Replacement Bank shall
acquire all of the Commitments and outstanding Loans of, and participations
in Swing Line Loans and Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect thereof
an amount equal to the sum of (A) an amount equal to the principal of, and
all accrued interest on, all outstanding Loans of the Replaced Bank, (B) an
amount equal to all unpaid drawings with respect to Letters of Credit that
have been funded by (and not reimbursed to) such Replaced Bank, together with
all then unpaid interest with respect thereto at such time, and (C) an amount
equal to all accrued, but theretofore unpaid, fees owing to the Replaced Bank
and (y) the appropriate
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Issuing Bank an amount equal to such Replaced Bank's Pro Rata Share of any
unpaid drawings with respect to Letters of Credit (which at such time remains
an unpaid drawing), to the extent such amount was not theretofore funded by
such Replaced Bank; and
(b) all obligations of the Borrower owing to the Replaced Bank
(excluding those specifically described in clause (a) above in respect of
which the assignment purchase price has been, or is concurrently being, paid)
shall be paid in full to such Replaced Bank concurrently with such
replacement.
Upon the execution of the respective assignment documentation, the
payment of amounts referred to in clauses (a) and (b) above and, if so requested
by the Replacement Bank, delivery to the Replacement Bank of the appropriate
Note or Notes executed by the Borrower, the Replacement Bank shall become a Bank
hereunder and the Replaced Bank shall cease to constitute a Bank hereunder,
except with respect to the Borrower's obligations regarding the indemnification
provisions under this Agreement, which shall survive for the benefit of such
Replaced Bank. Notwithstanding anything to the contrary contained above, no
Issuing Bank may be replaced hereunder at any time while it has Letters of
Credit outstanding hereunder unless arrangements satisfactory to such Issuing
Bank (including the furnishing of a standby letter of credit in form and
substance, and issued by an issuer satisfactory to such Issuing Bank or the
furnishing of cash collateral in amounts and pursuant to arrangements
satisfactory to such Issuing Bank) have been made with respect to such
outstanding Letters of Credit.
11.14 SURVIVAL. All indemnities set forth herein including, without
limitation, in Sections 2.07, 10.06 and 11.01 shall survive the execution and
delivery of this Agreement and the Notes and the making and repayment of the
Loans and the Letters of Credit.
11.15 DOMICILE OF LOANS. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
11.16 INTEGRATION. This Agreement, together with the exhibits to this
Agreement and the other documents described herein, is intended by the parties
hereto as a complete statement of the terms and conditions of their agreement.
11.17 SECURED OBLIGATIONS. The Borrower hereby agrees and confirms
that on and after the Closing Date each Credit Document to which the Borrower is
a party, including, as applicable, the Borrower Security Agreement, the Borrower
Pledge Agreement and the Trademark Security Agreement, and all collateral
encumbered thereby shall continue to secure to the fullest extent possible the
payment and performance of all "Secured Obligations" (as defined in each
applicable Credit Document), including without limitation the payment and
performance of all such "Secured Obligations" in respect of the Obligations of
the Borrower now or hereafter existing under or in respect of this Agreement and
the Notes. Without limiting the generality of the foregoing, the Borrower hereby
acknowledges and confirms its
97
understanding and intent that, upon the Closing Date and as a result thereof,
the definition of "Obligations" contained in this Agreement includes the
obligations of the Borrower under the Notes.
The Borrower acknowledges and agrees that any of the Credit Documents to
which it is a party or otherwise bound shall continue in full force and effect
and that all of its respective obligations thereunder shall be valid and
enforceable and shall not be impaired, limited or otherwise affected by the
execution, delivery or effectiveness of this Agreement or any future amendment
or modification of this Agreement. The Borrower represents and warrants that all
representations and warranties contained in each Credit Document to which it is
a party, including the Borrower Security Agreement, the Borrower Pledge
Agreement and the Trademark Security Agreement, are true, correct and complete
in all material respects on and as of the Closing Date to the same extent as
though made on and as of that date, except to the extent any such representation
or warranty specifically relates to an earlier date, in which case such
representation or warranty shall have been true, correct and complete in all
material respects on and as of such earlier date.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
CAPSTONE PHARMACY SERVICES, INC.,
a Delaware corporation
By: __________________
Name:
Title:
Notice Address:
Capstone Pharmacy Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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BANKERS TRUST COMPANY,
Individually and as the Agent
By: ________________________________
Name: ▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Assistant Vice President
Notice Address: One Bankers Trust Plaza, 14th Floor
New York, New York 10006
Attn: ▇▇▇▇▇▇ ▇▇▇▇
With a copy to: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇., ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇
Lending Office: Bankers Trust Co.
One Bankers Trust Plaza, 14th Floor
New York, New York 10006
100
BANK OF MONTREAL
By: _____________________
Name:
Title:
Notice Address
and Lending Office: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
101
CIBC INC.
By: _____________________
Name:
Title:
Notice Address
and Lending Office: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
102
CORESTATES BANK, N.A.
By: _____________________
Name:
Title:
Notice Address
and Lending Office: ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇
103
CREDITANSTALT CORPORATE FINANCE, INC.
By: ___________________
Name:
Title:
By: ___________________
Name:
Title:
Notice Address
and Lending Office: Two ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
104
MELLON BANK, N.A.
By: ___________________
Name:
Title:
By: ___________________
Name:
Title:
Notice Address
and Lending Office: Room 230
▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇