EXHIBIT 10.32
EXECUTION COPY
CREDIT AND SECURITY AGREEMENT
by and among
OPTION CARE, INC.("OPTION CARE"),
AND
THE DOMESTIC SUBSIDIARIES OF OPTION CARE PARTY HERETO,
AS BORROWERS,
THE LENDING INSTITUTIONS PARTY HERETO,
AS LENDERS,
▇.▇. ▇▇▇▇▇▇ BUSINESS CREDIT CORP., AS ADVISOR,
AND
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AND COLLATERAL AGENT AND ARRANGER,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS CO-AGENT
Dated as of March 29, 2002
CREDIT AND SECURITY AGREEMENT
CREDIT AND SECURITY AGREEMENT dated as of March 29, 2002 among OPTION
CARE, INC., a Delaware corporation ("OPTION CARE"), the domestic subsidiaries of
Option Care party hereto (the "Subsidiaries"), as joint and several borrowers,
the financial institutions identified on SCHEDULE 2.01(A) hereto (the "INITIAL
LENDERS"), and such other financial institutions as may from time to time become
parties hereto, as lenders, ▇.▇. ▇▇▇▇▇▇ BUSINESS CREDIT CORP., as Advisor,
JPMORGAN CHASE BANK, as administrative and collateral agent for the Lenders (in
such capacities, together with its successors in such capacities, the "AGENT"),
and LaSalle Bank National Association, as Co-Agent (in such capacity, the
"Co-Agent").
ARTICLE 1.
DEFINITIONS; ACCOUNTING TERMS
Section 1.01. DEFINITIONS. As used in this Agreement the following
terms have the following meanings (terms defined in the singular to have a
correlative meaning when used in the plural and VICE VERSA):
"ACCOUNT" means any account receivable or right of the Borrowers or
any of their Subsidiaries to payment for goods sold or leased or for services
rendered, regardless of how such right is evidenced and whether or not it has
been earned by performance, whether secured or unsecured, now existing or
hereafter arising, and the proceeds thereof.
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account.
"ACCOUNT DEBTOR NOTICE" means a notice to an Account Debtor
substantially in the form of EXHIBIT J hereto.
"ACQUISITION" means any transaction pursuant to which the Borrowers or
any of their Subsidiaries: (a) acquires equity securities (or warrants, options
or other rights to acquire such securities) of any corporation (other than the
Borrowers or any corporation which is then a Wholly-Owned Subsidiary of any
Borrower), pursuant to a solicitation of tenders therefor, or in one or more
negotiated block, market or other transactions not involving a tender offer, or
a combination of any of the foregoing; (b) makes any corporation a Subsidiary of
any Borrower, or causes any such corporation to be merged into any Borrower or
any Subsidiary, in any case pursuant to a merger, purchase of assets or any
reorganization providing for the delivery or issuance to the holders of such
corporation's then outstanding securities, in exchange for such securities, of
cash or securities of any Borrower or any Subsidiary, or a combination thereof;
or (c) purchases all or substantially all of the business or assets of any
corporation.
"ADJUSTED BASE RATE" means, for any day, an interest rate per annum
(rounded upwards, if necessary), to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day, and (b) the Federal Funds Rate in
effect on such day PLUS 1/2 of 1%. Any change in the Adjusted Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be
effective from and including the effective date of such change in the Prime Rate
or the Federal Funds Rate, respectively.
"ADJUSTED EURODOLLAR RATE" means, with respect to any Borrowing for
any Eurodollar Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the Eurodollar Rate for such
Eurodollar Interest Period multiplied by (b) the Statutory Reserve Rate.
"AFFILIATE" means any Person which directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under common Control
with, any Borrower.
"AGENT" has the meaning set forth in the preamble to this Agreement.
"AGREEMENT" means this Credit and Security Agreement, as amended or
supplemented from time to time. References to Articles, Sections, Exhibits,
Schedules and the like refer to the Articles, Sections, Exhibits, Schedules and
the like of this Agreement unless otherwise indicated.
"APPLICABLE COMMITMENT FEE RATE" means a rate of interest per year
(expressed in basis points), equal to:
(a) For the period from the date hereof through September 30, 2002,
twenty-five (25) basis points; and
(b) For each Fiscal Quarter thereafter, the Applicable Commitment
Fee Rate set forth below which corresponds to the Percent Utilization as of the
last day of the Prior Fiscal Quarter:
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APPLICABLE COMMITMENT FEE
PERCENT UTILIZATION RATE IN BASIS POINTS PER YEAR
--------------------------------------- -------------------------------------------
Less than 20% 45
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Equal to or greater than 20%
but less than 40% 37.5
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Equal to or greater than 40%
but less than 60% 30
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Equal to or greater than 60% 25
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Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default, the Applicable
Commitment Fee Rate shall equal forty-five (45) basis points.
"APPLICABLE MARGIN" means the Base Rate Margin in respect of each Base
Rate Loan and the Eurodollar Margin in respect of each Eurodollar Loan.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee and accepted by the Agent in
accordance with Section 12.05 and in substantially the form of EXHIBIT H hereto.
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"AUTHORIZATION LETTER" means the letter agreement executed by the
Borrowers in the form of EXHIBIT B hereto.
"AVAILABILITY" means, as of any date of determination thereof, the
amount by which (a) the lesser of (i) the Borrowing Base at such time and (ii)
the aggregate amount of the Revolving Credit Commitments at such time, exceeds
(b) the Total Exposure at such time.
"AVAILABLE FUNDS" means all deposits in the Collateral Account which
shall have been made by 2:00 p.m. on a Banking Day, or such later time in any
Banking Day as the Agent shall have expressly consented to.
"BANKING DAY" means any day on which commercial banks are not
authorized or are not required to be closed in
New York,
New York and whenever
such day relates to a Eurodollar Loan or notice with respect to any Eurodollar
Loan, a day on which dealings in Dollar deposits are also carried out in the
London interbank market.
"BASE RATE LOAN" means any Loan hereunder bearing interest at a rate
based upon the Adjusted Base Rate.
"BASE RATE MARGIN" means a rate of interest per year (expressed in
basis points) equal to:
(a) For the period from the date hereof through the first Banking Day
of the month following the date on which the Agent receives the Borrowing Base
Certificate required to be delivered by the Borrowers pursuant to Section
7.09(a)(ii) of this Agreement for the month ending April 30, 2002 zero (0) basis
points; and
(b) For each Base Rate Margin Period (as defined below) thereafter,
the Base Rate Margin set forth below which corresponds to the Availability as of
the commencement of such Base Rate Margin Period:
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BASE RATE MARGIN IN BASIS
AVAILABILITY POINTS PER YEAR
------------------------------------- -------------------------------------
Greater than or equal to $20,000,000 0
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Greater than or equal to $15,000,000 25
but less than $20,000,000
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Greater than or equal to $10,000,000 50
but less than $15,000,000
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Less than $10,000,000 75
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Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default and following a
written demand of the Agent to the Borrowers at the request of the Required
Lenders, interest shall accrue on all Loans at the Default Rate.
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"BASE RATE MARGIN PERIOD" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
Borrowing Base Certificate required to be delivered by the Borrowers pursuant to
Section 7.09(a)(ii) for the prior month and ending on the day immediately
preceding the commencement of the next Base Rate Margin Period.
"BORROWERS" means Option Care and each of its domestic Subsidiaries,
jointly and severally, together with (i) any Subsidiary of Option Care which,
upon the request of Option Care and upon the approval of the Agent and the
Required Lenders, becomes a co-borrower hereunder pursuant to such documentation
as the Agent shall reasonably request, and (ii) all of their respective
successors and assigns; and "BORROWER" means any one of the Borrowers.
"BORROWERS' AGENT" has the meaning set forth in Section 1.05 hereof.
"BORROWING BASE" means the sum in United States Dollars of the
following determined as of the latest Borrowing Base Certificate delivered to
the Agent:
(a) up to 85% of the aggregate amount of Eligible Accounts; plus
(b) the lesser of (i) up to 75% of the aggregate amount of
Eligible Unbilled Accounts and (ii) the Eligible Unbilled Cap Amount;
plus
(c) the lesser of (i) up to 50% of the cost of Eligible
Inventory and (ii) the Eligible Inventory Cap Amount; minus
(d) the aggregate amount of reserves established from time to
time by the Agent for Interest Rate Protection Obligations and Foreign
Exchange Obligations that are secured by the Collateral pursuant to
this Agreement or the other Facility Documents;
in each case as calculated by the Agent from time to time; PROVIDED, HOWEVER,
that the aggregate amount of the Borrowing Base attributable to accounts
receivable owing from Government Account Debtors shall not exceed (x)
$10,000,000 during the 365 day period from and after the Closing Date, (y)
$9,000,000 during the 365 day period from and after the first anniversary of the
Closing Date, and (z) $8,000,000 during the 365 day period from and after the
second anniversary of the Closing Date; and FURTHER PROVIDED that the Agent, in
its reasonable discretion, may on five (5) Banking Days prior written notice to
the Borrowers' Agent from time to time adjust the Borrowing Base by reducing the
percentages of Eligible Accounts, Eligible Unbilled Accounts, or Eligible
Inventory, by reducing the Eligible Unbilled Cap Amount or the Eligible
Inventory Cap Amount, or by setting up such reserves or other reductions in the
amount of the Borrowing Base as the Agent deems appropriate in its reasonable
credit judgment from time to time.
"BORROWING BASE CERTIFICATE" means and includes the Monthly Borrowing
Base Certificate delivered by the Borrowers' Agent to the Agent in substantially
the form of EXHIBIT C.
"CAPITAL EXPENDITURES" means, for any period, the sum for the
Borrowers (determined on a consolidated basis without duplication in accordance
with GAAP) of the aggregate amount of expenditures made or liabilities incurred
during such period (including the aggregate amount of
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Capital Lease Obligations incurred during such period) to acquire or construct
fixed assets, plant and equipment (including renewals, improvements and
replacements, but excluding repairs) computed in accordance with GAAP; PROVIDED
that such term shall not include any such expenditures in connection with any
replacement or repair of Property affected by a Casualty Event.
"CAPITALIZED LEASE" means any lease, the obligation for Rentals with
respect to which, is required to be capitalized on a consolidated or combined
balance sheet of the lessee and its subsidiaries or related entities in
accordance with GAAP.
"CAPITALIZED RENTALS" of any Person shall mean as of the date of any
determination thereof the amount at which the aggregate present value of future
Rentals due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a consolidated or
combined balance sheet of such Person in accordance with GAAP.
"CASH EQUIVALENTS" means any of the following, to the extent owned by
the Borrowers or any of their Subsidiaries free and clear of all Liens other
than Liens created under the Security Documents: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States having a maturity of not
greater than 360 days from the date of issuance thereof: (b) insured
certificates of deposit of, or time deposits having a maturity of not greater
than 360 days from the date of issuance thereof with, any commercial bank that
is a Lender or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c), is organized
under the laws of the United States or any State thereof and has combined
capital and surplus of at least $1 billion; or (c) commercial paper having a
maturity of not greater than 180 days from the date of issuance thereof in an
aggregate amount of no more than $4,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any State of the United
States and rated at least "Prime-1" (or the then equivalent grade) by ▇▇▇▇▇'▇
Investors Service, Inc. or "A-1" (or the then equivalent grade) by Standard &
Poor's Ratings Group.
"CASUALTY EVENT" means with respect to any property or asset of any
person, any loss of or damage to, or any condemnation or other taking of, such
property or asset for which such person receives insurance proceeds, or proceeds
of a condemnation award or other compensation.
"CLOSING DATE" means the date this Agreement has been executed by the
Borrowers, the Guarantors, the Initial Lenders and the Agent.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means, collectively, all of the Property (including
capital stock and other beneficial interests) in which Liens are purported to be
granted pursuant to Article 4 hereof as security for all Obligations of the
Borrowers and the Guarantors hereunder.
"COLLATERAL ACCOUNT" means, collectively, any account of the Borrowers
maintained at the Agent or at another financial institution reasonably
acceptable to the Agent as an account into which all proceeds of Collateral
shall be deposited pursuant to Article 4 hereof, as modified and
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amended from time to time, and pursuant to any Lock Box Agreement and Controlled
Account Agreement which the Borrowers or any of their Subsidiaries may enter
into with the Agent or at another financial institution reasonably acceptable to
the Agent.
"COLLATERAL AVAILABILITY" means, as any date of determination thereof,
the amount by which (a) the Borrowing Base at such time exceeds (b) the Total
Exposure at such time.
"CONCENTRATION PERCENTAGE" means with respect to any single ▇▇▇▇▇ or
HMO at any time, the percentage determined by dividing (a) the aggregate
receivables owing from such ▇▇▇▇▇ or HMO at such time by (b) the total aggregate
receivables owing from all Account Debtors at such time.
"CONTROL" and "CONTROLS" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of Voting Stock, by contract or holding
or owning the power to vote, or possessing the power to direct any right to
vote, or as an officer, director, employee or management consultant or other
arrangement where there is the power to direct or cause the direction of the
management and policies of a Person, and "CONTROLLED" means to be under the
Control of another Person.
"CONTROLLED ACCOUNT" means any deposit or other bank account
maintained by any of the Borrowers or any of their Subsidiaries with (i) the
Agent, or (ii) any financial institution other than the Agent that is the
subject of a Control Agreement in favor of the Agent.
"CONTROLLED ACCOUNT AGREEMENT" means with respect to any deposit or
other bank account maintained by any of the Borrowers or any of their
Subsidiaries with any financial institution other than the Agent, an agreement
among such Borrower or such Subsidiary, the depository institution at which such
account is maintained and the Agent in form and substance satisfactory to the
Agent that provides for the financial institution at which such account is
maintained to comply with instructions originated by the Agent with respect to
the funds from time to time on deposit in such account without further consent
of such Borrower or such Subsidiary; provided that such Controlled Account
Agreements may provide for the Borrowers to have access to the funds in such
accounts so long as (i) there are no Revolving Credit Loans or Letters of Credit
outstanding, and (ii) the Agent has not delivered a written notice to such
financial institution instructing such financial institution to no longer permit
the Borrowers to have access to the funds in such accounts.
"CONTROLLED DISBURSEMENTS ACCOUNT" means, collectively, the following
accounts: Account # ▇▇▇▇▇▇▇▇ maintained by the Borrowers at The Northern Trust
Company and any subsequent account of the Borrowers maintained at The Northern
Trust Company, at another financial institution acceptable to the Agent, or at
the Agent as a zero balance, cash management account pursuant to and under
controlled disbursement service agreements between the Borrowers and the Agent
or such other financial institution, and through which all disbursements by the
Borrowers and any designated Subsidiaries are made and settled on a daily basis
with no uninvested balance remaining overnight.
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"COPYRIGHTS" means all copyrights, whether statutory or common law,
owned by or assigned to the Borrowers, and all exclusive and nonexclusive
licenses to the Borrowers from third parties or rights to use copyrights owned
by such third parties, including, without limitation, the registrations,
applications and licenses listed on SCHEDULE 6.11 hereto, along with any and all
(a) renewals and extensions thereof, (b) income, royalties, damages, claims and
payments now and hereafter due and/or payable with respect thereto, including,
without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to ▇▇▇ for past, present and future
infringements thereof, and (d) foreign copyrights and any other rights
corresponding thereto throughout the world.
"DEFAULT" means any event, condition or act which, with the giving of
notice or lapse of time, or both, would become an Event of Default.
"DEFAULT RATE" means for any Loan a rate per annum equal to the rate
which is then in effect for such Loan plus two percent (2%).
"DESIGNATED FINANCIAL OFFICERS" has the meaning set forth in
Section 1.05 hereof.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"EARN OUT OBLIGATIONS" means the obligations of the Borrowers to make
payments in cash or cash equivalents in respect of any Acquisition after the
consummation of such Acquisition to any Person(s) who previously owned or
controlled the assets or capital stock of the business acquired by the Borrowers
pursuant to such Acquisition.
"EBITDA" means for any fiscal period and in respect of any Person, the
sum of (a) the net income of such Person for such period computed in accordance
with GAAP, PLUS (b) the interest expense, of such Person for such period as
reported on such Person's financial statements for such period, PLUS (c) the
income tax expense of such Person for such period as reported on such Person's
financial statements for such period, PLUS (d) the amount reported on the
financial statements of such Person as the depreciation of the assets of such
Person for such period computed in accordance with GAAP, PLUS (e) the amount
reported on the financial statements of such Person as the amortization of
intangibles assets of such Person for such period computed in accordance with
GAAP, and PLUS (f) all cash and non-cash extraordinary or non-operating expenses
and losses of such Person for such period computed in accordance with GAAP,
MINUS (g) all cash and non-cash extraordinary or non-operating income and gains
of such Person for such period, in each case as such item is used in the
computation of such Person's net income for such period.
"EFFECTIVE DATE" means the date on which all conditions under
Article 5 shall be fully satisfied.
"ELIGIBLE ACCOUNTS" means Accounts owing to any Borrower, now existing
or hereafter arising, each of which Accounts met the following specifications at
the time it came into existence and continues to meet the same until it is
collected in full:
(a) An invoice (in form and substance satisfactory to the
Agent) with respect to such Account has been sent to the applicable Account
Debtor and bears an invoice date
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contemporaneous with or later than the date of the sale of goods or rendering of
services giving rise to such invoice;
(b) The Account is due and payable in full, is not subject to
any ▇▇▇▇ and hold arrangement, and not more than 150 days have elapsed since the
date of the sale of goods or rendering of services giving rise to such Account;
PROVIDED, HOWEVER, that the aggregate amount of the Borrowing Base attributable
to Accounts for which more than 120 days but not more than 150 days have elapsed
since the date of the sale of goods or rendering of services giving rise to such
Accounts shall not exceed $5,000,000;
(c) The Account arose from the provision of goods (other than
durable medical equipment) authorized by a physician's prescription, the
provision of durable medical equipment, or the performance of services by any
Borrower; such services or goods have been performed or provided; the Account is
evidenced by such invoices, shipping documents or other instruments ordinarily
used in the trade as shall be reasonably satisfactory to the Agent; no Borrower
has been informed by the Account Debtor from whom the Account is due that such
provision of goods or services was not medically necessary (where the applicable
contract or applicable law provides that payment for such goods or services may
or shall be denied on grounds that such goods or services were not medically
necessary); and no other rejection or dispute has occurred;
(d) The Account debtor is a resident of the United States;
(e) The Account is not subject to any assignment, claim, lien,
or security interest, except in favor of the Agent and the Lenders;
(f) The Account is a valid and legally enforceable obligation of
the Account Debtor and is not subject to any claim for credit, defense, offset,
chargeback, counterclaim or adjustment by the Account debtor, other than any
discount allowed for prompt payment;
(g) The Account arose in the ordinary course of business of the
Borrowers and no notice of the bankruptcy, insolvency, failure, or suspension or
termination of business of the Account debtor has been received by the
Borrowers;
(h) The Account debtor is not an Affiliate of the Borrowers or
any of their Subsidiaries or a supplier (or an Affiliate of a Supplier) of goods
or services to the Borrowers or any of their Subsidiaries;
(i) The Account otherwise conforms to all representations,
warranties and other provisions of this Agreement relating to Accounts;
(j) The Account is not payable solely by the patient (or by a
natural person that is responsible for paying such amounts on behalf of such
patient) that received the goods or services giving rise to such Account;
(k) The Account does not represent a royalty or other right to
receive a franchise payment from any franchisee of any Borrower;
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(l) The Account is not evidenced by a promissory note, warrant
or other instrument or chattel paper;
(m) The Account is subject to an enforceable, perfected, first
priority Lien in favor of the Agent;
(n) If the Account is due from an ▇▇▇▇▇ or HMO, such ▇▇▇▇▇ or
HMO has received an Account Debtor Notice from the Borrowers with respect to the
Agent's security interest in such Account;
(o) The Account does not include fees charged for services or
goods that exceed limitations imposed by applicable law, or regulation;
(p) The Account is not due under a healthcare capitation
contract or similar arrangement under which any Borrower receives payments (i)
in advance of providing the applicable goods and services or (ii) without regard
to whether a Borrower provides any goods or services, PROVIDED that if a
capitation contract or similar arrangement includes provisions for a Borrower to
be paid on a "fee for service" basis, then the related Accounts, to the extent
they represent the right to payment on such "fee for service" basis, shall not
be excluded as Eligible Accounts solely pursuant to this clause (p);
(q) The Account does not represent an amount due in respect of a
"settlement" with respect to Medicare or Medicaid relating to the filing of any
"cost report" by any Borrower;
(r) The Account is not due from an Account Debtor for which more
than 50% (subject to periodic adjustment by the Agent) of the total Accounts due
from such Account Debtor fail to meet the eligibility criteria set forth above:
PROVIDED, that (i) if the aggregate amount of Accounts due from any Account
Debtor exceeds 25% of all Accounts of the Borrowers at such time, all Accounts
due from such Account Debtor shall be excluded from Eligible Accounts if more
than 35% of the Accounts due from such Account Debtor do not meet the above
eligibility criteria set forth above; and (ii) until such time as the Borrowers
demonstrate to the reasonable satisfaction of the Agent that the Borrowers'
information systems are capable of accurately reporting the aggregate amount of
Accounts due at any time from a single Account Debtor, the aggregate amount of
Accounts excluded from Eligible Accounts pursuant to this clause (r) shall be
estimated by the Borrowers in good faith based upon information available to the
Borrowers and shall be verified and adjusted periodically by the Agent based
upon the results of field audits and other information available to the Agent;
and
(s) The Agent in its reasonable discretion has not deemed the
credit worthiness of the Account or Account debtor unsatisfactory.
For purposes of determining the Borrowing Base at any time:
(x) the aggregate amount of Eligible Accounts shall be reduced by
the aggregate amount of contractual allowances as estimated by the Borrowers in
good faith from time to time and verified and adjusted periodically by the Agent
based upon the results of field audits and other information available to the
Agent; and
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(y) there shall be excluded from Eligible Accounts, the portion, if
any, of the aggregate amount of Accounts owing from any single ▇▇▇▇▇ or HMO that
exceeds the Concentration Percentage applicable to the IFSR Rating of such ▇▇▇▇▇
or HMO as set forth in the following table:
APPLICABLE IFSR RATING CONCENTRATION PERCENTAGE
A2 or better 35%
A3 30%
Baa1 25%
Baa2 20%
Baa3 15%
PROVIDED, that until such time as the Borrowers demonstrate to the reasonable
satisfaction of the Agent that the Borrowers' information systems are capable of
accurately reporting the aggregate amount of Accounts due at any time from a
single Account Debtor, the aggregate amount of Accounts excluded from Eligible
Accounts pursuant to this clause (y) shall be estimated by the Borrowers in good
faith based upon information available to the Borrowers and shall be verified
and adjusted periodically by the Agent based upon the results of field audits
and other information available to the Agent.
"ELIGIBLE ASSIGNEE" means: (a) a Lender; (b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000; (d) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$1,000,000,000; (e) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of $1,000,000,000, so long
as such bank is acting through a branch or agency located in the United States;
(f) the central bank of any country that is a member of the OECD; (g) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $1,000,000,000; and (h) any
other Person approved by the Agent and the Borrowers, such approval not to be
unreasonably withheld or delayed; provided that no such approval of the
Borrowers shall be required after the occurrence and during the continuance of a
Default); and PROVIDED FURTHER, that none of the Borrowers or any of their
Affiliates shall qualify as an Eligible Assignee under this definition.
"ELIGIBLE INVENTORY" means finished goods inventory of the Borrowers,
valued at the most recent purchase price paid by the Borrowers for such item of
inventory, excluding:
(a) slow moving, obsolete or unmerchantable inventory, as
reasonably determined by the Agent;
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(b) inventory located outside of the continental United States;
(c) inventory that is not located at premises owned or leased by
a Borrower (provided that if the aggregate amount of inventory located at any
location leased by a Borrower exceeds $100,000, unless the Agent has received a
waiver from the landlord of such location in form and substance reasonably
acceptable to the Agent, the Agent shall have the right in its discretion to (x)
exclude all or any portion of the inventory located at such location from
Eligible Inventory and/or (y) establish reserves under the Borrowing Base in
respect of such inventory);
(d) work in process, spare parts, packaging and shipping
materials, supplies, returned or defective inventory;
(e) inventory that is subject to any Lien, except Liens in favor
of the Agent;
(f) inventory that is not subject to an enforceable, perfected,
first priority Lien in favor of the Agent;
(g) goods held by any Borrower on consignment from another
Person; or
(f) inventory that the Agent, in its reasonable discretion, has
not deemed to be otherwise ineligible.
"ELIGIBLE INVENTORY CAP AMOUNT" means $5,000,000.
"ELIGIBLE UNBILLED ACCOUNTS" means amounts owing to any Borrower for
services rendered which have not been billed but which will be billed within 30
days from the date of the sale of goods or rendering of services giving rise to
such account and, when billed, will constitute Eligible Accounts; provided that
until such time as the Borrowers demonstrate to the reasonable satisfaction of
the Agent that the Borrowers' information systems are capable of accurately
reporting as of any given date the aggregate amount owing for unbilled services
which has not been billed within 30 days from the date of the sale of goods or
rendering of services, the aggregate amounts owing for unbilled goods or
services excluded from Eligible Unbilled Accounts shall be estimated by the
Borrowers in good faith based upon information available to the Borrowers and
shall be verified and adjusted periodically by the Agent based upon the results
of field audits and other information available to the Agent.
"ELIGIBLE UNBILLED CAP AMOUNT" means $5,000,000.
"ENVIRONMENTAL LAW" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601-9657, as
amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.
99-499, 100 Stat. 1613 (October 17, 1986), the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6991-6991i, as amended by the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613
(October 17, 1986), as the same may be amended from time to time, and any other
presently existing or hereafter enacted or decided federal, state or local
statutory or common laws relating to pollution or protection of the environment,
including without limitation, any common law of nuisance or trespass, and any
law or regulation relating to emissions,
11
discharges, releases or threatened release of pollutants, contaminants or
chemicals or industrial, toxic or hazardous substances or wastes into the
environment (including without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or chemicals, or industrial,
toxic or hazardous substances or wastes.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with any Borrower.
"EURODOLLAR LOAN" means any Loan Tranche when and to the extent the
interest rate therefor is determined on the basis of the "Eurodollar Rate."
"EURODOLLAR INTEREST PAYMENT DATE" means with respect to any
Eurodollar Loan the last day of the Eurodollar Interest Period applicable to
such Eurodollar Loan.
"EURODOLLAR INTEREST PERIOD" means the period of time commencing on
the day a Eurodollar Rate is made applicable to a Loan Tranche and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Borrowers may select pursuant to Sections 2.07
and 2.08, provided that each such Eurodollar Interest Period which commences on
the last Banking Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Banking Day of the appropriate calendar month.
"EURODOLLAR MARGIN" means a rate of interest per year (expressed in
basis points) equal to:
(a) For the period from the date hereof through the first Banking Day
of the month following the date on which the Agent receives the Borrowing Base
Certificate required to be delivered by the Borrowers pursuant to
Section 7.09(a)(ii) of this Agreement and for the month ending April 30, 2002,
200 basis points; and
(b) For each Eurodollar Margin Period (as defined below) thereafter,
the Eurodollar Margin set forth below which corresponds to the Availability as
of the commencement of such Eurodollar Margin Period:
12
----------------------------------------- -----------------------------------------
EURODOLLAR MARGIN IN
AVAILABILITY BASIS POINTS PER YEAR
----------------------------------------- -----------------------------------------
Greater than or equal to $20,000,000 200
----------------------------------------- -----------------------------------------
Greater than or equal to $15,000,000 225
but less than $20,000,000
----------------------------------------- -----------------------------------------
Greater than or equal to $10,000,000 250
but less than $15,000,000
----------------------------------------- -----------------------------------------
Less than $10,000,000 275
----------------------------------------- -----------------------------------------
To the extent that a Eurodollar Margin Period commences during the
pendency of a Eurodollar Interest Period for an existing Eurodollar Loan, the
Eurodollar Margin shall remain the same for the remainder of the Eurodollar
Interest Period for such existing Eurodollar Loan. Anything in the Agreement to
the contrary notwithstanding, after the occurrence and during the continuance of
any Event of Default and following a written demand of the Agent to the
Borrowers at the request of the Required Lenders, interest shall accrue on all
Loans at the Default Rate.
"EURODOLLAR MARGIN PERIOD" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
Borrowing Base Certificate required to be delivered by the Borrowers pursuant to
Section 7.09(a)(ii) for the prior month, and ending on the day immediately
preceding the commencement of the next Eurodollar Margin Period.
"EURODOLLAR RATE" means, with respect to any Eurodollar Loan for any
Eurodollar Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period, as the rate for dollar deposits
with a maturity comparable to such Eurodollar Interest Period. In the event that
such rate is not available at such time for any reason, then the "EURODOLLAR
RATE" with respect to such Eurodollar Loan for such Eurodollar Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Eurodollar Interest Period are offered by the Agent's
principal London office in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period.
"EVENT OF DEFAULT" has the meaning given such term in Section 10.01.
"EXCLUDED SUBSIDIARIES" means Option Care Foundation, Inc., Option
Care Home Hospice Foundation, Inc., Option First, LLC, Outpatient Medical
Network, Inc., Option Care Home Health, Inc., and Option Care Capital Services,
Inc.
13
"FACILITY DOCUMENTS" means this
Credit and Security Agreement, the
Notes, the Authorization Letter, all Letter of Credit documents, all Security
Documents, all foreign exchange contracts and Interest Rate Protection
Agreements between any of the Borrowers or Guarantors and the Agent or any of
the Lenders, and any other agreement between any of the Borrowers or Guarantors
and the Agent or the Lenders which by its terms provides that it is to be deemed
a Facility Document hereunder.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (expressed
on a 360 day basis of calculation) equal to the weighted average of the rates on
overnight federal funds transactions as published by the Federal Reserve Bank of
New York for such day (or for any day that is not a Banking Day, for the
immediately preceding Banking Day).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to Article 4 hereof or any Security Document,
that such Lien is the most senior Lien (other than Permitted Liens to the extent
not perfected by filing of any UCC financing statements) to which such
Collateral is subject.
"FISCAL MONTH" means each fiscal month of the Borrowers.
"FISCAL QUARTER" means each of the fiscal three month periods
commencing on the first day of the Fiscal Year and on the first day of each
subsequent fiscal three month period.
"FISCAL YEAR" means the fiscal year period of the Borrowers, each of
which shall end on the 31st day of December of each year. "FY" followed by a
year means the Fiscal Year ending in that year.
"FIXED CHARGE COVERAGE RATIO" means, as of any date, the ratio of (a)
(i) EBITDA of the Borrowers and their Subsidiaries for the period of four Fiscal
Quarters most recently ended prior to such date (determined on a consolidated
basis without duplication in accordance with GAAP) MINUS (ii) the aggregate
amount paid by the Borrowers and their Subsidiaries in cash in respect of the
current portion of all income taxes for such period MINUS (iii) the aggregate
amount of all Non-Financed Capital Expenditures of the Borrower and their
Subsidiaries during such period, to (b) the sum for the Borrowers and their
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of (i) the aggregate amount of Interest Expense for such
period, (ii) the aggregate amount of regularly scheduled payments of principal
in respect of Indebtedness for borrowed money (including the principal component
of any payments in respect of Capital Lease Obligations) paid or required to be
paid during such period, and (iii) the aggregate amount of cash payments in
respect of Earn Out Obligations paid or required to be paid during such period.
"FOREIGN EXCHANGE OBLIGATIONS" means all obligations of the Borrowers
or their Subsidiaries pursuant to and under any and all foreign exchange
contracts and agreements to which any Borrower or any Subsidiary is a party as
of any date of computation as if such foreign exchange agreement were to be
terminated or declared to be in default on such date (after giving effect to any
netting provisions).
"FUNDED INDEBTEDNESS" means, in respect of any Person, (a) all
Indebtedness of such Person for borrowed money or which has been incurred in
connection with the acquisition of
14
assets (excluding leases defined as "operating leases" under GAAP), (b) all
payments in respect of item (a) above that were required to be made within one
year prior to the date of any determination of Funded Indebtedness, if the
obligation to make such payments shall constitute a current liability of the
obligor under GAAP, (c) all Capitalized Rentals of such Person, and (d) any and
all other interest-bearing Indebtedness for borrowed money (other than undrawn
Letters of Credit).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 6.05 (except for changes concurred in by the Borrowers' independent
public accountants).
"GOVERNMENT ACCOUNT DEBTORS" means the United States of America, any
state or political subdivision thereof, any agency or instrumentality thereof,
or any fiscal intermediary thereof (including any ▇▇▇▇▇, HMO or other person
acting as a Medicare or Medicaid intermediary) that is obligated to make
payments to the Borrower under Medicare, Medicaid, the Civilian Health and
Medical Program of the Uniformed Services, the Civilian Health and Medical
Program of Veterans Affairs, or any other program established under federal or
state law that provides for payments for health care goods or services to be
made to providers thereof.
"GOVERNMENT OFFSET" means any amount determined by a Government
Account Debtor, or any agent or governmental agency acting on behalf of a
Government Account Debtor or governmental agency, to constitute an overpayment
made to any Borrower with respect to an Account and that is to be paid to such
Government Account Debtor by any Borrower or is to be offset against amounts
then due to any Borrower from such Government Account Debtor, including any
amounts determined by the HCFA, or any agent acting on behalf thereof.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government and the National Association of Insurance Commissioners.
"GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property or assets constituting security therefor, (b) to advance or supply
funds (i) for the purchase or payment of such Indebtedness or obligation, or
(ii) to maintain working capital or other balance sheet condition or otherwise
to advance or make available funds for the purchase or payment of such
Indebtedness or obligation, (c) to lease property or to purchase securities or
other property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to make
payment of the Indebtedness or obligation, or (d) otherwise to assure the owner
of the Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
15
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"GUARANTORS" means any direct or indirect Subsidiary of Option Care
(other than the Excluded Subsidiaries) who is not a Borrower hereunder and who
from time to time agrees to guaranty the obligations of the Borrowers hereunder
by executing and delivering to the Agent a Loan Guaranty, together with all of
their successors and assigns.
"HAZARDOUS MATERIALS" means any contaminants, hazardous substances,
regulated substances, or hazardous wastes which may be the subject of liability
pursuant to any Environmental Law.
"HCFA" means Health Care Financing Administration or any successor
thereto.
"HEALTH CARE LAWS" means any and all federal, state and local laws and
regulations governing the licensure, certification, good standing, accreditation
and approval of the provision of health care goods and services provided by any
Borrower or any Subsidiary, including but not limited to laws and regulations
relating to licensure of operation, certificates of need, certificates of
operations, insurance, fraud and abuse, kickbacks, false claims, physician
self-referral arrangements, Medicaid, Medicare, the Civilian Health and Medical
Program of the Uniformed Services, the Civilian Health and Medical Program of
Veterans Affairs, the federal Food, Drug & Cosmetic Act, and the rules and
regulations promulgated by the Food and Drug Administration and the HCFA.
"HMO" means a health maintenance organization that is an Account
Debtor of any Borrower.
"IFSR RATING" means with respect to any ▇▇▇▇▇ or HMO, the Insurance
Financial Strength Rating assigned to such ▇▇▇▇▇ or HMO by Moodys Investor
Service (or comparable nationally accredited rating agency).
"INDEBTEDNESS" of any Person means and includes all obligations of
such Person which in accordance with GAAP shall be classified upon a balance
sheet of such Person as liabilities of such Person, and in any event shall
include all (a) obligations of such Person for borrowed money or which have been
incurred in connection with the acquisition of property or assets, (b)
obligations secured by any Lien upon property or assets owned by such Person,
even though such Person has not assumed or become liable for the payment of such
obligations, (c) obligations created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such
Person, notwithstanding the fact that the rights and remedies of the seller,
lender or lessor under such agreement in the event of default are limited to
repossession or sale of property, (d) Capitalized Rentals, (e) Guaranties of
obligations of others of the character referred to in this definition, (f) Earn
Out Obligations, (g) Interest Rate Protection Obligations, and (h) Foreign
Exchange Obligations.
"▇▇▇▇▇." means an insurance company which is an Account Debtor of any
Borrower.
16
"INTEREST EXPENSE" means, for any period, the sum, without
duplication, for the Borrowers (determined on a consolidated basis without
duplication in accordance with GAAP), of the following: (a) all interest in
respect of Indebtedness paid in cash during such period, but excluding
capitalized debt acquisition costs (including capitalized fees and expenses
related to this Agreement) PLUS (b) the net amounts paid (or minus the net
amounts received) in cash in respect of Foreign Exchange Obligations or Interest
Rate Protection Agreements during such period excluding reimbursement of legal
fees and other similar transaction costs and excluding payments required by
reason of the early termination of Foreign Exchange Obligations or Interest Rate
Protection Agreements in effect on the date hereof PLUS (c) all fees, including
letter of credit fees and expenses, (but excluding reimbursement of legal fees)
paid in cash in pursuant to this Agreement during such period.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate cap,
swap, collar or other, similar protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement to which any Borrower or
any Subsidiary is a party or for which any Borrower is liable.
"INTEREST RATE PROTECTION OBLIGATION" means obligations of the
Borrowers and their Subsidiaries pursuant to and under any and all Interest Rate
Protection Agreements to which any Borrower or any Subsidiary is a party as of
any date of computation as if such Interest Rate Protection Agreement were to be
terminated or declared to be in default on such date (after giving effect to any
netting provisions).
"IP COLLATERAL" means, collectively, the Copyrights, Patents,
Trademarks and other Collateral relating to intellectual property rights of the
Borrowers, the Guarantors or any Security Document Parties under Article 4
hereof and the Security Documents.
"JPMORGAN CHASE OFFICE" means the office of the Agent at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇-▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇.
"LANDLORD'S WAIVER AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in form approved by the Agent in its sole discretion.
"LEASEHOLD PROPERTY" means any leasehold interest of any Borrower as
lessee under any lease of real property.
"LENDERS" means the Initial Lenders and each Person, if any, that
shall become a Lender hereunder pursuant to Section 13.05 other than any Person
that ceases to be a party hereto pursuant to an Assignment and Acceptance.
"LENDING OFFICE" means, for each Lender and for each type of Loan, the
lending office of such Lender (or of an Affiliate of such Lender) designated by
such Lender on the signature pages hereto, as the lending office of such Lender
for such type of Loan, or such other office of such Lender (or of an Affiliate
of such Lender) as such Lender may from time to time specify to the Agent and
the Borrowers as the office by which such Lender's Loans of such type are to be
made and maintained.
17
"LETTERS OF CREDIT" means any letters of credit issued from time to
time by the Agent for any Borrower as the account party.
"LETTER OF CREDIT EXPOSURE" means the maximum amount available to be
drawn under all outstanding Letters of Credit (converted to U.S. Dollars based
on the exchange rate in effect at the time the Letter of Credit Exposure is
determined).
"LETTER OF CREDIT SUBLIMIT" means $5,000,000.
"LIEN" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Borrowers and their Subsidiaries shall be deemed to be the owner
of any property which they have acquired or hold subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"LOAN GUARANTIES" means any future Guaranties executed and delivered
to the Agent by any Person, pursuant to which such Person guaranties all or any
part of the debts, liabilities and obligations of the Borrowers under the
Facility Documents, and all modifications and amendments thereto.
"LOAN TRANCHE" means any portion of the Loans outstanding under the
Notes as Base Rate Loans or any portion of the Loans outstanding under the Notes
as a Eurodollar Loan having a particular Eurodollar Interest Period. Each
Eurodollar Loan outstanding under the Notes having a different Eurodollar
Interest Period shall constitute a separate Loan Tranche, and all Base Rate
Revolving Credit Loans shall constitute a single Loan Tranche. Although there
will be separate Notes issued to each Lender, all Notes taken together shall
constitute a single Loan Tranche in respect of each corresponding Loan
outstanding under all Notes.
"LOANS" means and includes the Revolving Credit Loans and the
Reimbursement Obligations under Section 2.01(c); and "LOAN" means any of the
Loans.
"LOCK BOX" means, a post office box established by the Agent or such
other financial institutions as shall be acceptable to the Agent pursuant to a
Lock Box Agreement with the Borrowers or their Subsidiaries into which Account
Debtors of the Borrowers are directed to remit payments.
"LOCK BOX AGREEMENT" means an agreement pursuant to which the Agent or
another financial institution acceptable to the Agent maintains a post office
box into which customers of the Borrowers and certain of their Subsidiaries
remit payments of Accounts, and which payments are deposited into a Controlled
Account Account.
18
"MATERIAL ADVERSE EFFECT" means: (a) a material adverse effect on the
business, operations or condition (financial or otherwise) of the Borrowers and
their Subsidiaries taken as a whole; (b) a material adverse effect on the
ability of the Borrowers or any Guarantor to perform or comply with any of the
terms and conditions contained herein or in any other Facility Document; or (c)
a material adverse effect on the legality, validity, binding effect,
enforceability or admissibility into evidence of any Facility Document, or the
ability of the Agent or the Lenders to enforce any rights or remedies under or
in connection with any Facility Document.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by the Agent to be of material value as Collateral or of material
importance to the operations of the Borrowers or their Subsidiaries.
"MAXIMUM FACILITY AMOUNT" means $60,000,000.
"MATERIAL INDEBTEDNESS" means (i) Indebtedness (other than the Loans
or Letters of Credit), or (ii) obligations in respect of one or more Interest
Rate Protection Agreements, in the case of (i) and (ii) of any one or more of
the Borrowers or their Subsidiaries in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Foreign Exchange
Obligation or Interest Rate Protection Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that such
Person would be required to pay if such Foreign Exchange Obligation or Interest
Rate Protection Agreement were terminated at such time.
"MEDICAID" means the medical assistance program established by Title
XIX of the Social Security Act.
"MEDICARE" means the health insurance program established by Title
XVIII of the Social Security Act.
"MULTIEMPLOYER PLAN" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by any Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"NET CASH PAYMENTS" means:
(a) with respect to any Casualty Event, the aggregate amount
of proceeds of insurance, condemnation awards and other compensation received by
the Borrowers or any of their Subsidiaries in respect of such Casualty Event net
of (A) reasonable expenses incurred by the Borrowers or any of their
Subsidiaries in connection therewith and (B) contractually required repayments
of Indebtedness to the extent secured by a Lien on such property and any income
and transfer taxes payable by the Borrowers or any of their Subsidiaries in
respect of such Casualty Event;
(b) with respect to any sale or other disposition of assets,
the aggregate amount of all cash payments received by the Borrowers or any of
their Subsidiaries directly or indirectly in connection with such sale or other
disposition, whether at the time of such sale or disposition or thereafter under
deferred payment arrangements, including all cash payments
19
received in respect of investments entered into or received in connection with
any such sale or other disposition of assets; provided that
(i) Net Cash Payments shall be net of (A) the amount of any
legal, title, transfer and recording tax expenses, commissions
and other fees and expenses payable by the Borrowers or any of
their Subsidiaries in connection with such sale or other
disposition and (B) any federal, state and local income or other
taxes estimated to be payable by the Borrowers or any of their
Subsidiaries as a result of such sale or other disposition, but
only to the extent that such estimated taxes are in fact paid to
the relevant federal, state or local governmental authority
within twelve months of the date of such sale or other
disposition; and
(ii) Net Cash Payments shall be net of any repayments by the
Borrowers or any of their Subsidiaries of Indebtedness to the
extent that (I) such Indebtedness is secured by a Lien on the
property that is the subject of such sale or other disposition
and (II) the transferee of (or holder of a Lien on) such property
requires that such Indebtedness be repaid as a condition to the
purchase of such property; and
(c) with respect to any sale of debt or equity securities or
any incurrence of Indebtedness, the aggregate amount of all cash proceeds
received by the Borrowers or any of their Subsidiaries therefrom less all legal,
underwriting, and similar fees and expenses incurred in connection therewith.
"NON-FINANCED CAPITAL EXPENDITURES" means Capital Expenditures paid in
cash and not financed with Indebtedness for borrowed money; PROVIDED that
Capital Expenditures financed with the proceeds of Revolving Credit Loans shall
be deemed to constitute "Non-Financed Capital Expenditures" for purposes of this
Agreement.
"NOTES" means the notes evidencing the Loans hereunder; and "NOTE"
means any one of the Notes.
"OBLIGATIONS" means all obligations of the Borrowers to the Lenders
and the Agent under this Agreement or any of the other Facility Documents,
including, without limitation, all indebtedness evidenced by the Notes, all
obligations under or in respect of the Letters of Credit and all Reimbursement
Obligations, and all Foreign Exchange Obligations and Interest Rate Protection
Obligations of the Borrowers to the Lenders or the Agent, together with all
accrued and unpaid interest, fees, expenses and charges payable by Borrowers or
the Guarantors hereunder or under any of the other Facility Documents.
"OECD" means the Organization for Economic Cooperation and
Development.
"OPTION CARE FRANCHISEE" means a Person that is not an Affiliate of
any Borrower that operates a business and sells goods or renders services in
accordance with a franchise agreement between Option Care or one of its
Subsidiaries and such Person.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
20
"PATENTS" means all patents issued or assigned to and all patent
applications made by the Borrowers and, to the extent that the grant of a
security interest does not cause a breach or termination thereof, all exclusive
and nonexclusive licenses to the Borrowers from third parties or rights to use
patents owned by such third parties, including, without limitation, the patents,
patent applications and licenses listed on SCHEDULE 6.11 hereto, along with any
and all (a) inventions and improvements described and claimed therein, (b)
reissues, divisions, continuations, extensions and continuations-in-part
thereof, (c) income, royalties, damages, claims and payments now and hereafter
due and/or payable under and with respect thereto, including, without
limitation, damages and payments for past or future infringements thereof, (d)
rights to ▇▇▇ for past, present and future infringements thereof, and (e) any
other rights corresponding thereto throughout the world.
"PERCENT UTILIZATION" means, at any time, the percentage amount
determined by dividing (a) the daily average aggregate principal amount of
Revolving Credit Loans and Letters of Credit outstanding during the most
recently ended Fiscal Quarter, by (b) the aggregate Revolving Credit Commitments
of the Lenders at such time.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard and Poor's Ratings Service or from
▇▇▇▇▇'▇ Investors Service, Inc.;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) above and entered into
with a financial institution satisfying the criteria described in clause (c)
above;
(e) advances, loans and extensions of credit to any director, officer
or employee of the Credit Parties, if the aggregate outstanding amount of all
such advances, loans and extensions of credit (excluding travel advances in the
ordinary course of business) does not at any time exceed $100,000; and
(f) investments in money market mutual funds that are rated AAA by
Standard & Poor's Rating Service.
"PERMITTED LIENS" has the meaning set forth in Section 8.05.
21
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority or other entity of whatever nature.
"PLAN" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by any Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA or to which Section
412 of the Code applies.
"PLEDGE AGREEMENT" means the Stock Pledge Agreement substantially in
the form of EXHIBIT E annexed hereto, executed and delivered by each of the
Borrowers at the Effective Time, as such agreements may be amended, supplemented
or otherwise modified from time to time.
"PRIME RATE" means that rate of interest from time to time announced
by the Agent at its principal office as its prime commercial lending rate. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate being charged to any customer of the Agent.
"PROHIBITED TRANSACTION" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"PROPERTY" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of the Lender, desirable in order to create or perfect Liens on any IP
Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any fee
ownership or leasehold interest owned by any Borrower in any real property.
"REGISTER" has the meaning specified in Section 13.05 (d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"REGULATORY CHANGE" means, with respect to any Lender, any change
after the date of this Agreement in United States federal, state, municipal or
foreign laws or regulations (including Regulation D) or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks including such Lender of or under any United States federal,
state, municipal or foreign laws or regulations (whether or not having the force
of law) by any court, or governmental, or monetary authority charged with the
interpretation or administration thereof.
"REIMBURSEMENT OBLIGATION" means any obligation of the Borrowers to
reimburse the issuer of a Letter of Credit for any amount paid by such issuer
from time to time pursuant to and under any Letter of Credit.
22
"RENTALS" means and includes as of the date of any determination
thereof all payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property, and all payments, if any, required to be paid by the lessee regardless
of sales volume or gross revenues) payable by the Borrowers or any of their
Subsidiaries, as lessee or sublessee under a lease of real or personal property,
but shall be exclusive of any amounts required to be paid by the Borrowers or
any of their Subsidiaries (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar charges.
"REPORTABLE EVENT" has the same meaning as defined in ERISA.
"REQUIRED LENDERS" means, at any time, Lenders having Loans and unused
Revolving Credit Commitments representing at least (i) 66 2/3% of the aggregate
amount of all Loans and unused Revolving Credit Commitments outstanding at such
time if, at such time, there are at least three (3) Lenders that are parties to
this Agreement; and (ii) 100% of the aggregate amount of all Loans and unused
Revolving Credit Commitments outstanding at such time if, at such time, there
shall be two (2) or fewer Lenders that are parties to this Agreement.
"REVOLVING CREDIT COMMITMENTS" means the commitments of the Lenders to
make Revolving Credit Loans to the Borrowers as in effect from time to time
hereunder. The aggregate amount of the Revolving Credit Commitments shall
initially equal $60,000,000 and may be reduced pursuant to Section 2.10.
"REVOLVING CREDIT COMMITMENT AMOUNT" means, with respect to each
Lender, the commitment of such Lender to make Revolving Credit Loans hereunder,
as such commitment may be (a) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.05 and (b) reduced from
time to time pursuant to Section 2.10. The initial Revolving Credit Commitment
Amount of each Lender is the amount set forth opposite such Initial Lender's
name as such Lender's "Revolving Credit Commitment Amount" on SCHEDULE 2.01(a)
hereto, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Revolving Credit Commitment, as applicable.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" means for each Lender the
percentage determined by dividing such Lender's Revolving Credit Commitment
Amount by the aggregate amount of Revolving Credit Commitments, as such
Revolving Credit Commitments may be reduced from time to time pursuant to
Section 2.10. The initial Revolving Credit Commitment Percentage of each Lender
is as set forth opposite such Lender's name on SCHEDULE 2.01(a) hereto, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Revolving Credit Commitment, as applicable.
"REVOLVING CREDIT LOAN" means a Base Rate Loan or a Eurodollar Loan
made pursuant to Section 2.01 hereof.
"REVOLVING CREDIT NOTE" means a Note of the Borrowers issued to a
Lender in substantially the form of EXHIBIT A hereto.
"REVOLVING CREDIT OBLIGATIONS" means all Obligations of the Borrowers
hereunder in respect of the Revolving Credit Loans and the Revolving Credit
Commitments.
23
"REVOLVING CREDIT TERMINATION DATE" means March 29, 2005, provided
that if such date is not a Banking Day, such date shall be the next succeeding
Banking Day (or, if such next succeeding Banking Day falls in the next calendar
month, the immediately preceding Banking Day).
"SECURITY DOCUMENTS" means the Pledge Agreement, the other agreements,
instruments and documents identified on SCHEDULE 5.01(a) hereto and all other
instruments or documents delivered by any Borrower or any Guarantor or any
shareholder of a Borrower or Guarantor pursuant to this Agreement or any of the
other Facility Documents in order to grant to the Agent, on behalf of the
Lenders, a Lien on any real, personal or mixed property of that Borrower or
Guarantor as security for any of the Obligations of the Borrowers and Guarantors
hereunder.
"SECURITY DOCUMENT PARTY" means each party to a Security Document
other than the Borrowers or the Guarantors.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve to which the Agent
is subject with respect to the Adjusted Eurodollar Rate for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board of Governors of the Federal Reserve). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held by the parent, or (b) that is, as of
such date, otherwise Controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent. As used
herein without reference to any "parent", the terms "Subsidiary" and
"Subsidiaries" shall mean a Subsidiary or Subsidiaries, respectively, of the
Borrowers.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Borrowers
incurred after the Effective Date which matures in its entirety later than the
Loans and by its terms (or by the terms of a subordination agreement) is made
subordinate and junior in right of payment to the Loans and all other
Obligations of the Borrowers and their Subsidiaries under the Facility
Documents.
24
"TOTAL EXPOSURE" means, at any time, the aggregate outstanding
principal amount of Revolving Credit Loans, accrued and unpaid interest, fees
and charges, Letter of Credit Exposure and Reimbursement Obligations, Foreign
Exchange Obligations and Interest Rate Protection Obligations owing from the
Borrowers to the Lenders and the Agent at such time.
"TOTAL LEVERAGE RATIO" means, as of any date, (a) the aggregate amount
of Funded Indebtedness (including the capitalized amount of any Earn Out
Obligations, all Loans made hereunder and all outstanding Subordinated
Indebtedness) of the Borrowers and the Guarantors (determined on a consolidated
basis without duplication in accordance with GAAP) as of such date DIVIDED BY
(b) consolidated EBITDA for the period of four Fiscal Quarters most recently
ended prior to such date.
"TRADEMARKS" means all trademarks (including service marks), federal
and state trademark registrations and applications made by the Borrowers, common
law trademarks and trade names owned by or assigned to the Borrowers, all
registrations and applications for the foregoing and all exclusive and
nonexclusive licenses from third parties of the right to use trademarks of such
third parties, including, without limitation, the registrations, applications,
unregistered trademarks, service marks and licenses listed on SCHEDULE 6.11
hereto, along with any and all (a) renewals thereof, (b) income, royalties,
damages and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages, claims and payments for past or future
infringements thereof, (c) rights to ▇▇▇ for past, present and future
infringements thereof, and (d) foreign trademarks, trademark registrations, and
trade name applications for any thereof and any other rights corresponding
thereto throughout the world.
"UNCOLLECTED FUNDS" means all deposits of items which shall be on
deposit in the Collateral Account from time to time during the period from the
date on which such deposits became Available Funds to the beginning of the
second following Banking Day.
"UNCOLLECTED FUNDS COMPENSATION" means the compensation payable to the
Agent pursuant to Section 2.9 hereof.
"UNFUNDED VESTED LIABILITIES" means, with respect to any Plan, the
amount (if any) by which the present value of all vested benefits under the Plan
exceeds the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrowers
or any ERISA Affiliate to PBGC or the Plan under Title IV of ERISA.
"UNUSED FACILITY AMOUNT" means, at any time of determination, the
difference between (a) the aggregate Revolving Credit Commitments of the Lenders
at such time and (b) the sum of the outstanding principal amount of all Loans
and Letter of Credit Exposure at such time.
"VOTING STOCK" means securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to elect a
majority of the corporate directors (or Persons performing similar functions).
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any person, any
corporation or other entity of which all of the Voting Stock is at the time of
determination owned directly or indirectly by such Person.
25
Section 1.02. ACCOUNTING PRINCIPLES. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined, or any consolidation, combination or other accounting computation is
required to be made, for the purposes of this Agreement, the same shall be done
in accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement.
Section 1.03. DIRECTLY OR INDIRECTLY. Where any provision in this
Agreement refers to action to be taken or not to be taken by any Person, such
provision shall be applicable whether the action in question is taken directly
or indirectly by such Person.
Section 1.04. CONSTRUCTION. In the event of any inconsistency between
the covenants contained in the Security Documents and the covenants contained in
this Agreement, the provisions of this Agreement shall govern and be
controlling.
Section 1.05. JOINT AND SEVERAL OBLIGATIONS; BORROWERS' AGENT.
(a) All obligations of the Borrowers hereunder shall be joint
and several. Any notice, request, waiver, consent or other action made, given or
taken by any Borrower shall bind all of the Borrowers.
(b) Each of the Borrowers hereby authorizes Option Care to act
as agent (the "Borrowers' Agent") for the Borrowers, and to execute and deliver
on behalf of any Borrower such notices, requests, waivers, consents,
certificates, and other documents, and to take any and all actions, required or
permitted to be delivered or taken by the Borrowers hereunder. The Borrowers'
Agent hereby designates the financial officers of the Borrowers' Agent
identified in the Authorization Letter (the "Designated Financial Officers") to
act for and on behalf of the Borrowers' Agent and each of the Borrowers, and to
execute and deliver on behalf of the Borrowers' Agent and each of the Borrowers
such notices, requests, waivers, consents, certificates, and other documents,
and to take any and all actions, required or permitted to be delivered or taken
by the Borrowers' Agent and each of the Borrowers hereunder. The Borrowers'
Agent and each of the Borrowers hereby agrees that the Agent and the Lenders
shall be entitled to exclusively rely on any instrument, certificate, notice,
agreement or other document that is signed by any of the Designated Financial
Officers.
ARTICLE 2.
THE CREDIT
Section 2.01. THE REVOLVING CREDIT LOANS AND LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, each
of the Lenders severally agrees to make Revolving Credit Loans to the Borrowers
from time to time from and including the date hereof to but excluding the
Revolving Credit Termination Date in an aggregate principal amount at any one
time outstanding up to but not exceeding its Revolving Credit Commitment Amount;
PROVIDED that the obligation of each Lender to make Revolving Credit Loans
hereunder is subject to the condition that the Total Exposure (after giving
effect to the funding of such Revolving Credit Loans) shall not exceed the
Borrowing Base.
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(b) The Revolving Credit Loans shall be evidenced by Revolving
Credit Notes of the Borrowers issued to the Initial Lenders in the form of
EXHIBIT A, dated as of the Effective Date, payable to the order of the Initial
Lenders in the aggregate principal amount equal to the aggregate initial amount
of the Revolving Credit Commitments as of the Effective Date. The Revolving
Credit Loans may be assigned to, and the corresponding Revolving Credit
Commitments may be assumed by, one or more Eligible Assignees pursuant to
Section 13.05, whereupon the amounts payable to each such Lender in respect of
Revolving Credit Loans shall be evidenced by a Note in the form of EXHIBIT A
issued to each such Lender in accordance with Section 13.05 dated as of the date
of the corresponding Assignment and Acceptance and duly completed and executed
by the Borrowers.
(c) Subject to the provisions of Section 2.13 hereof and the
other terms and conditions of this Agreement, at the request of the Borrowers'
Agent the Agent shall issue Letters of Credit from time to time from and
including the date hereof to but excluding the Revolving Credit Termination Date
up to but not exceeding the lesser of (i) the difference between (A) the lesser
of (x) the aggregate amount of all Revolving Credit Commitments and (y) the
Borrowing Base and (B) the Total Exposure immediately prior to the issuance of
such Letter of Credit and (ii) the difference between (A) the Letter of Credit
Sublimit and (B) the aggregate amount of the Letter of Credit Exposure which
exists immediately prior to the issuance of such Letter of Credit.
Section 2.02. FUNDING OF REVOLVING CREDIT LOANS.
(a) Until such time as the Borrowers shall have established a
Controlled Disbursements Account with the Agent, to request the funding of any
Revolving Credit Loans hereunder, the Borrowers' Agent shall deliver to the
Agent notice in accordance with Section 2.11 setting forth the amount of the
requested Revolving Credit Loans to be funded, the Availability as set forth in
the most recent Borrowing Base Certificate delivered to Agent, whether such
Revolving Credit Loans are to be Base Rate Loans or Eurodollar Loans and, if
such Revolving Credit Loans are to be Eurodollar Loans, the respective
Eurodollar Interest Period for such Eurodollar Loans. Following receipt of such
notice, the Agent shall, not later than 2:00 p.m.
New York,
New York time, on
(i) the same Banking Day that such notice is given, if such Revolving Credit
Loans are to be Base Rate Loans, or (ii) on the third Banking Day after such
notice is given, if such Revolving Credit Loans are to be Eurodollar Loans,
subject to the conditions of this Agreement, make available to the Borrowers by
a credit to an account of the Borrowers maintained at the Agent the amount of
such requested Revolving Credit Loans. The Revolving Credit Loans shall be
deemed to be made by each Lender and to be outstanding to each Lender under the
Revolving Credit Note issued to such Lender as of the date that such credit is
made available to the Borrowers without regard to the settlement procedures
between the Agent and the Lenders pursuant to Section 2.14.
(b) After such time as the Borrowers shall have established a
Controlled Disbursements Account with the Agent, not later than 2:00 p.m.,
New
York,
New York time, on each Banking Day, the Agent shall, subject to the
conditions of this Agreement (but without any further written notice required),
make available to the Borrowers by a credit to an account of the Borrowers
maintained at the Agent the proceeds of Base Rate Revolving Credit Loans to the
extent necessary to pay items to be drawn on the Controlled Disbursements
Account that day
27
after giving effect to all Available Funds to be deposited to the Controlled
Disbursements Account on that day. All other Revolving Credit Loans and all
requests for the making of Eurodollar Loans, or for the conversion of Base Rate
Loans into Eurodollar Loans, shall be made upon notice given in accordance with
Section 2.11. The Revolving Credit Loans shall be deemed to be made by each
Lender and to be outstanding to each Lender under the Revolving Credit Note
issued to such Lender as of the date that such credit is made available to the
Borrowers without regard to the settlement procedures between the Agent and the
Lenders pursuant to Section 2.13.
Section 2.03. PRINCIPAL REPAYMENT OF REVOLVING CREDIT LOANS.
(a) Each Revolving Credit Loan shall mature and be payable in
full on the Revolving Credit Termination Date.
(b) Except to the extent otherwise expressly provided in any
Security Document, the Agent shall, not later than as of 1:00 p.m. on each
Banking Day when any Revolving Credit Loans shall be outstanding, transfer out
of the Collateral Account all moneys remitted to the Agent by Account Debtors of
the Borrowers or by financial institutions at which Controlled Accounts are
maintained, first making payments of the outstanding principal amount of the
Revolving Credit Loans (including all Revolving Credit Loans made or to be made
that day) by a debit to the Collateral Account in an amount equal to the balance
of the Collateral Account after giving effect to all Available Funds deposited
to the Collateral Account on that day and prior to any other transfers from the
Collateral Account. All such payments shall be applied first to the outstanding
principal amount of all Base Rate Loans. Except upon the occurrence and during
the continuance of an Event of Default, no payment of a Eurodollar Loan shall be
made under this section on a date other than the last day of an Interest Period
or the Revolving Credit Termination Date. To the extent that a payment hereunder
creates a credit balance under the Revolving Credit Obligations, such credit
balance shall bear interest and Agent shall credit the Revolving Credit
Obligations at a rate per annum equal to the Prime Rate MINUS three percent
(3%).
(c) If at any time (i) the Total Exposure exceeds (ii) the
Borrowing Base, then immediately upon demand by the Agent, the Borrowers shall
either (A) prepay Revolving Credit Loans by an amount equal to such excess, or
(B) provide the Agent and the Lenders with Cash Equivalents as security for the
payment of such excess.
Section 2.04. MANDATORY PREPAYMENTS. In addition to the payment
required under Section 2.03(c), the Borrowers shall make the following mandatory
prepayments of the Loans:
(a) CASUALTY EVENTS. Within 90 days following the receipt by the
Borrowers or any of their Subsidiaries of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty Event
affecting any property of the Borrowers or any of their Subsidiaries (or upon
such earlier date as the Borrowers or any of their Subsidiaries, as the case may
be, shall have determined not to repair or replace the property affected by such
Casualty Event), the Borrowers shall prepay the Revolving Credit Loans by an
aggregate amount, if any, equal to 100% of the Net Cash Payments from such
Casualty Event not theretofore applied or committed to be applied to the repair
or replacement of such property (it being understood that if Net Cash Payments
committed to be applied are not in fact applied
28
within 90 days of the respective Casualty Event, then such Proceeds shall be
applied to the prepayment of the Revolving Credit Loans as provided in this
clause (a) at the expiration of such 90 day period), such prepayment to be
effected in each case in the manner and to the extent specified in paragraph (d)
of this Section 2.04.
(b) SALE OF EQUITY SECURITIES. Without limiting the obligation
of the Borrowers to obtain the consent of the Lenders in accordance with Section
13.01 with respect to any sale of equity securities not otherwise permitted
hereunder, the Borrowers agree, on or prior to the closing of any sale of equity
securities by the Borrowers or any of their Subsidiaries (other than the
issuance of equity securities to employees in accordance with stock option and
related employee benefit programs), to deliver to the Agent a statement
certified by the Chief Financial Officer of the Borrowers' Agent, in form and
detail reasonably satisfactory to the Agent, of the estimated amount of the Net
Cash Payments of such sale of equity securities that will (on the date of such
sale) be received by the Borrowers or their Subsidiaries in cash, and, upon the
date of such sale of equity securities, the Borrowers shall prepay the Revolving
Credit Loans by an aggregate amount equal to 100% of the Net Cash Payments of
such sale of equity securities received by the Borrowers or their Subsidiaries,
such prepayment to be effected in each case in the manner and to the extent
specified in paragraph (d) of this Section 2.04.
(c) SALE OF ASSETS. Without limiting the obligation of the
Borrowers to obtain the consent of the Lenders in accordance with Section 13.01
with respect to any sale or other disposition of assets not otherwise permitted
hereunder, the Borrowers agree, on or prior to the occurrence of any sale or
other disposition of assets by the Borrowers or any of their Subsidiaries (other
than dispositions permitted under Sections 8.01(a) or 8.01(b)), to deliver to
the Agent a statement certified by the Chief Financial Officer of Option Care,
in form and detail reasonably satisfactory to the Agent, of the estimated amount
of the Net Cash Payments of such sale or other disposition that will (on the
date of such sale or other disposition) be received by the Borrowers or their
Subsidiaries in cash and the Borrowers shall prepay the Revolving Credit Loans,
as follows:
(i) within ten (10) days of the date of such sale or other
disposition, by an aggregate amount equal to 100% of the portion of
such estimated amount of the Net Cash Payments of such sale or other
disposition received by the Borrowers or their Subsidiaries that
exceed the amounts set forth in clause (ii) of the proviso in Section
8.01, in cash on the date of such sale or other disposition; and
(ii) thereafter, quarterly, on the date of the delivery of the
financial statements for any Fiscal Quarter or Fiscal Year by the
Borrowers to the Agent pursuant to Sections 7.08(a) and 7.08(b), to
the extent the Borrowers or any of their Subsidiaries shall receive
Net Cash Payments during the fiscal period ending on the date of such
financial statements in cash under deferred payment arrangements or in
respect of investments entered into or received in connection with any
such sale or disposition, by an amount equal to (A) 100% of the
portion of the aggregate amount of such Net Cash Payments that exceed
the amounts set forth in clause (ii) of the proviso in Section 8.01
MINUS (B) any transaction expenses associated with such sale or
dispositions and not previously deducted in the determination of Net
Cash Payments PLUS (or MINUS, as the case may be) (C) any other
adjustment received or paid by the Borrowers or any of their
Subsidiaries
29
pursuant to the respective agreements giving rise to such sale or
dispositions and not previously taken into account in the
determination of the Net Cash Payments.
Prepayments of the Loans resulting from any sale or other disposition of assets
shall be effected in each case in the manner and to the extent specified in
paragraph (d) of this Section 2.04.
(d) APPLICATION. In the event of any mandatory prepayment
pursuant to this Section 2.04, such prepayment shall be applied, first, to the
payment of accrued interest in respect of outstanding Base Rate Revolving Credit
Loans, second, to the principal amount of outstanding Base Rate Revolving Credit
Loans, third, to interest in respect of outstanding Eurodollar Revolving Credit
Loans, and fourth, to the principal amount of outstanding Eurodollar Revolving
Credit Loans. The Revolving Credit Commitments shall not be subject to permanent
reduction as result of any mandatory prepayment.
(e) PREPAYMENT PENALTIES. The Borrower shall not be required to
pay any prepayment premiums or penalties in connection with any mandatory
prepayment pursuant to this Section 2.04, other than payments required to be
paid pursuant to Section 3.05 in connection with any prepayment of any
Eurodollar Loan.
Section 2.05. INTEREST.
(a) Interest shall accrue on the outstanding and unpaid
principal amount of each Loan for the period from and including the date of such
Loan to but excluding the date such Loan is due, at the following rates per
year: (i) for a Loan Tranche which is outstanding as a Base Rate Loan, at a
variable rate per annum equal to the Adjusted Base Rate plus the Applicable
Margin; and (ii) for a Loan Tranche which is outstanding as a Eurodollar Loan,
at a fixed rate during the applicable Eurodollar Interest Period equal to the
corresponding Eurodollar Rate plus the Applicable Margin; PROVIDED HOWEVER that
after the occurrence and during the continuance of any Event of Default and a
written demand of the Agent to the Borrowers at the request of the Required
Lenders, interest shall accrue on all Loans at the Default Rate.
(b) Interest on each Eurodollar Loan shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. Interest on
each Base Rate Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrowers and the Lenders thereof.
(c) Accrued interest on each Base Rate Loan shall be due and
payable to the Agent for account of each Lender in arrears on the first Banking
Day of each calendar month, regardless of any payment of the principal thereof.
(d) Accrued interest on each Eurodollar Loan shall be due and
payable to the Agent for account of each Lender in arrears upon any payment of
principal and on each corresponding Eurodollar Interest Payment Date.
Section 2.06. EURODOLLAR INTEREST PERIODS. In the case of each Loan
other than a Base Rate Loan, the Borrowers shall select a Eurodollar Interest
Period of any duration in accordance with the definition of Eurodollar Interest
Period in Section 1.01, subject to the following limitations:
30
(a) no Eurodollar Interest Period shall have a duration of less than one month,
and if any such proposed Eurodollar Interest Period would otherwise be for a
shorter period (as a result of the Revolving Credit Termination Date or
otherwise), such Eurodollar Interest Period shall not be available; and (b) if a
Eurodollar Interest Period would end on a day which is not a Banking Day, such
Eurodollar Interest Period shall be extended to the next Banking Day, unless
such next Banking Day would fall in the next calendar month in which event such
Eurodollar Interest Period shall end on the immediately preceding Banking Day.
All elections of a Eurodollar Interest Period shall be made by the Borrowers'
Agent upon three Banking Days' notice to the Agent in accordance with Section
2.11, and the Agent shall quote to the Borrowers the actual Eurodollar Rate to
take effect for such Eurodollar Interest Period (based upon the rate quotation
described in the definition of Eurodollar Rate) on the next Banking Day.
Notwithstanding anything to the contrary set forth herein, the Borrowers shall
not be permitted to request any Eurodollar Loans until the Agent has completed
its initial syndication of the credit facilities hereunder.
Section 2.07. CONVERSIONS. Except to the extent specified to the
Initial Lenders prior to the Effective Date, each Loan shall be deemed to be a
Base Rate Loan unless and until converted to a Eurodollar Loan in accordance
with terms of this Section 2.07. The Borrowers shall have the right to make
payments of principal, or to convert a Loan Tranche from a Base Rate Loan to a
Eurodollar Loan or from a Eurodollar Loan to a Base Rate Loan at any time or
from time to time, provided that: (a) if the Loan Tranche is outstanding as a
Eurodollar Loan, it may be converted only on the last day of the applicable
Eurodollar Interest Period; (b) if the Loan Tranche is outstanding as a
Eurodollar Loan, it shall automatically convert to a Base Rate Loan on the last
day of the applicable Eurodollar Interest Period, unless the Borrowers' Agent
gives notice to the Agent in accordance with Section 2.11 three (3) Banking Days
prior to the last day of the corresponding Eurodollar Interest Period specifying
a new Eurodollar Interest Period to apply to such Loan Tranche; (c) no Loan
Tranche comprising a Eurodollar Loan may be in a principal amount less than
$500,000; (d) there may be no more than six (6) Loan Tranches comprising
Eurodollar Loans outstanding at any one time; and (e) no Loan Tranche comprising
a Eurodollar Loan may be created (or continued after the last day of the
applicable Eurodollar Interest Period) while any Default or Event of Default
exists and continues.
Section 2.08. VOLUNTARY PREPAYMENTS. In addition to repayments made
pursuant to Section 2.03(b), the Borrowers shall have the right to prepay Loans
at any time or from time to time; provided that: (i) the Borrowers' Agent shall
give the Agent notice of each such prepayment as provided in Section 2.11; and
(ii) the Borrowers shall be responsible for the payment of such amounts as
provided in Section 3.05 with respect to the prepayment of any Eurodollar Loans
prepaid on any date other than the last day of the corresponding Eurodollar
Interest Period. In addition, but subject to the foregoing, as a condition to
giving effect to any termination of the Revolving Credit Commitments pursuant to
Section 2.10, the aggregate principal of all Revolving Credit Loans shall be
fully prepaid, together with interest thereon accrued to the date of such
payment and all amounts payable pursuant to Section 2.13(c) and/or Section 3.05
in connection therewith.
Section 2.09. UNCOLLECTED FUNDS COMPENSATION. Any credit extended by
the Agent to the Borrowers by allowing the Uncollected Funds in any Collateral
Account maintained by the Borrowers at the Agent to be immediately available
funds to the Borrowers shall not be deemed to be Loans hereunder. Uncollected
Funds Compensation to the Agent shall accrue on the
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amount of the Uncollected Funds in existence from time to time at a variable
rate per annum equal to the Adjusted Base Rate plus the Applicable Margin for
Base Rate Loans for two (2) full days. Upon making such computation, the Agent
is authorized to make a Revolving Credit Loan to the Borrowers for the amount
thereof (or during the continuance of an Event of Default, debit the Collateral
Account) for the payment thereof to the Agent. The Agent shall notify the
Borrowers of the amount of the Uncollected Funds Compensation for the preceding
calendar month in the next monthly statement rendered by the Agent to the
Borrowers.
Section 2.10. TERMINATION OF REVOLVING CREDIT COMMITMENTS. The
Borrowers shall have the right to terminate the amount of Revolving Credit
Commitments in whole or in part at any time, provided that (a) the Borrowers'
Agent shall give notice of such termination to the Agent as provided in Section
2.11 and (b) each reduction of the Revolving Credit Commitments shall be in an
amount that is at least equal to $1,000,000 or any greater multiple of
$1,000,000. Any portion of the Revolving Credit Commitments that has been
terminated may not be reinstated.
Section 2.11. CERTAIN NOTICES. Notices by the Borrowers' Agent to the
Agent of borrowings other than pursuant to Section 2.02(b), notice of conversion
of any Base Rate Loans to Eurodollar Loans pursuant to Section 2.07, and notice
of each prepayment of a Loan pursuant to Section 2.08 (which does not include
repayments pursuant to Section 2.03(b)) or of termination of the Revolving
Credit Commitments pursuant to Section 2.10 shall be irrevocable and shall be
effective only if received by the Agent in writing on a Banking Day and (a) in
the case of Base Rate Loans and prepayments of Base Rate Loans given not later
than 11:00 a.m.
New York City time on the date of such Base Rate Loan or such
prepayment; (b) in the case of Eurodollar Loans and prepayments of Eurodollar
Loans, given not later than 11:00 a.m.
New York City time three (3) Banking Days
prior to the date of such Eurodollar Loan or such prepayment and (c) in the case
of termination of the Revolving Credit Commitments, given not later than 12:00
noon
New York City time four Banking Days prior thereto. Each such notice of
borrowing or prepayment shall specify the amount of the Loans to be borrowed or
prepaid and the date of borrowing or prepayment (which shall be a Banking Day).
The Agent shall promptly notify the Lenders of the contents of each such notice.
Section 2.12. CALCULATION OF BORROWING BASE. The Agent shall
calculate from time to time the amount of the Borrowing Base, based upon the
most recent Borrowing Base Certificate, and such amount shall be the "Borrowing
Base" hereunder; provided, however, that the Agent, in its reasonable
discretion, may on five (5) Banking Days prior written notice to the Borrowers,
establish additional reserves against the Borrowing Base, taking into account,
among other things, but without limitation in any way, increases in receivables
dilution as shown in periodic field examinations.
Section 2.13. LETTERS OF CREDIT.
(a) Subject to the terms and conditions set forth herein, the
Borrowers' Agent may request the issuance of Letters of Credit for the account
of any of the Borrowers or their Subsidiaries, in a form reasonably acceptable
to the Agent, by delivering to the Agent by electronic or facsimile transmission
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a letter of credit application in the form required by the Agent. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
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issuance, amendment, renewal or extension of each Letter of Credit, the
Borrowers shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the Total Exposure at such
time does not exceed the lesser of (x) the Borrowing Base at such time or (y)
the aggregate Revolving Credit Commitments at such time, and (ii) the Letter of
Credit Exposure at such time does not exceed the LC Sublimit at such time.
(b) Each Letter of Credit shall expire (without giving effect to
any extension thereof by reason of an interruption of business) at or prior to
the close of business on the earlier of (i) the date 360 days, in the case of
standby Letters of Credit, or 180 days, in the case of commercial or documentary
Letters of Credit, after the date of the issuance of such Letter of Credit (or,
in the case of any renewal or extension of any standby Letter of Credit, 365
days after such renewal or extension) provided that any such standby Letter of
Credit may provide for automatic extensions thereof to a date not later than 365
days beyond its current expiration date, and (ii) the date that is five (5)
Banking Days prior to the Revolving Credit Termination Date. No Letter of Credit
may be extended beyond the date that is five (5) Banking Days prior to the
Revolving Credit Termination Date.
(c) If the Agent shall make any disbursement in respect of any
Letter of Credit, the resulting Reimbursement Obligation created thereby shall
be deemed to be a Revolving Credit Loan from each of the Lenders in accordance
with each Lender's Revolving Credit Commitment Percentage. The Agent shall
notify the Lenders of the creation of any Reimbursement Obligation within two
Banking Days of any disbursement made by the Agent pursuant to or under any
Letter of Credit.
(d) The Borrowers' Reimbursement Obligations with respect to
Letters of Credit shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Agent to the
beneficiary under a Letter of Credit against presentation of a draft or other
document that substantially complies but does not strictly comply with the terms
of such Letter of Credit and (iv) any other event or circumstance whatsoever
(other than gross negligence or willful misconduct of the Agent), whether or not
similar to any of the foregoing, that might, but for the provisions of this
Section 2.13, constitute a legal or equitable discharge of the Borrowers'
obligations hereunder.
Section 2.14. SETTLEMENT BETWEEN AGENT AND LENDERS. The Agent and the
Lenders shall settle on an aggregated and netted basis (the "SETTLEMENT AMOUNT")
on a weekly basis or with such greater frequency as the Agent may determine
(each such date on which such a settlement occurs being a "SETTLEMENT DATE") for
all amounts which shall have become due to and due from the Agent and the
Lenders since the immediately preceding Settlement Date with respect to any
Obligations, other than the Settlement Amount which became due on the
immediately preceding Settlement Date. The Agent shall notify the Lenders by
11:00 A.M. on each Settlement Date of the Settlement Amount which is payable by
the Agent or the Lenders, and the Agent or the Lenders, as the case may be,
shall make payment of the Settlement Amount by an electronic funds transfer not
later than 5:00 P.M. on the Settlement Date. Nothing in this Section 2.14 or the
33
settlement procedures made pursuant to this Section 2.14 shall be deemed to
change, as between the Borrowers and the Lenders, the amount of the Loans which
are outstanding under the Notes to each of the Lenders or the accrual of
interest due to each of the Lenders on such Loans.
Section 2.15. FEES.
(a) The Borrowers agree to pay to the Agent quarterly after the
date hereof through the Revolving Credit Termination Date and on the Revolving
Credit Termination Date for the account of each of the Lenders a commitment fee
which shall accrue on the daily average Unused Facility Amount for the period
from and including the date hereof to the earlier of the date the Revolving
Credit Commitments are terminated in their entirety or the Revolving Credit
Termination Date. The commitment fee shall be calculated on the basis of a 360
day year for the actual number of days elapsed at a rate per year equal to the
Applicable Commitment Fee Rate. The commitment fee shall be due and payable in
arrears quarterly on the first Banking Day of each calendar quarter and shall be
computed by Agent. On each such payment date, the Agent is authorized to make a
Revolving Credit Loan to the Borrowers for the amount thereof (or during the
continuance of an Event of Default, debit the Collateral Account) for the
payment thereof to the Lenders. The Agent shall notify the Borrowers of the
amount of the commitment fee for the preceding quarter in the next monthly
statement rendered by the Agent to the Borrowers.
(b) The Borrowers agree to pay, with respect to Letters of
Credit issued hereunder, the following fees: (i) to the Agent for the benefit of
the Lenders (according to each Lender's Revolving Credit Commitment Percentage),
a letter of credit fee in respect of each standby Letter of Credit issued
hereunder which accrues at a rate equal to (x) the face amount of such Letter of
Credit multiplied by (y) the applicable Eurodollar Margin, such fees to be
calculated on the basis of a 360 day year for actual number of days elapsed and
paid by the Borrowers quarterly in advance on the first Banking Day of each
Fiscal Quarter, (ii) to the Agent for the benefit of the Lenders (according to
each Lender's Revolving Credit Commitment Percentage), a letter of credit fee in
respect of each documentary Letter of Credit issued hereunder which accrues at a
rate equal to (x) the greater of (a) the applicable Eurodollar Margin less 50
basis points and (b) 150 basis points MULTIPLIED BY (y) the face amount of such
Letter of Credit, such fees to be calculated on the basis of a 360 day year for
actual number of days elapsed and paid by the Borrowers quarterly in advance on
the first Banking Day of each calendar quarter, (iii) to the Agent for its own
account, a letter of credit fronting fee payable in advance on the issuance date
of each Letter of Credit in an amount equal to twelve and one-half (12.5) basis
points multiplied by the face amount of such Letter of Credit and (iv) to the
Agent for its customary processing fees and expenses charged by the Agent for
issuing, amending, modifying or extending any Letter of Credit. Upon making a
computation of the amount of such Letter of Credit fee, the Agent is authorized
to make a Revolving Credit Loan to the Borrowers for the amount thereof. The
Agent shall notify the Borrowers of the amount of such Letter of Credit fee in
the next monthly statement rendered by the Agent to the Borrowers.
(c) In the event that the Revolving Credit Commitments are
terminated in their entirety by the Borrowers prior to the second anniversary of
the Effective Date, the Borrowers shall pay to the Agent for the account of each
of the Lenders an early termination fee in an amount equal to (i) 1.00% of the
daily average aggregate amount of the Revolving Credit Commitments of the
Lenders during the period from the Closing Date through the date preceding
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the date of termination, if the Revolving Credit Commitments are terminated
prior to the first anniversary of the Effective Date and (ii) 0.50% of the daily
average aggregate amount of the Revolving Credit Commitments of the Lenders
during the 365 day period preceding the date of termination, if the Revolving
Credit Commitments are terminated on or after the first anniversary of the
Effective Date but prior to the second anniversary of the Effective Date;
provided, however, that no such prepayment fee shall be payable under this
paragraph (c) if the Revolving Credit Commitments are terminated in connection
with a refinancing of the Loans by the Agent or any of its affiliates.
(d) The Borrowers agree to pay the Agent (for its own account) such
fees payable in such amounts and at the times separately agreed to in writing
between the Borrowers and the Agent.
Section 2.16. PAYMENTS GENERALLY. All payments under this Agreement
or the Notes shall be made in United States Dollars in funds which are
immediately available not later than 1:00 p.m. New York City time on the
relevant dates specified above (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Banking Day) at
the JPMorgan Chase Office for the account of each Lender. In the event that any
payment under this Agreement becomes due at a time when no Revolving Credit
Loans are then outstanding, the Borrowers shall deliver such payment to the
Agent prior to the specified date of payment. If, at the time any such payment
becomes due there are Revolving Credit Loans outstanding, or, if the Borrowers
fail to make any such payment as and when due, the Agent, at its discretion
without the requirement of obtaining the consent of or giving prior notice to
the Borrowers, may make a Revolving Credit Loan to the Borrowers for the amount
thereof (or during the continuance of an Event of Default, debiting the
Collateral Account for the payment thereof to the Lenders). The Agent, or any
Lender for whose account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrowers with the Agent or such
Lender, as the case may be, and any Lender so doing shall promptly notify the
Agent. Subject to Section 12.16, the Borrowers shall, at the time of making each
payment under this Agreement or the Notes, specify to the Agent the principal or
other amount payable by the Borrowers under this Agreement or the Notes to which
such payment is to be applied and in the event that it fails to so specify, or
if a Default or Event of Default has occurred and is continuing, the Agent may,
subject to Section 12.16, apply such payment as it may elect in its sole
discretion. If the due date of any payment under this Agreement or the Notes
would otherwise fall on a day which is not a Banking Day, such date shall be
extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Each payment
received by the Agent hereunder or under any Note for the account of a Lender
shall be paid promptly to such Lender, in immediately available funds, for the
account of such Lender's Lending Office.
Section 2.17. PURPOSE. The Borrowers shall use the proceeds of the
Loans (a) to refinance the Indebtedness of the Borrowers listed on SCHEDULE 2.17
hereto, (b) for working capital requirements of the Borrowers and their
Subsidiaries, (c) to finance transaction costs associated with the closing of
the transactions contemplated by the Facility Documents, (d) to support Letters
of Credit up to the Letter of Credit Sublimit, (e) for Permitted Acquisitions,
and (f) for other general corporate purposes.
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ARTICLE 3.
YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01. ADDITIONAL COSTS.
(a) The Borrowers shall pay directly to each Lender from time to
time within five Banking Days of demand therefor such amounts as such Lender may
reasonably determine to be necessary to compensate it for any costs which such
Lender determines are attributable to its making or maintaining any Eurodollar
Loans under this Agreement or its Note or its obligation to make any such Loans
hereunder, or any reduction in any amount receivable by such Lender hereunder in
respect of any such Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called "ADDITIONAL COSTS"),
resulting from any Regulatory Change which: (i) changes the basis of taxation of
any amounts payable to such Lender under this Agreement or its Note in respect
of any of such Loans (other than taxes imposed on the overall net income of such
Lender or of its Lending Office for any of such Loans by the jurisdiction in
which such Lender has its principal office or such Lending Office); or (ii)
imposes or modifies any reserve, special deposit, deposit insurance or
assessment, minimum capital, capital ratio or similar requirements relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities of, such Lender; or (iii) imposes any other condition affecting this
Agreement or its Note (or any of such extensions of credit or liabilities). Each
Lender will notify the Borrowers of any event occurring after the date of this
Agreement which will entitle such Lender to compensation pursuant to this
Section 3.01(a) as promptly as practicable after it obtains knowledge thereof
and determines to request such compensation. If any Lender requests compensation
from the Borrowers under this Section 3.01(a), or under Section 3.01(c), the
Borrowers' Agent may, by notice to such Lender with a copy to the Agent, suspend
the obligation of such Lender to make Loans of the type with respect to which
such compensation is requested (in which case the provisions of Section 3.04
shall be applicable).
(b) Without limiting the effect of the foregoing provisions of
this Section 3.01, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the excess
above a specified level of the amount of a category of deposits or other
liabilities of such Lender which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in this Agreement or
a category of extensions of credit or other assets of such Lender which includes
Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Lender so
elects by notice to the Borrowers' Agent with a copy to the Agent, the
obligation of such Lender to make Loans of such type hereunder shall be
suspended until the date such Regulatory Change ceases to be in effect (in which
case the provisions of Section 3.04 shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 3.01 (but without duplication), the Borrowers shall pay directly to
each Lender from time to time within five Banking Days of request therefor such
amounts as such Lender may determine to be necessary to compensate such Lender
for any costs which it determines are attributable to the maintenance by the
Lender or its bank holding company or any of its Affiliates, pursuant to any law
or regulation of any jurisdiction or any interpretation, directive or request
(whether or not
36
having the force of law) of any court or governmental or monetary authority,
whether in effect on the date of this Agreement or thereafter, of capital in
respect of its Loans hereunder or its obligation to make Loans hereunder (such
compensation to include, without limitation, an amount equal to any reduction in
return on assets or equity of such Lender or its bank holding company or any of
its Affiliates to a level below that which it could have achieved but for such
law, regulation, interpretation, directive or request). Each Lender will notify
the Borrowers if such Lender is entitled to compensation pursuant to this
Section 3.01(c) as promptly as practicable after it determines to request such
compensation.
(d) Determinations and allocations by a Lender for purposes of
this Section 3.01 of the effect of any Regulatory Change pursuant to subsections
(a) or (b), or of the effect of capital maintained pursuant to subsection (c),
on its costs of making or maintaining Loans or its obligation to make Loans, or
on amounts receivable by, or the rate of return to, it in respect of Loans or
such obligation, and of the additional amounts required to compensate such
Lender under this Section 3.01, shall be conclusive, provided that such
determinations and allocations are made on a reasonable basis. Each Lender
demanding payment from the Borrowers pursuant to this Section 3.01 shall furnish
to the Borrowers at the time of such demand a statement showing the basis for
and the method of calculation of such demand.
Section 3.02. LIMITATION ON TYPES OF LOANS. Anything herein to the
contrary notwithstanding, if:
(a) the Agent reasonably determines (which determination shall
be conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Rate" in Section 1.01 are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for any type of Eurodollar Loans as provided in
this Agreement; or
(b) any Lender reasonably determines (which determination shall
be conclusive) and notifies the Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in Section 1.01 upon the
basis of which the rate of interest for any type of Eurodollar Loans is to be
determined do not adequately cover the cost to such Lender of making or
maintaining such Loans;
then the Agent shall give the Borrowers' Agent and each Lender prompt notice
thereof, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make Loans of such type.
Section 3.03. ILLEGALITY. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrowers' Agent thereof (with a copy
to the Agent) and such Lender's obligation to make or maintain Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain such affected Loans (in which case the provisions of Section 3.04 shall
be applicable).
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Section 3.04. CERTAIN BASE RATE LOANS PURSUANT TO SECTIONS 3.01 AND
3.03. If the obligations of any Lender to make Loans of a particular type (Loans
of such type being herein called "Affected Loans" and such type being herein
called the "Affected Type") shall be suspended pursuant to Sections 3.01 or
3.03, all Loans which would otherwise be made by such Lender as Loans of the
Affected Type shall be made instead as Base Rate Loans and, if an event referred
to in Section 3.01(b) or 3.03 has occurred and such Lender so requests by notice
to the Borrowers with a copy to the Agent, all Affected Loans of such Lender
then outstanding shall be automatically converted into Base Rate Loans on the
date specified by such Lender in such notice, and, to the extent that Affected
Loans are so made as (or converted into) Base Rate Loans, all payments of
principal which would otherwise be applied to such Lender's Affected Loans shall
be applied instead to its Base Rate Loans.
Section 3.05. CERTAIN COMPENSATION. The Borrowers shall pay to the
Agent for the account of each Lender, upon the request of such Lender through
the Agent, such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost or expense which
such Lender determines is attributable to:
(a) any payment of a Eurodollar Loan made by the Borrowers on a
date other than the last day of a Eurodollar Interest Period or the maturity
date, respectively, for such Loan (whether by reason of acceleration or
otherwise) (other than pursuant to Section 3.04); or
(b) any failure by the Borrowers to borrow any Loan to be made
by such Lender on the date specified therefor in the relevant notice under
Section 2.11.
Without limiting the foregoing, such compensation shall include an amount equal
to the excess, if any, of (i) the amount of interest which otherwise would have
accrued on the principal amount so paid or not borrowed for the period from and
including the date of such payment or failure to borrow to but excluding the
last day of the Eurodollar Interest Period for such Loan (or, in the case of a
failure to borrow, to but excluding the last day of the Eurodollar Interest
Period for such Loan which would have commenced on the date specified therefor
in the relevant notice) at the applicable rate of interest for such Loan
provided for herein over (ii) the amount of interest (as reasonably determined
by such Lender) such Lender would have bid in the London interbank market for
Dollar deposits for amounts comparable to such principal amount and maturities
comparable to such period. A determination of any Lender as to the amounts
payable pursuant to this Section 3.05 shall be conclusive, provided that such
determination is made on a reasonable basis.
Section 3.06. MITIGATION OBLIGATIONS. If any Lender requests
compensation under Section 3.01, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 3.01 in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
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ARTICLE 4.
THE COLLATERAL
Section 4.01. GRANT OF SECURITY INTEREST. As security for due and
punctual payment and performance of the Obligations, each Borrower and each
Guarantor hereby grants to the Agent for the benefit of the Lenders a continuing
security interest in and lien on all tangible and intangible property and assets
of such Borrower or such Guarantor, whether now owned or existing or hereafter
acquired or arising, together with any and all additions thereto and
replacements therefor and proceeds and products thereof (collectively referred
to for purposes of this Article 4 as "COLLATERAL"), including without limitation
the property described below:
(a) all tangible personal property, including without limitation
all present and future goods, inventory (including, without limitation, all
merchandise, raw materials, work in process, finished goods and supplies),
machinery, equipment, motor vehicles, rolling stock, tools, furniture, real
property, fixtures, office supplies, computers, computer software and associated
equipment, whether now owned or hereafter acquired, including, without
limitation, all tangible personal property used in the operation of the business
of such Borrower or such Guarantor;
(b) all rights under all present and future authorizations,
permits, licenses and franchises issued, granted or licensed to such Borrower or
such Guarantor for the operation of its business;
(c) all Patents of such Borrower or such Guarantor;
(d) all Trademarks of such Borrower or such Guarantor;
(e) all Copyrights of such Borrower or such Guarantor;
(f) the entire goodwill of business of such Borrower or such
Guarantor and all other general intangibles (including know-how, trade secrets,
customer lists, proprietary information, inventions, domain names, methods,
procedures and formulae) connected with the use of and symbolized by any
Patents, Trademarks or Copyrights of such Borrower or such Guarantor;
(g) all rights under all present and future vendor or customer
contracts and all franchise, distribution, design, consulting, construction,
engineering, management and advertising and related agreements;
(h) all rights under all present and future leases of real and
personal property; and
(i) all other personal property, including, without limitation,
all Accounts (whether or not earned by performance and including without
limitation health-care-insurance receivables, all interest, late charges,
penalties, collection fees, and other sums which shall be due and payable in
connection with any Account), cash, cash equivalents, deposits, deposit
accounts, loss carry back, tax refunds, insurance proceeds, premiums, rebates
and refunds, choses in action, investment property, securities, partnership
interests, limited liability company
39
interests, contracts, contract rights, general intangibles (including without
limitation, all customer and advertiser mailing lists, intellectual property,
patents, copyrights, trademarks, trade secrets, trade names, domain names,
goodwill, customer lists, advertiser lists, catalogs and other printed
materials, publications, indexes, lists, data and other documents and papers
relating thereto, blueprints, designs, charts, and research and development,
whether on paper, recorded electronically or otherwise), all websites (including
without limitation, all content, HTML documents, audiovisual material, software,
data, hardware, access lines, connections, copyrights, trademarks, patents and
trade secrets relating to such websites) and domain names, any information
stored on any medium, including electronic medium, related to any of the
personal property of such Borrower or such Guarantor, all financial books and
records and other books and records relating, in any manner, to the business of
such Borrower or such Guarantor, all proposals and cost estimates and rights to
performance, all instruments and promissory notes, documents and chattel paper,
all funds which become due to any Borrower or any Guarantor Party in connection
with the termination of any Plan or other employee benefit plan (together with
all other amounts payable to any Borrower or any Guarantor from or with respect
to any Plan), and all debts, obligations and liabilities in whatever form owing
to such Borrower or such Guarantor from any person, firm or corporation or any
other legal entity, whether now existing or hereafter arising, now or hereafter
received by or belonging or owing to such Borrower or such Guarantor; and all
guaranties and security therefor, and all letters of credit naming any Borrower
or any Guarantor as beneficiary and other supporting obligations in respect of
such debts, obligations and liabilities.
Any of the foregoing terms which are defined in the Uniform Commercial
Code shall have the meaning provided in the Uniform Commercial Code, as amended
and in effect from time to time, as supplemented and expanded by the foregoing.
Section 4.02. SPECIAL WARRANTIES AND COVENANTS OF THE BORROWERS AND
SUBSIDIARIES. Each Borrower and each Guarantor hereby warrants and covenants to
the Agent that:
(a) Such Borrower or such Guarantor has delivered to the Agent a
Perfection Certificate in substantially the form of EXHIBIT D hereto. All
information set forth in such Perfection Certificate is true and correct in all
material respects and the facts contained in such Perfection Certificate are
accurate in all material respects as of the date of this Agreement. Each
Borrower and each Guarantor agrees to supplement its Perfection Certificate
promptly after obtaining information which would require a correction or
addition to such Perfection Certificate.
(b) No Borrower or Guarantor will change its jurisdiction of
organization, principal or any other place of business, or the location of any
Collateral from the locations set forth in the Perfection Certificate delivered
by such Borrower or such Guarantor, or make any change in its name or conduct
its business operations under any fictitious business name or trade name,
without, in any such case, at least thirty (30) days' prior written notice to
the Agent; provided that the inventory of such Borrower or such Guarantor may be
in the possession of manufacturers or processors in any jurisdiction in which
all necessary UCC financing statements have been filed by the Agent and with
respect to which the Agent has received waiver letters from all landlords,
warehousemen and processors in form and substance reasonably acceptable to
Agent.
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(c) Except for Collateral that is obsolete or no longer used in
their business, the Borrowers and their Subsidiaries will keep the Collateral in
good order and repair (normal wear excepted) and adequately insured at all times
in accordance with the provisions of Section 7.05. The Borrowers and their
Subsidiaries will pay promptly when due all taxes and assessments on the
Collateral or for its use or operation, except for taxes and assessments
permitted to be contested under this Agreement. Following the occurrence and
during the continuance of an Event of Default, the Agent may at its option
discharge any taxes or Liens to which any Collateral is at any time subject
(other than Permitted Liens), and may, upon the failure of the Borrowers or
their Subsidiaries to do so in accordance with this Agreement, purchase
insurance on any Collateral and pay for the repair, maintenance or preservation
thereof, and each Borrower and each Guarantor agrees to reimburse the Agent on
demand for any payments or expenses incurred by the Agent pursuant to the
foregoing authorization and any unreimbursed amounts shall constitute
Obligations for all purposes hereof.
(d) The Agent may from time to time request and each Borrower
and each Guarantor shall deliver copies of all Account Debtor lists and supplier
lists.
(e) Each Borrower and each Subsidiary hereby authorizes and
appoints the Agent to prepare, execute, as applicable, and file such financing
statements, certificates and other documents or instruments as may be necessary
to enable the Agent to perfect or from time to time renew the Agent's Liens on
the Collateral, with full power of substitution, as each Borrower's and each
Subsidiaries' attorney in fact. Each Borrower and each Subsidiary further agrees
that a carbon, photographic or other reproduction of a security agreement or
financing statement is sufficient as a financing statement under this Agreement
and the other Facility Documents.
(f) Each Borrower will, and will cause each Subsidiary to, at
its expense, perform all steps reasonably requested by the Agent at any time and
from time to time to perfect, maintain, protect, and enforce the Agent's
security interest including, without limitation, (i) joining with the Agent in
executing or authorizing and filing and refiling, or permitting the Agent to
file and refile such financing statements, continuation statements and other
documents (including, without limitation, this Agreement and licenses to use
software and other property protected by copyright), in such offices (including,
without limitation, the PTO, the United States Copyright Office, and appropriate
state patent, trademark and copyright offices), as the Agent may reasonably deem
necessary or appropriate, wherever required or permitted by law in order to
perfect and preserve the rights and interests granted to the Agent hereunder;
(ii) delivering to the Agent warehouse receipts covering any portion of the
Collateral located in warehouses and for which warehouse receipts are issued;
(iii) executing and delivering to the Agent a security agreement relating to any
funds which may become due to any Borrower or any Subsidiary Party in connection
with the termination of any Plan or other employee benefit plan; and (iv) taking
such other steps as are deemed necessary or appropriate by the Agent to maintain
the Agent's security interest, including, without limitation, transferring
inventory to warehouses designated by the Agent from time to time (unless
prohibited by federal, state or local statute or regulation governing the
business of such Borrower or Subsidiary, in which case the applicable inventory
shall be transferred by such Borrower or Subsidiary, after notice with respect
thereto to the Agent, in compliance with applicable statutes and regulations).
Each Borrower or Subsidiary will give the Agent notice of each office at which
records of such Borrower or Subsidiary
41
pertaining to all intangible items of Collateral are kept. Except as may be
provided in such notice, the records concerning all intangible Collateral are
and will be kept at the address shown in the respective Perfection Certificate
for such Borrower or Subsidiary as the principal place of business of such
Borrower or Subsidiary.
(g) If any Collateral of any Borrower or Subsidiary is at any
time in the possession of a bailee, such Borrower or Subsidiary shall promptly
notify the Agent and, if requested by the Agent, the Borrowers shall use
reasonable efforts to obtain an acknowledgment, in form and substance reasonably
satisfactory to Agent, of any bailee having possession of any of the Collateral
that such bailee holds such Collateral for Agent and shall act upon the
instructions of the Agent, without further consent of the Borrowers or their
Subsidiaries.
(h) To the best of their knowledge, the Borrowers and their
Subsidiaries are the sole and exclusive owners of the websites and domain names
listed on SCHEDULE 6.11 hereto and have registered such domain names with the
entities listed on SCHEDULE 6.11 or the applicable authority which provides for
the exclusive use by the Borrowers and their Subsidiaries of such domain names.
The websites do not contain any material, the publication of which may result in
(a) the violation of rights of any person or (b) a right of any person against
the publisher or distributor of such material.
(i) The Borrowers and their Subsidiaries shall, annually by the
end of the first calendar quarter following the previous calendar year, provide
written notice to the Agent of all applications for registration of Patents,
Trademarks or Copyrights, to the extent such applications exist, made during the
preceding calendar year. The Borrowers and their Subsidiaries shall file and
prosecute diligently all applications for registration of Patents, Trademarks or
Copyrights now or hereafter pending that would be necessary to the business of
the Borrowers and their Subsidiaries to which any such applications pertain, and
shall do all commercially reasonable acts, in any such instance, necessary to
preserve and maintain all rights in such registered Patents, Trademarks or
Copyrights unless such Patents, Trademarks or Copyrights are not material to the
business of the Borrowers and their Subsidiaries, as reasonably determined by
the Borrowers and Subsidiaries consistent with prudent and commercially
reasonable business practices. Any and all costs and expenses incurred in
connection with any such actions shall be borne by the Borrowers and their
Subsidiaries.
(j) The domain name servers used in connection with the domain
names of the Borrowers and their Subsidiaries and all other relevant information
pertaining to such domain names, and the administrative contacts used in
connection with the registration of such domain names are identified on SCHEDULE
6.11 hereto. Promptly, and in any event, no later than ten (10) days after any
change in the identity of such domain name servers or of any domain name
administrative contact, the Borrowers and Subsidiaries shall provide notice
thereof to the Agent.
(k) To the extent that any Borrower or Subsidiary is a
beneficiary under any written letter of credit, such Borrower or Subsidiary
shall, at the request of Agent, deliver such letter of credit to the Agent, and
execute and deliver to the issuer of and any Person that has confirmed such
letter of credit an assignment of proceeds form, in favor of the Agent for the
benefit of the Lenders and satisfactory to the Agent and such issuer or (as the
case may be) such
42
Person that has confirmed such letter of credit, requiring the proceeds of any
drawing under such letter of credit to be paid directly to the Agent for
application against the Obligations.
Section 4.03. ACCOUNTS, GENERALLY.
(a) Each of the Borrowers and Subsidiaries hereby warrants and
covenants to the Agent that: (i) each existing Account represents, and each
future Account shall represent, a bona fide sale or lease and delivery of goods
or rendition of services by such Borrower or Subsidiary, in the ordinary course
of business; (ii) each existing Account is, and each future Account shall be, at
the time any such Account arose and at the time any such Account is billed, for
a liquidated amount payable by the Account Debtor thereon on the terms set forth
in the invoice therefor, without offset, deduction, defense, or counterclaim,
other than discounts required by law or contract, and corrections of billing
errors, in the ordinary course of business; (iii) no payment shall be received
with respect to any Account, and no credit, discount, extension, or agreement
therefor shall be granted on any Account, except as reported to the Agent in
pursuant to Section 7.09(a); (iv) each copy of an invoice or claim form
delivered to the Agent by any Borrower or Subsidiary shall be a genuine copy of
the original invoice or claim form sent to the Account Debtor named therein; (v)
all goods described in any invoice or claim form representing a sale of goods
shall have been delivered to the applicable patient and all services of any
Borrower or Subsidiary described in any invoice or claim form shall have been
performed; (vi) each of the Accounts and the related contracts is in full force
and effect and represents and constitutes a legal, valid and binding obligation
of the related Account Debtor, enforceable against such Account Debtor in
accordance with its terms; (vii) promptly following notice from an Account
Debtor as to an earlier overpayment by such Account Debtor to any Borrower or
Subsidiary, such Borrower or Subsidiary has made all payments to such Account
Debtor which are necessary to prevent such Account Debtor from offsetting such
overpayment against any amount owed by such Account Debtor; (viii) no direction
of any Borrower, Subsidiary or any other Person is in effect directing any
Account Debtor make payments in respect of the Accounts other than to a Lock Box
or a Controlled Account; and (ix) during the one year prior to the Closing Date,
no Borrower or Subsidiary has been subject to any Government Offset involving in
excess of fifty thousand dollars ($50,000). As of the date of each Revolving
Credit Loan, no Borrower or Subsidiary is aware of any potential Government
Offset greater than fifty thousand dollars ($50,000) for any single Governmental
Offset and greater than two hundred thousand dollars ($200,000) for all such
Government Offsets that has not been disclosed by such Borrower or Subsidiary to
the Agent in writing prior to such date. All of the Medicaid and Medicare
reports required to be filed by any Borrower or Subsidiary for all reporting
periods have been filed with the applicable Government Account Debtor, or HCFA
designated agents or agents of such Government Account Debtor.
(b) No Borrower or Subsidiary shall re-date any invoice, claim
form or sale or modify any Account (other than to correct billing errors in the
ordinary course of business). Each Lender acknowledges that if an Account Debtor
which is the "primary" payor does not pay a claim in full or denies such claim,
the Borrowers and their Subsidiaries may send a separate invoice to an Account
Debtor which is a "secondary" payor. If any Borrower or Subsidiary becomes aware
of any matter that is reasonably likely to materially adversely affect any
Account Debtor, including information regarding the Account Debtor's
creditworthiness, such Borrower or Subsidiary shall promptly so advise the
Agent.
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(c) No Borrower or Subsidiary shall accept any note, warrant or
other instrument (except a check or other instrument for the immediate payment
of money) with respect to any Account without the written consent of the Agent
(which consent shall not be unreasonably withheld or delayed). If the Agent
consents to the acceptance of any such note, warrant or other instrument, it
shall be considered as evidence of the Account and not payment thereof, and the
Borrowers and Subsidiaries shall promptly deliver such note, warrant or
instrument to the Agent appropriately endorsed. Regardless of the form of
presentment, demand, notice of dishonor, protest, and notice of protest with
respect thereto, the Borrowers and their Subsidiaries shall remain liable
thereon until such note, warrant or instrument is paid in full. Notwithstanding
the foregoing, any Borrower or Subsidiary may accept a note (i) from an Option
Care Franchisee or (ii) as payment solely for the provision of computer
software, PROVIDED that such Borrower or Subsidiary shall (x) promptly notify
the Agent that it has accepted any such note, and (y) upon request by the Agent,
promptly deliver such note to the Agent appropriately endorsed.
(d) Each of the Borrowers and their Subsidiaries shall notify
the Lenders promptly of (i) all disputes and claims (other than as to discounts
required by law or contract, and corrections of billing errors, in the ordinary
course of business) with any Account Debtor, involving in excess of fifty
thousand dollars ($50,000) for any single dispute or claim and in excess of two
hundred thousand dollars ($200,000) for all such disputes and claims, whether
any such Account Debtor is acting in its capacity as an Account Debtor or in its
individual capacity; and (ii) all alleged or asserted Government Offsets
involving in excess of fifty thousand dollars ($50,000) for any single
Government Offset and in excess of two hundred thousand dollars ($200,000) for
all such Government Offsets. No discount, credit or allowance shall be granted
with respect to any Eligible Account to any Account without the consent of the
Required Lenders, which consent shall not be unreasonably withheld, except for:
(i) discounts required by law or contract, and corrections of billing errors, in
the ordinary course of business; and (ii) any other discount which does not
exceed fifty thousand dollars ($50,000), provided that the aggregate amount of
discounts permitted pursuant to this clause (ii) during any calendar year shall
not exceed five hundred thousand dollars ($500,000).
(e) If an Account Debtor returns any inventory to any Borrower
or Subsidiary when no Event of Default exists, then such Borrower or Subsidiary
shall promptly determine the reason for such return and shall issue a credit
memorandum to the Account Debtor in the appropriate amount. Each Borrower or
Subsidiary shall immediately report to the Agent in the event that the aggregate
amount of such returns exceed one hundred thousand dollars ($100,000) during any
year. Each such report shall indicate the reasons for the returns and the
locations and condition of the returned inventory. In the event any Account
Debtor returns inventory to any Borrower or Subsidiary when an Event of Default
exists, such Borrower or Subsidiary shall: (i) hold the returned inventory in
trust for the Agent; (ii) segregate all returned inventory from all of its other
Property; (iii) dispose of the returned inventory solely according to the
written instructions of the Agent; and (iv) not issue any credits or allowances
with respect thereto without the prior written consent of the Required Lenders.
All returned inventory shall remain subject to the Agent's security interest.
Whenever any inventory is returned for which an Account had been created, such
related Account shall be deemed ineligible to the extent of such returned
Inventory, and Availability shall be adjusted accordingly.
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Section 4.04. COLLECTION OF ACCOUNTS.
(a) On or before the Closing Date, the Borrowers and their
Subsidiaries shall (i) direct all of their Account Debtors to make all payments
on Accounts directly to one or more Lock Boxes or Controlled Accounts (except
that the Agent and the Lenders acknowledge that payments made by patients at the
time such patients receive goods and services at a facility of a Borrower would
not be directed to be remitted to a Lock Box), (ii) establish Controlled
Accounts with the Agent or such other financial institutions as shall be
acceptable to the Agent, into which all payments received in the Lock Boxes
shall be deposited, and into which the Borrowers will promptly deposit all
payments made for inventory or services sold or rendered by the Borrowers and
received by the Borrowers in the identical form in which such payments were
made, whether by cash or check, and (iii) cause each Subsidiary and Affiliate,
and any other Person acting for or in concert with the Borrowers or their
Subsidiaries that receives any monies, checks, notes, drafts or other payments
relating to or as proceeds of Accounts or other Collateral, to promptly remit
the same (or cause the same to be remitted) in hand to the Controlled Accounts;
PROVIDED that, (x) for purposes of administrative convenience, the Agent may in
its reasonable discretion, permit the Borrowers and their Subsidiaries from time
to time to maintain one or more accounts with one or more financial institutions
other than the Agent and with such maximum cash balances as the Agent deems
appropriate, and for which the Borrowers and their Subsidiaries may, at the
discretion of the Agent, be permitted to have direct access, and (y) so long as
no Revolving Credit Loans or Letters of Credit shall be outstanding, the
Borrowers shall be permitted to have access to the funds in all Controlled
Accounts unless and until such time as the Agent shall have notified the
financial institutions where Controlled Accounts are maintained that the Agent
has elected to revoke the Borrowers' access to the funds in such Controlled
Accounts.
(b) The Borrowers hereby represent and warrant to the Agent that
the Borrowers have delivered Account Debtor Notices to all InsCos and HMOs that
are Account Debtors of the Borrowers as of the Closing Date, and the Borrowers
hereby covenant and agree to deliver Account Debtor Notices to all additional
InsCos and HMOs that become Account Debtors of the Borrowers after the Closing
Date.
(c) The Borrowers and their Subsidiaries agree to pay all
reasonable fees, costs and expenses which the Borrowers and their Subsidiaries
incur in connection with opening and maintaining any Lock Box and Controlled
Account. All of such fees, costs and expenses which remain unpaid pursuant to
any Lock Box or Controlled Account Agreement with the Borrowers and their
Subsidiaries, to the extent same shall have been paid by the Agent hereunder,
shall constitute Loans hereunder, shall be payable to the Agent by the Borrowers
and their Subsidiaries upon demand, and, until paid, shall bear interest at the
highest rate then applicable to Base Rate Loans hereunder. All checks, drafts,
instruments and other items of payment or proceeds of Collateral delivered to
the Agent in kind shall be endorsed by the Borrowers and their Subsidiaries, to
the Agent, and, if that endorsement of any such item shall not be made for any
reason, the Agent is hereby irrevocably authorized to endorse the same on behalf
of the Borrowers and their Subsidiaries, notwithstanding the inclusion on any
such item of restrictive notations such as "paid in full", "balance of account",
or other restrictions. For the purpose of this Section 4.04(c) and effective so
long as this Agreement shall remain in force and effect, each of the Borrowers
and their Subsidiaries irrevocably hereby makes, constitutes and appoints
45
the Agent (and all Persons designated by the Agent for that purpose) as such
Borrower's or such Subsidiary's true and lawful attorney and agent-in-fact (i)
to endorse the name of such Borrower or Subsidiary upon said items of payment
and/or proceeds of Collateral of the Borrowers and their Subsidiaries and upon
any chattel paper, document, instrument, invoice or similar document or
agreement relating to any account receivable of the Borrowers and their
Subsidiaries or goods pertaining thereto; (ii) to take control in any manner of
any item of payment or proceeds thereof; (iii) to have access to any Lock Box or
postal box into which any checks or other forms of payment in respect of
accounts receivable of the Borrowers and their Subsidiaries are remitted; and
(iv) open all mail containing checks and other forms of payment in respect of
accounts receivable of the Borrowers and their Subsidiaries and process such
checks and other forms of payment.
(d) The Agent (and all Persons designated by the Agent for such
purpose) may, at any time and from time to time after the occurrence and during
the continuance of an Event of Default, whether before or after notification to
any Account Debtor and whether before or after the maturity of any of the
Obligations, (i) enforce collection of any accounts receivable or contract
rights of the Borrowers and their Subsidiaries by suit or otherwise; (ii)
exercise all of the rights and remedies of the Borrowers and their Subsidiaries
with respect to proceedings brought to collect any accounts receivable; (iii)
surrender, release or exchange all or any part of any accounts receivable of the
Borrowers and their Subsidiaries, or compromise or extend or renew for any
period (whether or not longer than the original period) any indebtedness
thereunder; (iv) sell or assign any account receivable of the Borrowers and
their Subsidiaries upon such terms, for such amount and at such time or times as
the Agent deems advisable; (v) prepare, file and sign the names of the Borrowers
and their Subsidiaries on any proof of claim in bankruptcy or other similar
document against any account debtor indebted on an account receivable of the
Borrowers and their Subsidiaries; and (vi) do all other acts and things which
are necessary, in the Agent's sole discretion, to fulfill the Obligations of the
Borrowers and their Subsidiaries under this Agreement and to allow the Agent to
collect the accounts receivable. In addition to any other provision hereof or in
any of the other Facility Documents, the Agent may at any time on or after the
occurrence of an Event of Default, at the sole expense of the Borrowers and
their Subsidiaries, notify any parties obligated on any of the accounts
receivable of the Borrowers and their Subsidiaries to make payment directly to
the Agent of any amounts due or to become due thereunder.
Section 4.05. FIXTURES, ETC. It is the intention of the parties
hereto that none of the Collateral shall become fixtures and each Borrower and
each Subsidiary will take all such reasonable action or actions as may be
necessary to prevent any of the Collateral from becoming fixtures. Without
limiting the generality of the foregoing, each Borrower and each Subsidiary
will, if requested by the Agent, use commercially reasonable efforts to obtain
waivers of Liens, in form satisfactory to the Agent, from each lessor of real
property on which any of the Collateral is or is to be located to the extent
requested by the Agent.
Section 4.06. RIGHT OF AGENT TO DISPOSE OF COLLATERAL, ETC. Upon the
occurrence of any Event of Default, such Event of Default not having previously
been waived, remedied or cured, but subject to the provisions of the Uniform
Commercial Code or other applicable law, in addition to all other rights under
applicable law and under the Facility Documents, the Agent shall have the right
to take possession of the Collateral and, in addition thereto, the right to
enter
46
upon any premises on which the Collateral or any part thereof may be situated
and remove the same therefrom. The Agent may require the Borrowers and their
Subsidiaries to make the Collateral (to the extent the same is moveable)
available to the Agent at a place to be designated by the Agent or transfer any
information related to the Collateral to the Agent by electronic medium. Unless
the Collateral is perishable or threatens to decline speedily in value or is of
a type customarily sold on a recognized market, the Agent will give the
Borrowers and their Subsidiaries at least seven (7) days' prior written notice
of the time and place of any public sale thereof or of the time after which any
private sale or any other intended disposition thereof is to be made. Any such
notice shall be deemed to meet any requirement hereunder or under any applicable
law (including the Uniform Commercial Code) that reasonable notification be
given of the time and place of such sale or other disposition.
Section 4.07. RIGHT OF AGENT TO USE AND OPERATE COLLATERAL, ETC. Upon
the occurrence and during the continuance of any Event of Default, subject to
the provisions of the Uniform Commercial Code or other applicable law, the Agent
shall have the right and power to take possession of all or any part of the
Collateral, and to exclude the Borrowers and their Subsidiaries and all persons
claiming under the Borrowers and their Subsidiaries wholly or partly therefrom,
and thereafter to hold, store, and/or use, operate, manage and control the same.
Each of the Borrowers and Subsidiaries hereby grants to the Agent for the
benefit of the Lenders, effective upon the occurrence and during the continuance
of an Event of Default, a royalty free license (to the extent the Borrowers and
Subsidiaries have such rights to grant such licenses) to use any Patent,
Trademark or Copyright of the Borrowers and their Subsidiaries, to use, operate
and dispose of the Collateral. Such royalty free license shall extend to any
person or persons purchasing such Collateral from the Secured Parties. Upon
taking possession of any of the Collateral, the Agent may, from time to time, at
the expense of the Borrowers and their Subsidiaries, make all such repairs,
replacements, alterations, additions and improvements to and of the Collateral
as the Agent may deem proper. In any such case the Agent shall have the right to
manage and control the Collateral and to carry on the business and to exercise
all rights and powers of the Borrowers and their Subsidiaries in respect thereto
as the Agent shall deem best, including the right to enter into any and all such
agreements with respect to the operation of the Collateral or any part thereof
as the Agent may see fit; and the Agent shall be entitled to collect and receive
all rents, issues, profits, fees, revenues and other income of the same and
every part thereof. Such rents, issues, profits, fees, revenues and other income
shall be applied to pay the expenses of holding and operating the Collateral and
of conducting the business thereof, and of all maintenance, repairs,
replacements, alterations, additions and improvements, and to make all payments
which the Agent may be required or may elect to make, if any, for taxes,
assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments which the Agent may be required or authorized to
make under any provision of this Agreement (including reasonable legal costs and
reasonable attorneys' fees). The Agent shall apply the remainder of such rents,
issues, profits, fees, revenues and other income as provided in Section 4.08.
Section 4.08. PROCEEDS OF COLLATERAL. After deducting all reasonable
costs and expenses of collection, storage, custody, sale or other disposition
and delivery (including reasonable legal costs and reasonable attorneys' fees)
and all other charges against the Collateral, the Agent shall apply the residue
of the proceeds of any such sale or disposition to the Obligations in accordance
with the terms hereof and any surplus shall be returned to the Borrowers and
their Subsidiaries or
47
to any Person or party lawfully entitled thereto (including, if applicable, any
holders of Subordinated Indebtedness). In the event the proceeds of any sale,
lease or other disposition of the Collateral are insufficient to pay all of the
Obligations in full, the Borrowers and their Subsidiaries will be liable for the
deficiency, together with interest thereon at the Post-Default Rate, and the
cost and expenses of collection of such deficiency, including (to the extent
permitted by law), without limitation, reasonable attorneys' fees, expenses and
disbursements.
ARTICLE 5.
CONDITIONS PRECEDENT
Section 5.01. CONDITIONS PRECEDENT TO THE INITIAL LOANS. The
obligations of the Initial Lenders to make the Loans constituting the initial
borrowings are subject to the condition precedent that on or before the
Effective Date each of the following documents shall have been delivered to the
Agent in form and substance satisfactory to the Agent and its counsel, and each
of the following actions shall have been performed to the satisfaction of the
Agent and its counsel:
(a) The Agent shall have received the Facility Documents
(including this Agreement, the Notes and the Security Documents identified on
SCHEDULE 5.01(a)) duly executed by each of the parties thereto, and in full
force and effect;
(b) The Agent shall have received a certificate of the
Secretary/Clerk or Assistant Secretary/Clerk of each of the Borrowers, dated the
Effective Date, attesting to all corporate action taken by such Borrower,
including resolutions of its Board of Directors authorizing the execution,
delivery and performance of the Facility Documents to which such Borrower is a
party and each other document to be executed and delivered by such Borrower
pursuant to this Agreement and certifying the names and true signatures of the
officers of such Borrower authorized to sign the Facility Documents and the
other documents to be executed and delivered by such Borrower under this
Agreement;
(c) The Agent shall have received a certificate of the Secretary
or Assistant Secretary (or equivalent) of each Guarantor and each Security
Document Party, dated the Effective Date, attesting to all corporate action
taken by such Guarantor and such Security Document Party, including resolutions
of their Board of Directors (or equivalent) authorizing the execution, delivery
and performance of the Facility Documents to which such Guarantor or Security
Document Party is a party and each other document to be executed and delivered
by such Guarantor or Security Document Party pursuant to this Agreement and
certifying the names and true signatures of the officers of such Guarantor or
Security Document Party authorized to sign the Facility Documents and the other
documents to be executed and delivered by such Guarantor or Security Document
Party under this Agreement;
(d) The Agent shall have received evidence satisfactory to it
that the Borrowers, the Guarantors and any Security Document Parties shall have
taken or caused to be taken all such actions, executed and delivered or caused
to be executed and delivered all such agreements, documents and instruments, and
made or caused to be made all such filings and recordings (other than the filing
or recording of items delivered to the Agent for filing
48
contemporaneous with the funding of the initial Loans on the Closing Date) that
may be necessary or, in the opinion of the Agent, desirable in order to create
in favor of the Agent, for the benefit of the Lenders, a valid and (upon such
filing and recording) perfected First Priority security interest in the entire
personal and mixed property Collateral. Such actions shall include, without
limitation, the following: (i) delivery to the Lender of all the Security
Documents, duly executed by the applicable Borrower, Guarantor or Security
Document Party, together with accurate and complete schedules to all such
Security Documents; (ii) delivery to the Agent of (A) certificates (which
certificates shall be accompanied by irrevocable undated stock powers, duly
endorsed in blank and otherwise reasonably satisfactory in form and substance to
the Agent) representing all capital stock and other equity interests pledged
pursuant to the Security Documents and (B) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner reasonably
satisfactory to the Agent) evidencing any Collateral; (iii) delivery to the
Agent of (A) the results of a recent search, by one or more Persons satisfactory
to the Agent, of all effective UCC financing statements and fixture filings and
all judgment and tax lien filings which may have been made with respect to any
Collateral, together with copies of all such filings disclosed by such search,
(B) UCC termination statements duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements, fixture filings or comparable filings
disclosed in such search (other than any such financing statements or fixture
filings in respect of Liens permitted to remain outstanding pursuant to the
terms of this Agreement) or if UCC termination statements cannot be obtained
from a creditor whose debt is to be repaid with the proceeds of the Initial
Loans, an agreement to deliver such termination statements upon receipt by such
creditor of payment in full of the amounts due such creditor, and (C) UCC
financing statements and, where appropriate, fixture filings, duly executed by
each applicable Borrower, Guarantor and Security Document Party with respect to
all Collateral of such party, for filing in all jurisdictions as may be
necessary or, in the opinion of the Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Security Documents; (iv)
delivery to the Agent of all cover sheets or other documents or instruments
required to be filed in order to create or perfect Liens in respect of any IP
Collateral; and (v) delivery to the Agent of opinions of counsel (which counsel
shall be reasonably satisfactory to the Lender) under the local laws of each
jurisdiction where the Borrowers, the Guarantor or any Security Document Party
is organized or maintains an office or facility with respect to the creation and
perfection of the security interests in favor of the Agent in the Collateral and
such other matters governed by the laws of such jurisdiction regarding such
security interests as the Agent may reasonably request, in each case in form and
substance reasonably satisfactory to the Agent.
(e) The Agent shall have received from the Borrowers:
(i) In the case of each Material Leasehold Property
existing as of the Closing Date, copies of all leases between any
Borrower and any landlord or tenant;
(ii) In the case of each Material Leasehold Property
existing as of the Closing Date, a Landlord's Waiver and Consent with
respect thereto and where required by the terms of any lease, the
consent of the mortgagee, ground lessor or other party.
(f) The Borrowers shall have obtained all required environmental
permits, licenses, authorizations and consents that are necessary in connection
with the transactions
49
contemplated by the Facility Documents from the appropriate Governmental
Authorities, and each of the foregoing permits, licenses, authorizations and
consents shall be in full force and effect. The Borrowers shall have also
obtained all other permits, licenses, authorizations and consents from all other
Governmental Authorities and all consents of other Persons with respect to
Material Indebtedness, Liens and material agreements, in each case that are
necessary or advisable in connection with the transactions contemplated by the
Facility Documents, and each of the foregoing shall be in full force and effect.
(g) The Agent shall have received and shall be satisfied with
(i) the certified financial statements referred to in Section 6.05 hereof,
including, without limitation, the audited consolidated financial statements of
the Borrowers for the three most recent fiscal years of the Borrowers and (ii)
any and all written materials, reports, and/or management letters prepared by
the Borrowers' current independent auditors;
(h) The Agent shall have received and shall be satisfied with
its review of (i) estimated opening balance sheets for the Borrowers and their
Subsidiaries, prepared in accordance with GAAP, (ii) consolidated quarterly
profit and loss statements and cash flow projections for the Borrowers and their
Subsidiaries, prepared in accordance with GAAP, for the 2002 Fiscal Year, and on
an annual basis for Fiscal Years 2003 and 2004, together with the written
assumptions on which such projections are based, and (iii) consolidated balance
sheet projections for the Borrowers and their Subsidiaries, prepared in
accordance with GAAP, for Fiscal Years 2002, 2003, and 2004, together with the
written assumptions on which such projections are based;
(i) The Agent shall have received a certificate of a duly
authorized officer of the Borrowers dated the Effective Date, stating that the
representations and warranties in Article 6 are true and correct on such date as
though made on and as of such date and that no event has occurred and is
continuing which constitutes a Default or Event of Default;
(j) The Agent shall have received a favorable opinion of ▇▇▇▇ &
▇▇▇▇▇▇▇, counsel for the Borrowers, dated the Effective Date, in substantially
the form of EXHIBIT G hereto, and covering such matters as the Agent or any
Lender may reasonably request.
(k) The Agent shall have received a certificate of a duly
authorized officer of Option Care in the form of EXHIBIT F annexed hereto
certifying as to the solvency of the Borrowers and their Subsidiaries after
giving effect to the funding of the initial Loans.
(l) The Agent shall have received insurance certificates in form
reasonably satisfactory to the Agent evidencing casualty, all-risk, product
liability and other insurance of the Borrowers, their Subsidiaries and their
properties and assets having coverages and issued by insurance companies
reasonably satisfactory to the Agent and naming the Agent as a lender's loss
payee and (as appropriate) an additional insured.
(m) The Agent shall have received an initial Borrowing Base
Certificate, remittance, debit and credit reports, and a statement of accounts
in a form reasonably acceptable to the Agent with respect to the Borrowers and
consistent with the requirements of Section 7.09 hereof, dated as of not more
than 30 days prior to the date of the Loan;
50
(n) The Borrowers shall have delivered to the Agent evidence
reasonably satisfactory to the Agent that the Leasehold Properties do not any
liability to the Borrowers under any Environmental Laws;
(o) The Agent shall be satisfied that the Borrowers and their
Subsidiaries are in compliance with all federal and state governmental
regulations, all Medicare and Medicaid billing and reporting procedures, and all
other licensing and registration requirements applicable to the industry of
Borrowers and their Subsidiaries;
(p) The Agent shall have received and be satisfied with its
review of the Borrowers' and Subsidiaries' history regarding the nature of any
claims asserted by any Government Account Debtor regarding overpayments made to
the Borrowers and their Subsidiaries by such Government Account Debtor,
settlements with respect to Medicare and Medicare cost reports, and rights of
Government Account Debtors to reduce or offset receivables and other amounts due
to the Borrowers and their Subsidiaries.
(q) The Agent shall be satisfied with its due diligence review
of the Borrowers and their Subsidiaries, including, but not limited to,
satisfactory review by the Agent of the projections of the Borrowers and their
Subsidiaries;
(r) The Agent shall be satisfied with the cash management
arrangements (including domestic lock box arrangements) and management
information systems in place with respect to the Borrowers and their
Subsidiaries and the Agent shall have received counterparts of all Lockbox
Agreements and Controlled Account Agreements duly executed by all parties
thereto and such Lockbox Agreements and Controlled Account Agreements shall be
in full force and effect and in form and substance reasonably satisfactory to
the Agent;
(s) the Borrowers shall have sent an Account Debtor Notice to
each ▇▇▇▇▇ and HMO that is an Account Debtor of the Borrowers as of the Closing
Date;
(t) Immediately following the funding of the initial loans
hereunder, the Borrowers shall have caused to be repaid in full all outstanding
Indebtedness set forth on SCHEDULE 2.17 annex hereto and shall have caused to be
released all liens in favor of the holders of such Indebtedness;
(u) The Agent and the Lenders shall have received all fees and
other amounts due and payable to such Persons at or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrowers hereunder; and
(v) The Agent shall have received all material contracts and
such other documents as the Agent or any Lender shall have reasonably requested
and the same shall be reasonably satisfactory to each of them.
Section 5.02. ADDITIONAL CONDITIONS PRECEDENT. The obligations of the
Lenders to make any Loans (including the initial Loans) shall be subject to the
further conditions precedent that on the date of such Loan:
51
(a) The following statements shall be true:
(i) the representations and warranties contained in Article
6 of this Agreement are true and correct on and as of the date of such
Loan as though made on and as of such date; and
(ii) No Default or Event of Default has occurred and is
continuing, or would result from such Loan;
(b) The Agent shall have received such approvals, certificates
and other documents as the Agent or any Lender may reasonably request;
(c) At or before the time of making the first Revolving Credit
Loans hereunder and as of the date of each subsequent Revolving Credit Loan
hereunder, the Agent shall determine that the making of such Revolving Credit
Loan will not cause the amounts outstanding hereunder to exceed the Borrowing
Base;
(d) The Borrowers shall have paid to the Agent all accrued fees
and expenses payable to the Agent in connection with this Agreement, including
all reasonable fees and disbursements of legal counsel to the Agent.
Section 5.03. DEEMED REPRESENTATIONS. Each notice of a Loan and
acceptance by the Borrowers of the proceeds of such Loan shall constitute a
representation and warranty that the conditions set forth in Subsection (a) of
Section 5.02 are true and correct as of the date of each such Loan. The Agent
may from time to time require certificate(s) of duly authorized officer(s) of
one or both of the Borrowers, stating that the representations and warranties in
Article 6 are true and correct on such date as though made on and as of such
date and that no event has occurred and is continuing which constitutes a
Default or an Event of Default.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES
The Borrowers and the Guarantors hereby jointly and severally represent
and warrant, as of the date hereof and as of the date of each Loan, that:
Section 6.01. INCORPORATION, GOOD STANDING AND DUE QUALIFICATION.
Each of the Borrowers and each of their Subsidiaries is an entity which is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and authority to own
its assets and to transact the business in which it is now engaged or proposed
to be engaged, and is duly qualified as a foreign corporation and in good
standing under the laws of each other jurisdiction in which the failure to be so
qualified would not have a Material Adverse Effect.
Section 6.02. CORPORATE POWER AND AUTHORITY; NO CONFLICTS. Except as
set forth in SCHEDULE 6.02 hereto, the execution, delivery and performance of
the Facility Documents: (a) have been duly authorized by all necessary corporate
action by the Borrowers, the Guarantors and the Security Document Parties party
thereto and do not and will not require any consent or
52
approval of the equityholders of the Borrowers, the Guarantors or such Security
Document Parties or contravene their charters or by-laws; (b) will not violate
any provision of, or require any filing, registration, consent or approval
under, any law, rule, regulation (including, without limitation, Regulation U),
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrowers or any of their Subsidiaries; (c)
will not result in a breach of or constitute a default in any material respect
or require any consent which has not been obtained under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrowers, the Guarantors or any Security Document Party is a party or by which
the properties of the Borrowers, the Guarantors or any Security Document Party
may be bound or affected; (d) will not result in, or require, the creation or
imposition of any Lien, upon or with respect to any of the properties now owned
or hereafter acquired by the Borrowers or any of their Subsidiaries, except as
provided in the Security Documents; or (e) will not cause the Borrowers or any
Guarantor or any Security Document Party, as the case may be, to be in default
in any material respect under any such law, rule, regulation, order, writ,
judgment, injunction, decree, determination or award or any such indenture,
agreement, lease or instrument.
Section 6.03. LEGALLY ENFORCEABLE AGREEMENTS. Each Facility Document
is, or when delivered under this Agreement will be, a legal, valid and binding
obligation of the Borrowers, each Guarantor and each Security Document Party,
enforceable against the Borrowers, each Guarantor and each such Security
Document Party, in accordance with its terms, except to the extent that
enforceability may be subject to limitations imposed by general principles of
equity or applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.
Section 6.04. LITIGATION. Except as set forth on SCHEDULE 6.04
hereto, there are no actions, suits or proceedings pending or, to the knowledge
of the Borrowers, threatened, against or affecting the Borrowers or any of their
Subsidiaries before any court, governmental agency or arbitrator, which may, in
any one case or in the aggregate, materially adversely affect the financial
condition, operations, properties or business of the Borrowers and their
Subsidiaries taken as a whole or the ability of any Borrower, any Guarantor or
any Security Document Party to perform its obligations under the Facility
Documents.
Section 6.05. FINANCIAL STATEMENTS. (a) The Borrowers have heretofore
delivered to the Lenders the following financial statements:
(i) the consolidated balance sheets and statements of
operations, shareholders' equity and cash flows of the Borrowers and
their Subsidiaries, as of and for the fiscal years ended December 31,
1999, December 31, 2000, and December 31, 2001, audited and
accompanied by an opinion of the Borrowers' independent public
accountants;
(ii) the unaudited consolidated balance sheet and statement
of operations of the Borrowers and their Subsidiaries, as of and for
the Fiscal Months ended January, 2002 and February, 2002, certified by
the chief financial officer of Option Care that such financial
statements fairly present the financial condition of the Borrowers and
their Subsidiaries as at such dates and the results of the operations
of the Borrowers and their Subsidiaries for the period ended on such
dates and that all such financial statements,
53
including the related schedules and notes thereto have been prepared
in all material respects in accordance with GAAP applied consistently
throughout the periods involved; and
(iii) consolidated quarterly profit and loss statements,
balance sheets and cash flow projections for the Borrowers and their
Subsidiaries (including all Foreign Subsidiaries), prepared in
accordance with GAAP, for the 2002 Fiscal Year, and on an annual basis
for Fiscal Years 2003 and 2004, together with the written assumptions
on which such projections are based.
Except as disclosed on SCHEDULE 6.05, such financial statements
(except for the projections) present fairly, in all material respects, the
respective consolidated financial position and results of operations and cash
flows of the respective entities as of such respective dates and for such
periods in accordance with GAAP, subject to year-end audit adjustments and the
absence of footnotes in the case of such unaudited or pro forma statements. The
projections were prepared by the Borrowers in good faith and were based on
assumptions that were reasonable when made.
(b) Except as disclosed on SCHEDULE 6.05, since December 31,
2001, there has been no material adverse change in the business, assets,
operations or condition, financial or otherwise, of the Borrowers or any of
their Subsidiaries from that set forth in the December 31, 2001 financial
statements referred to in clause (i) of paragraph (a) above.
(c) None of the Borrowers or any of their Subsidiaries has on
the date hereof any contingent liabilities, liabilities for taxes, forward or
long-term commitments (other than those entered into in the ordinary course of
business) or unrealized or anticipated losses from any unfavorable commitments
in each case that are material, except as referred to or reflected or provided
for in the balance sheets as at the end of their respective fiscal years ended
in 2001, referred to above, as provided for in SCHEDULE 6.05 annexed hereto, or
as otherwise permitted pursuant to this Agreement, or as referred to or
reflected or provided for in the financial statements described in this Section
6.05.
Section 6.06. OWNERSHIP AND LIENS. The Borrowers and their
Subsidiaries have title to, or valid leasehold interests in, all of its
properties and assets, real and personal, including the properties and assets,
and leasehold interests reflected in the financial statements referred to in
Section 6.05 (other than any properties or assets disposed of in the ordinary
course of business), and none of the properties and assets owned by the
Borrowers or any of their Subsidiaries (excluding any of its leasehold
interests) is subject to any Lien, except as disclosed in such financial
statements or as may be permitted hereunder or as listed in SCHEDULE 6.06
hereto.
Section 6.07. EXISTING INDEBTEDNESS. None of the Borrowers nor any of
their Subsidiaries owes Indebtedness as of the Effective Date for borrowed money
or under any title retention agreements (including conditional sale contracts
and Capital Leases) except as listed on SCHEDULE 6.07 hereto.
Section 6.08. TAXES. Except as set forth on SCHEDULE 6.08 hereto, the
Borrowers and each of their Subsidiaries have filed all tax returns (federal,
state and local) required to be filed
54
and have paid all taxes, assessments and governmental charges and levies thereon
to be due, including interest and penalties, except for such taxes which are not
material in amount and are being contested by the Borrowers in good faith in
appropriate proceedings.
Section 6.09. ERISA. Except as set forth on SCHEDULE 6.09 hereto, the
Borrowers and their Subsidiaries have no Plans. The Borrowers and their
Subsidiaries are in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred with respect to any Plan; no notice of intent to terminate a Plan has
been filed nor has any Plan been terminated; no circumstance exists which
constitutes grounds under Section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; none of the Borrowers nor any ERISA
Affiliate has completely or partially withdrawn under Sections 4201 or 4204 of
ERISA from a Multiemployer Plan; the Borrowers and each of their ERISA
Affiliates have met all minimum funding requirements under ERISA with respect to
all of their Plans and none of the Borrowers nor any ERISA Affiliate has
incurred any liability to the PBGC under ERISA in excess of $250,000.
Section 6.10. SUBSIDIARIES AND AFFILIATES. Set forth on SCHEDULE 6.10
is a complete and correct list of all Subsidiaries of Option Care as of the date
hereof, together with, for each such Subsidiary, (a) the jurisdiction of
organization of such Subsidiary, (b) each Person holding ownership interests in
such Subsidiary and (c) the nature of the ownership interests held by each such
Person and the percentage of ownership of such Subsidiary represented by such
ownership interests. Except as disclosed in SCHEDULE 6.10, (i) each Borrower and
its respective Subsidiaries owns, free and clear of Liens (other than Liens
permitted hereunder), and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in SCHEDULE 6.10, (ii)
all of the issued and outstanding capital stock of each such Person organized as
a corporation is validly issued, fully paid and nonassessable and (iii) there
are no outstanding Equity Rights with respect to such Person. As of the
Effective Date, the authorized, issued and outstanding capital stock of the
Borrowers and their Subsidiaries consists of the capital stock described on
SCHEDULE 6.10, all of which is duly and validly issued and outstanding, fully
paid and nonassessable.
Section 6.11. OPERATION OF BUSINESS.
(a) The Borrowers and each of their Subsidiaries possesses all
licenses, permits, franchises, Patents, Copyrights, Trademarks and trade names,
or rights thereto, to conduct their business substantially as now conducted and
as presently proposed to be conducted, and none of the Borrowers nor any of
their Subsidiaries is in violation of any rights of others with respect to any
of the foregoing that is reasonably likely to result in a Material Adverse
Effect. Set forth on SCHEDULE 6.11 hereto is (i) a complete list of all Patents,
Trademarks and Copyrights (each of the foregoing, together with any other
intellectual property material to the business of the Borrowers and their
Subsidiaries being referred to herein as "Proprietary Rights"), and (ii) a
complete list of all websites and domain names owned by the Borrowers and their
Subsidiaries, the domain name servers used in connection with the registration
of such websites and domain names, and the administrative contacts used in
connection with the registration of such domain names. SCHEDULE 6.11 clearly
identifies all Patents, Trademarks and Copyrights that have been duly registered
in, filed in or issued by the
55
PTO or the United States Register of Copyrights (collectively, the "Registered
Proprietary Rights"). The Registered Proprietary Rights have been properly
maintained and renewed in accordance with all applicable provisions of law and
administrative regulations in the United States, as applicable. The Borrowers
have taken commercially reasonable steps to protect their Registered Proprietary
Rights and to maintain the confidentiality of all Proprietary Rights that are
not generally in the public domain. Notwithstanding anything to the contrary set
forth herein, within a reasonable period following the consummation of any
Permitted Acquisition, the Borrowers shall obtain all licenses, permits, and
franchises necessary to conduct the business acquired by the Borrowers in
connection with such Permitted Acquisition, except where the failure to obtain
the same would not result in a Material Adverse Effect.
(b) As of the date hereof, SCHEDULE 6.11 annexed hereto contains
a true, accurate and complete list of (i) all Real Property Assets, whether
owned or leased, and (ii) all leases, subleases or assignments of leases
(together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Leasehold Property, regardless of
whether such Borrower is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Except as specified in SCHEDULE 6.11, each agreement listed in clause (ii) of
the immediately preceding sentence is in full force and effect and the Borrowers
have no knowledge of any default that has occurred and is continuing thereunder,
and each such agreement constitutes the legal, valid and binding obligation of
each applicable Borrower, enforceable against such Borrower in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles.
Section 6.12. NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS. The
Borrowers and each of their Subsidiaries have satisfied all judgments against
them and none of the Borrowers nor any of their Subsidiaries is in default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
court, arbitrator or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or foreign,
except for judgments which are not material in amount and are being contested in
good faith by the Borrowers in appropriate proceedings.
Section 6.13. NO DEFAULTS ON OTHER AGREEMENTS. None of the Borrowers
nor any of their Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction which could reasonably be expected to have a
Material Adverse Effect. None of the Borrowers nor any of their Subsidiaries is
in default in any material respect in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in any agreement or
instrument material to its business to which it is a party.
Section 6.14. LABOR MATTERS.
(a) Except as set forth on SCHEDULE 6.14 as of the Effective
Time (i) no employee of any Borrower or any Subsidiary is represented by a labor
union, no labor union has been certified or recognized as a representative of
any such employee, and no Borrower or Subsidiary has any obligation under any
collective bargaining agreement or other agreement with
56
any labor union or any obligation to recognize or deal with any labor union, and
there are no such contracts or other agreements pertaining to or which determine
the terms or conditions of employment of any employee of any Borrower or
Subsidiary thereof; (ii) there are no pending or threatened representation
campaigns, elections or proceedings; (iii) no Borrower has any knowledge of any
strikes, slowdowns or work stoppages of any kind, or threats thereof, and no
such activities occurred during the 24-month period preceding the date hereof;
(iv) no Borrower or Subsidiary has engaged in, admitted committing or been held
to have committed any unfair labor practice; and (v) no claims have been filed
against any Borrower or Subsidiary by and any employees or representatives
thereof.
(b) Except as set forth on SCHEDULE 6.14, each of the Borrowers
and their Subsidiaries has at all times complied in all material respects, and
are in material compliance with, all applicable laws, rules and regulations
respecting employment, wages, hours, compensation, benefits, and payment and
withholding of taxes in connection with employment.
(c) Except as set forth on SCHEDULE 6.14, the Borrowers and
their Subsidiaries have at all times complied in all material respects, and are
in material compliance with, all applicable laws, rules and regulations
respecting occupational health and safety, whether now existing or subsequently
amended or enacted, including, without limitation, the Occupational Safety &
Health Act of 1970, 29 U.S.C. Section 651 et seq. and the state analogies
thereto, all as amended or superseded from time to time, and any common law
doctrine relating to worker health and safety.
Section 6.15. INVESTMENT COMPANY ACT. None of the Borrowers nor any
of their Subsidiaries is an "investment company" within the meaning of the
United States Investment Company Act of 1940, as amended.
Section 6.16. ENVIRONMENTAL MATTERS. Except as set forth on SCHEDULE
6.16 hereto, to the knowledge of the Borrowers and their Subsidiaries, no real
property currently or previously owned or leased by the Borrowers or any of
their Subsidiaries is in violation of any Environmental Laws, and no Hazardous
Materials are present on said real property other than Hazardous Materials used,
generated, treated, stored, disposed of or otherwise introduced in compliance
with all applicable Environmental Laws, and except for the presence of Hazardous
Materials that would not result in a Material Adverse Effect. Except as set
forth on SCHEDULE 6.16 hereto, none of the Borrowers nor any of their
Subsidiaries has been identified in any litigation, administrative proceedings
or investigation as a responsible party or potentially responsible party for any
liability under any Environmental Laws.
Section 6.17. REGULATION U. None of the Borrowers nor any of their
Subsidiaries owns, directly or indirectly any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System, as
supplemented from time to time). The proceeds of the Loans are not being used
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "margin stock".
Section 6.18. NO GUARANTIES OR INDEMNITIES. Except as set forth on
SCHEDULE 6.07 hereto, none of the Borrowers nor any of their Subsidiaries is
obligated on any Guaranty or any indemnification of any kind for the debts,
liabilities or obligations of any Person, including
57
without limitation any Affiliate, other than indemnities and hold harmless
provisions entered into in favor of customers, bonding agencies and sureties in
the ordinary course of business.
Section 6.19. BANK ACCOUNTS. SCHEDULE 6.19 lists all banks and other
financial institutions at which any Borrower maintains deposits and/or other
accounts as of the Closing Date, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number.
Section 6.20. TRADE RELATIONS. There exists no actual or, to the
knowledge of the Borrowers and their Subsidiaries, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between any Borrower or any Subsidiary and any customer or any
group of customers whose purchases of goods or services individually or in the
aggregate are material to the business of such Borrower or such Subsidiary, or
with any material supplier, and, to the knowledge of the Borrowers and their
Subsidiaries, there exists no present condition or state of facts or
circumstances which would materially adversely affect the Borrowers or their
Subsidiaries or prevent the Borrowers or their Subsidiaries from conducting
their businesses after the consummation of the transactions contemplated by this
Agreement in substantially the same manner in which such businesses heretofore
have been conducted.
Section 6.21. COMPLIANCE WITH HEALTH CARE LAWS.
(a) Each of the Borrowers and their Subsidiaries has complied in
all material respects with all Health Care Laws applicable to such Borrower's or
Subsidiary's business. None of the Borrowers nor any of their Subsidiaries is
subject to any action, order, or agreement relating to any failure or alleged
failure by any Borrower or any Subsidiary to comply with any Health Care Law,
and, to the best knowledge of the Borrowers and their Subsidiaries, no Borrower
or any Subsidiary has any potential material liability for failing to comply
with any Health Care Law.
(b) The Borrowers and their Subsidiaries have obtained all
material licenses, permits, accreditations, certifications and approvals
necessary for their current operations under Health Care Laws, and all such
licenses, permits, accreditations, certifications and approvals are in good
standing, and each of the Borrowers and each Subsidiary is in compliance with
all terms and conditions thereof.
(c) No Borrower or Subsidiary has received any summons,
complaint, subpoena, order or other notice that it is not currently in
compliance with any Health Care Laws or that it is or may be liable to any other
Person under or in connection with any Health Care Laws (unless, with respect to
any such order (which is not a judicial order) or any such other notice such
Borrower is in the process of remediating such noncompliance in accordance with
any applicable cure or remediation plan or period set forth in such order or
notice).
(d) To the best of each Borrower's knowledge, none of the
present or past operations of any Borrower or any Subsidiary is the subject of
any investigation by any Governmental Authority concerning alleged or potential
violations of Health Care Laws.
58
(e) No Borrower or Subsidiary has entered into any negotiations
or settlement agreements with any Person which impose or could impose material
obligations or liabilities with respect to any Health Care Law on any Borrower
or Subsidiary.
ARTICLE 7.
AFFIRMATIVE COVENANTS
So long as any of the Loans or Letters of Credit remain outstanding or
any Lender shall have any Revolving Credit Commitment under this Agreement, each
of the Borrowers shall:
Section 7.01. MAINTENANCE OF EXISTENCE. Except as permitted by
Section 7.03, preserve and maintain, and cause each of their Subsidiaries to
preserve and maintain, its legal existence and good standing in the jurisdiction
of its organization, and qualify and remain qualified, and cause each of its
Subsidiaries to qualify and remain qualified, as a foreign organization in each
jurisdiction in which the failure to be so qualified would have a Material
Adverse Effect.
Section 7.02. CONDUCT OF BUSINESS. Continue, and cause each of their
Subsidiaries to continue, to engage in an efficient and commercially reasonable
manner in a business of the same general type as conducted by it on the date of
this Agreement.
Section 7.03. MAINTENANCE OF PROPERTIES. Maintain, keep and preserve,
and cause each of their Subsidiaries to maintain, keep and preserve, all of its
properties, (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
Section 7.04. MAINTENANCE OF RECORDS; FISCAL YEAR. Keep, and cause
each of their Subsidiaries to keep, adequate records and books of account, in
which complete entries will be made in accordance with GAAP, reflecting all
financial transactions of the Borrowers and their Subsidiaries. To enable the
ready and consistent determination of compliance with the covenants set forth in
Article 9 of this Agreement, each of the Borrowers shall maintain, and shall
cause each of their Subsidiaries (including each Foreign Subsidiary) to
maintain, December 31 of each year as the end of such Borrower's or such
Subsidiary's Fiscal Year.
Section 7.05. MAINTENANCE OF INSURANCE. Maintain, and cause each of
their Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
the Agent deems reasonably appropriate. The Agent will be named "Lender's Loss
Payable" and/or "Additional Named Insured," as appropriate, on all insurance
policies.
Section 7.06. COMPLIANCE WITH LAWS. Comply, and cause each of their
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (including Health Care Laws, ERISA and
Environmental Laws), such compliance to include, without limitation, paying all
taxes, assessments and governmental charges imposed upon it or upon its property
before the same become delinquent, except for such taxes, assessments, and
governmental charges which are not material in amount and which are being
contested by the Borrowers in appropriate proceedings.
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Section 7.07. RIGHT OF INSPECTION. At any reasonable time and from
time to time during regular business hours and upon reasonable prior notice
(except that no such prior notice shall be required after the occurrence and
during the continuance of any Default or Event of Default), permit the Agent or
any agent or representative thereof, to examine and make copies and abstracts
from the records and books of account of, and visit the properties of, the
Borrowers and any of their Subsidiaries, and the Borrowers hereby give to the
Agent and to any of its agents or representatives the Borrowers' irrevocable
permission to discuss to the extent necessary the affairs, finances and accounts
of the Borrowers and any of their Subsidiaries with the Borrowers' or their
Subsidiaries' respective officers and directors and the Borrowers' independent
accountants.
Section 7.08. REPORTING REQUIREMENTS. Furnish to the Agent which
shall in turn furnish to each of the Lenders:
(a) As soon as available and in any event within 90 days after
the end of each Fiscal Year of the Borrowers, consolidated and consolidating
balance sheets of the Borrowers and their Subsidiaries as of the end of such
Fiscal Year and consolidated and consolidating statements of income, cash flows
and stockholders' equity of the Borrowers and their Subsidiaries for such Fiscal
Year, all in reasonable detail and all prepared in accordance with GAAP, and as
to the consolidated statements, accompanied by an opinion thereon by Ernst &
Young LLP or other independent accountants of national standing selected by the
Borrowers and reasonably acceptable to Agent, which opinion shall not be
qualified by reason of audit limitations imposed by the Borrowers;
(b) As soon as available and in any event within 45 days after
the end of each Fiscal Quarter of the Borrowers (including the Fiscal Quarter
ending December 31 of each Fiscal Year), consolidated balance sheets of the
Borrowers and their Subsidiaries as of the end of such Fiscal Quarter and
consolidated statements of income, and cash flows of the Borrowers and their
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, all in reasonable detail and
stating in comparative form the respective consolidated figures for the
corresponding date in the current Fiscal Quarter, and all prepared in accordance
with GAAP and certified by the chief financial officer of Option Care (subject
to year-end adjustments and the absence of footnotes);
(c) As soon as available and in any event within 15 Banking Days
after the end of each Fiscal Month of the Borrowers, consolidated balance sheets
of the Borrowers and their Subsidiaries as of the end of such Fiscal Month and
consolidated and consolidating statements of income, and cash flows of the
Borrowers and their Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Month, all in
reasonable detail and stating in comparative form the respective consolidated
figures for the corresponding date in the current Fiscal Year, and all prepared
in accordance with GAAP and certified by the chief financial officer of Option
Care (subject to year-end adjustments and the absence of footnotes);
(d) Simultaneously with the delivery of the financial statements
referred to above for each Fiscal Year and each Fiscal Quarter of the Borrowers,
a certificate of the chief financial officer of Option Care in substantially the
form of EXHIBIT I hereto (a "COMPLIANCE
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CERTIFICATE") (i) certifying that to the best of his knowledge no Default or
Event of Default has occurred and is continuing or, if a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which is proposed to be taken with respect thereto, (ii) with
computations set forth in reasonable detail satisfactory to the Lenders which
demonstrate compliance with the covenants contained in Article 9, and (iii) with
a schedule listing all Liens of which they have knowledge on the assets of the
Borrowers and their Subsidiaries which are in addition to those in favor of the
Agent and Lenders or those listed on SCHEDULE 6.16 hereto;
(e) Promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
against any of the Borrowers or any of their Subsidiaries which, if determined
adversely to the Borrowers or their Subsidiaries, could reasonably be expected
to have a Material Adverse Effect;
(f) As soon as possible and in any event within three (3) days
after the occurrence of each Default or Event of Default, a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrowers with respect thereto;
(g) Promptly after the receiving thereof, copies of all reports
and notices which the Borrowers or any of their Subsidiaries receives from the
PBGC or the U.S. Department of Labor under ERISA; and as soon as possible and in
any event within 10 days after the Borrowers or any of their Subsidiaries know
or have reason to know that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC or the Borrowers or any of
their Subsidiaries have instituted or will institute proceedings under Title IV
of ERISA to terminate any Plan, the Borrowers will deliver to each of the
Lenders a certificate of the chief financial officer of Option Care setting
forth details as to such Reportable Event or Prohibited Transaction or Plan
termination and the action the Borrowers propose to take with respect thereto;
(h) Within 90 days of the end of each Fiscal Year, a forecast of
the balance sheet, income statement and statement of cash flows for the then
current Fiscal Year of the Borrowers and their Subsidiaries in a form reasonably
acceptable to the Agent and prepared on a quarterly basis by management in
accordance with GAAP;
(i) Contemporaneously with the filing, copies of all material
and reports filed with the Securities and Exchange Commission; and
(j) Such other information respecting the condition or
operations, financial or otherwise, of the Borrowers or any of their
Subsidiaries as the Agent at the request of any Lender may from time to time
reasonably request.
Section 7.09. SPECIAL PERIODIC REPORTS. The Borrowers shall execute
and deliver to the Agent, the following documents compiled as of the last day of
the applicable fiscal period, and the Borrowers acknowledge that the Agent and
the Lenders will rely on such documents in making loans hereunder:
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(a) Monthly (or with such greater frequency as the Agent may
reasonably request), by the fifteenth (15th) Banking Day of the following month
(or by such other date as the Agent may reasonably specify in the event the
Agent requests that such information be provided more frequently):
(i) a declaration or statement of: (A) Accounts (identifying
both Eligible Accounts, Eligible Unbilled Accounts, and ineligible
Accounts), (B) sales, (C) aging of Accounts, (D) aging of accounts
payable, (E) order backlog, (F) inventory (identifying Eligible
Inventory and ineligible inventory); (G) approval or comments on the
loan reconciliation provided to the Borrowers by the Agent, and (H) an
accounts receivable reconciliation; all as of the prior month end and
certified by the chief financial officer of Option Care and in form
reasonably acceptable to the Agent; and
(ii) a Monthly Borrowing Base Certificate in substantially the
form of EXHIBIT C annexed hereto.
(b) At the Agent's reasonable request, and within ten (10) days
of any such request, certified true copies of customer's invoices, or the
equivalent, for all services rendered and goods provided; and
(c) At the Agent's reasonable request, and within a reasonable
time period, certified true copies of all contracts, security agreements,
mortgages and other documents executed by the customers in connection with all
services rendered and any other information, reports, reconciliations, Account
debtor's addresses or documents the Agent may call upon the Borrowers to submit
from time to time.
The failure by the Agent or the Lenders to request any or all of the foregoing
or the failure of the Borrowers to perform the same shall not affect the
security interest of the Agent or the Lenders in or rights to any of the
Collateral. The pledge and assignment of each Account hereunder shall constitute
and be a transaction separate from and independent of each other, but all such
transactions shall be subject to and governed by each and every one of the terms
and provisions of this Agreement.
Section 7.10. EMPLOYMENT CONTRACTS. With 150 days following the
Closing Date, the Borrowers shall enter into employment and noncompetition
agreements with the Borrowers' most senior executives (as previously identified
to the Agent) on terms and conditions reasonably acceptable to the Agent.
Section 7.11. FIELD AUDITS. The Borrowers will permit the Agent to
conduct field audit examinations of, among other things, the Borrowers' and
their Subsidiaries' assets, liabilities, books, records, billing and collection
processes and management information systems twice each Fiscal Year (or with
such greater frequency as the Agent may reasonably require); provided further
that the Borrowers will permit the Agent to conduct such examinations at any
time and from time to time upon the occurrence and during the continuance of a
Default. Each Lender shall have the right to participate, in a manner reasonably
acceptable to such Lender, in such field audit examinations, PROVIDED, however,
that in the event that any Lender's Revolving Credit Commitment at any time
exceeds the Revolving Credit Commitment of the Agent, such Lender
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shall have the right, in such Lender's reasonable discretion, to request that
the Agent conduct additional field audit examinations. The Borrowers will
reimburse the Agent for the expense of each field audit examination at the
Agent's standard per diem rate per person, plus out-of-pocket expenses. In
connection with such field audits, the Borrowers will permit the Agent to make
test verifications of the Accounts with the Borrowers' and their Subsidiaries'
customers.
Section 7.12. COOPERATION AND FURTHER ASSURANCE. At all times until
the Loans are repaid in full, the Borrowers shall, and shall cause each of their
Subsidiaries to, cooperate with the Agent and the Lenders to effectuate the
intent and purposes of the Facility Documents. Without limiting the foregoing,
the Borrowers agree to execute and deliver any financing statements or other
instruments and do such other acts and things, as Agent may reasonably deem
necessary or advisable to effectuate the intent and purposes of this Agreement,
and shall cause their Subsidiaries to do likewise.
Section 7.13. DEPOSITS INTO COLLATERAL ACCOUNT. At all times when any
Revolving Credit Loans or Letters of Credit shall be outstanding, the Borrowers
(i) shall remit to the Agent promptly following receipt, and shall hold in trust
for the Agent and the Lenders until so remitted, any and all moneys received
from any source for deposit into the Collateral Account, including without
limitation any proceeds from any equity investment or extraordinary transaction,
and (ii) shall direct all financial institutions at which any Controlled
Accounts are maintained to remit to the Agent on a daily basis (or at such other
frequency as the Agent, in its discretion shall specify to the Borrowers), all
collected funds in such Controlled Accounts. At all times from and after the
date hereof, the Borrowers shall take all actions necessary to maintain,
preserve and protect the rights and interests of the Agent with respect to all
cash deposits of the Borrowers and all other proceeds of Collateral and shall
not, without the Agent's prior written consent, open any new or additional
deposit or other bank accounts.
Section 7.14. LOCK BOX OPERATION. The Borrowers shall at all times
direct their Account Debtors to make all payments directly to Lock Boxes or
Controlled Accounts under the control of the Agent or under the control of
another financial institution reasonably acceptable to the Agent that has
entered into a Controlled Account Agreement with the Agent.
Section 7.15. COMPLIANCE WITH HEALTH CARE LAWS. Each Borrower shall
conduct its business in compliance with all Health Care Laws applicable to such
Borrower's business. Each Borrower shall act promptly and appropriately to
respond to and remediate any violation of any Health Care Law. Each of the
Borrowers shall promptly report to the Agent, any such violation and any such
response and remediation.
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ARTICLE 8.
NEGATIVE COVENANTS
So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Revolving Credit Commitment under this
Agreement, each of the Borrowers covenants and agrees that it shall not (unless
waived in accordance with the provisions of Section 13.01 hereof):
Section 8.01. SALE OF ASSETS. Sell, lease, assign, transfer or
otherwise dispose of, or permit any Subsidiary to sell, lease, assign, transfer
or otherwise dispose of, any of its now owned or hereafter acquired assets
(including, without limitation, shares of stock and indebtedness of any
Subsidiary, receivables and leasehold interests); except: (a) for inventory
disposed of, or other assets consumed, in the ordinary course of business; (b)
any sale, lease, assignment or other transfer by any Borrower of its assets to
any other Borrower; (c) any sale or other disposition of assets no longer used
or useful in the conduct of its business; and (d) any other sale, lease,
assignment, or other transfer of assets (other than Accounts and inventory) by
any Borrower or any Subsidiary, PROVIDED that (i) after giving effect to any
sale, lease assignment or other transfer pursuant to Section 8.01(d), the
Borrowers are in compliance with the covenants set forth in Article 9, and (ii)
100% of the Net Cash Payments received from dispositions under Sections 8.01(c)
or 8.01(d) shall be applied to prepay the Revolving Credit Loans in accordance
with Section 2.04(c).
Section 8.02. STOCK OF SUBSIDIARIES, ETC. Sell or otherwise dispose
of any shares of capital stock of any Subsidiary, except in connection with a
transaction permitted under Section 8.03, or permit any such Subsidiary to issue
any additional share of its capital stock, except (a) directors' qualifying
shares, and (b) the issuance of shares by any Subsidiary to any Borrower,
PROVIDED that such Borrower shall forthwith deliver to the Agent pursuant to the
applicable Security Documents the certificates evidencing such shares of stock,
accompanied by undated stock powers executed in blank, and shall take such other
action as the Agent shall request to create a valid and enforceable First
Priority Lien on such shares pursuant to such Security Documents.
Section 8.03. MERGERS, ETC. Merge or consolidate with, or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, or permit any Subsidiary to do so, except
that (a) any Wholly-Owned Subsidiary (other than a Foreign Subsidiary) may merge
into any Borrower (so long as such Borrower is the surviving corporation) and
(b) any Borrower may transfer assets to any other Borrower.
Section 8.04. DIVIDENDS AND STOCK REPURCHASES. Declare or pay any
dividends, purchase, redeem, retire or otherwise acquire for value any of its
capital stock now or hereafter outstanding, or make any distribution of assets
to its stockholders as such whether in cash, assets or in obligations of the
Borrowers, or allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption or retirement of
any shares of its capital stock, or make any other distribution by reduction of
capital or otherwise in respect of any shares of its capital stock or permit any
Subsidiary to purchase or otherwise acquire for value
64
any stock of the Borrowers or another Subsidiary, except that: (a) Option Care
may declare and deliver dividends and make distributions payable solely in
common stock of Option Care and (b) Option Care may purchase or otherwise
acquire shares of its capital stock from employees or directors in connection
with the termination of their employment or affiliation with Option Care and
pursuant to employee stock redemption plans, PROVIDED that the aggregate cash
consideration paid by Option Care for all such shares does not exceed $500,000
during any fiscal year.
Section 8.05. LIENS. Create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
except (the following being called "PERMITTED LIENS"):
(a) Liens in favor of the Agent on behalf of the Lenders
securing the Loans hereunder;
(b) Liens for taxes or assessments or other government charges
or levies if not yet due and payable or, if due and payable, if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are not
past due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves have been
established;
(d) Liens under workmen's compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) Judgment and other similar Liens arising in connection with
court proceedings; provided that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(g) Easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrower or any of its Subsidiaries of the
property or assets encumbered thereby in the normal course of its business or
materially impair the value of the property subject thereto;
(h) Liens in existence on the Effective Date and listed on
SCHEDULE 6.06 hereto; or
(i) Liens on fixed or capital assets, including real or personal
property, acquired, constructed or improved by any Borrower, provided that (A)
such Liens secure Indebtedness (including Capitalized Leases) permitted by
Section 8.11(b), (B) such Liens and the
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Indebtedness secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement or were in
effect at the time the Borrowers acquired the assets or stock, (C) the
Indebtedness secured thereby does not exceed the cost of acquiring, constructing
or improving such fixed or capital assets, (D) such security interests shall not
apply to any other property or assets of any Borrower; and (E) the Borrowers
shall be in compliance with Article 9 of this Agreement after giving effect to
such transactions.
Section 8.06. TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement, take any of the following actions or permit any
Subsidiary to take any of the following actions: (a) make any loan, advance or
investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any property to an Affiliate; (c) merge into or consolidate with an
Affiliate, or purchase or acquire property from an Affiliate; or (d) enter into
any other transaction directly or indirectly with or for the benefit of an
Affiliate (including, without limitation, guarantees and assumptions of
obligations of an Affiliate); PROVIDED that the Borrowers may engage in and
continue the transactions with or for the benefit of Affiliates which are
described in SCHEDULE 8.06 so long as the terms of such transactions are not
less favorable to the Borrowers than the terms of a commercially reasonable,
arms' length transaction between non-affiliated parties.
Section 8.07. HAZARDOUS MATERIALS; INDEMNIFICATION. Use, generate,
treat, store, dispose of or otherwise introduce, or permit any Subsidiary to
use, generate, treat, store, dispose of or otherwise introduce, any Hazardous
Materials into or on any real property owned or leased by any of them and will
not cause, suffer, allow or permit anyone else to do so, except in compliance
with all applicable Environmental Laws. The Borrowers hereby jointly and
severally agree to indemnify, reimburse, defend and hold harmless the Lenders
and their directors, officers, agents and employees ("Indemnified Parties") for,
from and against all demands, liabilities, damages, costs, claims, suits,
actions, legal or administrative proceedings, interest, losses, expenses and
reasonable attorney's fees (including any such fees and expenses incurred in
enforcing this indemnity) asserted against, imposed on or incurred by any of the
Indemnified Parties, directly or indirectly pursuant to or in connection with
the application of any Environmental Law to acts or omissions occurring at any
time on or in connection with any real estate owned or leased by the Borrowers
or any Subsidiary or any business conducted thereon.
Section 8.08. ACQUISITIONS. Make or permit any Subsidiary to make any
Acquisition except that the Borrowers shall be permitted to make Acquisitions of
the capital stock or assets of domestic businesses which are in the same line of
business (i.e., home healthcare and/or specialty pharmacy) as the Borrowers and
Subsidiaries (collectively, "PERMITTED ACQUISITIONS") and which meet the
following criteria:
(a) each such Acquisition shall have been approved by the board
of directors (and, if required under applicable law, the stockholders) of the
entity to be acquired;
(b) in the event the aggregate purchase price (including any
potential Earn Out Obligations) for any single Acquisition exceeds $1,000,000,
the Borrowers shall submit to the Agent, at least seven (7) Banking Days prior
to the closing of such Acquisition a certificate of the CFO of Option Care (the
"ACQUISITION CERTIFICATE") which shall include the following: (i)
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at least two years of annual audited or reviewed financial statements (or
otherwise acceptable to the Lenders) for the entity to be acquired, prepared on
standalone basis including balance sheets and income and cash flow statements;
(ii) reasonably detailed calculations demonstrating that on a pro forma combined
basis for the most recently ended period of twelve months (with such pro forma
adjustments as the Agent shall deem reasonably acceptable) the Borrowers and
Subsidiaries and the entity to be acquired shall meet all of the covenants set
forth in Article 9 hereof for the most recently completed fiscal quarter; and
(iii) a calculation of the pro forma Borrowing Base of the Borrowers including
the entity to be acquired that demonstrates that the Borrowers and their
Subsidiaries meet the minimum Collateral Availability requirement set forth in
Section 9.03 hereof;
(c) the aggregate purchase price for any Acquisition (including
all potential payments in respect of Earn Out Obligations) shall not exceed
$7,500,000;
(d) after giving effect to such Acquisition, the Borrowers shall
have pro forma Availability of not less than $7,500,000;
(e) no Default or Event of Default shall have occurred and be
continuing under the Facility Documents immediately prior to and after giving
effect to the proposed Acquisition;
(f) the Borrowers and their Subsidiaries, immediately prior to
and after giving effect to any proposed Acquisition, shall be in compliance with
all terms and provisions of the Facility Documents, including, without
limitation, the covenants set forth in Article 9 hereof and the minimum
Collateral Availability requirements set forth in Section 9.03 hereof;
(g) each business acquired shall be organized under the laws of
the United States and have its chief executive office and principal place of
business within the United States; and
(h) if the Acquisition is structured as a merger involving any
Borrower, such Borrower shall be the surviving corporation.
PROVIDED, HOWEVER that the Borrowers and their Subsidiaries shall not consummate
more than eight (8) Acquisitions of entities which are not Option Care
Franchisees during any period of twelve consecutive months without the prior
written consent of the Agent and the Lenders; and PROVIDED, FURTHER, that (x)
the Accounts of any business acquired by any Borrower or Subsidiary shall not be
included in the Borrowing Base unless such Accounts satisfy all criteria set
forth in the definition of Eligible Accounts in Section 1.01 hereof and (y) if
the aggregate amount of the Accounts of any business acquired by any Borrower or
Subsidiary exceeds $2,500,000, such Accounts shall not be included in the
Borrowing Base until the Agent shall have conducted, and be satisfied with, a
new field audit examination of the type described in Section 7.11, including
a review of such Accounts.
Section 8.09. SUBSIDIARIES. Create any Subsidiary after the date
hereof unless the Borrowers shall as soon as possible but in any case not later
than fifteen (15) days subsequent to the creation of such Subsidiary (i) cause
such Subsidiary to (x) execute and deliver to the Agent a counterpart to this
Agreement (and thereby to become a party to this Agreement, as a
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"Borrower" or "Guarantor" hereunder), a counterpart to the Pledge Agreement and
such other documentation in such form as the Lenders may reasonably require, (y)
take such other action as shall be necessary to create and perfect valid and
enforceable First Priority Liens in favor of the Agent on all or substantially
all of the assets of such Subsidiary consistent with the provisions of the
applicable Security Documents and (z) deliver proof of corporate action,
incumbency of officers and other documents and opinions as is consistent with
those delivered by each Borrower pursuant to Section 6.01 as of the Effective
Date and (ii) execute and deliver to the Agent such amendments to the Pledge
Agreement or such new pledge agreements and take such other actions (including
delivering the certificates representing such shares of stock to the Agent) as
shall be necessary to create and perfect valid and enforceable First Priority
Liens in favor of the Agent on all of the issued and outstanding stock of such
Subsidiary and deliver to the Agent such proof of corporate action, incumbency
certificates and opinions of counsel as are consistent with those delivered
under Section 6.01 with respect to those Subsidiaries whose stock is pledged to
the Agent on the Effective Date, all of the foregoing to be in form and
substance reasonably satisfactory to the Agent.
Section 8.10. CERTAIN INVESTMENTS. Make after the date of this
Agreement or permit to remain outstanding any loans, advances or investments of
any kind in or make any distributions of cash or other assets of any kind to any
other Person, except that (a) any Borrower may make loans to or investments in
any other Borrower, and (b) the Borrowers may make Permitted Investments;
PROVIDED that at any time when the Total Exposure exceeds $2,500,000, the
Borrowers shall within ten (10) Banking Days liquidate such Permitted
Investments and apply 100% of the net cash proceeds from the liquidation of such
Permitted Investments to prepay the Revolving Credit Loans in an amount
sufficient to reduce the Total Exposure to an amount less than $2,500,000.
Section 8.11. INDEBTEDNESS. Create, incur, assume or suffer to exist,
or permit any Subsidiary to create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement or the
Notes;
(b) other Indebtedness of the Borrowers (determined on a
consolidated basis without duplication in accordance with GAAP) consisting of
Capitalized Leases and/or secured by Liens permitted under Section 8.05, in an
aggregate principal amount at any time outstanding not in excess of $2,500,000
at any one time outstanding, PROVIDED that the Borrowers shall be in compliance
with Article 8 of this Agreement after giving effect to such transactions;
(c) Subordinated Indebtedness;
(d) Trade debt incurred in the ordinary course of business;
(e) Indebtedness existing on the date hereof which is set forth
on SCHEDULE 8.11 annexed hereto and has been designated on such schedule as
Indebtedness that will remain outstanding following the funding of the initial
Loans;
(f) Indebtedness in respect of Foreign Exchange Obligations and
Interest Rate Protection Obligations owing to the Agent or any of the Lenders;
and
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(g) unsecured Indebtedness in respect of Earn Out Obligations.
Section 8.12. GUARANTEES, ETC. Except as set forth in Section 6.17
or otherwise expressly permitted by Section 8.06 assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable, or permit
any Subsidiary to assume, guarantee, endorse or otherwise be or become directly
or contingently responsible or liable (including, but not limited to, an
agreement to purchase any obligation, stock, assets, goods or services or to
supply or advance any funds, assets, goods or services, or an agreement to
maintain or cause such Person to maintain a minimum working capital or net worth
or otherwise to assure the creditors of any Person against loss) for the
obligations of any Person, except (a) guarantees by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of business and (b) guarantees by any Subsidiary of Indebtedness of the
Borrowers permitted hereunder.
Section 8.13. SUBORDINATED INDEBTEDNESS. Purchase, redeem, retire or
otherwise acquire for value, or set apart any money for a sinking, defeasance or
other analogous fund for the purchase, redemption, retirement or other
acquisition of, or make, or permit any Subsidiary to do any of the foregoing in
respect of any voluntary payment or prepayment of the principal of or interest
on, or other amount owing in respect of, any Subordinated Indebtedness.
Section 8.14. RESTRICTIVE AGREEMENTS. Enter into, incur or permit to
exist, or permit any Subsidiary to enter into, incur or permit to exist, any
agreement or other arrangement that prohibits, restricts or imposes any
condition upon (a) the ability of any Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets in favor of
the Agent or the Lenders, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Borrowers or the ability of the
Guarantors to Guarantee Indebtedness of the Borrowers; provided that (i) the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement, and (ii) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted to be incurred by the Borrowers or their Subsidiaries
under the terms of this Agreement if such restrictions or conditions apply only
to the property or assets securing such Indebtedness.
Section 8.15. TRANSACTIONS WITH EXCLUDED SUBSIDIARIES.
Notwithstanding anything to the contrary set forth in this Agreement, except as
expressly permitted by this Section 8.15, take any of the following actions or
permit any Subsidiary to take any of the following actions: (a) make any loan,
advance or investment in an Excluded Subsidiary; (b) transfer, sell, lease,
assign, or otherwise dispose of any property to an Excluded Subsidiary; (c)
merge into or consolidate with an Excluded Subsidiary, or purchase or acquire
property from an Excluded Subsidiary; or (d) enter into any other transaction
directly or indirectly with or for the benefit of an Excluded Subsidiary
(including, without limitation, guarantees and assumptions of obligations of an
Excluded Subsidiary); PROVIDED that so long as no Default or Event of Default
shall have occurred and be continuing, the Borrowers may make capital
contributions to the Excluded Subsidiaries in an aggregate amount not to exceed
$1,000,000 per year.
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ARTICLE 9.
FINANCIAL COVENANTS
So long as any of the Notes shall remain unpaid or any Lender shall
have any Revolving Credit Commitment under this Agreement:
Section 9.01. MAXIMUM TOTAL LEVERAGE RATIO. The Borrowers will not
permit the Total Leverage Ratio of the Borrowers and their Subsidiaries
(determined on a consolidated basis in accordance with GAAP) as of the end of
each Fiscal Quarter to exceed 2.75 to 1.00.
Section 9.02. MINIMUM FIXED CHARGE COVERAGE RATIO. The Borrowers
shall not permit the Fixed Charge Coverage Ratio as of the end of each Fiscal
Quarter to be less than 1.50 to 1.00.
Section 9.03. MINIMUM COLLATERAL AVAILABILITY. The Borrowers shall
not permit the Collateral Availability at any time to be less than $5,000,000.
ARTICLE 10.
EVENTS OF DEFAULT
Section 10.01. EVENTS OF DEFAULT. Any of the following events shall be
an "Event of Default":
(a) The Borrowers shall fail to pay any principal of or interest
on the Loans or any Reimbursement Obligation or any fee or other amount due
hereunder when the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof, by acceleration of such due
or prepayment date, or otherwise;
(b) Any representation or warranty made or deemed made by the
Borrowers or any of their Subsidiaries in this Agreement or in any other
Facility Document or which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in connection with
any Facility Document shall prove to have been incorrect in any material respect
on or as of the date made or deemed made;
(c) The Borrowers or any of their Subsidiaries shall fail to
perform or observe (i) any of the covenants set forth in Sections 7.01, 7.07
through 7.09, 7.11, 7.13 or 7.14 or in Articles 8 or 9, or (ii) any term,
covenant or agreement contained in this Agreement (other than those referred to
elsewhere in this Section 10.01) or fail to perform or observe any term,
covenant or agreement on its part to be performed or observed in any other
Facility Document, and, in the case of this clause (ii), such failure shall
continue for 15 consecutive days after notice of such failure shall have been
made to the Borrowers by the Agent at the request of the Required Lenders;
(d) Any Borrower or any Subsidiary shall: (i) fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness of the Borrowers or such Subsidiary when due
(whether by scheduled maturity,
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required prepayment, demand or otherwise); or (ii) fail to perform or observe
any term, covenant or condition on its part to be performed or observed under
any agreement or instrument relating to any such Material Indebtedness, when
required to be performed or observed, if the effect of such failure to pay,
perform or observe is to accelerate the maturity of such Material Indebtedness
(or, after the giving of applicable notice or passage of time, or both, to
permit the acceleration of the maturity of such Material Indebtedness), or any
such Material Indebtedness shall be declared to be due and payable, or required
to be prepaid (other than by a regularly scheduled required prepayment), prior
to the stated maturity thereof;
(e) Any Borrower or any Subsidiary: (i) shall generally not, or
be unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; or (ii) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (iii) shall commence
any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (iv) shall have had any such petition or
application filed or any such proceeding shall have been commenced, against it,
in which an adjudication or appointment is made or order for relief is entered,
or which petition, application or proceeding remains undismissed for a period of
60 days or more; or (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 60 days or more;
(f) One or more judgments, decrees or orders for the payment of
money in excess of $1,000,000 in the aggregate shall be rendered against any
Borrower or any Subsidiary and such judgments, decrees or orders shall continue
unsatisfied and in effect for a period of 60 consecutive days without being
vacated, discharged, satisfied or stayed or bonded pending appeal;
(g) Any of the following events shall occur or exist with
respect to any Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; or (ii) any Reportable Event shall occur with respect to any
Plan; or (iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; or (iv) any event or
circumstance exists which might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the termination of, or for
the appointment of a trustee to administer, any Plan, or the institution by the
PBGC of any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the reorganization,
insolvency, or termination of any Multiemployer Plan; and in each case above,
such event or condition, together with all other events or conditions, if any,
could subject the Borrower to any tax, penalty, or other liability to a Plan,
Multiemployer Plan, the PBGC, or otherwise (or any combination thereof) which in
the aggregate exceed or may exceed $1,000,000;
(h) After the date hereof, any Person who does not now possess
Control of Option Care shall acquire Control of Option Care, alone or together
with its Affiliates, by stock
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purchase, tender offer or otherwise, other than transfers of the capital stock
of Option Care which shall occur by operation of law;
(i) The Security Documents shall at any time or for any reason
cease: (i) to create a valid and perfected security interest or lien in and to
the property purported to be subject to the same; or (ii) to be in full force
and effect or shall be declared null and void, or the validity or enforceability
thereof shall be contested by any party thereto or any party thereto shall deny
it has any further liability or obligations to the secured parties thereunder;
(j) Any Facility Document shall at any time or for any reason
cease to be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Borrower or any
Subsidiary, or any Borrower or any Subsidiary shall deny it has any further
liability or obligations thereunder;
(k) The Agent shall have reasonably determined that an event or
condition has occurred which has had, or which could be expected to have, a
Material Adverse Effect; or
(l) Any Borrower or Subsidiary shall (i) withdraw or attempt to
withdraw any funds or other items on deposit in any Lockbox or any Controlled
Account; (ii) direct or attempt to direct any bank at which any Lockbox or
Controlled Account is maintained not to make, or to cease making, transfers of
any funds or other items (x) from a Lockbox to a Controlled Account, or (y) from
a Controlled Account to the Agent or at the direction of the Agent; or (iii)
direct any Account Debtor not to make payments to Lockbox.
Section 10.02. REMEDIES. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Lenders, by a written
notice to the Borrowers: (a) declare the Revolving Credit Commitments to be
terminated, whereupon the same shall forthwith terminate, and (b) declare the
outstanding principal of the Loans, all interest thereon and all other amounts
payable under this Agreement and the Loans to be forthwith due and payable,
whereupon the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrowers;
provided that, in the case of an Event of Default referred to in Section
10.01(e) above, the Revolving Credit Commitments shall be immediately
terminated, and the Loans, all interest thereon and all other amounts payable
under this Agreement and the Notes shall be immediately due and payable without
notice, presentment, demand, protest or other formalities of any kind, all of
which are hereby expressly waived by the Borrowers. Further, upon the occurrence
and during the continuance of an Event of Default, the Agent, acting on behalf
of and at the direction of the Required Lenders (and subject to the provisions
of Section 11.17), may then exercise any and all rights and remedies available
under the Facility Documents or at law or in equity.
ARTICLE 11.
GUARANTY
Section 11.01. THE GUARANTEE. Each Person who may from time to time
become a Guarantor hereunder, hereby jointly and severally guarantees to each
Lender and the Agent and
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its respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loans made by the Lenders to the Borrowers, all fees and
other amounts from time to time owing from the Borrowers to the Lenders
hereunder, and all other Obligations of the Borrowers and each of their
Subsidiaries under the Facility Documents (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). Each Guarantor hereby further
agrees that if the Borrowers or any Subsidiary shall fail to pay in full when
due (whether at stated maturity, by acceleration or otherwise) any of the
Guaranteed Obligations, such Guarantor shall promptly pay the same upon demand
therefor by the Agent or the Lenders, without any further demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
Section 11.02. OBLIGATIONS UNCONDITIONAL. The obligations of each
Guarantor under Section 10.01 are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of this Agreement,
the other Facility Documents or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 11.02 that the obligations of each Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not, to the extent permitted by applicable law, alter or
impair the liability of each Guarantor and each other Guarantor under this
Article 11 which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to such
Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(b) any of the acts mentioned in any of the provisions hereof or
of the other Facility Documents or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under the
other Facility Documents or any other agreement or instrument referred to herein
or therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor of,
the Agent or the Lenders as security for any of the Guaranteed Obligations shall
fail to be perfected.
Each Guarantor hereby expressly waives, to the extent permitted by applicable
law, diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that
73
the Agent or the Lenders exhaust any right, power or remedy or proceed against
the Borrowers hereunder or under the other Facility Documents or any other
agreement or instrument referred to herein or therein, or against any other
Person under other guarantee of, or security for, any of the Guaranteed
Obligations.
Section 11.03. REINSTATEMENT. The obligations of each Guarantor under
this Article 11 shall be automatically reinstated if and to the extent that for
any reason any payment in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of any of the Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise, and each Guarantor agrees that it will indemnify the Agent and each
Lender on demand for all reasonable costs and expenses (including reasonable
fees and expenses of counsel) incurred by the Agent or any Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
Section 11.04. SUBROGATION. Unless and until all of the Loans have
been repaid in full and the Revolving Credit Commitments have been irrevocably
terminated, no Guarantor shall have any rights of subrogation, whether arising
by contract or operation of law (including, without limitation, any such right
arising under the Federal Bankruptcy Code of 1978, as amended) or otherwise by
reason of any payment by it pursuant to the provisions of this Article 10.
Section 11.05. REMEDIES. Each Guarantor agrees that, as between such
Guarantor and the Lenders, the obligations of the Borrowers hereunder may be
declared to be forthwith due and payable as provided in Section 10.01 hereof
(and shall be deemed to have become automatically due and payable in the
circumstances provided in Section 10.01) for purposes of Section 11.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrowers and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrowers) shall forthwith
become due and payable by such Guarantor for purposes of Section 11.01.
Section 11.06. INSTRUMENT FOR THE PAYMENT OF MONEY. Each Guarantor
hereby acknowledges that the guarantee in this Article 11 constitutes an
instrument for the payment of money, and consents and agrees that the Agent and
the Lenders, in the event of a dispute by any Guarantor in the payment of any
moneys due hereunder, shall have the right to summary judgment or such other
expedited procedure as may be available for a suit on a note or other instrument
for the payment of money.
Section 11.07. CONTINUING GUARANTEE. The guarantee in this Article 11
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
Section 11.08. GENERAL LIMITATION ON GUARANTEE OBLIGATIONS. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 11.01
would otherwise, taking into account the provisions of Section 11.08, be held or
determined to
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be void, invalid or unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under Section 11.01, then,
notwithstanding any other provision hereof to the contrary, the amount of such
liability shall, without any further action by any Guarantor, any Lender, the
Agent or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
ARTICLE 12.
RELATIONS AMONG AGENT, LENDERS AND BORROWERS
Section 12.01. APPOINTMENT, POWERS AND IMMUNITIES OF AGENT. Each
Lender hereby irrevocably (but subject to removal by the Required Lenders
pursuant to Section 12.09) appoints and authorizes the Agent to act as its agent
hereunder and under any other Facility Document with such powers as are
specifically delegated to the Agent by the terms of this Agreement and any other
Facility Document, together with such other powers as are reasonably incidental
thereto. The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and any other Facility Document, and shall
not by reason of this Agreement be a trustee for any Lender. The Agent shall not
be responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrowers or any officer or official of the Borrowers or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under, this Agreement or any other Facility
Document, or for the value, legality, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Facility Document
or any other document or instrument referred to or provided for herein or
therein, for the perfection or priority of any collateral security for the
Loans, or for any failure by the Borrowers to perform any of their obligations
hereunder or thereunder. The Agent may employ agents and attorneys-in-fact and
shall not be responsible, except as to money or securities received by it or its
authorized agents, for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither the Agent nor any
of its directors, officers, employees or agents shall be liable or responsible
for any action taken or omitted to be taken by it or them hereunder or under any
other Facility Document or in connection herewith or therewith, except for its
or their own gross negligence or willful misconduct.
Section 12.02. RELIANCE BY AGENT. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram, telecopier or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Lender as the holder of the Loans made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Lender shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Lender. As to any matters not expressly
provided for by this Agreement or any other Facility Document, the Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Lenders, and
such instructions of the Required Lenders and any action
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taken or failure to act pursuant thereto shall be binding on all of the Lenders
and any other holder of all or any portion of any Loan.
Section 12.03. DEFAULTS. The Agent shall not be deemed to have
knowledge of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Lenders) unless the
Agent has received notice from a Lender or the Borrowers specifying such Default
or Event of Default and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). The Agent
shall (subject to Section 11.08) take such action with respect to such Default
or Event of Default which is continuing as shall be directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders; and provided further that the Agent shall not
be required to take any such action which it determines to be contrary to law.
Section 12.04. RIGHTS OF AGENT AS A LENDER. With respect to any
Revolving Credit Commitment and the Loans made by it, the Agent in its capacity
as a Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as the
Agent, and the term "Lenders" shall, unless the context otherwise indicates,
include the Agent in its capacity as a Lender. The Agent and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to (on a secured or unsecured basis), and generally engage in any kind of
banking, trust or other business with, the Borrowers (and any of their
Affiliates) as if it were not acting as the Agent, and the Agent may accept fees
and other consideration from the Borrowers for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Although the Agent and its Affiliates may in the course of such relationships
and relationships with other Persons acquire information about the Borrowers,
their Affiliates and such other Persons, the Agent shall have no duty to
disclose such information to the Lenders.
Section 12.05. INDEMNIFICATION OF AGENT. The Lenders agree to
indemnify the Agent (to the extent not reimbursed under Section 13.03 or under
the applicable provisions of any other Facility Document, but without limiting
the obligations of the Borrower under Section 13.03 or such provisions), ratably
in accordance with the aggregate unpaid principal amount of the Loans made by
the Lenders (without giving effect to any participations, in all or any portion
of such Loans, sold by them to any other Person) (or, if no Loans are at the
time outstanding, ratably in accordance with their respective Revolving Credit
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, any
other Facility Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Borrowers are obligated to pay
under Section 13.03 or under the applicable provisions of any other Facility
Document but excluding, unless a Default or Event of Default has occurred,
normal administrative costs and expenses incident to the performance of its
agency
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duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents or instruments; provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent.
Section 12.06. DOCUMENTS. The Agent will forward to each Lender,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Lender.
Section 12.07. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and their
Subsidiaries and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the 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 analysis and decisions in taking or not taking action
under this Agreement or any other Facility Document. The Agent shall not be
required to keep itself informed as to the performance or observance by the
Borrowers of this Agreement or any other Facility Document or any other document
referred to or provided for herein or therein or to inspect the properties or
books of the Borrowers or any Subsidiary. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Borrowers or any of their Subsidiaries
which may come into the possession of the Agent or any of its Affiliates. The
Agent shall not be required to file this Agreement, any other Facility Document
or any document or instrument referred to herein or therein, for record or give
notice of this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, to anyone.
Section 12.08. FAILURE OF AGENT TO ACT. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Section 12.05 in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 12.09. RESIGNATION OR REMOVAL OF AGENT. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrowers, and the Agent may be removed at any time with or without cause by the
Required Lenders; provided that the Borrowers and the other Lenders shall be
promptly notified thereof. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank which has an office in the United States. The Required Lenders
or the retiring Agent, as the case may be, shall upon the appointment of a
successor Agent promptly so notify the Borrower and the other Lenders. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
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Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article 12 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent.
Section 12.10. AMENDMENTS CONCERNING AGENCY FUNCTION. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.
Section 12.11. LIABILITY OF AGENT. The Agent shall not have any
liabilities or responsibilities to the Borrowers on account of the failure of
any Lender to perform its obligations hereunder or to any Lender on account of
the failure of the Borrowers to perform their obligations hereunder or under any
other Facility Document. The Agent shall have no liability to the Borrowers or
to any Lender by reason of any error in the computation of the Borrowing Base.
Section 12.12. TRANSFER OF AGENCY FUNCTION. Without the consent of the
Borrowers or any Lender, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
provided that the Agent shall promptly notify the Borrowers and the Lenders
thereof.
Section 12.13. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent
shall have been notified by a Lender or the Borrowers (any such party as
appropriate being the "Payor") prior to the date on which such Lender is to make
payment hereunder to the Agent of the proceeds of a Loan or the Borrowers are to
make payment to the Agent, as the case may be (either such payment being a
"Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment (and if such
recipients are the Borrowers and the Payor Lender fails to pay the amount
thereof to the Agent upon demand, the Borrowers) shall, on demand, repay to the
Agent the amount made available to the Borrowers together with interest thereon
for the period from the date such amount was so made available by the Agent
until the date the Agent recovers such amount at a rate per annum equal to the
average daily Federal Funds Rate for such period; provided further that as used
in this Section 12.13, "Required Payment" does not include any amounts due from
a Lender to the Agent which are to be settled on the next Settlement Date
pursuant to Section 2.13, but "Required Payment" shall include as of each
Settlement Date any amounts due from a Lender to the Agent as part of the
Settlement Amount to be paid on such Settlement Date pursuant to Section 2.13.
Section 12.14. WITHHOLDING TAXES. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations
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relating thereto. Without limiting the effect of the foregoing, if any Lender is
not created or organized under the laws of the United States of America or any
state thereof, in the event that the payment of interest by the Borrowers is
treated for U.S. income tax purposes as derived in whole or in part from sources
from within the U.S., such Lender will furnish to the Agent Form 4224 or Form
1001 of the Internal Revenue Service, or such other forms, certifications,
statements or documents, duly executed and completed by such Lender as evidence
of such Lender's exemption from the withholding of U.S. tax with respect
thereto. The Agent shall not be obligated to make any payments hereunder to such
Lender in respect of any Loan or such Lender's Revolving Credit Commitment until
such Lender shall have furnished to the Agent the requested form, certification,
statement or document.
Section 12.15. SEVERAL OBLIGATIONS AND RIGHTS OF LENDERS. The failure
of any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to protect and enforce its rights arising out of this
Agreement, and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
Section 12.16. PRO RATA TREATMENT OF LOANS, ETC.
(a) Each Lender shall at all times maintain a uniform, and not a
varying, undivided percentage of all rights and obligations under and in respect
of the Revolving Credit Commitments and Revolving Credit Loans. The Revolving
Credit Commitment Percentage of each Lender shall be equivalent at all times.
(b) Except to the extent otherwise provided, (i) each borrowing
under Section 2.02 shall be made from the Lenders and each payment of commitment
fees accruing under Section 2.15 shall be made for the account of the Lenders,
pro rata according to the relative amounts of the Revolving Credit Commitments
of each Lender and (ii) each prepayment and payment of principal of or interest
on Revolving Credit Loans shall be made for the account of the Lenders, pro rata
according to each Lender's proportionate share of the principal amount of all
Revolving Credit Loans then outstanding.
(c) If the Agent receives funds for application to the
Obligations under the Facility Documents under circumstances for which the
Facility Documents do not specify the Loans or other Obligations to which, or
the manner in which, such funds are to be applied, the Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's proportionate share of the principal amount of all
Loans then outstanding, in repayment or prepayment of such of the outstanding
Loans or other Obligations owed to such Lender, and for application to such
principal installments, as the Agent shall direct.
Section 12.17. SHARING OF PAYMENTS AMONG LENDERS. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including any receipt of proceeds from the Collateral Account), it
shall promptly purchase from the other Lenders participations in (or, if
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and to the extent specified by such Lender, direct interests in) the Loans made
by the other Lenders in such amounts, and make such other adjustments from time
to time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment (net of any expenses which may be incurred by such
Lender in obtaining or preserving such benefit) pro rata in accordance with the
unpaid principal and interest on the Loans held by each of them. To such end the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrower agrees that any Lender so purchasing a participation
(or direct interest) in the Loans made by other Lenders may exercise all rights
of setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrower.
Section 12.18. ENFORCEMENT OF FACILITY DOCUMENTS. After the Agent has
received written notice from any Lender that an Event of Default has occurred
and is continuing, the Agent shall, subject to the other provisions of this
Article 12 and to the terms of the Facility Documents (and subject to the
rights, if any, of other persons holding liens on, security interests in or
claims to the Collateral which are prior to those of the Security Agreement),
take such steps toward collection or enforcement of any Facility Document and
the Collateral (or any portion thereof), including without limitation an action
to enforce the Security Documents, as may be instructed in writing by the
Required Lenders, provided, however, that in no event shall the Agent be
required, and in all cases it shall be fully justified in failing or refusing,
to take any action under or pursuant to this Agreement (including without
limitation this Section 12.18) which, in the reasonable opinion of the Agent,
would be contrary to law or to the terms of this Agreement or any Facility
Document or would subject it or its officers, employees or directors to
liability, unless and until the Agent shall be indemnified or tendered security
to its satisfaction by the Lenders, ratably as provided in Section 12.05 hereof,
against any and all loss, cost, expense or liability in connection therewith,
anything herein or elsewhere contained to the contrary notwithstanding. Except
as expressly provided in this Section 12.18, the Agent shall not be required to
take steps toward the collection of any amounts becoming payable upon any
Collateral, or to take any action towards enforcing any Facility Document or to
institute, appear in or defend any action, suit or other proceeding in
connection therewith. The foregoing provisions of this paragraph shall not be
construed to limit the power of the Agent to take any action permitted under any
Facility Document to be taken by the Agent, and the Agent may, in accordance
with this agreement, take any aforesaid action without the receipt of indemnity
or security or any request therefor and the taking of any such action shall not
be construed as a waiver of any provision of this Agreement. Each Lender agrees
with the other Lenders and the Agent that (i) such Lender will not take any
action whatsoever to enforce any term or provision of any Facility Document or
otherwise to realize the benefits of the Collateral, except through the Agent in
accordance with this Agreement, and (ii) if the Required Lenders shall instruct
the Agent pursuant to this Section 12.18 to commence action to enforce any
Facility Document, such Lender (a) shall not thereafter commence any proceeding
of its own seeking payment of the Loans and/or any other Obligation held by such
Lender so long as such enforcement action is ongoing, and (b) if such a
proceeding shall be pending at the time such instructions are given to the
Agent, shall promptly (but in no event later than the commencement of such
enforcement action) cause such proceeding to be discontinued, provided that if
such Lender shall fail to discontinue such proceeding, the Agent is
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hereby authorized and directed by such Lender and the other Lenders to commence
and maintain such foreclosure action on behalf of such other Lenders (excluding
such Lender) and any distribution of amounts required by this Agreement or the
Facility Documents shall be made only to such other Lenders and/or the Agent as
provided therein and, notwithstanding anything herein or in the Security
Agreement to the contrary, such Lender shall not be entitled to share therein.
Section 12.19. BORROWING BASE STATEMENTS, ETC. The Agent shall provide
to the Lenders and the Borrowers, within fourteen (14) days after receipt of the
Borrowers' reports required under Section 7.09, a copy of the computations of
the Borrowing Base made by the Agent on the basis of such reports in
substantially the same format which has been furnished to the Lenders as of the
date of this Agreement; provided, however, that the Agent shall not be liable to
the Lenders for the accuracy of any information contained in such statements.
The Agent shall provide to the Lenders each Borrowing Base Certificate promptly
after receipt thereof from the Borrowers.
Section 12.20. CO-AGENT. The Co-Agent shall not have any duties or
obligations under this Agreement and the other Facility Documents, express or
implied. The Co-Agent shall not incur any personal liability by reason of being
named the Co-Agent, hereunder.
ARTICLE 13.
MISCELLANEOUS
Section 13.01. AMENDMENTS AND WAIVERS. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement or any of the other
Facility Documents may be amended or modified only by an instrument in writing
signed by the Borrowers, the Agent and the Required Lenders, or by the Borrowers
and the Agent acting with the consent of the Required Lenders and any provision
of this Agreement or the other Facility Documents for the benefit of the
Required Lenders or the Agent may be waived by the Required Lenders or by the
Agent acting with the consent of the Required Lenders; provided that no
amendment, modification or waiver shall
(a) increase the Revolving Credit Commitment of any Lender
without the written consent of such Lender and the Agent;
(b) reduce the principal amount of any Loan or Reimbursement
Obligation or reduce the rate of interest thereon (other than the decision not
to charge, or to cease to charge, interest at the Default Rate), or reduce any
fees payable hereunder, without the written consent of each Lender directly
affected thereby;
(c) postpone the scheduled date of payment of the principal
amount of any Loan or Reimbursement Obligation other than mandatory prepayments
of the Loans required under Section 2.04, or any interest thereon, or any fees
payable hereunder, or reduce the amount of any such payment, change the maturity
date of any Loan, or postpone the scheduled date of expiration of any Revolving
Credit Commitment, or extend the ultimate expiration date of any Letter of
Credit beyond the Revolving Credit Termination Date, without the written consent
of each Lender directly affected thereby;
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(d) change any of the provisions of this Section 13.01 or the
definition of "Required Lenders", or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or under any other Facility Document or make any determination or
grant any consent hereunder or thereunder, without the written consent of each
Lender;
(e) release any material Guarantor from its obligations in
respect of its Guarantee under Article 11 or release all or substantially all of
the Collateral (or terminate all or substantially all of the Liens in favor of
the Agent on the Collateral), except as expressly permitted in this Agreement,
without the written consent of each Lender; or
(f) modify the Borrowing Base to increase the advance rate
percentages applicable to any category of Collateral included therein, to add
new categories of eligible Collateral or to make less restrictive the
eligibility criteria applicable to any category of Collateral (other than the
adjustment or elimination of reserves in the Agent's reasonable discretion),
without the written consent of each Lender and the Agent;
PROVIDED, FURTHER, that any amendment of Article 12 hereof or any amendment
which increases the obligations of the Agent hereunder shall require the consent
of the Agent. No failure by any party (Agent, any Lender or the Borrowers) to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
Section 13.02. USURY. Anything herein to the contrary notwithstanding,
the obligations of the Borrowers under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Lender limiting rates of interest which may be charged or collected by such
Lender.
Section 13.03. EXPENSES. The Borrowers and the Guarantors jointly and
severally agree to pay, or to reimburse the Agent or the Lenders, as applicable,
for paying: (a) all reasonable out-of-pocket expenses incurred by the Agent and
its Affiliates, including the reasonable fees, charges and disbursements of
counsel to the Agent, in connection with the preparation and administration of
this Agreement and the other Facility Documents or any amendments, modifications
or waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (b) all reasonable
out-of-pocket expenses incurred by the Agent in connection with the issuance,
amendment, renewal or extension of any Letter of Credit or any demand for
payment thereunder, (c) all out-of-pocket expenses incurred by the Agent or any
Lender, including the reasonable fees, charges and disbursements of any counsel
for the Agent or any Lender, in connection with the investigation, enforcement
or protection of its rights in connection with this Agreement and the other
Facility Documents, including its rights under this Section 13.03, or in
connection with the Loans made or Letters of Credit issued hereunder following a
Default or Event of Default, including in connection with any workout,
restructuring or negotiations in respect thereof; (d) all out-of-pocket costs,
expenses and advances incurred by the Agent in the protection of its security
interests (including but not limited to reasonable fees and out-of-pocket
expenses incurred in
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perfection of, or checking the status of such security interests and
examinations to determine the value of Accounts), (e) all present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies arising from any payment made hereunder or from the execution,
delivery or enforcement of, or otherwise with respect to this Agreement and the
other Facility Documents, all costs, expenses, taxes, assessments and other
charges incurred in connection with any filing, registration, recording,
perfection or termination of any security interest contemplated hereby or by any
other Facility Document or any other document referred to therein; and (f) the
amount of any and all out-of-pocket expenses which Agent may incur in connection
with the collection of any item deposited in the Controlled Disbursement Account
or received by Agent in connection with any Collateral, together with interest
on any of the above from the date of such expenditure to the date of repayment
in full to Agent at the rate of interest payable on the Notes. The Borrowers and
the Guarantors agree to indemnify the Agent and each Lender and their respective
directors, officers, employees and agents (each, an "Indemnified Party") from,
and hold each of them harmless against, any and all losses, liabilities, claims,
damages or expenses incurred by any of them arising out of or by reason of any
investigation or litigation or other proceedings (including any threatened
investigation or litigation or other proceedings) relating to any actual or
proposed use by the Borrowers or any Subsidiary of the proceeds of the Loans,
including without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation or litigation or other
proceedings (but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct of any
Indemnified Party). At its option, Agent may charge such costs, expenses and
amounts as a Revolving Credit Loan pursuant to this Agreement.
Section 13.04. SURVIVAL. The obligations of the Borrowers under
Section13.03 shall survive the repayment of the Loans and the termination of the
Revolving Credit Commitments.
Section 13.05. ASSIGNMENT; PARTICIPATIONS.
(a) Each Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or an undivided portion of all of its Revolving Credit
Commitment, Revolving Credit Loans, and all Notes held by it); PROVIDED,
HOWEVER, that (i) each such assignment shall be of a uniform, and not a varying,
undivided percentage of all rights and obligations under and in respect of the
Revolving Credit Commitments and Revolving Credit Loans; (ii) except in the case
of an assignment to a Person that, immediately prior to such assignment, was a
Lender or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Revolving Credit Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no event
be less than $5,000,000; (iii) each such assignment shall be to an Eligible
Assignee; (iv) no such assignments shall be permitted without the consent of the
Agent and the Borrowers (not to be unreasonably withheld) except that if a
Default or Event of Default shall have occurred and be continuing, the consent
of the Borrowers shall not be required; and (v) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
or Notes subject to such assignment and a processing and recordation fee of
$3,500.
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(b) Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in such Assignment and Acceptance,
(i) the assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (ii) the Lender assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrowers or any
of their Subsidiaries or the performance or observance by the Borrowers or their
Subsidiaries of any of their obligations under any Facility Document or any
other instrument or document furnished pursuant thereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Sections 6.05 and 7.08(a) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Facility Documents as are delegated to the Agent by the
terms hereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) The Agent shall maintain at its address referred to in
Section 13.06 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment and principal amount of the Loans
owing to each Lender from time to time (the "REGISTER"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
84
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of EXHIBIT H hereto, (i) accept such
Assignment and Acceptance; (ii) record the information contained therein in the
Register; and (iii) give prompt notice thereof to the Borrowers. In the case of
any assignment by a Lender, within five Banking Days after its receipt of such
notice, the Borrowers, at their own expense, shall execute and deliver to the
Agent in exchange for the surrendered Notes, new Notes to the order of such
Eligible Assignee in amounts equal to the Revolving Credit Commitment assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained a Revolving Credit Commitment hereunder, new Notes to the order of the
assigning Lender in amounts equal to the Revolving Credit Commitment retained by
it hereunder. Such new Note or Notes shall be in an aggregate principal amount
equal to the aggregate principal amount of such surrendered Note or Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of EXHIBIT A hereto.
(f) Each Lender may sell participations to one or more Persons
(other than the Borrowers or any of their Affiliates) in or to all or any
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Revolving Credit Commitments or Revolving
Credit Loans and any Note or Notes held by it); PROVIDED, HOWEVER, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Revolving Credit Commitment) shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations; (iii) such Lender shall remain the holder of any such Note for
all purposes of this Agreement; (iv) the Borrowers, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement; (v)
no participant under any such participation shall have any right to approve any
amendment or waiver of any provision of any Facility Document, or any consent to
any departure by the Borrowers or any of their Subsidiaries therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral; and (vi)
the identity of the participant shall have been approved by the Agent in writing
to such Lender.
(g) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
13.05, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrowers furnished to such Lender
by or on behalf of the Borrowers; PROVIDED, HOWEVER, that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree in writing to preserve the confidentiality of any confidential
information received by it from such Lender.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it)
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in favor of any Federal Reserve Bank in accordance with Regulation A of the
Board of Governors of the Federal Reserve System.
Section 13.06. NOTICES. All notices and other communications provided
for herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing and,
telecopied, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature page hereof or, as to any
party, at such other address as shall be designated by such party in a notice to
each other party. Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 13.07. TABLE OF CONTENTS; HEADINGS. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 13.08. SEVERABILITY. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 13.09. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 13.10. GOVERNING LAW. Pursuant to Section 5-1401 of the New
York General Obligations Law, the whole of this Agreement and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with, the laws of the State of New York without regard to any
conflicts-of-laws rules which would require the application of the laws of any
other jurisdiction.
Section 13.11. INCORPORATION BY REFERENCE; CONFLICTS. The rights and
remedies of Agent and the Lenders under the other Facility Documents are
incorporated herein by reference and the rights and remedies of the Agent and
the Lenders under this Agreement and all of the terms of this Agreement, are
likewise incorporated in the other Facility Documents by reference. In the case
of any conflict between the terms of this Agreement and the terms of any other
Facility Document, the terms of this Agreement shall govern.
Section 13.12. JURISDICTION, VENUE AND SERVICE. For purposes of this
Agreement, each of the Borrower hereby irrevocably consents and submits to the
nonexclusive jurisdiction and venue of all federal and state courts located in
the County of Erie, State of New York and consents that any order, process,
notice of motion or other application to or by any of said courts or a judge
thereof may be served within or without such court's jurisdiction by registered
mail or by
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personal service, PROVIDED a reasonable time for appearance is allowed, in
connection with any action or proceeding arising out of, under or relating to
this Agreement or the Facility Documents. At the option of the Agent, upon the
instructions of the Required Lenders, the Borrowers may be joined in any action
or proceeding commenced by the Agent or the Lenders against any Security
Document Party in connection with or based on the Security Documents, and
recovery may be had against the Borrowers in such action or proceeding or in any
independent action or proceeding against the Borrowers, without any requirement
that the Agent or the Lenders first assert, prosecute or exhaust any remedy or
claim against any Security Document Party. Each of the Borrowers hereby
irrevocably waives (to the fullest extent permitted by applicable law) any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of, under or relating to this Agreement or any
Facility Document brought in any federal or state court located in the County of
Erie, State of New York, and hereby further irrevocably waives (to the fullest
extent permitted by applicable law) any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient forum.
Section 13.13. WAIVER OF JURY TRIAL.
EACH OF THE AGENT, THE LENDERS, THE GUARANTORS AND THE BORROWERS
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY
DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT OR ANY FACILITY DOCUMENT,
AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A
JURY. IN ADDITION, EACH OF THE AGENT, THE LENDERS, THE GUARANTORS AND THE
BORROWERS WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF
LIMITATIONS OR ANY CLAIM OF LACHES AND ANY SET-OFF OR COUNTER CLAIM OF ANY
NATURE OR DESCRIPTION. EACH OF THE AGENT, THE LENDERS, THE GUARANTORS AND THE
BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE FREELY MADE.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
BORROWERS:
OPTION CARE, INC., A DELAWARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTION CARE, INC., A CALIFORNIA CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
MANAGEMENT BY INFORMATION, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
88
OPTION CARE HOME HEALTH OF CALIFORNIA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTION CARE HOME HEALTH, L.L.C.,
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
By: OPTION CARE ENTERPRISES, INC., a member
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
OPTION CARE OF OKLAHOMA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
89
▇▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTIONET, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTIONLINK, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
90
HOME HEALTH OF OPTION CARE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTION CARE ENTERPRISES, INC., A
DELAWARE CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
HOME CARE OF COLUMBIA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
91
OPTION CARE HOSPICE, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
▇▇▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTION CARE ENTERPRISES, INC., A
PENNSYLVANIA CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
92
OPTION CARE OF DENVER, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTION HOME HEALTH, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
OPTIONMED, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
93
EXCEL HEALTHCARE, L.L.C.,
By OPTION CARE ENTERPRISES, INC.,
Managing Member of Excel Healthcare, L.L.C.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
REHAB OPTIONS, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
NORTH COUNTY HOME I.V., INC.
By: /s/ ▇▇▇▇▇ ▇▇▇
------------------------------
Name ▇▇▇▇▇ ▇▇▇
Title: President
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Secretary
Address for Notices:
Attn: Chief Financial Officer
Facsimile #:
94
AGENT:
JPMORGAN CHASE BANK, AS
ADMINISTRATIVE AND COLLATERAL AGENT AND
ARRANGER
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
Attn: Option Care, Inc.
Account Representative
Telecopier # (▇▇▇) ▇▇▇-▇▇▇▇
95
ADVISOR:
▇.▇. ▇▇▇▇▇▇ BUSINESS CREDIT CORP.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
Attn: Option Care, Inc.
Account Representative
Telecopier # (▇▇▇) ▇▇▇-▇▇▇▇
96
LENDERS:
JPMORGAN CHASE BANK
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
Attn: Option Care, Inc.
Account Representative
Telecopier # (▇▇▇) ▇▇▇-▇▇▇▇
97
LASALLE BANK NATIONAL
ASSOCIATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address for Notices: ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telecopier # (▇▇▇) ▇▇▇-▇▇▇▇
98
EXHIBITS AND SCHEDULES
EXHIBIT A - FORM OF REVOLVING CREDIT NOTE
EXHIBIT B - FORM OF AUTHORIZATION LETTER
EXHIBIT C - FORM OF MONTHLY BORROWING BASE CERTIFICATE
EXHIBIT D - FORM OF PERFECTION CERTIFICATE
EXHIBIT E - FORM OF STOCK PLEDGE AGREEMENT
EXHIBIT F - FORM OF SOLVENCY CERTIFICATE
EXHIBIT G - FORM OF OPINION OF COUNSEL TO BORROWERS AND SUBSIDIARIES
EXHIBIT H - FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT I - FORM OF COMPLIANCE CERTIFICATE
EXHIBIT J - FORM OF ACCOUNT DEBTOR NOTICE
SCHEDULE 2.01(a) - LENDERS AND COMMITMENTS
SCHEDULE 2.17 - INDEBTEDNESS TO BE REFINANCED
SCHEDULE 5.01(a) - SECURITY DOCUMENTS
SCHEDULE 6.02 - NO CONFLICTS
SCHEDULE 6.04 - LITIGATION
SCHEDULE 6.05 - FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGES
SCHEDULE 6.06 - OUTSTANDING LIENS
SCHEDULE 6.07 - OUTSTANDING INDEBTEDNESS
SCHEDULE 6.08 - TAXES
SCHEDULE 6.09 - PENSION PLANS
SCHEDULE 6.10 - SUBSIDIARIES AND AFFILIATES; CAPITALIZATION
SCHEDULE 6.11 - PROPERTIES; PROPRIETARY AND REGISTERED RIGHTS
SCHEDULE 6.14 - LABOR AND EMPLOYMENT MATTERS
SCHEDULE 6.16 - ENVIRONMENTAL MATTERS
SCHEDULE 6.19 - BANK ACCOUNTS
SCHEDULE 8.06 - TRANSACTIONS WITH AFFILIATES
SCHEDULE 8.11 - CERTAIN INDEBTEDNESS PERMITTED TO REMAIN OUTSTANDING
99
SCHEDULE 2.01(a)
TO
OPTION CARE, INC.
CREDIT AGREEMENT
LIST OF LENDERS AND COMMITMENTS
REVOLVING CREDIT REVOLVING CREDIT
COMMITMENT COMMITMENT
NAME OF LENDER AMOUNT PERCENTAGE
----------------------------------- ------------------------ -----------------------
JPMorgan Chase Bank $40,000,000 66.6666666%
----------------------------------- ------------------------ -----------------------
LaSalle Bank National
Association $20,000,000 33.3333333%
----------------------------------- ------------------------ -----------------------
----------------------------------- ------------------------ -----------------------
TOTAL $60,000,000 100.0000000%
----------------------------------- ------------------------ -----------------------
100
SCHEDULE 5.01(a)
SECURITY DOCUMENTS
1. Stock Pledge Agreement, dated as of March 29, 2002 by and among the
Pledgors party thereto and the Agent.
2. Trademark Security Agreement, dated as of March 29, 2002 by and among the
Pledgors party thereto and the Agent.
3. Lockbox/ Blocked Account Agreement, dated as of March 29, 2002 by and among
the Borrowers, the Agent and The Northern Trust Company.
101
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS; ACCOUNTING TERMS......................................................1
Section 1.01. Definitions...................................................................1
Section 1.02. Accounting Principles........................................................26
Section 1.03. Directly or Indirectly.......................................................26
Section 1.04. Construction.................................................................26
Section 1.05. Joint and Several Obligations; Borrowers' Agent..............................26
ARTICLE 2. THE CREDIT........................................................................26
Section 2.01. The Revolving Credit Loans and Letters of Credit.............................26
Section 2.02. Funding of Revolving Credit Loans............................................27
Section 2.03. Principal Repayment of Revolving Credit Loans................................28
Section 2.04. Mandatory Prepayments........................................................28
Section 2.05. Interest.....................................................................30
Section 2.06. Eurodollar Interest Periods..................................................30
Section 2.07. Conversions..................................................................31
Section 2.08. Voluntary Prepayments........................................................31
Section 2.09. Uncollected Funds Compensation...............................................31
Section 2.10. Termination of Revolving Credit Commitments..................................32
Section 2.11. Certain Notices..............................................................32
Section 2.12. Calculation of Borrowing Base................................................32
Section 2.13. Letters of Credit............................................................32
Section 2.14. Settlement Between Agent and Lenders.........................................33
Section 2.15. Fees.........................................................................34
Section 2.16. Payments Generally...........................................................35
Section 2.17. Purpose......................................................................35
ARTICLE 3. YIELD PROTECTION; ILLEGALITY; ETC.................................................36
Section 3.01. Additional Costs.............................................................36
Section 3.02. Limitation on Types of Loans.................................................37
Section 3.03. Illegality...................................................................37
Section 3.04. Certain Base Rate Loans pursuant to Sections 3.01 and 3.03...................38
Section 3.05. Certain Compensation.........................................................38
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TABLE OF CONTENTS
(continued)
PAGE
Section 3.06. Mitigation Obligations.......................................................38
ARTICLE 4. THE COLLATERAL....................................................................39
Section 4.01. Grant of Security Interest...................................................39
Section 4.02. Special Warranties and Covenants of the Borrowers and Subsidiaries...........40
Section 4.03. Accounts, Generally..........................................................43
Section 4.04. Collection of Accounts.......................................................45
Section 4.05. Fixtures, etc................................................................46
Section 4.06. Right of Agent to Dispose of Collateral, etc.................................46
Section 4.07. Right of Agent to Use and Operate Collateral, etc............................47
Section 4.08. Proceeds of Collateral.......................................................47
ARTICLE 5. CONDITIONS PRECEDENT..............................................................48
Section 5.01. Conditions Precedent to the Initial Loans....................................48
Section 5.02. Additional Conditions Precedent..............................................51
Section 5.03. Deemed Representations.......................................................52
ARTICLE 6. REPRESENTATIONS AND WARRANTIES....................................................52
Section 6.01. Incorporation, Good Standing and Due Qualification...........................52
Section 6.02. Corporate Power and Authority; No Conflicts..................................52
Section 6.03. Legally Enforceable Agreements...............................................53
Section 6.04. Litigation...................................................................53
Section 6.05. Financial Statements.........................................................53
Section 6.06. Ownership and Liens..........................................................54
Section 6.07. Existing Indebtedness........................................................54
Section 6.08. Taxes........................................................................54
Section 6.09. ERISA........................................................................55
Section 6.10. Subsidiaries and Affiliates..................................................55
Section 6.11. Operation of Business........................................................55
Section 6.12. No Default on Outstanding Judgments or Orders................................56
Section 6.13. No Defaults on Other Agreements..............................................56
Section 6.14. Labor Matters................................................................56
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TABLE OF CONTENTS
(continued)
PAGE
Section 6.15. Investment Company Act.......................................................57
Section 6.16. Environmental Matters........................................................57
Section 6.17. Regulation U.................................................................57
Section 6.18. No Guaranties or Indemnities.................................................57
Section 6.19. Bank Accounts................................................................58
Section 6.20. Trade Relations..............................................................58
Section 6.21. Compliance with Health Care Laws.............................................58
ARTICLE 7. AFFIRMATIVE COVENANTS.............................................................59
Section 7.01. Maintenance of Existence.....................................................59
Section 7.02. Conduct of Business..........................................................59
Section 7.03. Maintenance of Properties....................................................59
Section 7.04. Maintenance of Records; Fiscal Year..........................................59
Section 7.05. Maintenance of Insurance.....................................................59
Section 7.06. Compliance with Laws.........................................................59
Section 7.07. Right of Inspection..........................................................60
Section 7.08. Reporting Requirements.......................................................60
Section 7.09. Special Periodic Reports.....................................................61
Section 7.10. Employment Contracts.........................................................62
Section 7.11. Field Audits.................................................................62
Section 7.12. Cooperation and Further Assurance............................................63
Section 7.13. Deposits Into Collateral Account.............................................63
Section 7.14. Lock Box Operation...........................................................63
Section 7.15. Compliance with Health Care Laws.............................................63
ARTICLE 8. NEGATIVE COVENANTS................................................................64
Section 8.01. Sale of Assets...............................................................64
Section 8.02. Stock of Subsidiaries, Etc...................................................64
Section 8.03. Mergers, Etc.................................................................64
Section 8.04. Dividends and Stock Repurchases..............................................64
Section 8.05. Liens........................................................................65
Section 8.06. Transactions with Affiliates.................................................66
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TABLE OF CONTENTS
(continued)
PAGE
Section 8.07. Hazardous Materials; Indemnification.........................................66
Section 8.08. Acquisitions.................................................................66
Section 8.09. Subsidiaries.................................................................67
Section 8.10. Certain Investments..........................................................68
Section 8.11. Indebtedness.................................................................68
Section 8.12. Guarantees, Etc..............................................................69
Section 8.13. Subordinated Indebtedness....................................................69
Section 8.14. Restrictive Agreements.......................................................69
Section 8.15. Transactions with Excluded Subsidiaries......................................69
ARTICLE 9. FINANCIAL COVENANTS...............................................................70
Section 9.01. Maximum Total Leverage Ratio.................................................70
Section 9.02. Minimum Fixed Charge Coverage Ratio..........................................70
Section 9.03. Minimum Collateral Availability..............................................70
ARTICLE 10. EVENTS OF DEFAULT.................................................................70
Section 10.01. Events of Default............................................................70
Section 10.02. Remedies.....................................................................72
ARTICLE 11. GUARANTY..........................................................................72
Section 11.01. The Guarantee................................................................72
Section 11.02. Obligations Unconditional....................................................73
Section 11.03. Reinstatement................................................................74
Section 11.04. Subrogation..................................................................74
Section 11.05. Remedies.....................................................................74
Section 11.06. Instrument for the Payment of Money..........................................74
Section 11.07. Continuing Guarantee.........................................................74
Section 11.08. General Limitation on Guarantee Obligations..................................74
ARTICLE 12. RELATIONS AMONG AGENT, LENDERS AND BORROWERS......................................75
Section 12.01. Appointment, Powers and Immunities of Agent..................................75
Section 12.02. Reliance by Agent............................................................75
Section 12.03. Defaults.....................................................................76
Section 12.04. Rights of Agent as a Lender..................................................76
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TABLE OF CONTENTS
(continued)
PAGE
Section 12.05. Indemnification of Agent.....................................................76
Section 12.06. Documents....................................................................77
Section 12.07. Non-Reliance on Agent and Other Lenders......................................77
Section 12.08. Failure of Agent to Act......................................................77
Section 12.09. Resignation or Removal of Agent..............................................77
Section 12.10. Amendments Concerning Agency Function........................................78
Section 12.11. Liability of Agent...........................................................78
Section 12.12. Transfer of Agency Function..................................................78
Section 12.13. Non-Receipt of Funds by the Agent............................................78
Section 12.14. Withholding Taxes............................................................78
Section 12.15. Several Obligations and Rights of Lenders....................................79
Section 12.16. Pro Rata Treatment of Loans, Etc.............................................79
Section 12.17. Sharing of Payments Among Lenders............................................79
Section 12.18. Enforcement of Facility Documents............................................80
Section 12.19. Borrowing Base Statements, Etc...............................................81
Section 12.20. Co-Agent.....................................................................81
ARTICLE 13. MISCELLANEOUS.....................................................................81
Section 13.01. Amendments and Waivers.......................................................81
Section 13.02. Usury........................................................................82
Section 13.03. Expenses.....................................................................82
Section 13.04. Survival.....................................................................83
Section 13.05. Assignment; Participations...................................................83
Section 13.06. Notices......................................................................86
Section 13.07. Table of Contents; Headings..................................................86
Section 13.08. Severability.................................................................86
Section 13.09. Counterparts.................................................................86
Section 13.10. Governing Law................................................................86
Section 13.11. Incorporation By Reference; Conflicts........................................86
Section 13.12. Jurisdiction, Venue and Service..............................................86
Section 13.13. Waiver of Jury Trial.........................................................87
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