CREDIT AGREEMENT among ORTHOFIX HOLDINGS, INC., as Borrower, and ORTHOFIX INTERNATIONAL N.V., COLGATE MEDICAL LIMITED, VICTORY MEDICAL LIMITED, SWIFTSURE MEDICAL LIMITED, ORTHOFIX UK LTD, AND THE DOMESTIC SUBSIDIARIES OF ORTHOFIX INTERNATIONAL N.V.,...
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Published
CUSIP Number:
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$375,000,000
among
ORTHOFIX
HOLDINGS, INC.,
as
Borrower,
and
ORTHOFIX
INTERNATIONAL N.V.,
COLGATE
MEDICAL LIMITED,
VICTORY
MEDICAL LIMITED,
SWIFTSURE
MEDICAL LIMITED,
ORTHOFIX
UK LTD,
AND
THE
DOMESTIC SUBSIDIARIES OF ORTHOFIX INTERNATIONAL N.V.,
as
Guarantors,
THE
LENDERS PARTIES HERETO,
WACHOVIA
BANK, NATIONAL ASSOCIATION,
as
Administrative Agent
and
CITICORP
NORTH AMERICA, INC.,
as
Syndication Agent
Dated
as
of September 22, 2006
WACHOVIA
CAPITAL MARKETS, LLC,
and
CITIGROUP
GLOBAL MARKETS INC.,
as
Joint
Lead Arrangers and Joint Bookrunners
TABLE
OF CONTENTS
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Page
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ARTICLE
I DEFINITIONS
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1
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Section
1.1
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Defined
Terms.
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1
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Section
1.2
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Other
Definitional Provisions.
|
34
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Section
1.3
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Accounting
Terms.
|
34
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ARTICLE
II THE LOANS; AMOUNT AND TERMS
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35
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Section
2.1
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Revolving
Loans; Revolver Increase.
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35
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Section
2.2
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Term
Loan Facility; Incremental Term Loan.
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38
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Section
2.3
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Letter
of Credit Subfacility.
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41
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Section
2.4
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Swingline
Loan Subfacility.
|
45
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Section
2.5
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Fees.
|
46
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Section
2.6
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Commitment
Reductions.
|
47
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Section
2.7
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Prepayments.
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48
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|
Section
2.8
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Lending
Offices.
|
50
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Section
2.9
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Default
Rate and Payment Dates.
|
50
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Section
2.10
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Conversion
Options.
|
51
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Section
2.11
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Computation
of Interest and Fees.
|
51
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Section
2.12
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Pro
Rata Treatment and Payments.
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52
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Section
2.13
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Non-Receipt
of Funds by the Administrative Agent.
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54
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Section
2.14
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Inability
to Determine Interest Rate.
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55
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Section
2.15
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Illegality.
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56
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Section
2.16
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Requirements
of Law.
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56
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Section
2.17
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Indemnity.
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58
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Section
2.18
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Taxes.
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59
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Section
2.19
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Indemnification;
Nature of Issuing Lender’s Duties.
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61
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ARTICLE
III REPRESENTATIONS AND WARRANTIES
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62
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|
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Section
3.1
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Financial
Condition.
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62
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Section
3.2
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No
Change.
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63
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Section
3.3
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Corporate
Existence; Compliance with Law.
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63
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Section
3.4
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Corporate
Power; Authorization; Enforceable Obligations.
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65
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Section
3.5
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Status
Under Certain Statutes.
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65
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Section
3.6
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Margin
Regulations.
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65
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Section
3.7
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No
Legal Bar; No Default.
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65
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Section
3.8
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No
Material Litigation.
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66
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Section
3.9
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ERISA.
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66
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Section
3.10
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Environmental
Matters.
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67
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Section
3.11
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Use
of Proceeds.
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68
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Section
3.12
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Subsidiaries.
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68
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Section
3.13
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Ownership.
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68
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Section
3.14
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Indebtedness.
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69
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Section
3.15
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Taxes.
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69
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Section
3.16
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Intellectual
Property.
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69
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Section
3.17
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Solvency.
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70
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i
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Section
3.18
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Investments.
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70
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Section
3.19
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Location
of Collateral.
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70
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Section
3.20
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No
Burdensome Restrictions.
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70
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Section
3.21
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Labor
Matters.
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70
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Section
3.22
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Security
Documents.
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70
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Section
3.23
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Accuracy
and Completeness of Information.
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71
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Section
3.24
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Fraud
and Abuse.
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71
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Section
3.25
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Licensing
and Accreditation.
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72
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Section
3.26
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Other
Regulatory Protection.
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72
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Section
3.27
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Reimbursement
from Third Party Payors.
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72
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Section
3.28
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Other
Agreements.
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73
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Section
3.29
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Material
Contracts.
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73
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Section
3.30
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Insurance.
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73
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Section
3.31
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Classification
as Senior Indebtedness.
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73
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Section
3.32
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Tax
Shelter Regulations.
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73
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Section
3.33
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Regulation
H.
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74
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Section
3.34
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Anti-Terrorism
Laws.
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74
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Section
3.35
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Compliance
with OFAC Rules and Regulations.
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74
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Section
3.36
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Compliance
with FCPA.
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74
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ARTICLE
IV CONDITIONS PRECEDENT
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75
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|
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Section
4.1
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Conditions
to Closing Date and Initial Extensions of Credit.
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75
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Section
4.2
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Conditions
to All Extensions of Credit.
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80
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ARTICLE
V AFFIRMATIVE COVENANTS
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81
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|
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Section
5.1
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Financial
Statements.
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81
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Section
5.2
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Certificates;
Other Information.
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82
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Section
5.3
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Payment
of Obligations.
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83
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Section
5.4
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Conduct
of Business and Maintenance of Existence.
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84
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|
Section
5.5
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Maintenance
of Property; Insurance.
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84
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|
Section
5.6
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Inspection
of Property; Books and Records; Discussions.
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85
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Section
5.7
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Notices.
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85
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Section
5.8
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Environmental
Laws.
|
86
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Section
5.9
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Financial
Covenants.
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87
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|
Section
5.10
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Additional
Subsidiary Guarantors.
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88
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|
Section
5.11
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Compliance
with Law.
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88
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|
Section
5.12
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Pledged
Assets.
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89
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Section
5.13
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Limitations
on Colgate and Victory.
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90
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Section
5.14
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Further
Assurances; Post-Closing Covenant.
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90
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ARTICLE
VI NEGATIVE COVENANTS
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93
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Section
6.1
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Indebtedness.
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93
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Section
6.2
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Liens.
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95
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Section
6.3
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Nature
of Business.
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95
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Section
6.4
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Consolidation,
Merger, Sale or Purchase of Assets, etc.
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95
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Section
6.5
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Advances,
Investments and Loans.
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97
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Section
6.6
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Transactions
with Affiliates.
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97
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Section
6.7
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Ownership
of Subsidiaries; Restrictions.
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97
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ii
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Section
6.8
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Fiscal
Year; Organizational Documents; Material Contracts; Subordinated
Indebtedness Documents.
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98
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Section
6.9
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Limitation
on Restricted Actions.
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98
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Section
6.10
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Restricted
Payments.
|
99
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Section
6.11
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Sale
Leasebacks.
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100
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Section
6.12
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No
Further Negative Pledges.
|
100
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Section
6.13
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Accounts.
|
100
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ARTICLE
VII EVENTS OF DEFAULT
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101
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Section
7.1
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Events
of Default.
|
101
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Section
7.2
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Acceleration;
Remedies.
|
104
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ARTICLE
VIII THE AGENT
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104
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Section
8.1
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Appointment.
|
104
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Section
8.2
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Delegation
of Duties.
|
105
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Section
8.3
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Exculpatory
Provisions.
|
105
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Section
8.4
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Reliance
by Administrative Agent.
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105
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Section
8.5
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Notice
of Default.
|
106
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Section
8.6
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Non-Reliance
on Administrative Agent and Other Lenders.
|
106
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Section
8.7
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Indemnification.
|
107
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Section
8.8
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Administrative
Agent in Its Individual Capacity.
|
107
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Section
8.9
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Successor
Administrative Agent.
|
107
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Section
8.10
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Other
Agents.
|
108
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Section
8.11
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Releases.
|
108
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ARTICLE
IX MISCELLANEOUS
|
109
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Section
9.1
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Amendments,
Waivers and Release of Collateral.
|
109
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Section
9.2
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Notices.
|
111
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Section
9.3
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No
Waiver; Cumulative Remedies.
|
112
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Section
9.4
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Survival
of Representations and Warranties.
|
112
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Section
9.5
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Payment
of Expenses and Taxes.
|
113
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Section
9.6
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Successors
and Assigns; Participations; Purchasing Lenders.
|
114
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Section
9.7
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Adjustments;
Set-off.
|
117
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Section
9.8
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Table
of Contents and Section Headings.
|
119
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Section
9.9
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Counterparts.
|
119
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Section
9.10
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Effectiveness.
|
119
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Section
9.11
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Severability.
|
119
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Section
9.12
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Integration.
|
119
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Section
9.13
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Governing
Law.
|
119
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Section
9.14
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Consent
to Jurisdiction and Service of Process.
|
120
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Section
9.15
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Confidentiality.
|
120
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Section
9.16
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Acknowledgments.
|
121
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Section
9.17
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Waivers
of Jury Trial.
|
121
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Section
9.18
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Patriot
Act Notice.
|
122
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Section
9.19
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Resolution
of Drafting Ambiguities.
|
122
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Section
9.20
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Judgment
Currency; Payments in Dollars.
|
122
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Section
9.21
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Arbitration.
|
122
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iii
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ARTICLE
X GUARANTY
|
124
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|
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Section
10.1
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The
Guaranty.
|
124
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Section
10.2
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Bankruptcy.
|
125
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Section
10.3
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Nature
of Liability.
|
125
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Section
10.4
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Independent
Obligation.
|
125
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Section
10.5
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Authorization.
|
126
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Section
10.6
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Reliance.
|
126
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Section
10.7
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Waiver.
|
126
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Section
10.8
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Limitation
on Enforcement.
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127
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Section
10.9
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Confirmation
of Payment.
|
128
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iv
Schedules
|
Schedule
1.1-1
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Account
Designation Letter
|
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Schedule
1.1-3
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Permitted
Liens
|
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Schedule
2.1(b)(i)
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Form
of Notice of Borrowing
|
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Schedule
2.1(e)
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Form
of Revolving Note
|
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Schedule
2.2(d)
|
Form
of Term Note
|
|
Schedule
2.4(d)
|
Form
of Swingline Note
|
|
Schedule
2.10
|
Form
of Notice of Conversion/Extension
|
|
Schedule
2.18
|
Form
of Tax Exempt Certificate
|
|
Schedule
3.3
|
Qui
Tam Actions
|
|
Schedule
3.8
|
Litigation
|
|
Schedule
3.12
|
Subsidiaries
|
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Schedule
3.16
|
Intellectual
Property
|
|
Schedule
3.19(a)
|
Location
of Real Property
|
|
Schedule
3.19(b)
|
Location
of Collateral
|
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Schedule
3.19(c)
|
Chief
Executive Offices
|
|
Schedule
3.19(d)
|
Mortgaged
Properties
|
|
Schedule
3.21
|
Labor
Matters
|
|
Schedule
3.29
|
Material
Contracts
|
|
Schedule
3.30
|
Insurance
|
|
Schedule
4.1-1
|
Form
of Secretary’s Certificate
|
|
Schedule
4.1-2
|
Form
of Solvency Certificate
|
|
Schedule
4.1-3
|
Form
of Lender Consent
|
|
Schedule
5.10
|
Form
of Joinder Agreement
|
|
Schedule
6.1(b)
|
Indebtedness
|
|
Schedule
6.4(a)
|
Permitted
Asset Sales
|
|
Schedule
6.5
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Investments
|
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Schedule
6.13
|
Accounts
|
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Schedule
9.6(c)
|
Form
of Assignment Agreement
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v
CREDIT
AGREEMENT,
dated
as of September 22, 2006, among ORTHOFIX
HOLDINGS, INC.,
a
Delaware corporation (the “Borrower”),
ORTHOFIX
INTERNATIONAL N.V.,
a
Netherlands Antilles corporation (the “Company”),
COLGATE
MEDICAL LIMITED,
a
company formed under the laws of England and Wales (“Colgate”),
VICTORY
MEDICAL LIMITED,
a
company formed under the laws of England and Wales (“Victory”),
SWIFTSURE
MEDICAL LIMITED,
a
company formed under the laws of England and Wales (“Swiftsure”),
ORTHOFIX
UK LTD,
a
company formed under the laws of England and Wales (“UK
Ltd”),
those
Domestic Subsidiaries of the Company identified as a “Guarantor” on the
signature pages hereto and such other Domestic Subsidiaries of the Company
as
may from time to time become a party hereto (together with Swiftsure and UK
Ltd,
each a “Subsidiary
Guarantor”
and,
together with the Company, Colgate and Victory, the “Guarantors”),
the
several banks and other financial institutions as may from time to time become
parties to this Agreement (collectively, the “Lenders”;
and
individually, a “Lender”),
and
WACHOVIA
BANK, NATIONAL ASSOCIATION,
a
national banking association, as administrative agent for the Lenders hereunder
(in such capacity, the “Administrative
Agent”).
W I T N E S S E T H:
WHEREAS,
the
Borrower has requested that the Lenders make loans and other financial
accommodations to the Borrower in the amount of up to $375,000,000, as more
particularly described herein; and
WHEREAS,
the
Lenders have agreed to make such loans and other financial accommodations to
the
Borrower on the terms and conditions contained herein.
NOW,
THEREFORE,
in
consideration of the premises and the mutual covenants contained herein, the
parties hereto hereby agree as follows:
ARTICLE
I
DEFINITIONS
|
Section
1.1
|
Defined
Terms.
|
As
used
in this Agreement, terms defined in the first paragraph of this Agreement have
the meanings therein indicated, and the following terms have the following
meanings:
“Account
Designation Letter”
shall
mean the Account Designation Letter dated the Closing Date from the Borrower
to
the Administrative Agent substantially in the form attached hereto as
Schedule
1.1-1.
“Acquired
Company”
shall
mean Blackstone Medical, Inc., a Massachusetts corporation.
1
“Acquisition”
shall
mean the merger of New Era Medical Corp., a Massachusetts corporation and a
direct wholly-owned Subsidiary of the Borrower, with and into the Acquired
Company, with the Acquired Company being the surviving company, pursuant to
the
Acquisition Documents.
“Acquisition
Documents”
shall
mean (a) the Agreement and Plan of Merger, dated as of August 4, 2006, among
the
Company, the Borrower, New Era Medical Corp, a Massachusetts corporation and
a
direct wholly-owned Subsidiary of the Borrower, the Acquired Company, the
principal shareholders of the Acquired Company and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, III, as
equityholders’ representative and (b) all other agreements and documents
executed in connection with the Acquisition, each as amended or modified prior
to the Closing Date.
“Additional
Credit Party”
shall
mean each Person that becomes a Guarantor by execution of a Joinder Agreement
in
accordance with Section 5.10.
“Additional
Revolving Loan”
shall
have the meaning set forth in Section 2.1.
“Additional
Term Loan”
shall
have the meaning set forth in Section 2.2.
“Administrative
Agent”
shall
have the meaning set forth in the first paragraph of this Agreement and any
successors in such capacity.
“Administrative
Details Form”
shall
mean, with respect to any Lender, a document containing such Lender’s contact
information for purposes of notices provided under this Agreement and account
details for purposes of payments made to such Lender under this
Agreement.
“Affiliate”
shall
mean as to any Person, any other Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person.
For
purposes of this definition, a Person shall be deemed to be “controlled by” a
Person if such Person possesses, directly or indirectly, power either (a) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such Person or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or
otherwise.
“Agent’s
Fee Letter”
shall
mean the letter agreement dated July 27, 2006 addressed to the Borrower from
Wachovia and WCM, as amended, modified, restated or supplemented from time
to
time in accordance with its terms.
“Agents”
shall
mean a collective reference to Wachovia and Citigroup North America, Inc.
“Agreement”
or
“Credit
Agreement”
shall
mean this Credit Agreement, as amended, restated, modified or supplemented
from
time to time in accordance with its terms.
2
“Alternate
Base Rate”
shall
mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on
such
day plus 1/2 of 1%. For purposes hereof: “Prime
Rate”
shall
mean, at any time, the rate of interest per annum publicly announced from time
to time by Wachovia at its principal office in Charlotte, North Carolina as
its
prime rate. Each change in the Prime Rate shall be effective as of the opening
of business on the day such change in the Prime Rate occurs. The parties hereto
acknowledge that the rate announced publicly by Wachovia as its Prime Rate
is an
index or base rate and shall not necessarily be its lowest or best rate charged
to its customers or other banks; and “Federal
Funds Effective Rate”
shall
mean, for any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published on the next
succeeding Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain
the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard
to
clause (b) of the first sentence of this definition, as appropriate, until
the
circumstances giving rise to such inability no longer exist. Any change in
the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of
such
change.
“Alternate
Base Rate Loans”
shall
mean Loans that bear interest at an interest rate based on the Alternate Base
Rate.
“Applicable
Percentage”
shall
mean, for any day, the rate per annum set forth below opposite the applicable
level then in effect, it being understood that the Applicable Percentage for
(a)
Revolving Loans that are Alternate Base Rate Loans shall be the percentage
set
forth under the column “Alternate Base Rate Margin for Revolving Loans”,
(b)
Revolving Loans that are LIBOR Rate Loans shall be the percentage set forth
under the column “LIBOR Rate Margin for Revolving Loans and Letter of Credit
Fee”, (c)
the
Letter of Credit Fee shall be the percentage set forth under the column “LIBOR
Rate Margin for Revolving Loans and Letter of Credit Fee”, (d)
Term
Loans that are Alternate Base Rate Loans shall be the percentage set forth
under
the column “Alternate Base Rate Margin for Term Loans”, (e)
Term
Loans that are LIBOR Rate Loans shall be the percentage set forth under the
column “LIBOR Rate Margin for Term Loans”, and (f)
the
Commitment Fee shall be the percentage set forth under the column “Commitment
Fee”:
3
|
Level
|
Leverage
Ratio
|
Alternate
Base Rate Margin for Revolving Loans
|
LIBOR
Rate Margin for Revolving Loans and Letter of Credit Fee
|
Alternate
Base Rate Margin for Term Loans
|
LIBOR
Rate Margin for Term Loans
|
Commitment
Fee
|
|
I
|
≥
4.00 to 1.0
|
1.25%
|
2.25%
|
0.75%
|
1.75%
|
0.500%
|
|
II
|
≥
3.25 to 1.0 but
<
4.00 to 1.0
|
1.00%
|
2.00%
|
0.75%
|
1.75%
|
0.375%
|
|
III
|
≥
2.50 to 1.0 but
<
3.25 to 1.0
|
0.75%
|
1.75%
|
0.75%
|
1.75%
|
0.375%
|
|
IV
|
≥
1.75 to 1.0 but
<
2.50 to 1.0
|
0.50%
|
1.50%
|
0.75%
|
1.75%
|
0.250%
|
|
V
|
<
1.75 to 1.0
|
0.25%
|
1.25%
|
0.75%
|
1.75%
|
0.250%
|
The
Applicable Percentage shall, in each case, be determined and adjusted quarterly
on the date five (5) Business Days after the date on which the Administrative
Agent has received from the Borrower the financial information and
certifications required to be delivered to the Administrative Agent and the
Lenders in accordance with the provisions of Sections 5.1(a), (b) and
(c) and Section 5.2(b) (each, an “Interest
Determination Date”).
Such
Applicable Percentage shall be effective from such Interest Determination Date
until the next such Interest Determination Date. The initial Applicable
Percentages shall be based on Level II until
the
first Interest Determination Date occurring after the delivery of the officer’s
compliance certificate pursuant to Section 5.2(b) for the quarter ended December
31, 2006. If the Borrower shall fail to provide the annual and quarterly
financial information and certifications in accordance with the provisions
of
Sections 5.1(a), (b) and (c) and Section 5.2(b), the Applicable Percentage
from such Interest Determination Date shall, on the date five (5) Business
Days
after the date by which the Borrower was so required to provide such financial
information and certifications to the Administrative Agent and the Lenders,
be
based on Level I until such time as such information and certifications are
provided, whereupon the level shall be determined by the then current Leverage
Ratio.
“Approved
Fund”
shall
mean any Fund that is administered, managed or underwritten by (a)
a
Lender, (b)
an
Affiliate of a Lender or (c)
an
entity or an Affiliate of an entity that administers or manages a
Lender.
“Arrangers”
shall
mean Wachovia Capital Markets, LLC and Citigroup Global Markets Inc., as joint
lead arrangers and joint bookrunners, together with their successors and/or
assigns.
“Asset
Disposition”
shall
mean the disposition of any or all of the assets (including, without limitation,
the disposition to any person that is not a Credit Party or a Subsidiary of
Capital Stock of a Subsidiary or any ownership interest in a joint venture)
of
the Company or any of its Subsidiaries whether by sale, lease, transfer or
otherwise. The term “Asset Disposition” shall not include (i) the sale, lease,
transfer or other disposition of assets permitted by Section 6.4(a)(i), (ii),
(iii), (iv), (v) or (vi) hereof or (ii) any Equity Issuance, including any
equity issued upon exercise of employee stock options.
4
“Assignment
Agreement”
shall
mean an Assignment Agreement entered into by a Lender and an Eligible Assignee
(with the consent of any party whose consent is required by Section 9.6), and
accepted by the Administrative Agent, in substantially the form of Schedule
9.6(c)
or any
other form approved by the Administrative Agent.
“Bank
Products”
shall
mean any one or more of the following types of services or facilities extended
to any of the Credit Parties and their Subsidiaries by an Agent or an Affiliate
thereof, to the extent not prohibited by the terms of this Agreement:
(a)
Automated Clearing House (ACH) transactions and other similar money transfer
services; (b)
cash
management, including controlled disbursement and lockbox services;
(c)
establishing and maintaining deposit accounts; (d)
credit
cards or stored value cards; and (e)
other
similar or related bank products and services.
“Bankruptcy
Code”
shall
mean the Bankruptcy Code in Title 11 of the United States Code, as amended,
modified, succeeded or replaced from time to time.
“Borrower”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“Borrowing
Date”
shall
mean, in respect of any Loan, the date such Loan is made.
“Business”
shall
have the meaning set forth in Section 3.10.
“Business
Day”
shall
mean a day other than a Saturday, Sunday or other day on which commercial banks
in Charlotte, North Carolina or New York, New York are authorized or required
by
law to close; provided,
however,
that
when used in connection with a rate determination, borrowing or payment in
respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day
on which banks in London, England are not open for dealings in Dollar deposits
in the London interbank market.
“Capital
Lease”
shall
mean any lease of property, real or personal, the obligations with respect
to
which are required to be capitalized on a balance sheet of the lessee in
accordance with GAAP.
“Capital
Lease Obligations”
shall
mean the capitalized lease obligations relating to a Capital Lease determined
in
accordance with GAAP.
“Capital
Stock”
shall
mean (a)
in the
case of a corporation, capital stock, (b)
in the
case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c)
in the
case of a partnership, partnership interests (whether general or limited),
(d)
in the
case of a limited liability company, membership interests and (e)
any
other interest or participation that confers on a Person the right to receive
a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
5
“Cash
Equivalents”
shall
mean (a)
securities issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the date of
acquisition (“Government
Obligations”),
(b)
U.S.
dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates
of
deposit of (i)
any
United States commercial bank of recognized standing having capital and surplus
in excess of $250,000,000 or (ii)
bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from ▇▇▇▇▇’▇ is at least P-1 or the equivalent thereof
(any such bank being an “Approved
Bank”),
in
each case with maturities of not more than 364 days from the date of
acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by any domestic corporation rated A-1 (or the equivalent thereof)
or
better by S&P or P-1 (or the equivalent thereof) or better by Moody’s and
maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including a Lender) or
a
recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (e)
obligations of any state of the United States or any political subdivision
thereof for the payment of the principal and redemption price of and interest
on
which there shall have been irrevocably deposited Government Obligations
maturing as to principal and interest at times and in amounts sufficient to
provide such payment, (f)
Investments, classified in accordance with GAAP as current assets of the
Borrower or its Subsidiaries, in money market investment programs registered
under the Investment Company Act of 1940, as amended, that are administered
by
financial institutions that have the highest rating obtainable from either
Moody’s or S&P, and the portfolios of which are limited solely to
Investments (i) in corporate obligations having a remaining maturity of less
than two years, issued by corporations having outstanding comparable obligations
that are rated in the two highest categories of Moody’s and S&P or no lower
than the two highest long term debt ratings categories of either Moody’s or
S&P or (ii) of the character, quality and maturity described in clauses
(a)-(e) of this definition and (g)
money
market funds compliant with Rule 2a-7 of the Exchange Act which
consist primarily of cash and cash equivalents set forth in clauses (a) through
(f) above.
“CHAMPUS”
shall
mean the United States Department of Defense Civilian Health and Medical Program
of the United States.
“Change
of Control”
shall
mean the occurrence of any of the following: (a)
any
“person” or “group” (within the meaning of Sections 13(d) and 14(d)(2) of the
Exchange Act) becomes the “beneficial owner” (as defined in Rule l3d-3 under the
Exchange Act) of more than 30% of then outstanding Voting Stock of the Company,
measured by voting power rather than the number of shares; (b)
Continuing Directors shall cease for any reason to constitute a majority of
the
members of the board of directors of the Company then in office, (c)
the
Company shall cease to own, directly or indirectly through wholly-owned
Subsidiaries, all of the outstanding Capital Stock of the Borrower or, except
as
result of the dissolution of Colgate or Victory pursuant to Section
6.4(a)(viii), Colgate or Victory, (d)
Victory
or any successor parent company of the Borrower resulting from the dissolution
of Victory pursuant to Section 6.4(a)(viii) shall cease to own directly all
of
the outstanding Capital Stock of the Borrower
or
(e)
the
occurrence of a “Change of Control” (or any comparable term) under, and as
defined in, the documents evidencing or governing any Subordinated
Indebtedness.
6
“Closing
Date”
shall
mean the date of this Agreement.
“CMS”
shall
mean the Centers for Medicare and Medicaid Services and any successor
thereto.
“Code”
shall
mean the Internal Revenue Code of 1986, as amended, modified, succeeded or
replaced from time to time.
“Colgate”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“Collateral”
shall
mean a collective reference to the collateral that is identified in, and at
any
time will be covered by, the Security Documents and any other property or assets
of a Credit Party, whether tangible or intangible and whether real or personal,
that may from time to time secure the Credit Party Obligations.
“Commitment”
shall
mean the Revolving Commitment, the LOC Commitment, the Swingline Commitment
and
the Term Loan Commitment, individually or collectively, as
appropriate.
“Commitment
Fee”
shall
have the meaning set forth in Section 2.5(a).
“Commitment
Percentage”
shall
mean the Revolving Commitment Percentage and/or the Term Loan Commitment
Percentage, as appropriate.
“Commitment
Period”
shall
mean the period from and including the Closing Date to but not including the
Revolver Maturity Date.
“Commonly
Controlled Entity”
shall
mean an entity, whether or not incorporated, which is under common control
with
the Borrower within the meaning of Section 4001(b)(1) of ERISA or is part of
a
group which includes the Borrower and which is treated as a single employer
under Section 414(b) or 414(c) of the Code or, solely for purposes of Section
412 of the Code to the extent required by such section, Section 414(m) or 414(o)
of the Code.
“Company”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“Consolidated
Capital Expenditures”
shall
mean, for any applicable period of computation, the aggregate amount (whether
paid in cash or accrued as a liability) of all capital expenditures of the
Company and its Subsidiaries on a consolidated basis for such period, as
determined in accordance with GAAP; provided,
however,
Consolidated Capital Expenditures shall not include any such expenditures
(i)
for
replacements and substitutions for capital assets or acquisitions of capital
assets, to the extent made with the proceeds of insurance in accordance with
Section 2.7(b)(ii) or (ii)
for
replacements and substitutions for capital assets or acquisitions of capital
assets, to the extent made with proceeds from the sale, exchange or other
disposition of assets as permitted under Section 2.7(b)(iv) or Section
6.4(a)(iii).
7
“Consolidated
EBITDA”
shall
mean,
for any
applicable period of computation, the sum of (a)
Consolidated Net Income for such period, but excluding therefrom all
extraordinary items of income or loss, plus
(b)
to the
extent deducted in determining Consolidated Net Income for such period, the
sum
of (i)
the
aggregate amount of depreciation and amortization charges for such period,
plus
(ii)
Consolidated Interest Expense for such period, plus
(iii)
the
aggregate amount of all income taxes reflected on the consolidated statements
of
income of the Company and its Subsidiaries for such period plus
(iv)
non-cash charges related to Hedging Agreements plus
(v)
non-cash expenses resulting from the grant of stock options to any director,
officer or employee of any Credit Party or any Subsidiary pursuant to a written
plan or agreement plus
(vi)
fees
and expenses associated with Permitted Acquisitions to the extent such fees
and
expenses do not exceed $8,000,000 during the term of this Agreement plus
(vii)
other
non-cash charges (excluding non-cash charges relating to accounts receivable
and
inventories) in an aggregate amount not to exceed $8,000,000 per year
plus
(viii) fees
and expenses associated with the Acquisition and the closing of this Credit
Agreement in an aggregate amount not to exceed $12,500,000 plus
(ix)
certain
one-time termination costs incurred in
connection with the termination of the Medtronic Services Agreement in an
aggregate amount not to exceed $6,100,000 plus
(x)
non-cash charges with respect to the write-off of research and development
expenses and inventory step-ups related to the Acquisition and the purchase
accounting treatment thereof minus
(xi)
non-cash gains related to Hedging Agreements;
provided,
however,
notwithstanding the foregoing, for purposes of determining the portion of
Consolidated EBITDA attributable to the Acquired Company and its Subsidiaries
for the fiscal quarters ended December 31, 2005, March 31, 2006 and June 30,
2006, such amounts shall be $2,300,000, $2,300,000 and $2,800,000, respectively.
“Consolidated
Interest Expense”
shall
mean, for any applicable period of computation, all interest expense of the
Company and its Subsidiaries on a consolidated basis for such period (including,
without limitation, the interest component under Capital Leases and any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product, but excluding interest income),
as
determined in accordance with GAAP.
“Consolidated
Net Income”
shall
mean, for any applicable period of computation, net income after taxes for
such
period of the Company and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
“Consolidated
Working Capital”
shall
mean, at any date, (a) the consolidated current assets of the Company and its
Subsidiaries as of such date (excluding cash and Permitted Investments and
current deferred tax assets) minus
(b) the
consolidated current liabilities of the Company and its Subsidiaries as of
such
date (excluding current liabilities in respect of Indebtedness and current
deferred tax liabilities). Consolidated Working Capital at any date may be
a
positive or negative number. Consolidated Working Capital increases when it
becomes more positive or less negative and decreases when it becomes less
positive or more negative.
“Continuing
Directors”
shall
mean, during any period of up to twenty-four (24) consecutive months commencing
after the Closing Date, individuals who at the beginning of such twenty-four
(24) month period were directors of the Company (together with any new director
whose (a)
election by the Company’s board of directors, (b)
nomination for election by the Company’s shareholders or board of directors or
(c)
appointment was approved by a vote of at least two-thirds of the directors
then
still in office who either were directors at the beginning of such period or
whose election, nomination for election or appointment was previously so
approved).
8
“Contractual
Obligation”
shall
mean, as to any Person, any provision of any security issued by such Person
or
of any contract, agreement, instrument or undertaking to which such Person
is a
party or by which it or any of its property is bound.
“Copyright
Licenses”
shall
mean any agreement, written or oral, naming the Borrower or any of its
Subsidiaries which are Credit Parties as licensor and granting any right under
any Copyright including, without limitation, any thereof referred to in
Schedule
3.16.
“Copyrights”
shall
mean (a) all registered United States copyrights in all Works, now existing
or
hereafter created or acquired, all registrations and recordings thereof, and
all
applications in connection therewith (including, without limitation,
registrations, recordings and applications in the United States Copyright
Office), including, without limitation, any thereof referred to in Schedule
3.16,
and (b)
all renewals thereof including, without limitation, any renewals referred to
in
Schedule
3.16.
“Credit
Documents”
shall
mean this Agreement, each of the Notes, any Joinder Agreement, the LOC
Documents, the Security Documents and all other agreements, documents,
certificates and instruments delivered to the Administrative Agent or any Lender
by any Credit Party in connection therewith (excluding, however, any Hedging
Agreement).
“Credit
Party”
shall
mean any of the Borrower or the Guarantors.
“Credit
Party Obligations”
shall
mean, without duplication, (a)
all of
the obligations of the Credit Parties to the Lenders (including the Issuing
Lender) and the Administrative Agent, whenever arising, under this Agreement,
the Notes or any of the other Credit Documents (including, but not limited
to,
any interest accruing after the occurrence of a filing of a petition of
bankruptcy under the Bankruptcy Code with respect to any Credit Party,
regardless of whether such interest is an allowed claim under the Bankruptcy
Code), and
(b)
all
liabilities and obligations, whenever arising, owing from any Credit Party
or
any of its Subsidiaries to any Hedging Agreement Provider arising under any
Secured Hedging Agreement permitted pursuant to
Section 6.1(f).
“Debt
Issuance”
shall
mean the issuance of any Indebtedness for borrowed money by the Company or
any
of its Subsidiaries (excluding, for purposes hereof, any Equity Issuance or
any
Indebtedness of the Company and its Subsidiaries permitted to be incurred
pursuant to Section 6.1 (other than Section 6.1(h) (except to the extent
proceeds from such issuance are used to consummate a Permitted Acquisition
if
permitted by such Section)).
“Default”
shall
mean any event which would constitute an Event of Default, whether or not any
requirement for the giving of notice or the lapse of time, or both, or any
other
condition with respect to such Event of Default, has been
satisfied.
9
“Defaulting
Lender”
shall
mean, at any time, any Lender that, at such time (a) has failed to make a Loan
required pursuant to the term of this Credit Agreement or failed to fund a
Participation Interest in accordance with the terms hereof, (b) has failed
to
pay to the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement, or (c) has been deemed insolvent
or has become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.
“Deposit
Account Control Agreement”
shall
mean an agreement, among a Credit Party, a depository institution, and the
Administrative Agent, which agreement is in a form reasonably acceptable to
the
Administrative Agent and which provides the Administrative Agent with “control”
(as such term is used in Article 9 of the Uniform Commercial Code) over the
deposit account(s) described therein, as the same may be as amended, modified,
extended, restated, replaced, or supplemented from time to time.
“Dispute”
shall
have the meaning set forth in Section 9.21.
“Dollars”
and
“$”
shall
mean dollars in lawful currency of the United States of America.
“Domestic
Lending Office”
shall
mean, initially, the office of each Lender designated as such Lender’s Domestic
Lending Office in such Lender’s Administrative Details Form; and thereafter,
such other domestic office of such Lender as such Lender may from time to time
specify to the Administrative Agent and the Borrower as the office of such
Lender at which Alternate Base Rate Loans of such Lender are to be
made.
“Domestic
Subsidiary”
shall
mean any Subsidiary that is organized and existing under the laws of the United
States or any state or commonwealth thereof or under the laws of the District
of
Columbia (other than any Subsidiary domiciled in Puerto Rico).
“Eligible
Assignee”
means
(a) a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any
other Person (other than a natural person) approved by (i) the Administrative
Agent, (ii) in the case of any assignment of a Revolving Commitment, the Issuing
Bank, and (iii) unless an Event of Default has occurred and is continuing,
the
Borrower (each such approval not to be unreasonably withheld or delayed);
provided
that
notwithstanding the foregoing, “Eligible Assignee” shall not include the
Borrower or any of the Borrower’s Affiliates or Subsidiaries.
“Environmental
Laws”
shall
mean any and all applicable foreign, Federal, state, local or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, requirements
of any Governmental Authority or other Requirement of Law (including common
law)
regulating, relating to or imposing liability or standards of conduct concerning
protection of human health as such relates to exposure to Materials of
Environmental Concern or the environment, as now or may at any time be in effect
during the term of this Agreement.
10
“Equity
Issuance”
shall
mean any issuance by the Company or any of its Subsidiaries to any Person that
is not a Credit Party or a Subsidiary of (a) shares of its Capital Stock,
(b) any shares of its Capital Stock pursuant to the exercise of options or
warrants (excluding employee stock options), (c) any shares of its Capital
Stock pursuant to the conversion of any debt securities to equity or
(d) warrants or options which are exercisable for shares of its Capital
Stock. The term “Equity Issuance” shall not include any Asset Disposition, Debt
Issuance, stock options, restricted stock or stock appreciation rights issued
by
the Company or any of its Subsidiaries under a long-term incentive or employee
benefit plan of the Company or any successor plan, any shares of Capital Stock
issued in connection with a stock split (whether pursuant to a stock split
in
the form of a stock dividend or otherwise), or any Capital Stock or stock
options issued in connection with or relating to the Acquisition.
“ERISA”
shall
mean the Employee Retirement Income Security Act of 1974, as amended, modified,
succeeded or replaced from time to time.
“Eurodollar
Reserve Percentage”
shall
mean for any day, the percentage (expressed as a decimal and rounded upwards,
if
necessary, to the next higher 1/100th of 1%) that is in effect for such day
as
prescribed by the Federal Reserve Board (or any successor) for determining
the
maximum reserve requirement (including without limitation any basic,
supplemental or emergency reserves) in respect of Eurocurrency liabilities,
as
defined in Regulation D of such Board as in effect from time to time, or any
similar category of liabilities for a member bank of the Federal Reserve System
in New York City.
“Event
of Default”
shall
mean any of the events specified in Section 7.1; provided,
however,
with
respect to any such event, that any requirement for the giving of notice or
the
lapse of time, or both, or any other condition with respect thereto, has been
satisfied.
“Excess
Cash Flow”
shall
mean, with respect to any fiscal year of the Company commencing with the
Company’s fiscal year ending December 31, 2007, for the Company and its
Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period minus
(b)
Consolidated Capital Expenditures paid in cash for such period minus
(c) Scheduled
Funded Debt Payments made during such period minus
(d)
Consolidated Interest Expense paid in cash (excluding any Consolidated Interest
Expense associated with intercompany Indebtedness) for such period minus
(e)
amounts
paid in respect of federal, state, local and foreign income taxes of the Company
and its Subsidiaries with respect to such period minus
(f)
increases in Consolidated Working Capital plus
(g)
decreases in Consolidated Working Capital minus
(h)
optional prepayments of Revolving Loans (to the extent accompanied by a
corresponding reduction of the Revolving Committed Amount) and the Term Loan
made pursuant to Section 2.7(a) minus
(i)
except
to the extent financed with the proceeds from the incurrence of Indebtedness
or
any Equity Issuance, the amount of any cash consideration paid in connection
with any Permitted Acquisition during such period.
“Exchange
Act”
shall
mean the Securities Exchange Act of 1934, as amended.
“Extension
of Credit”
shall
mean, as to any Lender, the making of a Loan by such Lender or the issuance
of,
or participation in, a Letter of Credit by such Lender.
“Federal
Funds Effective Rate”
shall
have the meaning set forth in the definition of “Alternate Base
Rate”.
11
“Fee
Letters”
shall
mean (a)
the
Agent’s Fee Letter and (b)
the
letter agreement dated July 27, 2006 addressed to the Borrower from Wachovia,
WCM and Citigroup Global Markets Inc.
“Fixed
Charge Coverage Ratio”
shall
mean, with respect to the Company and
its
Subsidiaries on a consolidated basis for the twelve-month period ending on
the
last day of any fiscal quarter of the Company,
the
ratio of (a)
Consolidated EBITDA for such period to (b) the
sum of Consolidated Interest Expense for such period plus
Scheduled Funded Debt Payments required to be made during such period
plus
cash
taxes paid or payable during such period plus
Consolidated Capital Expenditures for such period plus
Restricted Payments made during such period. Notwithstanding the foregoing,
for
purposes of calculating the Fixed Charge Coverage Ratio for the fiscal quarters
ending December 31, 2006, March 31, 2007 and June 30, 2007, the Fixed Charge
Coverage Ratio shall be determined by annualizing the Consolidated Interest
Expense and Scheduled Funded Debt Payments during such fiscal quarters such
that
(i) for the calculation of the Fixed Charge Coverage Ratio as of December 31,
2006, the Consolidated Interest Expense and Scheduled Funded Debt Payments
for
such fiscal quarter would be multiplied by four (4), (ii) for the
calculation of the Fixed Charge Coverage Ratio as of March 31, 2007, the
Consolidated Interest Expense and the Scheduled Funded Debt Payments for the
two
fiscal quarter period then ending would be multiplied by two (2) and (iii)
for the calculation of the Fixed Charge Coverage Ratio as of June 30, 2007,
the
Consolidated Interest Expense and the Scheduled Funded Debt Payments for the
three fiscal quarter period then ending would be multiplied by one and
one-third (1 1/3).
“Flood
Hazard Property”
shall
have the meaning set forth in Section 5.14(d).
“Foreign
Subsidiary”
shall
mean any Subsidiary that is not a Domestic Subsidiary, but shall not include
Victory, Colgate, Swiftsure or UK Ltd.
“Fund”
means
any Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.
“Funded
Debt”
shall
mean,
with
respect to any Person, without duplication, (a) all obligations of such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional sale
or
other title retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under agreements
with
suppliers entered into in the ordinary course of business), (d) all obligations
of such Person incurred, issued or assumed as the deferred purchase price of
property or services purchased by such Person (other than trade debt incurred
in
the ordinary course of business and due within six months of the incurrence
thereof) that would appear as liabilities on a balance sheet of such Person,
including, without limitation, the reasonably anticipated liability relating
to
any earnout obligations whether or not included on the balance sheet of such
Person, (e) the principal portion of all obligations of such Person under
Capital Leases, (f) all obligations of such Person under Hedging Agreements
to
the extent required to be accounted for as a liability under GAAP, excluding
any
portion thereof which would be accounted for as interest expense under GAAP,
(g)
the maximum amount of all letters of credit issued or bankers’ acceptances
facilities created for the account of such Person and, without duplication,
all
drafts drawn thereunder (to the extent unreimbursed), (h) all preferred Capital
Stock or other equity interests issued by such Person and which by the terms
thereof could be (at the request of the holders thereof or otherwise) subject
to
mandatory sinking fund payments, redemption or other acceleration, (i)
the
principal balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product,
(j) all
Indebtedness of others of the type described in clauses (a) through (i) hereof
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person, whether
or not the obligations secured thereby have been assumed; provided
that for
purposes of the amount of Indebtedness pursuant to this clause (j) shall equal
the lesser of (i) such Indebtedness, or (ii) the value of the property subject
to such Lien, (k) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person of the type described in clauses (a) through
(i)
hereof, and (l) all Indebtedness of the type described in clauses (a) through
(i) hereof of any partnership or unincorporated joint venture in which such
Person is a general partner or a joint venturer; provided,
however,
that
with respect to Funded Debt of the Company and its Subsidiaries, Funded Debt
shall not include (x) Subordinated Indebtedness among the Borrower and the
Guarantors to the extent such Indebtedness would be eliminated on a consolidated
basis or (y) any obligation of the Company to Medtronic in connection with
the
termination of the Medtronic Services Agreement in an aggregate amount not
to
exceed $6,100,000 during the term of this Agreement.
12
“GAAP”
shall
mean generally accepted accounting principles in effect in the United States
of
America applied on a consistent basis, subject,
however,
in the
case of determination of compliance with the financial covenants set out in
Section 5.9, to the provisions of Section 1.3.
“German
Breg”
shall
mean Breg Deutschland GmbH, a German company.
“German
Buyout”
shall
mean the purchase by Orthofix GmbH of the remaining 48% ownership interest
in
German Breg pursuant to that certain deferred purchase agreement, dated as
of
February 17, 2006 by and among Orthofix GmbH, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ Hansjorg,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇.
“Government
Acts”
shall
have the meaning set forth in Section 2.19(a).
“Governmental
Authority”
shall
mean any nation or government, any state or other political subdivision thereof
and any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
“Guarantor”
shall
mean the Company, Colgate, Victory and each
Subsidiary Guarantor.
“Guaranty”
shall
mean the guaranty of the Guarantors set forth in Article X.
“Guaranty
Obligations”
shall
mean, with respect to any Person, without duplication, any obligations of such
Person (other than endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to guarantee
any
Indebtedness of any other Person in any manner, whether direct or indirect,
and
including without limitation any obligation, whether or not contingent,
(a)
to
purchase any such Indebtedness or any property constituting security therefore,
(b)
to
advance or provide funds or other support for the payment or purchase of any
such Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep well
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (c)
to
lease or purchase Property, securities or services primarily for the purpose
of
assuring the holder of such Indebtedness, or (d)
to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger)
of
the Indebtedness in respect of which such Guaranty Obligation is
made.
13
“Hedging
Agreement Provider”
shall
mean any Person that enters into a Secured Hedging Agreement with a Credit
Party
or any of its Subsidiaries that is permitted by Section 6.1(f) to the extent
such Person is a Lender, an Affiliate of a Lender or any other Person that
was a
Lender (or an Affiliate of a Lender) at the time it entered into the Secured
Hedging Agreement but has ceased to be a Lender (or whose Affiliate has ceased
to be a Lender) under the Credit Agreement; provided, in the case of a Secured
Hedging Agreement with a Person who is no longer a Lender, such Person shall
be
considered a Hedging Agreement Provider only through the stated maturity date
(without extension or renewal) of such Secured Hedging Agreement.
“Hedging
Agreements”
shall
mean, with respect to any Person, any agreements entered into to protect such
Person against fluctuations in interest rates, or currency or raw materials
values, including, without limitation, any interest rate swap, cap or collar
agreements or similar arrangements between such Person and one or more
counterparties, any foreign currency exchange agreements, currency protection
agreements, commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements.
“Incremental
Term Facility”
shall
have the meaning set forth in Section 2.2.
“Indebtedness”
shall
mean, with
respect to any Person, without duplication, (a) all obligations of such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, or upon which interest payments are
customarily made, (c) all obligations of such Person under conditional sale
or
other title retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under agreements
with
suppliers entered into in the ordinary course of business), (d) all obligations
of such Person issued or assumed as the deferred purchase price of property
or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence thereof)
that would appear as liabilities on a balance sheet of such Person, including,
without limitation, the reasonably anticipated liability relating to any earnout
obligations whether or not included on the balance sheet of such Person, (e)
all
obligations of such Person under take-or-pay or similar arrangements or under
commodities agreements, (f) all Indebtedness of others secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, provided that for purposes of the amount
of
Indebtedness pursuant to this clause (j) shall equal the lesser of (i) such
Indebtedness, or (ii) the value of the property subject to such Lien, (g) all
Guaranty Obligations of such Person with respect to Indebtedness of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases plus any accrued interest thereon, (i) all obligations of such
Person under Hedging Agreements to the extent required to be accounted for
as a
liability under GAAP, excluding any portion thereof which would be accounted
for
as interest expense under GAAP, (j) the maximum amount of all letters of credit
issued or bankers’ acceptances facilities created for the account of such Person
and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (k) all preferred Capital Stock or other equity interest issued
by such Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration, (l) the
principal balance outstanding under any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing product
plus any accrued interest thereon,
and (m)
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer; provided,
however,
that
with respect to Indebtedness of the Company, Indebtedness shall not include
any
obligation of the Company to Medtronic in connection with the termination of
the
Medtronic Services Agreement in an aggregate amount not to exceed $6,100,00
during the term of this Agreement.
14
“Insolvency”
shall
mean, with respect to any Multiemployer Plan, the condition that such Plan
is
insolvent within the meaning of such term as used in Section 4245 of
ERISA.
“Insolvent”
shall
mean being in a condition of Insolvency.
“Intellectual
Property”
shall
mean, collectively, all
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks and
Trademark Licenses.
“Interest
Determination Date”
shall
have the meaning assigned thereto in the definition of “Applicable
Percentage”.
“Interest
Payment Date”
shall
mean (a) as to any Alternate Base Rate Loan or Swingline Loan, the last Business
Day of each March, June, September and December during the term of this
Agreement and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan
having an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any LIBOR Rate Loan having an Interest Period longer than
three months, (i)
each
three month anniversary of the first day of such Interest Period and
(ii)
the
last day of such Interest Period, and (d) as to any Loan which is the subject
of
a mandatory prepayment required pursuant to Section 2.7(b) hereof, the date
of
such prepayment.
“Interest
Period”
shall
mean, subject to availability, with respect to any LIBOR Rate Loan,
(a) initially,
the period commencing on the Borrowing Date or conversion date, as the case
may
be, with respect to such LIBOR Rate Loan and ending one, two, three, six, or
subject to the consent of all applicable Lenders, nine months thereafter, as
selected by the Borrower in the Notice of Borrowing or Notice of
Conversion/Extension given with respect thereto; and
15
(b) thereafter,
each period commencing on the last day of the immediately preceding Interest
Period applicable to such LIBOR Rate Loan and ending one, two, three, six,
or,
subject to the consent of all applicable Lenders, nine months thereafter, as
selected by the Borrower by irrevocable notice to the Administrative Agent
not
less than three (3) Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided
that the
foregoing provisions are subject to the following:
(i)
if
any
Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month in which event such Interest
Period shall end on the immediately preceding Business Day;
(ii) any
Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month for such
Interest Period;
(iii) if
the
Borrower shall fail to give notice as provided above, the Borrower shall be
deemed to have selected an Alternate Base Rate Loan to replace the affected
LIBOR Rate Loan;
(iv) any
Interest Period in respect of any Loan that would otherwise extend beyond the
Maturity Date for such Loan shall end on such Maturity Date;
(v) with
regard to the Term Loan, no Interest Period shall extend beyond any principal
amortization payment date unless the portion of the Term Loan consisting of
Alternate Base Rate Loans together with the portion of the Term Loan consisting
of LIBOR Rate Loans with Interest Periods expiring prior to or concurrently
with
the date such principal amortization payment date is due, is at least equal
to
the amount of such principal amortization payment due on such date; and
(vi) no
more
than six (6) LIBOR Rate Loans may be in effect at any time; provided
that,
for purposes hereof, LIBOR Rate Loans with different Interest Periods shall
be
considered as separate LIBOR Rate Loans, even if they shall begin on the same
date and have the same duration, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new LIBOR Rate Loan with a single
Interest Period.
16
“Internal
Control Event”
shall
mean a material weakness in, or fraud that involves management or other
employees who have a significant role in, any Credit Party’s internal controls
over financial reporting, in each case as described in the Securities Laws,
to
the extent such material weakness or fraud could reasonably be expected to
cause
a Material Adverse Effect.
“Investment”
shall
mean all investments made directly or indirectly in, to or from any Person,
whether in cash or by acquisition of shares of Capital Stock, property, assets,
indebtedness or other obligations or securities or by loan advance, capital
contribution or otherwise.
“Issuing
Lender”
shall
mean Wachovia.
“Issuing
Lender Fees”
shall
have the meaning set forth in Section 2.5(c).
“Joinder
Agreement”
shall
mean a Joinder Agreement substantially in the form of Schedule
5.10,
executed and delivered by an Additional Credit Party in accordance with the
provisions of Section 5.10.
“Judgment
Currency”
shall
have the meaning set forth in Section 9.20.
“Lender”
shall
have the meaning set forth in the first paragraph of this Agreement and shall
include the Issuing Lender and the Swingline Lender.
“Lender
Commitment Letter”
shall
mean, with respect to any Lender, the letter (or other correspondence) to such
Lender from the Administrative Agent notifying such Lender of its LOC
Commitment, Revolving Commitment Percentage and/or Term Loan Commitment
Percentage.
“Letters
of Credit”
shall
mean any letter of credit issued by the Issuing Lender pursuant to the terms
hereof, as such Letters of Credit may be amended, modified, extended, renewed
or
replaced from time to time.
“Letter
of Credit Fee”
shall
have the meaning set forth in Section 2.5(b).
“Leverage
Ratio”
shall
mean, with
respect to the Company and its Subsidiaries
on a consolidated basis for the twelve-month period ending on the last day
of
any fiscal quarter of the Company,
the
ratio of (a) Funded Debt of the Company and its Subsidiaries on a consolidated
basis on the last day of such period to (b) Consolidated EBITDA of the Company
and its Subsidiaries for such period.
17
“LIBOR”
shall
mean, for
any
LIBOR Rate Loan for any Interest Period therefore, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page
3750 (or any successor page) as the London interbank offered rate for deposits
in Dollars at approximately 11:00 A.M.
(London
time) two (2) Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period. If for any reason such rate
is
not available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any
Interest Period therefore, the rate per annum (rounded upwards, if necessary,
to
the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00
A.M.
(London
time) two (2) Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided,
however,
if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%). If,
for
any reason, neither of such rates is available, then “LIBOR” shall mean the rate
per annum at which, as determined by the Administrative Agent, Dollars in an
amount comparable to the Loans then requested are being offered to leading
banks
at approximately 11:00 A.M. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period for settlement in immediately
available funds by leading banks in the London interbank market for a period
equal to the Interest Period selected.
“LIBOR
Lending Office”
shall
mean, initially, the office of each Lender designated as such Lender’s LIBOR
Lending Office in such Lender’s Administrative Details Form; and thereafter,
such other office of such Lender as such Lender may from time to time specify
to
the Administrative Agent and the Borrower as the office of such Lender at which
the LIBOR Rate Loans of such Lender are to be made.
“LIBOR
Rate”
shall
mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th
of 1%) determined by the Administrative Agent pursuant to the following
formula:
LIBOR
Rate
=
LIBOR
1.00
-
Eurodollar Reserve Percentage
“LIBOR
Rate Loan”
shall
mean Loans the rate of interest applicable to which is based on the LIBOR
Rate.
“Lien”
shall
mean any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or
any
preference, priority or other security agreement or preferential arrangement
of
any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
“Loan”
shall
mean a Revolving Loan, a Swingline Loan and/or a Term Loan, as
appropriate.
“LOC
Commitment”
shall
mean the commitment of the Issuing Lender to issue Letters of Credit and, with
respect to each Revolving Lender, the commitment of such Revolving Lender to
purchase participation interests in the Letters of Credit up to the amount
identified as such Revolving Lender’s “LOC Commitment” on such Lender’s Lender
Commitment Letter or in the Register, as such amount may be modified in
connection with any assignment made in accordance with the provisions of Section
9.6(c) or reduced from time to time in accordance with the provisions
hereof.
18
“LOC
Committed Amount”
shall
have the meaning set forth in Section 2.3(a).
“LOC
Documents”
shall
mean, with respect to any Letter of Credit, such Letter of Credit, any
amendments thereto, any documents delivered in connection therewith, any
application therefore, and any agreements, instruments, guarantees or other
documents (whether general in application or applicable only to such Letter
of
Credit) governing or providing for (a)
the
rights and obligations of the parties concerned or (b)
any
collateral security for such obligations.
“LOC
Obligations”
shall
mean, at any time, the sum of (a)
the
maximum amount which is, or at any time thereafter may become, available to
be
drawn under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus
(b)
the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
“Mandatory
Borrowing”
shall
have the meaning set forth in Section 2.3(e) and Section 2.4(b)(ii),
as the context may require.
“Material
Adverse Effect”
shall
mean a material adverse effect on (a) the business, operations, property,
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken as
a
whole, (b) the ability of the Borrower or the Borrower and the Guarantors taken
as a whole, to perform their obligations when such obligations are required
to
be performed, under this Agreement, any of the Notes or any other Credit
Document or (c) the validity or enforceability of this Agreement, any of the
Notes or any of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
“Material
Contract”
shall
mean any contract or other arrangement, whether written or oral, to which any
Credit Party is a party as to which the breach, nonperformance, cancellation
or
failure to renew by any party thereto could reasonably be expected to have
a
Material Adverse Effect.
“Material
Property”
shall
mean real and/or personal property of the Credit Parties with an aggregate
fair
market value greater than or equal to $5,000,000.
“Materials
of Environmental Concern”
shall
mean any gasoline or petroleum (including crude oil or any fraction thereof)
or
petroleum products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law, including,
without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde
insulation.
“Maturity
Date”
shall
mean the Revolver Maturity Date and/or the Term Loan Maturity Date, as
applicable.
19
“Medicaid”
shall
mean that entitlement program under Title XIX of the Social Security Act that
provides federal grants to states for medical assistance based on specific
eligibility criteria.
“Medicaid
Certification”
shall
mean recognition by a state agency or other such entity administering a
particular state’s Medicaid program that a health care provider or supplier is
in compliance with all the conditions of participation set forth in the
appropriate state and federal Medicaid Regulations.
“Medicaid
Provider Agreement”
shall
mean an agreement entered into between a state agency
or
other such entity administering the Medicaid program and a health care provider
or supplier under which the health care provider or supplier agrees to provide
services for Medicaid patients in accordance with the terms of the agreement
and
Medicaid Regulations.
“Medicaid
Regulations”
shall
mean, collectively, (a)
all
federal statutes (whether set forth in Title XIX of the Social Security Act
or
elsewhere) affecting the medical assistance program established by Title XIX
of
the Social Security Act and any statutes succeeding thereto; (b)
all
applicable provisions of all federal rules, regulations, manuals and orders
of
all Governmental Authorities promulgated pursuant to or in connection with
the
statutes described in clause (a) above and all federal administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (a) above; (c)
all
state statutes and plans for medical assistance enacted in connection with
the
statutes and provisions described in clauses (a) and (b) above; and
(d)
all
applicable provisions of all rules, regulations, manuals and orders of all
Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (c) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (b) above, in each case as may be amended, supplemented
or
otherwise modified from time to time.
“Medical
Reimbursement Programs”
shall
mean Medicare, Medicaid and TRICARE programs and any other healthcare program
operated by or financed in whole or in part by any foreign, federal, state
or
local government and any other non-government funded third party payor
programs.
“Medicare
Certification”
shall
mean recognition by CMS or an entity under contract with CMS that the health
care provider or supplier is in compliance with all of the conditions of
participation set forth in the Medicare Regulations.
“Medicare
Provider Agreement”
means
an agreement entered into between CMS or other such entity administering the
Medicare program on behalf of CMS, and a health care provider or supplier under
which the health care provider or supplier agrees to provide services for
Medicare patients in accordance with the terms of the agreement and Medicare
Regulations.
20
“Medicare”
shall
mean that government-sponsored entitlement program under Title XVIII of the
Social Security Act that provides for a health insurance system for eligible
elderly and disabled individuals.
“Medicare
Regulations”
shall
mean, collectively, all Federal statutes (whether set forth in Title XVIII
of
the Social Security Act or elsewhere) affecting the health insurance program
for
the aged and disabled established by Title XVIII of the Social Security Act
and
any statutes succeeding thereto; together with all applicable provisions of
all
rules, regulations, manuals and orders and administrative, reimbursement and
other guidelines having the force of law of all Governmental Authorities
(including, without limitation, the United States Department of Health and
Human
Services (“HHS”),
CMS,
the OIG, or any person succeeding to the functions of any of the foregoing)
promulgated pursuant to or in connection with any of the foregoing having the
force of law, as each may be amended, supplemented or otherwise modified from
time to time.
“Medtronic”
shall
mean Medtronic Sofamor ▇▇▇▇▇ USA, Inc., a Tennessee corporation.
“Medtronics
Services Agreement”
shall
mean that certain Marketing Services Agreement, effective May 1, 2005 and
terminated August 10, 2006, between the Company and Medtronic.
“Moody’s”
shall
mean ▇▇▇▇▇’▇ Investors Service, Inc or any successor rating agency.
“Mortgage
Instruments”
shall
mean any mortgage, deed of trust or deed to secure debt executed by a Credit
Party in favor of the Administrative Agent pursuant to the terms of Section
5.14(d), 5.10 or 5.12, as the same may be amended, modified, restated or
supplemented from time to time.
“Mortgage
Policy”
shall
mean an ALTA mortgagee title insurance policy issued by the Title Insurance
Company in an amount (limited to 125% of the appraised value (if an appraisal
is
available) or, if no appraisal is available, then 125% of the assessed
value) satisfactory
to the Administrative Agent, in form and substance satisfactory to the
Administrative Agent.
“Mortgaged
Property”
shall
mean any owned or leased real property of a Credit Party with respect to which
such Credit Party executes a Mortgage Instrument in favor of the Administrative
Agent.
“Multiemployer
Plan”
shall
mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3)
of
ERISA.
“Net
Cash Proceeds”
shall
mean the aggregate cash proceeds received by (a) the Company or any of its
Subsidiaries in respect of any Asset Disposition, Debt Issuance, Recovery Event
or sale, lease, transfer or other disposition pursuant to Section 6.4(a)(iii)(B)
and (b) the Company or any of the Company’s Subsidiaries in respect of any
Equity Issuance, in each case net of (i) direct costs paid or payable as a
result thereof (including, without limitation, reasonable legal, accounting
and
investment banking fees, and sales commissions), (ii) taxes paid or payable
as a
result thereof and (iii) with respect to Indebtedness incurred pursuant to
Section 6.1(h), the direct costs incurred prior to or within 7 days of the
issuance of such Indebtedness and paid or payable as a result of any call spread
or simultaneous purchase and sale of call options for the same number of shares
instituted with respect to such Indebtedness in an aggregate amount up to 15%
of
the gross proceeds received by the Company and its Subsidiaries from such
Indebtedness; it being understood that “Net Cash Proceeds” shall include,
without limitation, any cash received upon the sale or other disposition of
any
non-cash consideration received by the Company or any of its Subsidiaries in
respect of such Asset Disposition, Equity Issuance, Debt Issuance, Recovery
Event or sale, lease, transfer or other disposition pursuant to Section
6.4(a)(iii)(B).
21
“Note”
or
“Notes”
shall
mean the Revolving Notes, the Swingline Note and/or the Term Notes,
collectively, separately or individually, as appropriate.
“Notice
of Borrowing”
shall
have the meaning set forth in Section 2.1(b)(i).
“Notice
of Conversion/Extension”
shall
have the meaning set forth in Section 2.10.
“Obligations”
shall
mean, collectively, Loans and LOC Obligations.
“OFAC”
shall
mean the U.S. Department of the Treasury’s Office of Foreign Assets
Control.
“OIG”
shall
mean the Office of the Inspector General for the United States Department of
Health and Human Services.
“Participant”
shall
have the meaning set forth in Section 9.6(b).
“Participation
Interest”
shall
mean the purchase by a Revolving Lender of a participation interest in Letters
of Credit as provided in Section 2.3 and in Swingline Loans as provided in
Section 2.4.
“Patent
License”
shall
mean any agreement, whether written or oral, providing for the grant by or
to
the Borrower or any of its Subsidiaries which are Credit Parties of any right
to
manufacture, use or sell any invention covered by a Patent, including, without
limitation, any thereof referred to in Schedule
3.16.
“Patents”
shall
mean (a) all patents of the United States or any other country and all reissues
and extensions thereof, including, without limitation, any thereof referred
to
in Schedule 3.16,
and (b)
all applications for patents of the United States or any other country and
all
divisions, continuations and continuations-in-part thereof, including, without
limitation, any thereof referred to in Schedule
3.16.
“Patriot
Act”
shall
have the meaning set forth in Section 9.18.
“PBGC”
shall
mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle
A
of Title IV of ERISA.
22
“Permitted
Acquisition”
shall
mean any acquisition or any series of related acquisitions by any Credit Party
of the assets or a majority of the Voting Stock or equity interests of a Person
or any division, line of business or other business unit of such Person (such
Person or such division, line of business or other business unit of such Person
referred to herein as the “Target”),
in
each case that is a type of business (or assets used in a type of business)
permitted to be engaged in by the Credit Parties pursuant to this Credit
Agreement, so long as (a)
no
Default or Event of Default shall then exist or would exist after giving effect
thereto, (b)
to the
extent required under this Agreement, the Administrative Agent, on behalf of
the
Lenders, shall have received (or shall receive in connection with the closing
of
such acquisition), a first priority perfected security interest in all property
with such exceptions as are consistent with Permitted Liens or otherwise
reasonably approved by the Administrative Agent (including, without limitation,
Capital Stock or equity interests) acquired with respect to the Target and
the
Target, if a Person, shall have executed a Joinder Agreement, (c)
such
acquisition is not a “hostile” acquisition and has been approved by the board of
directors and/or shareholders (or comparable persons or groups) of the
applicable Credit Party and the Target, (d) the
total consideration (including, without limitation, cash, assumed Indebtedness,
earnout payments and any other deferred payment but excluding the Capital Stock
of the applicable Credit Party) paid for the Target acquired in such acquisition
or series of related acquisitions shall not exceed $40,000,000 for any
individual acquisition (or series of related acquisitions) or $100,000,000
(of
which only $25,000,000 in the aggregate may be acquisitions or portions of
acquisitions involving assets situated outside the United States of America
or
the Capital Stock of any Person organized outside the United States of America)
in the aggregate during the term of this Agreement, (e)
to the
extent the total consideration of any Permitted Acquisition is in excess of
$15,000,000, the Target shall have earnings before interest, taxes, depreciation
and amortization in an amount greater than $0, determined on a Pro Forma Basis
for the period of twelve fiscal months most recently ended, (f) after
giving effect to such acquisition, there shall be at least $10,000,000 of
borrowing availability under the Revolving Committed Amount, (g)
the
Administrative Agent shall have received a certificate from a Responsible
Officer of the Borrower certifying that, in the reasonable judgment of the
Credit Parties, the Credit Parties have conducted such financial, legal,
environmental and consulting due diligence with respect to the Target as a
substantially similarly situated prudent purchaser acquiring substantially
similar property and/or assets would customarily conduct, and (h)
to the
extent the total consideration of any Permitted Acquisition is in excess of
$5,000,000 or the Borrower requests a Revolving Loan to fund such Permitted
Acquisition, the Borrower shall provide not less than fifteen (15) days prior
to
the consummation of such Permitted Acquisition (i) a
reasonably detailed description of the material terms of such Permitted
Acquisition (including, without limitation, the purchase price and method and
structure of payment) and of each Target, (ii) to the extent available,
financial statements of the Target for the previous two years and year-to-date
financial statements of the Target, and (iii)
a
certificate, in form and substance reasonably satisfactory to the Administrative
Agent, executed by a Responsible Officer of the Borrower (A) setting forth
the
best good faith estimate of the total consideration (including, without
limitation, cash, Capital Stock, assumed Indebtedness, earnout payments and
any
other deferred payment) to be paid for each Target, and (B) certifying that
such Permitted Acquisition complies with the requirements of this Credit
Agreement, and (C) certifying and demonstrating that after giving effect to
such
Permitted Acquisition and any borrowings in connection therewith on a Pro Forma
Basis, the Company and its Subsidiaries will be in compliance with the financial
covenants set forth in Section 5.9.
23
“Permitted
Investments”
shall
mean:
(a) cash
and
Cash Equivalents;
(b) receivables
owing to the Borrower or any of its Subsidiaries or any receivables and advances
to suppliers, in each case if created, acquired or made in the ordinary course
of business and payable or dischargeable in accordance with customary trade
terms;
(c) Investments
(including, without limitation, the purchase or ownership of Capital Stock)
by
any Credit Party in any other Credit Party (other than the Company) and
Subordinated Indebtedness owing by any Credit Party (other than the Company)
to
any other Credit Party; provided
that any
Investment or Subordinated Indebtedness made or issued by a Credit Party (other
than the Company) in or to Colgate or Victory shall be made or issued in
accordance with the Tax Structure Documents;
(d) loans
and
advances to officers, directors, employees and Affiliates that are not Credit
Parties or their Subsidiaries in the ordinary course of business in an aggregate
amount not to exceed $500,000 at any time outstanding;
(e) Investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the
ordinary course of business;
(f)
Investments
by any Foreign Subsidiary in any Credit Party or any other Foreign Subsidiary
and Investments by the Company in any Foreign Subsidiary;
(g) Investments,
acquisitions or transactions permitted under Section 6.4(b);
(h) Permitted
Acquisitions;
(i)
Hedging
Agreements to the extent permitted pursuant to Section 6.1(f);
(j)
Investments
set forth on Schedule
6.5;
(k) loans
and
advances by Colgate and Victory to the Company to the extent that such loans
and
advances would be permitted by Section 6.10(d), (f) or (i) if made as Restricted
Payments rather than loans and advances;
(l)
Investments
in German Breg pursuant to the German Buyout in an aggregate amount not to
exceed $4,000,000;
24
(m) direct
costs referred to in clause (iii) of the definition of Net Cash Proceeds;
and
(n) additional
loan advances and/or Investments of a nature not contemplated by the foregoing
clauses hereof; provided
that
such loans, advances and/or Investments made pursuant to this clause (n) shall
not exceed an aggregate amount of $5,000,000.
“Permitted
Liens”
shall
mean:
(a) Liens
created by or otherwise existing, under or in connection with this Agreement
or
the other Credit Documents in favor of the Administrative Agent and each other
Secured Party;
(b) Liens
securing purchase money Indebtedness and Capital Lease Obligations to the extent
permitted under Section 6.1(c), including Liens existing on any asset at the
time of acquisition pursuant to a Permitted Acquisition (other than any such
Liens created in contemplation of such acquisition that do not secure the
purchase price); provided
that
(i)
any
such Lien attaches to such property concurrently with or within thirty (30)
days after the acquisition thereof and (ii)
such
Lien attaches solely to the property so acquired in such
transaction;
(c) Liens
for
taxes, assessments, charges or other governmental levies not yet due or as
to
which the period of grace (not to exceed 60 days), if any, related thereto
has
not expired or which are being contested in good faith by appropriate
proceedings; provided
that
adequate reserves with respect thereto are maintained on the books of the
Borrower or any of its Subsidiaries, as the case may be, in conformity with
GAAP;
(d) carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business which are not overdue for a period
of
more than sixty (60) days or which are being contested in good faith by
appropriate proceedings;
(e) pledges
or deposits in connection with workers’ compensation, unemployment insurance and
other social security legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements incurred in the ordinary
course of business;
(f)
deposits
to secure the performance of bids, trade contracts (other than for borrowed
money), leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the ordinary course
of
business;
(g) any
extension, renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any Lien referred to in the foregoing
clauses; provided
that
such extension, renewal or replacement Lien shall be limited to all or a part
of
the property which secured the Lien so extended, renewed or
replaced;
25
(h) Liens
in
favor of a Hedging Agreement Provider in connection with any Secured Hedging
Agreement, but only (i)
to the
extent such Liens are on the Collateral and are shared ratably with the
Administrative Agent and (ii)
if such
Hedging Agreement Provider, the Administrative Agent and the Lenders shall
share
the proceeds of the Collateral subject to such Liens in accordance with the
terms of Section 2.12(b);
(i)
Liens
existing on the Closing Date and set forth on Schedule
1.1-3;
provided that no such Lien shall at any time be extended to cover property
or
assets other than the property or assets subject thereto on the Closing
Date;
(j)
easements,
rights-of-way, restrictions (including zoning restrictions), minor defects
or
irregularities in title and other similar charges or encumbrances shown on
any
Mortgage Policy or not, in any material respect, impairing the use of the
encumbered Property for its intended purposes;
(k) Liens
on
the assets of Foreign Subsidiaries securing Indebtedness of Foreign Subsidiaries
permitted by Section 6.1(e); and
(l)
Liens
on
equipment arising from precautionary UCC financing statements relating to the
lease of such equipment to the extent permitted by this Agreement.
“Person”
shall
mean an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
“Plan”
shall
mean, at any particular time, any employee benefit plan which is covered by
Title IV of ERISA and in respect of which any Credit Party or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would
under
Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5)
of ERISA.
“Pledge
Agreement”
shall
mean the pledge agreement dated as of the Closing Date executed by the Credit
Parties in favor of the Administrative Agent, as amended, modified, restated
or
supplemented from time to time in accordance with its terms and the terms
hereof.
“Prime
Rate”
shall
have the meaning set forth in the definition of “Alternate Base
Rate”.
“Pro
Forma Basis”
shall
mean, with
respect to any transaction, that
such
transaction shall be deemed to have occurred as of the first day of the
twelve-month period ending as of the most recent month end
ending at least twenty (20) days preceding the date of such transaction.
“Properties”
shall
have the meaning set forth in Section 3.10(a).
“Purchasing
Lenders”
shall
have the meaning set forth in Section 9.6(c).
26
“Recovery
Event”
shall
mean the receipt by the Company and its Subsidiaries of
any
cash insurance proceeds or condemnation award payable by reason of theft, loss,
physical destruction or damage, taking or similar event with respect to any
Material Property.
“Register”
shall
have the meaning set forth in Section 9.6(d).
“Reorganization”
shall
mean, with respect to any Multiemployer Plan, the condition that such Plan
is in
reorganization within the meaning of such term as used in Section 4241 of
ERISA.
“Related
Fund”
shall
mean, with respect to any Lender, any fund or trust or entity that invests
in
commercial bank loans in the ordinary course of business and is advised or
managed by (a)
such
Lender, (b)
an
Affiliate of such Lender, (c)
any
other Lender or any Affiliate thereof or (d)
the
same investment advisor as any Person described in clauses (a) -
(c).
“Reportable
Event”
shall
mean any of the events set forth in Section 4043(c) of ERISA, other than those
events as to which the thirty-day notice period is waived under PBGC Reg.
§4043.
“Required
Lenders”
shall
mean, at any time, Lenders holding in the aggregate a majority of (i) the
Commitments (and Participation Interests therein) or (ii) if the Commitments
have been terminated, the outstanding Loans and Participation Interests
(including the Participation Interests of the Issuing Lender in any Letters
of
Credit and of the Swingline Lender in Swingline Loans); provided,
however,
that if
any Lender shall be a Defaulting Lender at such time, then there shall be
excluded from the determination of Required Lenders, Obligations (including
Participation Interests) owing to such Defaulting Lender and such Defaulting
Lender’s Commitments, or after termination of the Commitments, the principal
balance of the Obligations owing to such Defaulting Lender.
“Requirement
of Law”
shall
mean, as to any Person, the Certificate of Incorporation and By-laws or other
organizational or governing documents of such Person, and each law, treaty,
rule
or regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of
its
Material Property or to which such Person or any of its Material Property is
subject.
“Responsible
Officer”
shall
mean, as to (a) the Company, the President, the Chief Executive Officer, the
Chief Financial Officer and the Treasurer thereof or (b) any other Credit Party
or any Subsidiary thereof, the President, the Chief Executive Officer, the
Chief
Financial Officer, the Treasurer and any other duly authorized director or
officer thereof.
27
“Restricted
Payments”
shall
mean (a) any dividend or other distribution, direct or indirect, on account
of
any shares of any class of Capital Stock of any Credit Party or any of its
Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement,
sinking fund or similar payment, purchase or other acquisition for value, direct
or indirect, of any shares of any class of Capital Stock of any Credit Party
or
any of its Subsidiaries, now or hereafter outstanding, (c) any payment made
to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire shares of any class of Capital Stock of any Credit
Party
or any of its Subsidiaries, now or hereafter outstanding, (d) any payment with
respect to any earnout obligation, (e) any payment or prepayment of principal
of, premium, if any, or interest on, redemption, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Subordinated
Indebtedness or (f) the payment by any Credit Party or any of its Subsidiaries
of any management or consulting fee to any Person or of any salary, bonus or
other form of compensation to any Person who is directly or indirectly a
significant partner, shareholder, owner or executive officer of any such Person,
to the extent such fee, salary, bonus or other form of compensation is either
not included in the corporate overhead of any Credit Party or such Subsidiary
or, to the extent such salary, bonus or other form of compensation, is
reimbursed by the Company.
“Revolver
Increase”
shall
have the meaning set forth in Section 2.1.
“Revolver
Maturity Date”
shall
mean September 22, 2012.
“Revolving
Commitment”
shall
mean, with respect to each Revolving Lender, the commitment of such Revolving
Lender to make Revolving Loans in an aggregate principal amount at any time
outstanding up to the amount identified as such Revolving Lender’s “Revolving
Commitment” on such Lender’s Lender Commitment Letter or in the Register, as
such amount may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c) or increased (in accordance with Section
2.1(f)) or reduced from time to time in accordance with the provisions
hereof.
“Revolving
Commitment Percentage”
shall
mean, for each Revolving Lender, the percentage identified as its “Revolving
Commitment Percentage” on such Lender’s Lender Commitment Letter or in the
Register, as such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 9.6(c).
“Revolving
Committed Amount”
shall
have the meaning set forth in Section 2.1.
“Revolving
Lender”
shall
mean, as of any date of determination, each Lender with a Revolving Commitment
greater than $0.
“Revolving
Loans”
shall
have the meaning set forth in Section 2.1.
“Revolving
Note”
or
“Revolving
Notes”
shall
mean the promissory notes of the Borrower in favor of each of the Revolving
Lenders evidencing the Revolving Loans provided pursuant to Section 2.1(e),
individually or collectively, as appropriate, as such promissory notes may
be
amended, modified, supplemented, extended, renewed or replaced from time to
time.
“S&P”
shall
mean Standard & Poor’s Ratings Service, a division of The McGraw Hill
Companies, Inc. or any successor or rating agency.
28
“Sanctioned
Country”
shall
mean a country subject to a sanctions program identified on the list maintained
by OFAC and available at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/
eotffc/ofac/sanctions/index.html,
or as
otherwise published from time to time.
“Sanctioned
Person”
shall
mean (a)
a
Person named on the list of “Specially Designated Nationals and Blocked Persons”
maintained by OFAC available at ▇▇▇▇://▇▇▇.▇▇▇▇▇.▇▇▇/▇▇▇▇▇▇▇/▇▇▇▇▇▇/▇▇▇▇/▇▇▇/▇▇▇▇▇.▇▇▇▇,
or as
otherwise published from time to time, or (b)
(i)
an
agency of the government of a Sanctioned Country, (ii)
an
organization controlled by a Sanctioned Country, or (iii)
a
person resident in a Sanctioned Country, to the extent subject to a sanctions
program administered by OFAC.
“▇▇▇▇▇▇▇▇-▇▇▇▇▇”
shall
mean the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
“Scheduled
Funded Debt Payments”
shall
mean, as of any date of determination for the Company and its Subsidiaries,
the
sum of all scheduled payments of principal on Funded Debt for the applicable
period ending on the date of determination (including the principal component
of
payments due on Capital Leases during the applicable period ending on the date
of determination).
“Secured
Hedging Agreement”
shall
mean any Hedging Agreement between a Credit Party and a Hedging Agreement
Provider, or any agreement relating to Bank Products between a Credit Party
and
an Agent or Affiliate thereof, as amended, modified, restated or supplemented
from time to time in accordance with its terms.
“Secured
Party”
shall
mean each of the Administrative Agent, the Lenders and the Hedging Agreement
Providers, together with their respective successors and assigns.
“Securities
Account Control Agreement”
shall
mean an agreement, among a Credit Party, a securities intermediary, and the
Administrative Agent, which agreement is or in a form reasonably acceptable
to
the Administrative Agent and which provides the Administrative Agent with
“control” (as such term is used in Articles 8 and 9 of the Uniform Commercial
Code) over the securities account(s) described therein, as the same may be
as
amended, modified, extended, restated, replaced, or supplemented from time
to
time.
“Securities
Act”
shall
mean the Securities Act of 1933, together with any amendment thereto or
replacement thereof and any rules or regulations promulgated
thereunder.
“Securities
Laws”
shall
mean the Securities Act, the Exchange Act, ▇▇▇▇▇▇▇▇-▇▇▇▇▇ and the applicable
accounting and auditing principles, rules, standards and practices promulgated,
approved or incorporated by the SEC or the Public Company Accounting Oversight
Board, as each of the foregoing may be amended and in effect on any applicable
date hereunder.
“Security
Agreement”
shall
mean the security agreement dated as of the Closing Date executed by the Credit
Parties in favor of the Administrative Agent, as amended, modified, restated
or
supplemented from time to time in accordance with its terms and the terms
hereof.
29
“Security
Documents”
shall
mean the Security Agreement, the Pledge Agreement, the UK Security Documents,
the Mortgage Instruments, and such other documents executed and delivered in
connection with the grant, attachment and perfection of the Administrative
Agent’s security interests and liens arising thereunder, including, without
limitation, UCC financing statements.
“Single
Employer Plan”
shall
mean any Plan which is not a Multiemployer Plan.
“Social
Security Act”
shall
mean the Social Security Act as set forth in Title 42 of the United States
Code,
as amended, and any successor statute thereto, as interpreted by the rules
and
regulations issued thereunder, in each case as in effect from time to time.
References to sections of the Social Security Act shall be construed also to
refer to any successor sections.
“Solvent”
shall
mean, with respect to any Person on any date (a) the fair saleable value of
such
Person’s assets, measured on a going concern basis, exceeds all probable
liabilities of such Person, including contingent liabilities and those
liabilities to be incurred pursuant to this Credit Agreement, or (b) such
Person (i) does not have unreasonably small capital in relation to the
business in which it is or proposes to be engaged, (ii) has not incurred,
or believes that it will incur after giving effect to the transactions
contemplated by this Credit Agreement, debts beyond its ability to pay such
debts as they become due, (iii) has not suspended making payments on any of
its
debts unless subject to a good faith dispute or (iv) by reason of actual or
anticipated financial difficulties, has not commenced negotiations with one
or
more of its creditors in order to reschedule the payment of such
indebtedness.
“SRL”
shall
mean Orthofix SRL/DMO, an Italian corporation.
“Subordinated
Indebtedness”
shall
mean any Indebtedness incurred by any Credit Party that is (a) specifically
subordinated in right of payment and performance to the prior payment of the
Credit Party Obligations on terms reasonably acceptable to the Administrative
Agent and (b) evidenced by promissory notes, to the extent such Indebtedness
is
owed to another Credit Party, which promissory notes shall be pledged to the
Administrative Agent as Collateral for the Credit Party
Obligations.
“Subsidiary”
shall
mean (a) as to any Person other than the Company, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers
of
such corporation, partnership, limited liability company or other entity are
at
the time owned, or the management of which is otherwise controlled, directly
or
indirectly through one or more intermediaries, or both, by such Person, and
(b)
as to the Company, a corporation, partnership, limited liability company or
other entity of which shares of stock or other ownership interest the Company
owns at the time directly or indirectly through one or more intermediaries,
or
both, of greater than 50%. Unless otherwise qualified, all references to a
“Subsidiary” or to “Subsidiaries” in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Company.
30
“Subsidiary
Guarantor”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“Survey”
shall
mean any maps or plats of an as-built survey of the site of a Mortgaged
Property, which maps or plats and the surveys on which they are based shall
be
sufficient to delete any standard printed survey exception contained in the
applicable title policy and be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established and adopted
by
the American Land Title Association and the American Congress on Surveying
and
Mapping in 2005, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the following: (a)
the locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (b) the lines of
streets abutting the sites and width thereof; (c) all access and other easements
appurtenant to the sites necessary to use the sites; (d) all roadways, paths,
driveways, easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (e) any
encroachments on any adjoining property by the building structures and
improvements on the sites; and (f) if the site is described as being on a filed
map, a legend relating the survey to said map.
“Swiftsure”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“Swingline
Commitment”
shall
mean the commitment of the Swingline Lender to make Swingline Loans in an
aggregate principal amount at any time outstanding up to the Swingline Committed
Amount, and the commitment of the Revolving Lenders to purchase participation
interests in the Swingline Loans as provided in Section 2.4(b)(ii), as such
amounts may be reduced from time to time in accordance with the provisions
hereof.
“Swingline
Committed Amount”
shall
have the meaning set forth in Section 2.4(a).
“Swingline
Lender”
shall
mean Wachovia.
“Swingline
Loan”
or
“Swingline
Loans”
shall
have the meaning set forth in Section 2.4(a).
“Swingline
Note”
shall
mean the promissory note of the Borrower in favor of the Swingline Lender
evidencing the Swingline Loans provided pursuant to Section 2.4(d), as such
promissory note may be amended, modified, supplemented, extended, renewed or
replaced from time to time.
“Target”
shall
have the meaning set forth in the definition of “Permitted
Acquisition”.
31
“Tax
Structure Documents”
shall
mean a collective reference to the following documents: (a)
Offer
Letter dated December 30, 2003 from Colgate to UK Ltd, (b)
Amendment Agreement dated October 25, 2005 between Colgate and UK Ltd,
(c)
Written
Notification of Termination and Offer of Amended Terms dated October 25, 2005
from Colgate to UK Ltd, (d)
Acknowledgment of Termination dated October 25, 2005 from UK Ltd to Colgate,
(e)
Promissory Note in the principal amount of $110,546,815 dated October 25, 2005
by UK Ltd for the benefit of Colgate, (f)
Debenture Receivable Sale and Purchase Agreement dated October 25, 2005 between
Colgate and Victory (“Receivable
Sale”),
(g)
1,999,999 ordinary shares of Victory issued to Colgate as consideration for
Receivable Sale, (h)
Share
Subscription Agreement dated October 25, 2005 between the Borrower and
Swiftsure, (i)
Subscription Request Letter dated October 25, 2005 from Swiftsure to the
Borrower, (j)
Acknowledgment of Subscription Request Letter dated October 25, 2005 by the
Borrower to Swiftsure (“Subscription
Request Letter”),
(k)
999
ordinary shares of Swiftsure issued to the Borrower in connection with the
Subscription Request Letter, (l)
Offer
Letter dated October 26, 2005 from Victory to Swiftsure, (m)
Guarantee dated October 26, 2005 by the Borrower for the
benefit
of Victory, (n)
Share
Sale and Purchase Agreement
dated
October 26, 2005 between the Borrower and Swiftsure (“Share
Sale and Purchase Agreement”),
(o)
Stock
Transfer Form dated October 26, 2005 relating to the Borrower’s sale of one
share of UK Ltd to Swiftsure (“Stock
Transfer Form”),
(p)
one
ordinary share of UK Ltd issued to Swiftsure in connection with the Stock
Transfer Form, (q)
one
ordinary shares of Swiftsure issued to the Borrower in connection with the
Share
Sale and Purchase Agreement and (r)
any
other agreement entered into to implement the terms and arrangements
contemplated by the foregoing documents that is reasonably acceptable to the
Administrative Agent.
“Taxes”
shall
have the meaning set forth in Section 2.18.
“Term
Loan”
shall
have the meaning set forth in Section 2.2(a).
“Term
Loan Commitment”
shall
mean, with respect to each Term Loan Lender, the commitment of such Term Loan
Lender to make its portion of the Term Loan in a principal amount equal to
such
Term Loan Lender’s Term Loan Commitment Percentage of the Term Loan Committed
Amount (and for purposes of making determinations of Required Lenders hereunder
after the Closing Date, the principal amount outstanding on the Term
Loan).
“Term
Loan Commitment Percentage”
shall
mean, for any Term Loan Lender, the percentage identified as its Term Loan
Commitment Percentage on such Lender’s Lender Commitment Letter, as such
percentage may be modified in connection with any Incremental Term Facility
in
accordance with the provisions of Section 2.2(e) or any assignment made in
accordance with the provisions of Section 9.6(c).
“Term
Loan Committed Amount”
shall
have the meaning set forth in Section 2.2(a).
“Term
Loan Lender”
shall
mean, as of any date of determination, each Lender that holds a portion of
the
outstanding Term Loan.
“Term
Loan Maturity Date”
shall
mean September 22, 2013.
“Term
Note” or “Term Notes”
shall
mean the promissory notes of the Borrower in favor of each of the Term Loan
Lenders evidencing the portion of the Term Loan provided pursuant to
Section 2.2(d), individually or collectively, as appropriate, as such
promissory notes may be amended, modified, restated, supplemented, extended,
renewed or replaced from time to time.
32
“Title
Insurance Company”
shall
mean Chicago Title Insurance Company or any other title insurance company
approved by the Administrative Agent in its reasonable discretion.
“Trademark
License”
shall
means any agreement, written or oral, providing for the grant by or to the
Borrower or any of its Subsidiaries which are Credit Parties of any right to
use
any Trademark, including, without limitation, any thereof referred to in
Schedule
3.16.
“Trademarks”
shall
mean (a) all trademarks, trade names, corporate names, company names, business
names, fictitious business names, trade dress and service marks, logos and
other
source or business identifiers, and the goodwill associated therewith, now
existing or hereafter adopted or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any thereof
referred to in Schedule
3.16,
and
(b) all renewals thereof, including, without limitation, any thereof
referred to in Schedule
3.16.
“Tranche”
shall
mean the collective reference to LIBOR Rate Loans whose Interest Periods begin
and end on the same day. A Tranche may sometimes be referred to as a “LIBOR
Tranche”.
“Transfer
Effective Date”
shall
have the meaning set forth in each Assignment Agreement.
“TRICARE”
means
the United States Department of Defense healthcare program for service families
(including TRICARE Prime, TRICARE Extra and TRICARE Standard), and any successor
or predecessor thereof, including without limitation, CHAMPUS.
“Type”
shall
mean, as to any Loan, its nature as an Alternate Base Rate Loan or LIBOR Rate
Loan, as the case may be.
“UK
Ltd”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“UK
Security Documents”
shall
mean (a)
that
certain pledge agreement dated as of the Closing Date executed by Colgate in
favor of the Administrative Agent with respect to the Capital Stock of Victory,
(b)
that
certain pledge agreement dated as of the Closing Date executed by the Borrower
in favor of the Administrative Agent with respect to the Capital Stock of
Swiftsure, (c)
that
certain pledge agreement dated as of the Closing Date executed by Swiftsure
in
favor of the Administrative Agent with respect to the Capital Stock of UK Ltd,
(d)
that
certain debenture dated as of the Closing Date executed by Colgate in favor
of
the Administrative Agent, (e)
that
certain debenture dated as of the Closing Date executed by Victory in favor
of
the Administrative Agent, (f)
that
certain debenture dated as of the Closing Date executed by Swiftsure in favor
of
the Administrative Agent and (g)
that
certain debenture dated as of the Closing Date executed by UK Ltd in favor
of
the Administrative Agent, in each case as amended, modified, restated or
supplemented from time to time in accordance with its terms and the terms
hereof.
▇▇
“▇.▇.”
▇▇
“▇▇▇▇▇▇
▇▇▇▇▇▇”
shall
mean the United States of America.
“Victory”
shall
have the meaning set forth in the first paragraph of this
Agreement.
“Voting
Stock”
shall
mean, with respect to any Person, Capital Stock issued by such Person the
holders of which are ordinarily, in the absence of contingencies, entitled
to
vote for the election of directors (or persons performing similar functions)
of
such Person, even though the right so to vote may be or have been suspended
by
the happening of such a contingency.
“Wachovia”
shall
mean Wachovia Bank, National Association, a national banking association,
together with its successors and/or assigns.
“WCM”
shall
mean Wachovia Capital Markets, LLC.
“Works”
shall
mean all works which are subject to copyright protection pursuant to
Title 17 of the United States Code.
|
Section
1.2
|
Other
Definitional Provisions.
|
(a) Unless
otherwise specified therein, all terms defined in this Agreement shall have
such
defined meanings when used in the Notes or other Credit Documents or any
certificate or other document made or delivered pursuant hereto.
(b) The
words
“hereof”, “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section, subsection, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) The
meanings given to terms defined herein shall be equally applicable to both
the
singular and plural forms of such terms.
|
Section
1.3
|
Accounting
Terms.
|
Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Company delivered to the Lenders;
provided
that, if
the Borrower notifies the Administrative Agent that it wishes to amend any
covenant in Section 5.9 to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the Borrower
that the Required Lenders wish to amend Section 5.9 for such purpose), then
the
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory
to
the Borrower and the Required Lenders.
34
The
Borrower shall deliver to the Administrative Agent and each Lender at the same
time as the delivery of any annual or quarterly financial statements given
in
accordance with the provisions of Section 5.1, (a)
a
description in reasonable detail of any material change in the application
of
accounting principles employed in the preparation of such financial statements
from those applied in the most recently preceding quarterly or annual financial
statements as to which no objection shall have been made in accordance with
the
provisions above and (b)
a
reasonable estimate of the effect on the financial statements on account of
such
changes in application.
Notwithstanding
the above, the parties hereto acknowledge and agree that, for purposes of all
calculations made in determining compliance for any applicable period with
the
financial covenants set forth in Section 5.9 (including without limitation
for
purposes of the definition of “Pro Forma Basis” set forth in Section 1.1),
after consummation of any Permitted Acquisition, (i) income
statement items and other balance sheet items (whether positive or negative)
attributable to the Target acquired in such transaction shall be included in
such calculations to the extent relating to such applicable period, and
(ii)
Indebtedness of a Target that is retired in connection with a Permitted
Acquisition shall be excluded from such calculations and deemed to have been
retired as of the first day of such applicable period,
in each
case in accordance with Regulation
S-X under the Securities Act, as amended, applicable to a Registration Statement
under such Act on Form S-1.
ARTICLE
II
THE
LOANS; AMOUNT AND TERMS
|
Section
2.1
|
Revolving
Loans; Revolver Increase.
|
(a) Revolving
Commitment.
During
the Commitment Period, subject to the terms and conditions hereof, each
Revolving Lender severally, but not jointly, agrees to make revolving credit
loans (“Revolving
Loans”)
to the
Borrower from time to time in an aggregate principal amount of up to
FORTY-FIVE
MILLION
DOLLARS
($45,000,000)
(as such
aggregate maximum amount may be reduced from time to time as provided in Section
2.6, the “Revolving
Committed Amount”)
for
the purposes hereinafter set forth; provided,
however,
that
(i) with regard to each Revolving Lender individually, the sum of such Revolving
Lender’s Revolving Commitment Percentage of outstanding Revolving Loans
plus
such
Revolving Lender’s Revolving Commitment Percentage of outstanding Swingline
Loans plus
such
Revolving Lender’s Revolving Commitment Percentage of outstanding LOC
Obligations shall not exceed such Revolving Lender’s Revolving Commitment and
(ii) with regard to the Revolving Lenders collectively, the sum of the
outstanding Revolving Loans plus
outstanding Swingline Loans plus
outstanding LOC Obligations shall not exceed the Revolving Committed Amount.
Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans,
or
a combination thereof, as the Borrower may request, and may be repaid or prepaid
and reborrowed in accordance with the provisions hereof; provided,
however,
Revolving Loans made on the Closing Date or on any of the three (3)
Business Days following the Closing Date may only consist of Alternate Base
Rate
Loans. LIBOR Rate Loans shall be made by each Revolving Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
35
(b) Revolving
Loan Borrowings.
(i)
Notice
of Borrowing.
The
Borrower shall request a Revolving Loan borrowing by written notice (a
“Notice
of Borrowing”)
substantially in the form of the notice attached as Schedule
2.1(b)(i)
(or
telephone notice promptly confirmed by delivery to the Administrative Agent
of a
Notice of Borrowing by fax or other electronic notice with confirmed receipt
from the recipient) to the Administrative Agent not later than 12:00 Noon
(Charlotte, North Carolina time) on the Business Day of the requested borrowing
in the case of Alternate Base Rate Loans, and on the third Business Day prior
to
the date of the requested borrowing in the case of LIBOR Rate Loans. Each such
request for borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested borrowing (which
shall be a Business Day), (C) the aggregate principal amount to be borrowed
on
such date, (D) whether the borrowing shall be comprised of Alternate Base Rate
Loans, LIBOR Rate Loans or a combination thereof, and (E) if LIBOR Rate Loans
are requested, the Interest Period(s) therefore. If the Borrower shall fail
to
specify in any such Notice of Borrowing (I) an applicable Interest Period in
the
case of a LIBOR Rate Loan, then such notice shall be deemed to be a request
for
an Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for an Alternate Base Rate
Loan
hereunder. The Administrative Agent shall give notice to each Revolving Lender
promptly upon receipt of each Notice of Borrowing, of the contents thereof
and
each such Revolving Lender’s share thereof.
(ii) Minimum
Amounts.
Each
Revolving Loan shall be in a minimum aggregate amount of $1,000,000 and in
integral multiples of $500,000 in excess thereof (or the remaining amount of
the
Revolving Committed Amount, if less).
(iii) Advances.
Each
Revolving Lender will make its Revolving Commitment Percentage of each Revolving
Loan borrowing available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in Section 9.2,
or
at such other office as the Administrative Agent may designate in writing,
by
2:00 P.M. (Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately available
to
the Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent by crediting the account of the Borrower
designated in the Account Designation Letter (or as otherwise agreed by the
Borrower and the Administrative Agent) with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in like
funds
as received by the Administrative Agent.
36
(c) Repayment.
The
principal amount of all Revolving Loans shall be due and payable in full on
the
Revolver Maturity Date, unless accelerated sooner pursuant to
Section 7.2.
(d) Interest.
Subject
to the provisions of Section 2.9, Revolving Loans shall bear interest as
follows:
(i)
Alternate
Base Rate Loans.
During
such periods as Revolving Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per annum rate
equal
to the sum of the Alternate Base Rate plus
the
Applicable Percentage; and
(ii) LIBOR
Rate Loans.
During
such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each
such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum
of
the LIBOR Rate plus
the
Applicable Percentage.
Interest
on Revolving Loans shall be payable in arrears on each Interest Payment
Date.
(e) Revolving
Notes; Covenant to Pay.
Each
Revolving Lender’s Revolving Commitment shall be evidenced by a duly executed
promissory note of the Borrower to such Revolving Lender in substantially the
form of Schedule
2.1(e).
The
Borrower covenants and agrees to pay the Revolving Loans in accordance with
the
terms of this Agreement.
(f)
Revolver
Increase.
Subject
to the terms and conditions set forth herein, the Borrower shall have the right,
at any time and from time to time prior to the Revolver Maturity Date, to incur
additional Indebtedness under this Credit Agreement in the form of an increase
to the Revolving Committed Amount (each a “Revolver
Increase”)
by an
aggregate amount of up to (a)
ONE
HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000) less
(b)
the sum
of (i)
the
aggregate amount of any prior Incremental Term Facility established pursuant
to
Section 2.2(e) plus
(ii)
the
aggregate amount of any prior Revolver Increases established pursuant to this
Section 2.1(f). The following terms and conditions shall apply to each Revolver
Increase: (i)
the
loans made under any such Revolver Increase (each an “Additional
Revolving Loan”)
shall
constitute Credit Party Obligations and will be secured and guaranteed with
the
other Credit Party Obligations on a pari passu basis, (ii)
the
proceeds of any Additional Revolving Loan will be used for the purposes set
forth in Section 3.11, (iii)
the
Borrower shall execute a Revolving Note in favor of any new Lender or any
existing Lender requesting a Revolving Note whose Revolving Commitment is
created or increased, (iv)
the
conditions to Extensions of Credit in Section 4.2 shall have been satisfied,
(v)
the
Administrative Agent shall have received an opinion or opinions (including,
if
reasonably requested by the Administrative Agent, local counsel opinions) of
counsel for the Credit Parties, addressed to the Administrative Agent and the
Lenders, in form and substance acceptable to the Administrative Agent,
(vi)
any
such Revolver Increase shall be in a minimum principal amount of $15,000,000
or,
if less, the maximum remaining amount permitted pursuant to this Section 2.1(f),
(vii)
if the
interest rate margin on any Revolver Increase would be more than the Applicable
Percentage for the existing Revolving Loans, the Applicable Percentage on the
existing Revolving Loans shall be increased such that the Applicable Percentage
on the existing Revolving Loans is equal to the interest rate margin on such
Revolver Increase, and (viii)
the
Administrative Agent shall have received from the Borrower updated financial
projections for the remainder of the projection term set forth in Section 3.1(e)
and an officer’s certificate, in each case in form and substance reasonably
satisfactory to the Administrative Agent, demonstrating that, after giving
effect to any such Revolver Increase on a Pro Forma Basis, the Borrower will
be
in compliance with the financial covenants set forth in Section 5.9 and no
Default or Event of Default shall exist. No existing Lender shall have any
obligation to provide all or any portion of the Revolver Increase. The
Administrative Agent is authorized to enter into, on behalf of the Lenders,
any
amendment to this Credit Agreement or any other Credit Document as may be
necessary to incorporate the terms of any new Revolver Increase
therein.
37
|
Section
2.2
|
Term
Loan Facility; Incremental Term Loan.
|
(a) Term
Loan.
Subject
to the terms and conditions hereof and in reliance upon the representations
and
warranties set forth herein, each Term Loan Lender severally agrees to make
available to the Borrower on the Closing Date, by transfer of funds as directed
by the Administrative Agent to the Borrower’s account set forth in the Account
Designation Letter, such Term Loan Lender’s Term Loan Commitment Percentage of a
term loan in Dollars (the “Term
Loan”)
in the
aggregate principal amount of THREE
HUNDRED THIRTY MILLION DOLLARS ($330,000,000)
(the
“Term
Loan Committed Amount”)
for
the purposes hereinafter set forth. The Term Loan may consist of Alternate
Base
Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request; provided
that on
the Closing Date the Term Loan shall only consist of Alternate Base Rate Loans.
Amounts repaid or prepaid on the Term Loan may not be reborrowed.
(b) Repayment
of Term Loan.
The
principal outstanding amount of the Term Loan as of the Closing Date shall
be
repaid in twenty-eight (28) consecutive quarterly installments as follows,
unless accelerated sooner pursuant to Section 7.2:
|
Principal
Amortization
Payment
Date
|
Term
Loan
Principal
Amortization Payment
|
|
December 31,
2006
|
$825,000
|
|
March 31,
2007
|
$825,000
|
|
June
30, 2007
|
$825,000
|
|
September
30, 2007
|
$825,000
|
|
December
31, 2007
|
$825,000
|
38
|
Principal
Amortization
Payment
Date
|
Term
Loan
Principal
Amortization Payment
|
|
March 31,
2008
|
$825,000
|
|
June
30, 2008
|
$825,000
|
|
September
30, 2008
|
$825,000
|
|
December 31,
2008
|
$825,000
|
|
March 31,
2009
|
$825,000
|
|
June
30, 2009
|
$825,000
|
|
September
30, 2009
|
$825,000
|
|
December 31,
2009
|
$825,000
|
|
March 31,
2010
|
$825,000
|
|
June
30, 2010
|
$825,000
|
|
September
30, 2010
|
$825,000
|
|
December 31,
2010
|
$825,000
|
|
March 31,
2011
|
$825,000
|
|
June
30, 2011
|
$825,000
|
|
September
30, 2011
|
$825,000
|
|
December 31,
2011
|
$825,000
|
|
March 31,
2012
|
$825,000
|
|
June
30, 2012
|
$825,000
|
|
September
30, 2012
|
$825,000
|
|
December 31,
2012
|
$77,550,000
|
|
March
31, 2013
|
$77,550,000
|
|
June
30, 2013
|
$77,550,000
|
|
Term
Loan Maturity Date
|
The
remainder of the outstanding Term
Loan
|
(c) Interest
on the Term Loan.
Subject
to the provisions of Section 2.9, the Term Loan shall bear interest as
follows:
(i)
Alternate
Base Rate Loans.
During
such periods as the Term Loan shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per annum rate
equal
to the sum of the Alternate Base Rate plus
the
Applicable Percentage; and
39
(ii) LIBOR
Rate Loans.
During
such periods as the Term Loan shall be comprised of LIBOR Rate Loans, each
such
LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of
the
LIBOR Rate plus
the
Applicable Percentage.
Interest
on the Term Loan shall be payable in arrears on each Interest Payment
Date.
(d) Term
Notes.
Each
Term Loan Lender’s Term Loan Commitment Percentage of the Term Loan Committed
Amount shall be evidenced by a duly executed promissory note of the Borrower
to
such Term Loan Lender in substantially the form of Schedule 2.2(d).
(e) Incremental
Term Loan.
Subject
to the terms and conditions set forth herein, the Borrower shall have the right,
at any time and from time to time prior to the Term Loan Maturity Date, to
incur
additional Indebtedness under this Credit Agreement in the form of a term loan
(each an “Incremental
Term Facility”)
by an
aggregate amount of up to (a)
ONE
HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000) less
(b)
the sum
of (i)
the
aggregate amount of increases in the Revolving Committed Amount pursuant to
any
Revolver Increase plus
(ii)
the
aggregate amount of any prior Incremental Term Facilities established pursuant
to this Section 2.2(e). The following terms and conditions shall apply to each
Incremental Term Facility: (i)
the
loans made under any such Incremental Term Facility (each an “Additional
Term Loan”)
shall
constitute Credit Party Obligations and will be secured and guaranteed with
the
other Credit Party Obligations on a pari passu basis, (ii)
any
such Incremental Term Facility shall have a maturity date no sooner than, and
a
weighted average life to maturity no shorter than, the Term Loan Maturity Date
and the weighted average life to maturity of the Term Loans at such time,
respectively, (iii)
any
such Incremental Term Facility shall be entitled to the same voting rights
as
the existing Term Loans and shall be entitled to receive proceeds of prepayments
on a pro rata basis with the existing Term Loans, (iv)
any
such Incremental Term Facility shall be obtained from existing Lenders or from
other banks, financial institutions or investment funds, (v)
any
such Incremental Term Facility shall be in a minimum principal amount of
$25,000,000 and
integral multiples of $1,000,000 in excess thereof, or, if less, the maximum
remaining amount permitted pursuant to this Section 2.2(e), (vi)
the
proceeds of any Additional Term Loan will be used for the purposes set forth
in
Section 3.11, (vii)
the
Borrower shall execute a Term Note in favor of any new Lender or any existing
Lender requesting a Term Note whose Term Loan Committed Amount is created or
increased, (viii)
the
conditions to Extensions of Credit in Section 4.2 shall have been satisfied,
(ix)
the
Administrative Agent shall have received an opinion or opinions (including,
if
reasonably requested by the Administrative Agent, local counsel opinions) of
counsel for the Credit Parties, addressed to the Administrative Agent and the
Lenders, in form and substance reasonably acceptable to the Administrative
Agent, (x)
if the
interest rate margin on any Incremental Term Facility would be more than 0.25%
greater than the Applicable Percentage for the existing Term Loan, the
Applicable Percentage on the existing Term Loan shall be increased such that
the
Applicable Percentage on the existing Term Loan is 0.25% lower than the interest
rate margin on the Incremental Term Facility, and (xi)
the
Administrative Agent shall have received from the Borrower updated financial
projections for the remainder of the initial projection term set forth in
Section 3.1 and an officer’s certificate, in each case in form and substance
reasonably satisfactory to the Administrative Agent, demonstrating that, after
giving effect to any such Incremental Term Facility on a Pro Forma Basis, the
Borrower will be in compliance with the financial covenants set forth in Section
5.9 and no Default or Event of Default shall exist. No existing Lender shall
have any obligation to provide all or any portion of the Incremental Term
Facility. The Administrative Agent is authorized to enter into, on behalf of
the
Lenders, any amendment to this Credit Agreement or any other Credit Document
as
may be necessary to incorporate the terms of any new Incremental Term Facility
therein.
40
|
Section
2.3
|
Letter
of Credit Subfacility.
|
(a) Issuance.
Subject
to the terms and conditions hereof and of the LOC Documents, if any, and any
other terms and conditions which the Issuing Lender may reasonably require,
during the Commitment Period the Issuing Lender shall issue, and the Revolving
Lenders shall participate in, Letters of Credit for the account of the Borrower
from time to time upon request in a form acceptable to the Issuing Lender;
provided,
however,
that
(i) the aggregate amount of LOC Obligations shall not at any time exceed
SEVEN
MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000)
(the
“LOC
Committed Amount”),
(ii)
the sum of outstanding Revolving Loans plus
outstanding Swingline Loans plus
outstanding LOC Obligations shall not at any time exceed the Revolving Committed
Amount, (iii) all Letters of Credit shall be denominated in U.S. Dollars and
(iv) Letters of Credit shall be issued for lawful corporate purposes and may
be
issued as standby letters of credit, including in connection with workers’
compensation and other insurance programs. Except as otherwise expressly agreed
upon by all the Revolving Lenders, no Letter of Credit shall have an original
expiry date more than twelve (12) months from the date of issuance; provided,
however,
so long
as no Default or Event of Default has occurred and is continuing and subject
to
the other terms and conditions to the issuance of Letters of Credit hereunder,
the expiry dates of Letters of Credit may be extended annually or periodically
from time to time at the request of the Borrower or by operation of the terms
of
the applicable Letter of Credit to a date not more than twelve (12) months
from
the date of extension; provided,
further,
that no
Letter of Credit, as originally issued or as extended, shall have an expiry
date
extending beyond the Revolver Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each Letter
of
Credit shall be a Business Day. Any Letters of Credit issued hereunder shall
be
in a minimum original face amount of $100,000. Wachovia shall be the Issuing
Lender on all Letters of Credit issued on or after the Closing Date. In the
event and to the extent that the provisions of any LOC Document shall conflict
with this Agreement, the provisions of this Agreement shall govern. The Issuing
Lender shall make any Letter of Credit issued hereunder available to the
Borrower at its office referred to in Section 9.2 or as otherwise agreed with
the Borrower in connection with such issuance.
41
(b) Notice
and Reports.
The
request for the issuance of a Letter of Credit shall be submitted to the Issuing
Lender at least five (5) Business Days prior to the requested date of issuance.
The Issuing Lender will promptly upon request of the Administrative Agent
provide to the Administrative Agent for dissemination to the Revolving Lenders
a
detailed report specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may have occurred since
the date of any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred.
(c) Participations.
Each
Revolving Lender upon issuance of a Letter of Credit shall be deemed to have
purchased without recourse a risk participation from the Issuing Lender in
such
Letter of Credit and the obligations arising thereunder and any collateral
relating thereto, in each case in an amount equal to its Revolving Commitment
Percentage of the obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Issuing Lender therefore and discharge when
due,
its Revolving Commitment Percentage of the obligations arising under such Letter
of Credit. Without limiting the scope and nature of each Revolving Lender’s
participation in any Letter of Credit, to the extent that the Issuing Lender
has
not been reimbursed as required hereunder or under any LOC Document, each such
Revolving Lender shall pay to the Issuing Lender its Revolving Commitment
Percentage of such unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Revolving Lender
to
so reimburse the Issuing Lender shall be absolute and unconditional and shall
not be affected by the occurrence of a Default, an Event of Default or any
other
occurrence or event. Any such reimbursement shall not relieve or otherwise
impair the obligation of the Borrower to reimburse the Issuing Lender under
any
Letter of Credit, together with interest as hereinafter provided.
42
(d) Reimbursement.
In the
event of any drawing under any Letter of Credit, the Issuing Lender will
promptly notify the Borrower and the Administrative Agent. The Borrower shall
reimburse the Issuing Lender on the day of drawing under any Letter of Credit
(with the proceeds of a Revolving Loan obtained hereunder or otherwise) in
same
day funds as provided herein or in the LOC Documents. If the
Borrower shall fail to reimburse the Issuing Lender as provided herein, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Alternate Base Rate plus
the
Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans
plus
two
percent (2%). Unless the Borrower shall promptly notify the Issuing Lender
and
the Administrative Agent of its intent to otherwise reimburse the Issuing
Lender, the Borrower shall be deemed to have requested a Revolving Loan in
the
amount of the drawing as provided in subsection (e) hereof, the proceeds of
which will be used to satisfy the reimbursement obligations. The Borrower’s
reimbursement obligations hereunder shall be absolute and unconditional under
all circumstances irrespective of any rights of set-off, counterclaim or defense
to payment the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit
drawn
upon or any other Person, including without limitation any defense based on
any
failure of the Borrower to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing Lender
will
promptly notify the other Revolving Lenders of the amount of any unreimbursed
drawing and each Revolving Lender shall promptly pay to the Administrative
Agent
for the account of the Issuing Lender in Dollars and in immediately available
funds, the amount of such Revolving Lender’s Revolving Commitment Percentage of
such unreimbursed drawing. Such payment shall be made on the day such notice
is
received by such Revolving Lender from the Issuing Lender if such notice is
received at or before 2:00 P.M. (Charlotte, North Carolina time), otherwise
such
payment shall be made at or before 12:00 Noon (Charlotte, North Carolina time)
on the next succeeding Business Day. If such Revolving Lender does not pay
such
amount to the Issuing Lender in full upon such request, such Revolving Lender
shall, on demand, pay to the Administrative Agent for the account of the Issuing
Lender interest on the unpaid amount during the period from the date of such
drawing until such Revolving Lender pays such amount to the Issuing Lender
in
full at a rate per annum equal to, if paid within two (2) Business Days of
the
date of drawing, the Federal Funds Effective Rate and thereafter at a rate
equal
to the Alternate Base Rate. Each Revolving Lender’s obligation to make such
payment to the Issuing Lender, and the right of the Issuing Lender to receive
the same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this Agreement
or the Commitments hereunder, the existence of a Default or Event of Default
or
the acceleration of the Credit Party Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
43
(e) Repayment
with Revolving Loans.
On any
day on which the Borrower shall have requested, or been deemed to have
requested, a Revolving Loan to reimburse a drawing under a Letter of Credit,
the
Administrative Agent shall give notice to the Revolving Lenders that a Revolving
Loan has been requested or deemed requested in connection with a drawing under
a
Letter of Credit, in which case a Revolving Loan borrowing comprised entirely
of
Alternate Base Rate Loans (each such borrowing, a “Mandatory
Borrowing”)
shall
be immediately made (without giving effect to any termination of the Commitments
pursuant to Section 7.2) pro rata
based on
each Revolving Lender’s respective Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to Section
7.2) and the proceeds thereof shall be paid directly to the Issuing Lender
for
application to the respective LOC Obligations. Each Revolving Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any such
request or deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the same such
date
notwithstanding
(i) the
amount of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii) whether any
conditions specified in Section 4.2 are then satisfied, (iii) whether a Default
or an Event of Default then exists, (iv) failure for any such request or deemed
request for Revolving Loan to be made by the time otherwise required in Section
2.1(b), (v) the date of such Mandatory Borrowing, or (vi) any reduction in
the Revolving Committed Amount after any such Letter of Credit may have been
drawn upon; provided,
however,
that in
the event any such Mandatory Borrowing should be less than the minimum amount
for borrowings of Revolving Loans otherwise provided in Section 2.1(b)(ii),
the
Borrower shall pay to the Administrative Agent for its own account an
administrative fee of $500. In the event that any Mandatory Borrowing cannot
for
any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code), then each such Revolving Lender hereby agrees that it shall forthwith
fund (as of the date the Mandatory Borrowing would otherwise have occurred,
but
adjusted for any payments received from the Borrower on or after such date
and
prior to such purchase) its Participation Interests in the LOC Obligations;
provided,
further,
that in
the event any Revolving Lender shall fail to fund its Participation Interest
on
the day the Mandatory Borrowing would otherwise have occurred, then the amount
of such Revolving Lender’s unfunded Participation Interest therein shall bear
interest payable by such Revolving Lender to the Issuing Lender upon demand,
at
the rate equal to, if paid within two (2) Business Days of such date, the
Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate
Base Rate.
(f)
Modification,
Extension.
The
issuance of any supplement, modification, amendment, renewal, or extension
to
any Letter of Credit shall, for purposes hereof, be treated in all respects
the
same as the issuance of a new Letter of Credit hereunder.
(g) ISP98
and UCP.
Unless
otherwise expressly agreed by the Issuing Lender and the Borrower, when a Letter
of Credit is issued, (i) the rules of the “International Standby Practices
1998,” published by the Institute of International Banking Law & Practice
(or such later version thereof as may be in effect at the time of issuance)
shall apply to each standby Letter of Credit, and (ii) the rules of The Uniform
Customs and Practice for Documentary Credits, as most recently published by
the
International Chamber of Commerce (the “UCP”)
at the
time of issuance, shall apply to each commercial Letter of Credit.
(h) Conflict
with LOC Documents.
In the
event of any conflict between this Agreement and any LOC Document (including
any
letter of credit application), this Agreement shall control.
(i)
Designation
of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Agreement, including
without limitation Section 2.3(a), a Letter of Credit issued hereunder may
contain a statement to the effect that such Letter of Credit is issued for
the
account of a Subsidiary of the Borrower; provided
that,
notwithstanding such statement, the Borrower shall be the actual account party
for all purposes of this Agreement for such Letter of Credit and such statement
shall not affect the Borrower’s reimbursement obligations hereunder with respect
to such Letter of Credit.
44
|
Section
2.4
|
Swingline
Loan Subfacility.
|
(a) Swingline
Commitment.
During
the Commitment Period, subject to the terms and conditions hereof, the Swingline
Lender, in its individual capacity, agrees to make certain revolving credit
loans to the Borrower (each a “Swingline
Loan”
and,
collectively, the “Swingline
Loans”)
for
the purposes hereinafter set forth; provided,
however,
(i) the
aggregate amount of Swingline Loans outstanding at any time shall not exceed
SEVEN
MILLION FIVE HUNDRED THOUSAND DOLLARS ($7,500,000)
(the
“Swingline
Committed Amount”),
and
(ii) the sum of the outstanding Revolving Loans plus
outstanding Swingline Loans plus
outstanding LOC Obligations shall not exceed the Revolving Committed Amount.
Swingline Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Swingline
Loan Borrowings.
(i)
Notice
of Borrowing and Disbursement.
The
Swingline Lender will make Swingline Loans available to the Borrower by
crediting the account of the Borrower designated in the Account Designation
Letter (or as otherwise agreed between the Borrower and the Administrative
Agent) on any Business Day upon request made by the Borrower through the
delivery of a Notice of Borrowing (with appropriate modifications) (or telephone
notice promptly confirmed by delivery to the Administrative Agent and the
Swingline Lender of a Notice of Borrowing by fax or other electronic notice
with
confirmed receipt from the recipient) to the Administrative Agent and the
Swingline Lender not later than 2:00 P.M. (Charlotte, North Carolina time)
on
such Business Day. Swingline Loan borrowings hereunder shall be made in minimum
amounts of $100,000 and in integral amounts of $100,000 in excess
thereof.
45
(ii) Repayment
of Swingline Loans.
Each
Swingline Loan borrowing shall be due and payable on the Revolver Maturity
Date.
The Swingline Lender may, at any time, in its sole discretion, by written notice
to the Borrower and the Administrative Agent, demand repayment of its Swingline
Loans by way of a Revolving Loan borrowing, in which case the Borrower shall
be
deemed to have requested a Revolving Loan borrowing comprised entirely of
Alternate Base Rate Loans in the amount of such Swingline Loans; provided,
however,
that,
in the following circumstances, any such demand shall also be deemed to have
been given one Business Day prior to each of (A)
the
Revolver Maturity Date, (B)
the
occurrence of any Event of Default described in Section 7.1(e), (C)
upon
acceleration of the Credit Party Obligations hereunder, whether on account
of an
Event of Default described in Section 7.1(e) or any other Event of Default,
and
(D)
the
exercise of remedies in accordance with the provisions of Section 7.2 hereof
(each such Revolving Loan borrowing made on account of any such deemed request
therefore as provided herein being hereinafter referred to as “Mandatory
Borrowing”).
Each
Revolving Lender hereby irrevocably agrees to make such Revolving Loans promptly
upon any such request or deemed request on account of each Mandatory Borrowing
in the amount and in the manner specified in the preceding sentence and on
the
same such date notwithstanding
(I) the amount of Mandatory Borrowing may not comply with the minimum
amount for borrowings of Revolving Loans otherwise required hereunder,
(II) whether any conditions specified in Section 4.2 are then satisfied,
(III) whether a Default or an Event of Default then exists, (IV) failure of
any
such request or deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory
Borrowing, or (VI) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to such Mandatory
Borrowing or contemporaneously therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code), then each Revolving Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory Borrowing would otherwise
have occurred, but adjusted for any payments received from the Borrower on
or
after such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to
cause
each such Revolving Lender to share in such Swingline Loans ratably based upon
its respective Revolving Commitment Percentage (determined before giving effect
to any termination of the Commitments pursuant to Section 7.2); provided
that (x)
all interest payable on the Swingline Loans shall be for the account of the
Swingline Lender until the date as of which the respective participation is
purchased, and (y) at the time any purchase of participations pursuant to
this sentence is actually made, the purchasing Revolving Lender shall be
required to pay to the Swingline Lender interest on the principal amount of
such
participation purchased for each day from and including the day upon which
the
Mandatory Borrowing would otherwise have occurred to but excluding the date
of
payment for such participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the Federal Funds
Effective Rate, and thereafter at a rate equal to the Alternate Base
Rate.
(c) Interest
on Swingline Loans.
Subject
to the provisions of Section 2.9, Swingline Loans shall bear interest at a
per
annum rate equal to the Alternate Base Rate plus
the
Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans.
Interest on Swingline Loans shall be payable in arrears on each Interest Payment
Date.
(d) Swingline
Note; Covenant to Pay.
The
Swingline Loans may be evidenced, upon such Lender’s request, by a duly executed
promissory note of the Borrower to the Swingline Lender in the original amount
of the Swingline Committed Amount and substantially in the form of Schedule
2.4(d).
The
Borrower covenants and agrees to pay the Swingline Loans in accordance with
the
terms of this Agreement.
46
|
Section
2.5
|
Fees.
|
(a) Commitment
Fee.
In
consideration of the Revolving Commitments, the Borrower agrees to pay to the
Administrative Agent for the ratable benefit of the Revolving Lenders a
commitment fee (the “Commitment
Fee”)
in an
amount equal to the Applicable Percentage per annum on the average daily unused
amount of the Revolving Committed Amount. For purposes of computation of the
Commitment Fee, LOC Obligations shall be considered usage of the Revolving
Committed Amount but Swingline Loans shall not be considered usage of the
Revolving Committed Amount. The Commitment Fee shall be payable quarterly in
arrears on the last Business Day of each calendar quarter for the prior calendar
quarter then ending.
(b) Letter
of Credit Fees.
In
consideration of the LOC Commitments, the Borrower agrees to pay to the Issuing
Lender a fee (the “Letter
of Credit Fee”)
equal
to the Applicable Percentage per annum on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of issuance
to
the date of expiration. In addition to such Letter of Credit Fee, the Issuing
Lender may charge, and retain for its own account without sharing by the other
Lenders, an additional facing fee of one-eighth of one percent (0.125%) per
annum on the average daily maximum amount available to be drawn under each
such
Letter of Credit issued by it. The Issuing Lender shall promptly pay over to
the
Administrative Agent for the ratable benefit of the Revolving Lenders (including
the Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee shall
be
payable quarterly in arrears on the last Business Day of each calendar quarter
for the prior calendar quarter then ending.
(c) Issuing
Lender Fees.
In
addition to the Letter of Credit Fees payable pursuant to subsection (b) hereof,
the Borrower shall pay to the Issuing Lender for its own account without sharing
by the other Lenders the reasonable and customary charges from time to time
of
the Issuing Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the “Issuing
Lender Fees”);
provided
such
fees shall not be duplicative of any fees charged under any LOC
Document.
(d) Administrative
Fee.
The
Borrower agrees to pay to the Administrative Agent the annual administrative
fee
as described in the Agent’s Fee Letter.
|
Section
2.6
|
Commitment
Reductions.
|
(a) Voluntary
Reductions.
The
Borrower shall have the right to terminate or permanently reduce the unused
portion of the Revolving Committed Amount at any time or from time to time
upon
not less than five (5) Business Days’ prior notice to the Administrative
Agent (which shall notify the Revolving Lenders thereof as soon as practicable)
of each such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction which shall be in a minimum
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof, or,
if
less, the remaining Revolving Committed Amount, and shall be irrevocable and
effective upon receipt by the Administrative Agent; provided
that no
such reduction or termination shall be permitted if after giving effect thereto,
and to any prepayments of the Loans made on the effective date thereof, the
sum
of the outstanding Revolving Loans plus
outstanding Swingline Loans plus
outstanding LOC Obligations would exceed the Revolving Committed
Amount.
47
(b) Swingline
Committed Amount.
If the
Revolving Committed Amount is reduced, pursuant to Section 2.6(a) above, below
the then current Swingline Committed Amount, the Swingline Committed Amount
shall automatically be reduced by an amount such that the Swingline Committed
Amount equals the Revolving Committed Amount.
(c) Revolver
Maturity Date.
The
Revolving Commitment, the Swingline Commitment and the LOC Commitment shall
automatically terminate on the Maturity Date.
|
Section
2.7
|
Prepayments.
|
(a) Optional
Prepayments.
The
Borrower shall have the right to prepay Loans in whole or in part from time
to
time; provided,
however,
that
each partial prepayment of a Revolving Loan and the Term Loan shall be in a
minimum principal amount of $1,000,000 and integral multiples of $500,000 in
excess thereof, and each partial prepayment of a Swingline Loan shall be in
a
minimum principal amount of $100,000 and integral multiples of $100,000 in
excess thereof. The Borrower shall give three (3) Business Days’
irrevocable notice in the case of LIBOR Rate Loans and one Business Day’s
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). To the extent the Borrower elects to prepay the Term Loan
(including, if applicable, any Additional Term Loan), amounts prepaid under
this
Section shall be applied to the next four (4) scheduled amortization payments
and then pro rata to the Term Loan and any Additional Term Loan, if applicable
(ratably to the remaining principal installments thereof), and then (after
the
Term Loan and any Additional Term Loan, if applicable, has been paid in full)
to
the Revolving Loans as the Borrower may elect. All prepayments under this
Section 2.7(a) shall be subject to Section 2.17, but otherwise without premium
or penalty. Interest on the principal amount prepaid shall be payable on the
next occurring Interest Payment Date that would have occurred had such loan
not
been prepaid or, at the request of the Administrative Agent, interest on the
principal amount prepaid shall be payable on any date that a prepayment is
made
hereunder through the date of prepayment.
(b) Mandatory
Prepayments.
(i)
Revolving
Committed Amount.
If at
any time after the Closing Date, the sum of the outstanding Revolving Loans
plus
outstanding Swingline Loans plus
outstanding LOC Obligations shall exceed the Revolving Committed Amount, the
Borrower immediately shall prepay the Loans and cash collateralize the
outstanding LOC Obligations in an amount sufficient to eliminate such excess
(such prepayment to be applied as set forth in clause (vi) below).
48
(ii) Asset
Dispositions.
The
Borrower shall prepay the Loans and cash collateralize the outstanding LOC
Obligations in an aggregate amount equal to 100% of the Net Cash Proceeds
derived from Asset Dispositions during any fiscal year in excess of $500,000
(such prepayment to be applied as set forth in clause (vi) below); provided,
however,
that,
so long as no Default or Event of Default has occurred and is continuing, such
Net Cash Proceeds shall not be required to be so applied to the extent the
Borrower delivers to the Administrative Agent promptly following such Asset
Disposition a certificate stating that it or the Company or any Subsidiary
intends to use such Net Cash Proceeds to acquire like assets used in the
business of the Borrower and its Subsidiaries within 180 days of the receipt
of
such Net Cash Proceeds, it being expressly agreed that any Net Cash Proceeds
not
so reinvested shall be applied to prepay the Loans and cash collateralize the
outstanding LOC Obligations immediately thereafter (such prepayment to be
applied as set forth in clause (vi) below).
(iii) Issuances.
Immediately upon receipt by the Company or any of its Subsidiaries of proceeds
from (A) any Debt Issuance, the Borrower shall prepay the Loans and cash
collateralize the outstanding LOC Obligations in an aggregate amount equal
to
100% of the Net Cash Proceeds of such Debt Issuance to the Lenders (such
prepayment to be applied as set forth in clause (vi) below) or (B) any Equity
Issuance, the Borrower shall prepay the Loans and cash collateralize the
outstanding LOC Obligations in an aggregate amount equal to 50% of the Net
Cash
Proceeds of such Equity Issuance (such prepayment to be applied as set forth
in
clause (vi) below);
provided,
however,
if the
Leverage Ratio is less than or equal to 1.75 to 1.00 as of the end of the
preceding fiscal year of the Company, then the Borrower shall not be required
to
prepay the Loans or cash collateralize the outstanding LOC Obligations with
the
proceeds of any Debt Issuance or any Equity Issuance.
(iv) Recovery
Event.
To the
extent of Net Cash Proceeds received in connection with a Recovery Event that
are not applied in accordance with Section 6.4(a)(iii), immediately following
the expiration of the period allowed for reinvesting of such Net Cash Proceeds
pursuant to Section 6.4(a)(iii), the Borrower shall prepay the Loans and cash
collateralize the outstanding LOC Obligations in an aggregate amount equal
to
100% of such Net Cash Proceeds (such prepayment to be applied as set forth
in
clause (vi) below).
(v) Excess
Cash Flow.
Within
ninety (90) days after the end of each fiscal year of the Company
(commencing with the fiscal year ending December 31, 2007), the Borrower shall
prepay the Loans and
cash
collateralize the outstanding LOC Obligations
in an
amount equal to 50% of the Excess Cash Flow earned during such prior fiscal
year
(such prepayments to be applied as set forth in clause (vi) below); provided,
however,
if the
Leverage Ratio is less than or equal to 1.75 to 1.00 as of the end of the
preceding fiscal year of the Company, then the Borrower shall not be required
to
prepay the Loans or cash collateralize the outstanding LOC Obligations with
Excess Cash Flow.
49
(vi) Application
of Mandatory Prepayments.
All
amounts required to be paid pursuant to this Section 2.7(b) shall be applied
as
follows: (A) with respect to all amounts prepaid pursuant to Section 2.7(b)(i),
(1) first,
to the
outstanding Swingline Loans, (2) second,
to the
outstanding Revolving Loans and (3) third
(after
all Revolving Loans have been repaid), to a cash collateral account in respect
of outstanding LOC Obligations, and (B) with respect to all amounts prepaid
pursuant to Sections 2.7(b)(ii) through (v), (1) first,
to the
next four (4) scheduled amortization payments of the Term Loan (including,
if applicable, any Additional Term Loan) and then pro rata to the Term Loan
and
any Additional Term Loan, if applicable (ratably to the remaining principal
installments thereof), (2) second
to the
Swingline Loans (without a corresponding reduction in the Revolving Committed
Amount), (3) third,
to the
Revolving Loans (without a corresponding reduction in the Revolving Committed
Amount) and (4) fourth
(after
all Revolving Loans have been repaid), to a cash collateral account in respect
of outstanding LOC Obligations. Within the parameters of the applications set
forth above, prepayments shall be applied first to Alternate Base Rate Loans
and
then to LIBOR Rate Loans in direct order of Interest Period maturities. Each
Lender shall receive its pro rata share (except with respect to prepayments
of
Swingline Loans) of any such prepayment based on its Revolving Commitment
Percentage or Term Loan Commitment Percentage, as applicable. All prepayments
under this Section 2.7(b) shall be subject to Section 2.17 and be
accompanied by interest on the principal amount prepaid through the date of
prepayment.
(c) Hedging
Obligations Unaffected.
Any
repayment or prepayment made pursuant to this Section 2.7 shall not affect
the
Borrower’s obligation to continue to make payments under any Secured Hedging
Agreement, which shall remain in full force and effect notwithstanding such
repayment or prepayment, subject to the terms of such Secured Hedging
Agreement.
|
Section
2.8
|
Lending
Offices.
|
LIBOR
Rate Loans shall be made by each Lender at its LIBOR Lending Office and
Alternate Base Rate Loans at its Domestic Lending Office.
|
Section
2.9
|
Default
Rate and Payment Dates.
|
Upon
the
occurrence, and during the continuance, of an Event of Default, the principal
of
and, to the extent permitted by law, interest on the Loans and any other amounts
owing hereunder or under the other Credit Documents shall, at the discretion
of
the Required Lenders, bear interest, payable on demand, at a per annum rate
2%
greater than the rate which would otherwise be applicable (or if no rate is
applicable, whether in respect of interest, fees or other amounts, then the
Alternate Base Rate plus
the
Applicable Percentage with respect to Alternate Base Rate Loans plus
2%).
50
|
Section
2.10
|
Conversion
Options.
|
(a) The
Borrower may, in the case of Revolving Loans and Term Loans, elect from time
to
time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by giving the
Administrative Agent at least three (3) Business Days’ prior irrevocable
written notice of such election substantially in the form of the notice attached
as Schedule
2.10
(the
“Notice
of Conversion/Extension”).
If
the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR
Rate Loan is not a Business Day, then such conversion shall be made on the
next
succeeding Business Day and during the period from such last day of an Interest
Period to such succeeding Business Day such Loan shall bear interest as if
it
were an Alternate Base Rate Loan. All or any part of outstanding Alternate
Base
Rate Loans may be converted as provided herein; provided
that (i)
no Loan may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing and (ii) partial conversions shall be
in
an aggregate principal amount of (A)
in the
case of Revolving Loans, $1,000,000 or a whole multiple of $500,000 in excess
thereof and (B)
in the
case of the Term Loan, $2,000,000 or a whole multiple of $1,000,000 in excess
thereof.
(b) Any
LIBOR
Rate Loans may be continued as such upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice provisions
contained in Section 2.10(a); provided,
that no
LIBOR Rate Loan may be continued as such when any Default or Event of Default
has occurred and is continuing, in which case such Loan shall be automatically
converted to an Alternate Base Rate Loan at the end of the applicable Interest
Period with respect thereto. If the Borrower shall fail to give timely notice
of
an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate
Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically
converted to Alternate Base Rate Loans at the end of the applicable Interest
Period with respect thereto.
|
Section
2.11
|
Computation
of Interest and Fees.
|
(a) Interest
payable hereunder with respect to Alternate Base Rate Loans based on the Prime
Rate shall be calculated on the basis of a year of 365 days (or 366 days, as
applicable) for the actual days elapsed. All other fees, interest and all other
amounts payable hereunder shall be calculated on the basis of a 360-day year
for
the actual days elapsed. The Administrative Agent shall as soon as practicable
notify the Borrower and the Lenders of each determination of a LIBOR Rate on
the
Business Day of the determination thereof. Any change in the interest rate
on a
Loan resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change in the Alternate
Base Rate shall become effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date and the
amount of each such change.
(b) Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower
and
the Lenders in the absence of manifest error. The Administrative Agent shall,
at
the request of the Borrower, deliver to the Borrower a statement showing the
computations used by the Administrative Agent in determining any interest
rate.
51
(c) It
is the
intent of the Lenders and the Credit Parties to conform to and contract in
strict compliance with applicable usury law from time to time in effect. All
agreements between the Lenders and the Credit Parties are hereby limited by
the
provisions of this subsection which shall override and control all such
agreements, whether now existing or hereafter arising and whether written or
oral. In no way, nor in any event or contingency (including but not limited
to
prepayment or acceleration of the maturity of any Credit Party Obligation),
shall the interest taken, reserved, contracted for, charged, or received under
this Agreement, under the Notes or otherwise, exceed the maximum nonusurious
amount permissible under applicable law. If, from any possible construction
of
any of the Credit Documents or any other document, interest would otherwise
be
payable in excess of the maximum nonusurious amount, any such construction
shall
be subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which would,
apart from this provision, be in excess of the maximum nonusurious amount,
an
amount equal to the amount which would have been excessive interest shall,
without penalty, be applied to the reduction of the principal amount owing
on
the Loans and not to the payment of interest, or refunded to the Borrower or
the
other payor thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right to demand
payment of the Loans or any other Indebtedness evidenced by any of the Credit
Documents does not include the right to receive any interest which has not
otherwise accrued on the date of such demand, and the Lenders do not intend
to
charge or receive any unearned interest in the event of such demand. All
interest paid or agreed to be paid to the Lenders with respect to the Loans
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any renewal
or
extension) of the Loans so that the amount of interest on account of such
Indebtedness does not exceed the maximum nonusurious amount permitted by
applicable law.
|
Section
2.12
|
Pro
Rata Treatment and Payments.
|
(a) Each
borrowing of Revolving Loans and any reduction of the Revolving Commitments
shall be made pro rata
according to the respective Revolving Commitment Percentages of the Revolving
Lenders. Each payment under this Agreement or any Note shall be applied, first,
to any fees then due and owing by the Borrower pursuant to Section 2.5, second,
to interest then due and owing in respect of the Notes of the Borrower and,
third, to principal then due and owing hereunder and under the Notes of the
Borrower. Each payment on account of any fees pursuant to Section 2.5 shall
be
made pro rata
in
accordance with the respective amounts due and owing (except as to the portion
of the Letter of Credit retained by the Issuing Lender and the Issuing Lender
Fees). Each payment (other than prepayments) by the Borrower on account of
principal of and interest on the Revolving Loans and the Term Loan shall be
made
pro rata
according to the respective amounts due and owing in accordance with Section
2.7
hereof. Each optional prepayment on account of principal of the Loans shall
be
applied in accordance with Section 2.7(a) and each mandatory prepayment on
account of principal of the Loans shall be applied in accordance with Section
2.7(b). All payments (including prepayments) to be made by the Borrower on
account of principal, interest and fees shall be made without defense, set-off
or counterclaim (except as provided in Section 2.18(b)) and shall be made
to the Administrative Agent for the account of the Lenders at the Administrative
Agent’s office specified in Section 9.2 in Dollars and in immediately available
funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date
when
due. The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the LIBOR Rate Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
If
any payment on a LIBOR Rate Loan becomes due and payable on a day other than
a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such payment
into another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
52
(b) Allocation
of Payments After Exercise of Remedies.
Notwithstanding any other provision of this Credit Agreement to the contrary,
upon the exercise of remedies by the Administrative Agent or the Lenders
pursuant to Section 7.2 (or after the Commitments shall automatically terminate
and the Loans and all other amounts under the Credit Documents shall
automatically become due and payable in accordance with the terms of such
Section), all amounts collected or received by the Administrative Agent or
any
Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST,
to
the payment of all reasonable out-of-pocket costs and expenses (including
without limitation reasonable attorneys’ fees) of the Administrative Agent in
connection with enforcing the rights of the Lenders under the Credit Documents
and any protective advances made by the Administrative Agent with respect to
the
Collateral under or pursuant to the terms of the Collateral
Documents;
SECOND,
to payment of any fees owed to the Administrative Agent;
THIRD,
to
the payment of all reasonable out-of-pocket costs and expenses (including
without limitation, reasonable attorneys’ fees) of each of the Lenders in
connection with enforcing its rights under the Credit Documents or otherwise
with respect to the Credit Party Obligations owing to such Lender;
53
FOURTH,
to the payment of all of the Credit Party Obligations consisting of accrued
fees
and interest, including with respect to any Secured Hedging Agreement, any
fees,
premiums and scheduled periodic payments due under such Secured Hedging
Agreement and any interest accrued thereon;
FIFTH,
to
the payment of the outstanding principal amount of the Credit Party Obligations
and the payment or cash collateralization of the outstanding LOC Obligations,
and including with respect to any Secured Hedging Agreement, any breakage,
termination or other payments due under such Secured Hedging Agreement and
any
interest accrued thereon;
SIXTH,
to
all other Credit Party Obligations and other obligations which shall have become
due and payable under the Credit Documents or otherwise and not repaid pursuant
to clauses “FIRST” through “FIFTH” above; and
SEVENTH,
to the payment of the surplus, if any, to whoever may be lawfully entitled
to
receive such surplus.
In
carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii) each of the Lenders and Hedging Agreement Providers
shall receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Loans and outstanding LOC Obligations held by such
Lender or the outstanding obligations payable to such Hedging Agreement Provider
bears to the aggregate then outstanding Loans, outstanding LOC Obligations
and
obligations payable under all Secured Hedging Agreements) of amounts available
to be applied pursuant to clauses ”THIRD”, “FOURTH”, “FIFTH” and “SIXTH”
above; and (iii) to the extent that any amounts available for distribution
pursuant to clause “FIFTH” above are attributable to the issued but undrawn
amount of outstanding Letters of Credit, such amounts shall be held by the
Administrative Agent in a cash collateral account and applied (A) first, to
reimburse the Issuing Lender from time to time for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses “FIFTH” and
“SIXTH” above in the manner provided in this Section 2.12(b). Notwithstanding
the foregoing terms of this Section 2.12(b), only Collateral proceeds and
payments under the Guaranty with respect to Secured Hedging Agreements shall
be
applied to obligations under any Secured Hedging Agreement.
|
Section
2.13
|
Non-Receipt
of Funds by the Administrative Agent.
|
(a) Unless
the Administrative Agent shall have been notified in writing by a Lender prior
to the date a Loan is to be made by such Lender (which notice shall be effective
upon receipt), that such Lender does not intend to make the proceeds of such
Loan available to the Administrative Agent, the Administrative Agent may assume
that such Lender has made such proceeds available to the Administrative Agent
on
such date, and the Administrative Agent may in reliance upon such assumption
(but shall not be required to) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to the
Administrative Agent, the Administrative Agent shall be able to recover such
corresponding amount from such Lender. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent’s demand therefor,
the Administrative Agent will promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative Agent.
The
Administrative Agent shall also be entitled to recover from the Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Administrative Agent to the Borrower to the date such corresponding amount
is
recovered by the Administrative Agent at a per annum rate equal to (i) from
the
Borrower at the applicable rate for the applicable borrowing pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds Effective
Rate.
54
(b) Unless
the Administrative Agent shall have been notified in writing by the Borrower,
prior to the date on which any payment is due from it hereunder (which notice
shall be effective upon receipt) that the Borrower does not intend to make
such
payment, the Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to each Lender on
such
payment date an amount equal to the portion of such assumed payment to which
such Lender is entitled hereunder, and if the Borrower has not in fact made
such
payment to the Administrative Agent, such Lender shall, on demand, repay to
the
Administrative Agent the amount made available to such Lender. If such amount
is
repaid to the Administrative Agent on a date after the date such amount was
made
available to such Lender, such Lender shall pay to the Administrative Agent
on
demand interest on such amount in respect of each day from the date such amount
was made available by the Administrative Agent to such Lender to the date such
amount is recovered by the Administrative Agent at a per annum rate equal to
the
Federal Funds Effective Rate.
(c) A
certificate of the Administrative Agent submitted to the Borrower or any Lender
with respect to any amount owing under this Section 2.13 shall be conclusive
in
the absence of manifest error.
|
Section
2.14
|
Inability
to Determine Interest Rate.
|
Notwithstanding
any other provision of this Agreement, if (i) the Administrative Agent shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that, by reason of circumstances affecting the relevant market,
reasonable and adequate means do not exist for ascertaining LIBOR Rate for
any
Interest Period, or (ii) the Administrative Agent or the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that LIBOR Rate does not adequately and fairly reflect the
cost
to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be
outstanding as a LIBOR Tranche during such Interest Period, the Administrative
Agent shall forthwith give telephone notice of such determination, confirmed
in
writing, to the Borrower, and the Lenders at least two (2) Business Days
prior to the first day of such Interest Period. Unless the Borrower shall have
notified the Administrative Agent upon receipt of such telephone notice that
it
wishes to rescind or modify its request regarding such LIBOR Rate Loans, any
Loans that were requested to be made as LIBOR Rate Loans shall be made as
Alternate Base Rate Loans and any Loans that were requested to be converted
into
or continued as LIBOR Rate Loans shall remain as or be converted into Alternate
Base Rate Loans. Until any such notice has been withdrawn by the Administrative
Agent, no further Loans shall be made as, continued as, or converted into,
LIBOR
Rate Loans for the Interest Periods so affected.
55
|
Section
2.15
|
Illegality.
|
Notwithstanding
any other provision of this Agreement, if the adoption of or any change in
any
Requirement of Law or in the interpretation, administration or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to
make
such Loans, (a) such Lender shall promptly notify the Administrative Agent
and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender’s
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period
as
required by law to Alternate Base Rate Loans. The Borrower hereby agrees
promptly to pay any Lender, upon its demand, any additional amounts necessary
to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder.
A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender (which certificate shall include a description of
the
basis for the computation), through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to
use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; provided,
however,
that
such efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender in its reasonable
discretion to be material.
|
Section
2.16
|
Requirements
of Law.
|
(a) If
the
adoption of or any change in any Requirement of Law (other than any change
by
way of imposition or increase of reserve requirements included in the Eurodollar
Reserve Percentage) or in the interpretation, administration or application
thereof or compliance by any Lender with any request or directive (whether
or
not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:
56
(i)
shall
subject such Lender to any tax of any kind whatsoever with respect to any Letter
of Credit or any application relating thereto, any LIBOR Rate Loan made by
it,
or change the basis of taxation of payments to such Lender in respect thereof
(except for changes in the rate of tax on the overall net income of such
Lender);
(ii) shall
impose, modify or hold applicable any reserve, special deposit, compulsory
loan
or similar requirement against assets held by, deposits or other liabilities
in
or for the account of, advances, loans or other extensions of credit by, or
any
other acquisition of funds by, any office of such Lender which is not otherwise
included in the determination of the LIBOR Rate hereunder; or
(iii) shall
impose on such Lender any other condition;
and
the
result of any of the foregoing is to increase the cost to such Lender of making
or maintaining LIBOR Rate Loans or the Letters of Credit or to reduce any amount
receivable hereunder or under any Note, then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable which such Lender reasonably deems to be material as determined
by
such Lender with respect to its LIBOR Rate Loans or Letters of Credit. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender (which certificate shall include a description of
the
basis for the computation), through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to
use
reasonable efforts (including reasonable efforts to change its Domestic Lending
Office or LIBOR Lending Office, as the case may be) to avoid or to minimize
any
amounts that might otherwise be payable pursuant to this paragraph of this
Section; provided,
however,
that
such efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender in its reasonable
discretion to be material.
(b) If
any
Lender shall have reasonably determined that the adoption of or any change
in
any Requirement of Law regarding capital adequacy or in the interpretation
or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether
or
not having the force of law) from any central bank or Governmental Authority
made subsequent to the date hereof does or shall have the effect of reducing
the
rate of return on such Lender’s or such corporation’s capital as a consequence
of its obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender’s or such corporation’s policies with
respect to capital adequacy) by an amount reasonably deemed by such Lender
in
its reasonable discretion to be material, then from time to time, within
fifteen (15) days after demand by such Lender, the Borrower shall pay to
such Lender such additional amount as shall be certified by such Lender as
being
required to compensate it for such reduction. Such a certificate as to any
additional amounts payable under this Section submitted by a Lender (which
certificate shall include a description of the basis for the computation),
through the Administrative Agent, to the Borrower shall be conclusive absent
manifest error.
57
(c) In
the
event that any Lender demands payment of costs or additional amounts pursuant
to
Section 2.16 or Section 2.18 or asserts, pursuant to Section 2.15, that it
is
unlawful for such Lender to make LIBOR Rate Loans, then (subject to such
Lender’s right to rescind such demand or assertion within 10 days after the
notice from the Borrower referred to below) the Borrower may, upon 20 days’
prior written notice to such Lender and the Administrative Agent, elect to
cause
such Lender to assign at par its Loans and Commitments in full to one or more
Persons selected by the Borrower so long as (i) each such Person is either
another Lender or any Affiliate or Related Fund thereof or is otherwise
satisfactory to the Administrative Agent, (ii) such Lender receives payment
in
full in cash of the outstanding principal amount of all Loans made by it and
all
accrued and unpaid interest thereon and all other amounts due and payable to
such Lender as of the date of such assignment (including, without limitation,
amounts owing pursuant to Sections 2.16, 2.17 and 2.18), (iii) each such Lender
assignee agrees to accept such assignment and to assume all obligations of
such
assigning party hereunder in accordance with Section 9.6 and (iv) the costs
and
compensation paid by the Borrower under Section 2.16 or Section 2.18 shall
be
reduced as a result of such assignment.
(d) The
agreements in this Section 2.16 shall survive the termination of this Agreement
and payment of the Notes and all other amounts payable hereunder.
|
Section
2.17
|
Indemnity.
|
The
Credit Parties hereby agree to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense which such Lender may sustain or
incur
as a consequence of (a) default by the Borrower in payment of the principal
amount of or interest on any Loan by such Lender in accordance with the terms
hereof, (b) default by the Borrower in accepting a borrowing after the Borrower
has given a notice in accordance with the terms hereof, (c) default by the
Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of
a
prepayment of a Loan, or the conversion thereof, on a day which is not the
last
day of the Interest Period with respect thereto, in each case including, but
not
limited to, any such loss or expense arising from interest or fees payable
by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty (30) days following such default, prepayment or conversion and shall
include a description of the basis for the computation) shall be conclusive
in
the absence of manifest error. The agreements in this Section shall survive
termination of this Agreement and payment of the Notes and all other amounts
payable hereunder.
58
|
Section
2.18
|
Taxes.
|
(a) All
payments made by the Borrower hereunder or under any Note will be, except as
provided in Section 2.18(b), made free and clear of, and without deduction
or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by
any
Governmental Authority or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits of a Lender pursuant to the laws
of
the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or
any
subdivision thereof or therein) and all interest, penalties or additions to
tax
with respect thereto (all such non-excluded taxes, levies, imposts, duties,
fees, assessments or other charges being referred to collectively as
“Taxes”
and
all
such excluded taxes referred to collectively as “Excluded
Taxes”).
If
any Taxes are so levied or imposed, the Borrower agrees to pay the full amount
of such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. The Borrower will furnish to
the
Administrative Agent as soon as practicable after the date the payment of any
Taxes is due pursuant to applicable law certified copies (to the extent
reasonably available and required by law) of tax receipts evidencing such
payment by the Borrower or such other evidence of payment reasonably
satisfactory to the Lenders. The Borrower agrees to indemnify and hold harmless
each Lender, and reimburse such Lender upon its written request (which shall
specify in reasonable detail the nature and amount of such Taxes), for the
amount of any Taxes so levied or imposed and paid by such Lender. Nothing
contained in this Section shall require a Lender to make available its tax
returns or provide any information relating to its taxes which it reasonably
deems confidential.
59
(b) Each
Lender that is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Closing Date, or in the case of a Lender
that is an assignee or transferee of an interest under this Agreement pursuant
to Section 9.6(c) (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of
such
assignment or transfer to such Lender, (i) if the Lender is a “bank” within the
meaning of Section 881(c)(3)(A) of the Code, two accurate and complete original
signed copies of Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY with
appropriate attachments (or successor forms) certifying such Lender’s
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or
(ii)
if the Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, Internal Revenue Service Form ▇-▇▇▇▇, ▇-▇▇▇▇ or W-8IMY with
appropriate attachments as set forth in clause (i) above, or (x) a certificate
in substantially the form of Schedule
2.18
(any
such certificate, a “Tax
Exempt Certificate”)
and
(y) two accurate and complete original signed copies of Internal Revenue Service
Form W-8BEN (or successor form) certifying such Lender’s entitlement to an
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. Each Lender that
is
a United States person as that term is defined in Section 7701(a)(30) of the
Code , other than a Lender that may be treated as an exempt recipient based
on
the indicators described in Treasury Regulation Section 1.6049-4(c)(1)(ii),
hereby agrees that it shall, no later than the Closing Date or, in the case
of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant Section 9.6(c), on the date of such assignment or transfer to such
Lender, deliver to the Borrower and the Administrative Agent two accurate,
complete and signed copies of Internal Revenue service Form W-9 or successor
form, certifying that such Lender is not subject to United States backup
withholding tax. In addition, each Lender agrees that it will deliver updated
versions of the foregoing, as applicable, (A)
whenever the previous certification has become inaccurate in any material
respect or (B)
at any
time reasonably requested by the Borrower or the Administrative Agent, together
with such other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in United
States withholding tax with respect to payments under this Agreement and any
Note. Notwithstanding anything to the contrary contained in Section 2.18(a),
but
subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
Taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender to the extent that such Lender has
not
provided to the Borrower U.S. Internal Revenue Service Forms that establish
a
complete exemption from such deduction or withholding and (y) the Borrower
shall
not be obligated pursuant to Section 2.18(a) hereof to gross-up payments to
be
made to a Lender in respect of Taxes imposed by the United States or to
indemnify such Lender for any withholding Taxes imposed by the United States
if
(I) such Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section or (II)
in the case of a payment, other than interest, to a Lender described in clause
(ii) above, to the extent that such Forms do not establish a complete exemption
from withholding of such Taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section, the Borrower
agrees to pay additional amounts and to indemnify each Lender in the manner
set
forth in Section 2.18(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted
or
withheld by it as described in the immediately preceding sentence as a result
of
any changes after the Closing Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of Taxes.
(c) Each
Lender agrees to use reasonable efforts (including reasonable efforts to change
its Domestic Lending Office or LIBOR Lending Office, as the case may be) to
avoid or to minimize any amounts which might otherwise be payable pursuant
to
this Section; provided,
however,
that
such efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender in its reasonable
discretion to be material.
60
(d) If
the
Borrower pays any additional amount pursuant to this Section with respect to
a
Lender, such Lender shall use reasonable efforts to obtain a refund of tax
or
credit against its tax liabilities on account of such payment; provided
that
such Lender shall have no obligation to use such reasonable efforts if either
(i) it is in an excess foreign tax credit position or (ii) it believes in good
faith, in its sole discretion, that claiming a refund or credit would cause
adverse tax consequences to it. In the event that such Lender receives such
a
refund or credit, such Lender shall pay to the Borrower an amount that such
Lender reasonably determines is equal to the net tax benefit obtained by such
Lender as a result of such payment by the Borrower. In the event that no refund
or credit is obtained with respect to the Borrower’s payments to such Lender
pursuant to this, then such Lender shall upon request provide a certification
that such Lender has not received a refund or credit for such payments. Nothing
contained in this Section shall require a Lender to disclose or detail the
basis
of its calculation of the amount of any tax benefit or any other amount or
the
basis of its determination referred to in the proviso to the first sentence
of
this Section to the Borrower or any other party.
(e) The
agreements in this Section shall survive the termination of this Agreement
and
the payment of the Notes and all other amounts payable hereunder.
|
Section
2.19
|
Indemnification;
Nature of Issuing Lender’s Duties.
|
(a) In
addition to its other obligations under Section 2.3, each Credit Party
hereby agrees to protect, indemnify, pay and save each Issuing Lender harmless
from and against any and all claims, demands, liabilities, damages, losses,
charges, and reasonable out of pocket costs and expenses (including reasonable
attorneys’ fees) that the Issuing Lender may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit
or
(ii) the failure of the Issuing Lender to honor a drawing under a 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 “Government
Acts”).
(b) As
between the Credit Parties, the Issuing Lender and each Lender, the Credit
Parties shall assume all risks of the acts, omissions or misuse of any Letter
of
Credit by the beneficiary thereof. Neither the Issuing Lender nor any Lender
shall be responsible for: (i) 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 any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in
part, that may prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) 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) errors in interpretation of technical terms; (vi) any loss or delay in
the transmission or otherwise of any document required in order to make a
drawing under a Letter of Credit or of the proceeds thereof; and (vii) any
consequences arising from causes beyond the control of the Issuing Lender or
any
Lender, including, without limitation, any Government Acts. None of the above
shall affect, impair, or prevent the vesting of the Issuing Lender’s rights or
powers hereunder.
61
(c) In
furtherance and extension and not in limitation of the specific provisions
hereinabove set forth, any action taken or omitted by the Issuing Lender or
any
Lender, under or in connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put such Issuing
Lender or such Lender under any resulting liability to the Borrower. It is
the
intention of the parties that this Agreement shall be construed and applied
to
protect and indemnify the Issuing Lender and each Lender against any and all
risks involved in the issuance of the Letters of Credit, all of which risks
are
hereby assumed by the Credit Parties, including, without limitation, any and
all
risks of the acts or omissions, whether rightful or wrongful, of any
Governmental Authority. The Issuing Lender and the Lenders shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to pay
any
drawing under any Letter of Credit as a result of any Government Acts or any
other cause beyond the control of the Issuing Lender and the
Lenders.
(d) Nothing
in this Section 2.19 is intended to limit the reimbursement obligation of the
Borrower contained in Section 2.3(d) hereof. The obligations of the Credit
Parties under this Section 2.19 shall survive the termination of this Agreement.
No act or omissions of any current or prior beneficiary of a Letter of Credit
shall in any way affect or impair the rights of the Issuing Lender to enforce
any right, power or benefit under this Agreement.
(e) Notwithstanding
anything to the contrary contained in this Section 2.19, the Credit Parties
shall have no obligation to indemnify any Issuing Lender or any Lender in
respect of any liability incurred by such Issuing Lender or such Lender arising
out of the gross negligence or willful misconduct of the Issuing Lender or
such
Lender (including action not taken by an Issuing Lender), as determined by
a
court of competent jurisdiction pursuant to a final non-appealable
judgment.
ARTICLE
III
REPRESENTATIONS
AND WARRANTIES
To
induce
the Lenders to enter into this Agreement and to make the Extensions of Credit
herein provided for, the Company and its Subsidiaries hereby represent and
warrant to the Administrative Agent and each Lender that:
62
|
Section
3.1
|
Financial
Condition.
|
The
Borrower has delivered to the Administrative Agent and the Lenders (a) balance
sheets and the related statements of income and of cash flows of (i) the
Company and its Subsidiaries for the fiscal years ended December 31, 2003,
December 31, 2004 and December 31, 2005 audited by Ernst & Young,
LLP and
(ii) the Acquired Company and its Subsidiaries for the fiscal years ended
December 31, 2003, December 31, 2004 and December 31, 2005 audited
by ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP, (b) a company-prepared unaudited balance sheet and the
related statement of income and of cash flow of the Borrower for fiscal years
ended December 31, 2004 and December 31, 2005, (c) company-prepared
unaudited balance sheets and related statements of income and cash flows for
the
Company, the Borrower and the Acquired Company and their respective Subsidiaries
for that portion of the fiscal year commencing on January 1, 2006 through the
month most recently ended prior to the Closing Date (provided
that if
the Closing Date shall occur prior to the twentieth day of any month, then
such
financial statements shall be provided as of the end of the month immediately
preceding the most recent month end), (d) good faith estimated (subject
only to completion of purchase price accounting and other related adjustments)
pro forma unaudited balance sheets of the Company and its Subsidiaries and
the
Borrower and its Subsidiaries as of the last day of the month most recently
ended prior to the Closing Date (provided
that if
the Closing Date shall occur prior to the twentieth day of any month, then
such
financial statements shall be provided as of the end of the month immediately
preceding the most recent month end), in each case prepared giving effect to
the
Acquisition and the initial Extensions of Credit made hereunder on a Pro Forma
Basis and in form and substance reasonably satisfactory to the Administrative
Agent and (e) the seven-year projections of the Company and the Borrower, in
form and substance reasonably satisfactory to the Administrative Agent. The
financial statements referred to in subsections (a)-(d) above are complete
and
correct and present fairly the financial condition of the Company, the Borrower,
the Acquired Company and their respective Subsidiaries as of such dates, subject
in the case of unaudited financials to the absence of footnotes and immaterial
year end adjustments. All such financial statements and projections, including
the related schedules and notes thereto, have been prepared in accordance with
GAAP applied consistently throughout the periods involved (except as disclosed
therein).
|
Section
3.2
|
No
Change.
|
Since
December 31, 2005 there has been no development or event which has had or could
reasonably be expected to have a Material Adverse Effect and no Internal Control
Event has occurred.
|
Section
3.3
|
Corporate
Existence; Compliance with Law.
|
Each
of
the Credit Parties (a) is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, organization or
formation, (b) has the requisite power and authority and the legal right to
own
and operate all its property, to lease the property it operates as lessee and
to
conduct the business in which it is currently engaged and has taken all actions
necessary to maintain all rights, privileges, licenses and franchises necessary
or required in the normal conduct of its business, except to the extent that
the
failure to do so could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect, (c) is duly qualified to conduct
business and is in good standing under the laws of (i)
the
jurisdiction of its organization or formation and (ii) each
other jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification except to the extent that
the failure to so qualify or be in good standing could not, individually or
in
the aggregate, reasonably be expected to have a Material Adverse Effect and
(d)
is in compliance with all Requirements of Law except to the extent that the
failure to comply therewith could not, in the aggregate, reasonably be expected
to have a Material Adverse Effect. Without limiting the generality of the
foregoing, each of the Credit Parties represents that:
63
(i)
(A)
To
the knowledge of any Responsible Officer of any Credit Party, there is no Credit
Party or individual employed by such Credit Party who may reasonably be expected
to have criminal culpability or to be excluded or suspended from participation
in any Medical Reimbursement Program for their corporate or individual actions
or failures to act where such culpability, exclusion and/or suspension has
or
could be reasonably expected to result in a Material Adverse Effect; and (B)
there is no member of management continuing to be employed by any Credit Party
who may reasonably be expected to have individual culpability for matters under
investigation by any Governmental Authority where such culpability has or could
reasonably be expected to result in a Material Adverse Effect unless such member
of management has been, within a reasonable period of time after discovery
of
such actual or potential culpability, either suspended or removed from positions
of responsibility related to those activities under challenge by the
Governmental Authority;
(ii) current
billing policies, arrangements, protocols and instructions comply with expressly
stated requirements of Medical Reimbursement Programs and are administered
by
properly trained personnel except where any such failure to comply could not
reasonably be expected to result in a Material Adverse Effect;
(iii) current
medical director compensation arrangements and other arrangements with referring
physicians comply with state and federal self-referral and anti-kickback laws,
including without limitation 42 U.S.C. Section 1320a-7b(b)(1) - (b)(2) and
42
U.S.C. Section 1395nn, except where any such failure to comply could not
reasonably be expected to result in a Material Adverse Effect;
(iv) none
of
the Credit Parties is currently, nor has in the past been subject to any
federal, state, local governmental or private payor civil or criminal
inspections, investigations, inquiries or audits involving and/or related to
its
activities, except for routine inspections, investigations, inquiries or audits
in the ordinary course not anticipated to result in a Material Adverse Effect;
and
(v) except
as
set forth on Schedule
3.3,
no
Credit Party: (A)
has had
a civil monetary penalty assessed against it pursuant to 42 U.S.C. §1320a 7a,
(B)
has
been excluded from participation in a Federal Health Care Program (as that
term
is defined in 42 U.S.C. §1320a 7b), (C)
has
been convicted (as that term is defined in 42 C.F.R. §1001.2) of any of those
offenses described in 42 U.S.C. §1320a 7b or 18 U.S.C. §§669, 1035, 1347, 1518,
or (D)
to the
knowledge of any Responsible Officer, has been involved or named in a U.S.
Attorney complaint made or any other action taken pursuant to the False Claims
Act under 31 U.S.C. §§3729 3731 or qui tam action brought pursuant to 31 U.S.C.
§3729 et seq.
64
|
Section
3.4
|
Corporate
Power; Authorization; Enforceable Obligations.
|
Each
of
the Credit Parties has full power and authority and the legal right to make,
deliver and perform the Credit Documents to which it is party and has taken
all
necessary limited liability company or corporate or other action to authorize
the execution, delivery and performance by it of the Credit Documents to which
it is party. No consent or authorization of, filing with, notice to or other
act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the borrowings hereunder or with the execution, delivery
or
performance of any Credit Document by the Credit Parties (other than those
which
have been obtained) or with the validity or enforceability of any Credit
Document against the Credit Parties (except such filings as are necessary in
connection with the perfection of the Liens created by such Credit Documents).
This Credit Agreement has been, and each other Credit Document when delivered
hereunder will have been, duly executed and delivered on behalf of each of
the
Credit Parties party thereto. Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of each of the Credit Parties,
enforceable against such Credit Party in accordance with its terms, except
as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors’ rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
|
Section
3.5
|
Status
Under Certain Statutes.
|
No
Credit
Party is (i) required to be registered as an “investment company”, or
“controlled” by a Person that is required to be registered as an “investment
company”, under the Investment Company Act of 1940, as amended, or (ii) subject
to regulation under any federal or state statute or regulation limiting its
ability to incur the Credit Party Obligations.
|
Section
3.6
|
Margin
Regulations.
|
No
part
of the proceeds of any Loan hereunder will be used directly or indirectly for
any purpose which does not comply with the provisions of Regulation T, U or
X of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect. The Company and its Subsidiaries taken as a group
do
not own “margin stock” except as identified in the financial statements referred
to in Section 3.1 and the aggregate value of all “margin stock” owned by the
Company and its Subsidiaries taken as a group does not exceed 25% of the value
of their assets.
|
Section
3.7
|
No
Legal Bar; No Default.
|
The
execution, delivery and performance of the Credit Documents, the borrowings
thereunder and the use of the proceeds of the Loans (a)
will
not violate any Requirement of Law in any material respect or any material
Contractual Obligation of any Credit Party (except those as to which waivers
or
consents have been obtained), (b)
will
not conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws, articles of organization, operating agreement
or other organization documents of the Credit Parties or any Material Contract
to which such Person is a party or by which any of its properties may be bound
or any material approval or material consent from any Governmental Authority
relating to such Person, and (c)
will
not result in, or require, the creation or imposition of any Lien on any Credit
Party’s properties or revenues pursuant to any Requirement of Law or Contractual
Obligation other than the Liens arising under or contemplated in connection
with
the Credit Documents or Permitted Liens. No Credit Party is in default under
or
with respect to any of its material Contractual Obligations in any material
respect. No Default or Event of Default has occurred and is
continuing.
65
|
Section
3.8
|
No
Material Litigation.
|
As
of the
Closing Date, set forth on Schedule
3.8
is a
description of any material litigation, investigation, claim, criminal
prosecution, civil investigative demand, criminal or civil fine and penalty,
or
other proceeding of or before any arbitrator or Governmental Authority
(including but not limited to those regulatory agencies responsible for
licensing, accrediting or issuing Medicare or Medicaid certifications) that
is
pending or, to the best knowledge of any Responsible Officer, threatened by
or
against the Company or any of its Subsidiaries or against any of its or their
respective properties or revenues. No litigation, investigation, claim, criminal
prosecution, civil investigative demand, imposition of criminal or civil fines
and penalties, or any other proceeding of or before any arbitrator or
Governmental Authority (including but not limited to those regulatory agencies
responsible for licensing, accrediting or issuing Medicare or Medicaid
certifications) is pending or, to the best knowledge of any Responsible Officer,
threatened by or against the Company or any of its Subsidiaries or against
any
of its or their respective properties or revenues (a) with respect to the Credit
Documents or any Loan or any of the transactions contemplated hereby, or (b)
which could reasonably be expected to be adversely determined and if so
adversely determined could reasonably be expected to have, individually or
in
the aggregate, a Material Adverse Effect.
|
Section
3.9
|
ERISA.
|
No
Reportable Event that could reasonably be expected to result in a Material
Adverse Effect, and no “accumulated funding deficiency” (within the meaning of
Section 412 of the Code or Section 302 of ERISA), has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan. Each Single Employer
Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred resulting
in
any liability that has remained underfunded. No Lien in favor of a Single
Employer Plan or in favor of the PBGC with respect to a Single Employer Plan
has
arisen, during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Single Employer Plan
(other than a Lien with respect to a liability which has been satisfied in
full). The present value of all accrued benefits under each Single Employer
Plan
(based on those assumptions used to fund such Plans) did not, as of the last
annual valuation date prior to the date on which this representation is made
or
deemed made, exceed the value of the assets of such Plan allocable to such
accrued benefits, except to the extent that such underfunding could not
reasonably be expected to result in a Material Adverse Effect. Neither any
Credit Party nor any Commonly Controlled Entity has any outstanding liability
for a complete or partial withdrawal from a Multiemployer Plan, except to the
extent such liability could not reasonably be expected to result in a Material
Adverse Effect.
66
|
Section
3.10
|
Environmental
Matters.
|
Except
as
could not reasonably be expected to have a Material Adverse Effect:
(a) The
facilities and properties owned, leased or operated by the Company or any of
its
Subsidiaries (the “Properties”)
do not
contain any Materials of Environmental Concern in amounts or concentrations
that
constitute a violation of or a liability under, any Environmental
Law.
(b) The
Properties, all operations of the Company and/or its Subsidiaries at the
Properties, and the business operated by the Company or any of its Subsidiaries
(the “Business”)
are in
compliance, and have in the last two years been in compliance, with all
applicable Environmental Laws.
(c) Neither
the Company nor any of its Subsidiaries has received any written notice of
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor does any Responsible
Officer of the Company or any of its Subsidiaries have knowledge that any such
notice will be received or is being threatened.
(d) Materials
of Environmental Concern have not been transported or disposed of from the
Properties by the Company or any of its Subsidiaries in violation of any
Environmental Law, and neither the Company nor any of its Subsidiaries has
received any written notice of any liability or potential liability for any
Materials of Environmental Concern transported or disposed of from the
Properties by the Company or any of its Subsidiaries. Materials of Environmental
Concern have not been generated, treated, stored or disposed of by the Company
or any of its Subsidiaries at, on or under any of the Properties in violation
of
any applicable Environmental Law, and neither the Company nor any of its
Subsidiaries is liable for any Materials of Environmental Concern that have
been
generated, treated, stored or disposed of at, on or under any of the
Properties.
(e) No
judicial proceeding or governmental or administrative action is pending or,
to
the knowledge of any Responsible Officer, threatened, under any Environmental
Law to which the Company or any Subsidiary is or, with respect to any threatened
proceeding or action, is reasonably expected to become a party with respect
to
the Properties or the Business, nor are there any governmental consent decrees,
consent orders or administrative orders with respect to which the Company or
any
of its Subsidiaries is a party, or other administrative or judicial requirements
applicable to the Company or any of its Subsidiaries outstanding under any
Environmental Law with respect to the Properties or the Business.
67
(f)
There
has
been no release of Materials of Environmental Concern by the Company or any
of
its Subsidiaries or for which the Company or any of its Subsidiaries is liable
at or from the Properties, or arising from or related to the operations of
the
Company or any of its Subsidiaries in connection with the Properties or
otherwise in connection with the Business, in violation of, or in amounts or
in
a manner that give rise to liability, under Environmental Laws, except for
any
such release that has been remediated in accordance with applicable
Environmental Laws.
|
Section
3.11
|
Use
of Proceeds.
|
The
proceeds of the Extensions of Credit shall be used solely by the Borrower to
(i)
finance
a portion of the Acquisition, (ii)
pay any
fees and expenses in connection with the Acquisition, (iii)
pay any
fees and expenses owing to the Lenders and the Administrative Agent in
connection with this Agreement and the other Credit Documents (including those
under the Fee Letters), (iv)
refinance certain existing indebtedness of the Company and its Subsidiaries,
and
(v)
provide
for working capital, capital expenditures and other general corporate purposes
of the Borrower and its Subsidiaries, including, without limitation, Permitted
Acquisitions.
|
Section
3.12
|
Subsidiaries.
|
Set
forth
on Schedule
3.12
is a
complete and accurate list of all direct and indirect Subsidiaries of the
Company as of the Closing Date. Information on the attached Schedule includes
jurisdiction of incorporation or organization; the number of shares of each
class of Capital Stock or other equity interests outstanding; the number and
percentage of outstanding shares of each class of Capital Stock held by each
shareholder; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and similar rights. The
outstanding Capital Stock and other equity interests of all such Subsidiaries
is
validly issued, fully paid and non-assessable and is owned, free and clear
of
all Liens (other than those arising under or contemplated in connection with
the
Credit Documents). There are no outstanding subscriptions, options, warrants,
calls, rights or other agreements or commitments (other than stock options
granted to employees or directors, directors’ qualifying shares or arrangements
with respect to the purchase of the remaining ownership interest in German
Breg
as contemplated in the German Buyout) of any nature relating to any Capital
Stock of the Company or any Subsidiary, except as contemplated in connection
with the Credit Documents.
|
Section
3.13
|
Ownership.
|
Each
of
the Company and its Subsidiaries is the owner of, and has good and insurable
title (in the case of real property) to or an indefeasible leasehold interest
in, all of its respective assets and none of such assets are subject to any
Lien
on such party’s interest other than Permitted Liens. Each Credit Party and its
Subsidiaries enjoys peaceful and undisturbed possession under all of its leases
and all such leases are valid and subsisting and in full force and effect.
68
|
Section
3.14
|
Indebtedness.
|
Except
as
otherwise permitted under Section 6.1, the Company and its Subsidiaries have
no
Indebtedness.
|
Section
3.15
|
Taxes.
|
Each
of
the Company and its Subsidiaries has filed, or caused to be filed, all tax
returns required to be filed and paid (a) all amounts of taxes shown thereon
to
be due (including interest and penalties) and (b) all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing by it, except for such
taxes (i) that are not yet delinquent or (ii) that are being contested in good
faith and by proper proceedings, and against which adequate reserves are being
maintained in accordance with GAAP. Neither the Company nor any of its
Subsidiaries are aware as of the Closing Date of any proposed tax assessments
against it or any of its Subsidiaries that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
|
Section
3.16
|
Intellectual
Property.
|
To
the
knowledge of any Responsible Officer, each of the Company and its Subsidiaries
owns, or has the legal right to use, all material Intellectual Property
necessary for each of them to conduct its business as currently conducted.
Set
forth on Schedule
3.16
is a
list of all material Intellectual Property (excluding unregistered trademarks
to
the extent not used or not reasonably identifiable by the Credit Parties) owned
by the Credit Parties or that any Credit Party has the right to use (excluding
standard “off the shelf” licensed software used in the ordinary course of
business). To the knowledge of any Responsible Officer, except pursuant to
a
license agreement disclosed in Schedule
3.16
hereto,
or as otherwise disclosed in Schedule
3.16
hereto,
(a) the Credit Parties have the right to use the Intellectual Property disclosed
in Schedule
3.16
hereto
in perpetuity and without payment of royalties, and (b) all registrations with
and applications to Governmental Authorities in respect of such Intellectual
Property are valid or subsisting and in full force and effect and are not
subject to the payment of any taxes or maintenance fees or the taking of any
interest therein, held by the Company or any of its Subsidiaries to maintain
their validity or effectiveness in any material respects. To the knowledge
of
any Responsible Officer, neither the Company nor any of its Subsidiaries is
in
default (or with the giving of notice or lapse of time or both, would be in
default) under any license to use any material Intellectual Property; other
than
as noted on Schedule
3.16,
no
claim has been asserted in writing and is pending by any Person, in any material
respects, seeking to restrict or deny the use of any material Intellectual
Property or the validity or effectiveness of any such Intellectual Property,
nor
does any Responsible Officer know of any such claim; and, to the knowledge
of
any Responsible Officer, the use of any material Intellectual Property by the
Company or any of its Subsidiaries does not infringe on the rights of any
Person. Schedule
3.16
may be
updated from time to time by the Borrower to include new Intellectual Property
by giving written notice thereof to the Administrative Agent.
69
|
Section
3.17
|
Solvency.
|
Each
of
the Credit Parties is Solvent.
|
Section
3.18
|
Investments.
|
All
Investments of each of the Company and its Subsidiaries are Permitted
Investments.
|
Section
3.19
|
Location
of Collateral.
|
Set
forth
on Schedule
3.19(a)
is a
list of the domestic real Properties (whether owned or leased) of the Credit
Parties as of the Closing Date with street address, county and state where
located. Set forth on Schedule
3.19(b)
is a
list of all locations where any domestic tangible personal property of the
Credit Parties with a fair market value in excess of $250,000 is located as
of
the Closing Date (other than trade show booths and related assets and tangible
personal property in transit, held by sales representatives or on consignment
with third parties), including county and state where located. Set forth on
Schedule
3.19(c)
is the
state of incorporation or organization, chief executive office, the principal
place of business, the tax identification number and organization identification
number of each of the Credit Parties as of the Closing Date. Set forth on
Schedule
3.19(d)
is a
list of all Mortgaged Properties as of the Closing Date.
|
Section
3.20
|
No
Burdensome Restrictions.
|
Neither
the Company nor any of its Subsidiaries is a party to any agreement or
instrument or subject to any other obligation or any charter or corporate
restriction or any provision of any applicable law, rule or regulation that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
|
Section
3.21
|
Labor
Matters.
|
Except
as
otherwise set forth in Schedule
3.21
hereto,
as of the Closing Date, (a) there are no collective bargaining agreements or
Multiemployer Plans covering the employees of the Company or any of its
Subsidiaries, (b) neither the Company nor any of its Subsidiaries has suffered
any material strikes, walkouts, work stoppages or other material labor
difficulty within the last five years, (c) no Responsible Officer of the Company
or any of its Subsidiaries has knowledge of any material potential or pending
strike, walkout or work stoppage and (d) no material unfair labor practice
complaint is pending or, to the best knowledge of any Responsible Officer,
threatened against the Company or any of its Subsidiaries before any
Governmental Authority.
|
Section
3.22
|
Security
Documents.
|
The
Security Documents create (or will create upon the execution and delivery
thereof) valid security interests in, and Liens on, the Collateral purported
to
be covered thereby, which security interests and Liens are currently (or will
be
upon the execution and delivery of the Security Documents and upon the filing
of
appropriate financing statements, the recordation of the applicable Mortgage
Instruments, the filing of appropriate notices with the United States Patent
and
Trademark Office and the United States Copyright Office, in each case in favor
of the Administrative Agent, on behalf of the Lenders) perfected security
interests and Liens, prior to all other Liens other than Permitted Liens that
would be prior to the Liens in favor of the Administrative Agent as a matter
of
law.
70
|
Section
3.23
|
Accuracy
and Completeness of Information.
|
All
factual written information (other than written financial projections)
heretofore, contemporaneously or hereafter furnished by or on behalf of any
Credit Party or any of its Subsidiaries to the Administrative Agent or any
Lender for purposes of or in connection with this Agreement or any other Credit
Document, or any transaction contemplated hereby or thereby, is or will be
true
and accurate in all material respects and not incomplete by omitting to state
any material fact necessary to make such information not misleading. The written
financial projections concerning the Company and its Subsidiaries heretofore,
contemporaneously or hereafter furnished by or on behalf of any Credit Party
or
any of its Subsidiaries to the Administrative Agent or any Lender for purposes
of or in connection with this Agreement or any other Credit Document, or any
transaction contemplated hereby or thereby, have been and will be prepared
in
good faith based upon assumptions that the Credit Parties believe to be
reasonable at the time of such preparation. There is no fact now known to the
Borrower, any other Credit Party or any of their Subsidiaries which has, or
could reasonably be expected to have, a Material Adverse Effect, which fact
has
not been set forth herein, in the financial statements of the Company and its
Subsidiaries furnished to the Administrative Agent and/or the Lenders, or in
any
opinion or other written statement made or furnished by any Credit Party to
the
Administrative Agent and/or the Lenders.
|
Section
3.24
|
Fraud
and Abuse.
|
To
the
knowledge of any Responsible Officer, neither the Company and its Subsidiaries
nor any of their officers or directors, have engaged in any activities which
are
prohibited under federal Medicare and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇.▇.▇. §▇▇▇▇▇-▇▇, or
42 U.S.C. §1395nn or the regulations promulgated pursuant to such statutes or
related state or local statutes or regulations, or which are prohibited by
binding rules of professional conduct, including but not limited to the
following: (a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any applications for any
benefit or payment; (b) knowingly and willfully making or causing to be
made any false statement or representation of a material fact for use in
determining rights to any benefit or payment; (c) failing 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
the intent to secure such benefit or payment fraudulently; (d) knowingly and
willfully soliciting or receiving any remuneration (including any kickback,
bribe or rebate), directly or indirectly, overtly or covertly, in cash or in
kind or offering to pay such remuneration (i) 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,
Medicaid or other applicable third party payors, or (ii) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service, or item for which payment
may be made in whole or in part by Medicare, Medicaid or other applicable third
party payors, except in each case for any such prohibited activity that could
not reasonably be expected to result in a Material Adverse Effect.
71
|
Section
3.25
|
Licensing
and Accreditation.
|
Each
of
the Company and its Subsidiaries has, to the extent applicable: (a)
obtained and maintains in good standing all required licenses; (b)
to the
extent prudent and customary in the industry in which it is engaged, obtained
and maintains accreditation from all generally recognized accrediting agencies;
(c)
obtained and maintains Medicaid Certification and Medicare Certification; and
(d)
entered
into and maintains in good standing its Medicare Provider Agreement and its
Medicaid Provider Agreement, except in each case to the extent the absence
of
such license, accreditation, certification or good standing could not reasonably
be expected to have a Material Adverse Effect. All such required licenses are
in
full force and effect on the date hereof and have not been revoked or suspended
or otherwise limited, except in each case to the extent such revocation,
suspension or other limitation could not reasonably be expected to have a
Material Adverse Effect.
|
Section
3.26
|
Other
Regulatory Protection.
|
Each
of
the Company and its Subsidiaries represent that it does not manufacture
pharmaceutical products and is in compliance with all applicable rules,
regulations and other requirements of the Food and Drug Administration
(“FDA”),
the
Federal Trade Commission (“FTC”),
the
Occupational Safety and Health Administration (“OSHA”),
the
Consumer Product Safety Commission, the United States Customs Service and the
United States Postal Service and other state or federal regulatory authorities
or jurisdictions in which the Company or any of its Subsidiaries do business
or
distribute and market products, except to the extent that any such
noncompliance, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect. Neither the FDA, the FTC, OSHA,
the
Consumer Product Safety Commission, nor any other such regulatory authority
has
requested (or, to the knowledge of any Responsible Officer, are considering
requesting) any product recalls or other enforcement actions that (a) if not
complied with, individually or in the aggregate, could reasonably be expected
to
result in a Material Adverse Effect and (b) with which the Company and its
Subsidiaries have not complied within the time period allowed.
|
Section
3.27
|
Reimbursement
from Third Party Payors.
|
The
accounts receivable of the Company and its Subsidiaries have been and will
continue to be adjusted to reflect the reimbursement policies (both those most
recently published in writing as well as those not in writing which have been
verbally communicated) of third party payors such as Medicare, Medicaid, Blue
Cross/Blue Shield, private insurance companies, health maintenance
organizations, preferred provider organizations, alternative delivery systems,
managed care systems, government contacting agencies and other third party
payors. In particular, accounts receivable relating to third party payors do
not
and shall not exceed amounts any obligee is entered to receive under any
capitation arrangement, fee schedule, discount formula, cost-based reimbursement
or other adjustment or limitation to its usual charges.
72
|
Section
3.28
|
Other
Agreements.
|
No
Credit
Party is in default in the performance, observance or fulfillment of any of
the
obligations, covenants or conditions contained in (a)
any
Medicaid Provider Agreement, Medicare Provider Agreement or other agreement
or
instrument to which such Person is a party, which default has resulted in,
or if
not remedied within any applicable grace period could result in, the revocation,
termination, cancellation or material suspension of Medicaid Certification
or
Medicare Certification of any such Person or (b)
any
other agreement or instrument to which any such Person is a party, which
default, individually or in the aggregate, has, or if not remedied within any
applicable grace period could reasonably be expected to have, a Material Adverse
Effect.
|
Section
3.29
|
Material
Contracts.
|
Schedule
3.29
sets
forth a true and correct and complete list of all Material Contracts currently
in effect. All of the Material Contracts are in full force and effect and no
material defaults exist thereunder.
|
Section
3.30
|
Insurance.
|
The
insurance coverage of the
Credit
Parties and, with respect to the general insurance coverage of the Company
and
its Subsidiaries, the Foreign Subsidiaries is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule
3.30
and such
insurance coverage complies with the requirements set forth in Section
5.5(b).
|
Section
3.31
|
Classification
as Senior Indebtedness.
|
The
Credit Party Obligations constitute “Senior Indebtedness” under and as may be
defined in any agreement governing any outstanding Subordinated Indebtedness
and
the subordination provisions set forth in each such agreement are legally valid
and enforceable against the parties thereto.
|
Section
3.32
|
Tax
Shelter Regulations.
|
The
Borrower does not intend to treat the Loans or Letters of Credit and
related transactions
as being
a “reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4). In the event the Borrower determines to take any action
inconsistent with such intention, it will promptly notify the Administrative
Agent thereof. If the Borrower so notifies the Administrative Agent, the
Borrower acknowledges that one or more of the Lenders may treat its Loans and/or
Letters of Credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such treasury
regulation.
73
|
Section
3.33
|
Regulation
H.
|
No
Mortgaged Property is a Flood Hazard Property.
|
Section
3.34
|
Anti-Terrorism
Laws.
|
Neither
any Credit Party nor any of its Subsidiaries is an “enemy” or an “ally of the
enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the
United States of America (50 U.S.C. App. §§ 1 et
seq.),
as
amended. Neither any Credit Party nor any or its Subsidiaries is in violation
of
(a) the Trading with the Enemy Act, as amended, (b) any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto or (c) the Patriot Act. None of the Credit Parties (i) is
a
blocked person described in Section 1 of the Executive Order Number 13224
(Anti-Terrorism Order) or (ii) to the knowledge of any Responsible Officer,
engages in any dealings or transactions, or is otherwise associated, with any
such blocked person.
|
Section
3.35
|
Compliance
with OFAC Rules and Regulations.
|
None
of
the Credit Parties or their Subsidiaries or, to the knowledge of any Responsible
Officer, their respective Affiliates (a) is a Sanctioned Person,
(b) has more than 15% of its assets in Sanctioned Countries, or
(c) derives more than 15% of its operating income from investments in, or
transactions with Sanctioned Persons or Sanctioned Countries. No part of the
proceeds of any Extension of Credit hereunder will be used directly or
indirectly to fund any operations in, finance any investments or activities
in
or make any payments to, a Sanctioned Person or a Sanctioned
Country.
|
Section
3.36
|
Compliance
with FCPA.
|
Each
of
the Credit Parties and their Subsidiaries is in compliance with the Foreign
Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et
seq.,
and, to
the knowledge of any Responsible Officer, any foreign counterpart thereto.
None
of the Credit Parties or their Subsidiaries has made a payment, offering, or
promise to pay, or authorized the payment of, money or anything of value
(a) in order to assist in obtaining or retaining business for or with, or
directing business to, any foreign official, foreign political party, party
official or candidate for foreign political office, (b) to a foreign
official, foreign political party or party official or any candidate for foreign
political office, and (c) with the intent to induce the recipient to misuse
his or her official position to direct business wrongfully to such Credit Party
or its Subsidiary or to any other Person, in violation of the Foreign Corrupt
Practices Act, 15 U.S.C. §§ 78dd-1, et
seq.
74
ARTICLE
IV
CONDITIONS
PRECEDENT
|
Section
4.1
|
Conditions
to Closing Date and Initial Extensions of Credit.
|
This
Agreement shall become effective upon, and the obligation of each Lender to
make
the initial Revolving Loans and the Term Loans on the Closing Date is subject
to, the satisfaction of the following conditions precedent:
(a) Execution
of Agreements.
The
Administrative Agent shall have received (i)
counterparts of this Agreement from each party hereto, (ii)
for the
account of each applicable Lender, a Revolving Note and a Term Note from the
Borrower, (iii)
for the
account of each Swingline Lender, the Swingline Note from the Borrower,
(iv)
counterparts of the Security Agreement, and the Pledge Agreement, each Mortgage
Instrument and the other Security Documents from each Credit Party party thereto
and (v)
executed consents, in the form of Schedule
4.1-3
from
each Lender authorizing the Administrative Agent to enter this Credit Agreement
on their behalf, in each case conforming to the requirements of this Agreement
and executed by a duly authorized officer of each party thereto, and in each
case in form and substance reasonably satisfactory to the Administrative Agent.
(b) Authority
Documents.
The
Administrative Agent shall have received the following:
(i)
Articles
of Incorporation/Organizational Documents.
Copies
of the articles of incorporation, certificate of incorporation or other
organizational documents, as applicable, of each Credit Party, certified (other
than with respect to the Company, Colgate, Victory, Swiftsure and UK Ltd) to
be
true and complete as of a recent date by the appropriate Governmental Authority
of the jurisdiction of its incorporation or organization, as the case may
be.
(ii) Resolutions.
Copies
of resolutions of the board of directors (or comparable group and, where
applicable, the shareholders or members) of each Credit Party approving and
adopting the Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a secretary or
assistant secretary of such Credit Party (pursuant to a secretary’s certificate
in substantially the form of Schedule
4.1-1
attached
hereto) as of the Closing Date to be true and correct and in force and effect
as
of such date.
(iii) Bylaws/Operating
Agreement.
A copy
of the bylaws, memorandum and articles of association, limited liability company
agreement or comparable operating agreement of each Credit Party (other than
the
Company) certified by a secretary or assistant secretary of such Credit Party
(pursuant to a secretary’s certificate in substantially the form of Schedule
4.1-1
attached
hereto) as of the Closing Date to be true and correct and in force and effect
as
of such date.
75
(iv) Good
Standing.
Copies
of certificates of good standing, existence or its equivalent (to the extent
applicable) with respect to the each Credit Party certified as of a recent
date
by the appropriate Governmental Authorities of the jurisdiction of incorporation
or organization and each other jurisdiction in which the failure to so qualify
and be in good standing could reasonably be expected to have a Material Adverse
Effect on the business or operations of such Credit Party in such
state.
(v) Incumbency.
An
incumbency certificate of Responsible Officers of each Credit Party authorized
to execute the Credit Documents on such Credit Party’s behalf certified by a
secretary or assistant secretary (pursuant to a secretary’s certificate in
substantially the form of Schedule
4.1-1
attached
hereto) to be true and correct as of the Closing Date.
(c) Legal
Opinions of Counsel.
The
Administrative Agent shall have received (i)
opinions of legal counsel (including local counsel to the extent required by
the
Administrative Agent) for the Credit Parties, dated the Closing Date and
addressed to the Administrative Agent and the Lenders, which opinions shall
include, without limitation, a “no conflicts” opinion with respect to corporate
instruments and Material Contracts of the Credit Parties on the Closing Date
after giving effect to the transactions contemplated herein, (ii)
an
opinion from STvB Advocaten (Caracao) N.V. as to, inter alia, the due
authorization, execution and delivery of the Credit Documents to which the
Company is a party, and (iii)
an
opinion from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP as to, inter alia, enforceability
of
the UK Security Documents and the due authorization, execution and delivery
of
the Credit Documents to which Colgate, Victory, Swiftsure or UK Ltd is a party,
such opinions to be in form and substance reasonably satisfactory to the
Administrative Agent.
(d) Reliance.
The
Administrative Agent shall have received a copy of each opinion, agreement,
and
other material document required to be delivered pursuant to the Acquisition
Documents and the transactions contemplated in connection therewith, together
with evidence that the Administrative Agent and the Lenders have been authorized
to rely on each such opinion to the extent counsel providing each such opinion
has agreed to such reliance, all in form and substance reasonably satisfactory
to the Administrative Agent.
(e) Personal
Property Collateral.
The
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent:
(i)
a
perfection certificate setting forth the state or jurisdiction of incorporation
or organization of each Credit Party and each jurisdiction where any Collateral
of such Credit Party with a fair market value in excess of $100,000 is located
or where the chief executive office of such Credit Party is located, copies
of
Lien searches in jurisdictions as required by the Administrative Agent, and
copies of the financing statements on file in such jurisdictions and evidence
that no Liens exist other than Permitted Liens;
76
(ii) UCC
financing statements for each appropriate jurisdiction as is necessary, in
the
Administrative Agent’s reasonable discretion, to perfect the Administrative
Agent’s security interest in the Collateral; and
(iii) duly
executed consents as are necessary, in the Administrative Agent’s sole
discretion, to perfect the Lenders’ security interest in the Collateral.
(f)
[Reserved]
(g) Liability,
Casualty and Business Interruption Insurance.
The
Administrative Agent shall have received copies of insurance policies (including
a ▇▇▇▇▇ Inc. report) or certificates of insurance evidencing liability and
casualty insurance meeting the requirements set forth herein or in the Security
Documents and business interruption insurance satisfactory to the Administrative
Agent. The Administrative Agent shall be named as loss payee or mortgagee,
as
its interest may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and the respective
Credit Party shall use commercially reasonable efforts to obtain from each
provider of any such insurance an agreement that such provider, by endorsement
upon the policy or policies issued by it or by independent instruments furnished
to the Administrative Agent, will give the Administrative Agent thirty (30)
days
prior written notice before any such policy or policies shall be altered or
canceled.
(h) Fees.
The
Administrative Agent and the Lenders shall have received (i) all
fees, if any, owing pursuant to the Fee Letters and Section 2.5 and
(ii)
evidence that the aggregate amount of fees and expenses payable in connection
with the consummation of the Acquisition by the Company and its Subsidiaries
(excluding those fees identified in the foregoing subsection (i)) did not exceed
$12,500,000.
(i)
Litigation.
Except
as set forth on Schedule
3.8,
there
shall not exist any material litigation, investigation, claim, criminal
prosecution, civil investigative demand, imposition of criminal or civil fines
and penalties, or any other proceeding of or before any arbitrator or
Governmental Authority (including but not limited to those regulatory agencies
responsible for licensing, accrediting or issuing Medicare or Medicaid
certifications) affecting or relating to any of the Company or its Subsidiaries,
this Agreement and the other Credit Documents, that has not been settled,
dismissed, vacated, discharged or terminated prior to the Closing
Date.
(j)
Solvency
Certificate.
The
Administrative Agent shall have received an officer’s certificate prepared by
the chief financial officer of the Company as to the financial condition,
solvency and related matters of each Credit Party, in each case after giving
effect to the Acquisition and the initial borrowings under the Credit Documents,
in substantially the form of Schedule
4.1-2
hereto.
77
(k) Account
Designation Letter.
The
Administrative Agent shall have received the executed Account Designation Letter
in the form of Schedule
1.1-1
hereto.
(l)
Corporate
Structure.
The
corporate, capital and ownership structure of the Company and its Subsidiaries
after giving effect to the Acquisition shall be as described in Schedule
3.12,
and
shall otherwise be reasonably satisfactory to the Administrative Agent. The
Administrative Agent shall be satisfied with the management of the Company
and
its Subsidiaries after giving effect to the Acquisition.
(m) Acquisition
Documents.
The
Administrative Agent shall have reviewed and approved to its reasonable
satisfaction all of the Acquisition Documents
(other than the Agreement and Plan of Merger referred to in the definition
of
“Acquisition Documents” and all related schedules and exhibits, which have been
approved) and there shall not have been any material modification, amendment,
supplement or waiver to the Acquisition
Documents
subsequent to August 4, 2006 without the prior written consent of the
Administrative Agent. The Acquisition shall
have been consummated substantially in accordance with the terms of the
Acquisition
Documents
(without waiver of any material conditions precedent to the obligations of
any
party thereto without the consent of the Administrative Agent). The
Administrative Agent shall have received a copy, certified by an officer of
the
Borrower as true and complete, of each Acquisition Document
as originally executed and delivered, together with all exhibits and schedules
thereto.
(n) Consents.
The
Administrative Agent shall have received evidence that all governmental,
shareholder, board of director and material third party consents and approvals
that the Borrower can obtain using its commercially reasonable efforts and
that
are necessary in connection with the financings, the Acquisition and other
transactions contemplated hereby have been obtained and all applicable waiting
periods have expired without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such transactions
or that could seek or threaten any of such transactions.
(o) Compliance
with Laws.
The
financings and other transactions contemplated hereby shall be in compliance
with all applicable Requirements of Law (including all applicable securities
and
banking laws, rules and regulations).
(p) Bankruptcy.
There
shall be no bankruptcy or insolvency proceedings with respect to any Credit
Party or any of its Subsidiaries.
(q) Material
Adverse Effect.
No
material adverse change shall have occurred or could reasonably be expected
to
occur since December 31, 2005 in the business, properties, prospects,
operations, regulatory environment or condition (financial or otherwise) of
either the Company, the Borrower and its Subsidiaries, taken as a whole or
the
Acquired Company and its Subsidiaries, taken as a whole.
78
(r)
Minimum
Consolidated EBITDA.
The
Administrative Agent shall have received evidence satisfactory thereto provided
by the Company that the Consolidated EBITDA for the twelve-month period ending
on the last day of the most recent fiscal quarter for which financial statements
of the Company and its Subsidiaries are available, calculated on a Pro Forma
Basis, is no less than $79,000,000.
(s) Leverage
Ratio.
The
Leverage Ratio (determined using Funded Debt of the Company and its Subsidiaries
as of the Closing Date and pro forma Consolidated EBITDA of the Company and
its
Subsidiaries for the twelve-month period ending
on
the last day
of the
most recent fiscal quarter for which financial statements of the Company and
its
Subsidiaries are available), calculated on a Pro Forma Basis as of the Closing
Date, shall not exceed 4.25 to 1.0.
(t)
Financial
Statements.
The
Administrative Agent shall have received copies of the financial statements
and
projections referred to in Section 3.1 hereof, each in form and substance
satisfactory to it.
(u) Termination
of Existing Indebtedness; Approval of Intercompany Indebtedness.
All
existing Indebtedness for borrowed money of the Company, the Borrower, the
Acquired Company and their respective Subsidiaries in excess of $5,000,000
in
the aggregate, other than Indebtedness incurred by SRL as set forth on
Schedule
6.1(b),
shall
have been repaid in full and terminated and all Liens relating thereto shall
have been terminated. The Administrative Agent shall have reviewed and approved
in its sole discretion all loan documentation with respect to any intercompany
Indebtedness of the Credit Parties and the Administrative Agent shall have
received a copy, certified by a Responsible Officer of the Borrower as true
and
complete, of each such document, as originally executed and delivered, together
with all exhibits, schedules, amendments and modifications thereto.
(v) Officer’s
Certificates.
The
Administrative Agent shall have received a certificate executed by a Responsible
Officer of the Borrower as of the Closing Date stating that (i) immediately
after giving effect to this Credit Agreement (including the initial Extensions
of Credit hereunder), the other Credit Documents and the Acquisition Documents
and all the transactions contemplated therein to occur on such date, (A) no
Default or Event of Default exists, (B) all representations and warranties
contained herein and in the other Credit Documents are true and correct in
all
material respects, and (C) the Credit Parties are in compliance with each of
the
financial covenants set forth in Section 5.9 and demonstrating compliance with
such financial covenants.
(w) Credit
Rating.
The
Borrower shall have obtained a senior secured credit rating from ▇▇▇▇▇’▇ and
from S&P.
(x)
Patriot
Act Certificate.
The
Administrative Agent shall have received a certificate satisfactory thereto,
for
benefit of itself and the Lenders, provided by the Borrower that sets forth
information required by the Patriot Act (as defined in Section 9.18) including,
without limitation, the identity of each Credit Party, the name and address
of
each Credit Party and other information that will allow the Administrative
Agent
or any Lender, as applicable, to identify each Credit Party in accordance with
the Patriot Act.
79
(y) Additional
Matters.
All
other documents and legal matters in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Administrative Agent and its counsel.
|
Section
4.2
|
Conditions
to All Extensions of Credit.
|
The
obligation of each Lender to make any Extension of Credit hereunder is subject
to the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Representations
and Warranties.
The
representations and warranties made by the Credit Parties herein, in the
Security Documents or which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct on and as of
the
date of such Extension of Credit as if made on and as of such date (other than
any such representations or warranties that, by their terms, refer to a specific
date other than the date of such Extension of Credit, in which case, as of
such
specific date).
(b) No
Default or Event of Default.
No
Default or Event of Default shall have occurred and be continuing on such date
or after giving effect to the Extension of Credit to be made on such date unless
such Default or Event of Default shall have been waived in accordance with
this
Agreement.
(c) Compliance
with Commitments.
Immediately after giving effect to the making of any such Extension of Credit
(and the application of the proceeds thereof), (i) the sum of outstanding
Revolving Loans plus
outstanding Swingline Loans plus
outstanding LOC Obligations shall not exceed the Revolving Committed Amount,
(ii) the outstanding LOC Obligations shall not exceed the LOC Committed Amount
and (iii) the Swingline Loans shall not exceed the Swingline Committed
Amount.
(d) Additional
Conditions to Extensions of Credit.
If such
Extension of Credit is made pursuant to Sections 2.1, 2.2, 2.3 or 2.4, all
conditions set forth in such Section shall have been satisfied.
Each
request for an Extension of Credit and each acceptance by the Borrower of any
such Extension of Credit shall be deemed to constitute a representation and
warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) through (d) of this Section have been
satisfied.
80
ARTICLE
V
AFFIRMATIVE
COVENANTS
The
Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note shall remain outstanding and unpaid and the Credit
Party Obligations, together with interest, Commitment Fees and all other amounts
owing to the Administrative Agent or any Lender hereunder, shall have been
paid
in full, the Credit Parties shall:
|
Section
5.1
|
Financial
Statements.
|
Furnish
to the Administrative Agent (which shall transmit or make available the same
to
the Lenders as soon as practicable):
(a) Annual
Financial Statements.
As soon
as available, but in any event within ninety (90) days after the end of
each fiscal year of the Company commencing with the fiscal year ended December
31, 2006 (or, with respect to the comparative information required below,
commencing with the fiscal year ended December 31, 2006), a copy of the
consolidated and consolidating balance sheet of the Company and its consolidated
Subsidiaries as at the end of such fiscal year and the related consolidated
and
consolidating statements of income and retained earnings and of cash flows
of
the Company and its consolidated Subsidiaries for such year, audited (with
respect to the consolidated statements only) by a firm of independent certified
public accountants of, as appropriate, nationally or internationally recognized
standing reasonably acceptable to the Administrative Agent, setting forth in
comparative form consolidated and consolidating figures
for the preceding fiscal year, reported on without a “going concern” or like
qualification or exception, or qualification indicating that the scope of the
audit was inadequate to permit such independent certified public accountants
to
certify such financial statements without such qualification;
(b) Annual
Unaudited Financial Statements.
As soon
as available, but in any event within ninety (90) days after the end of
each fiscal year of the Company commencing with the fiscal year ended December
31, 2006 (or, with respect to the comparative information required below,
commencing with the fiscal year ended December 31, 2006), a copy of the
consolidated and consolidating balance sheet of the Borrower and its
consolidated Subsidiaries as at the end of such fiscal year and the related
consolidated and consolidating statements of income and retained earnings and
of
cash flows of the Borrower and its consolidated Subsidiaries for such year,
setting forth in comparative form consolidated and consolidating figures
for the preceding fiscal year.
81
(c) Quarterly
Financial Statements.
(i) As
soon as available and in any event within (A) forty-five (45) days after the
end
of each of the first three fiscal quarters of the Company and (B) ninety (90)
days after the end of the fourth fiscal quarter of the Company, a
company-prepared consolidated and consolidating balance sheet of the Borrower
and its consolidated Subsidiaries as at the end of such period and related
company-prepared consolidated and consolidating statements
of income and retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the portion of
the
fiscal year ending with such period, in each case setting forth in comparative
form consolidated and consolidating figures
for the corresponding period or periods of the preceding fiscal year (subject
to
normal recurring year-end audit adjustments) and (ii) as soon as available
and
in any event within (A) forty-five (45) days after the end of each of the first
three fiscal quarters of the Company and (B) ninety (90) days after the end
of
the fourth fiscal quarter of the Company, a company-prepared consolidated and
consolidating balance sheet of the Company and its consolidated Subsidiaries
as
at the end of such period and related company-prepared consolidated and
consolidating statements
of income and retained earnings and of cash flows for the Company and its
consolidated Subsidiaries for such quarterly period and for the portion of
the
fiscal year ending with such period, in each case setting forth in comparative
form consolidated and consolidating figures
for the corresponding period or periods of the preceding fiscal year (subject
to
normal recurring year-end audit adjustments) and to the extent not disclosed
in
the Company’s Form 10-Q, management discussion and analysis of operating results
inclusive of operating metrics in comparative form; and
(d) Annual
Budget Plan.
As soon
as available, but in any event within sixty (60) days after the end of each
fiscal year, a copy of the detailed annual budget or plan of the Company for
the
next fiscal year on a quarterly basis, in form and detail reasonably acceptable
to the Administrative Agent, together with a summary of the material assumptions
made in the preparation of such annual budget or plan;
all
such
financial statements to be complete and correct in all material respects
(subject, in the case of interim statements, to normal recurring year-end audit
adjustments) and to be prepared in reasonable detail and, in the case of the
annual and quarterly financial statements provided in accordance with
subsections (a), (b) and (c) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements
on
account of a change, if any, in the application of accounting principles as
provided in Section 1.3.
|
Section
5.2
|
Certificates;
Other Information.
|
Furnish
to the Administrative Agent (which shall transmit or make available the same
to
the Lenders as soon as practicable):
(a) concurrently
with the delivery of the financial statements referred to in Section 5.1(a)
above, certificates of the independent certified public accountants of the
Company reporting on such financial statements stating that in making the
examination necessary therefore no knowledge was obtained of any Default or
Event of Default under Section 5.9, except as specified in such
certificate;
82
(b) concurrently
with the delivery of the financial statements referred to in Sections 5.1(a),
5.1(b) and 5.1(c) above, a certificate of a Responsible Officer of the Borrower
stating that, to the best of such Responsible Officer’s knowledge, during such
period each of the Credit Parties observed or performed all of its covenants
and
other agreements, and satisfied every condition, contained in this Agreement
to
be observed, performed or satisfied by it, and that such Responsible Officer
has
obtained no knowledge of any Default or Event of Default except as specified
in
such certificate and such certificate shall include the calculations in
reasonable detail required to indicate compliance with Section 5.9 as of the
last day of such period;
(c) within
ten (10) days after the same are sent, copies of all reports (other than those
otherwise provided pursuant to Section 5.1 and those which are of a promotional
nature) and other financial information which the Company sends to its members
and equity holders, and within ten (10) days after the same are filed, copies
of
all financial statements and non-confidential reports which the Company may
make
to or file with the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) within
ninety (90) days after the end of each fiscal year of the Company, a certificate
containing information regarding the amount of all Asset Dispositions, Debt
Issuances, and Equity Issuances that were made during the prior fiscal year
and
amounts received in connection with any Recovery Event during the prior fiscal
year;
(e) promptly
upon receipt thereof, a copy of any other report or “management letter”
submitted or presented by independent accountants to any Credit Party
or
any of
the Borrower’s Subsidiaries
in
connection with any annual, interim or special audit of the books of such Person
regarding material matters of the Company and its Subsidiaries, taken as a
whole;
(f)
promptly,
copies of all material notices from or material requests to the FDA, FTC, and
OSHA (each, as defined in Section 3.26); and
(g) promptly,
such additional financial and other information as the Administrative Agent,
on
behalf of any Lender, may from time to time reasonably request.
|
Section
5.3
|
Payment
of Obligations.
|
Pay,
discharge or otherwise satisfy at or before maturity or before they become
delinquent, as the case may be, all its taxes (Federal, state, local and any
other taxes) and all its other obligations and liabilities of whatever nature
and any additional costs that are imposed as a result of any failure to so
pay,
discharge or otherwise satisfy such obligations and liabilities, except
(a) when the amount or validity of such obligations, liabilities and costs
is currently being contested in good faith by appropriate proceedings and
reserves, if applicable, in conformity with GAAP with respect thereto have
been
provided on the books of any Credit Party, as the case may be or (b) where
any such failure to pay, discharge or satisfy could not reasonably be expected
to have a Material Adverse Effect.
83
|
Section
5.4
|
Conduct
of Business and Maintenance of Existence.
|
Continue
to (a) engage in business of the same general type as now conducted by it on
the
Closing Date and preserve, renew and keep in full force and effect its corporate
existence and take all reasonable action to maintain all rights, privileges
and
franchises necessary or that the applicable Credit Party reasonably deems
desirable in the normal conduct of its business; provided
that any
Credit Party or any Subsidiary thereof may reorganize in Delaware or in another
U.S. jurisdiction acceptable to the Required Lenders so long as the
Administrative Agent receives prior written notice thereof and all actions
required to continue the perfection of the Administrative Agent’s Liens on the
Collateral are taken; and provided,
further,
the
Company may consummate the Acquisition and any other merger, consolidation,
purchase, lease or acquisition permitted under Section 6.4 or liquidate or
dissolve any Subsidiary that has no assets or that has sold, disposed of or
otherwise transferred all of its assets to the Borrower or a Subsidiary
Guarantor, and (b) comply with all Contractual Obligations and Requirements
of
Law applicable to it except to the extent that failure to comply therewith,
individually or in the aggregate, could not reasonably be expected to have
a
Material Adverse Effect.
|
Section
5.5
|
Maintenance
of Property; Insurance.
|
(a) Keep
all
Material Property useful and necessary in its business in good working order
and
condition (ordinary wear and tear, damage by casualty and obsolescence
excepted);
(b) Maintain
with financially sound and reputable insurance companies insurance on all its
Material Property (including without limitation its material tangible
Collateral) in at least such amounts (or such greater amounts to the extent
any
coverage amount maintained by the Credit Parties is significantly lower than
the
coverage amount maintained by companies engaged in the same or a similar
business in the same general area) and against at least such risks as are
maintained by the Credit Parties as of the Closing Date and any other material
risks as are usually insured against in the same general area by companies
engaged in the same or a similar business; and furnish to the Administrative
Agent, upon written request, full information as to the insurance carried.
The
Administrative Agent shall be named as loss payee or mortgagee, as its interest
may appear, (or additional insured in the case of liability coverage) with
respect to any such insurance providing coverage in respect of any Collateral,
and each provider of any such insurance shall agree, by endorsement upon the
policy or policies issued by it or by independent instruments furnished to
the
Administrative Agent, that it will give the Administrative Agent thirty (30)
days prior written notice before any such policy or policies shall be altered
or
canceled, and that no act or default of any Credit Party or any Subsidiary
of
the Company or any other Person shall affect the rights of the Administrative
Agent or the Lenders under such policy or policies;
and
(c) In
case
of any material loss, damage to or destruction of the Collateral of any Credit
Party or any part thereof, such Credit Party shall promptly give written notice
thereof to the Administrative Agent generally describing the nature and extent
of such damage or destruction. In case of any material loss, damage to or
destruction of the Collateral of any Credit Party or any part thereof, such
Credit Party, whether or not the insurance proceeds, if any, received on account
of such damage or destruction shall be sufficient for that purpose, at such
Credit Party’s cost and expense, will promptly repair or replace the Collateral
of such Credit Party so lost, damaged or destroyed.
84
|
Section
5.6
|
Inspection
of Property; Books and Records; Discussions.
|
Keep
proper books and records of account in which full, true and correct entries
in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its businesses and activities; and permit,
during regular business hours and upon reasonable notice by the Administrative
Agent or any Lender, the Administrative Agent or any Lender to visit and inspect
any of its properties and examine and make abstracts from any of its books
and
records (other than materials protected by the attorney-client privilege and
materials which any Credit Party may not disclose without violation of a
confidentiality obligation binding upon it) once a fiscal quarter or upon the
occurrence and during the continuance of a Default or an Event of Default,
and
to discuss the business, operations, properties and financial and other
condition of the Credit Parties and their Subsidiaries with officers and
employees of the Credit Parties and their Subsidiaries and with its independent
certified public accountants. The forgoing, with respect to the Lenders, shall
be at such Lender’s expense and, with respect to the Administrative Agent, shall
be at the Borrower’s expense.
|
Section
5.7
|
Notices.
|
Give
notice in writing to the Administrative Agent (which shall promptly transmit
such notice to each Lender) of:
(a) promptly,
but in any event within two (2) Business Days after any Responsible Officer
of a
Credit Party knows thereof, the occurrence of any Default or Event of
Default;
(b) promptly,
any default or event of default under any Contractual Obligation of any Credit
Party or any of its Subsidiaries which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect or could reasonably
be
expected to result in a monetary payment in excess of $10,000,000;
(c) promptly,
any litigation, or any investigation or proceeding known to any Credit Party
(i)
affecting any Credit Party or any of its Subsidiaries which, if adversely
determined, individually or in the aggregate, could reasonably be expected
to
have a Material Adverse Effect or could reasonably be expected to result in
a
monetary judgment in excess of $5,000,000 or (ii) affecting or with respect
to this Agreement or any other Credit Document;
85
(d) as
soon
as possible and in any event within thirty (30) days after any Responsible
Officer of a Credit Party knows or has reason to know thereof: (i) the
occurrence of any material Reportable Event with respect to any Single Employer
Plan, a failure to make any required contribution to a Single Employer Plan,
the
creation of any Lien in favor of a Single Employer Plan or in favor of the
PBGC
with respect to a Single Employer Plan (other than a Permitted Lien) or any
withdrawal from, or the termination, Reorganization or Insolvency of, any
Multiemployer Plan, which could reasonably be expected to result in any material
liability for any Credit Party, or (ii) the institution of proceedings or the
taking of any other action by the PBGC or any Credit Party or any Commonly
Controlled Entity or any Multiemployer Plan with respect to the withdrawal
from,
or the terminating, Reorganization or Insolvency of, any Plan, which could
reasonably be expected to result in any material liability for any Credit Party;
(e) promptly,
of the institution of any investigation or proceeding against any Credit Party
to suspend, revoke or terminate or which may result in the termination of any
Medicaid Provider Agreement, Medicaid Certification, Medicare Provider
Agreement, Medicare Certification or exclusion from any Medical Reimbursement
Program;
(f)
promptly,
after any Credit Party becomes involved in a pending civil or criminal
investigation, criminal action or civil proposed debarment, exclusion or other
sanctioning action related to any Federal or state healthcare program;
(g) promptly,
any other development or event which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect;
(h) promptly,
any intention by the Borrower to treat the Loans and/or Letters of Credit and
related transactions as being a “reportable transaction” (within the meaning of
Treasury Regulation Section 1.6011-4), a duly completed copy of IRS Form 8886
or
any successor form; and
(i)
promptly,
the Company or any of its Subsidiaries (i) entering into a collective bargaining
agreement or Multiemployer Plan covering the employees of the Company or any
of
its Subsidiaries, (ii) suffering any material strike, walkout, work stoppage
or
other material labor difficulty or (iii) becoming aware of any material unfair
labor practice complaint against the Company or any of its Subsidiaries before
any Governmental Authority.
Each
notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto. In the case of any notice of a Default or Event of Default,
the
Borrower shall specify that such notice is a Default or Event of Default notice
on the face thereof.
|
Section
5.8
|
Environmental
Laws.
|
(a) Comply
in
all material respects with, and ensure compliance in all material respects
by
all tenants and subtenants, if any, with, all applicable Environmental Laws
and
obtain and comply in all material respects with and maintain, and ensure that
all tenants and subtenants obtain and comply in all material respects with
and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
failure to do so, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect;
86
(b) Conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws and
promptly comply in all material respects with all lawful orders and directives
of all Governmental Authorities regarding Environmental Laws except to the
extent that the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not reasonably be
expected to have a Material Adverse Effect; and
(c) Defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective employees, agents, officers and directors and affiliates, from and
against any and all claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable
to
the operations of any Credit Party or any of the Company’s Subsidiaries or the
Properties, or any orders, requirements or demands of Governmental Authorities
related thereto, including, without limitation, reasonable attorney’s and
consultant’s fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the Person seeking
indemnification or any of its employees, agents, officers and directors and
affiliates. The agreements in this paragraph shall survive repayment of the
Notes and all other amounts payable hereunder.
|
Section
5.9
|
Financial
Covenants.
|
Commencing
on the day immediately following the Closing Date and for so long as this
Agreement shall remain in effect, each of the Credit Parties shall, and shall
cause each of its Subsidiaries to, comply with the following financial
covenants:
(a) Leverage
Ratio.
The
Leverage Ratio, as of the last day of each fiscal quarter of the Company
occurring during the periods indicated below, shall be less than or equal to
the
following:
|
Period
|
Ratio
|
|
Closing
Date through June 30, 2007
|
4.25
to 1.0
|
|
July
1, 2007 through December 31, 2007
|
4.00
to 1.0
|
|
January
1, 2008 through June 30, 2008
|
3.75
to 1.0
|
|
July
1, 2008 through December 31, 2008
|
3.50
to 1.0
|
|
January
1, 2009 through June 30, 2009
|
3.25
to 1.0
|
|
July
1, 2009 through December 31, 2009
|
3.00
to 1.0
|
|
January
1, 2010 through June 30, 2010
|
2.75
to 1.0
|
|
July
1, 2010 and thereafter
|
2.50
to 1.0
|
87
(b) Fixed
Charge Coverage Ratio.
The
Fixed Charge Coverage Ratio, as of the last day of each fiscal quarter of the
Company occurring during the periods indicated below, shall be greater than
or
equal to the following:
|
Period
|
Ratio
|
|
October
1, 2006 through December 31, 2008
|
1.250
to 1.0
|
|
January
1, 2009 through December 31, 2009
|
1.300
to 1.0
|
|
January
1, 2010 and thereafter
|
1.375
to 1.0
|
Notwithstanding
the above, the parties hereto acknowledge and agree that, for purposes of all
calculations made in determining compliance for any applicable period with
the
financial covenants set forth in this Section, (i) after consummation of
any Permitted Acquisition, (A) income statement items and other balance
sheet items (whether positive or negative) attributable to the Target acquired
in such transaction shall be included in such calculations to the extent
relating to such applicable period, subject to adjustments mutually acceptable
to the Borrower and the Administrative Agent, and (B) Indebtedness of a
Target which is retired in connection with a Permitted Acquisition shall be
excluded from such calculations and deemed to have been retired as of the first
day of such applicable period and (ii) after any Asset Disposition
permitted by Section 6.4(a)(ix),
(A) income statement items, cash flow statement items and other balance
sheet items (whether positive or negative) attributable to the property or
assets disposed of shall be excluded in such calculations to the extent relating
to such applicable period, subject to adjustments mutually acceptable to the
Borrower and the Administrative Agent and (B) Indebtedness that is repaid
with the proceeds of such Asset Disposition shall be excluded from such
calculations and deemed to have been repaid as of the first day of such
applicable period.
|
Section
5.10
|
Additional
Subsidiary Guarantors.
|
The
Company will cause each of its Domestic Subsidiaries, whether newly formed,
after acquired or otherwise existing, to promptly become a Guarantor hereunder
by way of execution of a Joinder Agreement. The guaranty obligations of any
such
Additional Credit Party shall be secured by, among other things, the property
and assets of such Additional Credit Party and such Domestic Subsidiary shall
execute and deliver to the Administrative Agent such Security Documents, legal
opinions and related documents as the Administrative Agent may reasonably
request with respect to such property and assets.
|
Section
5.11
|
Compliance
with Law.
|
The
Credit Parties will, and will cause each of its Subsidiaries to, (a) comply
with
all expressly stated laws, rules, regulations, orders, restrictions and valid
requirements imposed by all Governmental Authorities and regulatory authorities
applicable to it, its property and assets and the conduct of its business if
noncompliance with any such law, rule, regulation, order, restriction or
requirement, including without limitation Titles XVIII and XIX of the Social
Security Act, Medicare Regulations and Medicaid Regulations, individually or
in
the aggregate, could reasonably be expected to have a Material Adverse Effect,
and (b)
obtain and maintain all licenses, permits, certifications and approvals of
all
applicable Governmental Authorities as are required for the conduct of its
business as currently conducted and herein contemplated, including without
limitation professional licenses, appropriate Medicaid Certifications and
Medicare Certifications, if failure to do so could reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect. Specifically,
but without limiting the foregoing, and except where any such failure to comply,
individually or in the aggregate, could not reasonably be expected to have
a
Material Adverse Effect: (x) billing policies, arrangements, protocols and
instructions will comply with reimbursement requirements under Medicare,
Medicaid and other Medical Reimbursement Programs and will be administered
by
properly trained personnel; and (y) medical director compensation arrangements
and other arrangements with referring physicians will comply with applicable
state and federal self-referral and anti-kickback laws, including without
limitation 42 U.S.C. Section 1320a-7b(b)(1) - (b)(2) and 42 U.S.C. Section
1395nn.
88
|
Section
5.12
|
Pledged
Assets.
|
(a) The
Company will, and will cause each of its Subsidiaries to, cause (i) 100% of
the
outstanding Capital Stock of each of Victory, the Borrower and the Subsidiary
Guarantors and (ii) 65% (to the extent the pledge of a greater percentage would
be unlawful or would cause any materially adverse tax consequences to the
Borrower or any Guarantor) of the voting Capital Stock and 100% of the
non-voting Capital Stock of each first-tier Foreign Subsidiary of the Borrower
and the Subsidiary Guarantors, in each case to be subject at all times to a
first priority, perfected Lien in favor of the Administrative Agent pursuant
to
the terms and conditions of the Security Documents or such other security
documents as the Administrative Agent shall reasonably request.
(b) If,
subsequent to the Closing Date, any Credit Party shall acquire any securities,
instruments (except checks), chattel paper or other personal property required
for perfection to be delivered to the Administrative Agent as Collateral
hereunder or under any of the Security Documents, such Credit Party shall
promptly (and in any event within three (3) Business Days) after such
acquisition notify the Administrative Agent of same; provided
that
property the value of which, individually, is less than $500,000 and, in the
aggregate, is less than $1,000,000 in any twelve-month period, shall not be
required to be delivered until such time that all such property shall exceed
$1,000,000 in the aggregate in any twelve-month period. Each of the Credit
Parties shall take such action at its own expense as may be necessary or
otherwise requested by the Administrative Agent (including, without limitation,
any of the actions described in Sections 4.1(e) and 5.13(b) hereof) to ensure
that the Administrative Agent has a first priority perfected Lien to secure
the
Credit Party Obligations in (i) all personal property Collateral of Colgate,
Victory, the Borrower and Subsidiary Guarantors and all tangible personal
property Collateral of the Company located in the United States and (ii) to
the
extent required by the Administrative Agent or the Required Lenders in its
or
their sole reasonable discretion, all real property owned by the Credit Parties
located in the United States, subject in each case only to Permitted Liens.
89
(c) If,
subsequent to the Closing Date, a Credit Party leases a warehouse, plant or
other real property material to such Person’s business and located within the
United States, such Credit Party shall (i) promptly notify the Administrative
Agent of such lease, (ii) to the extent required by the Administrative Agent
and
to the extent consented to by the relevant landlord or not prohibited under
the
lease, promptly deliver to the Administrative Agent such Mortgage Instruments,
title reports, Mortgage Policies, Surveys, environmental site assessment
reports, legal opinions and other documentation as the Administrative Agent
may
reasonably require and (iii) use its reasonable best efforts to deliver to
the
Administrative Agent such estoppel letters, consents and waivers from the
landlord on such real property as may be required by the Administrative Agent;
provided,
that
the Credit Party shall not be required to expend any significant amount of
money
to obtain such estoppel letters, consents and waivers.
|
Section
5.13
|
Limitations
on Colgate and Victory.
|
Neither
Colgate nor Victory shall have any Indebtedness or operations other than (a)
its
Guaranty, (b) intercompany Subordinated Indebtedness or Investments permitted
hereunder, (c) operations as contemplated by the Tax Structure Documents, (d)
operations relating to the holding of the Capital Stock of its Subsidiaries
and
(e) operations related to satisfying its obligations as a Credit
Party.
|
Section
5.14
|
Further
Assurances;
Post-Closing Covenant.
|
(a) Further
Assurances.
Upon
the reasonable request of the Administrative Agent, promptly perform or cause
to
be performed any and all acts and execute or cause to be executed any and all
documents for filing under the provisions of the Uniform Commercial Code or
any
other Requirement of Law which are necessary or advisable to maintain in favor
of the Administrative Agent, for the benefit of the Secured Parties, Liens
on
the Collateral that are duly perfected in accordance with the requirements
of,
or the obligations of the Credit Parties under, the Credit Documents and all
applicable Requirements of Law.
(b) Deposit
Account Control Agreements.
Within
sixty (60) days after the Closing Date (or such extended period of time as
agreed to by the Administrative Agent), the Administrative Agent shall have
received, in form and substance reasonably satisfactory to the Administrative
Agent, Deposit Account Control Agreements and Securities Account Control
Agreements with respect to each account required to be subject to such agreement
pursuant to Section 6.13.
(c) Notice
of Grant of Security.
Within
fifteen (15) Business Days after the Closing Date (or such extended period
of
time as agreed to by the Administrative Agent), the Administrative Agent shall
have received, in form and substance reasonably satisfactory to the
Administrative Agent, (i)
evidence that a notice of a grant of security was served upon Bank of America,
N.A. with respect to each account of Colgate, Victory Swiftsure and UK Ltd
located in the United Kingdom and (ii)
an
acknowledgement from Bank of America, N.A. as to the existence of such security,
to the extent such acknowledgement can be obtained using commercially reasonable
efforts.
90
(d) Real
Property Collateral.
Within
sixty (60) days after the Closing Date (or such extended period of time as
agreed to by the Administrative Agent), the Administrative Agent shall have
received, in form and substance reasonably satisfactory to the Administrative
Agent:
(i)
fully
executed and notarized Mortgage Instruments encumbering the owned or, to the
extent not prohibited by the applicable lease or consented to by the applicable
landlord, leasehold interest in the Mortgaged Properties owned or leased by
each
Credit Party and set forth on Schedule
3.19(d);
(ii) a
title
report in respect of each of the Mortgaged Properties;
(iii) with
respect to each Mortgaged Property, ALTA Mortgage Policies issued by the Title
Insurance Company, assuring the Administrative Agent that each of the Mortgage
Instruments creates a valid and enforceable first priority mortgage lien on
the
applicable Mortgaged Property, free and clear of all defects and encumbrances
except Permitted Liens, which Mortgage Policies shall provide for affirmative
insurance and such reinsurance as the Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably satisfactory
to
the Administrative Agent;
(iv) evidence
as to (A) whether any Mortgaged Property is in an area designated by the Federal
Emergency Management Agency as having special flood or mud slide hazards (a
“Flood
Hazard Property”)
and
(B) if any Mortgaged Property is a Flood Hazard Property, (1) whether the
community in which such Mortgaged Property is located is participating in the
National Flood Insurance Program, (2) the Borrower’s or the applicable Credit
Party’s written acknowledgment of receipt of written notification from the
Administrative Agent (y) as to the fact that such Mortgaged Property is a Flood
Hazard Property and (z) as to whether the community in which each such Flood
Hazard Property is located is participating in the National Flood Insurance
Program and (3) copies of insurance policies or certificates of insurance of
the
Borrower and its Subsidiaries evidencing flood insurance reasonably satisfactory
to the Administrative Agent and naming the Administrative Agent as loss payee
on
behalf of the Lenders;
(v) to
the
extent available, surveys of the sites of the Mortgaged Properties certified
to
the Administrative Agent and the Title Insurance Company in a manner reasonably
satisfactory to them, dated a date satisfactory to each of the Administrative
Agent and the Title Insurance Company by an independent professional licensed
land surveyor reasonably satisfactory to each of the Administrative Agent and
the Title Insurance Company;
91
(vi) reasonably
satisfactory Phase I environmental site assessment reports (or other
environmental reports acceptable to the Administrative Agent) with respect
to
each of the Mortgaged Properties, together with (to the extent required by
the
Administrative Agent) reliance letters with respect to such reports in favor
of
the Lenders;
(vii)
opinions
of counsel to the Borrower or the applicable Credit Party for each jurisdiction
in which the Mortgaged Properties are located; and
(viii)
in
the
case of the Properties located in McKinney,
Texas, Vista, California, Huntersville, North Carolina, Springfield,
Massachusetts, and Wayne, New Jersey, such estoppel letters, consents and
waivers from the landlords on such Properties as the Administrative Agent may
reasonably require; provided,
that
the Credit Parties shall not be required (A) to obtain any such consent to
the
extent the applicable landlord refuses to execute such consent after the Credit
Parties have used their commercially reasonable efforts to obtain such consent
or (B) to expend any significant amount of money to obtain such
consents.
(e) Stock
Certificate and Power.
Within
thirty (30) days after the Closing Date (or such extended period of time as
agreed to by the Administrative Agent), the Administrative Agent shall have
received the stock certificate evidencing the interest owned by Orthofix Inc.
in
Innovative Spinal Technologies and a duly executed in blank undated stock or
transfer power with respect thereto.
(f)
Opinion.
Within
thirty (30) days after the Closing Date (or such extended period of time as
agreed to by the Administrative Agent), the Administrative Agent shall have
received an opinion, in form and substance reasonably satisfactory to the
Administrative Agent, that the Capital Stock of each of the Credit Parties
organized under the laws of Delaware is duly authorized, validly issued, fully
paid, non-assessable and owned of record by such Credit Party.
(g) Intellectual
Property.
Within
thirty (30) days after the Closing Date (or such extended period of time as
agreed to by the Administrative Agent), the Administrative Agent shall have
received evidence that all chain of title issues have been resolved with the
United States Patent and Trademark Office and all third party security interests
with respect to the Intellectual Property of the Credit Parties have been
released of record with the United States Patent and Trademark Office;
provided
that any
Indebtedness associated with such security interests shall have been paid in
full and terminated on or prior to the Closing Date.
92
ARTICLE
VI
NEGATIVE
COVENANTS
The
Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations, together with interest, Commitment Fee and all other amounts owing
to the Administrative Agent or any Lender hereunder, are paid in full that:
|
Section
6.1
|
Indebtedness.
|
No
Credit
Party will, nor will it permit any Subsidiary to, contract, create, incur,
assume or permit to exist any Indebtedness, except:
(a) Indebtedness
arising or existing under this Agreement and the other Credit
Documents;
(b) Indebtedness
of the Company and its Subsidiaries existing as of the Closing Date as
referenced in the financial statements referenced in Section 3.1 or the
liquidity section of the management discussion and analysis (and set out more
specifically in Schedule
6.1(b)
hereto)
and renewals, refinancings or extensions thereof in a principal amount not
in
excess of that outstanding as of the date of such renewal, refinancing or
extension; provided
that the
Credit Parties party to the intercompany notes set forth on Schedule
6.1(b)
hereby
agree that the intercompany Indebtedness evidenced by such intercompany notes
shall be subordinated to the Credit Party Obligations and that the Credit Party
Obligations shall be paid in full prior to any payments being made on such
intercompany notes, except as permitted by Section 6.10;
(c) Indebtedness
of the Borrower and its Subsidiaries incurred after the Closing Date consisting
of Capital Leases or Indebtedness incurred to provide all or a portion of the
purchase price or cost of construction of an asset (or assumed or acquired
by
the Borrower and its Subsidiaries in connection with a Permitted Acquisition);
provided
that (i)
such Indebtedness to the extent resulting from Capital Leases or as a result
of
the purchase price or cost of construction when incurred shall not exceed the
purchase price or cost of construction of such asset; (ii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and (iii) the total amount
of all such Indebtedness shall not exceed $10,000,000 at any time
outstanding;
(d) Unsecured
intercompany Subordinated Indebtedness (i)
owing
by a Credit Party (other than, subject to clause (iv) below, the Company) to
another Credit Party; provided
that any
Subordinated Indebtedness issued by a Credit Party (other than the Company)
to
Colgate or Victory shall be issued in accordance with the Tax Structure
Documents, (ii)
among
the Company and Foreign Subsidiaries, (iii)
among
Foreign Subsidiaries and other Foreign Subsidiaries or (iv)
owing
by the Company to Colgate or Victory to the extent that such Subordinated
Indebtedness would be permitted by Section 6.10(d), (f) or (i) if made as a
Restricted Payment rather than the issuance of Subordinated
Indebtedness;
93
(e) Indebtedness
of Foreign Subsidiaries in an aggregate amount not to exceed $10,000,000 at
any
time outstanding;
(f)
Indebtedness
and obligations owing under Secured Hedging Agreements and other Hedging
Agreements entered into in order to manage existing or anticipated interest
rate
or exchange rate risks and not for speculative purposes;
(g) Indebtedness
and obligations of the Borrower and its Subsidiaries owing under documentary
letters of credit for the purchase of goods or other merchandise (but not under
standby, direct pay or other letters of credit except for the Letters of Credit
hereunder) generally;
(h) (i)
Indebtedness of the Company or any of its Subsidiaries the proceeds of which
are
used to prepay the Term Loan in accordance with Section 2.7 or used to fund
Permitted Acquisitions so long as such Indebtedness is (and all Guaranty
Obligations with respect to such Indebtedness are) unsecured and subordinated
in
right and time of payment (subject to the terms of Section 6.10(h)) and priority
to the Credit Party Obligations pursuant to subordination provisions that are
reasonably satisfactory to the Administrative Agent and (ii)
Indebtedness of the Company or any of its Subsidiaries the proceeds of which
are
used to prepay the Term Loan in accordance with Section 2.7 so long as such
Indebtedness is (and all Guaranty Obligations with respect to such Indebtedness
are) unsecured; provided,
in each
case that (A)
the
covenants and events of default of such Indebtedness are, taken as a whole,
materially less restrictive than those contained in this Agreement (and shall
not include any covenant or event of default more restrictive than those
contained in this Agreement), (B)
both
immediately prior and after giving effect thereto, (1) no Default or Event
of
Default shall exist or result therefrom and (2) the Company shall be in
compliance with the financial covenants set forth in Section 5.9, such
compliance immediately after giving effect thereto determined with regard to
calculations made on a Pro Forma Basis for the fiscal quarter most recently
ended, and the Administrative Agent shall have received a certificate of a
Responsible Officer of the Borrower to such effect, and (C)
such
Indebtedness matures, and does not require any scheduled amortization or other
scheduled or mandatory payments of principal or first scheduled put right prior
to, the date which is at least 120 days after the later of the Term Loan
Maturity Date and the maturity date of any Incremental Term Facility, other
than
(1) redemptions made at the option of the holders of such Indebtedness upon
a
change in control of the issuer in circumstances that would also constitute
a
Change of Control under this Agreement (provided
that any
such redemption cannot be made fewer than thirty (30) days after such change
in
control and that any such redemption is fully subordinated to the indefeasible
payment in full of all Credit Party Obligations), (2) mandatory prepayments
required as a result of asset dispositions if such Indebtedness allows the
issuer to satisfy such mandatory prepayment requirement by prepayment of Loans
under this Agreement or other senior obligations of the issuer or reinvestment
of the asset disposition proceeds within a specified period of time and (3)
payments permitted by Section 6.10(h)(ii);
94
(i)
Guaranty
Obligations in respect of Indebtedness of the Company and its Subsidiaries
to
the extent such Indebtedness is permitted to exist or be incurred pursuant
to
this Section 6.1; and
(j)
other
unsecured Indebtedness of the Company and its Subsidiaries which does not exceed
$10,000,000 in
the
aggregate at any time outstanding.
|
Section
6.2
|
Liens.
|
No
Credit
Party will, nor will it permit any of its Subsidiaries to, contract, create,
incur, assume or permit to exist any Lien with respect to any of its property
or
assets of any kind (whether real or personal, tangible or intangible), whether
now owned or hereafter acquired, except for Permitted Liens. Notwithstanding
the
foregoing, if a Credit Party shall ▇▇▇▇▇ ▇ ▇▇▇▇ on any of its assets in
violation of this Section, then it shall be deemed to have simultaneously
granted an equal and ratable Lien on any such assets in favor of the
Administrative Agent for the ratable benefit of the Lenders and the Hedging
Agreement Providers, to the extent such Lien has not already been granted to
the
Administrative Agent.
|
Section
6.3
|
Nature
of Business.
|
Each
of
the Credit Parties will not, nor will any Credit Party permit any Subsidiary
to,
alter the character of its business or any business activities reasonably
related thereto in any material respect from that conducted as of the Closing
Date; provided
that the
foregoing shall not apply to the cessation of business activities that the
applicable Credit Party or Subsidiary reasonably believes should no longer
be
conducted by such Credit Party or Subsidiary.
|
Section
6.4
|
Consolidation,
Merger, Sale or Purchase of Assets, etc.
|
Each
of
the Credit Parties will not, nor will the Credit Parties permit any Subsidiary
to,
(a) dissolve,
liquidate or wind up its affairs, sell, transfer, lease or otherwise dispose
of
its property or assets or agree to do so at a future time except the following,
shall be expressly permitted:
(i)
the
sale,
transfer, lease or other disposition of inventory and materials in the ordinary
course of business;
(ii) the
sale,
transfer or other disposition of cash and Cash Equivalents;
95
(iii) (A)
the
disposition of property or assets as a direct result of a Recovery Event or
(B)
the sale, lease, transfer or other disposition of machinery, parts and equipment
no longer used or useful in the conduct of the business of the Borrower or
any
of its Subsidiaries, so long as the Net Cash Proceeds from such dispositions,
sales, leases or transfers pursuant to clause (A) or (B) are used to replace
such machinery, parts and equipment or to purchase or otherwise acquire new
assets or property within 180 days of receipt of the Net Cash Proceeds or,
with
respect to dispositions pursuant to clause (A), such Net Cash Proceeds are
used
to prepay Loans and cash collateralize outstanding LOC Obligations in accordance
with the terms of Section 2.7(b)(iv); provided
that,
upon the occurrence and during the continuance of a Default or an Event of
Default, the Credit Parties and their Subsidiaries shall not have the right
to
reinvest such Net Cash Proceeds;
(iv) the
sale,
lease or transfer of property or assets between or among (A)
the
Borrower and the Subsidiary Guarantors; provided
that any
sale, lease or transfer of property or assets to Swiftsure and UK Ltd shall
be
limited to sales or transfers of property or assets in accordance with the
Tax
Structure Documents, or (B)
the
Foreign Subsidiaries of the Company and other Foreign Subsidiaries of the
Company;
(v) the
termination of any Hedging Agreement permitted pursuant to Section 6.1(f);
(vi) the
factoring or disposition of receivables by SRL in connection with the
Indebtedness of SRL set forth on Schedule
6.1(b);
(vii)
the
sale
of any assets set forth on Schedule
6.4(a);
provided
that the
Net Cash Proceeds from any such sale shall be applied to the Loans and the
outstanding LOC Obligations in accordance with the terms of Section 2.7(b)(ii)
(excluding any reinvestment right contained in such Section);
(viii)
the
liquidation or dissolution of (A)
any
Domestic Subsidiary of the Company that has no assets or that has sold, disposed
of or otherwise transferred all of its assets to the Borrower or a Subsidiary
Guarantor, (B)
any
Foreign Subsidiary of the Company that has no assets or that has sold, disposed
of or otherwise transferred all of its assets to the Borrower or a Subsidiary
Guarantor or another Foreign Subsidiary or (C)
Colgate, Victory, Swiftsure or UK Ltd if it has no assets or has sold, disposed
of or otherwise transferred all of its assets to the Borrower or a Subsidiary
Guarantor; provided
that
Victory shall not be liquidated or dissolved unless the Administrative Agent
receives a first priority, perfected security interest in 100% of the Capital
Stock of the Borrower from the parent company of the Borrower after giving
effect to such liquidation or dissolution on terms satisfactory to the
Administrative Agent; and
(ix) the
sale,
lease, transfer or other disposition of property or assets not to exceed
$3,000,000 in the aggregate in any fiscal year;
96
provided,
that,
in the case of clauses (i), (ii), (iii), (vii) and (ix) above, at least 75%
of
the consideration received therefore by the Borrower or any other Credit Party
is in the form of cash or Cash Equivalents; provided,
further,
that
with respect to sales, transfers, leases or other dispositions of assets
permitted hereunder only, the Administrative Agent shall without the consent
of
the Required Lenders, release its Liens relating to the particular assets sold,
transferred, leased or otherwise disposed of; or
(b) (i)
purchase, lease or otherwise acquire (in a single transaction or a series of
related transactions) the property or assets of any Person (other than
purchases, leases or other acquisitions of inventory, leases, materials,
property and equipment in the ordinary course of business, except as otherwise
limited or prohibited herein) or (ii)
enter
into any transaction of merger or consolidation, except for (A) consummation
of
the Acquisition, (B) investments or acquisitions permitted pursuant to Section
6.5, and (C) the merger or consolidation of (I) a Credit Party (other than
the
Company, Colgate or Victory) with and into another Credit Party (other than
the
Company, Colgate or Victory);
provided
that
(y)
if the
Borrower is a party thereto, the Borrower will be the surviving
corporation
and (z)
the Administrative Agent’s Liens with respect to the Collateral of each Credit
Party involved in such merger or consolidation shall remain continuously
perfected;
and
(II) a Foreign Subsidiary into another Foreign Subsidiary.
|
Section
6.5
|
Advances,
Investments and Loans.
|
No
Credit
Party will, nor will it permit any Subsidiary to, make any Investment except
for
Permitted Investments.
|
Section
6.6
|
Transactions
with Affiliates.
|
Except
as
permitted in subsections (c), (d), (e), (f) or (k) of the definition of
Permitted Investments, no Credit Party will, nor will it permit any Subsidiary
to, enter into any transaction or series of transactions, whether or not in
the
ordinary course of business, with any officer, director, shareholder or
Affiliate other than on terms and conditions substantially as favorable as
would
be obtainable in a comparable arm’s-length transaction with a Person other than
an officer, director, shareholder or Affiliate.
|
Section
6.7
|
Ownership
of Subsidiaries; Restrictions.
|
Neither
Colgate, Victory, the Borrower, nor any Subsidiary Guarantor will, nor will
it
permit any Subsidiary to, create, form or acquire any Subsidiaries, except
for
Domestic Subsidiaries which are Credit Parties or which are joined as Additional
Credit Parties in accordance with the terms hereof. Neither Colgate, Victory,
the Borrower, nor any Subsidiary Guarantor will sell, transfer, pledge or
otherwise dispose of any Capital Stock or other equity interests in any of
its
Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except in a transaction permitted by Section 6.4.
97
|
Section
6.8
|
Fiscal
Year; Organizational Documents; Material Contracts; Subordinated
Indebtedness
Documents.
|
Each
of
the Credit Parties will not, nor will any Credit Party permit any Subsidiary
to,
change its fiscal year or its accounting policies except as required by GAAP.
Except as permitted pursuant to Section 5.4, each of the Credit Parties will
not, nor will any Credit Party permit any Subsidiary to, amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) in a manner
adverse to the interests of the Lenders without the prior written consent of
the
Required Lenders; provided
that the
Company shall be permitted to amend such documents to provide for the issuance
of any classes or series of Capital Stock so long as such issuance does not
result in a Change of Control and the Capital Stock issued is not subject to
mandatory sinking fund payments, redemption or other acceleration or similar
rights or payments. Each of the Credit Parties will not, nor will any Credit
Party permit any Subsidiary to,
without
the prior written consent of the Administrative Agent, amend, modify, cancel
or
terminate or fail to renew or extend or permit the amendment, modification,
cancellation or termination of any of the Material Contracts to the extent
any
amendment, modification, cancellation, termination or failure to renew or extend
could reasonably be expected to have a Material Adverse Effect. Each of the
Credit Parties and their Subsidiaries will not, without the prior written
consent of the Required Lenders, amend, modify, waive or extend or permit the
amendment, modification, waiver or extension of any Subordinated Indebtedness
or
of any documentation governing or evidencing such Subordinated Indebtedness
in a
manner that is adverse to the interests of the Lenders or the issuer of such
Subordinated Indebtedness.
|
Section
6.9
|
Limitation
on Restricted Actions.
|
No
Credit
Party will, nor will it permit any Subsidiary to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Person to (a) pay dividends or make
any
other distributions to any Credit Party on its Capital Stock or with respect
to
any other interest or participation in, or measured by, its profits, (b) pay
any
Indebtedness or other obligation owed to any Credit Party, (c) make loans or
advances to any Credit Party, (d) sell, lease or transfer any of its properties
or assets to any Credit Party, or (e) act as a guarantor and pledge its assets
pursuant to the Credit Documents or any renewals, refinancings, exchanges,
refundings or extensions thereof, except (in respect of any of the matters
referred to in clauses (a)-(d) above) for such encumbrances or restrictions
existing under or by reason of (i) this Agreement and the other Credit
Documents, (ii) applicable law, (iii) any document or instrument governing
Indebtedness incurred pursuant to Section 6.1(c) or Guaranty Obligations with
respect to any of the foregoing; provided
that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith, or (iv) any Permitted Lien
or
any document or instrument governing any Permitted Lien; provided
that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien.
98
|
Section
6.10
|
Restricted
Payments.
|
No
Credit
Party will, nor will it permit any Subsidiary to, directly or indirectly,
declare, order, make or set apart any sum for or pay any Restricted Payment
except (a)
to make
dividends or distributions payable solely in the same class of Capital Stock
of
such Person (including, without limitation, stock splits provided that they
are
in the same class of Capital Stock of such Person), (b)
to make
dividends or other distributions (directly or indirectly through Subsidiaries)
payable to any Credit Party other than the Company, (c)
to make
dividends or other distributions by a Foreign Subsidiary of the Company payable
(directly or indirectly through Subsidiaries) to any Credit Party or any other
Foreign Subsidiary, (d)
to make
dividends payable solely to allow the Company, Colgate or Victory to pay federal
and state local taxes then due and owing, (e)
so long
as no Event of Default has occurred and is continuing or would result therefrom,
to make (i) payments on intercompany Subordinated Indebtedness permitted under
Sections 6.1(b) and (d), or (ii) Permitted Investments in accordance with the
Tax Structure Documents; provided
that
(A)
no
payment shall be made pursuant to this Subsection from a Credit Party to the
Company or any Foreign Subsidiary thereof and (B)
no
payment shall be made to Colgate or Victory except in accordance with the Tax
Structure Documents, (f)
so long
as (i)
no
Default or Event of Default exists or would exist on a Pro Forma Basis after
giving effect to such Restricted Payment and (ii)
the
Leverage Ratio is less than 1.75 to 1.0 (A)
before
giving effect to any such Restricted Payment and (B)
on a
Pro Forma Basis after giving effect to any such Restricted Payment (and in
the
case of any Restricted Payment or series of related Restricted Payments in
an
amount in excess of $5,000,000, the Borrower shall have furnished to the
Administrative Agent a compliance certificate as to such compliance, together
with supporting calculations), to make Restricted Payments in an aggregate
amount that, taken together with the aggregate of all other Restricted Payments
made by the Credit Parties and their Subsidiaries (other than Restricted
Payments permitted under other subsections of this Section 6.10) from and after
the Closing Date, does not exceed the sum of 25% of Excess Cash Flow for the
period from the Closing Date to the end of the most recently ended fiscal year
for which the Company has delivered financial statements as required by Section
5.1(a) which then may be paid to the shareholders of the Company in the form
of
a dividend or other distribution or may be used by the Company for other
corporate purposes, (g)
so long
as no Default or Event of Default exists or would exist on a Pro Forma Basis
after giving effect to such Restricted Payment, to repurchase Capital Stock,
warrants, options or other rights to acquire Capital Stock of the Company from
current or former officers, employees or directors (or their heirs or estates)
of a Credit Party or any Subsidiary in connection with the death, disability
or
termination of employment of any such Person in an aggregate amount not to
exceed $2,500,000 in any fiscal year and $5,000,000 during the term of this
Agreement, (h)
(i)
to make
distributions to pay regularly scheduled interest payments on Subordinated
Indebtedness issued by a Credit Party permitted by Section 6.1(h) pursuant
to
the subordination provisions applicable thereto and
(ii)
to the
extent that Net Cash Proceeds resulting from the issuance of Subordinated
Indebtedness pursuant to Section 6.1(h) shall have been applied to repay the
Term Loan as set forth in Section 2.7(b) (and not to finance Permitted
Acquisitions) and so long as no Default or Event of Default shall have occurred
and be continuing, or would result therefrom on an actual or Pro Forma Basis,
if
any such Subordinated Indebtedness shall contain a provision permitting a holder
thereof to convert or exchange such Indebtedness for common equity of the
Company and/or cash, to make payments in respect thereof upon the occurrence
of
the event giving rise to such holders right to conversion or exchange and
(i)
so long
as no Default or Event of Default exists or would exist on a Pro Forma Basis
after giving effect to such Restricted Payment, (A) the Company may make earnout
payments and any other deferred payment paid as consideration pursuant to a
Permitted Acquisition by the Company and (B) the Borrower and its Subsidiaries
may make earnout payments and any other deferred payment paid as consideration
pursuant to a Permitted Acquisition by the Borrower or any of its
Subsidiaries.
99
|
Section
6.11
|
Sale
Leasebacks.
|
No
Credit
Party will, nor will it permit any Subsidiary to, directly or indirectly become
or remain liable as lessee or as guarantor or other surety with respect to
any
lease, whether an operating lease or a Capital Lease, of any property (whether
real, personal or mixed), whether now owned or hereafter acquired, which any
Credit Party or any Subsidiary has sold or transferred or is to sell or transfer
to a Person which is not another Credit Party or Subsidiary
thereof.
|
Section
6.12
|
No
Further Negative Pledges.
|
No
Credit
Party will, nor will it permit any Subsidiary to, enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation
or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation, except (a) pursuant to this
Agreement and the other Credit Documents, (b) pursuant to any document or
instrument governing Indebtedness incurred pursuant to Section 6.1(c),
provided
that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith and (c) in connection with
any
Permitted Lien or any document or instrument governing any Permitted Lien;
provided
that any
such restriction contained therein relates only to the asset or assets subject
to such Permitted Lien.
|
Section
6.13
|
Accounts.
|
Set
forth
on Schedule
6.13
is a
complete and accurate list of all checking, savings or other accounts (including
securities accounts) of the Credit Parties at any bank or other financial
institution, or any other account where money is or may be deposited or
maintained with any Person as of the Closing Date. At anytime on or after
November 22, 2006, each of the Credit Parties (other than the Company) will
not,
nor will it permit any Subsidiary to, open,
maintain or otherwise have any checking, savings or other accounts (including
securities accounts) at any bank or other financial institution, or any other
account where money is or may be deposited or maintained with any Person, other
than (a)
the
accounts set forth on Schedule
6.13
and
designated as unrestricted accounts; provided
that the
balance on any such account does not exceed $500,000 and the aggregate balance
in all such accounts does not exceed $1,500,000, (b)
deposit
accounts that are subject to a Deposit Account Control Agreement, (c)
securities accounts that are subject to a Securities Account Control Agreement,
(d)
deposit
accounts established solely as payroll and other zero balance accounts and
(e)
deposit
accounts, so long as at any time the balance in any such account does not exceed
$500,000 and the aggregate balance in all such accounts does not exceed
$1,500,000.
100
ARTICLE
VII
EVENTS
OF DEFAULT
|
Section
7.1
|
Events
of Default.
|
An
Event
of Default shall exist upon the occurrence of any of the following specified
events (each an “Event
of Default”):
(a) The
Borrower shall fail to pay any principal on any Loan when due in accordance
with
the terms thereof or hereof; or the Borrower shall fail to reimburse the Issuing
Lender for any outstanding LOC Obligations when due in accordance with the
terms
hereof; or the Borrower shall fail to pay any interest on any Loan or any fee
or
other amount payable hereunder when due in accordance with the terms thereof
or
hereof and such failure shall continue unremedied for three (3) Business Days
(or any Guarantor shall fail to pay on the Guaranty in respect of any of the
foregoing or in respect of any other Guaranty Obligations thereunder within
the
aforesaid period of time); or
(b) Any
representation or warranty made or deemed made herein or in any of the other
Credit Documents or which is contained in any certificate, document or financial
or other written statement furnished at any time under or in connection with
this Agreement shall prove to have been incorrect, false or misleading in any
material respect on or as of the date made or deemed made; or
(c) (i)
Any
of the Credit Parties or their Subsidiaries shall fail to perform, comply with
or observe any term, covenant or agreement applicable to it contained in Section
5.1(a), (b) and (c), Section 5.2, Section 5.4, Section 5.7(a) and (d), Section
5.9 or Article VI hereof; or (ii) any Credit Party shall fail to comply with
any
other covenant, contained in this Credit Agreement or the other Credit Documents
or any other agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in favor
of
the Administrative Agent or the Lenders (other than as described in Sections
7.1(a), 7.1(b) or 7.1(c)(i) above), and in the event such breach or failure
to
comply is capable of cure, is not cured within thirty (30) days of its
occurrence; or
(d) Any
of
the Credit Parties or their Subsidiaries shall (i) default in any payment
of principal of or interest on any Indebtedness (other than the Notes) in a
principal amount outstanding of at least $5,000,000 in the aggregate for the
Credit Parties and their Subsidiaries beyond the period of grace (not to exceed
30 days), if any, provided in the instrument or agreement under which such
Indebtedness was created; (ii) default in the observance or performance of
any
other agreement or condition relating to any Indebtedness in a principal amount
outstanding of at least $5,000,000 in the aggregate for the Credit Parties
and
their Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition exist,
and, with respect to the foregoing, the effect of such default or other event
or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Indebtedness (or a trustee or agent
on
behalf of such holder or holders or beneficiary or beneficiaries) to cause,
with
the giving of notice if required, such Indebtedness to become due prior to
its
stated maturity; or (iii)
default
under any Secured Hedging Agreement; or
101
(e) (i)
Any
of the Credit Parties or their Subsidiaries shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect
to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, suspension of payment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator, administrator, administrative receiver, compulsory manager or
other
similar official for it or for all or any substantial part of its assets, or
the
Credit Parties or their Subsidiaries shall make a general assignment or
arrangement for the benefit of any of its creditors; or (ii) there shall be
commenced against any of the Credit Parties or their Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above which
(A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for, with
respect to such proceeding or other action in a jurisdiction outside the United
States, a period of thirty (30) days and, with respect to such proceeding or
other action in a United States jurisdiction, a period of sixty (60) days;
or
(iii) there shall be commenced against any of the Credit Parties or their
Subsidiaries, any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within, with respect to such case, proceeding or other action
in
a jurisdiction outside the United States, thirty (30) days from the entry
thereof and, with respect such case, proceeding or other action in a United
States jurisdiction, sixty (60) days from the entry thereof; or (iv) any of
the
Credit Parties or their Subsidiaries shall take any action in furtherance of,
or
indicating its consent to, approval of, or acquiescence in, any of the acts
set
forth in clauses (i), (ii), or (iii) above; or (v) any of the Credit Parties
(together with their Subsidiaries taken as a whole) shall fail to be Solvent;
or
(f)
One
or
more judgments or decrees shall be entered against any of the Credit Parties
and
shall not have been paid and satisfied, vacated, discharged, stayed or bonded
pending appeal within ten (10) days from the entry thereof to the extent such
judgments and decrees involve a liability (to the extent not paid when due
or
covered by insurance in excess of $5,000,000 in the aggregate); or
(g) (i)
Any
Person shall engage in any “prohibited transaction” (as defined in Section 406
of ERISA or Section 4975 of the Code) involving any Single Employer Plan, (ii)
any “accumulated funding deficiency” (as defined in Section 302 of ERISA),
whether or not waived, shall exist with respect to any Single Employer Plan
or
any Lien in favor of a Single Employer Plan or in favor of the PBGC with respect
to a Single Employer Plan (other than a Permitted Lien) shall arise on the
assets of any Credit Party or any Commonly Controlled Entity, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to have a
trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement
of
proceedings or appointment of a Trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, or (v) any Credit Party or any Commonly Controlled
Entity shall incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, any Multiemployer Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could reasonably be expected to have a
Material Adverse Effect; or
102
(h) There
shall occur a Change of Control; or
(i)
The
Guaranty or any provision thereof shall cease to be in full force and effect
or
any Guarantor or any Person authorized to act by or on behalf of any Guarantor
shall deny or disaffirm any Guarantor’s obligations under the Guaranty;
or
(j)
(i)
Any
other Credit Document or any security interest or Lien granted thereunder shall
fail to be in full force and effect, shall be declared null and void or shall
fail to give the Administrative Agent and/or the Lenders the security interests,
liens, perfection, priority, rights, powers and privileges purported to be
created thereby (except as such documents may be terminated or no longer in
force and effect in accordance with the terms thereof, other than those
indemnities and provisions which by their terms shall survive); or (ii) any
Credit Party or any Person authorized to act by or on behalf of any Credit
Party
shall deny or disaffirm any Credit Party Obligations or shall deny, disaffirm
or
contest the validity, perfection or priority of any security interest or Lien
granted under the Security Documents; or
(k) Any
default (which is not waived or cured within the applicable period of grace)
or
event of default shall occur under any document governing or evidencing any
Subordinated Indebtedness or the subordination provisions contained therein
shall cease to be in full force and effect or to give the Administrative Agent
and the Lenders the rights, powers and privileges purported to be created
thereby; or
(l)
any
Credit Party shall be temporarily or permanently excluded from, or have payments
suspended under, (i) any Medicaid Provider Agreement, Medicaid Certification,
Medicare Provider Agreement or Medicare Certification or (ii) any Medical
Reimbursement Program, where such exclusion or suspension arises from fraud
or
other claims or allegations which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
103
|
Section
7.2
|
Acceleration;
Remedies.
|
Upon
the
occurrence and during the continuation of an Event of Default, then, and in
any
such event, (a) if such event is an Event of Default specified in Section 7.1(e)
above with respect to any Credit Party or any material Subsidiary of the
Company, automatically the Commitments shall immediately terminate and the
Loans
(with accrued interest thereon), and all other amounts under the Credit
Documents (including without limitation the maximum amount of all contingent
liabilities under Letters of Credit) shall immediately become due and payable,
and (b) if such event is any other Event of Default, any or all of the following
actions may be taken: (i) with the written consent of the Required Lenders,
the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; (ii) the Administrative Agent may, or upon the written
request of the Required Lenders, the Administrative Agent shall, by notice
of
default to the Borrower, declare the Loans (with accrued interest thereon)
and
all other amounts
owing under this Agreement and the Notes to be due and payable forthwith and
direct the Borrower to pay to the Administrative Agent cash collateral as
security for the outstanding LOC Obligations for subsequent drawings under
then
outstanding Letters of Credit in an amount equal to the maximum amount of which
may be drawn under Letters of Credit then outstanding, whereupon the same shall
immediately become due and payable; (iii) exercise any rights or remedies of
the
Administrative Agent or the Lenders under this Agreement or any other Credit
Document, including, without limitation, any rights or remedies with respect
to
the Collateral; and (iv) exercise any rights or remedies available to the
Administrative Agent or Lenders under applicable law.
ARTICLE
VIII
THE
AGENT
|
Section
8.1
|
Appointment.
|
Each
Lender hereby irrevocably designates and appoints Wachovia Bank, National
Association as the Administrative Agent of such Lender under this Agreement,
and
each such Lender irrevocably authorizes Wachovia Bank, National Association,
as
the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Agreement and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
104
|
Section
8.2
|
Delegation
of Duties.
|
The
Administrative Agent may execute any of its duties under this Agreement by
or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
foregoing, but subject to the provisions of Section 8.3, the Administrative
Agent may appoint one of its affiliates as its agent to perform the functions
of
the Administrative Agent hereunder relating to the advancing of funds to the
Borrower and distribution of funds to the Lenders and to perform such other
related functions of the Administrative Agent hereunder as are reasonably
incidental to such functions.
|
Section
8.3
|
Exculpatory
Provisions.
|
Neither
the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection with
this Agreement (except for its or such Person’s own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or
any
officer thereof contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received by
the
Administrative Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency
of
any of the Credit Documents or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be
under
any obligation to any Lender to ascertain or to inquire as to the observance
or
performance by the Borrower of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower and its Subsidiaries.
|
Section
8.4
|
Reliance
by Administrative Agent.
|
(a) The
Administrative Agent shall be entitled to rely, and shall be fully protected
in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it in good faith
to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any Credit Party), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
may
deem and treat the payee of any Note as the owner thereof for all purposes
unless (a) a written notice of assignment, negotiation or transfer thereof
shall
have been filed with the Administrative Agent and (b) the Administrative Agent
shall have received the written agreement of such assignee to be bound hereby
as
fully and to the same extent as if such assignee were an original Lender party
hereto, in each case in form satisfactory to the Administrative Agent. The
Administrative Agent shall be fully justified in failing or refusing to take
any
action under this Agreement unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate or it shall first
be
indemnified to its satisfaction by the Lenders against any and all liability
and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected
in acting, or in refraining from acting, under any of the Credit Documents
in
accordance with a request of the Required Lenders or all of the Lenders, as
may
be required under this Agreement, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
105
(b) For
purposes of determining compliance with the conditions specified in
Section 4.1, each Lender that has signed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender.
|
Section
8.5
|
Notice
of Default.
|
The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating
that
such notice is a “notice of default”. In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed
by
the Required Lenders; provided,
however,
that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Credit Agreement expressly requires that such action
be
taken, or not taken, only with the consent or upon the authorization of the
Required Lenders, or all of the Lenders, as the case may be.
|
Section
8.6
|
Non-Reliance
on Administrative Agent and Other Lenders.
|
Each
Lender expressly acknowledges that neither the Administrative Agent nor any
of
its officers, directors, employees, agents, attorneys-in-fact or affiliates
has
made any representation or warranty to it and that no act by the Administrative
Agent hereinafter taken, including any review of the affairs of the Borrower,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it
has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of
the
Borrower. Except for notices, reports and other documents expressly required
to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness
of
the Borrower which may come into the possession of the Administrative Agent
or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
106
|
Section
8.7
|
Indemnification.
|
The
Lenders agree to indemnify the Administrative Agent and the Revolving Lenders
agree to indemnify the Issuing Lender and the Swingline Lender, in each case
in
its capacity hereunder and their Affiliates and their respective officers,
directors, agents and employees (to the extent not reimbursed by the Borrower
and without limiting any obligation of the Borrower to do so), ratably according
to their respective Commitment Percentages in effect on the date on which
indemnification is sought under this Section, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes)
be imposed on, incurred by or asserted against any such indemnitee in any way
relating to or arising out of any Credit Document or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby
or
thereby or any action taken or omitted by any such indemnitee under or in
connection with any of the foregoing; provided,
however,
that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements to the extent resulting from such indemnitee’s gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction. The agreements in this Section 8.7 shall survive the termination
of this Agreement and payment of the Notes and all other amounts payable
hereunder.
|
Section
8.8
|
Administrative
Agent in Its Individual Capacity.
|
The
Administrative Agent and its affiliates may make loans to, accept deposits
from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder. With respect
to its Loans made or renewed by it and any Note issued to it, the Administrative
Agent shall have the same rights and powers under this Agreement as any Lender
and may exercise the same as though it were not the Administrative Agent, and
the terms “Lender” and “Lenders” shall include the Administrative Agent in its
individual capacity.
107
|
Section
8.9
|
Successor
Administrative Agent.
|
The
Administrative Agent may resign as Administrative Agent upon thirty (30)
days’ prior written notice to the Borrower and the Lenders. If the
Administrative Agent shall resign as Administrative Agent, then the Required
Lenders shall appoint from among the Lenders (with such Lender’s consent) a
successor agent for the Lenders, which successor agent shall in the absence
of a
Default or an Event of Default be approved by the Borrower (which approval
shall
not be unreasonably withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the
term “Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any
of
the parties to this Agreement or any holders of the Notes. If no such successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within thirty (30) days after the retiring Administrative
Agent gives notice of its resignation, then such resignation shall nonetheless
become effective in accordance with such notice and (a)
the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents (except that in
the
case of any Collateral held by the Administrative Agent on behalf of the Secured
Parties, the retiring Administrative Agent shall continue to hold such
Collateral until such time as a successor Administrative Agent is appointed)
and
(b) all payments, communications and determinations provided to be made by,
to or through the Administrative Agent shall instead be made by or to (i) each
Lender and the Issuing Lender directly with respect to payments and
communications and (ii) the Required Lenders with respect to any determination,
until such time as the Required Lenders appoint a successor Administrative
Agent
as provided for above in this paragraph. After any retiring Administrative
Agent’s resignation as Administrative Agent, the provisions of this Section 8.9
shall inure to its benefit as to any actions taken or omitted to be taken by
it
while it was Administrative Agent under this Agreement.
|
Section
8.10
|
Other
Agents.
|
None
of
the Lenders or other Persons identified on the cover page or signature pages
of
this Agreement as a “syndication agent,” “documentation agent,” “co-agent,”
“book manager,” “bookrunner,” “joint bookrunner,” “lead manager,” “arranger,”
“lead arranger,” “joint lead arrangers” or “co-arranger” shall have any right
(except as expressly set forth herein), power, obligation, liability,
responsibility or duty under this Agreement or under any other Credit Document
other than, in the case of such Lenders, those applicable to all Lenders as
such; provided,
however,
that
the agents and co-lead arrangers shall be entitled to the same rights,
protections, exculpations and indemnifications granted to the Administrative
Agent under this Article VIII in their capacity as an agent or co-lead
arranger. Without limiting the foregoing, none of the Lenders or other Persons
so identified shall have or be deemed to have any fiduciary relationship with
any Lender. Each Lender acknowledges that it has not relied, and will not rely,
on any of the Lenders or other Persons so identified in deciding to enter into
this Credit Agreement or in taking or not taking action hereunder.
|
Section
8.11
|
Releases.
|
The
Administrative Agent will promptly release any Guarantor and any Lien on any
Collateral, which is sold, transferred or otherwise disposed of as permitted
by
the Credit Agreement or as otherwise permitted by the Lenders or Required
Lenders, as applicable.
108
ARTICLE
IX
MISCELLANEOUS
|
Section
9.1
|
Amendments,
Waivers and Release of Collateral.
|
Neither
this Agreement, nor any of the other Credit Documents, nor any terms hereof
or
thereof may be amended, supplemented, waived or modified except in accordance
with the provisions of this Section. The Required Lenders may, or, with the
written consent of the Required Lenders, the Administrative Agent may, from
time
to time, (a) enter into with the Credit Parties written amendments,
supplements or modifications hereto and/or to the other Credit Documents for
the
purpose of adding, deleting or modifying any provisions to this Agreement or
the
other Credit Documents or changing in any manner the rights or obligations
of
the Lenders or of the Credit Parties hereunder or thereunder or (b) waive,
on
such terms and conditions as the Required Lenders may specify in such
instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however,
that no
such waiver and no such amendment, waiver, supplement, modification or release
shall:
(i)
reduce
the amount or extend the scheduled date of maturity of any Loan, Note or LOC
Obligation or any installment thereon, or reduce the stated rate of any interest
or fee payable hereunder (except in connection with a waiver of interest at
the
increased post-default rate set forth in Section 2.9 which shall be determined
by a vote of the Required Lenders) or extend the scheduled date of any payment
thereof or increase the amount or extend the expiration date of any Lender’s
Commitment, in each case without the written consent of each Lender directly
affected thereby; provided
that, it
is understood and agreed that (A) no waiver, reduction or deferral of a
mandatory prepayment required pursuant to Section 2.7(b), nor any amendment
of
Section 2.7(b) or the definitions of Asset Disposition, Debt Issuance, Equity
Issuance, Excess Cash Flow or Recovery Event, shall
constitute a reduction of the amount of, or an extension of the scheduled date
of maturity of, or any installment of, any Loan, Note or LOC Obligation, (B)
any
reduction in the stated rate of interest on Revolving Loans shall only require
the written consent of each Lender holding a Revolving Commitment and (C) any
reduction in the stated rate of interest on the Term Loan shall only require
the
written consent of each Lender holding a portion of the outstanding Term Loan;
or
(ii) amend,
modify or waive any provision of this Section or reduce the percentage specified
in the definition of Required Lenders, without the written consent of all the
Lenders; or
(iii) amend,
modify or waive any provision of Article VIII without the written consent of
the
then Administrative Agent; or
109
(iv) release
the Borrower or all or substantially all of the Guarantors from obligations
under the Guaranty, without the written consent of all of the Lenders and the
Hedging Agreement Providers; or
(v) release
all or substantially all of the Collateral without the written consent of all
of
the Lenders and Hedging Agreement Providers; or
(vi) subordinate
any Credit Party Obligations to any other Indebtedness or the Liens securing
the
Credit Party Obligations to any other Indebtedness without the written consent
of all of the Lenders; or
(vii)
permit
a
Letter of Credit to have an original expiry date more than twelve (12) months
from the date of issuance without the consent of each of the Revolving Lenders;
provided,
that
the expiry date of any Letter of Credit may be extended in accordance with
the
terms of Section 2.3(a); or
(viii)
permit
any Credit Party to assign or transfer any of its rights or obligations under
this Agreement or other Credit Documents without the written consent of all
of
the Lenders; or
(ix) amend
or
modify the definition of Credit Party Obligations to delete or exclude any
obligation or liability described therein without the written consent of each
Lender and each Hedging Agreement Provider directly affected thereby;
or
(x) amend,
modify or waive any provision of the Credit Documents requiring consent,
approval or request of the Required Lenders or all Lenders without the written
consent of the Required Lenders or all the Lenders as appropriate;
or
(xi) without
the consent of Revolving Lenders holding in the aggregate more than 50% of
the
outstanding Revolving Commitments (or if the Revolving Commitments have been
terminated, the aggregate principal amount of outstanding Revolving Loans),
amend, modify or waive any provision in Section 4.2 or waive any Default or
Event of Default (or amend any Credit Document to effectively waive any Default
or Event of Default) if the effect of such amendment, modification or waiver
is
that the Revolving Lenders shall be required to fund Revolving Loans when such
Lenders would otherwise not be required to do so; or
(xii) amend,
modify or waive the order in which Credit Party Obligations are paid or in
a
manner that would alter the pro rata sharing of payments by and among the
Lenders, including, without limitation, as provided in Section 2.12,
without the written consent of each Lender and each Hedging Agreement Provider
directly affected thereby; or
110
(xiii)
amend
the
definitions of “Hedging Agreement,” “Secured Hedging Agreement,” or “Hedging
Agreement Provider” without the consent of any Hedging Agreement Provider that
would be adversely affected thereby.
provided,
further,
that no
amendment, waiver or consent affecting the rights or duties of the
Administrative Agent, the Issuing Lender or the Swingline Lender under any
Credit Document shall in any event be effective, unless in writing and signed
by
the Administrative Agent, the Issuing Lender and/or the Swingline Lender, as
applicable, in addition to the Lenders required hereinabove to take such action.
Any
such
waiver, any such amendment, supplement or modification and any such release
shall apply equally to each of the Lenders and shall be binding upon the
Borrower, the other Credit Parties, the Lenders, the Administrative Agent and
all future holders of the Notes. In the case of any waiver, the Borrower, the
other Credit Parties, the Lenders and the Administrative Agent shall be restored
to their former position and rights hereunder and under the outstanding Loans
and Notes and other Credit Documents, and any Default or Event of Default
permanently waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default,
or
impair any right consequent thereon.
Notwithstanding
any of the foregoing to the contrary, the consent of the Borrower shall not
be
required for any amendment, modification or waiver of the provisions of Article
VIII (other than the provisions of Section 8.9); provided,
however,
that
the Administrative Agent will provide written notice to the Borrower of any
such
amendment, modification or waiver.
Notwithstanding
the fact that the consent of all the Lenders is required in certain
circumstances as set forth above, (x) each Lender is entitled to vote as such
Lender sees fit on any bankruptcy reorganization plan that affects the Loans,
and each Lender acknowledges that the provisions of Section 1126(c) of the
Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and
(y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
|
Section
9.2
|
Notices.
|
Except
as
otherwise provided in Article II, all notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (including
by
telecopy or other electronic communication with confirmed receipt from the
recipient), and, unless otherwise expressly provided herein, shall be deemed
to
have been duly given or made (a) when delivered by hand, (b) when
transmitted via telecopy (or other electronic communication device with
confirmed receipt from the recipient) to the number set out herein, (c) the
day
following the day on which the same has been delivered prepaid (or pursuant
to
an invoice arrangement) to a reputable national overnight air courier service,
or (d) the third Business Day following the day on which the same is sent by
certified or registered mail, postage prepaid, in each case, addressed as
follows in the case of the Borrower, the other Credit Parties and the
Administrative Agent, and, in the case of each of the Lenders, as set forth
in
such Lender’s Administrative Details Form, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders
of
the Notes:
111
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The
Borrower
|
Orthofix
Holdings, Inc.
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and
the other
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▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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Credit
Parties:
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▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇▇
▇▇▇▇
Telecopier:
▇▇▇
▇▇▇
▇▇▇▇
Telephone:
▇▇▇
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▇▇▇▇
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The
Administrative
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Wachovia
Bank, National Association, as Administrative
Agent
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Agent:
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Charlotte
Plaza
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention:
Syndication
Agency Services
Telecopier:
(▇▇▇)
▇▇▇-▇▇▇▇
Telephone:
(▇▇▇)
▇▇▇-▇▇▇▇
with
a
copy to:
Wachovia
Bank, National Association
One
Wachovia Center
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ 15
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Attention:
▇▇▇▇▇
Santa ▇▇▇▇
Telecopier:
(▇▇▇)
▇▇▇-▇▇▇▇
Telephone:
(▇▇▇)
▇▇▇-▇▇▇▇
|
Section
9.3
|
No
Waiver; Cumulative Remedies.
|
No
failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
|
Section
9.4
|
Survival
of Representations and Warranties.
|
All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes and the making of
the
Loans; provided
that all
such representations and warranties shall terminate on the date upon which
the
Commitments have been terminated, no Credit Document remains in effect and
all
Credit Party Obligations have been paid in full.
112
|
Section
9.5
|
Payment
of Expenses and Taxes.
|
The
Borrower agrees (a) to pay or reimburse the Administrative Agent and the
Arranger for all their reasonable out-of-pocket costs and expenses incurred
in
connection with the development, preparation, negotiation, printing and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith (including, without limitation, all CUSIP fees for
registration with S&P’s CUSIP Service Bureau, together with the reasonable
fees and disbursements of counsel to the Administrative Agent and the Arranger,
(b) to pay or reimburse the Administrative Agent and, if an Event of
Default shall have occurred and is continuing, each Lender for all its costs
and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement and the other Credit Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent, and if applicable, and to the Lenders (including
reasonable allocated costs of in-house legal counsel), (c) on demand, to
pay, indemnify, and hold each Lender, the Administrative Agent and the Arranger
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the Credit
Documents and any such other documents; except for any and all stamp, excise
and
other similar taxes payable in connection with any transfer under Section 9.6
of
this Agreement, (d) to pay, indemnify, and hold each Lender, the
Administrative Agent, the Arranger and their Affiliates and their respective
officers, directors, employees, partners, members, counsel, agents,
representatives, advisors and affiliates (collectively called the “Indemnitees”)
harmless from and against, any and all other liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of the Credit Documents and any
such
other documents and the use, or proposed use, of proceeds of the Loans and
(e) to pay any civil penalty or fine assessed by the U.S. Department of the
Treasury’s Office of Foreign Assets Control against, and all reasonable costs
and expenses (including counsel fees and disbursements) incurred in connection
with defense thereof by the Administrative Agent or any Lender as a result
of
the funding of Loans, the issuance of Letters of Credit, the acceptance of
payments or of Collateral due under the Credit Documents (all of the foregoing,
collectively, the “Indemnified
Liabilities”);
provided,
however,
that
the Borrower shall not have any obligation hereunder to an Indemnitee with
respect to Indemnified Liabilities arising from the gross negligence or willful
misconduct of such Indemnitee, as determined by a court of competent
jurisdiction pursuant to a final non-appealable judgment. The agreements in
this
Section shall survive repayment of the Loans, Notes and all other amounts
hereunder.
113
|
Section
9.6
|
Successors
and Assigns; Participations; Purchasing Lenders.
|
(a) This
Agreement shall be binding upon and inure to the benefit of the Credit Parties,
the Lenders, the Administrative Agent, all future holders of the Notes and
their
respective successors and assigns, except that the Credit Parties may not assign
or transfer any of their rights or obligations under this Agreement or the
other
Credit Documents without the prior written consent of each Lender.
(b) Any
Lender may, in the ordinary course of its business and in accordance with
applicable law, at any time sell to one or more banks or other entities
(“Participants”)
participating interests in any Loan owing to such Lender, any Note held by
such
Lender, any Commitment of such Lender, or any other interest of such Lender
hereunder. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender’s obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Note for all purposes under this Agreement, and the Borrower
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this
Agreement. No Lender shall transfer or grant any participation under which
the
Participant shall have rights to approve any amendment to, or supplement,
modification or waiver of, this Agreement or any other Credit Document except
to
the extent such amendment, supplement, modification or waiver would
(i) extend the scheduled maturity of any Loan or Note or any installment
thereon in which such Participant is participating, or reduce the stated rate
or
extend the time of payment of interest or fees thereon (except in connection
with a waiver of interest at the increased post-default rate set forth in
Section 2.9 which shall be determined by a vote of the Required Lenders) or
reduce the principal amount thereof, or increase the amount of the Participant’s
participation over the amount thereof then in effect; provided
that, it
is understood and agreed that (A) any waiver, reduction or deferral of a
mandatory prepayment required pursuant to Section 2.7(b) and any amendment
of
Section 2.7(b) or the definitions of Asset Disposition, Debt Issuance, Equity
Issuance, or
Recovery Event, (B) any waiver of any Default or Event of Default and (C) any
increase in any Commitment or Loan shall be permitted without consent of any
participant if the Participant’s participation is not increased as a result
thereof, (ii) release all or substantially all of the Guarantors from their
obligations under the Guaranty, (iii) release
all or substantially all of the Collateral, or
(iv) consent
to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. In the case of any such participation, the
Participant shall not have any rights under this Agreement or any of the other
Credit Documents (the Participant’s rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the Participant relating thereto) and all amounts payable
by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation; provided
that
each Participant shall be entitled to the benefits of Sections 2.14, 2.15,
2.16,
2.17 and 9.5 with respect to its participation in the Commitments and the Loans
outstanding from time to time; provided further,
that no
Participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
114
(c) Any
Lender may, in accordance with applicable law, at any time, sell or assign
to
any Lender or any Affiliate or Approved Fund thereof and to one or more
additional banks, insurance companies, financial institutions, investment funds
or other entities (“Purchasing
Lenders”),
all
or any part of its rights and obligations under this Agreement and the Notes
in
minimum amounts of (i) $1,000,000 (or such lesser amount approved by the
Administrative Agent and, so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower) with respect to its Revolving
Commitment and its Revolving Loans (or, if less, the entire amount of such
Lender’s Revolving Commitment and Revolving Loans) and (ii) $1,000,000 (or
such lesser amount approved by the Administrative Agent and so long as no
Default or Event of Default shall have occurred and be continuing, the Borrower)
with respect to its Term Loans (or, if less, the entire amount of such Lender’s
Term Loans), pursuant to an Assignment Agreement, executed by such Purchasing
Lender and such transferor Lender, consented to (such consent not to be
unreasonably withheld or delayed) by the Administrative Agent, the Issuing
Lender and the Borrower (to the extent required), and delivered to the
Administrative Agent for its acceptance and recording in the Register;
provided,
however,
that
(A) any sale or assignment to an existing Lender, or Affiliate or Approved
Fund thereof, shall not require the consent of the Borrower, the Issuing Lender
or the Administrative Agent (but shall be accepted and acknowledged by the
Administrative Agent for the sole purpose of recording same in the Register)
nor
shall any such sale or assignment be subject to the minimum assignment amounts
specified herein, (B) so long as no Default or Event of Default shall have
occurred and be continuing, except as provided in the foregoing clause (A),
any
sale or assignment of a portion of the Revolving Loans and a Revolving Loan
Commitment shall require the consent of the Borrower (such
consent not to be unreasonably withheld), (C) except as provided in the
foregoing clause (ii), any sale or assignment of a portion of the Term Loan
and
a Term Loan Commitment shall not require the consent of the Borrower and (D)
contemporaneous sales and/or assignments to a Purchasing Lender and its
Affiliates and Approved Funds shall be treated as one assignment for purposes
of
determining compliance with the minimum assignment amounts specified herein.
Upon such execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Assignment Agreement, (1) the
Purchasing Lender thereunder shall be a party hereto and, to the extent provided
in such Assignment Agreement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (2) the transferor
Lender thereunder shall, to the extent provided in such Assignment Agreement,
be
released from its obligations under this Agreement (and, in the case of an
Assignment Agreement covering all or the remaining portion of a transferor
Lender’s rights and obligations under this Agreement, such transferor Lender
shall cease to be a party hereto; provided,
however,
that
such Lender shall continue to be entitled to any indemnification rights that
expressly survive hereunder). Such Assignment Agreement shall be deemed to
amend
this Agreement to the extent, and only to the extent, necessary to reflect
the
addition of such Purchasing Lender and the resulting adjustment of Commitment
Percentages arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement and the Notes. On or prior to the Transfer Effective Date specified
in
such Assignment Agreement, the Borrower, at its own expense, shall execute
and
deliver to the Administrative Agent in exchange for the Notes delivered to
the
Administrative Agent pursuant to such Assignment Agreement new Notes to the
order of such Purchasing Lender in an amount equal to the Commitment assumed
by
it pursuant to such Assignment Agreement and, unless the transferor Lender
has
not retained a Commitment hereunder, new Notes to the order of the transferor
Lender in an amount equal to the Commitment retained by it hereunder. Such
new
Notes shall be in the form of the Notes replaced thereby. Notwithstanding
anything to the contrary contained in this Section, a Lender may assign any
or
all of its rights under this Agreement to an Affiliate or a Approved Fund of
such Lender without delivering an Assignment Agreement to the Administrative
Agent; provided,
however,
that
(x) the Credit Parties and the Administrative Agent may continue to deal solely
and directly with such assigning Lender until an Assignment Agreement has been
delivered to the Administrative Agent for recordation on the Register, (y)
the
failure of such assigning Lender to deliver an Assignment Agreement to the
Administrative Agent shall not affect the legality, validity or binding effect
of such assignment and (z) an Assignment Agreement between the assigning Lender
and an Affiliate or Approved Fund of such Lender shall be effective as of the
date specified in such Assignment Agreement.
115
(d) The
Administrative Agent shall maintain at its address referred to in
Section 9.2 a copy of each Assignment Agreement delivered to it and a
register (the “Register”)
for
the recordation of the names and addresses of the Lenders and the Commitment
of,
and principal amount of the Loans owing to, each Lender from time to time.
Subject to the requirements of Section 9.6(c), a Loan (and the related Note)
recorded on the Register may be assigned or sold in whole or in part upon
registration of such assignment or sale on the Register. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as the owner of the Loan recorded therein
for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower or any Lender at any reasonable time and from time to time
upon
reasonable prior notice. In the case of an assignment pursuant to the last
sentence of Section 9.6(c) as to which an Assignment Agreement is not delivered
to the Administrative Agent, the assigning Lender shall, acting solely for
this
purpose as a non-fiduciary agent of the Credit Parties, maintain a comparable
register on behalf of the Credit Parties. In the event that any Lender sells
participations in a Loan recorded on the Register, such Lender shall maintain
a
register on which it enters the name of all participants in such Loans held
by
it (the “Participant
Register”).
A
Loan recorded on the Register (and the registered Note, if any, evidencing
the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each registered Note shall
expressly so provide). Any participation of such Loan recorded on the Register
(and the registered Note, if any, evidencing the same) may be effected only
by
the registration of such participation on the Participant Register.
116
(e) Upon
its
receipt of a duly executed Assignment Agreement, together with payment to the
Administrative Agent by the transferor Lender or the Purchasing Lender, as
agreed between them, of a registration and processing fee of $3,500 for each
Purchasing Lender (other than a Purchasing Lender that is an Affiliate or
Approved Fund of the transferor Lender) listed in such Assignment Agreement
and
the Notes subject to such Assignment Agreement, the Administrative Agent shall
(i) accept such Assignment Agreement, (ii) record the information
contained therein in the Register and (iii) give
prompt notice of such acceptance and recordation to the Lenders and the
Borrower.
(f)
The
Borrower authorizes each Lender to disclose to any Participant or Purchasing
Lender (each, a “Transferee”)
and
any prospective Transferee any and all financial information in such Lender’s
possession concerning the Borrower and its Subsidiaries which has been delivered
to such Lender by or on behalf of the Borrower pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender’s credit evaluation of the Borrower and its
Affiliates prior to becoming a party to this Agreement, in each case subject
to
Section 9.15.
(g) At
the
time of each assignment pursuant to this Section to a Person which is not
already a Lender hereunder and which is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Lender shall provide to the Borrower and
the
Administrative Agent the appropriate Internal Revenue Service Forms described
in
Section 2.18.
(h) Nothing
herein shall prohibit any Lender from pledging or assigning any of its rights
under this Agreement (including, without limitation, any right to payment of
principal and interest under any Note) to secure obligations of such Lender,
including without limitation, (i) any pledge or assignment to secure
obligations to a Federal Reserve Bank and (ii) in the case of any Lender
that is a fund or trust or entity that invests in commercial bank loans in
the
ordinary course of business, any pledge or assignment to any holders of
obligations owed, or securities issued, by such Lender including to any trustee
for, or any other representative of, such holders; it being understood that
the
requirements for assignments set forth in this Section shall not apply to any
such pledge or assignment of a security interest, except with respect to any
foreclosure or similar action taken by such pledgee or assignee with respect
to
such pledge or assignment; provided
that no
such pledge or assignment of a security interest shall release a Lender from
any
of its obligations hereunder or substitute any such pledgee or assignee for
such
Lender as a party hereto and no such pledgee or assignee shall have any voting
rights under this Agreement unless and until the requirements for assignments
set forth in this Section are complied with in connection with any foreclosure
or similar action taken by such pledgee or assignee.
117
|
Section
9.7
|
Adjustments;
Set-off.
|
(a) Each
Lender agrees that if any Lender (a “benefited
Lender”)
shall
at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily
or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 7.1(e), or otherwise) in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender’s Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall
be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however,
that if
all or any portion of such excess payment or benefits is thereafter recovered
from such benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but without
interest. The Borrower agrees that each Lender so purchasing a portion of
another Lender’s Loans may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if
such
Lender were the direct holder of such portion.
(b) In
addition to any rights and remedies of the Lenders provided by law (including,
without limitation, other rights of set-off), each Lender (and its Affiliates)
shall have the right, without prior notice to the Borrower, any such notice
being expressly waived by the Borrower to the extent permitted by applicable
law, in the event that all amounts under the Credit Agreement shall have become
immediately due and payable pursuant to Section 7.2, to setoff and appropriate
and apply any and all deposits (general or special, time or demand, provisional
or final), in any currency, and any other credits, indebtedness or claims,
in
any currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held by or owing to such Lender (and its
Affiliates) or any branch or agency thereof to or for the credit or the account
of the Borrower or any other Credit Party, or any part thereof in such amounts
as such Lender (and its Affiliates) may elect, against and on account of the
Loans and other Credit Party Obligations of the Borrower and the other Credit
Parties and claims of every nature and description of such Lender against the
Borrower and the other Credit Parties, in any currency, whether arising
hereunder, under any other Credit Document or any Secured Hedging Agreement
provided pursuant to the terms of this Agreement, as such Lender may elect,
whether or not such Lender or any other Lender has made any demand for payment
and although such obligations, liabilities and claims may be contingent or
unmatured. The aforesaid right of set-off may be exercised by such Lender (and
its Affiliates) against the Borrower, any other Credit Party or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of the
Borrower or any other Credit Party, or against anyone else claiming through
or
against the Borrower, any other Credit Party or any such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact that such
right of set-off shall not have been exercised by such Lender (or its
Affiliates) prior to the occurrence of any Event of Default. Each Lender agrees
promptly to notify the Borrower and the Administrative Agent after any such
set-off and application made by such Lender (and its Affiliates); provided,
however,
that
the failure to give such notice shall not affect the validity of such set-off
and application.
118
|
Section
9.8
|
Table
of Contents and Section Headings.
|
The
table
of contents and the Section and subsection headings herein are intended for
convenience only and shall be ignored in construing this Agreement.
|
Section
9.9
|
Counterparts.
|
This
Agreement may be executed by one or more of the parties to this Agreement on
any
number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same agreement. Delivery of an
executed counterpart of a signature page of this Agreement by telecopy or email
shall be effective as delivery of a manually executed counterpart of this
Agreement and shall constitute a representation that an original executed
counterpart will follow.
|
Section
9.10
|
Effectiveness.
|
This
Credit Agreement shall become effective on the date on which all of the parties
have signed a copy hereof (whether the same or different copies) and shall
have
delivered the same to the Administrative Agent pursuant to Section 9.2 or,
in
the case of the Lenders, shall have given to the Administrative Agent written,
telecopied or other electronic notice with confirmed receipt from the recipient
at such office that the same has been signed and mailed to it.
|
Section
9.11
|
Severability.
|
Any
provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any
other jurisdiction.
|
Section
9.12
|
Integration.
|
This
Agreement and the other Credit Documents represent the agreement of the
Borrower, the Administrative Agent and the Lenders with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent, the Borrower or any Lender relative
to
the subject matter hereof not expressly set forth or referred to herein or
in
the other Credit Documents or Fee Letters.
|
Section
9.13
|
Governing
Law.
|
This
Agreement and the other Credit Documents (other than the UK Security Documents)
and the rights and obligations of the parties under this Agreement and the
other
Credit Documents (other than the UK Security Documents) shall be governed by,
and construed and interpreted in accordance with, the law of the State of New
York.
119
|
Section
9.14
|
Consent
to Jurisdiction and Service of Process.
|
All
judicial proceedings brought against any party hereto with respect to this
Agreement, any Note or any of the other Credit Documents may be brought in
any
state or federal court of competent jurisdiction in the State of New York,
and,
by execution and delivery of this Agreement, each of such parties accepts,
for
itself and in connection with its properties, generally and unconditionally,
the
non-exclusive jurisdiction of the aforesaid courts and irrevocably agrees to
be
bound by any final judgment rendered thereby in connection with this Agreement,
any Note or any other Credit Document from which no appeal has been taken or
is
available. The parties hereto irrevocably agree that all service of process
in
any such proceedings in any such court may be effected by mailing a copy thereof
by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent or the Borrower shall have been
notified pursuant thereto, such service being hereby acknowledged by the parties
hereto to be effective and binding service in every respect. Each of the parties
hereto irrevocably waives any objection, including, without limitation, any
objection to the laying of venue based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right
to
serve process in any other manner permitted by law or shall limit the right
of
any party to bring proceedings against any other party in the court of any
other
jurisdiction.
|
Section
9.15
|
Confidentiality.
|
Each
of
the Administrative Agent, the Lenders and the Issuing Bank agrees to maintain
the confidentiality of the Information (as defined below), except that
Information may be disclosed (a)
to its
Affiliates and to its and its Affiliates’ respective partners, directors,
officers, employees, agents, advisors and other representatives (it being
understood and agreed that the Persons to whom such disclosure is made will
be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b)
to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c)
to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (d)
to any
other party hereto, (e)
in
connection with the exercise of any remedies hereunder or under any other Credit
Document or any action or proceeding relating to this Agreement or any other
Credit Document or the enforcement of rights hereunder or thereunder,
(f)
subject
to an agreement containing provisions substantially the same as those of this
Section, to (i)
any
assignee of or Participant in, or any prospective assignee of or Participant
in,
any of its rights or obligations under this Agreement,
(ii)
any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (iii)
to an
investor or prospective investor in an Approved Fund
that
also agrees that Information shall be used solely for the purpose of evaluating
an investment in such Approved Fund, (iv)
to a
trustee, collateral manager, servicer, backup servicer, noteholder or secured
party in an Approved Fund in connection with the administration, servicing
and
reporting on the assets serving as collateral for an Approved Fund,
or
(v)
to a
nationally recognized rating agency that requires access to information
regarding the Credit Parties, the Loans and Credit Documents in connection
with
ratings issued with respect to an Approved Fund, (g)
with
the consent of the Borrower or (h)
to the
extent such Information (i)
becomes
publicly available other than as a result of a breach of this Section or
(ii)
becomes
available to the Administrative Agent, any Lender, the Issuing Bank or any
of
their respective Affiliates on a nonconfidential basis from a source other
than
a Credit Party.
120
For
purposes of this Section, “Information”
means
all information received from any Credit Party or any of its Subsidiaries
relating to any Credit Party or any of its Subsidiaries or any of their
respective businesses, other than any such information that is available to
the
Administrative Agent, any Lender or the Issuing Lender on a nonconfidential
basis prior to disclosure by any Credit Party or any of its Subsidiaries. Any
Person required to maintain the confidentiality of Information as provided
in
this Section shall be considered to have complied with its obligation to do
so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
|
Section
9.16
|
Acknowledgments.
|
The
Borrower and the other Credit Parties each hereby acknowledges
that:
(a) it
has
been advised by counsel in the negotiation, execution and delivery of each
Credit Document;
(b) neither
the Administrative Agent nor any Lender has any fiduciary relationship with
or
duty to the Borrower or any other Credit Party arising out of or in connection
with this Agreement and the relationship between Administrative Agent and
Lenders, on one hand, and the Borrower and the other Credit Parties, on the
other hand, in connection herewith is solely that of creditor and debtor;
and
(c) no
joint
venture exists among the Lenders or among the Borrower or the other Credit
Parties and the Lenders.
|
Section
9.17
|
Waivers
of Jury Trial.
|
THE
BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT PERMITTED BY
APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
Each
of
the Borrower, the other Credit Parties, the Administrative Agent and the Lenders
agree not to assert any claim against any other party to this Agreement or
any
their respective directors, officers, employees, attorneys, Affiliates or
agents, on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to any of the transactions
contemplated herein.
121
|
Section
9.18
|
Patriot
Act Notice.
|
Each
Lender and the Administrative Agent (for itself and not on behalf of any other
party) hereby notifies the Borrower that, pursuant to the requirements of the
USA Patriot Act, Title III of Pub. L. 107-56, signed into law October 26, 2001
(the “Patriot
Act”),
it is
required to obtain, verify and record information that identifies the Borrower
and the other Credit Parties, which information includes the name and address
of
the Borrower and the other Credit Parties and other information that will allow
such Lender or the Administrative Agent, as applicable, to identify the Borrower
and the other Credit Parties in accordance with the Patriot Act.
|
Section
9.19
|
Resolution
of Drafting Ambiguities.
|
Each
Credit Party acknowledges and agrees that it was represented by counsel in
connection with the execution and delivery of this Agreement and the other
Credit Documents to which it is a party, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and thereof and that
any
rule of construction to the effect that ambiguities are to be resolved against
the drafting party shall not be employed in the interpretation hereof or
thereof.
|
Section
9.20
|
Judgment
Currency; Payments in Dollars.
|
If,
for
the purposes of obtaining judgment in any court, it is necessary to convert
a
sum due hereunder or under any other Credit Document in one currency into
another currency, the rate of exchange used shall be that at which in accordance
with normal banking procedures the Administrative Agent could purchase the
first
currency with such other currency on the Business Day preceding that on which
final judgment is given. The obligation of each of the Credit Parties in respect
of any such sum due from it to the Administrative Agent or any Lender hereunder
or under the other Credit Documents shall, notwithstanding any judgment in
a
currency (the “Judgment
Currency”)
other
than Dollars, be discharged only to the extent that on the Business Day
following receipt by the Administrative Agent or such Lender of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent or such Lender
may in accordance with normal banking procedures purchase Dollars with the
Judgment Currency. If the amount of Dollars so purchased is less than the sum
originally due to the Administrative Agent or such Lender in Dollars, the
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Administrative Agent or such Lender or the Person to whom
such
obligation was owing against such loss. If the amount of Dollars so purchased
is
greater than the sum originally due to the Administrative Agent or such Lender
in such currency, the Administrative Agent and the Lenders agree to apply such
excess to any Credit Party Obligations then due and payable in accordance with
the terms of Section 2.12. Notwithstanding anything to the contrary in any
Credit Documents, all payments made by the Credit Parties under the Credit
Documents shall be made in Dollars.
122
|
Section
9.21
|
Arbitration.
|
(a) Notwithstanding
the provisions of Section 9.14 to the contrary, upon demand of any party
hereto, whether made before or within three (3) months after institution of
any judicial proceeding, any dispute, claim or controversy arising out of,
connected with or relating to this Agreement and other Credit Documents
(“Disputes”)
between or among parties to this Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by a party
does not waive the right of that party to demand arbitration hereunder. Disputes
may include, without limitation, tort claims, counterclaims, disputes as to
whether a matter is subject to arbitration, claims brought as class actions,
claims arising from Credit Documents executed in the future, or claims arising
out of or connected with the transaction reflected by this Agreement.
Arbitration
shall be conducted under and governed by the Commercial Arbitration Rules (the
“Arbitration
Rules”)
of the
American Arbitration Association (the “AAA”)
and
Title 9 of the U.S. Code. All arbitration hearings shall be conducted in
Charlotte, North Carolina. A hearing shall begin within ninety (90) days
of
demand for arbitration and all hearings shall be concluded within
120 days
of
demand for arbitration. These time limitations may not be extended unless a
party shows cause for extension and then no more than a total extension of
sixty
(60) days.
The
expedited procedures set forth in Rule 51 et seq.
of the
Arbitration Rules shall be applicable to claims of less than $1,000,000. All
applicable statutes of limitation shall apply to any Dispute. A judgment upon
the award may be entered in any court having jurisdiction. Arbitrators shall
be
licensed attorneys selected from the Commercial Financial Dispute Arbitration
Panel of the AAA. The parties hereto do not waive applicable Federal or state
substantive law except as provided herein.
(b) Notwithstanding
the preceding binding arbitration provisions, the Administrative Agent, the
Lenders, the Borrowers and the other Credit Parties agree to preserve, without
diminution, certain remedies, as set forth below, that the Administrative Agent
on behalf of the Lenders may employ or exercise freely, independently or in
connection with an arbitration proceeding or after an arbitration action is
brought. The Administrative Agent on behalf of the Lenders shall have the right
to proceed in any court of proper jurisdiction or by self-help to exercise
or
prosecute the following remedies, as and if applicable (i) all rights to
foreclose against any real or personal property or other security by exercising
a power of sale granted under Credit Documents or under applicable law or by
judicial foreclosure and sale, including a proceeding to confirm the sale;
(ii) all rights of self-help including peaceful occupation of real property
and collection of rents, set-off, and peaceful possession of personal property
and giving notices to and collecting obligations from account debtors;
(iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and
filing an involuntary bankruptcy proceeding; and (iv) when applicable, a
judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be requested
by a party in a Dispute.
(c) The
parties hereto agree that they shall not have a remedy of punitive or exemplary
damages against the other in any Dispute and hereby waive any right or claim
to
punitive or exemplary damages they have now or which may arise in the future
in
connection with any Dispute whether the Dispute is resolved by arbitration
or
judicially.
123
(d) By
execution and delivery of this Agreement, each of the parties hereto accepts,
for itself and in connection with its properties, generally and unconditionally,
the non-exclusive jurisdiction relating to any arbitration proceedings conducted
under the Arbitration Rules in Charlotte, North Carolina and irrevocably agrees
to be bound by any final judgment rendered thereby in connection with this
Agreement from which no appeal has been taken or is available.
ARTICLE
X
GUARANTY
|
Section
10.1
|
The
Guaranty.
|
In
order
to induce the Lenders to enter into this Credit Agreement and any Hedging
Agreement Provider to enter into any Secured Hedging Agreement and to extend
credit hereunder and thereunder and in recognition of the direct benefits to
be
received by the Guarantors from the Extensions of Credit hereunder and any
Secured Hedging Agreement, each of the Guarantors hereby agrees with the
Administrative Agent and the Lenders as follows: the Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of
the
Borrower owed to the Administrative Agent, the Lenders and the Hedging Agreement
Providers. If any or all of the indebtedness becomes due and payable hereunder
or under any Secured Hedging Agreement, each Guarantor unconditionally promises
to pay such indebtedness to the Administrative Agent, the Lenders, the Hedging
Agreement Providers, or their respective order, or demand, together with any
and
all reasonable expenses which may be incurred by the Administrative Agent,
the
Lenders or the Hedging Agreement Providers in collecting any of the Credit
Party
Obligations. The word “indebtedness” is used in this Article X in its most
comprehensive sense and includes any and all advances, debts, obligations and
liabilities of the Borrower and the Guarantors, including specifically all
Credit Party Obligations, arising in connection with this Credit Agreement,
the
other Credit Documents or any Secured Hedging Agreement, in each case,
heretofore, now, or hereafter made, incurred or created, whether voluntarily
or
involuntarily, absolute or contingent, liquidated or unliquidated, determined
or
undetermined, whether or not such indebtedness is from time to time reduced,
or
extinguished and thereafter increased or incurred, whether the Borrower and
the
Guarantors may be liable individually or jointly with others, whether or not
recovery upon such indebtedness may be or hereafter become barred by any statute
of limitations, and whether or not such indebtedness may be or hereafter become
otherwise unenforceable. Notwithstanding anything herein or in any other Credit
Document to the contrary, the Guaranty provided hereunder is a guaranty of
payment and not of collection.
Notwithstanding
any provision to the contrary contained herein or in any other of the Credit
Documents, to the extent the obligations of a Guarantor shall be adjudicated
to
be invalid or unenforceable for any reason (including, without limitation,
because of any applicable law relating to fraudulent conveyances or transfers)
then the obligations of each such Guarantor hereunder shall be limited to the
maximum amount that is permissible under applicable law (including, without
limitation, the Bankruptcy Code or its non-U.S. equivalent).
124
|
Section
10.2
|
Bankruptcy.
|
Additionally,
each of the Guarantors unconditionally and irrevocably guarantees jointly and
severally the payment of any and all Credit Party Obligations of the Borrower
to
the Lenders and any Hedging Agreement Provider whether or not due or payable
by
the Borrower upon the occurrence of any of the events specified in
Section 7.1(e) as applicable to the Company, Colgate, Victory, the Borrower
or any material Subsidiaries of the Borrower, and unconditionally promises
to
pay such Credit Party Obligations to the Administrative Agent for the account
of
the Lenders and to any such Hedging Agreement Provider, or order, on demand,
in
lawful money of the United States. Each of the Borrower and the Guarantors
further agrees that to the extent that the Borrower or a Guarantor shall make
a
payment or a transfer of an interest in any property to the Administrative
Agent, any Lender or any Hedging Agreement Provider, which payment or transfer
or any part thereof is subsequently invalidated, declared to be fraudulent
or
preferential, or otherwise is avoided, and/or required to be repaid to the
Borrower or a Guarantor, the estate
of
the Borrower or a Guarantor, a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or other applicable law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been
made.
|
Section
10.3
|
Nature
of Liability.
|
The
liability of each Guarantor hereunder is exclusive and independent of any
security for or other guaranty of the Credit Party Obligations of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor’s liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Credit Party
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to
the
Administrative Agent, the Lenders or any Hedging Agreement Provider on the
Credit Party Obligations that the Administrative Agent, such Lenders or such
Hedging Agreement Provider repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each of the Guarantors waives any right to the deferral or
modification of its obligations hereunder by reason of any such
proceeding.
|
Section
10.4
|
Independent
Obligation.
|
The
obligations of each Guarantor hereunder are independent of the obligations
of
any other guarantor or the Borrower, and a separate action or actions may be
brought and prosecuted against each Guarantor whether or not action is brought
against any other guarantor or the Borrower and whether or not any other
Guarantor or the Borrower is joined in any such action or actions.
125
|
Section
10.5
|
Authorization.
|
Each
of
the Guarantors authorizes the Administrative Agent, each Lender and each Hedging
Agreement Provider without notice or demand (except as shall be required by
applicable law and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to (a) renew, compromise, extend,
increase, accelerate or otherwise change the time for payment of, or otherwise
change the terms of the Credit Party Obligations or any part thereof in
accordance with this Agreement and any Secured Hedging Agreement, as applicable,
including any increase or decrease of the rate of interest thereon, (b) take
and
hold security from any Guarantor or any other party for the payment of this
Guaranty or the Credit Party Obligations and exchange, enforce, waive and
release any such security, (c) apply such security and direct the order or
manner of sale thereof as the Administrative Agent and the Lenders in their
discretion may determine in accordance with the terms of this Agreement and
the
other Credit Documents and (d) release or substitute any one or more endorsers,
Guarantors, the Borrower or other obligors.
|
Section
10.6
|
Reliance.
|
It
is not
necessary for the Administrative Agent, the Lenders or any Hedging Agreement
Providers to inquire into the capacity or powers of the Borrower or the
officers, directors, members, partners or agents acting or purporting to act
on
its behalf, and any indebtedness made or created in reliance upon the professed
exercise of such powers shall be guaranteed hereunder.
|
Section
10.7
|
Waiver.
|
(a) Each
of
the Guarantors waives any right (except as shall be required by applicable
law
and cannot be waived) to require the Administrative Agent, any Lender or any
Hedging Agreement Provider to (i) proceed against the Borrower, any other
guarantor or any other party, (ii) proceed against or exhaust any security
held
from the Borrower, any other guarantor or any other party, or (iii) pursue
any
other remedy in the Administrative Agent’s, any Lender’s or any Hedging
Agreement Provider’s power whatsoever. Each of the Guarantors waives any defense
based on or arising out of any defense of the Borrower, any other guarantor
or
any other party other than payment in full of the Credit Party Obligations,
including without limitation any defense based on or arising out of
(A)
the
disability of the Borrower, any other guarantor or any other party,
(B)
the
unenforceability or invalidity of the Credit Party Obligations or any part
thereof from any cause, (C)
the
failure to properly perfect any Lien on the Collateral, (D)
the
amendment, modification or waiver of any Credit Document without the consent
of
such Guarantor, (E)
any law
or regulation of any jurisdiction or any other event affecting any term of
the
Guaranty or the other Credit Party Obligations, or (F)
the
cessation from any cause of the liability of the Borrower other than payment
in
full of the Credit Party Obligations. The Administrative Agent or any of the
Lenders may, at their election, foreclose on any security held by the
Administrative Agent or a Lender by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to
the
extent such sale is permitted by applicable law), or exercise any other right
or
remedy the Administrative Agent and any Lender may have against the Borrower
or
any other party, or any security, without affecting or impairing in any way
the
liability of any Guarantor hereunder except to the extent the Credit Party
Obligations have been paid in full. Each of the Guarantors, to the extent
permitted by law, waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such election operates
to impair or extinguish any right of reimbursement or subrogation or other
right
or remedy of the Guarantors against the Borrower or any other party or any
security.
126
(b) Each
of
the Guarantors waives all presentments, demands for performance, protests and
notices, including without limitation notices of nonperformance, notices of
protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional Credit
Party Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Credit Party
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that neither the Administrative Agent
nor any Lender shall have any duty to advise such Guarantor of information
known
to it regarding such circumstances or risks.
(c) Each
of
the Guarantors hereby agrees it will not exercise any rights of subrogation
which it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the U.S. Bankruptcy Code, or otherwise) to
the
claims of the Lenders or the Hedging Agreement Provider against the Borrower
or
any other guarantor of the Credit Party Obligations of the Borrower owing to
the
Lenders or such Hedging Agreement Provider (collectively, the “Other
Parties”)
or any
contractual, statutory or common law rights of reimbursement, contribution
or
indemnity from any Other Party which it may at any time otherwise have as a
result of this Guaranty until such time as the Credit Party Obligations shall
have been paid in full, no Credit Document or Secured Hedging Agreement remains
in effect and the Commitments have been terminated. Each of the Guarantors
hereby further agrees not to exercise any right to enforce any other remedy
which the Administrative Agent, the Lenders or any Hedging Agreement Provider
now has or may hereafter have against any Other Party, any endorser or any
other
guarantor of all or any part of the Credit Party Obligations of the Borrower
and
any benefit of, and any right to participate in, any security or collateral
given to or for the benefit of the Lenders and/or the Hedging Agreement
Providers to secure payment of the Credit Party Obligations of the Borrower
until such time as the Credit Party Obligations shall have been paid in full,
no
Credit Document or Secured Hedging Agreement remains in effect and the
Commitments have been terminated.
127
|
Section
10.8
|
Limitation
on Enforcement.
|
The
Lenders and the Hedging Agreement Providers agree that this Guaranty may be
enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or any such Hedging Agreement Provider
(only with respect to obligations under the applicable Secured Hedging
Agreement) and that no Lender or Hedging Agreement Provider shall have any
right
individually to seek to enforce or to enforce this Guaranty, it being understood
and agreed that such rights and remedies may be exercised by the Administrative
Agent for the benefit of the Lenders under the terms of this Credit Agreement
and for the benefit of any Hedging Agreement Provider under any Secured Hedging
Agreement. The Lenders and the Hedging Agreement Providers further agree that
this Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
|
Section
10.9
|
Confirmation
of Payment.
|
The
Administrative Agent and the Lenders will, upon request after payment of the
Credit Party Obligations under the Credit Documents which are the subject of
this Guaranty and termination of the Commitments relating thereto, confirm
to
the Borrower, the Guarantors or any other Person that the Credit Party
Obligations under the Credit Documents have been paid in full and the
Commitments relating thereto terminated, and this Guaranty released, subject
to
the provisions of Section 10.2.
128
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by its proper and duly authorized officers as of the
day
and year first above written.
|
BORROWER:
|
ORTHOFIX
HOLDINGS, INC.,
|
||
|
a
Delaware corporation
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Vice President and Secretary | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
GUARANTORS:
|
ORTHOFIX
INTERNATIONAL N.V.,
|
||
|
a
Netherlands Antilles corporation
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Cheif Financial Officer | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
COLGATE
MEDICAL LIMITED,
|
|||
|
a
company formed under the laws of England and Wales
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Director | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
VICTORY
MEDICAL LIMITED,
|
|||
|
a
company formed under the laws of England and Wales
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Director | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
ORTHOFIX
INC.,
|
|||
|
a
Minnesota corporation
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Chief Financial Officer, Vice President and Treasurer | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
BREG
INC.,
|
|||
|
a
California corporation
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Assistant Secretary | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
ORTHOFIX
US LLC,
|
|||
|
a
Delaware limited liability company
|
|||
|
By:
|
ORTHOFIX
UK LTD,
|
||
|
Sole
Member
|
|||
|
By:
|
/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Name:
|
▇▇▇▇▇▇ ▇▇▇▇ | ||
|
Title:
|
Secretary | ||
|
[Signature
Pages Continue]
|
|||
ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
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AMEI
TECHNOLOGIES INC.,
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a
Delaware corporation
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | ||
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Title:
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Treasurer and Assistant Secretary | ||
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[Signature
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ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
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NEOMEDICS,
INC., a New Jersey corporation
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | ||
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Title:
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Treasurer and Assistant Secretary | ||
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[Signature
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ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
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OSTEOGENICS
INC., a Delaware corporation
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | ||
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Title:
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Treasurer and Assistant Secretary | ||
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[Signature
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ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
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BLACKSTONE
MEDICAL, INC.,
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a
Massachusetts corporation
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | ||
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Title:
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Treasurer | ||
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[Signature
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ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
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SWIFTSURE
MEDICAL LIMITED,
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a
company formed under the laws of England and Wales
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | ||
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Title:
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Director | ||
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[Signature
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ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
ORTHOFIX
UK LTD,
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a
company formed under the laws of England and Wales
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By:
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/s/ ▇▇▇▇▇▇ ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇▇ ▇▇▇▇ | ||
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Title:
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Director
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[Signature
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ORTHOFIX
HOLDING, INC.
CREDIT
AGREEMENT
|
ADMINISTRATIVE
AGENT:
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WACHOVIA
BANK, NATIONAL ASSOCIATION,
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as
Administrative Agent for the Lenders and as a Lender
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By:
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/s/ ▇▇▇▇▇ Santa ▇▇▇▇ | ||
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Name:
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▇▇▇▇▇ Santa ▇▇▇▇ | ||
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Title:
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Director | ||