CREDIT AGREEMENT
Dated as of April 29, 1994
among
O&M HOLDING, INC.
(to be renamed Owens & Minor, Inc. after the Initial Funding Date),
as Borrower,
AND
CERTAIN OF ITS SUBSIDIARIES IDENTIFIED HEREIN
as Guarantors
THE BANKS IDENTIFIED HEREIN,
NATIONSBANK OF NORTH CAROLINA, N.A.,
as Agent,
CHEMICAL BANK
and
CRESTAR BANK,
as Co-Agents,
AND
NATIONSBANK OF NORTH CAROLINA, N.A.,
as Administrative Agent
TABLE OF CONTENTS
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS . . . . . . . - 1 -
1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.02 Computation of Time Periods . . . . . . . . . . . . . . - 15 -
1.03 Accounting Terms . . . . . . . . . . . . . . . . . . . . - 15 -
SECTION 2
CREDIT FACILITIES . . . . . . . . . . - 15 -
2.01 Revolving Loan Commitment . . . . . . . . . . . . . . . - 15 -
2.02 Committed Revolving Loan Advances . . . . . . . . . . . - 16 -
2.03 Conversion . . . . . . . . . . . . . . . . . . . . . . . - 17 -
2.04 Repayment of the Committed Revolving Loans . . . . . . . - 18 -
2.05 Interest on Committed Revolving Loans . . . . . . . . . - 18 -
2.06 Committed Revolving Notes . . . . . . . . . . . . . . . - 19 -
2.07 Swingline Loan Subfacility. . . . . . . . . . . . . . - 19 -
2.08 Competitive Loan Subfacility . . . . . . . . . . . . . . - 21 -
2.09 Conditions of Lending . . . . . . . . . . . . . . . . . - 23 -
2.10 Termination of Commitments . . . . . . . . . . . . . . . - 24 -
2.11 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . - 24 -
2.12 Prepayments . . . . . . . . . . . . . . . . . . . . . . - 25 -
2.13 Increased Costs, Illegality, etc . . . . . . . . . . . . - 26 -
2.14 Capital Adequacy . . . . . . . . . . . . . . . . . . . . - 27 -
2.15 Compensation . . . . . . . . . . . . . . . . . . . . . . - 27 -
2.16 Net Payments . . . . . . . . . . . . . . . . . . . . . . - 28 -
2.17 Change of Lending Office; Right to Substitute Lender . . - 28 -
2.18 Payments and Computations . . . . . . . . . . . . . . . - 29 -
2.19 Pro Rata Treatment . . . . . . . . . . . . . . . . . . . - 29 -
2.20 Sharing of Payments . . . . . . . . . . . . . . . . . . - 29 -
2.21 Foreign Lenders . . . . . . . . . . . . . . . . . . . . - 30 -
SECTION 3
GUARANTEE . . . . . . . . . . . . - 30 -
3.01 The Guarantee . . . . . . . . . . . . . . . . . . . . . - 30 -
3.02 Obligations Unconditional . . . . . . . . . . . . . . . - 31 -
3.03 Reinstatement . . . . . . . . . . . . . . . . . . . . . - 31 -
3.04 Certain Additional Waivers . . . . . . . . . . . . . . . - 32 -
3.05 Remedies . . . . . . . . . . . . . . . . . . . . . . . . - 32 -
3.06 Continuing Guarantee . . . . . . . . . . . . . . . . . . - 32 -
3.07 Limitation of Guarantee . . . . . . . . . . . . . . . . - 32 -
SECTION 4
CONDITIONS PRECEDENT . . . . . . . . . - 32 -
4.01 Conditions to Closing . . . . . . . . . . . . . . . . . - 32 -
4.02 Conditions to Initial Loan Advance . . . . . . . . . . . - 32 -
SECTION 5
- i -
REPRESENTATIONS AND WARRANTIES . . . . . . . - 34 -
5.01 Organization and Good Standing . . . . . . . . . . . . . - 34 -
5.02 Due Authorization . . . . . . . . . . . . . . . . . . . - 34 -
5.03 No Conflicts . . . . . . . . . . . . . . . . . . . . . . - 34 -
5.04 Consents . . . . . . . . . . . . . . . . . . . . . . . . - 34 -
5.05 Enforceable Obligations . . . . . . . . . . . . . . . . - 35 -
5.06 Financial Condition . . . . . . . . . . . . . . . . . . - 35 -
5.07 No Default . . . . . . . . . . . . . . . . . . . . . . . - 35 -
5.08 Liens . . . . . . . . . . . . . . . . . . . . . . . . . - 35 -
5.09 Indebtedness . . . . . . . . . . . . . . . . . . . . . . - 35 -
5.10 Litigation . . . . . . . . . . . . . . . . . . . . . . . - 35 -
5.11 Material Agreements . . . . . . . . . . . . . . . . . . - 35 -
5.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . - 35 -
5.13 Compliance with Law . . . . . . . . . . . . . . . . . . - 36 -
5.14 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
5.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . - 36 -
5.16 Use of Proceeds; Margin Stock . . . . . . . . . . . . . - 36 -
5.17 Government Regulation . . . . . . . . . . . . . . . . . - 36 -
5.18 Hazardous Substances . . . . . . . . . . . . . . . . . . - 36 -
5.19 Patents, Franchises, etc . . . . . . . . . . . . . . . . - 37 -
5.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
5.21 Investments . . . . . . . . . . . . . . . . . . . . . . - 37 -
SECTION 6
AFFIRMATIVE COVENANTS . . . . . . . . . - 37 -
6.01 Information Covenants . . . . . . . . . . . . . . . . . - 37 -
6.02 Preservation of Existence and Franchises . . . . . . . . - 39 -
6.03 Books, Records and Inspections . . . . . . . . . . . . . - 39 -
6.04 Compliance with Law . . . . . . . . . . . . . . . . . . - 40 -
6.05 Payment of Taxes and Other Indebtedness . . . . . . . . - 40 -
6.06 Insurance . . . . . . . . . . . . . . . . . . . . . . . - 40 -
6.07 Maintenance of Property . . . . . . . . . . . . . . . . - 40 -
6.08 Performance of Obligations . . . . . . . . . . . . . . . - 40 -
6.09 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . - 40 -
6.10 Use of Proceeds . . . . . . . . . . . . . . . . . . . . - 41 -
6.11 Financial Covenants . . . . . . . . . . . . . . . . . . - 41 -
6.12 Additional Subsidiaries . . . . . . . . . . . . . . . . - 42 -
6.13 Interest Rate Protection Agreements . . . . . . . . . . . - 42 -
SECTION 7
NEGATIVE COVENANTS . . . . . . . . . . - 43 -
7.01 Indebtedness . . . . . . . . . . . . . . . . . . . . . . - 43 -
7.02 Liens . . . . . . . . . . . . . . . . . . . . . . . . . - 44 -
7.03 Guaranty Obligations . . . . . . . . . . . . . . . . . . - 44 -
7.04 Nature of Business . . . . . . . . . . . . . . . . . . . - 44 -
7.05 Consolidation, Merger, Sale or Purchase of Assets, etc. - 44 -
7.06 Advances, Investments and Loans . . . . . . . . . . . . - 45 -
7.07 Prepayments of Indebtedness, etc . . . . . . . . . . . . - 45 -
7.08 Transactions with Affiliates . . . . . . . . . . . . . . - 45 -
7.09 Ownership of Subsidiaries . . . . . . . . . . . . . . . - 45 -
- ii -
7.10 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . - 46 -
7.11 Subsidiary Dividends . . . . . . . . . . . . . . . . . . - 46 -
SECTION 8
EVENTS OF DEFAULT . . . . . . . . . . - 46 -
8.01 Events of Default . . . . . . . . . . . . . . . . . . . - 46 -
8.02 Acceleration; Remedies . . . . . . . . . . . . . . . . . - 48 -
SECTION 9
AGENCY PROVISIONS . . . . . . . . . . - 48 -
9.01 Appointment . . . . . . . . . . . . . . . . . . . . . . - 48 -
9.02 Delegation of Duties . . . . . . . . . . . . . . . . . . - 49 -
9.03 Exculpatory Provisions . . . . . . . . . . . . . . . . . - 49 -
9.04 Reliance on Communications . . . . . . . . . . . . . . . - 49 -
9.05 Notice of Default . . . . . . . . . . . . . . . . . . . - 50 -
9.06 Non-Reliance on Agents and Other Banks . . . . . . . . . - 50 -
9.07 Indemnification . . . . . . . . . . . . . . . . . . . . - 51 -
9.08 Agents in their Individual Capacity . . . . . . . . . . - 51 -
9.09 Successor Agent . . . . . . . . . . . . . . . . . . . . - 51 -
SECTION 10
MISCELLANEOUS . . . . . . . . . . . - 52 -
10.01 Notices . . . . . . . . . . . . . . . . . . . . . . . . - 52 -
10.02 Right of Set-Off . . . . . . . . . . . . . . . . . . . - 52 -
10.03 Benefit of Agreement . . . . . . . . . . . . . . . . . - 53 -
10.04 No Waiver; Remedies Cumulative . . . . . . . . . . . . - 54 -
10.05 Payment of Expenses, etc . . . . . . . . . . . . . . . - 55 -
10.06 Amendments, Waivers and Consents . . . . . . . . . . . - 55 -
10.07 Counterparts . . . . . . . . . . . . . . . . . . . . . - 55 -
10.08 Headings . . . . . . . . . . . . . . . . . . . . . . . - 56 -
10.09 Survival . . . . . . . . . . . . . . . . . . . . . . . - 56 -
10.10 Governing Law; Submission to Jurisdiction; Venue . . . - 56 -
10.11 Severability . . . . . . . . . . . . . . . . . . . . . - 56 -
10.12 Entirety . . . . . . . . . . . . . . . . . . . . . . . - 56 -
10.13 Survival . . . . . . . . . . . . . . . . . . . . . . . - 57 -
SCHEDULES
Schedule 2.01(a) Schedule of Banks and Commitments
Schedule 2.02(1) Form of Notice of Borrowing
Schedule 2.02(2) Form of Notice of Conversion
Schedule 2.06 Form of Committed Revolving Note
Schedule 2.07(d) Form of Swingline Note
Schedule 2.08(b) Form of Competitive Bid Request
Schedule 2.08(b)-2 Form of Notice of Competitive Bid Request
Schedule 2.08(c) Form of Competitive Bid
Schedule 2.08(d) Form of Competitive Bid Accept/Reject Letter
Schedule 2.08(h) Form of Competitive Loan Note
- iii -
Schedule 4.01(b)(1) Form of Legal Opinion of Drew St.J. Carneal, Esq.
Schedule 4.01(b)(2) Form of Legal Opinion of Hunton & Williams
Schedule 5.09 Schedule of Outstanding Indebtedness
Schedule 5.10 Schedule of Legal Proceedings
Schedule 5.15 Schedule of Subsidiaries
Schedule 5.18 Schedule of Environmental Exceptions
Schedule 6.01(c) Schedule of Borrowing Base Certificate
Schedule 6.01(d) Form of Officer's Compliance Certificate
Schedule 6.06 Schedule of Insurance
Schedule 6.12 Form of Joinder Agreement
Schedule 7.02 Schedule of Permitted Liens
Schedule 10.03 Form of Assignment and Acceptance Agreement
- iv -
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of April 29, 1994 (the "Credit
Agreement"), is by and among O&M HOLDING, INC., a Virginia corporation,
which is expected to change its name to Owens & Minor, Inc. after the
Initial Funding Date (the "Borrower"), CERTAIN OF ITS SUBSIDIARIES
identified as a "Guarantor" in the definition thereof and on the signature
pages hereto (hereinafter sometimes referred to individually as a
"Guarantor" and collectively as the "Guarantors"), the various banks and
lending institutions identified on the signature pages hereto (each a
"Bank" and collectively, the "Banks"), NATIONSBANK OF NORTH CAROLINA, N.A.
as agent (in such capacity, the "Agent" or "Administrative Agent"),
CHEMICAL BANK and CRESTAR BANK as co-agents (in such capacity, the "Co-
Agents") and NATIONSBANK OF NORTH CAROLINA, N.A., as administrative agent
for the Banks (in such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Banks provide a
$350,000,000 credit facility for the purposes hereinafter set forth;
WHEREAS, the Banks have agreed to make the requested credit facility
available to the Borrower, and the Agents have accepted their duties
hereunder, all on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.01 Definitions. As used herein, the following terms shall have the
meanings herein specified unless the context otherwise requires. Defined
terms herein shall include in the singular number the plural and in the
plural the singular:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date.
"Adjusted Eurodollar Rate" means for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate equal
to the rate obtained by dividing (a) the rate of interest determined
by the Administrative Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of 1% per annum, if such average is not
such a multiple) of the per annum rates at which deposits in U.S.
- 1 -
dollars are offered to the Administrative Agent in the interbank
eurodollar market at 11:00 A.M. (Charlotte, North Carolina time) (or
as soon thereafter as is practicable), in each case two Business Days
before the first day of such Interest Period, in an amount
substantially equal to such Eurodollar Loan comprising part of such
borrowing (including conversions, extensions and renewals) and for a
period equal to such Interest Period by (b) a percentage equal to 100%
minus the Adjusted Eurodollar Rate Reserve Percentage for such
Interest Period. As used herein, "Adjusted Eurodollar Rate Reserve
Percentage" for the Interest Period for each Eurodollar Loan
comprising part of the same borrowing (including conversions,
extensions and renewals), means the percentage applicable two Business
Days before the first day of such Interest Period under regulations
issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank
of the Federal Reserve System in New York City with respect to
liabilities consisting of or including "eurocurrency liabilities", as
such term is defined in Regulation D (or with respect to any other
category of liabilities which includes deposits by reference to which
the interest rate on Eurodollar Loans is determined) having a term
equal to the Interest Period for which such Adjusted Eurodollar Rate
Reserve Percentage is determined.
"Adjusted Net Worth" means, with respect to any Guarantor as of
any date of determination thereof, the excess of (i) the "fair
valuation" of such Guarantor's property or the amount of the "present
fair saleable value" of the assets of such Guarantor as of such date
of determination, over (ii) the amount of all "debts" or "liabilities,
contingent or otherwise", of such Guarantor as of such date of
determination, as such quoted or similar terms are determined in
accordance with applicable Federal and state laws governing
determinations of the insolvency of debtors. In determining the
Adjusted Net Worth of any Guarantor for purposes of calculating the
Maximum Guaranteed Amount for such Guarantor in respect of any
Extension of Credit, the liabilities of such Guarantor to be used in
such determination pursuant to clause (ii) of the preceding sentence
shall in any event include the liabilities of such Guarantor hereunder
in respect of all Extensions of Credit other than the Extension of
Credit in respect of which such calculation is being made.
"Administrative Agent" means the administrative agent for the
Banks under this Credit Agreement as identified in the recital of
parties hereinabove, and any successors and assigns in such capacity.
"Administrative Agent's Fee Letter" means the letter agreement
dated as of February 15, 1994 between the Administrative Agent and the
Borrower, as amended, modified, supplemented or replaced from time to
time.
- 2 -
"Administrative Agent's Fees" means such term as defined in
Section 2.11(c).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct
or indirect common control with such Person. A Person shall be deemed
to control a corporation if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such
corporation or (ii) to direct or cause direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" means the agent for the Banks under this Credit Agreement
as identified in the recital of parties hereinabove, and any
successors and assigns in such capacity.
"Agents" means, collectively, the Agent, the Co-Agents and the
Administrative Agent.
"Applicable Federal Funds Rate" means, for any day, a per annum
rate equal to the sum of (i) the rate at which Federal funds are
offered to the Swingline Lender on an overnight basis as determined by
such Swingline Lender, plus (ii) one-eighth of one percent (1/8%).
"Applicable Margin" means such term as defined in Section 2.05.
"Approving Bank" means such term as defined in Section 2.01.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Base Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/16 of 1%)
equal to the greater of (a) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1% or (b) the Prime Rate in effect on such
day. If for any reason the Administrative Agent shall have determined
(which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability of the Administrative Agent to obtain
sufficient quotations in accordance with the terms hereof, the Base
Rate shall be determined without regard to clause (a) of the first
sentence of this definition until the circumstances giving rise to
such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or
the Federal Funds Effective Rate, respectively.
- 3 -
"Base Rate Loan" means a Loan which bears interest based on the
Base Rate.
"Borrower" means O&M Holding, Inc., a Virginia corporation (to be
renamed Owens & Minor, Inc. after the Initial Funding Date).
"Borrowing Base" means, at any time, the sum of 85% of Eligible
Receivables plus 50% of Eligible Inventory.
"Business Day" means any day other than a Saturday, a Sunday, a
legal holiday or a day on which banking institutions are authorized
by law or other governmental action to close in Richmond, Virginia,
Charlotte, North Carolina or New York, New York; except that in the
case of Eurodollar Loans, such day is also a day on which dealings
between banks are carried on in U.S. dollar deposits in the London
interbank market.
"Capital Expenditures" means all expenditures which in accordance
with generally accepted accounting principles would be classified as
capital expenditures, including without limitation Capitalized Leases.
"Capitalized Lease" means any lease the payments and obligations
with respect to which would be required to be capitalized in
accordance with generally accepted accounting principles.
"Cash Equivalents" means (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (ii) U.S. dollar denominated (or foreign currency fully
hedged) time deposits, certificates of deposit, Eurodollar time
deposits and Eurodollar certificates of deposit of (y) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $250,000,000 or (z) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more
than 364 days from the date of acquisition, (iii) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or
guaranteed by any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition
and (iv) repurchase agreements with a bank or trust company (including
a Bank) or a recognized securities dealer having capital and surplus
in excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America in which the Borrower shall
have a perfected first priority security interest (subject to no other
liens or encumbrances) and having, on the date of purchase thereof, a
fair market value of at least 100% of the amount of the repurchase
obligations.
- 4 -
"Change of Control" means (i) any Person or two or more Persons
acting in concert shall have acquired beneficial ownership, directly
or indirectly, of Voting Stock of the Borrower (or other securities
convertible into such Voting Stock) representing 35% or more of the
combined voting power of all Voting Stock of the Borrower, (ii) during
any period of up to 24 consecutive months, commencing after the
Closing Date, individuals who at the beginning of such 24 month period
were directors of the Borrower cease to constitute a majority of the
board of directors of the Borrower and such event is a result
(directly or indirectly) of the acquisition of 5% or more of the
combined voting power of the Voting Stock by a Person or Persons who
did not own at least 5% or more of the combined voting power of the
Voting Stock as of the Closing Date (specifically excluding for
purposes of this clause (ii) the effect of conversion of all or any
portion of the convertible preferred stock held by the Hillman family
on the Closing Date), or (iii) any Person or two or more Persons
acting in concert shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of, control over
Voting Stock of the Borrower (or other securities convertible into
such securities) representing 35% or more of the combined voting power
of all Voting Stock of the Borrower. As used herein, "beneficial
ownership" shall have the meaning provided in Rule 13d-3 of the
Securities and Exchange Commission under the Securities and Exchange
Act of 1934.
"Closing Date" means the date on which the conditions set forth
in Section 4.01 shall have been fulfilled.
"Co-Agent" means the co-agents for the Banks under this Credit
Agreement as identified and defined in the recital of the parties
hereinabove, and any successors and assigns in such capacity.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" means the commitments of the Banks to make Committed
Revolving Loans, of the Swingline Lender to make Swingline Loans and
of the Banks to purchase participation interests in the Swingline
Loans.
"Commitment Fee" means such term as defined in Section 2.11(b).
"Committed Revolving Loan" means a contractual revolving credit
loan made by the Banks pursuant to the provisions of Section 2.01.
"Committed Revolving Note" means the promissory notes of the
Borrower in favor of each of the Banks evidencing the Committed
Revolving Loans provided pursuant to Section 2.06, individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to
time.
- 5 -
"Competitive Bid" means an offer by a Bank to make a Competitive
Loan pursuant to the terms of Section 2.08.
"Competitive Bid Rate" means, as to any Competitive Bid made by a
Bank in accordance with the provisions of Section 2.08, the fixed rate
of interest offered by the Bank making the Competitive Bid.
"Competitive Bid Request" means a request by the Borrower for
Competitive Bids in accordance with the provisions of Section 2.08.
"Competitive Bid Request Fee" means the administrative fee
payable to the Administrative Agent, if any, in connection with a
Competitive Bid Request as provided in the Administrative Agent's Fee
Letter.
"Competitive Loan" means a loan made by a Bank in its discretion
pursuant to the provisions of Section 2.08.
"Competitive Loan Banks" means, at any time, those Banks which
have Competitive Loans outstanding.
"Competitive Loan Maximum Amount" means such term as defined in
Section 2.08.
"Competitive Loan Note" means the promissory notes of the
Borrower in favor of the Banks evidencing the Competitive Loans, if
any, provided pursuant to Section 2.08(h), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to
time.
"Consistent Basis" or "consistent basis" means, with regard to
the application of accounting principles, accounting principles
consistent in all material respects with the accounting principles
used and applied in preparation of the financial statements previously
delivered to the Banks and referred to in Section 5.06.
"Consolidated Borrower Group" means the Borrower and its
Restricted Subsidiaries.
"Consolidated Current Assets" means as of the date of
determination thereof the total amount of current assets of the
Borrower and its Restricted Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting
principles.
"Consolidated Current Liabilities" means as of the date of
determination thereof the total amount of current liabilities of the
Borrower and its Restricted Subsidiaries on a consolidated basis
determined in accordance with generally accepted accounting
principles.
- 6 -
"Consolidated Current Ratio" means, at any time, the ratio of
Consolidated Current Assets to Consolidated Current Liabilities.
"Consolidated Fixed Charges" means, for the applicable period
ending as of a Determination Date, the sum of (i) all Interest Expense
on all Indebtedness during such period, (ii) all Rentals (other than
Rentals on Capitalized Leases to the extent such Rentals are included
in Interest Expense or as a current maturity of a Capitalized Lease
under subsection (iii) hereof) payable during such period, (iii)
current maturities of Funded Debt and current maturities of
Capitalized Leases as of such Determination Date, and (iv) all
dividends paid in cash or property and redemptions made of capital
stock (other than dividends paid to, or redemptions of capital stock
owned by, the Borrower or a wholly-owned Restricted Subsidiary) during
such period, in each case for the Borrower and its Restricted
Subsidiaries on a consolidated basis determined in accordance with
generally accepted accounting principles.
"Consolidated Net Income" means, for the applicable period ending
as of a Determination Date, the net income of the Borrower and its
Restricted Subsidiaries for such period, determined on a consolidated
basis in accordance with generally accepted accounting principles, but
excluding for purposes of determining compliance with the Fixed Charge
Coverage Ratio in Section 6.11(d) hereof:
(a) any extraordinary gains or losses on the sale or
other disposition of assets, and any taxes on such excluded
gains and any tax deductions or credits on account of any
such excluded losses;
(b) restructuring costs associated with the
acquisition of Stuart Medical, which shall include those
costs associated with the restructuring of corporate
administrative functions, including without limitation the
closure of certain Owens & Minor, Inc. distribution
facilities, employee relocation and termination, and
writedown of certain software, in an amount not to exceed
$24,000,000 in the aggregate;
(c) the proceeds of any life insurance policy;
(d) net earnings of any business entity (other than a
Restricted Subsidiary) in which the Borrower or any
Restricted Subsidiary has an ownership interest unless such
net earnings shall have actually been received by the
Borrower or such Restricted Subsidiary in the form of cash
distributions; and
(e) any portion of the net earnings of any Restricted
Subsidiary which for any reason is unavailable for payment
of dividends to the Borrower or any other Restricted
Subsidiary.
- 7 -
"Consolidated Net Income Available for Fixed Charges" means, for
the applicable period ending as of a Determination Date, the sum of
Consolidated Net Income
plus (to the extent deducted in determining Consolidated Net
Income) (i) all provisions for any Federal, state or other income
taxes, (ii) depreciation, amortization and other non-cash
charges, including without limitation any accrual necessary for
purposes of conforming with Financial Accounting Standards Board
Statement Number 106 (as defined by generally accepted accounting
principles) to the extent that the accrued portion thereof
constitutes a non-cash charge, (iii) Interest Expense, and (iv)
all Rentals (but without duplication for the interest component
under the Capitalized Leases to the extent included in Interest
Expense),
minus (v) all Capital Expenditures,
for the Borrower and its Restricted Subsidiaries on a consolidated
basis determined in accordance with generally accepted accounting
principles.
"Consolidated Net Worth" means total stockholders' equity for the
Borrower and its Restricted Subsidiaries on a consolidated basis as
determined in accordance with generally accepted accounting
principles.
"Consolidated Tangible Net Worth" means total stockholders'
equity minus goodwill, patents, trade names, trade marks, copyrights,
franchises, organizational expense, deferred assets other than prepaid
insurance and prepaid taxes and such other assets as are properly
classified as "intangible assets", for the Borrower and its Restricted
Subsidiaries on a consolidated basis as determined in accordance with
generally accepted accounting principles.
"Consolidated Total Capitalization" means the sum of (i)
Consolidated Total Debt plus (ii) Consolidated Net Worth.
"Consolidated Total Debt" means all Indebtedness of the Borrower
and its Restricted Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles.
"Controlled Group" means (i) the controlled group of
corporations as defined in Section 414(b) of the Code and the
applicable regulations thereunder, or (ii) the group of trades or
businesses under common control as defined in Section 414(c) of the
Code and the applicable regulations thereunder, of which the Borrower
is a part or may become a part.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement and all other related agreements and documents
- 8 -
issued or delivered hereunder or thereunder or pursuant hereto or
thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Determination Date" means the last day of each quarterly fiscal
period of the Borrower.
"Disapproving Bank" means such term as defined in Section 2.01.
"Eligible Assignee" means any Bank or Affiliate or subsidiary of
a Bank; and any other commercial bank, financial institution or
"accredited investor" (as defined in Regulation D of the Securities
and Exchange Commission) with combined capital surplus in excess of
$500,000,000 reasonably acceptable to the Administrative Agent and the
Borrower.
"Eligible Inventory" means, as of any date of determination, the
aggregate net book value of all inventory of the Credit Parties on a
consolidated basis after deducting allowances or reserves relating
thereto, as shown on the books and records of such Credit Parties.
"Eligible Receivables" means as of any date of determination, the
aggregate net book value of all accounts, accounts receivable,
receivables, and obligations for payment created or arising from the
sale of inventory or the rendering of services in the ordinary course
of business (hereinafter sometimes referred to collectively as
"Receivables"), owned by or owing to the Credit Parties on a
consolidated basis after deducting allowances or reserves relating
thereto, as shown on the books and records of such Credit Parties.
"Equity Transaction" means such term as defined in Section
6.11(b).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated
and the rulings issued thereunder.
"ERISA Affiliate" means each person (as defined in Section 3(9)
of ERISA) which together with the Borrower, any Subsidiary of the
Borrower or member of the Consolidated Borrower Group would be deemed
to be a member of the same "controlled group" within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" means a Loan which bears interest based on the
Adjusted Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.
- 9 -
"Extension of Credit" means any Loan advance.
"Fed Funds Swingline Loan" means a Loan which bears interest
based on the Applicable Federal Funds Rate.
"Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight Federal funds transactions with
members of the Federal Reserve Bank of New York, or, if such rate is
not so released for any day which is a Business Day, the arithmetic
average (rounded upwards to the next 1/100th of 1%), as determined by
the Administrative Agent, of the quotations for the day of such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by it.
"Fees" means all fees payable pursuant to Section 2.11.
"Fitch" means Fitch Investors Service, Inc., and any successor
thereof.
"Fixed Charge Coverage Ratio" means the ratio of Consolidated Net
Income Available for Fixed Charges to Consolidated Fixed Charges.
"Fixed Rate Loan" means a Competitive Loan bearing interest at a
fixed percentage rate per annum as provided in accordance with the
provisions of Section 2.08.
"Funded Debt" means, for any Person, (i) all Indebtedness of such
Person for borrowed money or which has been incurred in connection
with the acquisition of assets, in each case having a final maturity
of one or more years from the date of origin thereof (or which is
renewable or extendible at the option of the obligor for a period or
periods more than one year from the date of origin), (ii) all
Capitalized Lease obligations for such Person, and (iii) all Guaranty
Obligations by such Person of Funded Debt of others. Funded Debt
shall include, without duplication, payments in respect of Funded Debt
which constitute current liabilities of the obligor under generally
accepted accounting principles.
"Generally Accepted Accounting Principles" or "generally accepted
accounting principles" means generally accepted accounting principles
at the time in the United States. Except as otherwise expressly
provided, all references to generally accepted accounting principles
shall be applied on a consistent basis.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means those corporations and entities identified as a
"Guarantor" on the signature pages hereto, being Owens & Minor, Inc.,
a Virginia corporation which is expected to change its name after the
Initial Funding Date to Owens & Minor Medical, Inc., National Medical
- 10 -
Supply Corporation, a Delaware corporation, Owens & Minor West, Inc.,
a California corporation, Koley's Medical Supply, Inc., a Nebraska
corporation, Lyons Physician Supply Company, an Ohio corporation, A.
Kuhlman & Company, a Michigan corporation, and Stuart Medical, Inc., a
Pennsylvania corporation; and each Additional Credit Party which has
executed a Joinder Agreement.
"Guaranty Obligations" means any obligations (other than
endorsements in the ordinary course of business of negotiable instru-
ments for deposit or collection) guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations of any other
Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or other obligation or any property
constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of such indebtedness or
obligation or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation
keep well agreements and capital maintenance agreements), (iii) to
lease or purchase property, securities or services primarily for the
purpose of assuring the owner of such Indebtedness or obligation, or
(iv) to otherwise assure or hold harmless the owner of such
Indebtedness or obligation against loss in respect thereof. The
amount of Guaranty Obligations hereunder shall be deemed to be an
amount equal to the stated or determinable amount of the Indebtedness
or obligation in respect of which such Guaranty Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated
amount in respect thereof (assuming such other Person is required to
perform thereunder) as determined in good faith.
"Hygeia Notes" means such term as defined in Section 7.07.
"Indebtedness" means without duplication, (i) all indebtedness
for borrowed money, (ii) the deferred purchase price of assets or
services which in accordance with generally accepted accounting
principles would be shown to be a liability (on the liability side of
a balance sheet), (iii) all Guaranty Obligations, (iv) the maximum
stated amount of all letters of credit issued or acceptance facilities
established for the account of such Person and, without duplication,
all drafts drawn thereunder (other than letters of credit (x)
supporting other Indebtedness of the Borrower or a Subsidiary or (y)
offset by a like amount of cash or government securities pledged or
held in escrow to secure such letter of credit and draws thereunder),
(v) all Capitalized Lease obligations, (vi) all Indebtedness of
another Person secured by any Lien on any property of the Borrower or
a Restricted Subsidiary, whether or not such Indebtedness has been
assumed, in an amount not to exceed the fair market value of the
property of the Borrower or Restricted Subsidiary securing such
Indebtedness, (vii) all obligations under take-or-pay or similar
arrangements or under interest rate, currency, or commodities
agreements, and (viii) indebtedness created or arising under any
conditional sale or title retention agreement; but specifically
- 11 -
excluding from the foregoing trade payables and accrued expenses
arising or incurred in the ordinary course of business.
"Initial Funding Date" means the date on which the conditions to
initial funding set forth in Section 4.02 hereof shall have been
fulfilled (or waived) and on which the initial Loan advance shall have
been made.
"Initial Interest Rate Period" means such term as defined in
Section 2.05.
"Interest Determination Date" means such term as defined in
Section 2.05.
"Interest Expense" means, for any period, all interest expense,
including the amortization of debt discount and premium and the
interest component under Capitalized Leases, determined in accordance
with generally accepted accounting principles.
"Interest Payment Date" means (i) as to Prime Loans and Fed Funds
Swingline Loans, the last day of each month, the date of repayment and
on the Termination Date and (ii) as to Eurodollar Loans and Fixed Rate
Loans, on the last day of each Interest Period for such Loan, the date
of repayment and on the Termination Date, and in addition where the
applicable Interest Period is more than 3 months, in the case of
Eurodollar Loans, then also on the date 3 months from the beginning of
the Interest Period, and each 3 months thereafter. If an Interest
Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding
Business Day, except that in the case of Eurodollar Loans where the
next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding day.
"Interest Period" means (i) as to Eurodollar Loans generally, a
period of one, two, three or six months' duration, and also as to
Eurodollar Loans of up to $25,000,000, a period of 7-days' duration
(provided that no more than one such Committed Revolving Loan with a
7-day Interest Period may be outstanding at any time), as the Borrower
may elect, commencing in each case, on the date of the borrowing
(including conversions, extensions and renewals) and (ii) as to Fixed
Rate Loans, a period beginning on the date of advance and ending on
the date specified in the respective Competitive Bid whereby the offer
to make such Fixed Rate Loan was extended, which shall be not less
than 7 days' nor more than 30 days' duration; provided, however, (A)
if any Interest Period would end on a day which is not a Business Day,
such Interest Period shall be extended to the next succeeding Business
Day (except that in the case of Eurodollar Loans where the next
succeeding Business Day falls in the next succeeding calendar month,
then on the next preceding Business Day), (B) no Interest Period shall
extend beyond the Termination Date and (C) in the case of Eurodollar
Loans, where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
- 12 -
Interest Period is to end, such Interest Period shall end on the last
day of such calendar month.
"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 6.12 hereto executed and delivered by an
Additional Credit Party in accordance with the provisions of Section
6.12.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise) or charge of any kind (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under
the Uniform Commercial Code as adopted and in effect in the relevant
jurisdiction or other similar recording or notice statute, and any
lease in the nature thereof) securing or purporting to secure any
Indebtedness.
"Loan" means a Committed Revolving Loan, a Competitive Loan
and/or Swingline Loan, as appropriate.
"Material Adverse Effect" means a material adverse effect on (i)
the operations or financial condition of the Borrower and its
Restricted Subsidiaries, or of the Borrower and its Subsidiaries, in
each case taken as a whole, (ii) the ability of the Borrower or
Guarantors to perform their respective obligations under this Credit
Agreement, or (iii) the validity or enforceability of this Credit
Agreement, or any of the other Credit Documents, in each case as to
the obligations of the Borrower or the Guarantors hereunder or
thereunder, or the rights and remedies of the Banks hereunder or
thereunder.
"Maximum Guaranteed Amount" means, for any Guarantor as of the
date of determination thereof, the sum of (i) with respect to each
Extension of Credit (or portion thereof) the proceeds of which are
used to make a Valuable Transfer to such Guarantor, the amount of such
Extension of Credit (or such portion thereof) plus (ii) with respect
to each Extension of Credit (or portion thereof) the proceeds of which
are not used to make a Valuable Transfer to such Guarantor, the lesser
of (a) the outstanding amount of such Extension of Credit (or such
portion thereof) as of such date or (b) the greater of (1) ninety-five
percent (95%) of the Adjusted Net Worth of such Guarantor at the time
of such Extension of Credit or (2) ninety-five percent (95%) of the
Adjusted Net Worth of such Guarantor at the earliest of (A) such date,
(B) the date of commencement of a case under the Bankruptcy Code in
which such Guarantor is a debtor or (C) the date enforcement of such
Guarantor's obligations under Section 3 is sought.
"Moody's" means Moody's Investors Service, Inc., and any
successor thereof.
- 13 -
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to
which any member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan
years made contributions, including for these purposes any Person
which ceased to be a member of the Controlled Group during such five
year period.
"NationsBank" means NationsBank of North Carolina, N.A. or its
successor.
"Non-Guarantor Subsidiaries" means Subsidiaries of the Borrower
which are not Guarantors, as referenced in Section 6.12.
"Note" or "Notes" means the Committed Revolving Notes, the
Competitive Loan Notes and/or the Swingline Note, individually or
collectively, as appropriate.
"Notice of Borrowing" shall have such meaning as provided in
Sections 2.02(a) and Section 2.07(b).
"Notice of Conversion" shall have such meaning as provided in
Section 2.03.
"Obligations" means, without duplication, all of the obligations
of the Borrower or other Credit Party to the Banks, the Administrative
Agent and the Co-Agents (including the obligations to pay principal of
and interest on the Loans, to pay and satisfy guaranty obligations in
respect of the Loans, to pay all Fees, to pay certain expenses and the
obligations arising in connection with various indemnities) whenever
arising, under this Credit Agreement, the Notes or any of the other
Credit Documents to which the Borrower or other Credit Party is a
party.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, and any successor thereto.
"Participation Interest" means the extension of credit by a Bank
by way of purchase of a participation hereunder in Committed Revolving
Loans as provided in Section 2.20 or in Swingline Loans as provided in
Section 2.07(b)(iii).
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
receivables owing to the Borrower or its Restricted Subsidiaries or
any of its receivables and advances to suppliers, in each case if
created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms,
(iii) subject to the limitations set out in Section 7.05(b),
investments by the Borrower and its Restricted Subsidiaries in and to
a Credit Party, including any investment in a corporation which, after
giving effect to such investment, will become an Additional Credit
Party (provided such Additional Credit Party shall execute a Joinder
- 14 -
Agreement), (iv) loans and advances in the usual and ordinary course
of business to officers, directors and employees for expenses
(including moving expenses related to a transfer) incidental to
carrying on the business of the Borrower or any Restricted Subsidiary
in an aggregate amount not to exceed $1,500,000 at any time
outstanding, (v) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business, and (vi) additional loan advances and/or investments of
a nature not contemplated by the foregoing clauses hereof, provided
that such loans, advances and/or investments made pursuant to this
clause (vi) shall not exceed $3,000,000 in aggregate amount at any
time outstanding. As used herein, "investment" means all investments,
in cash or by delivery of property made, directly or indirectly in any
Person, whether by acquisition of shares of capital stock,
indebtedness or other obligations or securities or by loan advance,
capital contribution or otherwise.
"Permitted Liens" means (i) Liens created by, under or in
connection with this Credit Agreement or the other Credit Documents in
favor of the Banks; (ii) Liens described on Schedule 7.02 attached
hereto; (iii) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith by appropriate proceedings for which
adequate reserves determined in accordance with generally accepted
accounting principles have been established (and as to which the
property subject to such lien is not yet subject to foreclosure, sale
or loss on account thereof); (iv) Liens in respect of property imposed
by law arising in the ordinary course of business such as
materialmen's, mechanics', warehousemen's and other like Liens
provided that such Liens secure only amounts not more than 30 days
past due or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
generally accepted accounting principles have been established (and as
to which the property subject to such lien is not yet subject to
foreclosure, sale or loss on account thereof); (v) pledges or deposits
made to secure payment of worker's compensation insurance,
unemployment insurance, pensions or social security programs; (vi)
Liens arising from good faith deposits in connection with or to secure
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-
money bonds and other similar obligations incurred in the ordinary
course of business (other than obligations in respect of the payment
of borrowed money); (vii) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or irregularities in
title and other similar charges or encumbrances not, in any material
respect, impairing the use of such property for its intended purposes
or interfering with the ordinary conduct of business of the Borrower
and its Subsidiaries taken as a whole; (viii) Liens regarding
operating or financing leases permitted by this Credit Agreement; (ix)
leases or subleases granted to others in the ordinary course of
business not interfering in any material respect with the business or
- 15 -
operations of the Borrower or its Subsidiaries; (x) purchase money
Liens securing purchase money indebtedness to the extent permitted
under Section 7.01; (xi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs
duties in connection with the importation of goods; and (xii) any
judgment lien which does not create an Event of Default under Section
8.01(h) of this Credit Agreement.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated), or any government or
political subdivision or any agency, department or instrumentality
thereof.
"Plan" means any single-employer plan as defined in Section 4001
of ERISA, which is maintained, or at any time during the five calendar
years preceding the date of this Credit Agreement was maintained, for
employees of the Borrower, any Subsidiary or an ERISA Affiliate.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect
at its principal office in Charlotte, North Carolina; each change in
the Prime Rate shall be effective on the date such change is publicly
announced as effective. The Prime Rate is not necessarily the best or
lowest rate offered by NationsBank.
"Ratings Services" means such term as defined in Section 2.05.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve
requirements.
"Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin
requirements.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin
requirements.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin
requirements.
"Rentals" means, as of the date of determination thereof, all
fixed payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or
surrender of the leased property) payable by a Person, as lessee or
- 16 -
sublessee under a lease of real or personal property, but shall be
exclusive of any amounts required to be paid by such Person (whether
designated as rents or additional rents) on account of maintenance,
repairs, insurance, taxes and similar charges. Fixed rents under any
so-called "percentage leases" shall be computed solely on the basis of
the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Required Banks" means Banks holding in the aggregate at least
51% of the Commitments (other than with respect to Swingline Loans)
or, if the aggregate Commitments have been terminated, Banks in the
aggregate holding at least 51% of the principal amount of the Loans
then outstanding (provided that in the case of Swingline Loans, where
a Mandatory Borrowing cannot be made and the Banks shall have
purchased a participation interest in the Swingline Loans in
accordance with the provisons of Section 2.07(b)(iii), for purposes of
determining the aggregate amount of Loans owing to each Bank
hereunder, such Bank's funded participation interest in the Swingline
Loans shall be considered as if it were a direct loan and not a
participation interest, and the aggregate amount of Swingline Loans
owing to the Swingline Lender shall be reduced by the amount of such
funded participation interests).
"Responsible Officer" means, with respect to the subject matter
of any representation, warranty, covenant, agreement, obligation or
certificate of any Credit Party contained in or delivered pursuant to
any of the Credit Documents, the President, any Executive Vice
President, Senior Vice President, Vice President, Chief Financial
Officer, Treasurer, Controller, or any other officer of the
Consolidated Borrower Group who in the normal performance of his
operational responsibilities would have knowledge of such matter and
the requirements with respect thereto.
"Restricted Subsidiary" means any Subsidiary (i) which is
organized under the laws of the United States or any State thereof;
(ii) which conducts substantially all of its business and has
substantially all of its assets within the United States; and (iii) of
which more than 50% (by number of votes) of the Voting Stock is
beneficially owned, directly or indirectly, by the Borrower.
"Revolving Committed Amount" means collectively the aggregate
amount of all of the Banks' commitments, and individually the amount
of each such Bank's commitment to make Committed Revolving Loans
specified in Schedule 2.01, as such amounts may from time to time be
reduced in accordance with the provisions of Sections 2.10 and 2.12(b)
hereof.
"S&P" means Standard & Poor's Corporation, and any successor
thereof.
"Stuart Medical" means Stuart Medical, Inc., a Pennsylvania
corporation.
"Subordinated Debt" means such term as defined in Section 7.07.
- 17 -
"Subsidiary" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time
owned by such Person directly or indirectly through Subsidiaries, and
(ii) any partnership, association, joint venture or other entity in
which such person directly or indirectly through Subsidiaries has more
than 50% equity interest at any time. Except as otherwise expressly
provided, all references herein to "Subsidiary" shall mean a
Subsidiary of the Borrower.
"Swingline Committed Amount" means the amount of the Swingline
Lender's commitment to make Swingline Loans as specified in Section
2.07(a), as such amount may from time to time be reduced in accordance
with the provisions of Section 2.10 hereof.
"Swingline Lender" means NationsBank, or such other Bank as the
Borrower has requested and as to which such requested successor
Swingline Lender and the Required Banks may agree, and their
respective successors and assigns. There shall be no more than one
Swingline Lender at any time.
"Swingline Loan" means a swingline revolving credit loan made by
the Swingline Lender pursuant to the provisions of Section 2.07.
"Swingline Note" means the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans as
provided pursuant to Section 2.07(d), as such promissory note may be
amended, modified, supplemented, extended, renewed or replaced from
time to time.
"Taxes" shall have such meaning as provided in Section 2.16.
"Termination Date" means such term as defined in Section 2.01,
being initially April 29, 1999.
"Threshold Requirement" means such term as defined in Section
6.12.
"Upfront Fee" means such term as defined in Section 2.11(a).
"Valuable Transfer" means, in respect of any Guarantor, (i) all
loans, advances or capital contributions made to or for the benefit of
such Guarantor with proceeds of Extensions of Credit, (ii) all debt
securities or other obligations of such Guarantor acquired from such
Guarantor or retired by such Guarantor with proceeds of Extensions of
Credit, (iii) the fair market value of all property acquired with
proceeds of Extensions of Credit and transferred, absolutely and not
as collateral, to such Guarantor and (iv) all equity securities of
such Guarantor acquired from such Guarantor with proceeds from
Extensions of Credit.
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"Voting Stock" means the voting stock or other securities of any
class or classes, the holders of which are ordinarily, in the absence
of contingencies, entitled to elect a majority of the corporate
directors (or Persons performing similar functions).
1.02 Computation of Time Periods. For purposes of computation of
periods of time hereunder, the word "from" means "from and including" and
the words "to" and "until" each mean "to but excluding."
1.03 Accounting Terms. Accounting terms used but not otherwise
defined herein shall have the meanings provided by, and be construed in
accordance with, generally accepted accounting principles. References
herein to "consolidating" financial statements shall mean and include
financial statements for each business segment of the subject Person.
SECTION 2
CREDIT FACILITIES
2.01 Revolving Loan Commitment. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein set
forth, each Bank severally agrees, from time to time from the Initial
Funding Date until April 29, 1999 (such date, as extended, if extended, in
the sole discretion of the Banks as hereinafter provided, is hereinafter
referred to as the "Termination Date") to make revolving credit loans (each
a "Committed Revolving Loan" and, collectively, the "Committed Revolving
Loans") to the Borrower for the purposes hereinafter set forth; provided,
however, that (i) with regard to the Banks collectively, the amount of
Committed Revolving Loans outstanding shall not at any time exceed THREE
HUNDRED FIFTY MILLION DOLLARS ($350,000,000) in the aggregate (as such
aggregate maximum amount may be reduced from time to time as hereinafter
provided, the "Revolving Committed Amount"), and (ii) with regard to each
Bank individually, each such Bank's pro rata share of outstanding Committed
Revolving Loans shall not at any time exceed such Bank's Revolving
Committed Amount; and provided, further, that notwithstanding anything
herein to the contrary, the sum of Committed Revolving Loans plus Swingline
Loans plus Competitive Loans shall not at any time exceed the lesser of the
aggregate Revolving Committed Amount or the Borrowing Base. Committed
Revolving Loans hereunder may consist of Base Rate Loans or Eurodollar
Loans (or a combination thereof) as the Borrower may request, and may be
repaid and reborrowed in accordance with the provisions hereof. The
Borrower may, not more than 90 days but not less than 60 days prior to the
third anniversary date of the Closing Date and each anniversary date
thereafter, by notice to the Administrative Agent, make written request of
the Banks to extend the Termination Date for an additional period of one
year. The Administrative Agent will give prompt notice to each of the
Banks of its receipt of any such request for extension of the Termination
Date. Each Bank shall make a determination not later than 30 days prior to
the then applicable anniversary date as to whether or not it will agree to
extend the Termination Date as requested; provided, however, that failure
by any Bank to make a timely response to the Borrower's request for
extension of the Termination Date shall be deemed to constitute a refusal
- 19 -
by the Bank to extend the Termination Date. If, in response to a request
for an extension of the Termination Date, one or more Banks shall fail to
agree to the requested extension (the "Disapproving Banks"), then provided
that the requested extension is approved by Banks holding at least 75% of
the Commitments hereunder (the "Approving Banks"), the Borrower may, at its
own expense with the assistance of the Administrative Agent, within a
period of 30 days thereafter, make arrangements for another bank or
financial institution agreeable to the extension of such Termination Date
and reasonably acceptable to the Administrative Agent, to acquire, in whole
or in part, the Loans and Commitments of the Disapproving Banks, whereupon
after giving effect to the assignment of the Disapproving Banks' Loans and
Commitments in accordance with the terms hereof the Termination Date shall
be extended and the credit facility continued hereunder at existing levels.
If on the other hand the Borrower is unable to make arrangements for the
replacement of the Disapproving Banks in accordance with the terms hereof,
then the Borrower shall have the option of (i) continuing the credit
facility hereunder at existing levels until the Termination Date then in
effect without extension, or (ii) upon payment to the Disapproving Banks of
the amount of Loans and other amounts owing to them and termination of
their Commitments hereunder, extending and continuing the credit facility
hereunder at a lower aggregate amount equal to the Commitments held by the
Approving Banks until the new Termination Date as extended. Where any such
arrangements are made for another bank or financial institution to acquire
the Loans and Commitments of a Disapproving Bank, or any portion thereof,
then upon payment of the Loans and other amounts owing to it and
termination of its Commitments relating thereto, such Disapproving Bank
shall promptly transfer and assign, in whole or in part, as requested,
without recourse (in accordance with and subject to the provisions of
Section 10.03), all or part of its interests, rights and obligations under
this Credit Agreement to such bank or financial institution which shall
assume such assigned obligations and become a "Bank" under this Credit
Agreement (which assignee may be another Bank, if a Bank accepts such
assignment); provided, that such assignment shall not conflict with any
law, rule or regulation or order of any court or other Governmental
Authority.
2.02 Committed Revolving Loan Advances.
(a) Notices. Whenever the Borrower desires a Committed
Revolving Loan advance hereunder, it shall give written notice
(or telephone notice promptly confirmed in writing) to the
Administrative Agent (a "Notice of Borrowing") not later than
10:00 A.M. (Charlotte, North Carolina time) on the Business Day
of the requested advance in the case of Base Rate Loans and on
the third Business Day prior to the requested advance in the case
of Eurodollar Loans. Each such notice shall be irrevocable and
shall specify (i) that a Committed Revolving Loan is requested,
(ii) the date of the requested advance (which shall be a Business
Day), (iii) the aggregate principal amount of Committed Revolving
Loans requested, and (iv) whether the Loan requested shall
consist of Base Rate Loans, Eurodollar Loans or a combination
thereof, and if Eurodollar Loans are requested, the Interest
Periods with respect thereto. If the Borrower shall fail to
specify in any Notice of Borrowing (A) an applicable Interest
- 20 -
Period in the case of a Eurodollar Loan, then such notice shall
be deemed to be a request for an Interest Period of one month, or
(B) the type of Committed Revolving Loan requested, then such
notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Administrative Agent shall as promptly as
practicable give each Bank notice of each requested Committed
Revolving Loan advance, of such Bank's pro rata share thereof and
of the other matters covered in the Notice of Borrowing.
(b) Minimum Amounts. Committed Revolving Loan advances
shall be in a minimum aggregate amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof.
(c) Advances. Each Bank will make its pro rata share of
each Committed Revolving Loan advance available to the
Administrative Agent by 2:00 P.M. (Charlotte, North Carolina
time) on the date specified in the Notice of Borrowing by deposit
in U.S. dollars of immediately available funds at the offices of
the Administrative Agent in Charlotte, North Carolina, or at such
other address in the United States as the Administrative Agent
may designate in writing. All Committed Revolving Loan advances
shall be made by the Banks pro rata on the basis of each Bank's
respective share of the aggregate Revolving Committed Amount. No
Bank shall be responsible for the failure or delay by any other
Bank in its obligation to make Committed Revolving Loan advances
hereunder; provided, however, that the failure of any Bank to
fulfill its commitments hereunder shall not relieve any other
Bank of its commitments hereunder. Unless the Administrative
Agent shall have been notified by any Bank prior to the date of
any such Committed Revolving Loan advance that such Bank does not
intend to make available to the Administrative Agent its portion
of the Committed Revolving Loan advance to be made on such date,
the Administrative Agent may assume that such Bank has made such
amount available to the Administrative Agent on the date of such
Committed Revolving Loan advance, and the Administrative Agent,
in reliance upon such assumption, may (in its sole discretion
without any obligation to do so) make available to the Borrower a
corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by a Bank, the
Administrative Agent shall be entitled to recover such
corresponding amount from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent will promptly
notify the Borrower and the Borrower shall immediately pay such
corresponding amount to the Administrative Agent. The
Administrative Agent shall also be entitled to recover from such
Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative
Agent to the Borrower to the date such corresponding amount is
recovered by the Administrative Agent, at a per annum rate equal
to (i) if paid by such Bank, within two (2) Business Days of
making such corresponding amount available to the Borrower, the
overnight Federal Funds Effective Rate, and thereafter the Base
- 21 -
Rate, and (ii) if paid by the Borrower, the then applicable rate
calculated in accordance with Section 2.05.
2.03 Conversion. The Borrower shall have the option, on any Business
Day, to extend existing Committed Revolving Loans into a subsequent
Interest Period or to convert Committed Revolving Loans into Committed
Revolving Loans of another type; provided, however, that (i) except as
provided in Section 2.13(iii), Eurodollar Loans may be converted into
Committed Revolving Loans of another type only on the last day of an
Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Committed Revolving Loans may be converted into Eurodollar Loans, only
if no Default or Event of Default is in existence on the date of extension
or conversion, (iii) Committed Revolving Loans extended as, or converted
into, Eurodollar Loans shall be in such minimum amounts as provided in
Section 2.02(b), and (iv) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be
deemed to be a request for an Interest Period of one month. Each such
extension or conversion shall be effected by the Borrower by giving written
notice (or telephone notice promptly confirmed in writing) to the
Administrative Agent (including requests for extensions and renewals, a
"Notice of Conversion") prior to 10:00 A.M. (Charlotte, North Carolina
time) on the Business Day of, in the case of Base Rate Loans, and on the
third Business Day prior to, in the case of Eurodollar Loans, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Committed Revolving Loans to be so extended or
converted, the types of Committed Revolving Loans into which such Committed
Revolving Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or
conversion shall be deemed to be a reaffirmation by the Borrower that no
Default or Event of Default then exists and is continuing and that the
representations and warranties set forth in Section 5 are true and correct
in all material respects (except to the extent they relate to an earlier
period). In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any
such conversion or extension is not permitted or required by this Section,
then such Committed Revolving Loans shall be automatically converted into
Base Rate Loans at the end of their Interest Period. The Administrative
Agent shall give each Bank notice as promptly as practicable of any such
proposed conversion affecting any Committed Revolving Loans.
2.04 Repayment of the Committed Revolving Loans. The Committed
Revolving Loans shall be due and payable in full on the Termination Date.
2.05 Interest on Committed Revolving Loans. The Committed Revolving
Loans shall bear interest at a per annum rate equal to:
(a) Base Rate Loans. During such periods as Committed
Revolving Loans shall consist of Base Rate Loans, the sum of the
Base Rate plus the Applicable Margin; and
(b) Eurodollar Loans. During such periods as Committed
Revolving Loans shall consist of Eurodollar Loans, the sum of the
Adjusted Eurodollar Rate plus the Applicable Margin;
- 22 -
provided, however, that from and after any failure to make any payment of
principal or interest in respect of any of the Loans hereunder when due,
whether at scheduled or accelerated maturity or on account of any mandatory
prepayment, the principal of and, to the extent permitted by law, interest
on, the Committed Revolving Loans shall bear interest, payable on demand,
at a per annum rate two percent (2%) in excess of the rate otherwise
applicable hereunder. Interest on Committed Revolving Loans shall be
payable in arrears on each Interest Payment Date. As used herein
"Applicable Margin" means from the Closing Date until the Interest
Determination Date occurring after September 30, 1994 (the "Initial
Interest Rate Period"), seven-eighths percent (.875%) in the case of
Eurodollar Loans and Fed Funds Swingline Loans and zero percent (0%) in the
case of Base Rate Loans, and on Interest Determination Dates occurring
after the Initial Interest Rate Period:
Applicable Margin
Consolidated Total Debt Eurodollar Loan
to Consolidated Total and Fed Funds
Ratings Capitalization Ratio Swingline Loan Base Rate Loan
BB/Ba2 >=55% 1.250% .25%
BB+/Ba1 <55% but >=50% .875% 0%
BBB-/Baa3 <50% but >=45% .750% 0%
BBB/Baa2 <45% but >=40% .625% 0%
BBB+/Baa1 <40% .500% 0%
The appropriate Applicable Margin shall be determined based on the
Borrower's unsecured senior long term debt rating as determined by Moody's,
S&P and Fitch (collectively, the "Ratings Services"). If two or more of
the Ratings Services have rated the Borrower's unsecured senior long term
debt, the Applicable Margin shall be determined by taking the lower of the
two such highest ratings. If only one or none of the Ratings Services have
rated the Borrower's unsecured senior long term debt, the appropriate
Applicable Margin shall be determined based on the Borrower's Consolidated
Total Debt to Consolidated Total Capitalization Ratio. Where the
Applicable Margin is determined based on the Consolidated Total Debt to
Consolidated Total Capitalization Ratio, the appropriate Applicable Margin
shall be determined and adjusted quarterly 45 days after the end of each of
the Borrower's fiscal quarters (an "Interest Determination Date") upon
receipt of, and based on, the company-prepared quarterly financial
statements delivered in accordance with provisions of Section 6.01(b), such
Applicable Margin to be effective from such Interest Determination Date
until the next such quarterly Interest Determination Date.
2.06 Committed Revolving Notes. Committed Revolving Loans by each
Bank shall be evidenced by a duly executed promissory note of the Borrower
to each such Bank dated as of the Closing Date in an original principal
amount equal to such Bank's Revolving Committed Amount and substantially in
the form of Schedule 2.06 (such promissory note, as amended, modified,
extended, renewed or replaced from time to time is hereinafter referred to
individually as a "Committed Revolving Note" and collectively as the
"Committed Revolving Notes").
2.07 Swingline Loan Subfacility.
- 23 -
(a) Swingline Commitment. Subject to and upon the terms and
conditions and relying upon the representations and warranties herein
set forth, the Swingline Lender, in its individual capacity, agrees to
make certain revolving credit loans to the Borrower (each a "Swingline
Loan" and, collectively, the "Swingline Loans") from time to time from
the Initial Funding Date until the Termination Date for the purposes
hereinafter set forth; provided, however, (i) the aggregate amount of
Swingline Loans outstanding at any time shall not exceed TWENTY-FIVE
MILLION DOLLARS ($25,000,000) (the "Swingline Committed Amount"), and
(ii) the sum of Committed Revolving Loans plus Swingline Loans plus
Competitive Loans outstanding at any time shall not exceed the lesser
of the Revolving Committed Amount or the Borrowing Base. Swingline
Loans hereunder may consist of Base Rate Loans or Fed Funds Swingline
Loans (or a combination thereof) as the Borrower may request, and may
be repaid and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires a
Swingline Loan advance hereunder it shall give written notice (or
telephone notice promptly confirmed in writing) to the Swingline
Lender and to the Administrative Agent (not later than 11:00 a.m.
(Charlotte, North Carolina time) on the Business Day of the
requested Swingline Loan advance. Each such notice shall be
irrevocable and shall specify (A) that a Swingline Loan advance
is requested, (B) the date of the requested Swingline Loan
advance (which shall be a Business Day), (C) the aggregate
principal amount of the Swingline Loan advance requested and (D)
whether the Swingline Loan shall consist of Base Rate Loans, Fed
Funds Swingline Loans or a combination thereof. The Swingline
Lender shall initiate the transfer of funds representing the
Swingline Loan advance to the Borrower by 1:30 p.m. (Charlotte,
North Carolina time) on the Business Day specified by the
Borrower in the applicable Notice of Borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance shall be
in a minimum principal amount of $250,000 and integral multiples
of $100,000 in excess thereof.
(iii) Repayment of Swingline Loans. Each Swingline Loan
advance shall be due and payable on the earliest of (A) 30 days
from the date of advance thereof, (B) the date of the next
Committed Revolving Loan advance or Competitive Loan advance
hereunder, if sooner, or (C) the Termination Date. If, and to
the extent, any Swingline Loan advances shall be outstanding on
the date of any Committed Revolving Loan advance or any
Competitive Loan advance, such Swingline Loans shall first be
repaid from the proceeds of such Committed Revolving Loan advance
or Competitive Loan advance prior to distribution to the
Borrower. If, and to the extent, Committed Revolving Loans or
Competitive Loans are not requested prior to the Termination Date
or the end of any such 30 day period from the date of any such
Swingline Loan advance, the Borrower shall be deemed to have
requested a Committed Revolving Loan comprised solely of Base
- 24 -
Rate Loans in the amount of such Swingline Loan advance then
outstanding, the proceeds of which shall be used to repay the
Swingline Lender for such Swingline Loan. In addition, the
Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Administrative Agent,
demand repayment of its Swingline Loans by way of a Committed
Revolving Loan advance, in which case the Borrower shall be
deemed to have requested a Committed Revolving Loan advance
comprised solely of Base Rate Loans in the amount of such
Swingline Loans; provided, however, that any such demand shall be
deemed to have been given one Business Day prior to the
Termination Date and upon the occurrence of any Event of Default
described in Section 8.01(f) and also upon acceleration of the
Obligations hereunder, whether on account of an Event of Default
described in Section 8.01(f) or any other Event of Default, and
the exercise of remedies in accordance with the provisions of
Section 8.02 hereof (each such Committed Revolving Loan advance
made on account of any such deemed request therefor as provided
herein being hereinafter referred to as a "Mandatory Borrowing").
Each Bank hereby irrevocably agrees to make such Committed
Revolving Loans promptly upon any such request or deemed request
on account of each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the same such
date notwithstanding (I) the amount of Mandatory Borrowing may
not comply with the minimum amount for advances of Committed
Revolving Loans otherwise required hereunder, (II) whether any
conditions specified in Section 2.09 are then satisfied, (III)
whether a Default or an Event of Default then exists, (IV)
failure for any such request or deemed request for Committed
Revolving Loan to be made by the time otherwise required in
Section 2.02(a), (V) the date of such Mandatory Borrowing, or
(VI) any reduction in the Revolving Committed Amount or
termination of the Commitments relating thereto immediately prior
to such Mandatory Borrowing or contemporaneous therewith. In the
event that any Mandatory Borrowing cannot for any reason be made
on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under
the Bankruptcy Code with respect to the Borrower or any other
Credit Party), then each Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such
purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each
such Bank to share in such Swingline Loans ratably based upon its
respective Revolving Loan Commitment (determined before giving
effect to any termination of the Commitments pursuant to Section
8.02), provided that (A) all interest payable on the Swingline
Loans shall be for the account of the Swingline Lender until the
date as of which the respective participation is purchased, and
(B) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Bank shall be required
to pay to the Swingline Lender interest on the principal amount
of participation purchased for each day from and including the
- 25 -
day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2)
Business Days of the date of the Mandatory Borrowing, the Federal
Funds Effective Rate, and thereafter at a rate equal to the Base
Rate.
(c) Interest on Swingline Loans. Swingline Loans shall bear
interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as a
Swingline Loan shall consist of Base Rate Loans, the sum of
the Base Rate plus the Applicable Margin; and
(ii) Fed Funds Swingline Loans. During such period as
a Swingline Loan shall consist of Fed Funds Swingline Loans,
the sum of the Applicable Federal Funds Rate plus the
Applicable Margin;
provided, however, that from and after any failure to make any payment
of principal or interest in respect of any of the Loans hereunder when
due, whether at scheduled or accelerated maturity or on account of any
mandatory prepayment, the principal of and, to the extent permitted by
law, interest on, Swingline Loans shall bear interest, payable on
demand, at a per annum rate two percent (2%) in excess of the rate
otherwise applicable hereunder. Interest on Swingline Loans shall be
payable in arrears on each Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by a
duly executed promissory note of the Borrower to the Swingline Lender
dated as of the Closing Date in the original amount of the Swingline
Committed Amount and substantially in the form of Schedule 2.07(d) (as
amended, modified, supplemented, extended, renewed or replaced from
time to time, the "Swingline Note").
2.08 Competitive Loan Subfacility.
(a) Competitive Loans. Subject to the terms and conditions
and relying upon the representations and warranties herein set
forth, from such time as the Borrower shall have attained, and
for so long as the Borrower shall maintain, a ratio of
Consolidated Total Debt to Consolidated Total Capitalization of
less than .45:1.0 for two consecutive fiscal quarters, the
Borrower may, from time to time from the Initial Funding Date
(for so long as the Borrower shall maintain such ratio of
Consolidated Total Debt to Consolidated Total Capitalization
required hereby) until the earlier of the Termination Date or the
termination of the Commitments hereunder, request and each Bank
may, in its sole discretion, agree to make Competitive Loans to
the Borrower; provided, however, (i) the aggregate amount of
Competitive Loans shall not at any time exceed the lesser of
THREE HUNDRED FIFTY MILLION DOLLARS ($350,000,000) or the
Revolving Committed Amount (the "Competitive Loan Maximum
Amount"), and (ii) the sum of Committed Revolving Loans plus
- 26 -
Swingline Loans plus Competitive Loans shall not at any time
exceed the lesser of the aggregate Revolving Committed Amount or
the Borrowing Base. Each Competitive Loan shall be comprised
entirely of Fixed Rate Loans. Each Competitive Loan shall be not
less than $5,000,000 in the aggregate and integral multiples of
$1,000,000 in excess thereof (or the remaining portion of the
Competitive Loan Maximum Amount, if less).
(b) Competitive Bid Requests. The Borrower may solicit
Competitive Bids by delivery of a Competitive Bid Request
substantially in the form of Schedule 2.08(b) to the
Administrative Agent by 12:00 noon (Charlotte, North Carolina
time) on a Business Day not less than three (3) nor more than ten
(10) Business Days prior to the date of a requested Competitive
Loan advance. A Competitive Bid Request shall specify (i) the
date of the requested Competitive Loan advance (which shall be a
Business Day), (ii) the amount of the requested Competitive Loan
advance and (iii) the applicable Interest Periods requested and
shall be accompanied by payment of the Competitive Bid Request
Fee, if any. The Administrative Agent shall notify the Banks of
its receipt of a Competitive Bid Request and the contents thereof
and invite the Banks to submit Competitive Bids in response
thereto. A form of such notice is provided in Schedule 2.08(b)-
2. No more than three Competitive Bid Requests (e.g., the
Borrower may request Competitive Bids for no more than three
different Interest Periods at a time) shall be submitted at any
one time and Competitive Bid Requests may be made no more
frequently than once every ten (10) Business Days.
(c) Competitive Bid Procedure. Each Bank may, in its sole
discretion, make one or more Competitive Bids to the Borrower in
response to a Competitive Bid Request. Each Competitive Bid must
be received by the Administrative Agent not later than 10:00 a.m.
(Charlotte, North Carolina time) on the proposed date of a
Competitive Loan advance; provided, however, that should the
Administrative Agent, in its capacity as a Bank, desire to submit
a Competitive Bid it shall notify the Borrower of its Competitive
Bid and the terms thereof not later than 9:30 A.M. (Charlotte,
North Carolina time) on the proposed date of a Competitive Loan
advance. A Bank may offer to make all or part of the requested
Competitive Loan advance and may submit multiple Competitive Bids
in response to a Competitive Bid Request. The Competitive Bid
shall specify (i) the particular Competitive Bid Request as to
which the Competitive Bid is submitted, (ii) the minimum (which
shall be not less than $1,000,000 and integral multiples of
$500,000 in excess thereof) and maximum principal amounts of the
requested Competitive Loan or Loans as to which the Bank is
willing to make, and (iii) the applicable interest rate or rates
and Interest Period or Periods therefor. A form of such
Competitive Bid is provided in Schedule 2.08(c). A Competitive
Bid submitted by a Bank in accordance with the provisions hereof
shall be irrevocable. The Administrative Agent shall promptly
notify the Borrower of all Competitive Bids made and the terms
thereof. The Administrative Agent shall send a copy of each of
- 27 -
the Competitive Bids to the Borrower for its records as soon as
practicable.
(d) Acceptance of Competitive Bids. The Borrower may, in
its sole and absolute discretion, subject only to the provisions
of this subsection (d), accept or refuse any Competitive Bid
offered to it. To accept a Competitive Bid, the Borrower shall
give written notification (or telephone notice promptly confirmed
in writing) of its acceptance of any or all such Competitive Bids
to the Administrative Agent by 11:00 A.M. (Charlotte, North
Carolina time) on the proposed date of a Competitive Loan
advance; provided, however, (i) the failure by the Borrower to
give timely notice of its acceptance of a Competitive Bid shall
be deemed to be a refusal thereof, (ii) the Borrower may accept
Competitive Bids only in ascending order of rates, (iii) the
aggregate amount of Competitive Bids accepted by the Borrower
shall not exceed the principal amount specified in the
Competitive Bid Request, (iv) the Borrower may accept a portion
of a Competitive Bid in the event, and to the extent, acceptance
of the entire amount thereof would cause the Borrower to exceed
the principal amount specified in the Competitive Bid Request,
subject however to the minimum amounts provided herein (and
provided that where two or more such Banks may submit such a
Competitive Bid at the same such Competitive Bid Rate, then pro
rata between or among such Banks) and (v) no bid shall be
accepted for a Competitive Loan unless such Competitive Loan is
in a minimum principal amount of $1,000,000 and integral
multiples of $500,000 in excess thereof, except that where a
portion of a Competitive Bid is accepted in accordance with the
provisions of subsection (iv) hereof, then in a minimum principal
amount of $100,000 and integral multiples thereof (but not in any
event less than the minimum amount specified in the Competitive
Bid), and in calculating the pro rata allocation of acceptances
of portions of multiple bids at a particular Competitive Bid Rate
pursuant to subsection (iv) hereof, the amounts shall be rounded
to integral multiples of $100,000 in a manner which shall be in
the discretion of the Borrower. A notice of acceptance of a
Competitive Bid given by the Borrower in accordance with the
provisions hereof shall be irrevocable. The Administrative Agent
shall, not later than 12:00 noon (Charlotte, North Carolina time)
on the proposed date of a Competitive Loan advance, notify each
bidding Bank whether or not its Competitive Bid has been accepted
(and if so, in what amount and at what Competitive Bid Rate), and
each successful bidder will thereupon become bound, subject to
the other applicable conditions hereof, to make the Competitive
Loan in respect of which its bid has been accepted.
(e) Funding of Competitive Loans. Each Bank which is to
make a Competitive Loan shall make its Competitive Loan advance
available to the Administrative Agent by 1:30 P.M. (Charlotte,
North Carolina time) on the date specified in the Competitive Bid
Request by deposit in U.S. dollars of immediately available funds
at the office of the Administrative Agent in Charlotte, North
Carolina, or at such other address as the Administrative Agent
- 28 -
may designate in writing, as provided in Section 2.02(c). The
Administrative Agent will, upon receipt thereof by such time,
initiate the transfer of funds representing such Competitive
Loans to the Borrower by 2:30 p.m. (Charlotte, North Carolina
time) on the same such date specified in the Competitive Bid
Request.
(f) Maturity of Competitive Loans. Each Competitive Loan
shall mature and be due and payable in full on the last day of
the Interest Period applicable thereto. Unless the Borrower
shall give notice to the Administrative Agent otherwise, the
Borrower shall be deemed to have requested a Committed Revolving
Loan advance in the amount of the maturing Competitive Loan, the
proceeds of which will be used to repay such Competitive Loan.
(g) Interest on Competitive Loans. The Competitive Loans
shall bear interest in each case at the Competitive Bid Rate
applicable thereto; provided, however, that from and after any
failure to make any payment of principal or interest in respect
of the Loans hereunder when due, whether at scheduled or
accelerated maturity or on account of any mandatory prepayment,
the principal of and, to the extent permitted by law, interest
on, each Competitive Loan shall bear interest, payable on demand,
at a per annum rate two percent (2%) in excess of the Base Rate.
(h) Competitive Loan Notes. The Competitive Loans shall be
evidenced by a duly executed promissory note of the Borrower to
each Bank dated as of the Closing Date in an original principal
amount equal to the Competitive Loan Maximum Amount and
substantially in the form of Schedule 2.08(h) (such promissory
note, as amended, modified, extended, renewed or replaced from
time to time is hereinafter referred to individually as a
"Competitive Loan Note" and collectively as the Competitive Loan
Notes").
2.09 Conditions of Lending.
(a) Conditions. The obligation to make any Extension of
Credit hereunder is subject to satisfaction of the following
conditions:
(i) receipt of a Notice of Borrowing pursuant to Section
2.02(a) or 2.07(b)(i) or Competitive Bid Request pursuant to
Section 2.08;
(ii) the representations and warranties set forth in
Section 5 hereof shall be true and correct in all material
respects as of such date (except for those which expressly
relate to an earlier date);
(iii) immediately after giving effect to the requested
Extension of Credit, (A) with regard to each Bank
individually, the Bank's pro rata share of the outstanding
Committed Revolving Loans and Swingline Loans shall not
- 29 -
exceed such Bank's Revolving Committed Amount, and (B) with
regard to the Banks collectively, (I) the sum of Committed
Revolving Loans plus Swingline Loans plus Competitive Loans
then outstanding shall not exceed the lesser of the
aggregate Revolving Committed Amount or the Borrowing Base,
(II) the aggregate amount of Swingline Loans shall not
exceed the Swingline Committed Amount, and (III) the
aggregate amount of Competitive Loans shall not exceed the
Competitive Loan Maximum Amount; and
(iv) no Default or Event of Default shall exist and be
continuing either prior to or after giving effect thereto.
(b) Reaffirmation. Each request for a Committed Revolving
Loan advance or Swingline Loan advance pursuant to a Notice of
Borrowing or a Notice of Conversion and for Competitive Bid
pursuant to a Competitive Bid Request shall be deemed to be
representation and warranty by the Borrower of the correctness of
the matters specified in this subsections (a)(ii), (iii) and (iv)
hereof.
2.10 Termination of Commitments. The Borrower may from time to time
permanently terminate the Revolving Committed Amount and/or the Swingline
Committed Amount in whole or in part (in minimum aggregate amounts of
$5,000,000 and integral multiples of $1,000,000 in excess thereof) upon 3
Business Days' prior written notice to the Administrative Agent and, in the
case of a reduction in the Swingline Commitment, also to the Swingline
Lender.
2.11 Fees.
(a) Upfront Fee. The Borrower agrees to pay in immediately
available funds to the Administrative Agent for the benefit of
the Banks on or before the Closing Date an upfront fee (the
"Upfront Fee") in the amounts provided in the Administrative
Agent's Fee Letter between the Borrower and the Administrative
Agent.
(b) Commitment Fees. In consideration for the Commitments
by the Banks hereunder, the Borrower agrees to pay to the
Administrative Agent quarterly in arrears on the 15th day
following the last day of each of the Borrower's fiscal quarters
for the ratable benefit of the Banks a commitment fee (the
"Commitment Fee") of (i) from the Closing Date until the Initial
Funding Date, one-eighth of one percent (1/8%) per annum, and
(ii) from the Initial Funding Date and thereafter, one-fourth of
one percent (1/4%) per annum, on the average daily unused amount
of the Revolving Committed Amount for such prior quarter. This
Commitment Fee shall accrue from the Closing Date. For purposes
of computation of the Commitment Fee, neither Swingline Loans nor
Competitive Loans shall be counted toward or considered usage
under the Committed Revolving Loan facility.
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(c) Administrative Agent's Fee. The Borrower agrees to pay
to the Administrative Agent, for its own account, the
administrative and other fees referred to in the Administrative
Agent's Fee Letter other than the Upfront Fee (the
"Administrative Agent's Fees").
(d) Competitive Bid Request Fee. The Borrower shall make
payment to the Administrative Agent of the applicable Competitive
Bid Request Fee, if any, concurrently with delivery of such
Competitive Bid Request (whether or not any Competitive Bid is
offered by a Bank, accepted by the Borrower or extended by the
offering Bank pursuant thereto).
2.12 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the
right to prepay Loans in whole or in part from time to time
without premium or penalty; provided, however, that (A)
Eurodollar Loans and Fixed Rate Loans may only be prepaid (y) on
the last day of an Interest Period applicable thereto or (z) on a
day that is not the last day of an Interest Period applicable
thereto if the Borrower pays to the applicable Banks any amounts
due under Section 2.15(ii), and (B) each such partial prepayment
shall be a minimum principal amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof (or the amount then
outstanding, if less). Amounts prepaid on the Loans may be
reborrowed in accordance with the provisions hereof. If the
Borrower shall fail to specify the manner of application,
prepayments shall be applied first to Base Rate Loans and Fed
Funds Swingline Loans, then to Eurodollar Loans and Fixed Rate
Loans in direct order of their Interest Period maturities (and
pro-rata to the extent such maturities are the same).
(b) Mandatory Prepayments. If at any time (i) the sum of
Committed Revolving Loans plus Swingline Loans plus Competitive
Loans shall exceed the lesser of the aggregate Revolving
Committed Amount or the Borrowing Base, (ii) the aggregate amount
of Swingline Loans shall exceed the Swingline Committed Amount,
or (iii) the aggregate amount of the Competitive Loans shall
exceed the Competitive Loan Maximum Amount, then in any such
instance the Borrower shall immediately make payment on the Loans
in an amount sufficient to eliminate the deficiency. In the case
of a mandatory payment required on account of subsections (ii) or
(iii), the amount required to be paid hereby shall serve to
temporarily reduce the Revolving Committed Amount (for purposes
of borrowing availability hereunder, but not for purposes of
computation of fees) by the amount of the payment required until
such time as the situation described in subsection (ii) or (iii)
shall no longer exist. Further, in the event the Borrower or any
other Credit Party shall make a public issuance of indebtedness,
then the Borrower shall immediately make payment on the Loans
hereunder in an amount equal to the lesser of (A) fifty percent
(50%) of the amount of net proceeds received from such public
issuance, or (B) the amount of Loans then outstanding, and the
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Revolving Committed Amount hereunder shall be permanently reduced
by an amount equal to fifty percent (50%) of the amount of net
proceeds received from such public issuance. Payments made under
this subsection 2.12(b) shall be applied first to Committed
Revolving Loans, then to Swingline Loans and then to Competitive
Loans, and with respect to the types of Loans, first to Base Rate
Loans and Fed Funds Swingline Loans and then to Eurodollar Loans
and Fixed Rate Loans in direct order of their Interest Period
maturities (and pro-rata to the extent such maturities are the
same). The Administrative Agent will, to the extent it may have
knowledge, as a courtesy and not as a requirement, give prompt
notice to the Borrower of any situation which may give rise to a
mandatory prepayment under this Section 2.12(b); provided,
however, delivery of any such notice by the Administrative Agent
shall not constitute any kind of condition to the Borrower's
obligation to make such mandatory prepayment, which obligation
shall exist and be immediately owing notwithstanding the failure
or inability of the Administrative Agent to give such notice.
(c) Notice. The Borrower will provide notice to the
Administrative Agent of any prepayment by 10:00 a.m. (Charlotte,
North Carolina time) on the date of prepayment.
2.13 Increased Costs, Illegality, etc. In the event any Bank shall
determine (which determination shall be final and conclusive and binding on
all the parties hereto absent manifest error) that:
(i) Unavailability. On any date for determining the
appropriate Adjusted Eurodollar Rate for any Interest Period,
that by reason of any changes arising on or after the date of
this Credit Agreement affecting the interbank Eurodollar market,
dollar deposits in the principal amount requested are not
generally available in the interbank Eurodollar Market, or
adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the
definition of Adjusted Eurodollar Rate; then Eurodollar Loans
will no longer be available, and request for a Eurodollar Loan
shall be deemed requests for Base Rate Loans, until such time as
such Bank shall notify the Borrower that the circumstances giving
rise thereto no longer exist.
(ii) Increased Costs. At any time that such Bank shall
incur increased costs or reductions in the amounts received or
receivable hereunder with respect to any Eurodollar Loans because
of (x) any change since the date of this Credit Agreement in any
applicable law, governmental rule, regulation, guideline or order
(or in the interpretation or administration thereof and including
the introduction of any new law or governmental rule, regulation,
guideline or order) including without limitation the imposition,
modification or deemed applicability of any reserves, deposits or
similar requirements (excluding taxes) as related to Eurodollar
Loans (such as, for example, but not limited to, a change in
official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in
- 32 -
the computation of the Adjusted Eurodollar Rate and/or (y) other
circumstances (excluding taxes) arising after the date of this
Credit Agreement affecting such Bank, the interbank Eurodollar
market or the position of such Bank in such market; then the
Borrower shall pay to such Bank promptly upon written demand
therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or
otherwise as such Bank may determine in its reasonable
discretion) as may be required to compensate such Bank for such
increased costs or reductions in amounts receivable hereunder
(written notice as to the additional amounts owed to such Bank,
showing the basis for calculation thereof, shall, absent manifest
error, be final and conclusive and binding on all parties hereto;
provided, however, that such determinations are made on a
reasonable basis).
(iii) Illegality. At any time after the date of this
Credit Agreement, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Bank in
good faith with any law, governmental rule, regulation, guideline
or order (or would conflict with any such governmental rule,
regulation, guideline or order not having the force of law even
though the failure to comply therewith would not be unlawful), or
has become impossible as a result of a contingency occurring
after the date of this Credit Agreement which materially and
adversely affects the interbank Eurodollar market; then
Eurodollar Loans will no longer be available, requests for
Eurodollar Loans shall be deemed requests for Base Rate Loans and
the Borrower may, and upon direction of the Bank, shall, as
promptly as possible and, in any event within the time period
required by law, have any such Eurodollar Loans then outstanding
converted into Base Rate Loans.
2.14 Capital Adequacy. If after the date of this Credit Agreement,
any Bank has determined that the adoption or effectiveness of any
applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
such Bank with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on such Bank's capital or assets as a consequence of its commitments
or obligations hereunder to a level below that which such Bank could have
achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Bank's policies with respect to capital adequacy),
then from time to time, within 15 days after demand by such Bank, the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction. Upon determining in good faith
that any additional amounts will be payable pursuant to this Section, such
Bank will give prompt written notice thereof to the Borrower, which notice
shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish
any of the Borrower's obligations to pay additional amounts pursuant to
- 33 -
this Section. Determination by any such Bank of amounts owing under this
Section shall, absent manifest error, be final and conclusive and binding
on the parties hereto; provided, however, that such determinations are made
on a reasonable basis. Failure on the part of any Bank to demand
compensation for any period hereunder shall not constitute a waiver of such
Bank's rights to demand any such compensation in such period or in any
other period; provided, however, that if such demand is made more than 180
days after the Bank had knowledge of the occurrence of any event described
above regarding capital adequacy, the Borrower shall not be obligated to
reimburse the Bank for amounts incurred prior to the date on which the
Borrower receives such demand for compensation under this Section 2.14.
2.15 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth the basis for requesting
such compensation), for all reasonable losses, expenses and liabilities
(including, without limitation, any loss, expense or liability incurred by
reason of the liquidation or reemployment of deposits or other funds
required by the Bank to fund its Eurodollar Loans or Fixed Rate Loans)
which such Bank may sustain:
(i) if for any reason a borrowing of Eurodollar Loans or
Fixed Rate Loans does not occur on a date specified therefor in a
Notice of Borrowing, Notice of Conversion or Competitive Bid
Request;
(ii) if any repayment or conversion of any Eurodollar Loan
or Fixed Rate Loan occurs on a date which is not the last day of
an Interest Period applicable thereto including without
limitation in connection with any demand, repayment, acceleration
or otherwise;
(iii) if any prepayment of any Eurodollar Loan or Fixed Rate
Loan is not made on any date specified in a notice of prepayment
given by the Borrower; or
(iv) as a consequence of (x) any other default by the
Borrower to repay its Loans when required by the terms of this
Credit Agreement or (y) an election made pursuant to this
Section.
Calculation of all amounts payable to a Bank under this Section shall be
made as though the Bank has actually funded its relevant Eurodollar Loan or
Fixed Rate Loan, in the case of Eurodollar Loans through the purchase of a
Eurodollar deposit bearing interest at the Adjusted Eurodollar Rate in an
amount equal to the amount of that Loan, having a maturity comparable to
the relevant Interest Period and in the case of Eurodollar Loans, through
the transfer of such Eurodollar deposit from an offshore office of that
Bank to a domestic office of that Bank in the United States of America;
provided, however, that each Bank may fund each of its Eurodollar Loans in
any manner it sees fit and the foregoing assumption shall be utilized only
for the calculation of amounts payable under this Section.
2.16 Net Payments. All payments made by the Borrower hereunder will
be made without setoff or counterclaim. All payments by the Borrower under
- 34 -
this Credit Agreement to or for the benefit of a Bank that is not a United
States person within the meaning of Section 7701(a)(30) of the Internal
Revenue Code shall be made free and clear of and without deduction or
withholding for any future withholding or similar tax imposed by the United
States or any political subdivision thereof excluding any tax (i) on income
effectively connected with such Bank's conduct of a business within the
United States or (ii) that would not be imposed absent a failure of such
Bank to provide the documentation required by Section 2.21 hereof (such
nonexcluded taxes being hereafter referred to as the "Taxes"). If the
Borrower shall be required to withhold or deduct Taxes from any sum payable
hereunder, (i) the sum payable shall be increased as may be necessary so
that the amount received is equal to the sum which would have been received
had no withholdings or deductions been made, (ii) the Borrower shall make
such necessary withholdings or deductions, and (iii) the Borrower shall pay
the full amount withheld or deducted to the relevant authority according to
applicable law so that such Bank shall not be required to make any
deduction or payment of Taxes. If any such Bank receives a refund or
credit (against any other tax) of any Taxes paid by the Borrower hereunder,
the Bank shall promptly pay the full amount of such refund (including any
interest received thereon) or credit to the Borrower.
2.17 Change of Lending Office; Right to Substitute Lender.
(a) Each Bank agrees that, upon the occurrence of any event
giving rise to the operation of Section 2.13(ii) or (iii) or 2.16, it
will, if requested by the Borrower, use reasonable efforts (subject to
overall policy considerations of such Bank) to designate another
lending office for any Loans affected by such event, provided that
such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequence of the event giving rise to the
operation of any such Section. Except in the case of a change of
lending office made at the request of the Borrower, no change in
lending office will be made if greater costs and expenses would result
under Section 2.13(ii) or (iii) or 2.16 on account of any such change
in designation. Nothing in this Section shall affect or postpone any
of the obligations of the Borrower or the right of any Bank provided
in Section 2.13, 2.14 or 2.16.
(b) In addition to the Borrower's rights under Section 2.17(a),
upon the occurrence of any event giving rise to the operation of
Section 2.13(ii) or (iii) or 2.16, the Borrower may, within a period
of sixty (60) days following the Borrower's obtaining knowledge of the
occurrence of the event giving rise to the operation of such
provisions, at its own expense, make arrangements for another bank or
financial institution reasonably acceptable to the Administrative
Agent to purchase and accept the rights and obligations under this
Credit Agreement of any Bank entitled to payment under Section
2.13(ii) or (iii) or Section 2.16, whereupon such Bank shall assign to
the bank or financial institution designated by the Borrower its
rights and obligations hereunder pursuant to the provisions of Section
10.03(b) of this Credit Agreement.
- 35 -
2.18 Payments and Computations. Except as otherwise specifically
provided herein, all payments hereunder shall be made to the Administrative
Agent in U.S. dollars in immediately available funds at its offices at
NationsBank Plaza, NC1-002-06-19, Charlotte, North Carolina not later than
2:00 p.m. (Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The Administrative Agent may (but shall not be
obligated to) debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Borrower maintained with
the Administrative Agent (with notice to the Borrower). The Borrower
shall, at the time it makes any payment under this Credit Agreement,
specify to the Administrative Agent the Loans, Fees or other amounts
payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails so to specify, or if such application would
be inconsistent with the terms hereof, the Administrative Agent shall
distribute such payment to the Banks in such manner as the Administrative
Agent may determine to be appropriate in respect of obligations owing by
the Borrower hereunder, subject to the terms of Section 2.20). The
Administrative Agent will thereafter cause to be distributed promptly like
funds relating to the payment of principal or interest or fees ratably to
the Banks entitled to receive such payments in accordance with the terms of
this Credit Agreement. Whenever any payment hereunder shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of
interest and Fees for the period of such extension), except that in the
case of Eurodollar Loans, if the extension would cause the payment to be
made in the next following calendar month, then such payment shall instead
be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on
the basis of actual number of days elapsed over a year of 365/366 days, in
the case of interest on Base Rate Loans, and over a year of 360 days in all
other instances. Interest shall accrue from and include the date of
advance, but exclude the date of payment.
2.19 Pro Rata Treatment. Except to the extent otherwise provided
herein:
(a) Committed Revolving Loans. Each Committed Revolving
Loan (including without limitation each Mandatory Borrowing),
each payment or prepayment of principal of any Committed
Revolving Loan, each payment of interest on the Committed
Revolving Loans, each payment of Commitment Fees, each reduction
of the Revolving Committed Amount, and each conversion or
continuation of any Committed Revolving Loan, shall be allocated
pro rata among the relevant Banks in accordance with the
respective applicable Revolving Loan Commitments (or, if the
Commitments of such Banks have expired or been terminated, in
accordance with the principal amounts of the outstanding
Committed Revolving Loans and Participation Interests of such
Banks); and
(b) Competitive Loans. Should the Borrower fail to specify
the particular Competitive Loans as to which any payment or other
amount should be applied and it is not otherwise clear as to the
- 36 -
particular Competitive Loans to which such payment or other
amounts relate, or any such payment or other amount is to be
applied to Competitive Loans without regard to any such direction
by the Borrower, then each payment or prepayment of principal on
Competitive Loans and each payment of interest or other amount on
or in respect of Competitive Loans, shall be allocated pro rata
among the relevant Competitive Loan Banks in accordance with the
then outstanding amounts of their respective Competitive Loans.
2.20 Sharing of Payments. The Banks agree among themselves that, in
the event that any Bank shall obtain payment in respect of any Loan through
the exercise of a right of set-off, banker's lien, counterclaim or
otherwise in excess of its pro rata share as provided for in this Credit
Agreement, such Bank shall promptly purchase from the other Banks a
participation in such Loans and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end
that all Banks share such payment in accordance with their respective
ratable shares as provided for in this Credit Agreement. The Banks further
agree among themselves that if payment to a Bank obtained by such Bank
through the exercise of a right of set-off, banker's lien, counterclaim or
otherwise as aforesaid shall be rescinded or must otherwise be restored,
each Bank which shall have shared the benefit of such payment shall, by
repurchase of a participation theretofore sold, return its share of that
benefit to each Bank whose payment shall have been rescinded or otherwise
restored. The Borrower and each other Credit Party agrees that any Bank so
purchasing such a participation may, to the fullest extent permitted by
law, exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such participation as fully as if such Bank
were a holder of such Loan or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit
Agreement, if any Bank or the Administrative Agent shall fail to remit to
the Administrative Agent or any other Bank an amount payable by such Bank
or the Administrative Agent to the Administrative Agent or such other Bank
pursuant to this Credit Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from
the date such amount is due until the date such amount is paid to the
Administrative Agent or such other Bank at a rate per annum equal to the
Federal Funds Effective Rate.
2.21 Foreign Lenders. Each Bank (which, for purposes of this
Section 2.21, shall include any Affiliate of a Bank that makes any
Eurodollar Loan advance pursuant to the terms of this Credit Agreement)
that is not a "United States person" (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrower and the
Administrative Agent on or before the Closing Date (or, in the case of a
Person that becomes a Bank after the Closing Date by assignment, promptly
upon such assignment), two duly completed and signed copies of (A) either
(1) Form 1001 of the United States Internal Revenue Service entitling such
Bank to a complete exemption from withholding on all amounts to be received
by such Bank pursuant to this Agreement and/or the Notes or (2) Form 4224
of the United States Internal Revenue Service relating to all amounts to be
received by such Bank pursuant to this Agreement and/or the Notes and (B)
an Internal Revenue Service Form W-8 or W-9 entitling such Bank to receive
a complete exemption from United States backup withholding tax. Each such
- 37 -
Bank shall, from time to time thereafter, submit to the Borrower and the
Administrative Agent such additional duly completed and signed copies of
such forms (or such successor forms or other documents as shall be adopted
from time to time by the relevant United States taxing authorities) as may
be (1) reasonably requested in writing by the Borrower or the
Administrative Agent or (2) appropriate under then current United States
laws or regulations. Upon the reasonable request of the Borrower or the
Administrative Agent, each Bank that has not provided the forms or other
documents, as provided above, on the basis of being a United States person
shall submit to the Borrower and the Administrative Agent a certificate to
the effect that it is such a "United States person."
SECTION 3
GUARANTEE
3.01 The Guarantee. Each of the Guarantors hereby jointly and
severally guarantees to each Bank, the Agent, Administrative Agent and Co-
Agents as hereinafter provided the prompt payment of the Obligations in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration or otherwise) strictly in accordance with the terms thereof.
The Guarantors hereby further agree that if any of the Obligations are not
paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise), the Guarantors will, jointly and
severally, promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any
of the Obligations, the same will be promptly paid in full when due
(whether at extended maturity, as a mandatory prepayment, by acceleration
or otherwise) in accordance with the terms of such extension or renewal.
3.02 Obligations Unconditional. The obligations of the Guarantors
under Section 3.01 hereof are joint and several, absolute and
unconditional, irrespective of the value, genuineness, validity, regularity
or enforceability of any of the Credit Documents, or any other agreement or
instrument referred to therein, or any substitution, release or exchange of
any other guarantee of or security for any of the Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor, it being the
intent of this Section 3.02 that the obligations of the Guarantors
hereunder shall be absolute and unconditional under any and all
circumstances. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the occurrence of any
one or more of the following shall not alter or impair the liability of any
Guarantor hereunder which shall remain absolute and unconditional as
described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any
of the Obligations shall be extended, or such performance or
compliance shall be waived;
- 38 -
(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents or any other agreement or instrument
referred to therein shall be done or omitted;
(iii) the maturity of any of the Obligations shall be
accelerated, or any of the Obligations shall be modified,
supplemented or amended in any respect, or any right under any of
the Credit Documents or any other agreement or instrument
referred to therein shall be waived or any other guarantee of any
of the Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Administrative
Agent or any Bank or Banks as security for any of the Obligations
shall fail to attach or be perfected; or
(v) any of the Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any
creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Bank
exhaust any right, power or remedy or proceed against any Person under any
of the Credit Documents or any other agreement or instrument referred to
therein, or against any other Person under any other guarantee of, or
security for, any of the Obligations.
3.03 Reinstatement. The obligations of the Guarantors under this
Section 3 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of any Person in respect of the
Obligations is rescinded or must be otherwise restored by any holder of any
of the Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will
indemnify each of the Administrative Agent and each Bank on demand for all
reasonable costs and expenses (including, without limitation, fees of
counsel) incurred by the Administrative Agent or such Bank in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
3.04 Certain Additional Waivers. Without limiting the generality of
the provisions of any other Section of this Section 3, each Guarantor
hereby specifically waives the benefits of VA. Code Ann. (section mark)
(section mark) 49-25 and 49-26
(1950, as amended). Each Guarantor further agrees that such Guarantor
shall have no right of recourse to security for the Obligations. In
addition, each Guarantor hereby waives and renounces any and all rights it
has or may have for subrogation, indemnity, reimbursement or contribution
against the Borrower for amounts paid by such Guarantor pursuant to Section
3.01. This waiver is expressly intended to prevent the existence of any
claim in respect to such reimbursement by any Guarantor against the estate
- 39 -
of the Borrower within the meaning of Section 101 of the Bankruptcy Code,
and to prevent any Guarantor from constituting a creditor of the Borrower
in respect of such reimbursement within the meaning of Section 547(b) of
the Bankruptcy Code in the event of a subsequent case involving the
Borrower.
3.05 Remedies. The Guarantors agree that, to the fullest extent
permitted by law, as between the Guarantors, on the one hand, and the
Administrative Agent and the Banks, on the other hand, the Obligations may
be declared to be forthwith due and payable as provided in Section 8.02
hereof (and shall be deemed to have become automatically due and payable in
the circumstances provided in said Section 8.02) for purposes of Section
3.01 hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration (or preventing such Obligations from becoming
automatically due and payable) as against any other Person and that, in the
event of such declaration (or such Obligations being deemed to have become
automatically due and payable), such Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by the
Guarantors for purposes of said Section 3.01.
3.06 Continuing Guarantee. The guarantee in this Section 3 is a
continuing guarantee, and shall apply to all Obligations whenever arising.
3.07 Limitation of Guarantee. The liability of each Guarantor with
respect to the Obligations guaranteed hereunder shall not exceed the
Maximum Guaranteed Amount as determined at the earlier of the date of
commencement of a case under the Bankruptcy Code in which the Guarantor is
a debtor or the date enforcement is sought under this Section 3.
SECTION 4
CONDITIONS PRECEDENT
4.01 Conditions to Closing. The closing of this credit facility is
subject to satisfaction of the following conditions (in form and substance
acceptable to the Administrative Agent:
(a) Executed Credit Documents. Receipt by the Administrative
Agent of copies of the Credit Agreement, the Notes and the other
Credit Documents, if any (in sufficient numbers to provide a fully
executed original to each Bank) as executed by the Borrower and the
other Credit Parties other than Stuart Medical.
(b) Fees. Payment to the Administrative Agent of the portion of
the Upfront Fees and Administrative Agent's Fees payable on the
Closing Date.
4.02 Conditions to Initial Loan Advance. The obligation of the Banks
to make the initial Loan advance is subject, at the time of the making of
such initial Loan advance, to satisfaction of the following conditions (in
form and substance acceptable to the Administrative Agent and the Required
Banks):
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(a) No Default; Representations and Warranties. Both at the
time of the making of such Loan and after giving effect thereto (i)
there shall exist no Default or Event of Default and (ii) all
representations and warranties contained herein or in the other Credit
Documents then in effect shall be true and correct in all material
respects.
(b) Opinions of Counsel. Receipt by the Administrative Agent of
the opinions of Drew St.J. Carneal, Esq., Senior Vice President and
Corporate Counsel of the Borrower, and Hunton & Williams, special
counsel to the Borrower and the Guarantors, substantially in the forms
of Schedules 4.01(b)(1) and (2), respectively, (in sufficient numbers
to provide a fully executed original to each Bank).
(c) Corporate Documents. Receipt by the Administrative Agent of
the following:
(i) Articles of Incorporation. Copies of the articles of
incorporation or charter documents of the Borrower and the
Guarantors certified to be true and complete as of a recent date
by the appropriate governmental authority of the state of its
incorporation.
(ii) Resolutions. Copies of resolutions of the Board of
Directors of the Borrower and the Guarantors approving and
adopting the Credit Documents, the transactions contemplated
therein and authorizing execution and delivery thereof, certified
by a secretary or assistant secretary as of the Closing Date to
be true and correct and in force and effect as of such date and
containing therein certification of the incumbency and specimen
signatures of the officers of the Credit Parties executing the
Credit Documents.
(iii) Bylaws. A copy of the bylaws of the Borrower and the
Guarantors certified by a secretary or assistant secretary as of
the Closing Date to be true and correct and in force and effect
as of such date.
(iv) Good Standing. Copies of (i) certificates of good
standing, existence or its equivalent with respect to the
Borrower and the Guarantors certified as of a recent date by the
appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so
qualify and be in good standing would have a Material Adverse
Effect and (ii) a certificate indicating payment of all corporate
franchise taxes in such states of incorporation certified as of a
recent date by the appropriate governmental taxing authorities,
to the extent generally available from such authorities.
(d) Acquisition of Stuart Medical. Receipt by the
Administrative Agent of the Agreement of Exchange dated as of December
22, 1993 as amended and restated as of March 31, 1994 among Stuart
Medical, the Borrower and Owens & Minor, Inc. and certain shareholders
of Stuart Medical (the "Exchange Agreement") relating to the
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acquisition of Stuart Medical by the Borrower, together with evidence
(i) that consummation of the acquisition of Stuart Medical pursuant to
the terms thereof shall have occurred prior to or will occur
contemporaneous with the initial Loan advance hereunder; (ii) that
Stuart Medical (or its assets, as appropriate) shall have been
acquired free and clear of liens, security interests, claims and other
encumbrances, except for certain permitted liens as provided in the
Exchange Agreement, all of which Liens shall, upon consummation of the
acquisition contemplated in the Exchange Agreement and the corporate
reorganization contemplated in connection therewith and funding of the
Loans hereunder, constitute Permitted Liens hereunder, (iii) that the
aggregate amount paid (including indebtedness assumed) in connection
with the acquisition of Stuart Medical shall not exceed $325,000,000
(with the Series B Preferred Stock of the Borrower to be issued in
connection with such acquisition being valued at $115,000,000 for this
purpose); (iv) that the corporate structure of the Borrower and its
Subsidiaries upon consummation of such acquisition of Stuart Medical
shall not differ in any material respect from the corporate structure
contemplated in the Exchange Agreement, (v) that all consents and
approvals, if any, necessary in connection with consummation of such
acquisition (including compliance with the Hart-Scott-Rodino Act)
shall have been obtained and (vi) that the cash amount of accounting,
investment banking, financial advisory and legal fees and expenses
paid or incurred by the Borrower in connection with such acquisition
shall not exceed $5,000,000 in the aggregate.
(e) Addition of Stuart Medical as a Credit Party. Stuart
Medical shall have joined in the execution of this Credit Agreement as
a Guarantor and Credit Party contemporaneous with the initial funding
hereunder.
(f) Termination of Existing Credit Facilities. Receipt by the
Administrative Agent of evidence of repayment and termination of the
existing revolving credit facility extended to Owens & Minor, Inc. by
Crestar Bank and NationsBank of Virginia, N.A.
(g) Outside Initial Funding Date. The Initial Funding Date
shall not occur later than May 31, 1994.
SECTION 5
REPRESENTATIONS AND WARRANTIES
Each Credit Party hereby represents and warrants to the Agents and
each Bank that:
5.01 Organization and Good Standing. Such Credit Party is a
corporation duly incorporated, validly existing and in good standing under
the laws of the State of its incorporation, is duly qualified and in good
standing as a foreign corporation authorized to do business in every
jurisdiction where the failure to so qualify would have a Material Adverse
Effect, and has the requisite corporate power and authority to own its
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properties and to carry on its business as now conducted and as proposed to
be conducted.
5.02 Due Authorization. Such Credit Party (i) has the requisite
corporate power and authority to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party and to
incur the obligations herein and therein provided for, and (ii) is duly
authorized to, and has been authorized by all necessary corporate action,
to execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.
5.03 No Conflicts. Neither the execution and delivery of the Credit
Documents, nor the consummation of the transactions contemplated therein,
nor performance of and compliance with the terms and provisions thereof by
such Credit Party will (i) violate or conflict with any provision of its
articles of incorporation or bylaws, (ii) violate, contravene or materially
conflict with any law, regulation (including without limitation Regulation
U or Regulation X), order, writ, judgment, injunction, decree or permit
applicable to it, (iii) violate, contravene or materially conflict with
contractual provisions of, or cause an event of default under, any
indenture, loan agreement, mortgage, deed of trust, contract or other
agreement or instrument to which it is a party or by which it may be bound,
the violation of which would have a Material Adverse Effect, (iv) result in
or require the creation of any lien, security interest or other charge or
encumbrance (other than those contemplated in or created in connection with
the Credit Documents) upon or with respect its properties, the creation of
which would have a Material Adverse Effect.
5.04 Consents. No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party in respect of such Credit Party is required in
connection with the execution, delivery or performance of this Credit Agr-
eement or any of the other Credit Documents by the Borrower or any
Guarantor, or if required, such consent, approval and authorization has
been obtained.
5.05 Enforceable Obligations. This Credit Agreement and the other
Credit Documents have been duly executed and delivered and constitute
legal, valid and binding obligations of such Credit Party enforceable
against such Credit Party in accordance with their respective terms, except
as may be limited by bankruptcy or insolvency laws or similar laws
affecting creditors' rights generally or by general equitable principles.
5.06 Financial Condition. The financial statements and financial
information provided to the Banks, consisting of, among other things, an
audited consolidated balance sheet of the Borrower and its Subsidiaries
dated as of December 31, 1993 together with related consolidated statements
of income, stockholders' equity and changes in financial position or cash
flow certified by KPMG Peat Marwick, certified public accountants, are true
and correct in all material respects and fairly represent the financial
condition of the Borrower and its Subsidiaries as of such date; such
financial statements were prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as noted
therein); and since the date of such financial statements there have
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occurred no changes or circumstances which have had or are likely to have a
Material Adverse Effect.
5.07 No Default. No Default or Event of Default presently exists.
5.08 Liens. Except for Permitted Liens, such Credit Party has good
and marketable title to all of its properties and assets free and clear of
all liens, encumbrances, mortgages, pledges, security interests and other
adverse claims of any nature.
5.09 Indebtedness. Such Credit Party has no Indebtedness (including
without limitation Guaranty Obligations, reimbursement or other contingent
obligations) except as disclosed in the financial statements referenced in
Section 5.06 and as set forth in Schedule 5.09.
5.10 Litigation. Except as disclosed in Schedule 5.10, there are no
actions, suits or legal, equitable, arbitration or administrative
proceedings, pending or, to the knowledge of a Responsible Officer of such
Credit Party, threatened against such Credit Party or any of its Restricted
Subsidiaries which, if adversely determined, would likely have a Material
Adverse Effect. For purposes hereof, in the case of proceedings involving
only monetary damages, $5,000,000 or more in any instance shall be
considered as having a Material Adverse Effect. Since the date of this
Credit Agreement (or the date of the most recent update hereunder), there
has been no material adverse change in the status of any actions, suits,
investigations, litigation or proceedings disclosed hereunder which is
likely to result in a Material Adverse Effect.
5.11 Material Agreements. Such Credit Party is not in default in any
material respect under any contract, lease, loan agreement, indenture,
mortgage, security agreement or other material agreement or obligation to
which it is a party or by which any of its properties is bound which
default would have a Material Adverse Effect.
5.12 Taxes. Such Credit Party has filed, or caused to be filed, all
material tax returns (federal, state, local and foreign) required to be
filed and paid all amounts of taxes shown thereon to be due (including
interest and penalties) and has paid all other taxes, fees, assessments and
other governmental charges (including mortgage recording taxes, documentary
stamp taxes and intangibles taxes) owing (or necessary to preserve any
liens in favor of the Banks) by it, except for such taxes (i) which are not
yet delinquent or (ii) as are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with generally accepted accounting principles. Such Credit
Party is not aware of any proposed material tax assessments against it or
any other members of the Consolidated Borrower Group.
5.13 Compliance with Law. Such Credit Party is in substantial
compliance with all laws, rules, regulations, orders and decrees (including
without limitation environmental laws) applicable to it, or to its
properties, the failure to comply with which would have a Material Adverse
Effect.
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5.14 ERISA. (i) No Reportable Event (as defined in ERISA) has
occurred and is continuing with respect to any Plan; (ii) no Plan has an
unfunded current liability (determined under Section 412 of the Code) or an
accumulated funding deficiency, (iii) no proceedings have been instituted,
or, to the knowledge of any Responsible Officer of such Credit Party,
planned, to terminate any Plan, (iv) neither such Credit Party nor any
member of a Controlled Group, nor any duly-appointed administrator of a
Plan has instituted or intends to institute proceedings to withdraw from
any Multiemployer Plan; and (v) each Plan has been maintained and funded in
all material respects with its terms and with the provisions of ERISA
applicable thereto.
5.15 Subsidiaries. Set forth in Schedule 5.15 is a complete and
accurate list of all Subsidiaries of each of such Credit Party. Further,
the Non-Guarantor Subsidiaries, as a group, do not exceed the Threshold
Requirement as provided in Section 6.12. Information on the attached
Schedule includes state of incorporation; the number of shares of each
class of capital stock or other equity interests outstanding; the number
and percentage of outstanding shares of each class owned (directly or
indirectly) by such Credit Party; and the number and effect, if exercised,
of all outstanding options, warrants, rights of conversion or purchase and
similar rights. The outstanding capital stock and other equity interests
of all such Subsidiaries is validly issued, fully paid and non-assessable
and is owned by such Credit Party, directly or indirectly, free and clear
of all liens, security interests and other charges or encumbrances (other
than those arising under or contemplated in connection with the Credit
Documents).
5.16 Use of Proceeds; Margin Stock. The proceeds of the Loans
hereunder will be used solely for the purposes specified in Section 6.10.
None of such proceeds will be used for the purpose of purchasing or
carrying any "margin stock" as defined in Regulation U, Regulation X or
Regulation G, or for the purpose of reducing or retiring any Indebtedness
which was originally incurred to purchase or carry "margin stock" or for
any other purpose which might constitute this transaction a "purpose
credit" within the meaning of Regulation U, Regulation X or Regulation G.
Such Credit Party does not own "margin stock" except as identified in the
financial statements referred to in Section 5.06 hereof and, as of the date
hereof, the aggregate value of all "margin stock" owned by such Credit
Party and its Subsidiaries does not exceed 25% of the value of all such
Credit Party's and its Subsidiaries' assets.
5.17 Government Regulation. Such Credit Party is not subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Investment Company Act of 1940 or the Interstate
Commerce Act, each as amended. In addition, such Credit Party is not (i)
an "investment company" registered or required to be registered under the
Investment Company Act of 1940, as amended, and is not controlled by such a
company, or (ii) a "holding company," or a "Subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a
"Subsidiary" or a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
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5.18 Hazardous Substances. Except as disclosed on Schedule 5.18 or
except as would not reasonably be expected to have a Material Adverse
Effect, to the knowledge of any Responsible Officer of such Credit Party,
the real property owned or leased by such Credit Party and its Subsidiaries
or on which it or its Subsidiaries operates (the "Subject Property") (i) is
free from "hazardous substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
(section mark)(section mark) 9601 et seq., as amended, and the regulations
promulgated thereunder;
(ii) no portion of the Subject Property is subject to federal, state or
local regulation or liability because of the presence of stored, leaked or
spilled petroleum products, waste materials or debris, "PCB's" or PCB items
(as defined in 40 C.F.R. (section mark)763.3), underground storage tanks,
"asbestos" (as
defined in 40 C.F.R. (section mark)763.63) or the past or present accumulation,
spillage
or leakage of any such substance; (iii) such Credit Party and its
Subsidiaries are in substantial compliance with all federal, state and
local requirements relating to protection of health or the environment in
connection with the operation of their businesses; and (iv) no Responsible
Officer of such Credit Party knows of any complaint or investigation
regarding real property which it or any other Credit Party owns or leases
or on which it or any other Credit Party operates.
5.19 Patents, Franchises, etc. Such Credit Party possesses all
material patents, trademarks, service marks, trade names, copyrights,
licenses and other rights, free from burdensome restrictions, that are
reasonably necessary for the operation of its business as presently
conducted and as proposed to be conducted. Such Credit Party has obtained
all material licenses, permits, franchises or other governmental
authorizations necessary to the ownership of its respective property and to
the conduct of its business except as would not reasonably be expected to
have a Material Adverse Effect.
5.20 Solvency. Such Credit Party and each of its Restricted
Subsidiaries, both collectively and individually, is and, after
consummation of this Credit Agreement and after giving effect to all
Indebtedness incurred hereunder, will be, solvent.
5.21 Investments. All investments of such Credit Party are Permitted
Investments.
SECTION 6
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest,
fees and other obligations hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
6.01 Information Covenants. The Credit Parties will furnish, or
cause to be furnished, to the Administrative Agent and each Bank:
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(a) Annual Financial Statements. As soon as available and
in any event within 90 days after the close of each fiscal year
of the Borrower, a consolidated balance sheet of the Borrower and
its Subsidiaries as at the end of such fiscal year together with
related consolidated statements of income and retained earnings
and of cash flows for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal
year, all in reasonable detail and examined by KPMG Peat Marwick,
or other independent certified public accountants of recognized
national standing reasonably acceptable to the Required Banks and
whose opinion shall be to the effect that such consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis (except for changes with which such accountants concur).
It is specifically understood and agreed that failure of the
annual financial statements to be accompanied by an opinion and
certificate of such accountants in form and substance as provided
herein shall constitute a Default hereunder.
(b) Quarterly Financial Statements. As soon as available
and in any event within 45 days after the end of each fiscal
quarter of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries and consolidating balance sheet for
the Borrower which shall include detail for Owens & Minor, Inc.
(to be renamed Owens & Minor Medical, Inc. after the Initial
Funding Date) and Stuart Medical only, and statements of income
and retained earnings and of cash flows for the Borrower and its
Subsidiaries and consolidating statements of income and retained
earnings for the Borrower which shall include detail for Owens &
Minor, Inc. (to be renamed Owens & Minor Medical, Inc. after the
Initial Funding Date) and Stuart Medical only, each for such
quarterly period and for the portion of the fiscal year ending
with such period, in each case setting forth in comparative form
consolidated figures for the corresponding period of the
preceding fiscal year (except that the balance sheet shall be
compared to that at prior year end), all in reasonable form and
detail acceptable to the Required Banks, and accompanied by a
certificate of the chief financial officer, treasurer, controller
or chief accounting officer of the Borrower, to the best of his
knowledge and belief, as being true and correct in all material
respects and as having been prepared in accordance with generally
accepted accounting principles applied on a consistent basis,
subject to changes resulting from normal year-end audit
adjustments.
(c) Borrowing Base Certificates. As soon as practicable
and in any event within 15 days after the end of each fiscal
quarter of the Borrower, a statement of the Borrowing Base and
its components as of the end of the immediately preceding fiscal
quarter, substantially in the form of Schedule 6.01(c) hereto,
certified by the chief financial officer, treasurer, controller
or chief accounting officer of the Borrower as being, to the best
of his knowledge and belief, true and correct in all material
respects as of such date.
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(d) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 6.01(a) and (b)
hereof, a certificate of the chief financial officer, treasurer,
controller or chief accounting officer of the Borrower
substantially in the form of Schedule 6.01(d) to the effect that
no Default or Event of Default exists, or if any Default or Event
of Default does exist specifying the nature and extent thereof
and what action the Borrower proposes to take with respect
thereto. In addition, the Officer's Certificate shall
demonstrate compliance of the financial covenants contained in
Section 6.11 by calculation thereof as of the end of each such
fiscal period.
(e) Accountant's Certificate. Within the period for
delivery of the annual financial statements provided in Section
6.01(a), a certificate of the accountants conducting the annual
audit stating that they have reviewed this Credit Agreement and
stating further whether, in the course of their audit, they have
become aware of any Default or Event of Default arising as a
result of a violation of the financial covenants contained in
Section 6.11 of this Credit Agreement and, if any such Default or
Event of Default exists, specifying the nature and extent
thereof.
(f) SEC and Other Reports. Promptly upon transmission
thereof, copies of any filings and registrations with, and
reports to, (i) the Securities and Exchange Commission, or any
successor agency, by the Borrower or any of its Subsidiaries, and
copies of all financial statements, proxy statements, notices and
reports as the Borrower or its Subsidiaries shall send to its
shareholders or to the holders of any other Indebtedness
(including specifically without limitation, any Subordinated
Debt) in their capacity as such holders and (ii) the United
States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or
local agency responsible for health and safety matters, or any
successor agencies or authorities concerning environmental,
health or safety matters.
(g) Other Information. With reasonable promptness upon any
such request, such other information regarding the business,
properties or financial condition of the Borrower and its
Subsidiaries as the Administrative Agent or the Required Banks
may reasonably request.
(h) Notice of Default or Litigation. Upon any Responsible
Officer of a Credit Party obtaining knowledge thereof, such
Credit Party will give written notice to the Administrative Agent
(i) immediately, but in any event within 3 Business Days, of the
occurrence of an event or condition consisting of a Default or
Event of Default, specifying the nature and existence thereof and
what action the Borrower proposes to take with respect thereto,
and (ii) promptly, but in any event within 5 Business Days, of
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the occurrence of any of the following with respect to any member
of the Consolidated Borrower Group: (A) the pendency or
commencement of any litigation, arbitral or governmental
proceeding against any member of the Consolidated Borrower Group
which if adversely determined is likely to have a Material
Adverse Effect, (B) any levy of an attachment, execution or other
process against its assets having a value of $500,000 or more,
(C) the occurrence of an event or condition which shall
constitute a default or event of default under any Indebtedness
of any member of the Consolidated Borrower Group which, if
accelerated as a result of such event of default would have a
Material Adverse Effect, (D) any development in its business or
affairs which has resulted in, or which any Credit Party
reasonably believes may result in, a Material Adverse Effect, or
(E) the institution of any proceedings against any member of the
Consolidated Borrower Group with respect to, or the receipt of
notice by a Responsible Officer of such Person of potential
liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including
but not limited to, regulations promulgated under the Resource
Conservation and Recovery Act of 1976, 42 U.S.C.
(section mark)(section mark)6901 et seq.,
regulating the generation, handling or disposal of any toxic or
hazardous waste or substance or the release into the environment
or storage of any toxic or hazardous waste or substance, the
violation of which would likely have a Material Adverse Effect,
or (F) any notice or determination concerning the imposition of
any withdrawal liability by a multiemployer Plan against any
member of the Consolidated Borrower Group or any of its ERISA
Affiliates, the determination that a multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV
or ERISA, the termination of any Plan, and the amount of
liability incurred or which may be incurred in connection with
any such event.
6.02 Preservation of Existence and Franchises. Except as otherwise
permitted under Section 7.05, each member of the Consolidated Borrower
Group will do all things necessary in any material respect to preserve and
keep in full force and effect its existence, rights, franchises and
authority for the normal conduct of its business.
6.03 Books, Records and Inspections. Each member of the Consolidated
Borrower Group will keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of
generally accepted accounting principles applied on a consistent basis
(including the establishment and maintenance of appropriate reserves).
Each member of the Consolidated Borrower Group will permit on reasonable
notice and, prior to the occurrence or during the continuance of an Event
of Default, during normal business hours, officers or designated
representatives of Administrative Agent or any Bank to visit and inspect
its books of account and records and any of its properties or assets (in
whomever's possession) and to discuss the affairs, finances and accounts of
such member of the Consolidated Borrower Group with, and be advised as to
the same by, its and their officers, directors and independent accountants.
- 49 -
6.04 Compliance with Law. Each member of the Consolidated Borrower
Group will comply with all applicable laws, rules, regulations and orders
of, and all applicable restrictions imposed by all applicable Governmental
Authorities applicable to it and its property (including applicable
statutes, regulations, orders and restrictions relating to environmental
standards and controls) if noncompliance with any such law, rule,
regulation or restriction would have a Material Adverse Effect.
6.05 Payment of Taxes and Other Indebtedness. Each member of the
Consolidated Borrower Group will pay and discharge (i) all taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (ii) all lawful claims (including claims for labor, materials
and supplies) which, if unpaid, might give rise to a Lien or charge upon
any of its properties, and (iii) except as prohibited hereunder, all of its
other Indebtedness as it shall become due; provided, however, that members
of the Consolidated Borrower Group shall not be required to pay any such
tax, assessment, charge, levy, claim or Indebtedness which is being
contested in good faith by appropriate proceedings and as to which adequate
reserves therefor have been established in accordance with generally
accepted accounting principles, unless the failure to make any such payment
(a) shall give rise to an immediate right to foreclosure on a Lien securing
such amounts or (b) otherwise would have a Material Adverse Effect.
6.06 Insurance. Each member of the Consolidated Borrower Group will
at all times maintain in full force and effect insurance (including
worker's compensation insurance, liability insurance, casualty insurance
and business interruption insurance) in such amounts, covering such risks
and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice unless higher limits or
other types of coverage are required by the terms of the other Credit
Documents or are otherwise reasonably required by the Required Banks. The
present coverage of the members of the Consolidated Borrower Group is
outlined as to carrier, policy number, expiration date, type and amount on
Schedule 6.06 hereto and is acceptable to the Banks as of the Closing Date.
6.07 Maintenance of Property. Each member of the Consolidated
Borrower Group will maintain and preserve its properties and equipment used
or useful in any material portion of its business (in whomsoever's
possession as they may be) in good repair, working order and condition,
normal wear and tear, obsolescence and replacement excepted, and will make,
or cause to be made, in such properties and equipment from time to time all
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the
manner customary for companies in similar businesses.
6.08 Performance of Obligations. Each member of the Consolidated
Borrower Group will perform in all material respects all of its obligations
(including, except as may be otherwise prohibited or contemplated
hereunder, payment of Indebtedness in accordance with its terms) under the
terms of all material agreements, indentures, mortgages, security
agreements or other debt instruments to which it is a party or by which it
is bound if the failure to do so would have a Material Adverse Effect.
- 50 -
6.09 ERISA. Each Credit Party and ERISA Affiliate will, (a) at all
times, make prompt payment of all contributions required under all employee
pension benefit plans (as defined in Section 3(2) of ERISA) ("Pension
Plans") and required to meet the minimum funding standard set forth in
ERISA with respect to each Plan; (b) promptly upon request, furnish the
Administrative Agent and the Banks copies of each annual report/return
(Form 5500 Series), as well as all schedules and attachments required to be
filed with the Department of Labor and/or the Internal Revenue Service
pursuant to ERISA, and the regulations promulgated thereunder, in
connection with each of its Pension Plans for each Plan Year; (c) notify
the Administrative Agent immediately of any fact, including, but not
limited to, any Reportable Event (as defined in ERISA) arising in
connection with any Plan, which might constitute grounds for termination
thereof by the PBGC or for the appointment by the appropriate United States
District Court of a trustee to administer such Plan, together with a
statement, if requested by the Bank, as to the reason therefor and the
action, if any, proposed to be taken with respect thereof; and (d) furnish
to the Administrative Agent, upon its request, such additional information
concerning any of the Pension Plans as may be reasonably requested. The
Borrower will not, nor will it permit any of its Subsidiaries or ERISA
Affiliates to (I) terminate a Plan if any such termination would have a
Material Adverse Effect, or (II) cause or permit to exist any Reportable
Event (as defined in ERISA) or other event or condition which presents a
material risk of termination at the request of the PBGC.
6.10 Use of Proceeds. The proceeds of the Loans hereunder shall be
used for the purpose of (i) financing the acquisition of the capital stock
of Stuart Medical, (ii) refinancing approximately $150,000,000 in existing
indebtedness of Stuart Medical, (iii) financing costs and expenses incurred
in connection with the acquisition of Stuart Medical, (iv) refinancing and
replacing the existing credit facility extended to Owens & Minor, Inc. by
NationsBank of Virginia, N.A. and Crestar Bank and other existing bank
indebtedness, (v) financing general working capital needs and other
corporate purposes.
6.11 Financial Covenants.
(a) Consolidated Current Ratio. The Borrower will maintain at
all times a Consolidated Current Ratio of at least 1.4 to 1.0.
(b) Consolidated Tangible Net Worth. On each Determination Date
Consolidated Tangible Net Worth will not be less than:
(i) from the Closing Date through June 29, 1994,
$50,000,000; and
(ii) on June 30, 1994 and thereafter, the sum of the
greater of
(A) $50,000,000, or
(B) the amount equal to Consolidated Tangible Net Worth as
of June 30, 1994 minus $15,000,000;
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plus (y) on the last day of each of the Borrower's fiscal years
to occur after June 30, 1994, 50% of Consolidated Net Income for
the period from January 1, 1994 to such date (or if Consolidated
Net Income for such period is a deficit figure, then zero) plus
(z) 50% of the net proceeds received by the Borrower or any
Subsidiary pursuant to any Equity Transaction from and after the
Closing Date. As used herein, "Equity Transaction" means (i) the
issuance by the Borrower or any Subsidiary of new shares of
capital stock, unless such new shares are being issued in
exchange for an ownership interest in another Person or in
exchange for substantially all of the assets of another Person in
connection with an acquisition permitted by Section 7.05, (ii)
the issuance by the Borrower or any Subsidiary of any shares of
capital stock (or any warrants or options relating to the
subsequent purchase thereof) pursuant to the exercise of options
or warrants, and (iii) the issuance by the Borrower or any
Subsidiary of any shares of capital stock pursuant to the
conversion of any debt securities (including any Subordinated
Debt) to equity.
(c) Leverage Ratio. On each Determination Date the ratio
of Consolidated Total Debt to Consolidated Total Capitalization
will not exceed:
Leverage Ratio
From the Closing Date through the
First Anniversary Date of the
Closing Date .65 to 1.0
Thereafter through the Third Anniversary
Date of the Closing Date .60 to 1.0
Thereafter .55 to 1.0
(d) Fixed Charge Coverage Ratio. As of each Determination
Date for the Applicable Period set forth below, the Fixed Charge
Coverage Ratio will be not less than 1.5 to 1.0. The Applicable
Period for which the Fixed Charge Coverage Ratio shall be
determined shall be as follows:
Duration of Applicable
Period ending as of
Determination Date Determination Date*
End of Second Quarter 1994 One Quarter
End of Third Quarter 1994 Two Quarters
End of Fourth Quarter 1994 Three Quarters
End of First Quarter 1995 and
thereafter Four Quarters
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* Components of the Fixed Charge Coverage Ratio shall be
determined for the Applicable Period ending as of the Determination
Date, except that determination of current maturities of Funded Debt
and current maturities of Capitalized Leases under subsection (iii) of
the definition of Consolidated Fixed Charges shall be for the duration
shown for the Applicable Period above as of the Determination Date.
6.12 Additional Subsidiaries. Where the Subsidiaries which are not
Guarantors hereunder (the "Non-Guarantor Subsidiaries") shall, as a group,
at any time constitute more than either (i) 5% of the consolidated gross
revenues for the Borrower and its Subsidiaries, (ii) 5% of consolidated net
income for the Borrower and its Subsidiaries, or (iii) 5% of consolidated
assets for the Borrower and its Subsidiaries (collectively, the "Threshold
Requirement"), the Borrower will promptly notify the Administrative Agent
thereof, and promptly cause one or more of the Non-Guarantor Subsidiaries
to become a "Guarantor" hereunder by way of execution of a Joinder
Agreement, such that immediately after the joinder of such Subsidiaries as
Guarantors hereunder, the remaining Non-Guarantor Subsidiaries shall not,
as a group, exceed the Threshold Requirement. The Borrower may at any
time, at its option, cause a Non-Guarantor Subsidiary to sign a Joinder
Agreement at which time such Subsidiary shall become a Guarantor and a
Credit Party under this Credit Agreement.
6.13 Interest Rate Protection Agreements. The Borrower shall, within
90 days of the Closing Date, enter into interest rate protection agreements
protecting against fluctuations in interest rates as to which the material
terms are reasonably satisfactory to the Administrative Agent and the
Required Banks, which agreements shall provide coverage for an amount equal
to at least (i) 50% of the initial borrowing on the Closing Date hereunder
less (ii) the amount of any mandatory prepayments made by the Borrower
pursuant to Section 2.12(b) in connection with the public issuance of
indebtedness. If at any time following the Borrower's entering into such
interest rate protection agreement the Borrower makes a mandatory
prepayment pursuant to Section 2.12(b) in connection with the public
issuance of indebtedness, the Borrower may reduce the amount subject to
such interest rate protection agreement by an amount equal to the amount of
such mandatory prepayment.
SECTION 7
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest,
fees and other obligations hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
7.01 Indebtedness. Neither the Borrower nor any of its Restricted
Subsidiaries will contract, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and
the other Credit Documents;
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(b) Indebtedness existing as of the Closing Date as
referenced in Section 5.09 (and renewals, refinancings or
extensions thereof on terms and conditions no more favorable to
such Person than such existing Indebtedness (taking into account
reasonable market conditions existing at such time) and in a
principal amount not in excess of that outstanding as of the date
of such renewal, refinancing or extension), including
specifically without limitation the Hygeia Notes;
(c) Indebtedness in respect of current accounts payable or
accrued (other than for borrowed money or purchase money
obligations) and incurred in the ordinary course of business,
provided, that all such liabilities, accounts and claims shall be
paid when due (or in conformity with customary trade terms);
(d) Purchase money Indebtedness and capital lease
obligations relating to Capitalized Leases incurred to finance
the purchase or lease of fixed assets provided that (i) the total
of all such Indebtedness and obligations shall not exceed an
aggregate principal amount of $10,000,000 at any one time
outstanding; (ii) such Indebtedness and obligations when incurred
shall not exceed the purchase price of the asset financed; and
(iii) no such Indebtedness and obligations shall be refinanced
for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and
(e) Publicly issued Indebtedness of the Borrower on terms
acceptable to the Administrative Agent and the Required Banks,
subject to a prepayment of net proceeds thereof and reduction in
the Commitments hereunder in accordance with the provisions of
Section 2.12(b);
(f) Unsecured intercompany Indebtedness among the Credit
Parties;
(g) Other short term unsecured indebtedness for borrowed
money (including Guaranty Obligations) by the Borrower which does
not exceed $5,000,000 in the aggregate at any time outstanding;
(h) Obligations under or arising in connection with the
Interest Rate Protection Agreements required pursuant to Section
6.13.
7.02 Liens. Neither the Borrower nor any of its Restricted
Subsidiaries will contract, create, incur, assume or permit to exist any
Lien with respect to any of its property or assets of any kind (whether
real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens.
7.03 Guaranty Obligations. Neither the Borrower nor any of its
Restricted Subsidiaries will enter into or otherwise become or be liable in
respect of any Guaranty Obligations (excluding specifically therefrom
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) other than (i) those in favor of the Banks in
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connection herewith, (ii) guaranty of indebtedness of account debtors of
the Credit Parties relating to the financing or refinancing of trade
receivables owing to the Credit Parties in an aggregate amount not to
exceed $1,000,000, (iii) guaranty by the Credit Parties in respect of
publicly issued Indebtedness of the Borrower permitted under Section
7.01(e) and in respect of Obligations under or arising in connection with
Interest Rate Protection Agreements required pursuant to Section 6.13, and
(iv) other Guaranty Obligations to the extent permitted pursuant to Section
7.01.
7.04 Nature of Business. Neither the Borrower nor any of its
Restricted Subsidiaries will substantively alter the character of its
business in any material respect from that conducted as of the Closing
Date.
7.05 Consolidation, Merger, Sale or Purchase of Assets, etc. Neither
the Borrower nor any of its Restricted Subsidiaries will
(a) dissolve, liquidate, or wind up its affairs, sell, transfer,
lease or otherwise dispose of all or any substantial part of its
property or assets (other than in the ordinary course of business for
fair consideration), or agree to any of the foregoing at a future
time, except for the sale or disposition of machinery and equipment no
longer useful in the conduct of its business. As used herein,
"substantial part" shall mean if the book value of such assets, when
added to the book value of all other assets sold, leased or otherwise
disposed of by the Borrower and its Restricted Subsidiaries (other
than in the ordinary course of business), (i) during the 12-month
period ending with the date of such sale, lease or other disposition
exceeds 10% of consolidated assets, determined as of the end of the
immediately preceding fiscal year, or (ii) during the period beginning
on the date of this Credit Agreement and ending on the date of such
sale, lease or other disposition, exceeds an amount equal to 20% of
consolidated assets determined as of the end of the immediately
preceding fiscal year (but with adjustment to include the assets of
Stuart Medical in the case of fiscal year 1994); or
(b) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) all or any
substantial part of the property or assets of any Person (other than
purchases or other acquisitions of inventory, leases, materials,
property and equipment in the ordinary course of business, except as
otherwise limited or prohibited herein), or enter into any transaction
of merger or consolidation, or agree to do any of the foregoing at a
future time, except for (i) Capital Expenditures to the extent of the
limitations set out in Section 6.11(d) by way of inclusion of Capital
Expenditures in the definition of "Consolidated Net Income Available
for Fixed Charges" as used therein, (ii) investments, acquisitions and
transfers or dispositions of properties permitted pursuant to Section
7.06, (iii) the merger or consolidation of a Restricted Subsidiary
into, or a sale, transfer or lease of all or a substantial part of its
properties (at fair value) to, a Credit Party, and (iv) the merger of
any Person into a Credit Party, provided that the Credit Party shall
be the surviving corporation, and management and control of the Credit
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Party shall remain substantially unchanged and no Default or Event of
Default shall exist either immediately prior to or after giving effect
to such merger. Notwithstanding the foregoing, other than Capital
Expenditures permitted pursuant to Section 6.11(d) by way of inclusion
of Capital Expenditures in the definition of "Consolidated Net Income
Available for Fixed Charges" as used therein, investments pursuant to
Section 7.06 and the acquisition of Stuart Medical, in the case of an
acquisition by the Borrower or its Restricted Subsidiaries, whether by
way of asset purchase, stock or securities purchase or merger or
consolidation, the aggregate consideration paid in connection with
such acquisitions whether in cash, securities, property or other
consideration, shall not exceed $25,000,000 for the remainder of
fiscal year 1994, and thereafter, for any fiscal year, 40% of
Consolidated Tangible Net Worth as of the last day of the immediately
preceding fiscal year. The Borrower will, in connection with any such
material purchase, lease or acquisition and prior to giving effect
thereto, deliver to the Administrative Agent a pro forma statement
demonstrating compliance with the provisions hereof.
7.06 Advances, Investments and Loans. Neither the Borrower nor any
of its Restricted Subsidiaries will lend money or credit or make advances
to any Person, or purchase or acquire any stock, obligations or securities
of, or any other interest in, or make any capital contribution to any
Person except for Permitted Investments.
7.07 Prepayments of Indebtedness, etc. Except (A) as to the 61/2%
Convertible Subordinated Note Due May 31, 1996 of Owens & Minor, Inc.
(which is to be exchanged for a 9.10% Convertible Subordinated Note of the
Borrower in connection with the consummation of the Exchange Agreement) and
the 0% Subordinated Note Due May 31, 1997 of Owens & Minor, Inc., as the
same is to be amended in connection with the consummation of the Exchange
Agreement (collectively referred to as the "Hygeia Notes") and (B)
prepayments in respect of capital lease obligations relating to Capitalized
Leases not to exceed $5,000,000 in the aggregate in any fiscal year,
neither the Borrower nor any of its Restricted Subsidiaries will (i) after
the issuance thereof, amend or modify (or permit the amendment or
modification of), any of the terms of any subordinated or senior funded
indebtedness for borrowed money to the extent any such amendment or
modification would be reasonably adverse to the interests of the Banks,
(ii) make (or give any notice with respect thereto) any voluntary or
optional payment or prepayment or redemption or acquisition for value of
(including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying
when due) or exchange of any other Indebtedness for borrowed money or (iii)
make any payment, prepayment, redemption, acquisition for value of
(including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying
when due) refund, refinance or exchange of any Subordinated Debt. As used
herein, "Subordinated Debt" means any indebtedness for borrowed money which
by its terms is, or upon the happening of certain events may become,
subordinated in right of payment to the Loans and other amounts owing
hereunder or in connection herewith.
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7.08 Transactions with Affiliates. No member of the Consolidated
Borrower Group will enter into any transaction or series of transactions,
whether or not in the ordinary course of business, with any officer,
director, shareholder, Subsidiary or Affiliate other than on terms and
conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an Affiliate.
7.09 Ownership of Subsidiaries. Neither the Borrower nor any of its
Restricted Subsidiaries will sell, transfer or otherwise dispose of, any
shares of capital stock of any Subsidiaries or permit any Subsidiaries to
issue, sell or otherwise dispose of, any shares of capital stock of any
Subsidiary. Neither the Borrower nor any of its Restricted Subsidiaries
will create, form or acquire a Subsidiary unless such Subsidiary is or
would be a Restricted Subsidiary.
7.10 Fiscal Year. Neither the Borrower nor any of its Restricted
Subsidiaries will change its fiscal year.
7.11 Subsidiary Dividends. Neither the Borrower nor any of the other
Credit Parties will enter into, assume or otherwise become subject to, or
permit any of their respective Subsidiaries to enter into, assume or
otherwise become subject to, any agreement prohibiting or otherwise
restricting the payment of dividends by any of the Borrower's Subsidiaries.
SECTION 8
EVENTS OF DEFAULT
8.01 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any principal of
any of the Loans, or
(ii) default, and such default shall continue for three
(3) or more days, in the payment when due of any interest
on the Loans, or of any fees or other amounts owing
hereunder, under any of the other Credit Documents or in
connection herewith; or
(b) Representations. Any representation, warranty or
statement made or deemed to be made by any Credit Party herein,
in any of the other Credit Documents, or in any statement or
certificate delivered or required to be delivered pursuant hereto
or thereto shall prove untrue in any material respect on the date
as of which it was deemed to have been made; or
(c) Covenants. Any Credit Party shall
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(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 6.01(h),
6.02, 6.10, 6.11 or 7.01 through 7.11, inclusive, or
(ii) default in the due performance or observance by it
of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this
Section 8.01) contained in this Credit Agreement and such
default shall continue unremedied for a period of at least
30 days after the earlier of a Responsible Officer becoming
aware of such default or notice thereof by the
Administrative Agent; provided, however, that if such
default cannot be cured within such period, the Borrower or
other Credit Party may have such additional period of time
not to exceed 30 days after the expiration of such original
30 day period, and such default shall not constitute an
Event of Default hereunder, so long as the applicable Credit
Party shall commence within such original 30 day period, and
diligently pursue, appropriate curative efforts; or
(d) Other Credit Documents. (i) Any Credit Party shall
default in the due performance or observance of any term,
covenant or agreement in any of the other Credit Documents
(subject to applicable grace or cure periods, if any), or (ii)
any Credit Document shall fail to be in full force and effect or
to give the Administrative Agent and/or the Banks the liens,
rights, powers and privileges purported to be created thereby; or
(e) Guaranties. The guaranty given by the Credit Parties
hereunder or by any Additional Credit Party hereafter or any
material provision thereof shall cease to be in full force and
effect, or any Guarantor thereunder or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under such guaranty, or any Guarantor shall default
in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to any
guaranty; or
(f) Bankruptcy, etc. The Borrower or any Restricted
Subsidiary shall commence a voluntary case concerning itself
under the Bankruptcy Code; or an involuntary case is commenced
against the Borrower or any Restricted Subsidiary under the
Bankruptcy Code and the petition is not dismissed within 90 days
after commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of all or
substantially all of the property of the Borrower or any
Restricted Subsidiary; or the Borrower or any Restricted
Subsidiary commences any other proceeding under any
reorganization, arrangement, adjustment of the debt, relief of
creditors, dissolution, insolvency or similar law of any
jurisdiction whether now or hereafter in effect relating to the
Borrower or any Restricted Subsidiary; or there is commenced
against the Borrower or any Restricted Subsidiary any such
proceeding which remains undismissed for a period of 90 days; or
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the Borrower or any Restricted Subsidiary is adjudicated
insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower
or any Restricted Subsidiary suffers appointment of any custodian
or the like for it or for any substantial part of its property to
continue unchanged or unstayed for a period of 90 days; or the
Borrower or any Restricted Subsidiary makes a general assignment
for the benefit of creditors; or any corporate action is taken by
the Borrower or any Restricted Subsidiary for the purpose of
effecting any of the foregoing; or
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this
Credit Agreement) in excess of $15,000,000 in the aggregate for
the Borrower and its Restricted Subsidiaries, (i) the Borrower or
any of its Restricted Subsidiaries shall (A) default in any
payment (beyond the applicable grace period with respect thereto,
if any) with respect to any such Indebtedness, or (B) default in
the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to
cause, any such Indebtedness to become due prior to its stated
maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity
thereof; or
(h) Judgments. One or more judgments or decrees shall be
entered against the Borrower or any Restricted Subsidiary
involving a liability of $500,000 or more in the aggregate (to
the extent not paid or fully covered by insurance provided by a
carrier who has acknowledged coverage) and any such judgments or
decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) ERISA. (i) Any Credit Party or any member of the
Controlled Group shall fail to pay when due an amount or amounts
aggregating in excess of $500,000 which it shall have become
liable to pay under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans which in the aggregate have unfunded
liabilities in excess of $500,000 (individually and collectively,
a "Material Plan") shall be filed under Title IV of ERISA by any
such member of the Consolidated Borrower Group or any member of
the Controlled Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to
cause a trustee to be appointed to administer any Material Plan;
or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any Material Plan
must be terminated; or there shall occur a complete or partial
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withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer
Plans which could cause one or more members of the Controlled
Group to incur a current payment obligation in excess of
$500,000; or
(j) Ownership. There shall occur a Change of Control.
8.02 Acceleration; Remedies. Upon the occurrence of an Event of
Default, and at any time thereafter unless and until such Event of Default
has been waived by the Required Banks or cured to the satisfaction of the
Required Banks (pursuant to the voting procedures in Section 10.06), the
Administrative Agent may, and upon the request and direction of the
Required Banks, shall, by written notice to the Borrower take any of the
following actions without prejudice to the rights of the Administrative
Agent or any Bank to enforce its claims against the Credit Parties, except
as otherwise specifically provided for herein:
(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately
terminated.
(ii) Acceleration of Loans. Declare the unpaid principal of
and any accrued interest in respect of all Loans and any and all
other indebtedness or obligations of any and every kind owing by
the Borrower to any of the Banks hereunder to be due whereupon
the same shall be immediately due and payable without
presentment, demand, protest or other notice of any kind, all of
which are hereby waived by the Borrower.
(iii) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all
rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
8.01(f) shall occur, then the Commitments shall automatically terminate and
all Loans, all accrued interest in respect thereof, all accrued and unpaid
Fees and other indebtedness or obligations owing to the Banks hereunder
shall immediately become due and payable without the giving of any notice
or other action by the Administrative Agent or the Banks.
SECTION 9
AGENCY PROVISIONS
9.01 Appointment. Each Bank hereby designates and appoints
NationsBank of North Carolina, N.A. as agent (in such capacity as Agent
hereunder, the "Agent"), Chemical Bank, N.A. and Crestar Bank as co-agents
(in such capacity as Co-Agent hereunder, the "Co-Agents") and NationsBank
of North Carolina, N.A. as administrative agent (in such capacity as
Administrative Agent hereunder, the "Administrative Agent") of such Bank to
act as specified herein and the other Credit Documents, and each such Bank
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hereby authorizes the Agent, the Administrative Agent and the Co-Agents,
respectively, as the agent for such Bank, to take such action on its behalf
under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are
expressly delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the
other Credit Documents, neither the Agent, the Co-Agents nor the
Administrative Agent shall have any duties or responsibilities, except
those expressly set forth herein and therein, or any fiduciary relationship
with any Bank, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Credit Agreement
or any of the other Credit Documents, or shall otherwise exist against the
Agents. To the extent that the provisions of this Section relate to
intercreditor or other issues as between and among the Agents and the
Banks, they are solely for the benefit of the Agents and the Banks and none
of the Credit Parties shall have any rights as a third party beneficiary of
the provisions hereof. In performing its functions and duties under this
Credit Agreement and the other Credit Documents, the Agent, the
Administrative Agent and the Co-Agents shall act solely as agents of the
Banks and do not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrower or
any other Credit Party.
9.02 Delegation of Duties. The Agents may execute any of their
respective duties hereunder or under the other Credit Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Agents shall
not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
9.03 Exculpatory Provisions. Neither the Agent, the Co-Agents nor
the Administrative Agent nor any of their respective officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for
any action lawfully taken or omitted to be taken by it or such Person under
or in connection herewith or in connection with any of the other Credit
Documents (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by any of the
Credit Parties contained herein or in any of the other Credit Documents or
in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in
connection herewith or in connection with the other Credit Documents, or
enforceability or sufficiency hereof or of any of the other Credit
Documents, or for any failure of the Borrower to perform its obligations
hereunder or thereunder. Neither the Agent, the Co-Agents nor the
Administrative Agent shall be responsible to any Bank for the
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Credit Agreement, or any of the other Credit Documents
or for any representations, warranties, recitals or statements made herein
or therein or made by the Borrower or any Credit Party in any written or
oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by the Agent, the Co-Agents or the
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Administrative Agent to the Banks or by or on behalf of the Credit Parties
to the Agent, the Co-Agents or the Administrative Agent or any Bank or be
required to ascertain or inquire as to the performance or observance of any
of the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Loans or of the
existence or possible existence of any Default or Event of Default or to
inspect the properties, books or records of the Credit Parties.
9.04 Reliance on Communications. The Agent, the Co-Agents and the
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower or any of the other Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care).
The Administrative Agent may deem and treat the Banks as the owner of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 10.03(b) hereof. The
Administrative Agent shall be fully justified in failing or refusing to
take any action under this Credit Agreement or under any of the other
Credit Documents unless it shall first receive such advice or concurrence
of the Required Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing
to take any such action. The Administrative Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under
any of the other Credit Documents in accordance with a request of the
Required Banks (or to the extent specifically provided in Section 10.06,
all the Banks) and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks (including their
successors and assigns).
9.05 Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received notice from
a Bank or a Credit Party referring to the Credit Document, describing such
Default or Event of Default and stating that such notice is a "notice of
default." In the event that the Administrative Agent receives such a
notice, the Administrative Agent shall give prompt notice thereof to the
Banks. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the
Required Banks.
9.06 Non-Reliance on Agents and Other Banks. Each Bank expressly
acknowledges that neither the Agent, the Co-Agents nor the Administrative
Agent nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties
to it and that no act by the Agent, the Co-Agents or the Administrative
Agent or any affiliate thereof hereinafter taken, including any review of
the affairs of the Borrower, shall be deemed to constitute any
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representation or warranty by the Agent, the Co-Agents or the
Administrative Agent to any Bank. Each Bank represents to the Agent, the
Co-Agents and the Administrative Agent that it has, independently and
without reliance upon the Agent, the Co-Agents or the Administrative Agent
or any other Bank, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower and made its own decision to
make its Loans hereunder and enter into this Credit Agreement. Each Bank
also represents that it will, independently and without reliance upon the
Agent, the Co-Agents or the Administrative Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business,
assets, operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the
Administrative Agent hereunder, neither the Agent, the Co-Agents nor the
Administrative Agent shall have any duty or responsibility to provide any
Bank with any credit or other information concerning the business,
operations, assets, property, financial or other conditions, prospects or
creditworthiness of the Borrower which may come into the possession of the
Agent, the Co-Agents nor the Administrative Agent or any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.07 Indemnification. The Banks agree to indemnify the Agent, the
Co-Agents and the Administrative Agent in their respective capacities as
such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including
without limitation at any time following the payment of the Obligations) be
imposed on, incurred by or asserted against the Agent, the Co-Agents or the
Administrative Agent in their respective capacities as such in any way
relating to or arising out of this Credit Agreement or the other Credit
Documents or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Agent, the Co-Agents or the Administrative Agent under or in
connection with any of the foregoing; provided that no Bank shall be liable
for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or willful misconduct of
the Agent, a Co-Agent or the Administrative Agent. If any indemnity
furnished to the Agent, the Co-Agents or the Administrative Agent for any
purpose shall, in the opinion of the Agent, the Co-Agents or the
Administrative Agent, be insufficient or become impaired, the
Administrative Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
payment of the Obligations and all other amounts payable hereunder and
under the other Credit Documents.
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9.08 Agents in their Individual Capacity. The Agent, the Co-Agents
and the Administrative Agent and their respective affiliates may make loans
to, accept deposits from and generally engage in any kind of business with
the Borrower or any other members of the Consolidated Borrower Group as
though the Agent, the Co-Agents or the Administrative Agent were not the
Agent, a Co-Agent or Administrative Agent hereunder. With respect to the
Loans made and all Obligations owing to it, the Agent, the Co-Agent or the
Administrative Agent shall have the same rights and powers under this
Credit Agreement as any Bank and may exercise the same as though they were
not the Agent, a Co-Agent or Administrative Agent, and the terms "Bank" and
"Banks" shall include the Agent, the Co-Agents and the Administrative Agent
in their individual capacity.
9.09 Successor Agent. The Agent, the Administrative Agent and any
Co-Agent may, at any time, resign upon 30 days' written notice to the Banks
and the Borrower, and be removed with or without cause by the Required
Banks upon 30 days' written notice to the Borrower and the Agent, the Co-
Agent or Administrative Agent. Upon any such resignation or removal, the
Required Banks, with the consent of the Borrower (which consent shall not
be unreasonably withheld or delayed), shall have the right to appoint a
successor Agent, Co-Agent or Administrative Agent. If no successor Agent,
Co-Agent or Administrative Agent shall have been so appointed by the
Required Banks, and shall have accepted such appointment, within 30 days
after the notice of resignation or notice of removal, as appropriate, then
the retiring Agent, Co-Agent or Administrative Agent shall select a
successor Agent, Co-Agent or Administrative Agent, with the consent of the
Borrower (which consent shall not be unreasonably withheld or delayed),
provided such successor is a Bank hereunder or a commercial bank organized
under the laws of the United States of America or of any State thereof and
has a combined capital and surplus of at least $400,000,000. Upon the
acceptance of any appointment as Agent, Co-Agent or Administrative Agent
hereunder by a successor, such successor Co-Agent or Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, Co-Agent or Administrative
Agent, and the retiring Agent, Co-Agent or Administrative Agent shall be
discharged from its duties and obligations as Agent, Co-Agent or
Administrative Agent, as appropriate, under this Credit Agreement and the
other Credit Documents and the provisions of this Section 9.09 shall inure
to its benefit as to any actions taken or omitted to be taken by it while
it was Agent, Co-Agent or Administrative Agent under this Credit Agreement.
SECTION 10
MISCELLANEOUS
10.01 Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered, (ii) when transmitted via telecopy (or other
facsimile device) to the number set out below, (iii) the day following the
day on which the same has been delivered prepaid to a reputable national
overnight air courier service, or (iv) the third Business Day following the
day on which the same is sent by certified or registered mail, postage
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prepaid, in each case to the respective parties at the address, in the case
of the Borrower and the Administrative Agent, set forth below, and in the
case of the Banks, set forth on Schedule 2.01(a), or at such other address
as such party may specify by written notice to the other parties hereto:
if to the Borrower or the Guarantors:
Owens & Minor, Inc.
4800 Cox Road
Glen Allen, Virginia 23060
Attn: Richard F. Bozard
Telephone: (804) 965-2921
Telecopy: (804) 965-5403
if to the Agent, the Administrative Agent or the Swingline Lender:
NationsBank of North Carolina, N.A.
NationsBank Plaza, 6th Floor
NC1-002-06-19
Charlotte, North Carolina 28255
Attn: Tracy Crotts
Telephone: (704) 386-9368
Telecopy: (704) 386-9923
with a copy to:
NationsBank of North Carolina, N.A.
1111 East Main Street
Fourth Floor Pavilion
VA2-310-04-07
Richmond, Virginia 23277-0001
Attn: Robert Y. Bennett
Vice President
Telephone: (804) 788-3631
Telecopy: (804) 788-3669
10.02 Right of Set-Off. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of
any such rights, the Borrower agrees that upon the occurrence and during
the continuance of an Event of Default and the commencement of the remedies
described in Section 8.02 hereof, each Bank is authorized at any time and
from time to time, without presentment, demand, protest or other notice of
any kind (all of which rights being hereby expressly waived), to set-off
and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by such Bank (including,
without limitation branches, agencies or Affiliates of such Bank wherever
located) to or for the credit or the account of the Borrower against
obligations and liabilities of the Borrower to such Bank hereunder, under
the Notes, the other Credit Documents or otherwise, irrespective of whether
such Bank shall have made any demand hereunder and although such
obligations, liabilities or claims, or any of them, may be contingent or
unmatured, and any such set-off shall be deemed to have been made
immediately upon the occurrence of an Event of Default even though such
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charge is made or entered on the books of such Bank subsequent thereto.
The Borrower hereby agrees that any Person purchasing a participation in
the Loans and Commitments hereunder pursuant to Section 10.03(c) or Section
2.20. may exercise all rights of set-off with respect to its participation
interest as fully as if such Person were a Bank hereunder. The
Administrative Agent and the Banks agree to give written notice to the
appropriate Credit Party of any exercise of set-off, bankers' lien or other
similar right; provided, however, that any such notice need not be given in
advance of the exercise thereof.
10.03 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that the
Borrower may not assign and transfer any of its interests without
prior written consent of the Banks; provided further that the
rights of each Bank to transfer, assign or grant participations
in its rights and/or obligations hereunder shall be limited as
set forth in this Section 10.03, provided however that nothing
herein shall prevent or prohibit any Bank from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank, or
(ii) granting assignments or participation in such Bank's Loans
and/or Commitments hereunder to its parent company and/or to any
affiliate of such Bank which is at least 50% owned by such Bank
or its parent company.
(b) Assignments. Each Bank may with the prior written
consent of the Borrower and the Administrative Agent, which
consent shall not be unreasonably withheld or delayed, assign all
or a portion of its rights and obligations hereunder pursuant to
an assignment agreement (an "Assignment") substantially in the
form of Schedule 10.03(b) to one or more Eligible Assignees,
provided that (i) any such prospective assignment shall first be
offered to the other Banks on the same terms and conditions as
are available to the prospective assignee, (ii) so long as no
Event of Default shall then exist and be continuing, after a
period of 15 days from first offering such assignment interest to
the Banks as provided in the foregoing subsection (i) hereof, the
assigning Bank shall give notice to the Borrower of any such
prospective assignment and the Borrower may, at its own expense
with the assistance of the Administrative Agent, within a period
of 30 days thereafter, make arrangements for another bank or
financial institution reasonably acceptable to the Administrative
Agent to purchase and accept such assignment interest (at par
without payment of any fee, other than the $1,500 transfer fee to
the Administrative Agent described below, on account thereof),
(iii) any such assignment shall be in a minimum aggregate amount
of $10,000,000 of the Commitments and in integral multiples of
$1,000,000 above such amount, and (iv) each such assignment shall
be of a constant not varying the percentage of all of the
assigning Bank's rights and obligations under this Credit
Agreement. The Administrative Agent shall maintain a copy of
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each Assignment and the names and addresses of the Banks, and the
Commitment of, and principal amount of the Loans owing to, each
Bank pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive in
the absence of manifest error and the Credit Parties, the Agents
and the Banks may treat each person whose name is recorded in the
Register pursuant to the terms hereof as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower and any Bank, at any reasonable time
and from time to time upon reasonable prior notice. Any such
assignment hereunder shall be effective upon (i) the written
consent of the Borrower and the Administrative Agent, (ii)
delivery to the Administrative Agent of a copy of the Assignment
together with a transfer fee of $1,500 payable by the assigning
Bank to the Administrative Agent for its own account and (iii)
the Administrative Agent's recordation of the name of the
assignee in the Register. The assigning Bank will give prompt
notice to the Administrative Agent and the Borrower of any
Assignment. Upon the effectiveness of any such assignment (and
after notice to the Borrower as provided herein), the assignee
shall become a "Bank" for all purposes of this Credit Agreement
and the other Credit Documents and, to the extent of such
assignment, the assigning Bank shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment
components being assigned. Along such lines the Borrower agrees
that upon notice of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the
assigning Bank and to the assignee separate promissory notes in
the amount of their respective interests substantially in the
form of the original Note (but with notation thereon that it is
given in substitution for and replacement of the original Note or
any replacement notes thereof). All surrendered Notes shall be
canceled and returned to the Borrower.
(c) Participations. Each Bank may sell, transfer, grant or
assign participations in all or any part of such Bank's interests
and obligations hereunder; provided that (i) such selling Bank
shall remain a "Bank" for all purposes under this Credit
Agreement (such selling Bank's obligations under the Credit
Documents remaining unchanged) and the participant shall not
constitute a Bank hereunder, (ii) no such participant shall have,
or be granted, rights to approve any amendment or waiver relating
to this Credit Agreement or the other Credit Documents except to
the extent any such amendment or waiver would (A) reduce the
principal of or rate of interest on or fees in respect of any
Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of
the Termination Date or the date of any mandatory prepayment),
interest or fees in which the participant is participating, or
(C) release all or substantially all of the collateral or
guaranties (except as expressly provided in the Credit Documents)
supporting any of the Loans or Commitments in which the
participant is participating, (iii) sub-participations by the
participant (except to an affiliate, parent company or affiliate
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of a parent company of the participant) shall be prohibited and
(iv) any such participations shall be in a minimum aggregate
amount of $5,000,000 of the Commitments and in integral multiples
of $1,000,000 in excess thereof. In the case of any such
participation, the participant shall not have any rights under
this Credit Agreement or the other Credit Documents (the
participant's rights against the selling Bank in respect of such
participation to be those set forth in the participation
agreement with such Bank creating such participation) and all
amounts payable by the Borrower hereunder shall be determined as
if such Bank had not sold such participation.
10.04 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Administrative Agent or any Bank in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any Guarantor and the Administrative Agent
or any Bank shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any
other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder.
The rights and remedies provided herein are cumulative and not exclusive of
any rights or remedies which the Administrative Agent or any Bank would
otherwise have. No notice to or demand on the Borrower in any case shall
entitle the Borrower or any Guarantor to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Banks to any other or further
action in any circumstances without notice or demand.
10.05 Payment of Expenses, etc. The Borrower agrees to: (i) pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the negotiation, preparation, execution and delivery and
administration of this Credit Agreement and the other Credit Documents and
the documents and instruments referred to therein (including, without
limitation, the reasonable fees and expenses of Moore & Van Allen, special
counsel to the Administrative Agent) and any amendment, waiver or consent
relating hereto and thereto including, but not limited to, any such
amendments, waivers or consents resulting from or related to any work-out,
renegotiation or restructure relating to the performance by the Borrower
under this Credit Agreement and of the Administrative Agent and the Banks
in connection with enforcement of the Credit Documents and the documents
and instruments referred to therein (including, without limitation, in
connection with any such enforcement, the reasonable fees and disbursements
of counsel for the Administrative Agent and each of the Banks, including
in-house counsel); (ii) pay and hold each of the Banks harmless from and
against any and all present and future stamp and other similar taxes with
respect to the foregoing matters and save each of the Banks harmless from
and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank) to
pay such taxes; and (iii) indemnify each Bank, its officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way
related to, or by reason of, any investigation, litigation or other
proceeding (whether or not any Bank is a party thereto) related to the
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entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or
the consummation of any other transactions contemplated in any Credit
Document, including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investiga-
tion, litigation or other proceeding (but excluding (i) any costs or
expenses associated with the transfer of a participation interest under
Section 10.03(a)(ii) or 10.03(c), and (ii) any such losses, liabilities,
claims, damages or expenses to the extent incurred by reason of gross
negligence or willful misconduct on the part of the Person to be
indemnified).
10.06 Amendments, Waivers and Consents. Neither this Credit
Agreement nor any other Credit Document nor any of the terms hereof or
thereof may be amended, changed, waived, discharged or terminated unless
such amendment, change, waiver, discharge or termination is in writing
signed by the Required Banks, provided that no such amendment, change,
waiver, discharge or termination shall, without the consent of each Bank,
(i) extend the scheduled maturities (including the final maturity and any
mandatory prepayments) of any Loan, or any portion thereof, or reduce the
rate or extend the time of payment of interest (other than as a result of
waiving the applicability of any post-default increase in interest rates)
thereon or fees hereunder or reduce the principal amount thereof, or
increase the Commitments of the Banks over the amount thereof in effect (it
being understood and agreed that a waiver of any Default or Event of
Default or of a mandatory reduction in the total commitments shall not
constitute a change in the terms of any Commitment of any Bank), (ii)
release any Guarantor from its guaranty obligations hereunder, (iii) amend,
modify or waive any provision of this Section or Section 2.13, 2.14, 2.15,
2.16, 2.19, 8.01(a), 9.07, 10.02, 10.03 and the provisions of Section
2.12(b) relating to a mandatory reduction in Commitments on account of a
public issuance of indebtedness, (iv) reduce any percentage specified in,
or otherwise modify, the definition of Required Banks or (v) consent to the
assignment or transfer by the Borrower (or Guarantor) of any of its rights
and obligations under (or in respect of) this Credit Agreement. No
provision of Section 9 may be amended without the consent of the
Administrative Agent.
10.07 Counterparts. This Credit Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall
be an original, but all of which shall constitute one and the same
instrument. It shall not be necessary in making proof of this Credit
Agreement to produce or account for more than one such counterpart.
10.08 Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the
meaning or construction of any provision of this Credit Agreement.
10.09 Survival of Indemnification. All indemnities set forth herein,
including, without limitation, in Sections 2.13, 2.15 or 10.05 shall
survive the execution and delivery of this Credit Agreement, and the making
of the Loans, the repayment of the Loans and other obligations and the
termination of the Commitment hereunder.
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10.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS
AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA. Any
legal action or proceeding with respect to this Credit Agreement
or any other Credit Document may be brought in the courts of the
Commonwealth of Virginia in City of Richmond, or of the United
States for the Eastern District of Virginia, and, by execution
and delivery of this Credit Agreement, each of the Credit Parties
hereby irrevocably accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents
to the service of process out of any of the aforementioned courts
in any such action or proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to it at the
address set out for notices pursuant to Section 10.01, such
service to become effective 30 days after such mailing. Nothing
herein shall affect the right of the Agent to serve process in
any other manner permitted by law or to commence legal
proceedings or to otherwise proceed against the Borrower in any
other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives
any objection which it may now or hereafter have to the laying of
venue of any of the aforesaid actions or proceedings arising out
of or in connection with this Credit Agreement or any other
Credit Document brought in the courts referred to in subsection
(a) hereof and hereby further irrevocably waives and agrees not
to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an
inconvenient forum.
(c) EACH OF THE AGENTS, EACH OF THE BANKS AND EACH OF THE
CREDIT PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.11 Severability. If any provision of any of the Credit Documents
is determined to be illegal, invalid or unenforceable, such provision shall
be fully severable and the remaining provisions shall remain in full force
and effect and shall be construed without giving effect to the illegal,
invalid or unenforceable provisions.
10.12 Entirety. This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto,
and supersede all prior agreements and understandings, oral or written, if
any, including any commitment letters or correspondence relating to the
Credit Documents or the transactions contemplated herein and therein.
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10.13 Survival of Representations and Warranties. All
representations and warranties made by the Borrower herein shall survive
delivery of the Notes and the making of the Loans hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as
of the date first above written.
BORROWER:
O&M HOLDING, INC.,
a Virginia corporation
(to be renamed Owens & Minor, Inc. after the
Initial Funding Date)
By____________________________
Title_________________________
GUARANTORS:
OWENS & MINOR, INC.
a Virginia corporation
(to be renamed Owens & Minor Medical, Inc. after the
Initial Funding Date)
By____________________________
Title_________________________
NATIONAL MEDICAL SUPPLY CORPORATION
a Delaware corporation
By____________________________
Title_________________________
OWENS & MINOR WEST, INC.
a California corporation
By____________________________
Title_________________________
KOLEY'S MEDICAL SUPPLY, INC.
a Nebraska corporation
By____________________________
Title_________________________
LYONS PHYSICIAN SUPPLY COMPANY
an Ohio corporation
By____________________________
Title_________________________
A. KUHLMAN & COMPANY
a Michigan corporation
By____________________________
Title_________________________
STUART MEDICAL, INC.
a Pennsylvania corporation
By____________________________
Title_________________________
BANKS:
NATIONSBANK OF NORTH CAROLINA, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent and
Administrative Agent
By____________________________
Robert Y. Bennett,
Vice President
CHEMICAL BANK,
individually in its capacity as a
Bank and in its capacity as a Co-Agent
By____________________________
Title_________________________
CRESTAR BANK,
individually in its capacity as a
Bank and in its capacity as a Co-Agent
By____________________________
Title_________________________
BANK OF AMERICA NT & SA
By____________________________
Title_________________________
THE BANK OF NOVA SCOTIA
By____________________________
Title_________________________
FIRST UNION NATIONAL BANK OF VIRGINIA
By____________________________
Title_________________________
PNC BANK, NATIONAL ASSOCIATION
By____________________________
Title_________________________
BANK OF MONTREAL
By____________________________
Title_________________________
THE BANK OF NEW YORK
By____________________________
Title_________________________
MELLON BANK, N.A.
By____________________________
Title_________________________
NATIONAL WESTMINSTER BANK USA
By____________________________
Title_________________________
NBD BANK, N.A.
By____________________________
Title_________________________
THE SANWA BANK LTD.
By____________________________
Title_________________________
SHAWMUT BANK CONNECTICUT N.A.
By____________________________
Title_________________________
SIGNET BANK/VIRGINIA
By____________________________
Title_________________________
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By____________________________
Title_________________________