EXHIBIT 4.1
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Execution Version
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[Published CUSIP Number: __________]
MULTI-YEAR
$400,000,000
CREDIT AGREEMENT
Dated as of September 28, 2004
among
ST. JUDE MEDICAL, INC.,
as the Borrower,
BANK OF AMERICA, N.A.,
as Administrative Agent, L/C Issuer and Lender,
THE BANK OF TOKYO-MITSUBISHI, LTD.,
AS SYNDICATION AGENTS
BANK ONE, NA,
WELLS FARGO BANK, N.A.
AND
SUNTRUST BANK,
AS CO-DOCUMENTATION AGENTS
and
The Other Lenders Party Hereto
BANC OF AMERICA SECURITIES LLC,
as
Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Section Page
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ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS.......................1
1.01 Defined Terms..................................................1
1.02 Other Interpretive Provisions.................................18
1.03 Accounting Terms..............................................18
1.04 Rounding......................................................19
1.05 References to Agreements and Laws.............................19
1.06 Times of Day..................................................19
1.07 Letter of Credit Amounts......................................19
ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS.................19
2.01 Loans.........................................................19
2.02 Borrowings, Conversions and Continuations of Loans............20
2.03 Letters of Credit.............................................21
2.04 Prepayments...................................................28
2.05 Termination or Reduction of Commitments.......................29
2.06 Repayment of Loans............................................29
2.07 Interest......................................................29
2.08 Fees..........................................................30
2.09 Computation of Interest and Fees..............................30
2.10 Evidence of Debt..............................................31
2.11 Payments Generally............................................31
2.12 Sharing of Payments...........................................33
2.13 Increase in Commitments.......................................33
ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY................35
3.01 Taxes.........................................................35
3.02 Illegality....................................................36
3.03 Inability to Determine Rates..................................36
3.04 Increased Cost and Reduced Return; Capital Adequacy...........36
3.05 Funding Losses................................................37
3.06 Matters Applicable to all Requests for Compensation...........38
3.07 Survival......................................................38
ARTICLE IV. CONDITIONS PRECEDENT TO CREDIT EXTENSIONS.............38
4.01 Conditions of Initial Credit Extension........................38
4.02 Conditions to all Credit Extensions...........................40
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................40
5.01 Corporate Existence and Power.................................40
5.02 Corporate Authorization; No Contravention.....................41
5.03 Governmental Authorization....................................41
5.04 Binding Effect................................................41
5.05 Litigation....................................................41
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5.06 No Default....................................................42
5.07 ERISA Compliance..............................................42
5.08 Use of Proceeds; Margin Regulations...........................43
5.09 Title to Properties...........................................43
5.10 Taxes.........................................................43
5.11 Financial Condition...........................................43
5.12 Environmental Matters.........................................44
5.13 Regulated Entities............................................44
5.14 No Burdensome Restrictions....................................44
5.15 Copyrights, Patents, Trademarks and Licenses, Etc. ...........44
5.16 Subsidiaries..................................................44
5.17 Insurance.....................................................44
5.18 Full Disclosure...............................................44
ARTICLE VI. AFFIRMATIVE COVENANTS.................................45
6.01 Financial Statements..........................................45
6.02 Certificates; Other Information...............................45
6.03 Notices.......................................................47
6.04 Preservation of Corporate Existence, Etc. ....................48
6.05 Maintenance of Property.......................................48
6.06 Insurance.....................................................48
6.07 Payment of Obligations........................................49
6.08 Compliance with Laws..........................................49
6.09 Inspection of Property and Books and Records..................49
6.10 Environmental Laws............................................49
6.11 Use of Proceeds...............................................49
ARTICLE VII. NEGATIVE COVENANTS....................................50
7.01 Limitation on Liens...........................................50
7.02 Disposition of Assets.........................................51
7.03 Consolidations and Mergers....................................52
7.04 Loans and Investments.........................................52
7.05 Limitation on Subsidiary Indebtedness.........................53
7.06 Transactions with Affiliates..................................54
7.07 Use of Proceeds; Regulation U.................................54
7.08 Limitation on Subsidiary Dividends............................54
7.09 Joint Ventures................................................54
7.10 Restricted Payments...........................................54
7.11 Change in Business............................................55
7.12 Accounting Changes............................................55
7.13 Consolidated Interest Coverage Ratio..........................55
7.14 Consolidated Leverage Ratio...................................55
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES........................55
8.01 Events of Default.............................................55
8.02 Remedies Upon Event of Default................................58
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8.03 Application of Funds..........................................58
ARTICLE IX. ADMINISTRATIVE AGENT..................................59
9.01 Appointment and Authority.....................................59
9.02 Rights as a Lender............................................59
9.03 Exculpatory Provisions........................................59
9.04 Reliance by Administrative Agent..............................60
9.05 Delegation of Duties..........................................61
9.06 Resignation of Administrative Agent...........................61
9.07 Non-Reliance on Administrative Agent and Other Lenders........61
9.08 No Other Duties, Etc..........................................62
9.09 Administrative Agent May File Proofs of Claim.................62
ARTICLE X. MISCELLANEOUS.........................................63
10.01 Amendments, Etc...............................................63
10.02 Notices; Effectiveness; Electronic Communication..............64
10.03 No Waiver; Cumulative Remedies................................65
10.04 Expenses; Indemnity; Damage Waiver............................65
10.05 Payments Set Aside............................................67
10.06 Successors and Assigns........................................67
10.07 Treatment of Certain Information; Confidentiality.............71
10.08 Set-off.......................................................71
10.09 Interest Rate Limitation......................................72
10.10 Counterparts..................................................72
10.11 Integration...................................................72
10.12 Survival of Representations and Warranties....................72
10.13 Severability..................................................73
10.14 Replacement of Lenders........................................73
10.15 Tax Forms.....................................................74
10.16 Governing Law.................................................76
10.17 Waiver of Right to Trial by Jury..............................77
10.18 USA PATRIOT Act Notice........................................77
SIGNATURES.................................................................S-1
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SCHEDULES
1.01 Excluded Subsidiaries
2.01 Commitments and Pro Rata Shares
5.05 Litigation
5.07 ERISA Matters
5.10 Taxes
5.11 Material Indebtedness
5.12 Environmental Matters
5.16 Subsidiaries
6.06 Insurance Coverage
7.01 Existing Liens
7.04(a) Investment Policy
7.05 Existing Indebtedness
10.02 Administrative Agent's Office, Certain Addresses for Notices
EXHIBITS
FORM OF
A Loan Notice
B Note
C Compliance Certificate
D Assignment and Assumption Agreement
E Opinion Matters
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MULTI-YEAR $400,000,000 CREDIT AGREEMENT
This MULTI-YEAR $400,000,000 CREDIT AGREEMENT (the "Agreement") is
entered into as of September 28, 2004, among ST. JUDE MEDICAL, INC., a Minnesota
corporation (the "Borrower"), each lender from time to time party hereto
(collectively, the "Lenders" and individually, a "Lender"), and BANK OF AMERICA,
N.A., as Administrative Agent, LC Issuer and Lender.
The Borrower has requested that the Lenders provide a multi-year
revolving credit facility, with a letter of credit subfacility, and the Lenders
are willing to do so on the terms and conditions set forth herein. In
consideration of the mutual covenants and agreements herein contained, the
parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"Acquisition" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests or equity of any Person or otherwise causing any
Person, to become a Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a Subsidiary)
provided that the Borrower or a Subsidiary is the surviving entity.
"Administrative Agent" means Bank of America in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
"Administrative Agent's Office" means the Administrative Agent's
address and, as appropriate, account as set forth on Schedule 10.02, or such
other address or account as the Administrative Agent may from time to time
notify the Borrower and the Lenders.
"Administrative Questionnaire" means an Administrative Questionnaire in
a form supplied by the Administrative Agent.
"Affiliate" means, with respect to any Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified. "Control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a Person, whether through the
ability to exercise voting power, by contract or otherwise. "Controlling" and
"Controlled" have meanings correlative thereto. Without limiting the generality
of the foregoing, a Person shall be deemed to be Controlled by another Person if
such other Person possesses, directly or indirectly, power to vote 20% or more
of the securities having ordinary voting power for the election of directors,
managing general partners or the equivalent.
1
"Aggregate Commitments" means the Commitments of all the Lenders, which
on the Closing Date equal the sum of $400,000,000.
"Agreement" means this Credit Agreement.
"Applicable Rate" means, from time to time, the following percentages
per annum, based upon the Debt Rating as set forth below:
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UTILIZATION FEE
APPLICABLE MARGIN LETTER OF (GREATER THAN OR
LEVEL DEBT RATING FACILITY FEE FOR LIBOR LOANS CREDIT FEE EQUAL TO 50% USAGE)
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I A / A2 or higher 0.080 0.220 0.300 0.100
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II A- / A3 0.100 0.300 0.400 0.100
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III BBB+ / Baa1 0.110 0.390 0.500 0.125
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IV BBB / Baa2 0.150 0.475 0.625 0.125
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V BBB- / Baa3 0.200 0.675 0.875 0.125
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VI BB+ / Bal or lower 0.300 0.950 1.250 0.125
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"Debt Rating" means, as of any date of determination, the
rating as determined by either S&P or Moody's (collectively, the "Debt
Ratings") of the Borrower's non-credit-enhanced, senior unsecured
long-term debt; provided that, if a Debt Rating is issued by each of
the foregoing rating agencies, then the higher of such Debt Ratings
shall apply (with the Debt Rating for Pricing Level I being the highest
and the Debt Rating for Pricing Level VI being the lowest), unless
there is a split in Debt Ratings of more than one level, in which case
the Pricing Level that is one level lower than the Pricing Level of the
higher Debt Rating shall apply.
Initially, the Applicable Rate shall be determined based upon the Debt Rating
specified in the certificate delivered pursuant to Section 4.01(a)(vii).
Thereafter, each change in the Applicable Rate resulting from a publicly
announced change in the Debt Rating shall be effective, in the case of an
upgrade, during the period commencing on the date of delivery by the Borrower to
the Administrative Agent of notice thereof pursuant to Section 6.02(d) and
ending on the date immediately preceding the effective date of the next such
change and, in the case of a downgrade, during the period commencing on the date
of the public announcement thereof and ending on the date immediately preceding
the effective date of the next such change.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as
sole lead arranger and sole book manager.
"Assignment and Assumption" means an Assignment and Assumption
Agreement substantially in the form of Exhibit D.
"Attorney Costs" means and includes all reasonable fees, expenses and
disbursements of any law firm or other external counsel and, without
duplication, the allocated cost of internal legal services and all expenses and
disbursements of internal counsel.
2
"Attributable Indebtedness" means, on any date, (a) in respect of any
capital lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
"Audited Financial Statements" means the audited consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal year ended December
31, 2003, and the related consolidated statements of income or operations,
shareholders' equity and cash flows for such fiscal year of the Borrower and its
Subsidiaries, including the notes thereto and the accompanying Management's
Discussion and Analysis of Financial Condition and Results of Operations.
"Availability Period" means the period from and including the Closing
Date to the earliest of (a) the Maturity Date, (b) the date of termination of
the Aggregate Commitments pursuant to Section 2.05, and (c) the date of
termination of the commitment of each Lender to make Loans and of the obligation
of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.
"Bank of America" means Bank of America, N.A. and its successors.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by Bank of
America as its "prime rate". The "prime rate" is a rate set by Bank of America
based upon various factors including Bank of America's costs and desired return,
general economic conditions and other factors, and is used as a reference point
for pricing some loans, which may be priced at, above, or below such announced
rate. Any change in such rate announced by Bank of America shall take effect at
the opening of business on the day specified in the public announcement of such
change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"Borrower" has the meaning specified in the introductory paragraph
hereto.
"Borrowing" means a borrowing consisting of simultaneous Loans of the
same Type and, in the case of Eurodollar Rate Loans, having the same Interest
Period made by each of the Lenders pursuant to Section 2.01.
"Business Day" means any day other than a Saturday, Sunday or other day
on which commercial banks are authorized to close under the Laws of, or are in
fact closed in, the state where the Administrative Agent's Office is located
and, if such day relates to any Eurodollar Rate Loan, means any such day on
which dealings in Dollar deposits are conducted by and between banks in the
London interbank eurodollar market.
"Cash Collateralize" has the meaning specified in Section 2.03(g).
3
"Change of Control" means, with respect to any Person, an event or
series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or
other fiduciary or administrator of any such plan) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such
person or group has the right to acquire (such right, an "option
right"), whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 20% or more of the
equity securities of such Person entitled to vote for members of the
board of directors or equivalent governing body of such Person on a
fully-diluted basis (and taking into account all such securities that
such person or group has the right to acquire pursuant to any option
right); or
(b) during any period of 24 consecutive months, a majority of
the members of the board of directors or other equivalent governing
body of such Person cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of
such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of
an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group
other than a solicitation for the election of one or more directors by
or on behalf of the board of directors).
"Closing Date" means the first date all the conditions precedent in
Section 4.01 are satisfied or waived in accordance with Section 10.01 (or, in
the case of Section 4.01(b), waived by the Person entitled to receive the
applicable payment).
"Code" means the Internal Revenue Code of 1986.
"Commitment" means, as to each Lender, its obligation to (a) make Loans
to the Borrower pursuant to Section 2.01, and (b) purchase participations in L/C
Obligations in an aggregate principal amount at any one time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in
the Assignment and Assumption pursuant to which such Lender becomes a party
hereto, as applicable, as such amount may be adjusted from time to time in
accordance with this Agreement.
"Compliance Certificate" means a certificate substantially in the form
of Exhibit C.
4
"Consolidated EBITDA" means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to Consolidated Net Income
for such period plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period,
(ii) the provision for federal, state, local and foreign income taxes payable by
the Borrower and its Subsidiaries for such period, (iii) the amount of
depreciation and amortization expense deducted in determining such Consolidated
Net Income and (iv) other expenses of the Borrower and its Subsidiaries reducing
such Consolidated Net Income which do not represent a cash item in such period
or any future period and minus (b) all non-cash items increasing Consolidated
Net Income for such period.
"Consolidated Funded Indebtedness" means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated basis,
the sum of (a) the outstanding principal amount of all obligations, whether
current or long-term, for borrowed money (including Obligations hereunder) and
all obligations evidenced by bonds, debentures, notes, loan agreements or other
similar instruments, (b) all purchase money Indebtedness, (c) all direct
obligations arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar instruments, (d)
all obligations in respect of the deferred purchase price of property or
services (other than trade accounts payable in the ordinary course of business),
(e) Attributable Indebtedness in respect of capital leases and Synthetic Lease
Obligations, (f) without duplication, all Guarantees with respect to outstanding
Indebtedness of the types specified in clauses (a) through (e) above of Persons
other than the Borrower or any Subsidiary, and (g) all Indebtedness of the types
referred to in clauses (a) through (f) above of any partnership or joint venture
(other than a joint venture that is itself a corporation or limited liability
company) in which the Borrower or a Subsidiary is a general partner or joint
venturer, unless such Indebtedness is expressly made non-recourse to the
Borrower or such Subsidiary.
"Consolidated Interest Charges" means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, debt discount, fees, charges and related expenses of the
Borrower and its Subsidiaries in connection with borrowed money (including
capitalized interest) or in connection with the deferred purchase price of
assets, in each case to the extent treated as interest in accordance with GAAP,
and (b) the portion of rent expense of the Borrower and its Subsidiaries with
respect to such period under capital leases that is treated as interest in
accordance with GAAP.
"Consolidated Interest Coverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated EBITDA for the period of the four
prior fiscal quarters ending on such date to (b) Consolidated Interest Charges
for such period.
"Consolidated Leverage Ratio" means, as of any date of determination,
the ratio of (a) Consolidated Funded Indebtedness as of such date to (b)
Consolidated EBITDA for the period of the four fiscal quarters most recently
ended for which the Borrower has delivered financial statements pursuant to
Section 6.01(a) or (b).
"Consolidated Net Income" means, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the net income of the Borrower and its
Subsidiaries (excluding extraordinary gains but including extraordinary losses)
for that period.
5
"Consolidated Tangible Net Worth" means, as of any date of
determination, for the Borrower and its Subsidiaries on a consolidated basis,
Shareholders' Equity of the Borrower and its Subsidiaries on that date minus the
Intangible Assets of the Borrower and its Subsidiaries on that date.
"Contingent Obligation" means, as to any Person, any direct or indirect
liability of that Person with respect to any Indebtedness, lease, dividend,
guaranty, letter of credit or other financial obligation (each a "primary
obligation") of another Person (the "primary obligor"), whether or not
contingent, (a) to purchase, repurchase or otherwise acquire any such primary
obligation or any property constituting direct or indirect security therefor, or
(b) to advance or provide funds (i) for the payment or discharge of any such
primary obligation, or (ii) to maintain working capital or equity capital of the
primary obligor in respect of any such primary obligation or otherwise to
maintain the net worth or solvency or any balance sheet item, level of income or
financial condition of such primary obligor, or (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor thereof to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss or failure or inability to
perform in respect thereof. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Control" has the meaning specified in the definition of "Affiliate".
"Credit Extension" means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.
"Debt Rating" has the meaning set forth in the definition of
"Applicable Rate".
"Debtor Relief Laws" means the Bankruptcy Code of the United States,
and all other liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
"Default" means any event or condition that constitutes an Event of
Default or that, with the giving of any notice, the passage of time, or both,
would be an Event of Default.
"Default Rate" means (a) when used with respect to Obligations other
than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus
(ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2%
per annum; provided, however, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws, and (b) when used with
respect to Letter
6
of Credit Fees, a rate equal to the Applicable Rate applicable to Letter of
Credit Fees plus 2% per annum.
"Defaulting Lender" means any Lender that (a) has failed to fund any
portion of the Loans or participations in L/C Obligations required to be funded
by it hereunder within one Business Day of the date required to be funded by it
hereunder, (b) has otherwise failed to pay over to the Administrative Agent or
any other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due, unless the subject of a good faith dispute,
or (c) has been deemed insolvent or become the subject of a bankruptcy or
insolvency proceeding.
"Dollar" and "$" mean lawful money of the United States.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
(c) an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent and the L/C Issuer, and (ii) unless an
Event of Default has occurred and is continuing, the Borrower (each such
approval not to be unreasonably withheld or delayed); provided that
notwithstanding the foregoing, "Eligible Assignee" shall not include the
Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Environmental Laws" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"Environmental Liability" means any liability, contingent or otherwise
(including any liability for damages, costs of environmental remediation, fines,
penalties or indemnities), of the Borrower or any of its Subsidiaries directly
or indirectly resulting from or based upon (a) violation of any Environmental
Law, (b) the generation, use, handling, transportation, storage, treatment or
disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials,
(d) the release or threatened release of any Hazardous Materials into the
environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
7
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the
imposition of any liability under Title IV of ERISA, other than for PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon the Borrower
or any ERISA Affiliate.
"Eurodollar Base Rate" has the meaning set forth in the definition of
Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Rate Loan, a rate per annum determined by the Administrative Agent
pursuant to the following formula:
Eurodollar Base Rate
Eurodollar Rate = ------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Base Rate" means, for any Interest Period
with respect to a Eurodollar Rate Loan, the rate per annum
equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR"), as published by Reuters (or other commercially
available source providing quotations of BBA LIBOR as
designated by the Administrative Agent from time to time) at
approximately 11:00 a.m., London time, two Business Days prior
to the commencement of such Interest Period, for Dollar
deposits (for delivery on the first day of such Interest
Period) with a term equivalent to such Interest Period. If
such rate is not available at such time for any reason, then
the "Eurodollar Rate" for such Interest Period shall be the
rate per annum determined by the Administrative Agent to be
the rate at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the
approximate amount of the Eurodollar Rate Loan being made,
continued or converted by Bank of America and with a term
equivalent to such Interest Period would be offered by Bank of
America's London Branch to major banks in the London interbank
eurodollar market at their request at approximately 11:00 a.m.
(London time) two Business Days prior to the commencement of
such Interest Period.
"Eurodollar Rate Loan" means a Loan that bears interest at a rate based
on the Eurodollar Rate.
"Eurodollar Reserve Percentage" means, for any day during any Interest
Period, the reserve percentage (expressed as a decimal, carried out to five
decimal places) in effect on such day, whether or not applicable to any Lender,
under regulations issued from time to time by the FRB for determining the
maximum reserve requirement (including any emergency, supplemental or other
marginal reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities"). The Eurodollar Rate for each
outstanding Eurodollar Rate Loan
8
shall be adjusted automatically as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 8.01.
"Excluded Subsidiary" means each Subsidiary listed on Schedule 1.01 by
reason that such Subsidiary no longer actively conducts any business or
operations, including as a holding or investment company, and has been, will be
after the Closing Date, or likely will be after the Closing Date, liquidated,
and in the event that any such Subsidiary shall after the Closing Date conduct
any business or operations, including as a holding or investment company, such
that after three consecutive fiscal quarters of the Borrower and its
Subsidiaries, such Subsidiary has income equal to or greater than 1% of
Consolidated Net Income determined for the same such period, then such
Subsidiary shall no longer be an Excluded Subsidiary as of the date of delivery,
or date delivery is required (whichever is earlier), of the financial statements
of the Borrower and its Subsidiaries pursuant to Section 6.01(a) or (b) with
respect to the third such consecutive fiscal quarter and a Responsible Officer
shall notify the Administrative Agent thereof.
"Existing Multi-Year Credit Agreement" means that certain Multi-Year
Credit Agreement dated as of September 11, 2003 (as now or hereafter amended,
modified, supplemented or amended and restated) by and among the Borrower, Bank
of America as administrative agent, and the lenders from time to time party
thereto.
"Federal Funds Rate" means, for any day, the rate per annum equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate (rounded
upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fee Letter" means the letter agreement, dated August 31, 2004, among
the Borrower, the Administrative Agent and the Arranger.
"Foreign Lender" has the meaning specified in Section 10.15(a)(i).
"FRB" means the Board of Governors of the Federal Reserve System of the
United States.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United
States set forth in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting
9
Standards Board or such other principles as may be approved by a significant
segment of the accounting profession in the United States, that are applicable
to the circumstances as of the date of determination, consistently applied.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Granting Lender" has the meaning specified in Section 10.06(h).
"Guarantee" means, as to any Person, any (a) any obligation, contingent
or otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or other obligation payable or performable by
another Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of such Person, direct or indirect, (i)
to purchase or pay (or advance or supply funds for the purchase or payment of)
such Indebtedness or other obligation, (ii) to purchase or lease property,
securities or services for the purpose of assuring the obligee in respect of
such Indebtedness or other obligation of the payment or performance of such
Indebtedness or other obligation, (iii) to maintain working capital, equity
capital or any other financial statement condition or liquidity or level of
income or cash flow of the primary obligor so as to enable the primary obligor
to pay such Indebtedness or other obligation, or (iv) entered into for the
purpose of assuring in any other manner the obligee in respect of such
Indebtedness or other obligation of the payment or performance thereof or to
protect such obligee against loss in respect thereof (in whole or in part), or
(b) any Lien on any assets of such Person securing any Indebtedness or other
obligation of any other Person, whether or not such Indebtedness or other
obligation is assumed by such Person. The amount of any Guarantee shall be
deemed to be an amount equal to the stated or determinable amount of the related
primary obligation, or portion thereof, in respect of which such Guarantee is
made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof as determined by the guaranteeing Person in good
faith. The term "Guarantee" as a verb has a corresponding meaning.
"Hazardous Materials" means all explosive or radioactive substances or
wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos-containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"Indebtedness" means, as to any Person at a particular time, without
duplication, all of the following, whether or not included as indebtedness or
liabilities in accordance with GAAP:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
10
(b) all direct or contingent obligations of such Person
arising under letters of credit (including standby and commercial),
bankers' acceptances, bank guaranties, surety bonds and similar
instruments;
(c) net obligations of such Person under any Swap Contract;
(d) all obligations of such Person to pay the deferred
purchase price of property or services (other than trade accounts
payable in the ordinary course of business);
(e) indebtedness (excluding prepaid interest thereon) secured
by a Lien on property owned or being purchased by such Person
(including indebtedness arising under conditional sales or other title
retention agreements), whether or not such indebtedness shall have been
assumed by such Person or is limited in recourse;
(f) capital leases and Synthetic Lease Obligations; and
(g) all Guarantees of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Indebtedness is expressly
made non-recourse to such Person. The amount of any net obligation under any
Swap Contract on any date shall be deemed to be the Swap Termination Value
thereof as of such date. The amount of any capital lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnitees" has the meaning set forth in Section 10.04(b).
"Independent Auditor" has the meaning set forth in Section 6.01(a).
"Intangible Assets" means assets that are considered to be intangible
assets under GAAP, including customer lists, goodwill, computer software,
copyrights, trade names, trademarks, patents, franchises, licenses, unamortized
deferred charges, unamortized debt discount and capitalized research and
development costs.
"Interest Payment Date" means, (a) as to any Loan other than a Base
Rate Loan, the last day of each Interest Period applicable to such Loan and the
Maturity Date; provided, however, that if any Interest Period for a Eurodollar
Rate Loan exceeds three months, the respective dates that fall every three
months after the beginning of such Interest Period shall also be Interest
Payment Dates; and (b) as to any Base Rate Loan, the last Business Day of each
March, June, September and December and the Maturity Date.
"Interest Period" means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Loan Notice; provided
that:
11
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period shall extend beyond the Maturity
Date.
"Investment" means, as to any Person, any direct or indirect
acquisition or investment by such Person, whether by means of (a) the purchase
or other acquisition of capital stock or other securities of another Person, (b)
a loan, advance or capital contribution to, Guarantee or assumption of debt of,
or purchase or other acquisition of any other debt or equity participation or
interest in, another Person, including any partnership or joint venture interest
in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment.
"Investment Transaction" has the meaning set forth in Section 7.04.
"IRS" means the United States Internal Revenue Service.
"ISP" means, with respect to any Letter of Credit, the "International
Standby Practices 1998" published by the Institute of International Banking Law
& Practice (or such later version thereof as may be in effect at the time of
issuance).
"Issuer Documents" means with respect to any Letter of Credit, the
Letter of Credit Application, and any other document, agreement and instrument
entered into by the L/C Issuer and the Borrower (or any Subsidiary) or in favor
of the L/C Issuer and relating to any such Letter of Credit.
"Joint Venture" means a corporation, partnership, joint venture or
other similar legal arrangement (whether created by contract or conducted
through a separate legal entity) now or hereafter formed by the Borrower or any
of its Subsidiaries with another Person in order to conduct a common venture or
enterprise with such Person.
"Laws" means, collectively, all international, foreign, Federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
12
"L/C Advance" means, with respect to each Lender, such Lender's funding
of its participation in any L/C Borrowing in accordance with its Pro Rata Share.
"L/C Borrowing" means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Borrowing.
"L/C Credit Extension" means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
"L/C Issuer" means Bank of America in its capacity as issuer of Letters
of Credit hereunder, or any successor issuer of Letters of Credit hereunder.
"L/C Obligations" means, as at any date of determination, the aggregate
amount available to be drawn under all outstanding Letters of Credit plus the
aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For
purposes of computing the amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.07. For all purposes of this Agreement, if on any date of
determination a Letter of Credit has expired by its terms but any amount may
still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP,
such Letter of Credit shall be deemed to be "outstanding" in the amount so
remaining available to be drawn.
"Lender" has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer.
"Lending Office" means, as to any Lender, the office or offices of such
Lender described as such in such Lender's Administrative Questionnaire, or such
other office or offices as a Lender may from time to time notify the Borrower
and the Administrative Agent.
"Letter of Credit" means any letter of credit issued hereunder. A
Letter of Credit may only be a standby letter of credit.
"Letter of Credit Application" means an application and agreement for
the issuance or amendment of a Letter of Credit in the form from time to time in
use by the L/C Issuer.
"Letter of Credit Expiration Date" means the day that is seven days
prior to the Maturity Date then in effect (or, if such day is not a Business
Day, the next preceding Business Day).
"Letter of Credit Sublimit" means an amount equal to $25,000,000. The
Letter of Credit Sublimit is part of, and not in addition to, the Aggregate
Commitments.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, and any financing lease having substantially the same economic effect
as any of the foregoing).
"Loan" has the meaning specified in Section 2.01.
13
"Loan Documents" means this Agreement, each Note, and the Fee Letter.
"Loan Notice" means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Eurodollar Rate
Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially
in the form of Exhibit A.
"Margin Stock" means "margin stock" as such term is defined in
Regulation F, U or X of the FRB.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of the Borrower to perform its obligations under any Loan Document to
which it is a party; or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Borrower of any Loan
Document to which it is a party.
"Maturity Date" means September 28, 2009.
"Moody's" means Moody's Investors Service, Inc. and any successor
thereto.
"Multiemployer Plan" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
five plan years, has made or been obligated to make contributions.
"Note" means a promissory note made by the Borrower in favor of a
Lender evidencing Loans made by such Lender, substantially in the form of
Exhibit B.
"Obligations" means all advances to, and debts, liabilities,
obligations, covenants and duties of, the Borrower arising under any Loan
Document or otherwise with respect to any Loan or Letter of Credit, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest and fees that accrue after the commencement by or against the
Borrower or any Affiliate thereof of any proceeding under any Debtor Relief Laws
naming such Person as the debtor in such proceeding, regardless of whether such
interest and fees are allowed claims in such proceeding.
"Organization Documents" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws (or equivalent or
comparable constitutive documents with respect to any non-U.S. jurisdiction);
(b) with respect to any limited liability company, the certificate or articles
of formation or organization and operating agreement; and (c) with respect to
any partnership, joint venture, trust or other form of business entity, the
partnership, joint venture or other applicable agreement of formation or
organization and any agreement, instrument, filing or notice with respect
thereto filed in connection with its formation or organization with the
applicable Governmental Authority in the jurisdiction of its formation or
organization and, if applicable, any certificate or articles of formation or
organization of such entity.
14
"Other Taxes" has the meaning set forth in Section 3.01(b).
"Outstanding Amount" means (i) with respect to Loans on any date, the
aggregate outstanding principal amount thereof after giving effect to any
borrowings and prepayments or repayments of Loans occurring on such date; and
(ii) with respect to any L/C Obligations on any date, the amount of such L/C
Obligations on such date after giving effect to any L/C Credit Extension
occurring on such date and any other changes in the aggregate amount of the L/C
Obligations as of such date, including as a result of any reimbursements of
outstanding unpaid drawings under any Letters of Credit or any reductions in the
maximum amount available for drawing under Letters of Credit taking effect on
such date.
"Participant" has the meaning specified in Section 10.06(d).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer or
other plan described in Section 4064(a) of ERISA, has made contributions at any
time during the immediately preceding five plan years.
"Permitted Liens" has the meaning specified in Section 7.01.
"Permitted Receivables Facility" means one or more accounts receivable
securitization arrangements which provide for (a) the sale of accounts
receivable and any related property by the Borrower and/or any of its
Subsidiaries to a financing party or a special purpose vehicle and (b) if a
special purpose vehicle is used in any such arrangements, the granting of a
security interest in accounts receivables and any related property by such
special purpose vehicle and/or the granting of a security interest by the
Borrower or such Subsidiary in any such related property; provided however, that
the sum of the aggregate net unrecovered investment and the aggregate
outstanding advances from the financing parties under such accounts receivable
securitization arrangements shall not exceed $150,000,000.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or, with respect to any such
plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA
Affiliate.
"Pro Rata Share" means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the ninth decimal place),
the numerator of which is the amount of the Commitment of such Lender at such
time and the denominator of which is the amount of the Aggregate Commitments at
such time; provided that if the commitment of each Lender to make Loans and the
obligation of the L/C Issuer to make L/C Credit Extensions have been terminated
pursuant to Section 8.02, then the Pro Rata Share of each Lender shall be
determined based on the Pro Rata Share of such Lender immediately prior to such
termination and after giving effect
15
to any subsequent assignments made pursuant to the terms hereof. The initial Pro
Rata Share of each Lender is set forth opposite the name of such Lender on
Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender
becomes a party hereto, as applicable.
"Register" has the meaning set forth in Section 10.06(c).
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA, other than events for which the 30 day notice period has been waived.
"Request for Credit Extension" means (a) with respect to a Borrowing,
conversion or continuation of Loans, a Loan Notice, and (b) with respect to an
L/C Credit Extension, a Letter of Credit Application.
"Required Lenders" means, as of any date of determination, Lenders
having more than 50% of the Aggregate Commitments or, if the commitment of each
Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit
Extensions have been terminated pursuant to Section 8.02, Lenders holding in the
aggregate more than 50% of the Total Outstandings (with the aggregate amount of
each Lender's risk participation and funded participation in L/C Obligations
being deemed "held" by such Lender for purposes of this definition); provided
that the Commitment of, and the portion of the Total Outstandings held or deemed
held by, any Defaulting Lender shall be excluded for purposes of making a
determination of Required Lenders.
"Responsible Officer" means the chief executive officer, president,
chief financial officer, treasurer or assistant treasurer of the Borrower. Any
document delivered hereunder that is signed by a Responsible Officer of the
Borrower shall be conclusively presumed to have been authorized by all necessary
corporate, partnership and/or other action on the part of the Borrower and such
Responsible Officer shall be conclusively presumed to have acted on behalf of
the Borrower.
"Restricted Payment" means any dividend or other distribution (whether
in cash, securities or other property) with respect to any capital stock or
other equity interest of the Borrower or any Subsidiary, or any payment (whether
in cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such capital stock or other equity interest
or of any option, warrant or other right to acquire any such capital stock or
other equity interest.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. and any successor thereto.
"SEC" means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions.
16
"Shareholders' Equity" means, as of any date of determination,
consolidated shareholders' equity of the Borrower and its Subsidiaries as of
that date determined in accordance with GAAP.
"SPC" has the meaning specified in Section 10.06(h).
"Subsidiary" of a Person means a corporation, partnership, joint
venture, limited liability company or other business entity of which a majority
of the shares of securities or other interests having ordinary voting power for
the election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
"Subsidiary" or to "Subsidiaries" shall refer to a Subsidiary or Subsidiaries of
the Borrower.
"Swap Contract" means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "Master Agreement"), including
any such obligations or liabilities under any Master Agreement.
"Swap Termination Value" means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include a Lender or any Affiliate of a
Lender).
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" has the meaning set forth in Section 3.01(a).
17
"Total Outstandings" means the aggregate Outstanding Amount of all
Loans and all L/C Obligations.
"Type" means, with respect to a Loan, its character as a Base Rate Loan
or a Eurodollar Rate Loan.
"Unfunded Pension Liability" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
"United States" and "U.S." mean the United States of America.
"Unreimbursed Amount" has the meaning set forth in Section 2.03(c)(i).
1.02 OTHER INTERPRETIVE PROVISIONS. With reference to this Agreement
and each other Loan Document, unless otherwise specified herein or in such other
Loan Document:
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "herein," "hereto," "hereof" and "hereunder"
and words of similar import when used in any Loan Document shall refer
to such Loan Document as a whole and not to any particular provision
thereof.
(ii) Article, Section, Exhibit and Schedule references are to
the Loan Document in which such reference appears.
(iii) The term "including" is by way of example and not
limitation.
(iv) The term "documents" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical
or electronic form.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the words "to"
and "until" each mean "to but excluding"; and the word "through" means "to and
including".
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. (a) All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with, GAAP applied on a consistent basis, as in effect from time to
time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, except as otherwise specifically prescribed herein.
18
(b) If at any time any change in GAAP would affect the computation of
any financial ratio or requirement set forth in any Loan Document, and either
the Borrower or the Required Lenders shall so request, the Administrative Agent,
the Lenders and the Borrower shall negotiate in good faith to amend such ratio
or requirement to preserve the original intent thereof in light of such change
in GAAP (subject to the approval of the Required Lenders); provided that, until
so amended, (i) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (ii) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to Organization Documents, agreements (including
the Loan Documents) and other contractual instruments shall be deemed to include
all subsequent amendments, restatements, extensions, supplements and other
modifications thereto, but only to the extent that such amendments,
restatements, extensions, supplements and other modifications are not prohibited
by any Loan Document; and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
1.06 TIMES OF DAY. Unless otherwise specified, all references herein to
times of day shall be references to Eastern time (daylight or standard, as
applicable).
1.07 LETTER OF CREDIT AMOUNTS. Unless otherwise specified herein, the
amount of a Letter of Credit at any time shall be deemed to be the stated amount
of such Letter of Credit in effect at such time; provided, however, that with
respect to any Letter of Credit that, by its terms or the terms of any Issuer
Documents related thereto, provides for one or more automatic increases in the
stated amount thereof, the amount of such Letter of Credit shall be deemed to be
the maximum stated amount of such Letter of Credit after giving effect to all
such increases, whether or not such maximum stated amount is in effect at such
time.
ARTICLE II.
THE COMMITMENTS AND CREDIT EXTENSIONS
2.01 LOANS. Subject to the terms and conditions set forth herein, each
Lender severally agrees to make loans (each such loan, a "Loan") to the Borrower
from time to time, on any Business Day during the Availability Period, in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender's Commitment; provided, however, that after giving effect to any
Borrowing, (i) the Total Outstandings shall not exceed the Aggregate
Commitments, and (ii) the aggregate Outstanding Amount of the Loans of any
Lender, plus such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations shall not exceed such
19
Lender's Commitment. Within the limits of each Lender's Commitment, and subject
to the other terms and conditions hereof, the Borrower may borrow under this
Section 2.01, prepay under Section 2.04, and reborrow under this Section 2.01.
Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided
herein.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one Type to the
other, and each continuation of Eurodollar Rate Loans shall be made upon the
Borrower's irrevocable notice to the Administrative Agent, which may be given by
telephone. Each such notice must be received by the Administrative Agent not
later than 12:00 noon. (i) three Business Days prior to the requested date of
any Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of
any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the
requested date of any Borrowing of Base Rate Loans. Each telephonic notice by
the Borrower pursuant to this Section 2.02(b) must be confirmed promptly by
delivery to the Administrative Agent of a written Loan Notice, appropriately
completed and signed by a Responsible Officer of the Borrower. Each Borrowing
of, conversion to or continuation of Eurodollar Rate Loans shall be in a
principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess
thereof. Except as provided in Section 2.03(c), each Borrowing of or conversion
to Base Rate Loans shall be in a principal amount of $500,000 or a whole
multiple of $100,000 in excess thereof. Each Loan Notice (whether telephonic or
written) shall specify (i) whether the Borrower is requesting a Borrowing, a
conversion of Loans from one Type to the other, or a continuation of Eurodollar
Rate Loans, (ii) the requested date of the Borrowing, conversion or
continuation, as the case may be (which shall be a Business Day), (iii) the
principal amount of Loans to be borrowed, converted or continued, (iv) the Type
of Loans to be borrowed or to which existing Loans are to be converted, and (v)
if applicable, the duration of the Interest Period with respect thereto. If the
Borrower fails to specify a Type of Loan in a Loan Notice or if the Borrower
fails to give a timely notice requesting a conversion or continuation, then the
applicable Loans shall be made as, or converted to, Base Rate Loans. Any such
automatic conversion to Base Rate Loans shall be effective as of the last day of
the Interest Period then in effect with respect to the applicable Eurodollar
Rate Loans. If the Borrower requests a Borrowing of, conversion to, or
continuation of Eurodollar Rate Loans in any such Loan Notice, but fails to
specify an Interest Period, it will be deemed to have specified an Interest
Period of one month.
(b) Following receipt of a Loan Notice, the Administrative Agent shall
promptly notify each Lender of the amount of its Pro Rata Share of the
applicable Loans, and if no timely notice of a conversion or continuation is
provided by the Borrower, the Administrative Agent shall notify each Lender of
the details of any automatic conversion to Base Rate Loans described in the
preceding subsection. In the case of a Borrowing, each Lender shall make the
amount of its Loan available to the Administrative Agent in immediately
available funds at the Administrative Agent's Office not later than 1:00 p.m. on
the Business Day specified in the applicable Loan Notice. Upon satisfaction of
the applicable conditions set forth in Section 4.02 (and, if such Borrowing is
the initial Credit Extension, Section 4.01), the Administrative Agent shall make
all funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of Bank of America with the amount of such funds or (ii) wire transfer of
such funds, in each case in accordance with instructions provided to (and
reasonably acceptable to) the Administrative
20
Agent by the Borrower; provided, however, that if, on the date the Loan Notice
with respect to such Borrowing is given by the Borrower, there are L/C
Borrowings outstanding, then the proceeds of such Borrowing, first, shall be
applied to the payment in full of any such L/C Borrowings, and second, shall be
made available to the Borrower as provided above.
(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of an Interest Period for such
Eurodollar Rate Loan. During the existence of a Default, no Loans may be
requested as, converted to or continued as Eurodollar Rate Loans without the
consent of the Required Lenders.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Interest Period for Eurodollar
Rate Loans upon determination of such interest rate. The determination of the
Eurodollar Rate by the Administrative Agent shall be conclusive in the absence
of manifest error. At any time that Base Rate Loans are outstanding, the
Administrative Agent shall notify the Borrower and the Lenders of any change in
Bank of America's prime rate used in determining the Base Rate promptly
following the public announcement of such change.
(e) After giving effect to all Borrowings, all conversions of Loans
from one Type to the other, and all continuations of Loans as the same Type,
there shall not be more than ten Interest Periods in effect with respect to
Loans.
2.03 LETTERS OF CREDIT.
(a) The Letter of Credit Commitment.
(i) Subject to the terms and conditions set forth herein, (A)
the L/C Issuer agrees, in reliance upon the agreements of the other
Lenders set forth in this Section 2.03, (1) from time to time on any
Business Day during the period from the Closing Date until the Letter
of Credit Expiration Date, to issue Letters of Credit for the account
of the Borrower, and to amend Letters of Credit previously issued by
it, in accordance with subsection (b) below, and (2) to honor drafts
under the Letters of Credit; and (B) the Lenders severally agree to
participate in Letters of Credit issued for the account of the
Borrower; provided that the L/C Issuer shall not be obligated to make
any L/C Credit Extension with respect to any Letter of Credit, and no
Lender shall be obligated to participate in any Letter of Credit if as
of the date of such L/C Credit Extension, (x) the Total Outstandings
would exceed the Aggregate Commitments, (y) the aggregate Outstanding
Amount of the Loans of any Lender, plus such Lender's Pro Rata Share of
the Outstanding Amount of all L/C Obligations would exceed such
Lender's Commitment, or (z) the Outstanding Amount of the L/C
Obligations would exceed the Letter of Credit Sublimit. Within the
foregoing limits, and subject to the terms and conditions hereof, the
Borrower's ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have
expired or that have been drawn upon and reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
21
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin
or restrain the L/C Issuer from issuing such Letter of Credit,
or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer
shall prohibit, or request that the L/C Issuer refrain from,
the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and
which the L/C Issuer in good faith deems material to it;
(B) the expiry date of such requested Letter of
Credit would occur more than twelve months after the date of
issuance, unless the Required Lenders have approved such
expiry date;
(C) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer; or
(E) such Letter of Credit is in an initial amount
less than $500,000 or is to be denominated in a currency other
than Dollars; or
(F) a default of any Lender's obligations to fund
under Section 2.03(c) exists or any Lender is at such time a
Defaulting Lender hereunder, unless the L/C Issuer has entered
into satisfactory arrangements with the Borrower or such
Lender to eliminate the L/C Issuer's risk with respect to such
Lender.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit.
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such Letter of Credit Application
must be received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m. at least two Business Days (or such later date
and time as the Administrative Agent and the L/C Issuer may agree in a
particular instance in their sole discretion) prior to the proposed
issuance date or date of amendment, as the case may be. In the case of
a request for an initial issuance of a Letter of Credit, such Letter of
Credit Application shall specify in
22
form and detail satisfactory to the L/C Issuer: (A) the proposed
issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D)
the name and address of the beneficiary thereof; (E) the documents to
be presented by such beneficiary in case of any drawing thereunder; (F)
the full text of any certificate to be presented by such beneficiary in
case of any drawing thereunder; and (G) such other matters as the L/C
Issuer may require. In the case of a request for an amendment of any
outstanding Letter of Credit, such Letter of Credit Application shall
specify in form and detail satisfactory to the L/C Issuer (A) the
Letter of Credit to be amended; (B) the proposed date of amendment
thereof (which shall be a Business Day); (C) the nature of the proposed
amendment; and (D) such other matters as the L/C Issuer may require.
Additionally, the Borrower shall furnish to the L/C Issuer and the
Administrative Agent such other documents and information pertaining to
such requested Letter of Credit issuance or amendment, including any
Issuer Documents, as the L/C Issuer or the Administrative Agent may
require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received
a copy of such Letter of Credit Application from the Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy
thereof. Unless the L/C Issuer has received written notice from any
Lender or the Administrative Agent, at least one Business Day prior to
the requested date of issuance or amendment of the applicable Letter of
Credit, that one or more applicable conditions contained in Article IV
shall not then be satisfied, then, subject to the terms and conditions
hereof, the L/C Issuer shall, on the requested date, issue a Letter of
Credit for the account of the Borrower or enter into the applicable
amendment, as the case may be, in each case in accordance with the L/C
Issuer's usual and customary business practices. Immediately upon the
issuance of each Letter of Credit, each Lender shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the L/C
Issuer a risk participation in such Letter of Credit in an amount equal
to the product of such Lender's Pro Rata Share times the amount of such
Letter of Credit.
(iii) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrower and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.
(c) Drawings and Reimbursements; Funding of Participations.
(i) Upon receipt from the beneficiary of any Letter of Credit
of any notice of a drawing under such Letter of Credit, the L/C Issuer
shall notify the Borrower and the Administrative Agent thereof. Not
later than 11:00 a.m. on the date of any payment by the L/C Issuer
under a Letter of Credit (each such date, an "Honor Date"), the
Borrower shall reimburse the L/C Issuer through the Administrative
Agent in an amount equal to the amount of such drawing. If the Borrower
fails to so reimburse the L/C Issuer by such time, the Administrative
Agent shall promptly notify each Lender of the Honor Date, the amount
of the unreimbursed drawing (the "Unreimbursed Amount"), and the amount
of such Lender's Pro Rata Share thereof. In such event, the Borrower
shall be deemed to
23
have requested a Borrowing of Base Rate Loans to be disbursed on the
Honor Date in an amount equal to the Unreimbursed Amount, without
regard to the minimum and multiples specified in Section 2.02 for the
principal amount of Base Rate Loans, but subject to the amount of the
unutilized portion of the Aggregate Commitments and the conditions set
forth in Section 4.02 (other than the delivery of a Loan Notice). Any
notice given by the L/C Issuer or the Administrative Agent pursuant to
this Section 2.03(c)(i) may be given by telephone if immediately
confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of
such notice.
(ii) Each Lender shall upon any notice pursuant to Section
2.03(c)(i) make funds available to the Administrative Agent for the
account of the L/C Issuer at the Administrative Agent's Office in an
amount equal to its Pro Rata Share of the Unreimbursed Amount not later
than 1:00 p.m. on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of Section
2.03(c)(iii), each Lender that so makes funds available shall be deemed
to have made a Base Rate Loan to the Borrower in such amount. The
Administrative Agent shall remit the funds so received to the L/C
Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Borrowing of Base Rate Loans because the
conditions set forth in Section 4.02 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender's payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
Section 2.03(c)(ii) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under
this Section 2.03.
(iv) Until each Lender funds its Loan or L/C Advance pursuant
to this Section 2.03(c) to reimburse the L/C Issuer for any amount
drawn under any Letter of Credit, interest in respect of such Lender's
Pro Rata Share of such amount shall be solely for the account of the
L/C Issuer.
(v) Each Lender's obligation to make Loans or L/C Advances to
reimburse the L/C Issuer for amounts drawn under Letters of Credit, as
contemplated by this Section 2.03(c), shall be absolute and
unconditional and shall not be affected by any circumstance, including
(A) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the L/C Issuer, the Borrower or any other
Person for any reason whatsoever; (B) the occurrence or continuance of
a Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing; provided, however, that each
Lender's obligation to make Loans pursuant to this Section 2.03(c) is
subject to the conditions set forth in Section 4.02 (other than
delivery by the Borrower of a Loan Notice). No such making of an L/C
Advance shall relieve or otherwise impair the obligation of the
Borrower to reimburse the L/C Issuer for the amount of any payment
24
made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this Section 2.03(c) by the time specified in Section 2.03(c)(ii),
the L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer
at a rate per annum equal to the greater of the Federal Funds Rate and
a rate determined by the L/C Issuer in accordance with banking industry
rules on interbank compensation. A certificate of the L/C Issuer
submitted to any Lender (through the Administrative Agent) with respect
to any amounts owing under this clause (vi) shall be conclusive absent
manifest error.
(d) Repayment of Participations.
(i) At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with Section 2.03(c),
if the Administrative Agent receives for the account of the L/C Issuer
any payment in respect of the related Unreimbursed Amount or interest
thereon (whether directly from the Borrower or otherwise, including
proceeds of Cash Collateral applied thereto by the Administrative
Agent), the Administrative Agent will distribute to such Lender its Pro
Rata Share thereof (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Lender's L/C
Advance was outstanding) in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to Section 2.03(c)(i) is
required to be returned under any of the circumstances described in
Section 10.05 (including pursuant to any settlement entered into by the
L/C Issuer in its discretion), each Lender shall pay to the
Administrative Agent for the account of the L/C Issuer its Pro Rata
Share thereof on demand of the Administrative Agent, plus interest
thereon from the date of such demand to the date such amount is
returned by such Lender, at a rate per annum equal to the Federal Funds
Rate from time to time in effect. The obligations of the Lenders under
this clause shall survive the payment in full of the Obligations and
the termination of this Agreement.
(e) Obligations Absolute. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit and to repay each
L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
25
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
(f) Role of L/C Issuer. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. None of the L/C Issuer,
the Administrative Agent, any of their respective Related Parties nor any
correspondent, participant or assignee of the L/C Issuer shall be liable to any
Lender for (i) any action taken or omitted in connection herewith at the request
or with the approval of the Lenders or the Required Lenders, as applicable; (ii)
any action taken or omitted in the absence of gross negligence or willful
misconduct; or (iii) the due execution, effectiveness, validity or
enforceability of any document or instrument related to any Letter of Credit or
Issuer Document. The Borrower hereby assumes all risks of the acts or omissions
of any beneficiary or transferee with respect to its use of any Letter of
Credit; provided, however, that this assumption is not intended to, and shall
not, preclude the Borrower's pursuing such rights and remedies as it may have
against the beneficiary or transferee at law or under any other agreement. None
of the L/C Issuer, the Administrative Agent, any of their respective Related
Parties nor any correspondent, participant or assignee of
26
the L/C Issuer shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section 2.03(e); provided, however, that anything
in such clauses to the contrary notwithstanding, the Borrower may have a claim
against the L/C Issuer, and the L/C Issuer may be liable to the Borrower, to the
extent, but only to the extent, of any direct, as opposed to consequential or
exemplary, damages suffered by the Borrower which the Borrower proves were
caused by the L/C Issuer's willful misconduct or gross negligence or the L/C
Issuer's willful failure to pay under any Letter of Credit after the
presentation to it by the beneficiary or transferee at law or under any other
agreement of a sight draft and certificate(s) strictly complying with the terms
and conditions of a Letter of Credit. In furtherance and not in limitation of
the foregoing, the L/C Issuer may accept documents that appear on their face to
be in order, without responsibility for further investigation, regardless of any
notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) Cash Collateral. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any L/C Obligation for any reason
remains outstanding, the Borrower shall, in each case, immediately Cash
Collateralize the then Outstanding Amount of all L/C Obligations. Sections 2.04
and 8.02(c) set forth certain additional requirements to deliver Cash Collateral
hereunder. For purposes of this Section 2.03, Section 2.04 and Section 8.02(c),
"Cash Collateralize" means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash or deposit account balances pursuant to
documentation in form and substance satisfactory to the Administrative Agent and
the L/C Issuer (which documents are hereby consented to by the Lenders).
Derivatives of such term have corresponding meanings. The Borrower hereby grants
to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders,
a security interest in all such cash, deposit accounts and all balances therein
and all proceeds of the foregoing. Cash Collateral shall be maintained in
blocked, non-interest bearing deposit accounts at Bank of America.
(h) Applicability of ISP. Unless otherwise expressly agreed by the L/C
Issuer and the Borrower when a Letter of Credit is issued, the rules of the ISP
shall apply to each Letter of Credit.
(i) Letter of Credit Fees. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share a
Letter of Credit fee (the "Letter of Credit Fee") for each Letter of Credit
equal to the Applicable Rate times the daily maximum amount available to be
drawn under such Letter of Credit. For purposes of computing the daily amount
available to be drawn under any Letter of Credit, the amount of such Letter of
Credit shall be determined in accordance with Section 1.07. Letter of Credit
Fees shall be (i) computed on a quarterly basis in arrears and (ii) due and
payable on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand. If there is any change in the Applicable Rate during any quarter, the
daily amount available to be drawn under each Letter of Credit shall be computed
and multiplied by the
27
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect. Notwithstanding anything to the contrary
contained herein, upon the request of the Required Lenders, while any Event of
Default exists, all Letter of Credit Fees shall accrue at the Default Rate.
(j) Fronting Fee and Documentary and Processing Charges Payable to L/C
Issuer. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee with respect to each Letter of Credit, at the rate per annum
specified in the Fee Letter, computed on the daily amount available to be drawn
under such Letter of Credit and on a quarterly basis in arrears, and due and
payable on the first Business Day after the end of each March, June, September
and December, commencing with the first such date to occur after the issuance of
such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on
demand until no amounts remain to be drawn under such Letter of Credit. For
purposes of computing the daily amount available to be drawn under any Letter of
Credit, the amount of such Letter of Credit shall be determined in accordance
with Section 1.07. In addition, the Borrower shall pay directly to the L/C
Issuer for its own account the customary issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of the L/C Issuer
relating to letters of credit as from time to time in effect. Such customary
fees and standard costs and charges are due and payable on demand and are
nonrefundable.
(k) Conflict with Issuer Documents. In the event of any conflict
between the terms hereof and the terms of any Issuer Document, the terms hereof
shall control.
2.04 PREPAYMENTS.
(a) The Borrower may, upon notice to the Administrative Agent, at any
time or from time to time voluntarily prepay Loans in whole or in part without
premium or penalty; provided that (i) such notice must be received by the
Administrative Agent not later than 12:00 noon; (A) three Business Days prior to
any date of prepayment of Eurodollar Rate Loans and (B) on the date of
prepayment of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans
shall be in a principal amount of $5,000,000 or a whole multiple of $1,000,000
in excess thereof; and (iii) any prepayment of Base Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
or, in each case, if less, the entire principal amount thereof then outstanding.
Each such notice shall specify the date and amount of such prepayment and the
Type(s) of Loans to be prepaid. The Administrative Agent will promptly notify
each Lender of its receipt of each such notice, and of the amount of such
Lender's Pro Rata Share of such prepayment. If such notice is given by the
Borrower, the Borrower shall make such prepayment and the payment amount
specified in such notice shall be due and payable on the date specified therein.
Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued
interest thereon, together with any additional amounts required pursuant to
Section 3.05. Each such prepayment shall be applied to the Loans of the Lenders
in accordance with their respective Pro Rata Shares.
(b) If for any reason the Total Outstandings at any time exceed the
Aggregate Commitments then in effect, the Borrower shall immediately prepay
Loans and/or Cash Collateralize the L/C Obligations in
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an aggregate amount equal to such excess; provided, however, that the Borrower
shall not be required to Cash Collateralize the L/C Obligations pursuant to this
Section 2.04(b) unless after the prepayment in full of the Loans the Total
Outstandings exceed the Aggregate Commitments then in effect.
2.05 TERMINATION OR REDUCTION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent, terminate the Aggregate Commitments, or from
time to time permanently reduce the Aggregate Commitments; provided that (i) any
such notice shall be received by the Administrative Agent not later than 12:00
noon five Business Days prior to the date of termination or reduction, (ii) any
such partial reduction shall be in an aggregate amount of $5,000,000 or any
whole multiple of $1,000,000 in excess thereof, (iii) the Borrower shall not
terminate or reduce the Aggregate Commitments if, after giving effect thereto
and to any concurrent prepayments hereunder, the Total Outstandings would exceed
the Aggregate Commitments, and (iv) if, after giving effect to any reduction of
the Aggregate Commitments, the Letter of Credit Sublimit exceeds the amount of
the Aggregate Commitments, the Letter of Credit Sublimit shall be automatically
reduced by the amount of such excess. The Administrative Agent will promptly
notify the Lenders of any such notice of termination or reduction of the
Aggregate Commitments. Any reduction of the Aggregate Commitments shall be
applied to the Commitment of each Lender according to its Pro Rata Share. All
facility and utilization fees accrued until the effective date of any
termination of the Aggregate Commitments shall be paid on the effective date of
such termination.
2.06 REPAYMENT OF LOANS. The Borrower shall repay to the Lenders on the
Maturity Date the aggregate principal amount of Loans outstanding on such date.
2.07 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period plus the Applicable Rate; and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate.
(b) If any amount payable by the Borrower under any Loan Document is
not paid when due (without regard to any applicable grace periods), whether at
stated maturity, by acceleration or otherwise, such amount shall thereafter bear
interest at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Laws. Furthermore,
while any Event of Default exists, the Borrower shall pay interest on the
principal amount of all outstanding Obligations hereunder at a fluctuating
interest rate per annum at all times equal to the Default Rate to the fullest
extent permitted by applicable Laws. Accrued and unpaid interest on past due
amounts (including interest on past due interest) shall be due and payable upon
demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
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2.08 FEES. In addition to certain fees described in subsections (i) and
(j) of Section 2.03:
(a) Facility Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share, a facility
fee equal to the Applicable Rate times the actual daily amount of the Aggregate
Commitments (or, if the Aggregate Commitments have terminated, on the
Outstanding Amount of all Loans and L/C Obligations), regardless of usage. The
facility fee shall accrue at all times during the Availability Period (and
thereafter so long as any Loans or L/C Obligations remain outstanding),
including at any time during which one or more of the conditions in Article IV
is not met, and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing with the
first such date to occur after the Closing Date, and on the Maturity Date (and,
if applicable, thereafter on demand). The facility fee shall be calculated
quarterly in arrears, and if there is any change in the Applicable Rate during
any quarter, the actual daily amount shall be computed and multiplied by the
Applicable Rate separately for each period during such quarter that such
Applicable Rate was in effect.
(b) Utilization Fee. The Borrower shall pay to the Administrative Agent
for the account of each Lender in accordance with its Pro Rata Share, a
utilization fee equal to the corresponding Applicable Rate times the Total
Outstandings on each day that the Total Outstandings exceed 50% of the actual
daily amount of the Aggregate Commitments. The utilization fee shall be due and
payable quarterly in arrears on the last Business Day of each March, June,
September and December, commencing with the first such date to occur after the
Closing Date, and on the Maturity Date. The utilization fee shall be calculated
quarterly in arrears and if there is any change in the Applicable Rate during
any quarter, the daily amount shall be computed and multiplied by the Applicable
Rate for each period during which such Applicable Rate was in effect. The
utilization fee shall accrue at all times, including at any time during which
one or more of the conditions in Article IV is not met.
(c) Other Fees. (i) The Borrower shall pay to the Arranger and the
Administrative Agent for their own respective accounts fees in the amounts and
at the times specified in the Fee Letter. Such fees shall be fully earned when
paid and shall not be refundable for any reason whatsoever.
(ii) The Borrower shall pay to the Lenders such fees as shall have been
separately agreed upon in writing in the amounts and at the times so specified.
Such fees shall be fully earned when paid and shall not be refundable for any
reason whatsoever.
2.09 COMPUTATION OF INTEREST AND FEES. All computations of interest for
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be made on the basis of a year of 365 or 366 days, as the case may
be, and actual days elapsed. All other computations of fees and interest shall
be made on the basis of a 360-day year and actual days elapsed (which results in
more fees or interest, as applicable, being paid than if computed on the basis
of a 365-day year). Interest shall accrue on each Loan for the day on which the
Loan is made, and shall not accrue on a Loan, or any portion thereof, for the
day on which the Loan or such portion is paid, provided that any Loan that is
repaid on the same day on which it is made shall, subject to Section 2.11(a),
bear interest for one day.
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2.10 EVIDENCE OF DEBT.
(a) The Credit Extensions made by each Lender shall be evidenced by one
or more accounts or records maintained by such Lender and by the Administrative
Agent in the ordinary course of business. The accounts or records maintained by
the Administrative Agent and each Lender shall be conclusive absent manifest
error of the amount of the Credit Extensions made by the Lenders to the Borrower
and the interest and payments thereon. Any failure to so record or any error in
doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In
the event of any conflict between the accounts and records maintained by any
Lender and the accounts and records of the Administrative Agent in respect of
such matters, the accounts and records of the Administrative Agent shall control
in the absence of manifest error. Upon the request of any Lender made through
the Administrative Agent, the Borrower shall execute and deliver to such Lender
(through the Administrative Agent) a Note, which shall evidence such Lender's
Loans in addition to such accounts or records. Each Lender may attach schedules
to its Note and endorse thereon the date, Type (if applicable), amount and
maturity of its Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control in the absence of manifest
error.
2.11 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or set-off.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 2:00 p.m. on
the date specified herein. The Administrative Agent will promptly distribute to
each Lender its Pro Rata Share (or other applicable share as provided herein) of
such payment in like funds as received by wire transfer to such Lender's Lending
Office. All payments received by the Administrative Agent after 2:00 p.m. shall
be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue.
(b) If any payment to be made by the Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.
(c) (i) Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior
to the proposed date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with Section 2.02
and
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may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made
its share of the applicable Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to
pay to the Administrative Agent forthwith on demand such corresponding
amount in immediately available funds with interest thereon, for each
day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative
Agent, at (A) in the case of a payment to be made by such Lender, the
greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation and (B) in the case of a payment to be made by
the Borrower, the interest rate applicable to Base Rate Loans. If the
Borrower and such Lender shall pay such interest to the Administrative
Agent for the same or an overlapping period, the Administrative Agent
shall promptly remit to the Borrower the amount of such interest paid
by the Borrower for such period. If such Lender pays its share of the
applicable Borrowing to the Administrative Agent, then the amount so
paid shall constitute such Lender's Loan included in such Borrowing.
Any payment by the Borrower shall be without prejudice to any claim the
Borrower may have against a Lender that shall have failed to make such
payment to the Administrative Agent.
(ii) Payments by Borrower; Presumptions by Administrative
Agent. Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the
Administrative Agent for the account of the Lenders or the L/C Issuer
hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment
on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case
may be, the amount due. In such event, if the Borrower has not in fact
made such payment, then each of the Lenders or the L/C Issuer, as the
case may be, severally agrees to repay to the Administrative Agent
forthwith on demand the amount so distributed to such Lender or the L/C
Issuer, in immediately available funds with interest thereon, for each
day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on
interbank compensation.
A notice of the Administrative Agent to any Lender or the Borrower with
respect to any amount owing under this subsection (c) shall be conclusive,
absent manifest error.
(d) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this Article II, and such funds are not made available to the Borrower by the
Administrative Agent because the conditions to the applicable Credit Extension
set forth in Article IV are not satisfied or waived in accordance with the terms
hereof, the Administrative Agent shall return such funds (in like funds as
received from such Lender) to such Lender, without interest.
(e) The obligations of the Lenders hereunder to make Loans, to fund
participations in Letters of Credit and to make payments pursuant to Section
10.04(c) are several and not joint.
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The failure of any Lender to make any Loan, to fund any such participation or to
make any payment under Section 10.04(c) on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Loan, to purchase its participation or to make its payment under
Section 10.04(c).
(f) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.12 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in L/C Obligations held by it, any payment (whether
voluntary, involuntary, through the exercise of any right of set-off, or
otherwise) in excess of its ratable share (or other share contemplated
hereunder) thereof, such Lender shall immediately (a) notify the Administrative
Agent of such fact, and (b) purchase from the other Lenders such participations
in the Loans made by them and/or such subparticipations in the participations in
L/C Obligations held by them, as the case may be, as shall be necessary to cause
such purchasing Lender to share the excess payment in respect of such Loans or
such participations, as the case may be, pro rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described in
Section 10.05 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender's ratable share (according to the proportion of (i) the amount of such
paying Lender's required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon. The Borrower agrees that any Lender so purchasing a
participation from another Lender may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off, but subject
to Section 10.08) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
The Administrative Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments. Each Lender that purchases a participation pursuant to this Section
shall from and after such purchase have the right to give all notices, requests,
demands, directions and other communications under this Agreement with respect
to the portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.
2.13 INCREASE IN COMMITMENTS.
(a) Request for Increase. Provided that no Default or Event of Default
has occurred and is continuing, upon notice to the Administrative Agent (which
shall promptly notify the Lenders), the Borrower may, from time to time, request
an increase in the Aggregate Commitments by an amount (for all such requests)
not exceeding $100,000,000; provided that (i) any such request for an increase
shall be in a minimum amount of $25,000,000, and (ii) there shall have been no
prior voluntary reduction by the Borrower of the Aggregate Commitments.
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At the time of sending such notice, the Borrower (in consultation with the
Administrative Agent) shall specify the time period within which each Lender is
requested to respond (which shall in no event be less than ten Business Days
from the date of delivery of such notice to the Lenders).
(b) Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Pro Rata Share of such requested increase. Any Lender not
responding within such time period shall be deemed to have declined to increase
its Commitment.
(c) Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Borrower and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent and
each L/C Issuer (which approvals shall not be unreasonably withheld), the
Borrower may also invite additional Eligible Assignees to become Lenders
pursuant to a joinder agreement in form and substance reasonably satisfactory to
the Administrative Agent.
(d) Effective Date and Allocations. If the Aggregate Commitments are
increased in accordance with this Section, the Administrative Agent and the
Borrower shall determine the effective date (the "Increase Effective Date") and
the final allocation of such increase; provided, however, that any increase
pursuant to this Section 2.13 shall not increase the Letter of Credit Sublimit.
The Administrative Agent shall promptly notify the Borrower and the Lenders of
the final allocation of such increase and the Increase Effective Date.
(e) Conditions to Effectiveness of Increase. As a condition precedent
to such increase, the Borrower shall deliver to the Administrative Agent a
certificate dated as of the Increase Effective Date (in sufficient copies for
each Lender) signed by a Responsible Officer of the Borrower (i) certifying and
attaching the resolutions adopted by the Borrower approving or consenting to
such increase, and (ii) certifying that, before and after giving effect to such
increase, (A) the representations and warranties contained in Article V of this
Agreement, but excluding the representation and warranty as to no Material
Adverse Effect contained in Section 5.11(b) of this Agreement, or any other Loan
Document are true and correct on and as of the Increase Effective Date, except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they are true and correct as of such earlier date,
and except that for purposes of this Section 2.13, the representations and
warranties contained in subsection (a) of Section 5.11 shall be deemed to refer
to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of Section 6.01, and (B) no Default exists. The Borrower shall
prepay any Loans outstanding on the Increase Effective Date (and pay any
additional amounts required pursuant to Section 3.05) to the extent necessary to
keep the outstanding Loans ratable with any revised Pro Rata Shares of the
Lenders arising from any nonratable increase in the Commitments under this
Section.
(f) Conflicting Provisions. This Section shall supersede any provisions
in Sections 2.12 or 10.01 to the contrary.
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ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, excluding, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its
overall net income, and franchise taxes imposed on it (in lieu of net income
taxes), by the jurisdiction (or any political subdivision thereof) under the
Laws of which the Administrative Agent or such Lender, as the case may be, is
organized or maintains a lending office (all such non-excluded taxes, duties,
levies, imposts, deductions, assessments, fees, withholdings or similar charges,
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by any Laws to deduct any Taxes from or in respect of any sum
payable under any Loan Document to the Administrative Agent or any Lender, (i)
the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section), each of the Administrative Agent and such Lender receives
an amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other authority
in accordance with applicable Laws, and (iv) within 30 days after the date of
such payment, the Borrower shall furnish to the Administrative Agent (which
shall forward the same to such Lender) the original or a certified copy of a
receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent or to such Lender, as the case may be, at the time interest
is paid, such additional amount that the Administrative Agent or such Lender
specifies is necessary to preserve the after-tax yield (after factoring in all
taxes, including taxes imposed on or measured by net income) that the
Administrative Agent or such Lender would have received if such Taxes or Other
Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under Section 3.01(c) and (iii) any liability (including additions to
tax, penalties, interest and expenses) arising therefrom or with respect
thereto, in each case whether or not such Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. Payment
under this subsection (d) shall
35
be made within 30 days after the date the Lender or the Administrative Agent
makes a demand therefor.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period therefor, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay accrued
interest on the amount so prepaid or converted. Each Lender agrees to designate
a different Lending Office if such designation will avoid the need for such
notice and will not, in the good faith judgment of such Lender, otherwise be
materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Required Lenders determine
that for any reason adequate and reasonable means do not exist for determining
the Eurodollar Rate for any requested Interest Period with respect to a proposed
Eurodollar Rate Loan, or that the Eurodollar Rate for any requested Interest
Period with respect to a proposed Eurodollar Rate Loan does not adequately and
fairly reflect the cost to such Lenders of funding such Loan, the Administrative
Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be
suspended until the Administrative Agent (upon the instruction of the Required
Lenders) revokes such notice. Upon receipt of such notice, the Borrower may
revoke any pending request for a Borrowing of, conversion to or continuation of
Eurodollar Rate Loans or, failing that, will be deemed to have converted such
request into a request for a Borrowing of Base Rate Loans in the amount
specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that as a result of the introduction of or
any change in or in the interpretation of any Law, or such Lender's compliance
therewith, there shall be any increase in the cost to such Lender of agreeing to
make or making, funding or maintaining Eurodollar Rate Loans or (as the case may
be) issuing or participating in Letters of Credit, or a reduction in the amount
received or receivable by such Lender in connection with any of the foregoing
(excluding for purposes of this subsection (a) any such increased costs or
reduction in amount resulting from (i) Taxes or Other Taxes (as to which Section
3.01 shall govern), (ii) changes in the basis of taxation of overall net income
or overall gross income by the United States or any foreign jurisdiction or any
political subdivision of either thereof under the Laws of which such Lender is
organized or has its Lending Office, and (iii) reserve requirements utilized in
the determination of the Eurodollar Rate, then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such
36
Lender such additional amounts as will compensate such Lender for such increased
cost or reduction.
(b) If any Lender determines that the introduction of any Law regarding
capital adequacy or any change therein or in the interpretation thereof, or
compliance by such Lender (or its Lending Office) therewith, has the effect of
reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations hereunder
(taking into consideration its policies with respect to capital adequacy and
such Lender's desired return on capital), then from time to time upon demand of
such Lender (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to such Lender such additional amounts as will compensate
such Lender for such reduction.
(c) If any Lender makes demand under either Section 3.04(a) or (b) more
than ninety (90) days after it obtains knowledge of an event giving rise to its
right to make such demand, such Lender shall, with respect to compensation
payable pursuant to Section 3.04(a) or (b), only be entitled to payment
thereunder as a result of any such event for the period from and after the date
ninety (90) days prior to the date that such Lender does make demand. Each
demand shall be accompanied by a certificate stating the amount demanded and
stating in reasonable detail the basis for the charges and the method of
computation. Notwithstanding any other provision of this Section 3.04, no Lender
shall demand compensation for any increased cost, charge or reduction referred
to in Section 3.04(a) or (b) if it shall not at the time be the general policy
of such Lender to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, and each Lender shall in good
faith endeavor to allocate increased costs or reductions fairly among all of its
affected commitments and credit extensions (whether or not it seeks compensation
from all affected borrowers).
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise);
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; or
(c) any assignment of a Eurodollar Rate Loan on a day other than the
last day of the Interest Period therefor as a result of a request by the
Borrower pursuant to Section 10.14;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
The Borrower shall also pay any customary administrative fees charged by such
Lender for services actually performed in connection with the foregoing.
37
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.05, each Lender shall be deemed to have funded each Eurodollar
Rate Loan made by it at the Eurodollar Base Rate used in determining the
Eurodollar Rate for such Loan by a matching deposit or other borrowing in the
London interbank eurodollar market for a comparable amount and for a comparable
period, whether or not such Eurodollar Rate Loan was in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION.
(a) A certificate of the Administrative Agent or any Lender claiming
compensation under this Article III and setting forth the additional amount or
amounts to be paid to it hereunder shall be conclusive in the absence of
manifest error. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods.
(b) Upon any Lender's making a claim for compensation under Section
3.01 or 3.04, the Borrower may replace such Lender in accordance with Section
10.14.
3.07 SURVIVAL. All of the Borrower's obligations under this Article III
shall survive termination of the Aggregate Commitments and repayment of all
other Obligations hereunder.
ARTICLE IV.
CONDITIONS PRECEDENT TO CREDIT EXTENSIONS
4.01 CONDITIONS OF INITIAL CREDIT EXTENSION. The obligation of the L/C
Issuer and each Lender to make its initial Credit Extension hereunder is subject
to satisfaction of the following conditions precedent:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) unless
otherwise specified, each properly executed by a Responsible Officer of the
Borrower, each dated the Closing Date (or, in the case of certificates of
governmental officials, a recent date before the Closing Date) and each in form
and substance satisfactory to the Administrative Agent and each of the Lenders:
(i) executed counterparts of this Agreement, sufficient in
number for distribution to the Administrative Agent, each Lender and
the Borrower;
(ii) a Note executed by the Borrower in favor of each Lender
requesting a Note;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of the Borrower as the Administrative Agent may require
evidencing the identity, authority and capacity of each Responsible
Officer thereof authorized to act as a Responsible Officer in
connection with this Agreement and the other Loan Documents;
(iv) such documents and certifications as the Administrative
Agent may reasonably require to evidence that the Borrower is duly
organized or formed, and that the Borrower is validly existing, in good
standing and qualified to engage in business in each jurisdiction where
its ownership, lease or operation of properties or the conduct of
38
its business requires such qualification, except to the extent that
failure to do so could not reasonably be expected to have a Material
Adverse Effect;
(v) favorable opinions of Kevin O'Malley, General Counsel of
the Borrower, and Dorsey & Whitney, LLP, special counsel to the
Borrower, each addressed to the Administrative Agent and each Lender,
as to the matters set forth in Exhibit E and such other matters
concerning the Borrower and the Loan Documents as the Required Lenders
may reasonably request;
(vi) a certificate of a Responsible Officer of the Borrower
either (A) attaching copies of all consents, licenses and approvals
required in connection with the execution, delivery and performance by
the Borrower and the validity against the Borrower of the Loan
Documents to which it is a party, and such consents, licenses and
approvals shall be in full force and effect, or (B) stating that no
such consents, licenses or approvals are so required;
(vii) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that the representations and warranties of the
Borrower contained in Article V of this Agreement, or any other Loan
Document, or which are contained in any document furnished at any time
under or in connection herewith or therewith, are true and correct on
and as of the date hereof, except to the extent that such
representations and warranties specifically refer to an earlier date,
in which case they shall be true and correct as of such earlier date,
and except that for purposes of this Section 4.01, the representations
and warranties contained in subsection (a) of Section 5.11 shall be
deemed to refer to the most recent statements furnished pursuant to
clauses (a) and (b), respectively, of Section 6.01, (B) the conditions
specified in Sections 4.02(b) have been satisfied, (C) that there has
been no event or circumstance since June 30, 2004 that has had or could
be reasonably expected to have, either individually or in the
aggregate, a Material Adverse Effect; and (D) the current Debt Ratings;
(viii) evidence that all insurance required to be maintained
pursuant to the Loan Documents has been obtained and is in effect;
(ix) a Compliance Certificate for the Borrower and its
Subsidiaries, prepared as of the last day of the fiscal quarter thereof
ended most recently prior to the Closing Date; and
(x) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent and the L/C Issuer or the
Required Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date shall
have been paid.
(c) Unless waived by the Administrative Agent, the Borrower shall have
paid all Attorney Costs of the Administrative Agent to the extent invoiced prior
to or on the Closing Date, plus such additional amounts of Attorney Costs as
shall constitute its reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that
39
such estimate shall not thereafter preclude a final settling of
accounts between the Borrower and the Administrative Agent).
(d) The Closing Date shall have occurred on or before October 8, 2004.
Without limiting the generality of the provisions of Section 9.04, for
purposes of determining compliance with the conditions specified in this Section
4.01, each Lender that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Lender unless the Administrative Agent shall have received
notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.
4.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each Lender
to honor any Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type, or a continuation of Eurodollar
Rate Loans) is subject to the following conditions precedent:
(a) The representations and warranties of the Borrower contained in
Article V of this Agreement, but excluding the representation and warranty as to
no Material Adverse Effect contained in Section 5.11(b) of this Agreement, or
any other Loan Document, or which are contained in any document furnished at any
time under or in connection herewith or therewith, shall be true and correct on
and as of the date of such Credit Extension, except to the extent that such
representations and warranties specifically refer to an earlier date, in which
case they shall be true and correct as of such earlier date, and except that for
purposes of this Section 4.02, the representations and warranties contained in
subsection (a) of Section 5.11 shall be deemed to refer to the most recent
statements furnished pursuant to clauses (a) and (b), respectively, of Section
6.01.
(b) No Default shall exist, or would result from such proposed Credit
Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer shall
have received a Request for Credit Extension in accordance with the requirements
hereof.
Each Request for Credit Extension (other than a Loan Notice requesting
only a conversion of Loans to the other Type or a continuation of Eurodollar
Rate Loans) submitted by the Borrower shall be deemed to be a representation and
warranty that the conditions specified in Sections 4.02(a) and (b) have been
satisfied on and as of the date of the applicable Credit Extension.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent and
the Lenders that:
5.01 CORPORATE EXISTENCE AND POWER. The Borrower and each of its
Subsidiaries (other than Excluded Subsidiaries):
40
(a) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, carry on its business
and to execute, deliver, and perform its obligations under the Loan Documents;
(c) is duly qualified as a foreign corporation and is licensed and in
good standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
or license; and
(d) is in compliance with all Laws; except, in each case referred to in
clause (b), (c) or clause (d), to the extent that the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
5.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Borrower of this Agreement and each other Loan Document
have been duly authorized by all necessary corporate action, and do not and will
not:
(a) contravene the terms of any of the Borrower's Organization
Documents;
(b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any document evidencing any Contractual Obligation
to which the Borrower is a party or any order, injunction, writ or decree of any
Governmental Authority to which the Borrower or its property is subject; or
(c) violate any Laws.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower of
this Agreement or any other Loan Document.
5.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Borrower is a party constitute the legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability.
5.05 LITIGATION. Except as specifically disclosed in Schedule 5.05,
there are no actions, suits, proceedings, claims or disputes pending, or to the
best knowledge of the Borrower, threatened or contemplated, at law, in equity,
in arbitration or before any Governmental Authority, against the Borrower or its
Subsidiaries or any of their respective properties which:
(a) purport to affect or pertain to this Agreement or any other Loan
Document, or any of the transactions contemplated hereby or thereby; or
41
(b) if determined adversely to the Borrower or its Subsidiaries, would
reasonably be expected to have a Material Adverse Effect. No injunction, writ,
temporary restraining order or any order of any nature has been issued by any
court or other Governmental Authority purporting to enjoin or restrain the
execution, delivery or performance of this Agreement or any other Loan Document,
or directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.06 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Borrower. As of the Closing Date,
neither the Borrower nor any Subsidiary is in default under or with respect to
any Contractual Obligation in any respect which, individually or together with
all such defaults, could reasonably be expected to have a Material Adverse
Effect, or that would, if such default had occurred after the Closing Date,
create an Event of Default under Section 8.01(e).
5.07 ERISA COMPLIANCE.
(a) Except as specifically disclosed in Schedule 5.07, each Plan is in
substantial compliance in all material respects with the applicable provisions
of ERISA, the Code and other federal or state law. Each Plan which is intended
to qualify under Section 401 (a) of the Code has received a favorable
determination letter from the IRS and to the best knowledge of the Borrower,
nothing has occurred which would if not remedied (the time for such remedy not
having yet expired) cause the loss of such qualification.
(b) There are no pending, or to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan which has resulted or could reasonably be expected to
result in a Material Adverse Effect. There has been no prohibited transaction or
other violation of the fiduciary responsibility rule under ERISA with respect to
any Plan which could reasonably result in a Material Adverse Effect.
(c) Except as specifically disclosed in Schedule 5.07, no ERISA Event
has occurred or is reasonably expected to occur with respect to any Pension
Plan.
(d) Except as specifically disclosed in Schedule 5.07, no Pension Plan
has any Unfunded Pension Liability.
(e) Except as specifically disclosed in Schedule 5.07, the Borrower has
not incurred, nor does it reasonably expect to incur, any liability under Title
IV of ERISA with respect to any Pension Plan (other than premiums due and not
delinquent under Section 4007 of ERISA).
(f) Except as specifically disclosed in Schedule 5.07, the Borrower has
not transferred any Unfunded Pension Liability to any Person or to the knowledge
of the Borrower otherwise engaged in a transaction subject to Section 4069 of
ERISA.
(g) No trade or business (whether or not incorporated) under common
control with the Borrower within the meaning of Section 414(b), (c), (m) or (o)
of the Code maintains or contributes to any Pension Plan or other Plan subject
to Section 412 of the Code. During the five year period ending on the Closing
Date, neither the Borrower nor any Person under common
42
control with the Borrower (as defined in the preceding sentence) has ever
contributed to any multiemployer plan within the meaning of Section 4001(a)(3)
of ERISA.
5.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by Section 6.11
and Section 7.07. Neither the Borrower nor any Subsidiary is generally engaged
in the business of purchasing or selling Margin Stock or extending credit for
the purpose of purchasing or carrying Margin Stock.
5.09 TITLE TO PROPERTIES. The Borrower and each Subsidiary have good
record and marketable title in fee simple to, or valid leasehold interests in,
all real property necessary or used in the ordinary conduct of their respective
businesses, except for such defects in title as could not, individually or in
the aggregate, have a Material Adverse Effect. As of the Closing Date, the
property of the Borrower and its Subsidiaries (other than Excluded Subsidiaries)
is subject to no Liens, other than Permitted Liens.
5.10 TAXES. The Borrower and its Subsidiaries (other than Excluded
Subsidiaries) have filed all federal and other material tax returns and reports
required to be filed, and have paid all federal and other material taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets otherwise due and payable, except those which
are being contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against the Borrower or any Subsidiary that would, if
made, have a Material Adverse Effect or that is not disclosed on Schedule 5.10.
5.11 FINANCIAL CONDITION.
(a) The Audited Financial Statements, and the unaudited consolidated
financial statements of the Borrower and its Subsidiaries dated June 30, 2004,
and the related consolidated statements of income or operations, shareholders'
equity and cash flows for the fiscal quarter ended on June 30, 2004 including
the notes thereto and the accompanying Management's Discussion and Analysis of
Financial Condition and Results of Operations:
(i) were prepared in accordance with GAAP consistently applied
throughout the period covered thereby, except as otherwise expressly
noted therein, subject to ordinary, good faith year end audit
adjustments in the case of such unaudited statements;
(ii) fairly present the financial condition of the Borrower
and its Subsidiaries as of the date thereof and results of operations
for the period covered thereby; and
(iii) except as specifically disclosed in Schedule 5.11, show
all material Indebtedness and other liabilities, direct or contingent,
of the Borrower and its consolidated Subsidiaries as of the date
thereof, including liabilities for taxes, material commitments and
Contingent Obligations.
(b) Since June 30, 2004, there has been no Material Adverse Effect.
43
5.12 ENVIRONMENTAL MATTERS. Except as specifically disclosed in
Schedule 5.12, existing Environmental Laws and existing Environmental Claims
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.13 REGULATED ENTITIES. Neither the Borrower, any Person controlling
the Borrower, nor any Subsidiary, is an "Investment Company" within the meaning
of the Investment Companies Act of 1940. The Borrower is not subject to any
other federal or state statute or regulation limiting its ability to incur
Indebtedness.
5.14 NO BURDENSOME RESTRICTIONS. Neither the Borrower nor any
Subsidiary is a party to or bound by any Contractual Obligation, or subject to
any restriction in any Organization Document, or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
5.15 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The Borrower
and its Subsidiaries own or are licensed or otherwise have the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of their respective businesses, without conflict with the rights
of any other Person. To the best knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrower or any
Subsidiary (other than an Excluded Subsidiary) infringes upon any rights held by
any other Person. Except as specifically disclosed in Schedule 5.05, no claim or
litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or, to the knowledge of the Borrower,
proposed, which, in either case, could reasonably be expected to have a Material
Adverse Effect.
5.16 SUBSIDIARIES. As of the Closing Date, the Borrower has no
Subsidiaries other than those specifically disclosed in part (a) of Schedule
5.16 hereto and has no equity investments in any other corporation or entity
other than those specifically disclosed in part (b) of Schedule 5.16.
5.17 INSURANCE. The properties of the Borrower and its Subsidiaries
(other than Excluded Subsidiaries) are insured either with financially sound and
reputable insurance companies or under legitimate and responsible self-insurance
programs, in such amounts, with such deductibles and covering such risks as are
customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or its Subsidiaries (other
than Excluded Subsidiaries) operate.
5.18 FULL DISCLOSURE. None of the representations or warranties made by
the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements
44
made therein, in light of the circumstances under which they are made, not
misleading as of the time when made or delivered.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall, and shall (except in the
case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.11) cause
each Subsidiary (other than Excluded Subsidiaries) to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent, in form
and detail satisfactory to the Administrative Agent and the Required Lenders,
with sufficient copies for each Lender:
(a) as soon as available, but not later than 90 days after the end of
each fiscal year of the Borrower, a copy of the audited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income or operations, shareholders'
equity and cash flows for such fiscal year, setting forth in each case in
comparative form the figures for the previous fiscal year, all in reasonable
detail and prepared in accordance with GAAP, audited and accompanied by the
opinion of Ernst & Young LLP or another nationally-recognized independent public
accounting firm ("Independent Auditor") which report shall state that such
consolidated financial statements present fairly the financial position for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years. Such opinion shall be prepared in accordance with generally
accepted auditing standards and shall not be subject to any "going concern" or
like qualification or be qualified or limited because of a restricted or limited
examination by the Independent Auditor of any material portion of the Borrower
or any Subsidiary's records; and
(b) as soon as available, but not later than 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the Borrower,
commencing with the fiscal quarter ending September 30, 2004, a copy of the
unaudited consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such fiscal quarter and the related consolidated statements of income
and cash flows for the period commencing on the first day and ending on the last
day of such fiscal quarter, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good faith year-end
audit adjustments), the financial position and the results of operations of the
Borrower and its Subsidiaries. As to any information contained in materials
furnished pursuant to Section 6.02(d), the Borrower shall not be separately
required to furnish such information under clause (a) or (b) above, but the
foregoing shall not be in derogation of the obligation of the Borrower to
furnish the information and materials described in subsections (a) and (b) above
at the times specified therein.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent with sufficient copies for each Lender, in form and detail satisfactory to
the Administrative Agent and the Required Lenders:
45
(a) (i) concurrently with the delivery of the financial statements
referred to in subsections 6.01(a) and (b), a Compliance Certificate, executed
by a Responsible Officer, which certifies, among other things, that no Default
or Event of Default has occurred and is continuing (except as described
therein);
(b) promptly, copies of all financial statements and reports that the
Borrower sends to its shareholders, and copies of all financial statements and
regular, periodical or special reports (including Forms 10K, 10Q and 8K) that
the Borrower or any Subsidiary may make to, or file with, the SEC;
(c) promptly, such additional information regarding the business,
financial or corporate affairs of the Borrower or any Subsidiary as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request;
(d) immediately, written notice of the Borrower's receipt of a Debt
Rating or any change in such Debt Rating; and
(e) immediately, written notice of Loans in excess of 50% of the Total
Commitment.
Documents required to be delivered pursuant to Section 6.01(a) or (b)
or Section 6.02(b) (to the extent any such documents are included in materials
otherwise filed with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on which the
Borrower posts such documents, or provides a link thereto on the Borrower's
website on the Internet at the website address listed on Schedule 10.02; or (ii)
on which such documents are posted on the Borrower's behalf on
IntraLinks/IntraAgency or another relevant website, if any, to which each Lender
and the Administrative Agent have access (whether a commercial, third-party
website or whether sponsored by the Administrative Agent); provided that: (i)
the Borrower shall deliver paper copies of such documents to the Administrative
Agent upon its request for itself and to each Lender that makes a request to the
Borrower to deliver such paper copies until a written request to cease
delivering paper copies is given by the Administrative Agent on behalf of itself
or such Lender and (ii) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the Compliance Certificates required by Section 6.02(a)
to the Administrative Agent for itself and each of the Lenders. Except for such
Compliance Certificates, the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
The Borrower hereby acknowledges that (a) the Administrative Agent
and/or the Arranger will make available to the Lenders and the L/C Issuer
materials and/or information provided by or on behalf of the Borrower hereunder
(collectively, "Borrower Materials") by posting the Borrower Materials on
IntraLinks or another similar electronic system (the "Platform") and (b) certain
of the Lenders may be "public-side" Lenders (i.e., Lenders that do
46
not wish to receive material non-public information with respect to the Borrower
or its securities) (each, a "Public Lender"). The Borrower hereby agrees that
(w) all Borrower Materials that are to be made available to Public Lenders shall
be clearly and conspicuously marked "PUBLIC" which, at a minimum, shall mean
that the word "PUBLIC" shall appear prominently on the first page thereof; (x)
by marking Borrower Materials "PUBLIC", the Borrower shall be deemed to have
authorized the Administrative Agent, the Arranger, the L/C Issuer and the
Lenders to treat such Borrower Materials as either publicly available
information or not material information (although it may be sensitive and
proprietary) with respect to the Borrower or its securities for purposes of
United States Federal and state securities laws; (y) all Borrower Materials
marked "PUBLIC" are permitted to be made available through a portion of the
Platform designated "Public Investor"; and (z) the Administrative Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor".
6.03 NOTICES. Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default or Event of Default, and of the
occurrence or existence of any event or circumstance that is reasonably likely
to become a Default or Event of Default;
(b) of any matter that has resulted or is reasonably likely to result
in a Material Adverse Effect, including (insofar as the same has resulted or is
reasonably likely to result in a Material Adverse Effect) (i) breach or
non-performance of, or any default under, a Contractual Obligation of the
Borrower or its Subsidiaries; (ii) any dispute, litigation, investigation,
proceeding or suspension between the Borrower or any of its Subsidiaries and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any of
its Subsidiaries, including pursuant to any applicable Environmental Laws;
(c) of any of the following events affecting the Borrower, together
with a copy of any notice with respect to such event that may be required to be
filed with a Governmental Authority and any notice delivered by a Governmental
Authority to the Borrower with respect to such event:
(i) an ERISA Event;
(ii) if any of the representations and warranties in Section
5.12 ceases to be true and correct;
(iii) the adoption of any new Pension Plan or other Plan
subject to Section 412 of the Code;
(iv) the adoption of any amendment to a Pension Plan or other
Plan subject to Section 412 of the Code that results in a material
increase in contributions or Unfunded Pension Liability; or
(v) the commencement of contributions to any Pension Plan or
other Plan subject to Section 412 of the Code; and
47
(d) of any material change in accounting policies or financial
reporting practices by the Borrower or any of its consolidated Subsidiaries.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the occurrence
referred to therein, and stating what action the Borrower or any affected
Subsidiary proposes to take with respect thereto and at what time. Each notice
under Section 6.03(a) shall describe with particularity any and all clauses or
provisions of this Agreement or other Loan Document that have been (or
foreseeably will be) breached or violated.
6.04 PRESERVATION OF CORPORATE EXISTENCE, ETC.
(a) preserve and maintain in full force and effect its corporate
existence and good standing under the laws of its state or jurisdiction of
incorporation;
(b) preserve and maintain in full force and effect all governmental
rights, privileges, qualifications, permits, licenses and franchises necessary
or desirable in the normal conduct of its business except in connection with
transactions permitted by Section 7.03 and sales of assets permitted by Section
7.02;
(c) use reasonable efforts, in the ordinary course of business, to
preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect.
6.05 MAINTENANCE OF PROPERTY. Maintain, and preserve all its property
which is used or useful in its business in good working order and condition,
ordinary wear and tear excepted, and make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. The Borrower and each
Subsidiary (other than an Excluded Subsidiary) shall use the standard of care
typical in the industry in the operation and maintenance of its facilities.
6.06 INSURANCE. Maintain, either with financially sound and reputable
independent insurers or under legitimate and responsible self-insurance
programs, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons; provided that at all
times during the term of this Agreement the Borrower shall maintain insurance
coverage with sound and reputable independent insurers in substantially the same
amounts and covering substantially the same risks as the coverage existing on
the Closing Date which is specifically disclosed in Schedule 6.06. Upon request
of the Administrative Agent or any Lender, the Borrower shall furnish the Agent,
with sufficient copies for each Lender, at reasonable intervals (but not more
than once per calendar year) a certificate of the Borrower's insurance broker
setting forth the nature, extent and such other information as the
Administrative Agent may reasonably request regarding the independent insurance
maintained by the Borrower and its Subsidiaries (other than Excluded
Subsidiaries) in accordance with this Section 6.06.
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6.07 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become
due and payable, all their respective obligations and liabilities with respect
to which the failure to make payment could reasonably be expected to have a
Material Adverse Effect, including (insofar as the same could reasonably be
expected to have a Material Adverse Effect):
(a) all tax liabilities, assessments and governmental charges or levies
upon it or its properties or assets, unless the same are being contested in good
faith by appropriate proceedings and adequate reserves in accordance with GAAP
are being maintained by the Borrower or such Subsidiary;
(b) all lawful claims which, if unpaid, would by law become a Lien upon
its property, unless the same are being contested in good faith by appropriate
proceedings and adequate reserves in accordance with GAAP are being maintained
by the Borrower or such Subsidiary; and
(c) all Indebtedness, as and when due and payable.
6.08 COMPLIANCE WITH LAWS. Comply, in all material respects with all
requirements of Law of any Governmental Authority having jurisdiction over it or
its business (including the Federal Fair Labor Standards Act and Regulation U
issued by the FRB), except such as may be contested in good faith or as to which
a bona fide dispute may exist.
6.09 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Borrower shall
maintain and shall cause each Subsidiary (other than Excluded Subsidiaries) to
maintain proper books of record and account, in which full, true and correct
entries in conformity with GAAP consistently applied shall be made of all
financial transactions and matters involving the assets and business of the
Borrower and its Subsidiaries. The Borrower shall permit, and shall cause each
Subsidiary (other than Excluded Subsidiaries) to permit, representatives and
independent contractors of the Administrative Agent, at the expense of the
Borrower for one annual visit and inspection and at the expense of the
Administrative Agent for each more frequent visit and inspection, or any Lender,
at such Lender's expense, to visit and inspect any of their respective
properties, to examine their respective corporate, financial and operating
records, and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective directors,
officers, and independent public accountants, all at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; provided, however, when an Event of
Default exists the Administrative Agent or any Lender may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice at the Borrower's expense.
6.10 ENVIRONMENTAL LAWS. The Borrower shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws (except for any noncompliance which has
not resulted or is not reasonably likely to result in a Material Adverse
Effect).
6.11 USE OF PROCEEDS. Use the proceeds of the Credit Extensions (a) for
working capital, capital expenditures, acquisitions, share repurchases and other
corporate purposes not in
49
contravention of any Law or of any Loan Document; and (b) to provide liquidity
to support the Borrower's commercial paper program.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, any Loan or
other Obligation hereunder shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, the Borrower shall not, nor shall it permit any
Subsidiary (other than an Excluded Subsidiary) to, directly or indirectly:
7.01 LIMITATION ON LIENS. Create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, other than the following ("Permitted Liens"):
(a) any Lien existing on property of the Borrower or any Subsidiary on
the Closing Date and set forth in Schedule 7.01 securing Indebtedness
outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental charges
which-are not delinquent or remain payable without penalty, or to the extent
that non-payment thereof is permitted by Section 6.04, provided that no notice
of lien has been filed or recorded under the Code;
(d) carriers', warehousemen's, mechanics', landlords', materialmen's,
repairmen's or other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of pledges
or deposits required in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(f) Liens on the property of the Borrower or any of its Subsidiaries
securing (i) the non-delinquent performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, (ii) contingent obligations
on surety and appeal bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business, provided all
such Liens in the aggregate would not (even if enforced) cause a Material
Adverse Effect;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or interfere
with the ordinary conduct of the businesses of the Borrower and its
Subsidiaries;
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(h) Liens on assets of companies which become Subsidiaries after the
date of this Agreement, provided, however, that such Liens existed at the time
the respective companies became Subsidiaries and were not created in
anticipation thereof;
(i) purchase money security interests on any property acquired or held
by the Borrower or any Subsidiary in the ordinary course of business, securing
Indebtedness incurred or assumed for the purpose of financing all or any part of
the cost of acquiring such property; provided that (i) any such Lien attaches to
such property concurrently with or within 20 days after the acquisition thereof,
(ii) such Lien attaches solely to the property so acquired in such transaction,
(iii) the principal amount of the debt secured thereby does not exceed 100% of
the cost of such property, and (iv) the principal amount of the Indebtedness
secured by any and all such purchase money security interests shall not at any
time exceed $75,000,000;
(j) Liens securing obligations in respect of capital leases on assets
subject to such leases, provided that such capital leases are otherwise
permitted hereunder;
(k) Liens arising solely by virtue of any statutory or common law
provision relating to banker's liens, rights of set-off or similar rights and
remedies as to deposit accounts or other funds maintained with a creditor
depository institution; provided that (i) such deposit account is not a
dedicated cash collateral account and is not subject to restrictions against
access by either of the Borrower in excess of those set forth by regulations
promulgated by the FRB, and (ii) such deposit account is not intended by either
of the Borrower or any Subsidiary to provide collateral to the depository
institution;
(l) Other Liens on property, provided that the sum of the aggregate
Indebtedness secured by such Liens (exclusive of Indebtedness secured by Liens
permitted by clauses (a) through (k), (m) and (n) hereof) shall not exceed an
amount equal to 5% of Consolidated Tangible Net Worth as shown on the Borrower's
consolidated balance sheet for its most recent prior fiscal quarter; and
(m) Liens on accounts receivable and related property of any Subsidiary
of the Borrower and/or on any such related property of the Borrower, in each
case subject to a Permitted Receivables Facility and created in connection with
such Permitted Receivables Facility; and
(n) Liens on property existing at the time of acquisition thereof by
the Borrower or any Subsidiary; provided, such Liens were in existence prior to
such acquisition and were not created in contemplation of such acquisition.
7.02 DISPOSITION OF ASSETS. Sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) any property
(including accounts and notes receivable, with or without recourse) or enter
into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus equipment,
all in the ordinary course of business;
51
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied to the
purchase price of such replacement equipment;
(c) other dispositions of property during the term of this Agreement
whose net book value in the aggregate shall not exceed 10% of the total assets
of the Borrower and its consolidated Subsidiaries as reflected on the balance
sheet of the Borrower and its consolidated Subsidiaries for their most recent
prior fiscal quarter; and
(d) the sale of notes or account receivables (or interests therein)
pursuant to and in accordance with the terms of a Permitted Receivables Facility
by the Borrower or any Subsidiary.
7.03 CONSOLIDATIONS AND MERGERS. Merge, consolidate with or into, or
convey, transfer, 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 or in favor of any Person, except:
(a) any Subsidiary may merge with the Borrower, provided that the
Borrower shall be the continuing or surviving corporation, or with any one or
more Subsidiaries, provided that if any transaction shall be between a
Subsidiary and a wholly-owned Subsidiary, the wholly-owned Subsidiary shall be
the continuing or surviving corporation;
(b) any Subsidiary may sell all or substantially all of its assets
(upon voluntary liquidation or otherwise), to the Borrower or another
wholly-owned Subsidiary or as otherwise permitted by Section 7.02; and
(c) any Subsidiary may merge with a third party in order to consummate
an Acquisition, including any merger as a result of which the third party is the
surviving entity, so long as such entity upon the consummation of the merger is
a Subsidiary.
7.04 LOANS AND INVESTMENTS. Purchase or acquire, or make any commitment
therefor, any capital stock, equity interest, or any obligations or other
securities of, or any interest in, any Person, or make or commit to make any
Acquisitions, or make or commit to make any advance, loan, extension of credit
or capital contribution to or any other investment in, any Person including any
Affiliate of the Borrower, except for:
(a) investments in cash equivalents and short term marketable
securities in accordance with the written investment policy approved from time
to time by the Borrower's board of directors, a current copy of which is set
forth as Schedule 7.04(a) attached hereto and provided further, that the
Borrower shall provide a copy of such policy to any Lender upon written request
given to the Administrative Agent from time to time;
(b) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(c) extensions of credit by the Borrower to any of its Subsidiaries or
by any of its Subsidiaries to another of its Subsidiaries;
52
(d) Acquisitions, including investments in a Subsidiary or a third
party incurred in order to consummate Acquisitions, provided that (i) such
Acquisitions are undertaken in accordance with all applicable Laws; and (ii) the
prior, effective written consent or approval to such Acquisition of the board of
directors or equivalent governing body of the acquiree or any owner of any
assets being acquired is obtained if such consent or approval is required to
authorize the same;
(e) minority equity investments or venture capital investments,
provided that such investments are within the healthcare industry;
(f) loans or other advances made during the term of this Agreement by
the Borrower or any of their Subsidiaries which in the aggregate do not exceed
1% of the total assets of the Borrower and its consolidated Subsidiaries as
reflected on the balance sheet of the Borrower and its consolidated Subsidiaries
for the most recent fiscal quarter preceding the date of determination;
(g) Advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $5,000,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes; and
(h) investments in one or more Subsidiaries of the Borrower by the
Borrower.
The Borrower shall not, and shall not suffer or permit any of its Subsidiaries
to, use any portion of the Loan proceeds, directly or indirectly, to acquire any
securities in connection with any transaction subject to Section 13(d) (other
than an Investment Transaction) or Section 14 of the Exchange Act, unless, prior
to the time such transaction becomes subject to such Section 13 or 14, the board
of directors or other applicable governing body of the Person that is the issuer
of such securities has adopted a resolution approving such transaction. For
purposes of this Section 7.04, an "Investment Transaction" means a transaction
subject to Section 13(d) of the Exchange Act, provided that in connection with
such transaction the Borrower or any Subsidiary (as the case may be) has
reported and at all times continues to report to the SEC that such transaction
is undertaken for investment purposes or strategic business purposes.
7.05 LIMITATION ON SUBSIDIARY INDEBTEDNESS. Permit any Subsidiary to
create, incur, assume, suffer to exist, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness or Contingent
Obligations, except:
(a) Indebtedness outstanding on the date hereof and listed on Schedule
7.05 and any refinancings, refundings, renewals or extensions thereof; provided
that the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection therewith and by an amount equal to any
existing commitments unutilized thereunder;
(b) letters of credit, bid bonds, performance guarantees and overdraft
obligations guaranteed by the Borrower so long as the aggregate Indebtedness and
Contingent Obligations under this subsection (b) is not of any time in excess of
$30,000,000;
53
(c) endorsements for collection or deposit in the ordinary course of
business;
(d) Indebtedness of any Subsidiary incurred pursuant to a Permitted
Receivables Facility;
(e) Indebtedness consisting of (i) the 1.019% unsecured private
placement notes issued by Getz Bros. Co. Ltd. ("Getz") in May 2003 in the
original principal amount of 20,864,375,000 Japanese Yen and maturing May 7,
2010, and (ii) all loans and other obligations incurred by Getz under a
revolving credit facility with Bank of Tokyo-Mitsubishi in the maximum aggregate
principal amount at any time outstanding of 2,735,625,000 Japanese Yen, and,
with respect to both clauses (i) and (ii), any refinancings, refundings,
renewals or extensions thereof; provided that the amount of such Indebtedness is
not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in connection therewith and by
an amount equal to any existing commitments unutilized thereunder.
(f) other Indebtedness or Contingent Obligations, provided that the
aggregate amount of Indebtedness and Contingent Obligations permitted under
subsections (a) and (f) of this Section 7.05 shall not exceed $125,000,000.
The restrictions contained in this Section shall not include any
Indebtedness of any Subsidiary incurred under this Agreement or under the
Existing Multi-Year Credit Agreement.
7.06 TRANSACTIONS WITH AFFILIATES. Enter into any transaction with any
Affiliate of the Borrower, except upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Borrower or such
Subsidiary.
7.07 USE OF PROCEEDS; REGULATION U. Following the application of
proceeds of each Loan, have more than 25% of the value of assets of the
Borrower, which are subject to any arrangement with the Administrative Agent or
any Lender (herein or otherwise) whereby the Borrower's or any Subsidiary's
right or ability to sell, pledge or otherwise dispose of assets is in any way
restricted, be Margin Stock.
7.08 LIMITATION ON SUBSIDIARY DIVIDENDS. Permit any Subsidiary (other
than an Excluded Subsidiary) to enter into any agreement with any Person (other
than the Lenders pursuant to this Agreement) which prohibits or limits the
ability of such Subsidiary (other than an Excluded Subsidiary) to declare or pay
any dividends or make other distributions of assets, properties, cash, rights,
obligations or securities on account of any shares of any class of the capital
stock of such Subsidiary (other than an Excluded Subsidiary).
7.09 JOINT VENTURES. Enter into any Joint Venture which is not in the
healthcare industry.
7.10 RESTRICTED PAYMENTS. Declare or make any dividend payment or other
distribution of assets, properties, cash, rights, obligations or securities on
account of any shares of any class of its capital stock, or purchase, redeem or
otherwise acquire for value any shares of
54
its capital stock or any warrants, rights or options to acquire such shares, now
or hereafter outstanding; except that the Borrower and any wholly-owned
Subsidiary may:
(a) declare and make dividend payments or other distributions payable
solely in its common stock;
(b) purchase, redeem or otherwise acquire shares of its common stock or
warrants or options to acquire any such shares with the proceeds received from
the substantially concurrent issue of new shares of its common stock; and
(c) declare or pay cash dividends to its stockholders and purchase,
redeem or otherwise acquire shares of its capital stock or warrants, rights or
options to acquire any such shares for cash provided, that, before and
immediately after giving effect to such proposed action, no Default or Event of
Default exists or would exist.
7.11 CHANGE IN BUSINESS. Engage in any material line of business
substantially different from those lines of business carried on by the Borrower
and its Subsidiaries on the date hereof.
7.12 ACCOUNTING CHANGES. Make any significant change in accounting
treatment or reporting practices, except as required by GAAP, or change the
fiscal year of the Borrower or of any Subsidiary.
7.13 CONSOLIDATED INTEREST COVERAGE RATIO. Permit the Consolidated
Interest Coverage Ratio as of the end of any fiscal quarter of the Borrower to
be less than 3.5 to 1.0 for the four fiscal quarters ending on such date.
7.14 CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio at any time during any period of four fiscal quarters of the Borrower to
be greater than 3.0 to 1.0 for the four fiscal quarters ending on such date.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an "Event
of Default":
(a) Non-Payment. The Borrower fails to pay (i) when and as required to
be paid herein, any amount of principal of any Loan or any L/C Obligation, or
(ii) within three days after the same becomes due, any interest on any Loan or
on any L/C Obligation, or any facility, utilization or other fee due hereunder,
or (iii) within five days after the same becomes due, any other amount payable
hereunder or under any other Loan Document; or
(b) Specific Covenants. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.09,
or 6.11 or Article VII and, with respect to any default under Section 6.01 or
6.02, such default shall remain unremedied for a period of five days; or
55
(c) Other Defaults. The Borrower fails to perform or observe any other
covenant or agreement (not specified in subsection (a) or (b) above) contained
in any Loan Document on its part to be performed or observed and such failure
continues unremedied for 30 days after the earlier of (i) the date upon which a
Responsible Officer knew or reasonably should have known of such failure and
(ii) the date upon which written notice thereof is given to the Borrower by the
Administrative Agent or any Lender; or
(d) Representations and Warranties. Any representation, warranty,
certification or statement of fact made or deemed made by or on behalf of the
Borrower herein, in any other Loan Document, or in any document delivered in
connection herewith or therewith shall be incorrect or misleading when made or
deemed made; or
(e) Cross-Default. (i) The Borrower or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) under (I) the Existing Multi-Year Credit
Agreement or (II) in respect of any Indebtedness or Guarantee (other than
Indebtedness hereunder and Indebtedness under Swap Contracts) having an
aggregate principal amount (including undrawn committed or available amounts and
including amounts owing to all creditors under any combined or syndicated credit
arrangement) of more than the $25,000,000, or (B) fails to observe or perform
any other agreement or condition (I) contained in the Existing Multi-Year Credit
Agreement or (II) relating to any such other Indebtedness or Guarantee or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event occurs, the effect of which default or other event
is to cause, or to permit the lenders under the Existing Multi-Year Credit
Agreement or any holder or holders of such Indebtedness or the beneficiary or
beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder
or holders or beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness (including without limitation Indebtedness
incurred pursuant to the Existing Multi-Year Credit Agreement) to be demanded or
to become due or to be repurchased, prepaid, defeased or redeemed (automatically
or otherwise), or an offer to repurchase, prepay, defease or redeem such
Indebtedness (including without limitation Indebtedness incurred pursuant to the
Existing Multi-Year Credit Agreement) to be made, prior to its stated maturity,
or such Guarantee to become payable or cash collateral in respect thereof to be
demanded; or (ii) there occurs under any Swap Contract an Early Termination Date
(as defined in such Swap Contract) resulting from (A) any event of default under
such Swap Contract as to which the Borrower or any Subsidiary is the Defaulting
Party (as defined in such Swap Contract) or (B) any Termination Event (as so
defined) under such Swap Contract as to which the Borrower or any Subsidiary is
an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than $75,000,000; or
(f) Insolvency Proceedings, Etc. The Borrower or any of its
Subsidiaries (other than an Excluded Subsidiary) institutes or consents to the
institution of any proceeding under any Debtor Relief Law, or makes an
assignment for the benefit of creditors; or applies for or consents to the
appointment of any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer for it or for all or any material part of its
property; or any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 60
calendar days; or any proceeding under any Debtor Relief Law relating to any
such Person
56
or to all or any material part of its property is instituted without the consent
of such Person and continues undismissed or unstayed for 60 calendar days, or an
order for relief is entered in any such proceeding; or
(g) Inability to Pay Debts; Attachment. (i) The Borrower or any
Subsidiary (other than an Excluded Subsidiary) becomes unable or admits in
writing its inability or fails generally to pay its debts as they become due, or
(ii) any writ or warrant of attachment or execution or similar process is issued
or levied against all or any material part of the property of any such Person
and is not released, vacated or fully bonded within 30 days after its issue or
levy; or
(h) Judgments. There is entered against the Borrower or any Subsidiary
(other than an Excluded Subsidiary) (i) a final judgment or order for the
payment of money in an aggregate amount exceeding $75,000,000 (to the extent not
covered by independent third-party insurance as to which the insurer does not
dispute coverage), or (ii) any one or more non-monetary final judgments that
have, or could reasonably be expected to have, individually or in the aggregate,
a Material Adverse Effect and, in either case, (A) enforcement proceedings are
commenced by any creditor upon such judgment or order, or (B) there is a period
of 30 consecutive days during which a stay of enforcement of such judgment, by
reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of the Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $25,000,000,
or (ii) the commencement or increase of contributions to, or the adoption of or
the amendment of a Pension Plan which has resulted or could reasonably be
expected to result in an increase in Unfunded Pension Liability among all
Pension Plans in an aggregate amount in excess of $75,000,000; or
(j) Invalidity of Loan Documents. Any Loan Document, at any time after
its execution and delivery and for any reason other than as expressly permitted
hereunder or satisfaction in full of all the Obligations, ceases to be in full
force and effect; or the Borrower or any other Person contests in any manner the
validity or enforceability of any Loan Document; or the Borrower denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document; or
(k) Change of Control. There occurs any Change of Control with respect
to the Borrower; or
(l) Loss of Licenses. (i) The Food and Drug Administration or any other
Governmental Authority revokes or fails to renew any material license, permit,
franchise, patent, trademark, service mark, trade name, copyright, authorization
or other right of the Borrower or any Subsidiary, or the Borrower or any
Subsidiary for any reason loses any material license, permit, franchise, patent,
trademark, service mark, trade name, copyright, authorization or other right, or
the Borrower or any Subsidiary suffers the imposition of any restraining order,
escrow, suspension or impound of funds in connection with any proceeding
(judicial or administrative) with respect to any material license, permit,
franchise, patent, trademark, service mark, trade
57
name, copyright, authorization or other right; and (ii) any event or
circumstance described in clause (i) has resulted or is reasonably likely to
result in a Material Adverse Effect.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such commitments and obligation shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
law; provided, however, that upon the occurrence of an actual or deemed entry of
an order for relief with respect to the Borrower under the Bankruptcy Code of
the United States, the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for
in Section 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to Section 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs and amounts
payable under Article III) payable to the Administrative Agent in its capacity
as such;
Second, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal and interest) payable
to the Lenders (including Attorney Costs and amounts payable under Article III),
ratably among them in proportion to the amounts described in this clause Second
payable to them;
Third, to payment of that portion of the Obligations constituting
accrued and unpaid interest on the Loans, L/C Borrowings and other Obligations,
ratably among the Lenders and the
58
L/C Issuer in proportion to the respective amounts described in this clause
Third payable to them;
Fourth, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders and
the L/C Issuer in proportion to the respective amounts described in this clause
Fourth held by them;
Fifth, to the Administrative Agent for the account of the L/C Issuer,
to Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to Section 2.03(c), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause Fifth above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as Cash Collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORITY. Each of the Lenders and the L/C Issuer
hereby irrevocably appoints Bank of America to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the L/C Issuer, and the Borrower shall not
have rights as a third party beneficiary of any of such provisions.
9.02 RIGHTS AS A LENDER. The Person serving as the Administrative Agent
hereunder shall have the same rights and powers in its capacity as a Lender as
any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
9.03 EXCULPATORY PROVISIONS. The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:
(a) shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing;
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(b) shall not have any duty to take any discretionary action
or exercise any discretionary powers, except discretionary rights and
powers expressly contemplated hereby or by the other Loan Documents
that the Administrative Agent is required to exercise as directed in
writing by the Required Lenders (or such other number or percentage of
the Lenders as shall be expressly provided for herein or in the other
Loan Documents), provided that the Administrative Agent shall not be
required to take any action that, in its opinion or the opinion of its
counsel, may expose the Administrative Agent to liability or that is
contrary to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the
other Loan Documents, have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the
Borrower or any of its Affiliates that is communicated to or obtained
by the Person serving as the Administrative Agent or any of its
Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or
not taken by it (i) with the consent or at the request of the Required Lenders
(or such other number or percentage of the Lenders as shall be necessary, or as
the Administrative Agent shall believe in good faith shall be necessary, under
the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence
of its own gross negligence or willful misconduct. The Administrative Agent
shall be deemed not to have knowledge of any Default unless and until notice
describing such Default is given to the Administrative Agent by the Borrower, a
Lender or the L/C Issuer.
The Administrative Agent shall not be responsible for or have any duty
to ascertain or inquire into (i) any statement, warranty or representation made
in or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article IV or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.
9.04 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely upon, and shall not incur any liability for relying upon,
any notice, request, certificate, consent, statement, instrument, document or
other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine and to have been
signed, sent or otherwise authenticated by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to have been made by the proper Person, and shall not incur any
liability for relying thereon. In determining compliance with any condition
hereunder to the making of a Loan, or the issuance of a Letter of Credit, that
by its terms must be fulfilled to the satisfaction of a Lender or the L/C
Issuer, the Administrative Agent may presume that such condition is satisfactory
to such Lender or the L/C Issuer unless the Administrative Agent shall have
received notice to the contrary from such Lender or the L/C Issuer prior to the
making of such Loan or the issuance of such Letter of Credit. The Administrative
Agent may consult with legal counsel (who may be counsel for the
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Borrower), independent accountants and other experts selected by it, and shall
not be liable for any action taken or not taken by it in accordance with the
advice of any such counsel, accountants or experts.
9.05 DELEGATION OF DUTIES. The Administrative Agent may perform any and
all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent, and shall apply to their respective
activities in connection with the syndication of the credit facilities provided
for herein as well as activities as Administrative Agent.
9.06 RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative Agent may
at any time give notice of its resignation to the Lenders, the L/C Issuer and
the Borrower. Upon receipt of any such notice of resignation, the Required
Lenders shall have the right, in consultation with the Borrower, to appoint a
successor, which shall be a bank with an office in the United States, or an
Affiliate of any such bank with an office in the United States. If no such
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent may on
behalf of the Lenders and the L/C Issuer, appoint a successor Administrative
Agent meeting the qualifications set forth above; provided that if the
Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents and (2) all payments,
communications and determinations provided to be made by, to or through the
Administrative Agent shall instead be made by or to each Lender and the L/C
Issuer directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section. Upon the acceptance
of a successor's appointment as Administrative Agent hereunder, such successor
shall succeed to and become vested with all of the rights, powers, privileges
and duties of the retiring (or retired) Administrative Agent, and the retiring
Administrative Agent shall be discharged from all of its duties and obligations
hereunder or under the other Loan Documents (if not already discharged therefrom
as provided above in this Section). The fees payable by the Borrower to a
successor Administrative Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent's resignation hereunder and under the
other Loan Documents, the provisions of this Article and Section 10.04 shall
continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken
or omitted to be taken by any of them while the retiring Administrative Agent
was acting as Administrative Agent.
9.07 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS. Each
Lender and the L/C Issuer acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender or any of their
Related Parties and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender and the L/C Issuer also acknowledges that it
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will, independently and without reliance upon the Administrative Agent or any
other Lender or any of their Related Parties and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
9.08 NO OTHER DUTIES, ETC. Anything herein to the contrary
notwithstanding, none of the Bookrunners, Arrangers, Syndication Agent or
Co-Documentation Agents listed on the cover page hereof shall have any powers,
duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a
Lender or the L/C Issuer hereunder.
9.09 ADMINISTRATIVE AGENT MAY FILE PROOFS OF CLAIM. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower, the Administrative Agent (irrespective of
whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the
principal and interest owing and unpaid in respect of the Loans, L/C
Obligations and all other Obligations that are owing and unpaid and to
file such other documents as may be necessary or advisable in order to
have the claims of the Lenders, the L/C Issuer and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders, the L/C Issuer and the
Administrative Agent and their respective agents and counsel and all
other amounts due the Lenders, the L/C Issuer and the Administrative
Agent under Sections 2.03(i) and (j), 2.08 and 10.04) allowed in such
judicial proceeding; and
(b) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding
is hereby authorized by each Lender and the L/C Issuer to make such
payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments
directly to the Lenders and the L/C Issuer, to pay to the
Administrative Agent any amount due for the reasonable compensation,
expenses, disbursements and advances of the Administrative Agent and
its agents and counsel, and any other amounts due the Administrative
Agent under Sections 2.08 and 10.04.
Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of
any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment
or composition affecting the Obligations or the rights of any Lender or to
authorize the Administrative Agent to vote in respect of the claim of any Lender
in any such proceeding.
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ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, ETC. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent to any departure by the
Borrower therefrom, shall be effective unless in writing signed by the Required
Lenders and the Borrower, and acknowledged by the Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no such amendment,
waiver or consent shall:
(a) waive any condition set forth in Section 4.01(a) without the
written consent of each Lender;
(b) extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 8.02) without the written consent of
such Lender;
(c) postpone any date fixed by this Agreement or any other Loan
Document for any payment of principal, interest, fees or other amounts due to
the Lenders (or any of them) hereunder or under any other Loan Document without
the written consent of each Lender directly affected thereby;
(d) reduce the principal of, or the rate of interest specified herein
on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso
to this Section 10.01) any fees or other amounts payable hereunder or under any
other Loan Documents, without the written consent of each Lender directly
affected thereby; provided, however, that only the consent of the Required
Lenders shall be necessary to amend the definition of "Default Rate" or to waive
any obligation of the Borrower to pay interest or Letter of Credit Fees at the
Default Rate;
(e) change Section 2.12 or Section 8.03 in a manner that would alter
the pro rata sharing of payments required thereby without the written consent of
each Lender;
(f) change any provision of this Section or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders required to amend, waive or otherwise modify any rights hereunder or
make any determination or grant any consent hereunder, without the written
consent of each Lender;
and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Lenders required above,
affect the rights or duties of the L/C Issuer under this Agreement or any Issuer
Document relating to any Letter of Credit issued or to be issued by it; (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Administrative Agent in addition to the Lenders required above, affect the
rights or duties of the Administrative Agent under this Agreement or any other
Loan Document; and (iii) Section 10.07(h) may not be amended, waived or
otherwise modified without the consent of each Granting Lender all or any part
of whose Loans are being funded by an SPC at the time of such amendment, waiver
or other modification; and (iv) the Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or
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disapprove any amendment, waiver or consent hereunder, except that the
Commitment of such Lender may not be increased or extended without the consent
of such Lender.
10.02 NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in subsection (b) below), all notices and other communications provided
for herein shall be in writing and shall be delivered by hand or overnight
courier service, mailed by certified or registered mail or sent by telecopier as
follows, and all notices and other communications expressly permitted hereunder
to be given by telephone shall be made to the applicable telephone number, as
follows:
(i) if to the Borrower, the Administrative Agent or the L/C
Issuer, to the address, telecopier number, electronic mail address or
telephone number specified for such Person on Schedule 10.02; and
(ii) if to any other Lender, to the address, telecopier
number, electronic mail address or telephone number specified in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by
certified or registered mail, shall be deemed to have been given when received;
notices sent by telecopier shall be deemed to have been given when sent (except
that, if not given during normal business hours for the recipient, shall be
deemed to have been given at the opening of business on the next business day
for the recipient). Notices delivered through electronic communications to the
extent provided in subsection (b) below, shall be effective as provided in such
subsection (b).
(b) Electronic Communications. Notices and other communications to the
Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the foregoing
shall not apply to notices to any Lender or the L/C Issuer pursuant to Article
II if such Lender or the L/C Issuer, as applicable, has notified the
Administrative Agent that it is incapable of receiving notices under such
Article by electronic communication. The Administrative Agent or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it,
provided that approval of such procedures may be limited to particular notices
or communications.
Unless the Administrative Agent otherwise prescribes, (i) notices and
other communications sent to an e-mail address shall be deemed received upon the
sender's receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described in
the foregoing clause (i) of notification that such notice or communication is
available and identifying the website address therefor.
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(c) Change of Address, Etc. Each of the Borrower, the Administrative
Agent and the L/C Issuer may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the other parties
hereto. Each other Lender may change its address, telecopier or telephone number
for notices and other communications hereunder by notice to the Borrower, the
Administrative Agent and the L/C Issuer.
(d) Reliance by Administrative Agent, L/C Issuer and Lenders. The
Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely
and act upon any notices (including telephonic Loan Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related
Parties of each of them from all losses, costs, expenses and liabilities
resulting from the reliance by such Person on each notice purportedly given by
or on behalf of the Borrower. All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
10.04 EXPENSES; INDEMNITY; DAMAGE WAIVER.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable out
of pocket expenses incurred by the Administrative Agent and its Affiliates
(including the reasonable fees, charges and disbursements of counsel for the
Administrative Agent), in connection with the syndication of the credit
facilities provided for herein, the preparation, negotiation, execution,
delivery and administration of this Agreement and the other Loan 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), (ii) all reasonable out of pocket expenses incurred by the L/C
Issuer in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out of
pocket expenses incurred by the Administrative Agent, any Lender or the L/C
Issuer (including the fees, charges and disbursements of any counsel for the
Administrative Agent, any Lender or the L/C Issuer), in connection with the
enforcement or protection of its rights (A) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, or (B) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out of pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit.
(b) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent (and any sub-agent thereof), each Lender and the L/C
Issuer, and each
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Related Party of any of the foregoing Persons (each such Person being called an
"Indemnitee") against, and hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any
Indemnitee or asserted against any Indemnitee by any third party or by the
Borrower arising out of, in connection with, or as a result of (i) the execution
or delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit
if the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory, whether
brought by a third party or by the Borrower, and regardless of whether any
Indemnitee is a party thereto; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses (x) are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or (y) result from a claim
brought by the Borrower against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrower has obtained a final and nonappealable judgment in its favor on such
claim as determined by a court of competent jurisdiction.
(c) Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under subsection (a) or (b)
of this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), the L/C Issuer or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), the L/C Issuer or such Related Party, as the case may be, such
Lender's Pro Rata Share (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or the L/C Issuer in
its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or L/C Issuer in
connection with such capacity. The obligations of the Lenders under this
subsection (c) are subject to the provisions of Section 2.11(e).
(d) Waiver of Consequential Damages, Etc. To the fullest extent
permitted by applicable law, the Borrower shall not assert, and hereby waives,
any claim against any Indemnitee, on any theory of liability, for special,
indirect, consequential or punitive damages (as opposed to direct or actual
damages) arising out of, in connection with, or as a result of, this Agreement,
any other Loan Document or any agreement or instrument contemplated hereby, the
transactions contemplated hereby or thereby, any Loan or Letter of Credit or the
use of the proceeds thereof. No Indemnitee referred to in subsection (b) above
shall be liable for any damages arising from the use by unintended recipients of
any information or other materials
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distributed by it through telecommunications, electronic or other information
transmission systems in connection with this Agreement or the other Loan
Documents or the transactions contemplated hereby or thereby.
(e) Payments. All amounts due under this Section shall be payable not
later than ten Business Days after demand therefor.
(f) Survival. The agreements in this Section shall survive the
resignation of the Administrative Agent and the L/C Issuer, the replacement of
any Lender, the termination of the Aggregate Commitments and the repayment,
satisfaction or discharge of all the other Obligations.
10.05 PAYMENTS SET ASIDE. To the extent that any payment by or on
behalf of the Borrower is made to the Administrative Agent, the L/C Issuer or
any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises
its right of set-off, and such payment or the proceeds of such set-off or any
part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Administrative Agent, the L/C Issuer or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Lender and the L/C Issuer severally agrees to pay to the Administrative
Agent upon demand its applicable share (without duplication) of any amount so
recovered from or repaid by the Administrative Agent, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the Federal Funds Rate from time to time in effect. The obligations of
the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall
survive the payment in full of the Obligations and the termination of this
Agreement.
10.06 SUCCESSORS AND ASSIGNS.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, (iii) by way of pledge or
assignment of a security interest subject to the restrictions of subsection (f)
of this Section, or (iv) to an SPC in accordance with the provisions of
subsection (h) of this Section (and any other attempted assignment or transfer
by any party hereto shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby,
Participants to the extent provided in subsection (d) of this Section and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
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(b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans
(including for purposes of this subsection (b), participations in L/C
Obligations) at the time owing to it); provided that:
(i) except in the case of an assignment of the entire
remaining amount of the assigning Lender's Commitment and the Loans at
the time owing to it or in the case of an assignment to a Lender or an
Affiliate of a Lender or an Approved Fund with respect to a Lender, the
aggregate amount of the Commitment (which for this purpose includes
Loans outstanding thereunder) or, if the Commitment is not then in
effect, the principal outstanding balance of the Loans of the assigning
Lender subject to each such assignment, determined as of the date the
Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000 unless each of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or
delayed);
(ii) each partial assignment shall be made as an assignment of
a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Loans or the
Commitment assigned;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent and the L/C Issuer unless the Person that is the
proposed assignee is itself a Lender (whether or not the proposed
assignee would otherwise qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with
a processing and recordation fee of $3,500, and the Eligible Assignee,
if it shall not be a Lender, shall deliver to the Administrative Agent
an Administrative Questionnaire.
Subject to acceptance and recording thereof by the Administrative Agent
pursuant to subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption, the Eligible Assignee thereunder
shall be a party to this Agreement and, to the extent of the interest assigned
by such Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this
subsection shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
subsection (d) of this Section.
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(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative Agent's Office
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and L/C Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each of the Borrower and the L/C Issuer at any
reasonable time and from time to time upon reasonable prior notice. In addition,
at any time that a request for a consent for a material or substantive change to
the Loan Documents is pending, any Lender wishing to consult with other Lenders
in connection therewith may request and receive from the Administrative Agent a
copy of the Register.
(d) Participations. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participations in L/C Obligations) owing to it); provided that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent, the Lenders
and the L/C Issuer shall continue to deal solely and directly with such Lender
in connection with such Lender's rights and obligations under this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, waiver or other modification described in the first proviso to
Section 10.01 that directly affects such Participant. Subject to subsection (e)
of this Section, the Borrower agrees that each Participant shall be entitled to
the benefits of Sections 3.01, 3.04 and 3.05 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to subsection (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 10.08 as though it were a Lender, provided
such Participant agrees to be subject to Section 2.12 as though it were a
Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 3.01 or 3.04 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.01 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 10.15 as though it were a
Lender.
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(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement
(including under its Note, if any) to secure obligations of such Lender,
including any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided that no such pledge or assignment shall release such Lender from
any of its obligations hereunder or substitute any such pledgee or assignee for
such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution",
"signed", "signature", and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Special Purpose Funding Vehicles. Notwithstanding anything to the
contrary contained herein, any Lender (a "Granting Lender") may grant to a
special purpose funding vehicle identified as such in writing from time to time
by the Granting Lender to the Administrative Agent and the Borrower (an "SPC")
the option to provide all or any part of any Loan that such Granting Lender
would otherwise be obligated to make pursuant to this Agreement; provided that
(i) nothing herein shall constitute a commitment by any SPC to fund any Loan,
and (ii) if an SPC elects not to exercise such option or otherwise fails to make
all or any part of such Loan, the Granting Lender shall be obligated to make
such Loan pursuant to the terms hereof or, if it fails to do so, to make such
payment to the Administrative Agent as is required under Section 2.11(c). Each
party hereto hereby agrees that (i) neither the grant to any SPC nor the
exercise by any SPC of such option shall increase the costs or expenses or
otherwise increase or change the obligations of the Borrower under this
Agreement (including its obligations under Section 3.04), (ii) no SPC shall be
liable for any indemnity or similar payment obligation under this Agreement for
which a Lender would be liable, and (iii) the Granting Lender shall for all
purposes, including the approval of any amendment, waiver or other modification
of any provision of any Loan Document, remain the lender of record hereunder.
The making of a Loan by an SPC hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this Agreement) that,
prior to the date that is one year and one day after the payment in full of all
outstanding commercial paper or other senior debt of any SPC, it will not
institute against, or join any other Person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency, or liquidation proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPC may (i) with notice to, but
without prior consent of the Borrower and the Administrative Agent and without
paying any processing fee therefor, assign all or any portion of its right to
receive payment with respect to any Loan to the Granting Lender and (ii)
disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or Guarantee or credit or liquidity enhancement to such SPC.
70
(i) Resignation as L/C Issuer after Assignment. Notwithstanding
anything to the contrary contained herein, if at any time Bank of America
assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank
of America may, upon 30 days' notice to the Borrower and the Lenders, resign as
L/C Issuer. In the event of any such resignation as L/C Issuer, the Borrower
shall be entitled to appoint from among the Lenders a successor L/C Issuer
hereunder; provided, however, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Bank of America as L/C Issuer. If
Bank of America resigns as L/C Issuer, it shall retain all the rights and
obligations of the L/C Issuer hereunder with respect to all Letters of Credit
outstanding as of the effective date of its resignation as L/C Issuer and all
L/C Obligations with respect thereto (including the right to require the Lenders
to make Base Rate Loans or fund risk participations in Unreimbursed Amounts
pursuant to Section 2.03(c)).
10.07 TREATMENT OF CERTAIN INFORMATION; CONFIDENTIALITY. Each of the
Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' respective
partners, directors, officers, employees, agents, advisors and representatives
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to keep
such Information confidential), (b) to the extent requested by any regulatory
authority purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with the
exercise of any remedies hereunder or under any other Loan Document or any
action or proceeding relating to this Agreement or any other Loan Document or
the enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Agreement or (ii) any actual or
prospective counterparty (or its advisors) to any swap or derivative transaction
relating to the Borrower and its obligations, (g) with the consent of the
Borrower or (h) to the extent such Information (x) becomes publicly available
other than as a result of a breach of this Section or (y) becomes available to
the Administrative Agent, any Lender, the L/C Issuer or any of their respective
Affiliates on a nonconfidential basis from a source other than the Borrower.
For purposes of this Section, "Information" means all information
received from the Borrower or any Subsidiary relating to the Borrower or any
Subsidiary or any of their respective businesses, other than any such
information that is available to the Administrative Agent, any Lender or the L/C
Issuer on a nonconfidential basis prior to disclosure by the Borrower or any
Subsidiary, provided that, in the case of information received from the Borrower
or any Subsidiary after the date hereof, such information is clearly identified
at the time of delivery as confidential. Any Person required to maintain the
confidentiality of Information as provided in this Section shall be considered
to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
10.08 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower, any such
71
notice being waived by the Borrower to the fullest extent permitted by law, to
set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held by, and other indebtedness at any time
owing by, such Lender to or for the credit or the account of the Borrower
against any and all Obligations owing to such Lender hereunder or under any
other Loan Document, now or hereafter existing, irrespective of whether or not
the Administrative Agent or such Lender shall have made demand under this
Agreement or any other Loan Document and although such Obligations may be
contingent or unmatured or denominated in a currency different from that of the
applicable deposit or indebtedness. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such set-off and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application.
10.09 INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "Maximum Rate"). If the Administrative
Agent or any Lender shall receive interest in an amount that exceeds the Maximum
Rate, the excess interest shall be applied to the principal of the Loans or, if
it exceeds such unpaid principal, refunded to the Borrower. In determining
whether the interest contracted for, charged, or received by the Administrative
Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent
permitted by applicable Law, (a) characterize any payment that is not principal
as an expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.
10.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.11 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or
72
any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter
of Credit shall remain outstanding.
10.13 SEVERABILITY. If any provision of this Agreement or the other
Loan Documents is held to be illegal, invalid or unenforceable, (a) the
legality, validity and enforceability of the remaining provisions of this
Agreement and the other Loan Documents shall not be affected or impaired thereby
and (b) the parties shall endeavor in good faith negotiations to replace the
illegal, invalid or unenforceable provisions with valid provisions the economic
effect of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions. The invalidity of a provision in a particular
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.14 REPLACEMENT OF LENDERS. (a) If any Lender requests compensation
under Section 3.04, or if the Borrower is required to pay any additional amount
to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 3.01, or if any Lender is a Defaulting Lender, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 10.06), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment), provided that:
(i) the Borrower shall have paid to the Administrative Agent
the assignment fee specified in Section 10.06(b) (except as otherwise
provided herein);
(ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans and L/C Advances,
accrued interest thereon, accrued fees and all other amounts payable to
it hereunder and under the other Loan Documents (including any amounts
under Section 3.05) from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower
(in the case of all other amounts);
(iii) in the case of any such assignment resulting from a
claim for compensation under Section 3.04 or payments required to be
made pursuant to Section 3.01, such assignment will result in a
reduction in such compensation or payments thereafter; and
(iv) such assignment does not conflict with applicable Laws.
A Lender shall not be required to make any such assignment or
delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require such assignment
and delegation cease to apply. Any Defaulting Lender that has on more than one
occasion failed to fund any portion of the Loans or participations in L/C
Obligations required to be funded by it hereunder within one Business Day of the
date required to be funded by it hereunder shall pay to the Administrative Agent
the assignment fee specified in Section 10.06(b).
73
(b) In the event any Lender fails to approve any amendment, waiver or
consent requested by the Borrower pursuant to Section 10.01 that has received
the written approval of not less than the Required Lenders but also requires the
approval of such Lender (any such Lender, a "Restricted Lender"), so long as no
Default or Event of Default shall have occurred and be continuing and the
Borrower has obtained a commitment (in an amount not less than the entire amount
of such Restricted Lender's Commitment) from one or more Lenders or Eligible
Assignees to become a Lender for all purposes hereunder (such Lender or Lenders
referred to as the "Replacement Lender"), the Borrower may cause such Restricted
Lender to be replaced by, and to assign all its rights and obligations under
this Agreement (including its Commitment and its outstanding Credit Extensions)
pursuant to Section 10.06 to, such Replacement Lender. Such Restricted Lender
agrees to execute and to deliver to the Administrative Agent one or more
Assignment and Assumptions with such Replacement Lender as provided in Section
10.06 upon payment at par of all principal, accrued interest, accrued fees and
other amounts accrued or owing under this Agreement to such Restricted Lender,
and such Replacement Lender shall pay to the Administrative Agent the assignment
fee specified in Section 10.06(b) in connection with such assignment. The
Restricted Lender making such assignment will be entitled to compensation for
any expenses or other amounts which would be owing to such Restricted Lender
pursuant to any indemnification provision hereof (including, if applicable,
Section 3.05) as if the Borrowers had prepaid the Loans of such Lender (and
terminated its Commitment, if applicable) rather than such Restricted Lender
having assigned its interest hereunder.
(c) In each case of clause (a) and (b) above, the Administrative Agent
shall distribute an amended Schedule 2.01, which shall be deemed incorporated
into this Agreement, to reflect changes in the identities of the Lenders and
adjustments of their respective Commitments and/or Pro Rata Shares resulting
from any such replacement.
(d) This section shall supersede any provision in Section 10.01 to the
contrary.
10.15 TAX FORMS.
(a) (i) Each Lender that is not a "United States person" within the
meaning of Section 7701(a)(30) of the Code (a "Foreign Lender") shall
deliver to the Administrative Agent, prior to receipt of any payment
subject to withholding under the Code (or upon accepting an assignment
of an interest herein), two duly signed completed copies of either IRS
Form W-8BEN or any successor thereto (relating to such Foreign Lender
and entitling it to an exemption from, or reduction of, withholding tax
on all payments to be made to such Foreign Lender by the Borrower
pursuant to this Agreement) or IRS Form W-8ECI or any successor thereto
(relating to all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement) or such other evidence
satisfactory to the Borrower and the Administrative Agent that such
Foreign Lender is entitled to an exemption from, or reduction of, U.S.
withholding tax, including any exemption pursuant to Section 881(c) of
the Code. Thereafter and from time to time, each such Foreign Lender
shall (A) promptly submit to the Administrative Agent such additional
duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then
current United States laws and regulations to avoid, or such evidence
as is satisfactory to the Borrower and the Administrative Agent of any
available
74
exemption from or reduction of, United States withholding taxes in
respect of all payments to be made to such Foreign Lender by the
Borrower pursuant to this Agreement, (B) promptly notify the
Administrative Agent of any change in circumstances which would modify
or render invalid any claimed exemption or reduction, and (C) take such
steps as shall not be materially disadvantageous to it, in the
reasonable judgment of such Lender, and as may be reasonably necessary
(including the re-designation of its Lending Office) to avoid any
requirement of applicable Laws that the Borrower make any deduction or
withholding for taxes from amounts payable to such Foreign Lender.
(ii) Each Foreign Lender, to the extent it does not act or
ceases to act for its own account with respect to any portion of any
sums paid or payable to such Lender under any of the Loan Documents
(for example, in the case of a typical participation by such Lender),
shall deliver to the Administrative Agent on the date when such Foreign
Lender ceases to act for its own account with respect to any portion of
any such sums paid or payable, and at such other times as may be
necessary in the determination of the Administrative Agent (in the
reasonable exercise of its discretion), (A) two duly signed completed
copies of the forms or statements required to be provided by such
Lender as set forth above, to establish the portion of any such sums
paid or payable with respect to which such Lender acts for its own
account that is not subject to U.S. withholding tax, and (B) two duly
signed completed copies of IRS Form W-8IMY (or any successor thereto),
together with any information such Lender chooses to transmit with such
form, and any other certificate or statement of exemption required
under the Code, to establish that such Lender is not acting for its own
account with respect to a portion of any such sums payable to such
Lender.
(iii) The Borrower shall not be required to pay any additional
amount to any Foreign Lender under Section 3.01 (A) with respect to any
Taxes required to be deducted or withheld on the basis of the
information, certificates or statements of exemption such Lender
transmits with an IRS Form W-8IMY pursuant to this Section 10.15(a) or
(B) if such Lender shall have failed to satisfy the foregoing
provisions of this Section 10.15(a); provided that if such Lender shall
have satisfied the requirement of this Section 10.15(a) on the date
such Lender became a Lender or ceased to act for its own account with
respect to any payment under any of the Loan Documents, nothing in this
Section 10.15(a) shall relieve the Borrower of its obligation to pay
any amounts pursuant to Section 3.01 in the event that, as a result of
any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer
properly entitled to deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender or other Person
for the account of which such Lender receives any sums payable under
any of the Loan Documents is not subject to withholding or is subject
to withholding at a reduced rate.
(iv) The Administrative Agent may, without reduction, withhold
any Taxes required to be deducted and withheld from any payment under
any of the Loan Documents with respect to which the Borrower is not
required to pay additional amounts under this Section 10.15(a).
75
(b) Upon the request of the Administrative Agent, each Lender that is a
"United States person" within the meaning of Section 7701(a)(30) of the Code
shall deliver to the Administrative Agent two duly signed completed copies of
IRS Form W-9. If such Lender fails to deliver such forms, then the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable back-up withholding tax imposed by the Code,
without reduction.
(c) If any Governmental Authority asserts that the Administrative Agent
did not properly withhold or backup withhold, as the case may be, any tax or
other amount from payments made to or for the account of any Lender, such Lender
shall indemnify the Administrative Agent therefor, including all penalties and
interest, any taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section, and costs and expenses (including
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the termination of the Aggregate Commitments,
repayment of all other Obligations hereunder and the resignation of the
Administrative Agent.
10.16 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
SITTING IN NEW YORK CITY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER
WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE
MADE BY ANY OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
(c) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL
AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW.
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10.17 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
10.18 USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act
(as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Borrower that pursuant to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender or
the Administrative Agent, as applicable, to identify the Borrower in accordance
with the Act.
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SCHEDULE 1.01
EXCLUDED SUBSIDIARIES
Bio-Medical Sales, Inc.
HeartBeat Medical, Inc.
St. Jude Medical, Inc., Cardiac Assist Division
Telectronics B.V.
IBI Merger Corporation
Dragonfly Merger Corporation
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER COMMITMENT PRO RATA SHARE
- --------------------------------------------------------------------------------
Bank of America, N.A. $48,000,000 12.000000000%
The Bank of Tokyo-Mitsubishi, Ltd. $42,000,000 10.500000000%
Bank One, NA $42,000,000 10.500000000%
Wells Fargo, N.A. $42,000,000 10.500000000%
BNP Paribas $42,000,000 10.500000000%
KeyBank National Association $42,000,000 10.500000000%
SunTrust Bank $42,000,000 10.500000000%
U.S. Bank National Association $25,000,000 6.250000000%
Svenska Handelsbanken A-B (Publ) $25,000,000 6.250000000%
The Northern Trust Company $25,000,000 6.250000000%
The Bank of New York $25,000,000 6.250000000%
TOTAL $400,000,000.00 100.000000000%
SCHEDULE 5.05
LITIGATION
SILZONE(R) LITIGATION: IN JULY 1997, the Borrower began marketing mechanical
heart valves which incorporated a Silzone(R) coating. The Borrower later began
marketing heart valve repair products incorporating a Silzone(R) coating. The
Silzone(R) coating was intended to reduce the risk of endocarditis, a bacterial
infection affecting heart tissue, which is associated with replacement heart
valves.
In January 2000, the Borrower voluntarily recalled all field inventories of
Silzone(R) devices after receiving information from a clinical study that
patients with a Silzone(R) valve had a small, but statistically significant,
increased incidence of explant due to paravalvular leak compared to patients in
that clinical study with non-Silzone(R) heart valves.
Subsequent to the Borrower's voluntary recall, the Borrower has been sued in
various jurisdictions and now has cases pending in the United States, Canada,
and United Kingdom by some patients who received a Silzone(R) device. Some of
these claims allege bodily injuries as a result of an explant or other
complications, which they attribute to the Silzone(R) devices. Others, who have
not had their device explanted, seek compensation for past and future costs of
special monitoring they allege they need over and above the medical monitoring
all replacement heart valve patients receive. Some of the lawsuits seeking the
cost of monitoring have been initiated by patients who are asymptomatic and who
have no apparent clinical injury to date. The Borrower has vigorously defended
against the claims that have been asserted, and expects to continue to do so
with respect to any remaining claims.
The Borrower has settled a number of these Silzone(R)-related cases and others
have been dismissed. Cases filed in the United States in federal courts have
been consolidated in the federal district court for the district of Minnesota
under Judge Tunheim. A number of class-action complaints have been consolidated
into one case seeking certification of two separate classes. One proposed class
in the consolidated complaint seeks injunctive relief in the form of medical
monitoring. A second class in the consolidated complaint seeks an unspecified
amount of money damages. In a March 27, 2003 ruling, the Court conditionally
certified two separate classes, and also certified a class for patients claiming
relief under Minnesota's Consumer Protection Statutes.
On January 5, 2004, the judge issued further rulings concerning the classes that
he had conditionally certified. More specifically, the judge declined to grant
class-action status to personal injury claims; however, he granted class-action
status for patients from a limited group of states to proceed with medical
monitoring claims.
Judge Tunheim also ruled against the Borrower in a separate order on the issue
of preemption and held that the plaintiff's causes of action were not preempted
by the U.S. Food and Drug Act.
In a July 15, 2004 order, Judge Tunheim added three additional states to the
limited group of states from which he determined residents with Silzone(R)
valves could proceed with a class action involving medical monitoring claims so
long as they did not have a clinical injury. In this order, the Court also
indicated that the class action he certified under Minnesota's Consumer
Protection Statutes should proceed. The Borrower intends to attempt to appeal
the class certification orders as well as the Court's preemption decision.
In addition to the class-type claims, there are currently 28 individual
Silzone(R) cases filed in various federal courts where plaintiffs are each
requesting damages ranging from $9.5 thousand to $120.5 million and, in some
cases, seek an unspecified amount. These cases are proceeding in accordance with
the orders issued by Judge Tunheim. There are also presently 20 individual state
court suits filed involving 28 patients. The complaints in these cases each
request damages ranging from $50 thousand to $100 thousand and, in some cases,
seek an unspecified amount. These state court cases are proceeding in accordance
with the orders issued by the judges in those matters.
In addition, a lawsuit seeking a class action for all persons residing in the
European Economic Union member jurisdictions who have had a heart valve
replacement and/or repair procedure using a product with Silzone(R) coating has
been filed in Minnesota state court. The complaint seeks damages in an
unspecified amount for the class, and in excess of $50 thousand for the
representative plaintiff individually. The complaint also seeks injunctive
relief in the form of medical monitoring. The Borrower removed this matter to
the federal court in Minnesota, but the plaintiffs are challenging this removal
and are seeking to have the case returned to Minnesota state court. The hearing
on this issue occurred on June 22, 2004. The Borrower has indicated that it
seeks to have the case transferred, consistent with applicable principles, from
the United States to Europe for disposition, given that that is where the
plaintiffs reside.
Four class-action cases and one individual case have been filed against the
Borrower in Canada. In one such case in Ontario, the court certified that a
class action may proceed involving Silzone(R) patients. The most recent decision
on certification was issued by the Ontario court on January 16, 2004, but the
Borrower has recently moved for leave to appeal the rulings on certification.
Proceedings to certify a class in the Province of Quebec are also underway. In
the United Kingdom, two cases involving two separate plaintiffs have been filed.
The complaints in these cases request damages of unspecified amounts. One of
these matters has not been served upon the Borrower and the other is only in
very preliminary stages.
The Borrower is not aware of any unasserted claims related to Silzone(R)
devices. Borrower management believes that the final resolution of the
Silzone(R) cases will take several years. While management reviews the claims
that have been asserted from time to time and periodically engages in
discussions about the resolution of claims with claimants' representatives,
management cannot reasonably estimate at this time the time frame in which any
potential settlements or judgments would be paid out. The Borrower accrues for
contingent losses when it is probable that a loss has been incurred and the
amount can be reasonably
estimated. The Borrower has recorded an accrual for probable legal costs that it
will incur to defend the various cases involving Silzone(R) devices, and the
Borrower has recorded a receivable from its product liability insurance carriers
for amounts expected to be recovered (see Note 6 of the Borrower's form 10Q for
the period ending June 30, 2004). The Borrower has not accrued for any amounts
associated with probable settlements or judgments because management cannot
reasonably estimate such amounts. However, management believes that no
significant claims will ultimately be allowed to proceed as class actions in the
United States and, therefore, that all settlements and judgments will be covered
under the Borrower's remaining product liability insurance coverage
(approximately $160 million at July 12, 2004), subject to the insurance
companies' performance under the policies (see Note 6 of the Borrower's form 10Q
for the period ending June 30, 2004 for further discussion on the Borrower's
insurance carriers). As such, management believes that any costs (the material
components of which are settlements, judgments, legal fees and other related
defense costs) not covered by its product liability insurance policies or
existing reserves will not have a material adverse effect on the Borrower's
statement of financial position or liquidity, although such costs may be
material to the Borrower's consolidated results of operations of a future
period.
GUIDANT 1996 PATENT LITIGATION: In November 1996, Guidant Corporation (Guidant)
sued St. Jude Medical alleging that the Borrower did not have a license to
certain patents controlled by Guidant covering ICD products and alleging that
the Borrower was infringing those patents. St. Jude Medical's contention was
that it had obtained a license from Guidant to the patents in issue when it
acquired certain assets of Telectronics in November 1996. In July 2000, an
arbitrator rejected St. Jude Medical's position, and in May 2001, a federal
district court judge also ruled that the Guidant patent license with
Telectronics had not transferred to St. Jude Medical.
Guidant's suit originally alleged infringement of four patents by St. Jude
Medical. Guidant later dismissed its claim on one patent and a court ruled that
a second patent was invalid. This determination of invalidity was appealed by
Guidant and the Court of Appeals upheld the lower court's invalidity
determination. In a jury trial involving the two remaining patents (the '288 and
'472 patents), the jury found that these patents were valid and that St. Jude
Medical did not infringe the '288 patent. The jury also found that the Borrower
did infringe the '472 patent, though such infringement was not willful. The jury
awarded damages of $140 million to Guidant. In post-trial rulings, however, the
judge overseeing the jury trial ruled that the '472 patent was invalid and also
was not infringed by St. Jude Medical, thereby eliminating the $140 million
verdict against the Borrower. The trial court also made other rulings as part of
the post-trial order, including a ruling that the '288 patent was invalid on
several grounds.
In August 2002, Guidant commenced an appeal of certain of the trial judge's
post-trial decisions pertaining to the '288 patent. Guidant did not appeal the
trial court's finding of invalidity and non-infringement of the '472 patent. As
part of its appeal, Guidant requested that the monetary damages awarded by the
jury pertaining to the '472 patent ($140 million) be transferred to the '288
patent infringement claim. The Borrower maintains that such a request is not
supported by the facts or law. After the briefing for this appeal was completed,
oral argument before the Court of Appeals occurred on September 4, 2003. The
Borrower expects that the Appellate Court will issue a decision concerning
Guidant's appeal sometime later in 2004. While it is not possible to
predict the outcome of the appeal process, the Borrower believes that the
decision of the trial court in its post-trial rulings, which is publicly
available, was correct.
The '288 patent expired in December 2003. Accordingly, the final outcome of the
appeal process cannot involve an injunction precluding the Borrower from selling
ICD products in the future. Sales of the Borrower's ICD products which Guidant
asserts infringed the '288 were approximately 18% of the Borrower's consolidated
net sales during the fiscal year ended December 31, 2003.
The Borrower has not accrued any amounts for losses related to the Guidant 1996
patent litigation. Although the Borrower believes that the assertions and claims
in these matters are without merit, potential losses arising from this
litigation are possible, but not estimable, at this time. The range of such
losses could be material to the operations, financial position and liquidity of
the Borrower.
GUIDANT 2004 PATENT LITIGATION: In February 2004, Guidant sued the Borrower
alleging that the Borrower's Epic(TM) HF ICD, Atlas(R)+ HF ICD and Frontier(TM)
device infringe U.S Patent No. RE 38,119E (the '119 patent). Guidant also sued
the Borrower in February 2004 alleging that the Borrower's QuickSite(TM) 1056K
pacing lead infringes U.S. Patent No. 5,755,766 (the '766 patent). Guidant is
seeking an injunction against the manufacture and sale of these devices by the
Borrower in the United States and compensation for what it claims are infringing
sales of these products up through the effective date of the injunction. Sales
of these St. Jude Medical devices in the United States were not material during
the first six months of 2004 or the full fiscal year 2003, although now that the
Borrower has received FDA approval to market these products, it is anticipated
that sales of these devices could become material in the future. The Borrower
has not submitted a substantive response to Guidant's claims at this time.
Another competitor of the Borrower, Medtronic, Inc., which has a license to the
'119 patent, is contending in a separate lawsuit with Guidant that the '119
patent is invalid.
The Borrower has not accrued any amounts for losses related to the Guidant 2004
patent litigation. Potential losses arising from this litigation are possible,
but not estimable, at this time. The range of such losses could be material to
the operations, financial position and liquidity of the Borrower.
SYMMETRY(TM) LITIGATION: The Borrower has been sued in thirteen cases in the
United States alleging that its Symmetry(TM) Bypass System Aortic Connector
(Symmetry(TM) device) caused bodily injury or might cause bodily injury. The
first such suit was filed against the Borrower on August 5, 2003, and the most
recently initiated case was served upon the Borrower on June 17, 2004. Each of
the complaints in these cases request damages ranging from $50 thousand to $100
thousand and, in some cases, seek an unspecified amount. Four of the thirteen
cases are seeking class-action status. One of the cases seeking class-action
status has been dismissed but the dismissal is being appealed by the plaintiff.
The Borrower believes that those cases seeking class-action status will request
damages for injuries and monitoring costs.
The Borrower's Symmetry(TM) device was cleared through a 51O(K) submission to
the FDA, and therefore, is not eligible for the defense under the doctrine of
federal preemption that such suits
are prohibited. Given the Borrower's self-insured retention levels under its
product liability insurance policies, the Borrower expects that it will be
solely responsible for these lawsuits, including any costs of defense,
settlements and judgments. The Borrower's management believes that class-action
status is not appropriate for the claims asserted based on the facts and case
law. Discovery is in the very early stages in these cases.
The Borrower has not accrued any amounts for losses related to the Symmetry(TM)
litigation. Potential losses arising From this litigation are possible, but not
estimable, at this time. The range of such losses could be material to the
operations, financial position and liquidity of the Borrower. At this time, the
Borrower management cannot reasonably estimate the time frame in which this
litigation will be resolved, including when potential settlements or judgments
would be paid out, if any.
OTHER LITIGATION MATTERS: The Borrower is involved in various other product
liability lawsuits, claims and proceedings that arise in the ordinary course of
business.
RECENT EVENTS
On August 31, 2004, a three judge panel of the Court of Appeals for the Federal
Circuit (CAFC) issued a ruling on Guidant's appeal of the trial court decision
and jury verdict on the '288 patent controlled by Guidant.
The CAFC reversed the decision of the trial court judge that the '288 patent was
invalid. The court also ruled that the trial judge's claim construction of the
'288 patent was incorrect and, therefore, the jury's verdict of non-infringement
was set aside. The court also ruled on other issues that were raised by the
parties.
The effect of the decision, if unappealed, will be to return the case to the
trial judge for claim construction of a possible new trial on the issue of
infringement and damages.
Guidant had sued St. Jude Medical in 1996 alleging that the Borrower's
implantable cardioverter-defibrillator products infringed the '288 and three
other patents. The other patents were dropped or dismissed from the litigation.
Guidant is claiming damages for ICD sales from May 15, 1997 through December
2003, when the '288 patent expired.
The decision can be accessed at www.FedCir.gov/dailylog.html.
On September 2, 2004, the United States Court of Appeals for the Eighth Circuit
issued an order granting St. Jude Medical, Inc.'s Petition under Federal Rule of
Civil Procedure 23(f) for Permission to Appeal a Class Certification Order.
In the Petition, St. Jude Medical sought permission to appeal from the July 15,
2004 class certification order of United States District Judge John R. Tunheim
in the multi-district Silzone(R) heart valve litigation. The order had certified
a nationwide class action for personal injury and
medical monitoring claims under Minnesota's consumer protection statutes. Judge
Tunheim also certified a medical monitoring class based on specific states' tort
laws.
In granting the Petition, the Eighth Circuit agreed to allow St. Jude Medical to
appeal from the July 15, 2004 order, but did not decide whether the classes were
properly certified. The Eighth Circuit will address that issue at a later date
and after further briefing. It may be eight to twelve months before the Eighth
Circuit issues a decision on this matter. St. Jude Medical's position is that
proceeding with a class action is not appropriate under existing law.
In a separate ruling on September 2, 2004, the Eighth Circuit issued an order
denying St. Jude Medical's request that the appellate court review a decision by
Judge Tunheim which held that the plaintiff s claims were not preempted by the
U.S. Food and Drug Act. The Eighth Circuit's decision does not substantively
address or disagree with St. Jude Medical's grounds for appeal of the preemption
ruling, but rather merely determined that an appeal of the preemption ruling
was not possible at this time.
SCHEDULE 5.07
ERISA SCHEDULE
Section Exceptions
- ------- ----------
5.07(a) None
5.07(c) None
5.07(d) None
5.07(e) None
5.07(f) None
SCHEDULE 5.10
SCHEDULE OF TAXES
None
SCHEDULE 5.11
SCHEDULE OF MATERIAL INDEBTEDNESS
St. Jude subsidiaries in Spain and Italy have initiated letters of credit with
various banks in the ordinary course of business. These letters of credit total
approximately $4 million.
St. Jude Medical, Inc. maintains a large deductible workers' compensation
insurance program in the U.S. for which insurance carriers require collateral in
the form of a standby letter of credit. These letters of credit currently total
approximately $7 million.
Getz Brothers, a wholly owned indirect subsidiary of St. Jude Medical, Inc. has
the following outstanding debt as of September 28, 2004:
o Yen 20,864,375,000 Senior Notes Due May 7, 2010 - guaranteed
by St. Jude Medical, Inc.
As of September 24, 2004 St. Jude has $82,000,000 outstanding under the
Borrower's commercial paper program.
SCHEDULE 5.12
ENVIRONMENTAL SCHEDULE
None
SCHEDULE 5.16
ST. JUDE MEDICAL, INC.
SUBSIDIARIES AND EQUITY INVESTMENTS
8/30/04
ST. JUDE MEDICAL, INC. WHOLLY OWNED SUBSIDIARIES:
- -------------------------------------------------
o Pacesetter, Inc. - Sylmar, California, Scottsdale, Arizona, and Maven, South
Carolina (Delaware corporation) (doing business as St. Jude Medical Cardiac
Rhythm Management Division)
o St. Jude Medical S.C., Inc. - St. Paul, Minnesota (Minnesota corporation)
- Bio-Medical Sales, Inc. (Pennsylvania corporation)
- HeartBeat Medical, Inc. (Utah corporation)
o St. Jude Medical Europe, Inc. - St. Paul, Minnesota (Delaware corporation)
- Brussels, Belgium branch
o St. Jude Medical Canada, Inc. - Mississauga, Ontario and St. Hyacinthe,
Quebec (Ontario, Canada corporation)
o St. Jude Medical (Shanghai) Ltd. (Chinese Corporation)
o IBI Merger Corporation - St. Paul, Minnesota (California Corporation)
o Dragonfly Merger Corporation - St. Paul, Minnesota (Delaware corporation)
o Epicor Medical, Inc. - Sunnyvale, California (Delaware Corporation)
o St. Jude Medical (Hong Kong) Limited - Kowloon, Hong Kong (Hong Kong
corporation)
- Shanghai and Beijing, China representative offices
- Singapore representative office
- Bangalore representative office
- Korean branch office
- Taiwan branch office
- Mumbai, New Delhi, Calcutta and Chennai, India branch offices
o St. Jude Medical, Inc., Cardiac Assist Division - St. Paul, Minnesota
(Delaware corporation) (Assets of St. Jude Medical, Inc., Cardiac Assist
Division sold to Bard 1/19/96)
o St. Jude Medical Australia Pty., Ltd. - Sydney, Australia (Australian
corporation)
o St. Jude Medical Brasil, Ltda. - Sao Paulo and Belo Horizonte, Brazil
(Brazilian corporation)
o St. Jude Medical, Daig Division, Inc.- Minnetonka, Minnesota (Minnesota
corporation)
o St. Jude Medical Colombia, Ltda. (Bogota, Colombia) (Colombian corporation)
o St. Jude Medical ATG, Inc. - Maple Grove, Minnesota (Minnesota corporation)
o SJM International, Inc. - St. Paul, Minnesota (Delaware corporation)
- Tokyo, Japan branch
SJM INTERNATIONAL INC. WHOLLY OWNED LEGAL ENTITIES -(DIRECTLY AND INDIRECTLY)
- -----------------------------------------------------------------------------
o St. Jude Medical Puerto Rico, Inc. - Caguas, Puerto Rico (Delaware
corporation)
- St. Jude Medical Delaware Holding LLC - St. Paul, Minnesota
(Delaware corporation) (wholly owned subsidiary of St. Jude Medical
Puerto Rico, Inc.)
o St. Jude Medical Holland Finance C.V. (Netherlands limited partnership)
(ownership of St. Jude Medical Holland Finance C.V. is shared by SJM
International, Inc., St. Jude Medical Delaware Holding LLC, and the general
partner, St. Jude Medical Puerto Rico, Inc.)
- St. Jude Medical Investments, B.V. (Netherlands corporation
headquartered in Luxembourg) (wholly owned subsidiary of St. Jude
Medical Holland Finance C.V.)
- St. Jude Medical Holdings B.V. (Netherlands corporation) (wholly
owned subsidiary of St. Jude Medical Investments, B.V.)
- Getz Bros. Co. Ltd. (Japanese corporation) (wholly owned
subsidiary of St. Jude Medical Holdings B.V.)
- St. Jude Medical Nederland B.V. (Netherlands corporation)
(wholly owned subsidiary of St. Jude Medical Investments, B.V.)
- Telectronics B.V. (Netherlands corporation) (wholly owned
subsidiary of St. Jude Medical Nederland B.V.)
- St. Jude Medical Enterprise AB (Swedish corporation
headquartered in Luxembourg) (wholly owned subsidiary of St.
Jude Medical Investments, B.V.)
- St. Jude Medical Puerto Rico B.V. (Netherlands corporation)
(wholly owned subsidiary of St. Jude Medical Enterprise AB)
- Puerto Rico branch of St. Jude Medical Puerto Rico B.V.
- St. Jude Medical Coordination Center (Belgium branch of St. Jude Medical
Enterprise AB)
- St. Jude Medical AB (Swedish corporation) (Wholly owned subsidiary of
St. Jude Medical Enterprise AB)
o St. Jude Medical Sweden AB (Swedish corporation)
o St. Jude Medical Danmark A/S (Danish corporation)
o St. Jude Medical (Portugal) - Distribuicao de Produtos Medicos, Lda.
(Portuguese corporation)
o St. Jude Medical Export Ges.m.b.H. (Austrian corporation)
o St. Jude Medical Medizintechnik Ges.m.b.H. (Austrian corporation)
o St. Jude Medical Italia S.p.A. (Italian corporation) N.V.
o St. Jude Medical Belgium, S.A. (Belgian corporation)
o St. Jude Medical Espana, S.A. (Spanish corporation)
o St. Jude Medical France S.A.S. (French corporation)
o St. Jude Medical Finland O/y (Finnish corporation)
o St. Jude Medical Kft. (Hungarian corporation)
o St. Jude Medical Sp.zo.o. (Polish corporation)
o St. Jude Medical GmbH (German corporation)
o St. Jude Medical UK Limited (United Kingdom corporation)
o St. Jude Medical AG (Swiss corporation)
EQUITY INVESTMENTS:
o Cyberonics, Inc.
o Cardima, Inc.
o Asahi Intecc
o Bioheart, Inc.
o Cardiodyne, Inc
o Emphasys Medical, Inc.
o Fine Medix
o Fox Hollow Technologies, Inc.
o GM Medical
o Irvine Biomedical, Inc. (St. Jude Medical, Inc. expects to close this
acquisition 9/30/04
o MediaWay, Inc.
o Micrus, Corporation
o Neovasys, Inc.
o Novoste Corporation
o Rhythm Technologies, Inc.
o St. Croix Medical, Inc.
o SL Japan
o Surgical Innovations Group plc
o Vascor, Inc.
o WebMD
PARTNERSHIPS:
o American Healthcare Fund
o Piper Jaffray Healthcare Fund
o Pathfinder
o Frazier & Co.
o Capstone Venture
o Three Arch
o Three Arch II
o Three Arch III
o Three Arch Capital
o Technology Gateway
OTHER AGREEMENT: Tokumei Kumiai ("TK") Agreement between St. Jude Medical
Enterprise AB and Getz Bros. Co. Ltd.
SCHEDULE 6.06
INSURANCE
COVERAGE LIMITS RETENTION INSURANCE COMPANIES
- -------- ------ --------- -------------------
Products Liability $ 425 million 75 million/occurrence XL Insurance Ltd.
Allied World Assurance Co.
MaxRe
Staff Excess Int'l
Ace
Endurance
Gerling
Commercial Based on valuation Various St. Paul Travelers
Property/earthquake $500 million aggregate XL
Arch
CNA
Axis
Travelers
Employers of Wausau
General Liability $ 2 million aggregate Various St. Paul Travelers
$ 1 million/occurrence
Auto Insurance $500,000 $ 1,000 St. Paul Travelers
Workers' Statutory $ 500,000 St. Paul Travelers
Compensation
Umbrella $ 30 million Underlying policy St. Paul Travelers
Foreign DIC etc. Various Various St. Paul Travelers
Directors & Officers $ 60 million $ 15 million (Securities National Union
claims) $5 million other Chubb
claims Allied World Assurance Co.
CODA
Crime $ 10 million $ 250,000 National Union
Cargo Various $ 10,000 Ace USA
Fiduciary $ 15 million $ 100,000 Chubb
SCHEDULE 7.01
EXISTING LIENS
None
SCHEDULE 7.04(A)
ST. JUDE MEDICAL, INC.
GLOBAL INVESTMENT POLICY
EFFECTIVE DECEMBER 2003
PURPOSE
- -------
This investment policy ("Policy") describes the objectives of and provides
guidelines for investment of funds on behalf of St. Jude Medical, Inc. and all
of its legal entities. The Policy also defines the employees authorized to
engage in investment activity ("Authorized Individuals"), authorized investment
sources ("Authorized Brokers/Issuers"), authorized investment managers
("Authorized Managers"), and portfolio quality, diversification and maturity
parameters. Modification of or deviation from the Policy requires the approval
of the Audit Committee of the Board of Directors of the Borrower ("Audit
Committee"), except for changes in Authorized Individuals, Authorized
Brokers/Issuers, or Authorized Managers, which require the prior written
approval of the Borrower's Chief Financial Officer and either the Treasurer or
Assistant Treasurer.
This policy does not supersede the Borrower's Banking Resolution. Any banks
listed as Authorized Brokers/Issuers for the purpose of this Policy refer to the
investment or investment brokerage entity or function within that bank or
investment bank, but not to the depository, lending function or organization
which is the subject of the Banking Resolution.
Investment Obiectives
- ---------------------
The Borrower has three primary investment objectives, in priority order:
1. Preservation of principal
2. Liquidity
3. Competitive after-tax yield
AUTHORIZED INDIVIDUALS
- ----------------------
1. Chief Executive Officer
2. Chief Operating Officer
3. Chief Financial Officer
4. Treasurer
5. Assistant Treasurer
6. Manager of Treasury Operations
7. Sr. Treasury Analyst
8. Other designees as approved in writing by the Chief Executive Officer or
the Chief Financial Officer and either the Treasurer or Assistant Treasurer
AUTHORIZED INVESTMENTS
- ----------------------
Authorized investments, minimum quality characteristics, maximum allowable
maturities and allowable concentration (percentage of investment portfolio)
parameters are described in Exhibit A of the Policy. In general, investment
activity is restricted to investment grade securities, with minimum rating(s) on
trade date by Standard & Poor's as A2 or better (short term) or BBB or better
(long term), or the equivalent rating from Moody's, or Fitch. Investments must
be currency neutral, i.e. investments must be made in the reporting currency or
the currency that is already held by the entity completing the investment.
AUTHORIZED BROKERS/ISSUERS
- --------------------------
Authorized Individuals are restricted to utilizing brokers, banks and direct
issuers of commercial paper as described in Exhibit B of the Policy. A current
version of Exhibit B indicating all additions or deletions from the list of
Authorized Brokers/Issuers is to be maintained by the Treasurer or Assistant
Treasurer. A written agreement signed by the Borrower's Chief Financial Officer
and Treasurer or Assistant Treasurer is required for each Authorized
Broker/Issuer prior to executing investment transactions.
AUTHORIZED MANNERS
- ------------------
Authorized Managers are described in Exhibit C of the Policy. Authorized
Managers are restricted to investments as detailed in Exhibit A of the Policy.
Authorized Managers are required to utilize broker dealers providing best
execution of trades, "best execution" being defined as most favorable pricing at
lowest cost. A written agreement signed by the Borrower's Chief Financial
Officer and Treasurer or Assistant Treasurer is required for each Authorized
Manager prior to executing investment transactions. This written agreement will
contain an addendum documenting selection of security custodians and appropriate
performance benchmarks mutually chosen by the Authorized Manager and the
Borrower.
RESPONSIBILITY
- --------------
1. Audit Committee
a. Annual review of investment activity and results
b. Annual review of the Borrower's internally prepared compliance report
2. Chief Financial Officer
a. Annual review of the Policy
b. Overall compliance with the Policy
c. Approval of any changes in Authorized Individuals or Authorized
Brokers/Issuers or Authorized Managers
d. Execution of agreements with Authorized Brokers/Issuers and Authorized
Managers
e. Distribution of annual investment and audit reports to the Audit
Committee
f. Decision on appropriate remedial strategy regarding any investment
where that investments' value may be affected because of a negative
credit rating change subsequent to purchase.
3. Treasurer or Assistant Treasurer
a. Direct responsibility for compliance with the Policy
b. Approval of any changes in Authorized Individuals or Authorized
Brokers/Issuers or Authorized Managers
c. Execution of agreements with Authorized Brokers/Issuers or Authorized
Managers
d. Distribution of periodic reports to management
e. As soon as known by the Treasurer or Assistant Treasurer, report to
the Chief Financial Officer any negative credit rating change that
may affect any existing investments' value. This report shall include
viable elections with respect to the investment of concern
4. Authorized Individuals
a. Ongoing compliance with the Policy
b. Preparation of accurate and timely reports for management and the
Audit Committee
c. As soon as known by the Individual, report to the Treasurer or
Assistant Treasurer any negative credit rating change of any existing
investment
5. Internal Audit Function
a. Preparation and distribution of an annual compliance audit for the
Audit Committee
REPORTING REQUIREMENTS
- -----------------------
1. Annual investment report to the Audit Committee
2. Monthly report to Chief Financial Officer, Treasurer and Controller
3. Annual compliance audit report
4. Other as directed by management
EQUITY INVESTMENTS
- ------------------
At the direction of the Chief Executive Officer of the Borrower, Authorized
Individuals are permitted to purchase up to $10 million in aggregate of the
capital stock, or equivalent, in a non affiliated company. Amounts in excess of
$10 million in aggregate require approval by the Board of Directors.
Without further approval of the Board of Directors, the Chief Executive Officer
may direct authorized individuals to sell or otherwise dispose of investments in
non-affiliated companies.
MANAGEMENT SAVINS PLAN (MSP) INVESTMENTS
- ----------------------------------------
The Borrower maintains certain investments such as life insurance contracts and
mutual funds that serve to hedge the Borrower's obligations under its MSP. This
Global Investment Policy is not intended to govern the management of the MSP
investments.
DURATION
- --------
This Policy is subject to annual review by the Audit Committee.
ST JUDE MEDICAL, INC.
INVESTMENT POLICY
EXHIBIT A
AUTHORIZED INVESTMENTS
- -----------------------------------------------------------------------------------------------------
MINIMUM MAXIMUM
RATING ON EXPECTED EXPOSURE PER ISSUE/ISSUER
INSTRUMENT TRADE DATE AVERAGE ON TRADE DATE
(S&P OR LIFE
EQUIV.)
- -----------------------------------------------------------------------------------------------------
See Definitions and Clarifications below table
- -----------------------------------------------------------------------------------------------------
Bank certificates of deposit A 90 days A rated - $10 million or 5%
of portfolio
AA 90 days AA rated $20 million or 5%
of portfolio
- -----------------------------------------------------------------------------------------------------
Yankee certificates of A 90 days A rated - $10 million or 5%
deposit of portfolio
AA 90 days AA rated - $20 million or
5% of portfolio
- -----------------------------------------------------------------------------------------------------
Bankers' acceptances A2 180 days $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
Commercial paper Al 270 days $10 million or 5% of
portfolio
A2 60 days
$10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
Asset backed commercial A2 60 days $10 million or 5% of
paper portfolio
- -----------------------------------------------------------------------------------------------------
Asset backed securities AAA 1 year $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
Corporate bonds or notes AA Two years $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
Corporate medium term AA Two years $10 million or 5% of
notes portfolio
- -----------------------------------------------------------------------------------------------------
Money market funds AAA 397 days $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
Liquidity vehicles/money Al 90 days $10 million or 5% of
market equivalents portfolio
- -----------------------------------------------------------------------------------------------------
Dutch Auction Securities BBB 180 days $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------
Municipal bonds or notes BBB One year $10 million or 5% of
Portfolio
- -----------------------------------------------------------------------------------------------------
Municipal variable rate notes SP-2 14 days $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
Repurchase agreements AA 7 days $10 million or 5% of
portfolio
- -----------------------------------------------------------------------------------------------------
U.S. government agencies N/A Three N/A
years
- -----------------------------------------------------------------------------------------------------
U.S. government obligations N/A Three N/A
years
- -----------------------------------------------------------------------------------------------------
DEFINITIONS AND CLARIFICATIONS
- ------------------------------
MINIMUM RATING ON TRADE DATE:
o For Split rated securities, the lowest of the ratings is used
o Repurchase agreements must be collateralized by U.S. Government or
Agency securities
EXPECTED AVERAGE LIFE:
o FOR INVESTMENTS MANAGED INTERNALLY:
o St. Jude investments managed internally shall be governed solely
by the Expected Average Life in the table above. For securities
which have put dates or reset dates the first put date or first
reset date will be used instead of the final legal maturity
date.
o FOR INVESTMENTS MANAGED EXTERNALLY (BY AUTHORIZED MANAGERS):
The following criteria will be used for purposes of determining Expected
Average Life:
o The next reset date will be used for floating rate securities,
the put date for putable securities, the call date for
securities trading on a yield-to-call basis, and the average
life on securities with periodic principal payments prior to
maturity such as mortgage backed securities and asset backed
securities.
o The final legal maturity date of any single issue cannot exceed
3 years from the date of purchase.
MAXIMUM EXPOSURE PER ISSUE/ISSUER ON TRADE DATE:
o FOR INVESTMENTS MANAGED INTERNALLY: St. Jude investments managed
internally shall be governed solely by the $ maximum exposure limits per
issue/issuer outlined in the table above and shall be:
o Consolidated for all SJM entities
o Consolidated for each issue/issuer
o FOR INVESTMENTS MANAGED EXTERNALLY (BY AUTHORIZED MANAGERS): maximum
exposure limits will be governed solely by percentage maximums as
outlined in the table above. Each Authorized Manager will base their
percentage maximum on the portfolio they manage.
o TO DETERMINE MAXIMUM EXPOSURE PER ISSUE/ISSUER FOR INVESTMENTS
DENOMINATED IN CURRENCIES OTHER THAN US$:
o A spot exchange rate shall be obtained from Reuters on the
investment trade date
o A foreign currency equivalent maximum shall be calculated using the
rate obtained and the US$ maximum from the table above
ST. JUDE MEDICAL, INC.
INVESTMENT POLICY
EXHIBIT B
AUTHORIZED BROKERS/ISSUERS
- --------------------------------------------------------------------------------------------------------------------
DIRECT ISSUERS OF
INVESTMENT BANKS COMMERCIAL BANKS COMMERCIAL PAPER
- --------------------------------------------------------------------------------------------------------------------
BP Capital Markets (Puerto Rico only) Banco Popular To be designated and
- -------------------------------------------------------------------------------- approved in the future
Credit Suisse First Boston Bank of America
- --------------------------------------------------------------------------------
RBC Capital Markets Bank One
- --------------------------------------------------------------------------------
Morgan Stanley JP Morgan Chase
- --------------------------------------------------------------------------------
Goldman Sachs Citigroup
- --------------------------------------------------------------------------------
Merrill Lynch Scotia Bank
- --------------------------------------------------------------------------------
Wells Fargo
- --------------------------------------------------------------------------------
US Bancorp Piper Jaffray KBC Bank
- --------------------------------------------------------------------------------
Salomon Smith Barney ABN Amro
- --------------------------------------------------------------------------------
Bear Steams Canadian Imperial Bank of
Commerce
- --------------------------------------------------------------------------------
UBS Paine Webber Svenska Handelsbanken
- --------------------------------------------------------------------------------
HSBC
- --------------------------------------------------------------------------------------------------------------------
BNP Paribas
- --------------------------------------------------------------------------------------------------------------------
Suntrust
- --------------------------------------------------------------------------------------------------------------------
ST. JUDE MEDICAL, INC.
INVESTMENT POLICY
EXHIBIT C
AUTHORIZED MANAGERS
Bank of America Capital Management, Inc.
ABN Amro Asset Management Services, Inc.
Goldman Sachs Asset Management
Wells Capital Management
TrusCo Capital Management
SCHEDULE 7.05
EXISTING SUBSIDIARY INDEBTEDNESS AND
CONTINGENT OBLIGATIONS
St. Jude subsidiaries in Spain and Italy have initiated letters of credit with
various banks in the ordinary course of business. These letters of credit total
approximately $4 million.
Getz Brothers, a wholly owned indirect subsidiary of St. Jude Medical, Inc. has
the following outstanding debt as of September 28, 2004:
o Yen 20,864,375,000 Senior Notes Due May 7, 2010 - guaranteed
by St. Jude Medical, Inc.
SCHEDULE 10.02
ADMINISTRATIVE AGENT'S OFFICE,
CERTAIN ADDRESSES FOR NOTICES
BORROWER:
- ---------
ST. JUDE MEDICAL, INC.
One Lillehei Plaza
St. Paul, Minnesota 55117
Attention: Robert Frenz
Telephone: 651-481-7661
Facsimile: 651-490-4333
Electronic Mail: rfrenz@sjm.com
ADMINISTRATIVE AGENT:
- ---------------------
BANK OF AMERICA, N.A.
ADMINISTRATIVE AGENT'S OFFICE
- -----------------------------
(FOR PAYMENTS AND REQUESTS FOR CREDIT EXTENSIONS)
Bank of America, N.A.
NCI-001-15-01
10 1 N. Tryon Street
Charlotte, NC 28255
Attn: Dee Daniel
Telephone: 704-387-5441
Facsimile: 704-409-0299
Email: dee.daniel@bankofamerica.com
PAYMENT INSTRUCTIONS:
- ---------------------
Bank of America, NA
New York NY
ABA# 026009593
A/C# 136621-2250600
Attn: Corporate Credit Services
Ref: St. Jude Medical
OTHER NOTICES AS ADMINISTRATIVE AGENT:
- --------------------------------------
Bank of America, N.A.
Agency Management
CA5-701-12-09
1455 Market Street
San Francisco, CA 94103
Attn: Cassandra McCain
Telephone: 415-436-3400
Facsimile: 415-503-5133
Email: cassandra.g.mccain@bankofamerica.com
L/C ISSUER:
Bank of America, N.A.
Trade Operations-Los Angeles #22621
333 S. Beaudry Avenue, 19th Floor
Mail Code: CA9-703-19-23
Los Angeles, CA 90017-1466
Attention: Sandra Leon
Vice President
Telephone: 213.345.5231
Facsimile: 213.345.6694
Electronic Mail: Sandra.Leon@bankofamerica.com