Exhibit 10.1
EXECUTION COPY
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$100,000,000
CREDIT AGREEMENT
among
GENESIS HEALTH VENTURES, INC.
as Borrower,
and
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS PARTIES HERETO,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
GENERAL ELECTRIC CAPITAL CORPORATION
and
ING CAPITAL LLC,
as Syndication Agents
and
LASALLE BANK NATIONAL ASSOCIATION,
and
U.S. BANK, NATIONAL ASSOCIATION,
as Documentation Agents
Dated as of December 1, 2003
WACHOVIA CAPITAL MARKETS, LLC, as Co-Lead Arranger and Sole Bookrunner
and
GENERAL ELECTRIC CAPITAL CORPORATION, as Co-Lead Arranger
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TABLE OF CONTENTS
----------------- Page
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ARTICLE I DEFINITIONS...............................................................................1
Section 1.1 Defined Terms.............................................................1
Section 1.2 Other Definitional Provisions............................................27
Section 1.3 Accounting Terms.........................................................28
ARTICLE II THE LOANS; AMOUNT AND TERMS.............................................................29
Section 2.1 Revolving Loans..........................................................29
Section 2.2 Letter of Credit Subfacility.............................................31
Section 2.3 Swingline Loan Subfacility...............................................34
Section 2.4 Fees.....................................................................36
Section 2.5 Commitment Reductions....................................................37
Section 2.6 Prepayments..............................................................37
Section 2.7 Minimum Principal Amount of Tranches; Lending Offices....................38
Section 2.8 Default Rate and Payment Dates...........................................38
Section 2.9 Conversion Options.......................................................38
Section 2.10 Computation of Interest and Fees.........................................39
Section 2.11 Pro Rata Treatment and Payments..........................................39
Section 2.12 Non-Receipt of Funds by the Administrative Agent.........................42
Section 2.13 Inability to Determine Interest Rate.....................................42
Section 2.14 Illegality...............................................................43
Section 2.15 Requirements of Law......................................................43
Section 2.16 Indemnity................................................................45
Section 2.17 Taxes....................................................................45
Section 2.18 Indemnification; Nature of Issuing Lender's Duties.......................47
ARTICLE III REPRESENTATIONS AND WARRANTIES.........................................................49
Section 3.1 Financial Condition......................................................49
Section 3.2 No Change................................................................49
Section 3.3 Corporate Existence; Compliance with Law.................................49
Section 3.4 Corporate Power; Authorization; Enforceable Obligations..................50
Section 3.5 No Legal Bar; No Default.................................................51
Section 3.6 No Material Litigation...................................................51
Section 3.7 Investment Company Act...................................................51
Section 3.8 Margin Regulations.......................................................51
Section 3.9 ERISA....................................................................52
Section 3.10 Environmental Matters....................................................52
Section 3.11 Use of Proceeds..........................................................53
Section 3.12 Subsidiaries.............................................................53
Section 3.13 Ownership................................................................54
Section 3.14 Indebtedness.............................................................54
Section 3.15 Taxes....................................................................54
Section 3.16 Intellectual Property....................................................54
Section 3.17 Solvency.................................................................55
Section 3.18 Investments..............................................................55
i
Section 3.19 Location of Collateral...................................................55
Section 3.20 No Burdensome Restrictions...............................................55
Section 3.21 Brokers' Fees............................................................56
Section 3.22 Labor Matters............................................................56
Section 3.23 Security Documents.......................................................56
Section 3.24 Accuracy and Completeness of Information.................................56
Section 3.25 Consummation of Spin-off; Representations and
Warranties from Other Documents..........................................57
Section 3.26 Fraud and Abuse..........................................................57
Section 3.27 Licensing and Accreditation..............................................57
Section 3.28 Other Regulatory Protection..............................................58
Section 3.29 Material Contracts.......................................................58
Section 3.30 Insurance................................................................59
Section 3.31 Reimbursement from Third Party Payors....................................59
Section 3.32 Other Agreements.........................................................59
Section 3.33 Classification as Senior Indebtedness....................................59
Section 3.34 Tax Shelter Regulations..................................................59
Section 3.35 Medicare and Medicaid Notices and Filings Related to Business............59
ARTICLE IV CONDITIONS PRECEDENT....................................................................60
Section 4.1 Conditions to Closing Date and Initial Extensions of Credit..............60
Section 4.2 Conditions to All Extensions of Credit...................................65
ARTICLE V AFFIRMATIVE COVENANTS....................................................................65
Section 5.1 Financial Statements.....................................................66
Section 5.2 Certificates; Other Information..........................................67
Section 5.3 Payment of Obligations...................................................68
Section 5.4 Conduct of Business and Maintenance of Existence.........................68
Section 5.5 Maintenance of Property; Insurance.......................................68
Section 5.6 Inspection of Property; Books and Records; Discussions...................69
Section 5.7 Notices..................................................................69
Section 5.8 Environmental Laws.......................................................71
Section 5.9 Financial Covenants......................................................71
Section 5.10 Additional Subsidiary Guarantors.........................................72
Section 5.11 Compliance with Law......................................................72
Section 5.12 Pledged Assets...........................................................73
Section 5.13 Further Assurances.......................................................73
ARTICLE VI NEGATIVE COVENANTS......................................................................73
Section 6.1 Indebtedness.............................................................73
Section 6.2 Liens....................................................................75
Section 6.3 Nature of Business.......................................................75
Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc...................75
Section 6.5 Advances, Investments and Loans..........................................76
Section 6.6 Transactions with Affiliates.............................................76
Section 6.7 Ownership of Subsidiaries; Restrictions..................................76
Section 6.8 Fiscal Year; Organizational Documents; Material Contracts................76
Section 6.9 Limitation on Restricted Actions.........................................77
Section 6.10 Restricted Payments......................................................77
Section 6.11 Sale Leasebacks..........................................................78
Section 6.12 No Further Negative Pledges..............................................78
Section 6.13 Operating Lease Obligations..............................................79
ii
ARTICLE VII EVENTS OF DEFAULT......................................................................79
Section 7.1 Events of Default........................................................79
Section 7.2 Acceleration; Remedies...................................................82
ARTICLE VIII THE AGENT.............................................................................82
Section 8.1 Appointment..............................................................82
Section 8.2 Delegation of Duties.....................................................83
Section 8.3 Exculpatory Provisions...................................................83
Section 8.4 Reliance by Administrative Agent.........................................83
Section 8.5 Notice of Default........................................................84
Section 8.6 Non-Reliance on Administrative Agent and Other Lenders...................84
Section 8.7 Indemnification..........................................................85
Section 8.8 Administrative Agent in Its Individual Capacity..........................85
Section 8.9 Successor Administrative Agent...........................................85
Section 8.10 Other Agents.............................................................86
ARTICLE IX MISCELLANEOUS...........................................................................86
Section 9.1 Amendments, Waivers and Release of Collateral............................86
Section 9.2 Notices..................................................................87
Section 9.3 No Waiver; Cumulative Remedies...........................................88
Section 9.4 Survival of Representations and Warranties...............................88
Section 9.5 Payment of Expenses and Taxes............................................89
Section 9.6 Successors and Assigns; Participations; Purchasing Lenders...............89
Section 9.7 Adjustments; Set-off.....................................................92
Section 9.8 Table of Contents and Section Headings...................................93
Section 9.9 Counterparts.............................................................93
Section 9.10 Effectiveness............................................................93
Section 9.11 Severability.............................................................93
Section 9.12 Integration..............................................................94
Section 9.13 Governing Law............................................................94
Section 9.14 Consent to Jurisdiction and Service of Process...........................94
Section 9.15 [Intentionally Omitted]..................................................94
Section 9.16 Confidentiality..........................................................95
Section 9.17 Acknowledgments..........................................................95
Section 9.18 Waivers of Jury Trial....................................................96
ARTICLE X GUARANTY.................................................................................96
Section 10.1 The Guaranty.............................................................96
Section 10.2 Bankruptcy...............................................................97
Section 10.3 Nature of Liability......................................................97
Section 10.4 Independent Obligation...................................................97
Section 10.5 Authorization............................................................98
Section 10.6 Reliance.................................................................98
Section 10.7 Waiver...................................................................98
Section 10.8 Limitation on Enforcement................................................99
Section 10.9 Confirmation of Payment..................................................99
iii
Schedules
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Schedule 1.1-1 Account Designation Letter
Schedule 1.1-2 Permitted Liens
Schedule 1.1-3 Consolidated Capital Expenditures
Schedule 1.1-4 Consolidated EBITDA
Schedule 1.1-5 Existing Letters of Credit
Schedule 1.1-6 Indemnified Guaranty Obligations
Schedule 1.1-7 Existing Permitted Joint Ventures
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.3(d) Form of Swingline Note
Schedule 2.9 Form of Notice of Conversion/Extension
Schedule 3.9 ERISA
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.22 Labor Matters
Schedule 3.28 Material Contracts
Schedule 3.29 Insurance
Schedule 3.34 Capital Structure
Schedule 4.1-1 Form of Secretary's Certificate
Schedule 4.1-2 Form of Solvency Certificate
Schedule 5.10 Form of Joinder Agreement
Schedule 5.13 Leased Properties
Schedule 6.1(b) Indebtedness
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
iv
CREDIT AGREEMENT, dated as of December 1, 2003, among GENESIS HEALTH
VENTURES, INC., a Pennsylvania corporation (to be renamed NEIGHBORCARE, INC.
following the consummation of the Spin-off (as defined herein)) (the
"Borrower"), those Domestic Subsidiaries of the Borrower identified as a
"Guarantor" on the signature pages hereto and such other Domestic Subsidiaries
of the Borrower as may from time to time become a party hereto (individually a
"Guarantor" and collectively, the "Guarantors"), the several banks and other
financial institutions as may from time to time become parties to this Agreement
(collectively, the "Lenders"; and individually, a "Lender"), and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent
for the Lenders hereunder (in such capacity, the "Administrative Agent"),
GENERAL ELECTRIC CAPITAL CORPORATION and ING CAPITAL LLC, as syndication agents
for the Lenders hereunder (in such capacity, each a "Syndication Agent") and
LASALLE BANK NATIONAL ASSOCIATION and U.S. BANK, NATIONAL ASSOCIATION, as
documentation agents for the Lenders hereunder (in such capacity, each a
"Documentation Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make loans and
other financial accommodations to the Borrower in the amount of up to
$100,000,000, as more particularly described herein; and
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms.
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As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"Account Designation Letter" shall mean the Notice of Account
Designation Letter dated the Closing Date from the Borrower to the
Administrative Agent substantially in the form attached hereto as Schedule
1.1-1.
"Additional Credit Party" shall mean each Person that becomes a
Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.
1
"Administrative Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Affiliate" shall mean as to any Person, any other Person (excluding
any Subsidiary) which, directly or indirectly, is in control of, is controlled
by, or is under common control with, such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" a Person if such
Person possesses, directly or indirectly, power either (a) to vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agreement" or "Credit Agreement" shall mean this Credit Agreement, as
amended, modified or supplemented from time to time in accordance with its
terms.
"Aggregate Revolving Committed Amount" shall have the meaning set forth
in Section 2.1.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"Prime Rate" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia at its principal office in Charlotte,
North Carolina as its prime rate. Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in the Prime Rate
occurs. The parties hereto acknowledge that the rate announced publicly by
Wachovia as its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and "Federal
Funds Effective Rate" shall mean, for any day, the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from three
federal funds brokers of recognized standing selected by it. If for any reason
the Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"Alternate Base Rate Loans" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"Applicable Percentage" shall mean, for any day, the rate per annum set
forth below opposite the applicable level then in effect, it being understood
that the Applicable Percentage for (i) Loans that are Alternate Base Rate Loans
shall be the percentage set forth under the column "Alternate Base Rate Margin
for Loans", (ii) Loans that are LIBOR Rate Loans shall be the percentage set
forth under the column "LIBOR Rate Margin for Loans and Letter of Credit Fee",
(iii) the Letter of Credit Fee shall be the percentage set forth under the
column "LIBOR Rate Margin for Loans and Letter of Credit Fee", and (iv) the
Commitment Fee shall be the percentage set forth under the column "Commitment
Fee":
2
- ----------- ---------------------- --------------- ---------------- ------------
LIBOR Rate
Margin for
Loans and Alternate
Letter of Base Rate
Leverage Credit Fee Margin for Commitment
Level Ratio Loans Fee
- ----------- ---------------------- --------------- ---------------- ------------
I > 2.75 to 1.0 2.25% 1.25% 0.50%
-
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II > 1.75 to 1.0 but 2.00% 1.00% 0.50%
-
< 2.75 to 1.0
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III < 1.75 to 1.0 1.75% 0.75% 0.50%
- ----------- ---------------------- --------------- ---------------- ------------
The Applicable Percentage shall, in each case, be determined and
adjusted quarterly on the date five (5) Business Days after the date on which
the Administrative Agent has received from the Borrower the financial
information and certifications required to be delivered to the Administrative
Agent and the Lenders in accordance with the provisions of Sections 5.1(a) and
(b) and Section 5.2(b) (each an "Interest Determination Date"). Such Applicable
Percentage shall be effective from such Interest Determination Date until the
next such Interest Determination Date. The initial Applicable Percentages shall
be based on Level II until the first Interest Determination Date occurring after
the delivery of the officer's compliance certificate pursuant to Section 5.2(a)
for the quarter ended December 31, 2003. After the Closing Date, if the Borrower
shall fail to provide the quarterly financial information and certifications in
accordance with the provisions of Sections 5.1(a) and (b) and Section 5.2(b),
the Applicable Percentage from such Interest Determination Date shall, on the
date five (5) Business Days after the date by which the Borrower was so required
to provide such financial information and certifications to the Administrative
Agent and the Lenders, be based on Level I until such time as such information
and certifications are provided, whereupon the Level shall be determined by the
then current Leverage Ratio.
"Arranger" shall mean either of, Wachovia Capital Markets, LLC and
General Electric Capital Corporation, as Co-Lead Arrangers.
"Asset Disposition" shall mean the disposition of any or all of the
assets (including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) the sale, lease, transfer or other disposition of assets
permitted by Section 6.4(a)(i), (ii), (iii), (iv) or (v) hereof or (ii) any
Equity Issuance.
"Availability" shall mean, as of any date of determination, the
Aggregate Revolving Committed Amount then in effect less the sum of (i)
outstanding Revolving Loans, (ii) outstanding Swingline Loans and (iii)
outstanding LOC Obligations.
3
"Bankruptcy Code" shall mean the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from time to
time.
"Borrower" shall have the meaning set forth in the first paragraph of
this Agreement.
"Borrowing Date" shall mean, in respect of any Loan, the date such Loan
is made.
"Business" shall have the meaning set forth in Section 3.10.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or New York, New York
are authorized or required by law to close; provided, however, that when used in
connection with a rate determination, borrowing or payment in respect of a LIBOR
Rate Loan, the term "Business Day" shall also exclude any day on which banks in
London, England are not open for dealings in Dollar deposits in the London
interbank market.
"Capital Lease" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" shall mean the capitalized lease
obligations relating to a Capital Lease determined in accordance with GAAP.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean (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 ("Government Obligations"), (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-2 or the equivalent thereof or
from Moody's is at least P-2 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-2 (or
the equivalent thereof) or better by S&P or P-2 (or the equivalent thereof) or
better by Moody's and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a Lender) or
a recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by the United
States of America, (v) obligations of any state of the United States or any
political subdivision thereof for the payment of the principal and redemption
price of and interest on which there shall have been irrevocably deposited
Government Obligations maturing as to principal and interest at times and in
amounts sufficient to provide such payment, and (vi) auction preferred stock
rated in the highest short-term credit rating category by S&P or Moody's.
4
"Change of Control" shall mean the occurrence of any of the following:
(a) any "person" or "group" (within the meaning of Sections 13(d) and 14(d)(2)
of the Securities Exchange Act of 1934) becomes the "beneficial owner" (as
defined in Rule l3d-3 under the Securities Exchange Act of 1934) of more than
35% of then outstanding Voting Stock of the Borrower, measured by voting power
rather than the number of shares; provided, however, that for the purposes
hereof any Person shall not be deemed to be a "beneficial owner" (as defined in
Rule l3d-3 under the Securities Exchange Act of 1934) of shares tendered
pursuant to a tender offer or exchange offer paid by or on behalf of that Person
or any Affiliate of that Person until the tendered shares are accepted for
purchase or exchange, (b) Continuing Directors shall cease for any reason to
constitute a majority of the members of the board of directors of the Borrower
then in office or (c) the occurrence of a "Change of Control" (or any comparable
term) under, and as defined in, the documents evidencing or governing any
Subordinated Indebtedness.
"Closing Date" shall mean the date of this Agreement.
"CMS" shall mean the Center for Medicare and Medicaid Services of HHS
and any predecessor or successor thereto, including the United States Health
Care Financing Administration.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean a collective reference to the collateral which
is identified in, and at any time will be covered by, the Security Documents.
"Commitment" shall mean the Revolving Commitment, the LOC Commitment
and the Swingline Commitment, individually or collectively, as appropriate.
"Commitment Fee" shall have the meaning set forth in Section 2.4(a).
"Commitment Percentage" shall mean the Revolving Commitment Percentage
and the LOC Commitment Percentage, as appropriate.
"Commitment Period" shall mean the period from and including the
Closing Date to but not including the Maturity Date.
"Commitment Transfer Supplement" shall mean a Commitment Transfer
Supplement, substantially in the form of Schedule 9.6(c).
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001(a)(14) of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414(b), (c),
(m) or (o) of the Code.
5
"Consolidated Capital Expenditures" shall mean, for any period, all
capital expenditures of the Borrower and its Subsidiaries on a consolidated
basis for such period, as determined in accordance with GAAP. The term
"Consolidated Capital Expenditures" shall not include capital expenditures in
respect of the reinvestment of proceeds derived from Recovery Events received by
the Borrower and its Subsidiaries to the extent that such reinvestment is
permitted under the Credit Documents; provided, however, that (a) for the
determinations of the fiscal quarter periods ending December 31, 2002, March 31,
2003 and June 30, 2003, Consolidated Capital Expenditures for each respective
quarter shall be deemed to be the amounts set forth on Schedule 1.1-3 and (b)
for the fiscal quarter periods ending September 30, 2003 and December 31, 2003,
Consolidated Capital Expenditures shall be an amount determined in a manner
consistent with the determinations used in calculating the amounts set forth on
Schedule 1.1-3 for the prior three fiscal quarters.
"Consolidated EBITDA" shall mean, for any period, for the Borrower and
its Subsidiaries on a consolidated basis, the sum of (a) Consolidated Net Income
for such period, plus (b) an amount which, in the determination of Consolidated
Net Income for such period, has been deducted for (i) Consolidated Interest
Expense, (ii) total federal, state, local and foreign income taxes, (iii)
depreciation and amortization expense, (iv) non-recurring expenses related to
the Spin-off including strategic planning, severance and other related costs to
the extent incurred on or after October 1, 2003 but not later than June 30,
2004, in an aggregate amount not to exceed $20,000,000 and (v) pro forma EBITDA
adjustments in connection with Permitted Acquisitions to the extent such
adjustments meet the requirements of Regulation S-X under the Securities Act of
1933, as amended, applicable to a Registration Statement under such Act on Form
S-1 and are approved by the Administrative Agent, all as determined in
accordance with GAAP; provided that Consolidated EBITDA shall exclude the effect
of (A) gains and non-cash losses on the sale, conversion or other disposition of
capital assets (other than gains on the sale or disposition of assets in the
ordinary course of business not constituting extraordinary gains), (B) gains and
non-cash losses on the acquisition, retirement, sale or other disposition of
Capital Stock of such Person or any of its Subsidiaries (other than gains on the
sale or disposition of Capital Stock in the ordinary course of business not
constituting extraordinary or nonrecurring gains), (C) gains on the collection
of life insurance proceeds, (D) any write-up of any asset or any write-down of
any non-cash charges relating to the impairment of goodwill or other intangibles
under the guidelines of FASB 142 and 143 and (E) any other non-cash gain or
credit of an extraordinary nature, in each case to the extent taken in to
account in the calculation of Consolidated Net Income for such period; provided,
however that (a) for the determinations of the fiscal quarter periods ending
March 31, 2003 and June 30, 2003, Consolidated EBITDA for each respective
quarter shall be deemed to be the amounts set forth on Schedule 1.1-4 and (b)
for the fiscal quarter periods ending September 30, 2003 and December 31, 2003,
Consolidated EBITDA shall be an amount determined in a manner consistent with
the determinations used in calculating the amounts set forth on Schedule 1.1-4
for the prior two fiscal quarters.
6
"Consolidated Interest Expense" shall mean, for any period, all cash
interest expense of the Borrower and its Subsidiaries (including, without
limitation, the interest component under Capital Leases and any synthetic lease,
tax retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product), as determined in accordance with GAAP. For purposes
hereof, Consolidated Interest Expense for the first three complete fiscal
quarters to occur after the Closing Date shall be determined by annualizing
Consolidated Interest Expense such that for the first complete fiscal quarter to
occur after the Closing Date such components would be multiplied by four (4),
the first two complete fiscal quarters would be multiplied by two (2) and the
first three fiscal quarters would be multiplied by one and one-third (1 1/3).
"Consolidated Net Income" shall mean, for any period, net income after
taxes for such period of the Borrower and its Subsidiaries on a consolidated
basis, as determined in accordance with GAAP.
"Consolidated Total Assets" shall mean, on the date of computation, the
total assets of the Borrower and its Subsidiaries on a consolidated basis, as
determined in accordance with GAAP.
"Consolidated Working Capital" shall mean at anytime, the excess of (i)
current assets of the Borrower and its Subsidiaries on a consolidated basis at
such time less (ii) current liabilities of the Borrower and its Subsidiaries on
a consolidated basis at such time, all in accordance with GAAP.
"Continuing Directors" shall mean, at the end of any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such period were directors of the Borrower (together with any new
director whose election by the Borrower's board of directors or whose nomination
for election by the Borrower's shareholders was approved by a vote of at least
two-thirds of the directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved).
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Copyright Licenses" shall mean any written agreement naming any Credit
Party as licensor and granting any right under any Copyright including, without
limitation, any thereof referred to in Schedule 3.16.
"Copyrights" shall mean (a) all registered United States copyrights in
all Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications in the United
States Copyright Office including, without limitation, any thereof referred to
in Schedule 3.16, and (b) all renewals thereof including, without limitation,
any thereof referred to in Schedule 3.16.
7
"Credit Documents" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the LOC Documents and the Security Documents.
"Credit Party" shall mean any of the Borrower or the Guarantors.
"Credit Party Obligations" shall mean, without duplication, (i) all of
the obligations, whenever arising, under this Agreement, the Notes or any of the
other Credit Documents (including, but not limited to, the Obligations of the
Credit Parties to the Lenders (including the Issuing Lender) and the
Administrative Agent, and any interest accruing after the occurrence of a filing
of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit
Party, regardless of whether such interest is an allowed claim under the
Bankruptcy Code) and (ii) solely for the purposes of the Security Documents and
the Guaranty, all liabilities and obligations, whenever arising, owing from any
Credit Party or any of their Subsidiaries to any Hedging Agreement Provider
arising under any Secured Hedging Agreement permitted pursuant to Section
6.1(e).
"Debt Issuance" shall mean the issuance of any Indebtedness for
borrowed money by any Credit Party or any of its Subsidiaries (excluding, for
purposes hereof, any Equity Issuance or any Indebtedness of any Credit Party and
its Subsidiaries permitted to be incurred pursuant to Section 6.1 hereof).
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice or the lapse of time, or
both, or any other condition, has been satisfied.
"Defaulting Lender" shall mean, at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"Disqualified Stock" shall mean any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible, or for which it
is exchangeable, in each case at the option of the holder of the Capital Stock),
or upon the happening of any event, matures or is mandatorily redeemable,
pursuant to a sinking fund obligation or otherwise or redeemable at the option
of the holder of the Capital Stock, in whole or in part, on or prior to the date
that is 91 days after the Maturity Date.
"Documentation Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on Schedule
9.2; and thereafter, such other office of such Lender as such Lender may from
time to time specify to the Administrative Agent and the Borrower as the office
of such Lender at which Alternate Base Rate Loans of such Lender are to be made.
8
"Domestic Subsidiary" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
"Environmental Laws" shall mean any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority or other
Requirement of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the
environment, as now or may at any time be in effect during the term of this
Agreement.
"Equity Issuance" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party of (a) shares of its
Capital Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants, (c) any shares of its Capital Stock pursuant to the
conversion of any debt securities to equity or (d) warrants or options which are
exercisable for shares of its Capital Stock. The term "Equity Issuance" shall
not include any Asset Disposition or Debt Issuance.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Eurodollar Reserve Percentage" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"Event of Default" shall mean any of the events specified in Section
7.1; provided, however, with respect to any such event, that any requirement for
the giving of notice or the lapse of time, or both, or any other condition with
respect thereto, has been satisfied.
"Excluded Subsidiary" shall mean (a) any Unrestricted Subsidiary and
(b) any Permitted Joint Venture; provided, however, that to the extent that the
portion of Consolidated EBITDA contributed by Unrestricted Subsidiaries (other
than Permitted Joint Ventures) exceeds five percent (5%) of total Consolidated
EBITDA of the Borrower and its Subsidiaries on a consolidated basis or the
portion of Consolidated Total Assets owned by Unrestricted Subsidiaries exceeds
five percent (5%) of total Consolidated Total Assets of the Borrower and its
Subsidiaries on a consolidated basis, then the Credit Parties shall cause one or
more Unrestricted Subsidiaries to comply with the provisions of Section 5.10
hereof to become a Credit Party hereunder in an amount as necessary to reduce
such contributed portion of Consolidated EBITDA and/or Consolidated Total Assets
to be less than five percent (5%) of the total Consolidated EBITDA and/or
Consolidated Total Assets of the Borrower and its Subsidiaries on a consolidated
basis.
9
"Exclusion Event" means an event or related events resulting in the
exclusion of any Credit Party from participation in any Medical Reimbursement
Program.
"Existing Credit Agreement" shall mean that certain Credit, Security,
Guaranty and Pledge Agreement, dated as of October 2, 2001, by and among the
Borrower and the Lenders party thereto, as amended through the date hereof.
"Existing Letter of Credit" shall mean each of the letters of credit
described by date of issuance, amount, purpose and the date of expiry on
Schedule 1.1-5 hereto.
"Extension of Credit" shall mean, as to any Lender, the making of a
Loan by such Lender or the issuance of, or participation in, a Letter of Credit
by such Lender.
"Federal Funds Effective Rate" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"Fee Letter" shall mean the letter agreement dated October 15, 2003
addressed to the Borrower from Wachovia and WCM, as amended, modified or
otherwise supplemented.
"Fixed Charge Coverage Ratio" shall mean, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter of the Borrower, the ratio
of (i) the sum of Consolidated EBITDA for such period minus Consolidated Capital
Expenditures for such period to (ii) the sum of Consolidated Interest Expense
for such period plus Scheduled Funded Debt Payments for such period plus cash
taxes paid during such period plus dividends paid during such period as
permitted under Section 6.10(g). Notwithstanding the foregoing, for purposes of
calculating the Fixed Charge Coverage Ratio for the first three complete fiscal
quarters to occur after the Closing Date, the Fixed Charge Coverage Ratio shall
be determined by annualizing the components of the denominator thereof such that
for the first complete fiscal quarter to occur after the Closing Date such
components would be multiplied by four (4), the first two complete fiscal
quarters would be multiplied by two (2) and the first three complete fiscal
quarters would be multiplied by one and one-third (1 1/3).
"Foreign Subsidiary" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person
10
incurred, issued or assumed as the deferred purchase price of property or
services purchased by such Person (other than trade debt incurred in the
ordinary course of business and due within six months of the incurrence thereof)
which would appear as liabilities on a balance sheet of such Person, (e) the
principal portion of all obligations of such Person under Capital Leases, (f)
all obligations of such Person under Hedging Agreements, excluding any portion
thereof which would be accounted for as interest expense under GAAP, (g) the
maximum amount of all letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (h) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration prior to the date which is six months
after the Maturity Date, (i) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product, (j) all Indebtedness of others of
the type described in clauses (a) through (i) hereof secured by (or for which
the holder of such Indebtedness has an existing right, contingent or otherwise,
to be secured by) any Lien on, or payable out of the proceeds of production
from, property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (k) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person of the type described in clauses
(a) through (i) hereof, and (l) all Indebtedness of the type described in
clauses (a) through (i) hereof of any partnership in which such Person is a
general partner or of any joint venture for which such Person is liable;
provided, however, that Funded Debt shall not include Indebtedness among the
Credit Parties to the extent such Indebtedness would be eliminated on a
Consolidated basis.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject, however, in
the case of determination of compliance with the financial covenants set out in
Section 5.9 to the provisions of Section 1.3.
"GHC" shall mean Genesis HealthCare Corporation, a Pennsylvania
corporation and prior to the Spin-off, a wholly-owned Subsidiary of the
Borrower.
"Government Acts" shall have the meaning set forth in Section 2.18.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters for which such Person becomes obligated or similar
agreements or arrangements) for the benefit of any holder of Indebtedness of
such other Person, (iii) to lease or purchase Property, securities or services
primarily for the purpose of assuring the holder of such Indebtedness, or (iv)
to otherwise assure or hold harmless the holder of such Indebtedness against
loss in respect thereof. The amount of any Guaranty Obligation hereunder shall
(subject to any limitations set forth therein) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made. Guaranty
Obligations does not include those guaranties described in Schedule 1.1-6 to the
extent of any indemnification provided by GHC to the Borrower with respect
thereto.
11
"Guarantor" shall have the meaning set forth in the first paragraph of
this Agreement.
"Guaranty" shall mean the guaranty of the Guarantors set forth in
Article X.
"Hedging Agreement Provider" shall mean any Person that enters into a
Secured Hedging Agreement with a Credit Party or any of their Subsidiaries that
is permitted by Section 6.1(e) to the extent such Person is a Lender, an
Affiliate of a Lender or any other Person that was a Lender (or an Affiliate of
a Lender) at the time it entered into the Secured Hedging Agreement but has
ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the
Credit Agreement.
"Hedging Agreements" shall mean, with respect to any Person, any
agreement entered into to protect such Person against fluctuations in interest
rates, or currency or raw materials values, including, without limitation, any
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"HIPAA" means the Health Insurance Portability and Accountability Act
of 1996, Pub. L. 104-191, Aug. 21, 1996, 110 Stat. 1936.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases plus any accrued interest
thereon, (i) all obligations of such Person under Hedging Agreements, (j) the
maximum amount of all letters of credit issued or bankers' acceptances
12
facilities created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent unreimbursed), (k) all preferred Capital
Stock issued by such Person and which by the terms thereof could be (at the
request of the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration, (l) the principal balance
outstanding under any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product plus any
accrued interest thereon, and (m) the Indebtedness of any partnership in which
such Person is a general partner of any joint venture for which such Person is
liable.
"Insolvency" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"Insolvent" shall mean being in a condition of Insolvency.
"Intellectual Property" shall mean, collectively, all Copyrights,
Copyright Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.
"Interest Determination Date" shall have the meaning assigned thereto
in the definition of "Applicable Percentage".
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loan or Swingline Loan, the last Business Day of each March, June, September and
December during the term of this Agreement and on the applicable Maturity Date,
(b) as to any LIBOR Rate Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any LIBOR Rate Loan having an
Interest Period longer than three months, each day which is three months after
the first day of such Interest Period and the last day of such Interest Period
and (d) as to any Loan which is the subject of a mandatory prepayment required
pursuant to Section 2.6(b) hereof, the date of such prepayment.
"Interest Period" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate
Loan and ending one, two, three or six months thereafter, as selected
by the Borrower in the notice of borrowing or notice of conversion
given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate
Loan and ending one, two, three or six months, as selected by the
Borrower by irrevocable notice to the Administrative Agent not less
than three Business Days prior to the last day of the then current
Interest Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a LIBOR Rate
Loan would otherwise end on a day that is not a Business Day,
such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
13
(B) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar
month;
(C) if the Borrower shall fail to give notice as
provided above, the Borrower shall be deemed to have selected
an Alternate Base Rate Loan to replace the affected LIBOR Rate
Loan;
(D) any Interest Period in respect of any Loan that
would otherwise extend beyond the applicable Maturity Date for
such Loan shall end on such Maturity Date; and
(E) no more than seven (7) LIBOR Rate Loans may be in
effect at any time; provided that, for purposes hereof, LIBOR
Rate Loans with different Interest Periods shall be considered
as separate LIBOR Rate Loans, even if they shall begin on the
same date and have the same duration, although borrowings,
extensions and conversions may, in accordance with the
provisions hereof, be combined at the end of existing Interest
Periods to constitute a new LIBOR Rate Loan with a single
Interest Period.
"Investment" shall mean all investments made directly or indirectly in,
to or from any Person, whether in cash or by acquisition of shares of Capital
Stock, property, assets, indebtedness or other obligations or securities or by
loan advance, capital contribution or otherwise.
"Issuing Lender" shall mean Wachovia.
"Issuing Lender Fees" shall have the meaning set forth in Section
2.4(c).
"Joinder Agreement" shall mean a Joinder Agreement substantially in the
form of Schedule 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"Laws" means, collectively, all international, foreign, federal, state
and local statutes, treaties, rules, guidelines, regulations, ordinances, codes
and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"Lender" shall have the meaning set forth in the first paragraph of
this Agreement.
14
"Letters of Credit" shall mean (a) any letter of credit issued by the
Issuing Lender pursuant to the terms hereof and (b) any Existing Letter of
Credit, in each case as such letter of credit may be amended, modified,
extended, renewed or replaced from time to time.
"Letter of Credit Fee" shall have the meaning set forth in Section
2.4(b).
"Leverage Ratio" shall mean, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter of the Borrower, the ratio of (a) Funded Debt
of the Credit Parties and their Subsidiaries on a consolidated basis on the last
day of such period to (b) Consolidated EBITDA for such period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
"LIBOR Lending Office" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on Schedule 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR Rate" shall mean a rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) determined by the Administrative
Agent pursuant to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR Rate Loan" shall mean Loans the rate of interest applicable to
which is based on the LIBOR Rate.
15
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
Capital Lease having substantially the same economic effect as any of the
foregoing).
"Loan" shall mean a Revolving Loan and/or a Swingline Loan as
appropriate.
"LOC Commitment" shall mean the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the commitment of such
Lender to purchase participation interests in the Letters of Credit up to such
Lender's LOC Committed Amount as specified in Schedule 2.1(a), as such amount
may be reduced from time to time in accordance with the provisions hereof.
"LOC Commitment Percentage" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC Committed Amount" shall mean, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and participate in Letters
of Credit as referenced in Section 2.2 and, individually, the amount of each
Lender's LOC Commitment as specified in Schedule 2.1(a).
"LOC Documents" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
"LOC Obligations" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit plus (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"Mandatory LOC Borrowing" shall have the meaning set forth in Section
2.2(d).
"Mandatory Swingline Borrowing" shall have the meaning set forth in
Section 2.3(b)(ii).
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, property or condition (financial or otherwise)
of the Borrower or of the Credit Parties and their Subsidiaries taken as a
whole, (b) the ability of the Borrower or any Guarantor to perform its
obligations, when such obligations are required to be performed, under this
Agreement, any of the Notes or any other Credit Document or (c) the validity or
enforceability of this Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder and shall include but not be limited to an Exclusion
Event that has the effect stated in clause (a) of this definition.
16
"Material Contract" shall mean those contracts or other arrangements to
which any Credit Party or any of its Subsidiaries is a party set forth on
Schedule 3.29 hereto.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maturity Date" shall mean December 1, 2008.
"Medicaid" shall mean that entitlement program under Title XIX of the
Social Security Act that provides federal grants to states for medical
assistance based on specific eligibility criteria.
"Medicaid Certification" means certification by a state agency or other
such entity administering the Medicaid program that a health care provider or
supplier is in compliance with all the conditions of participation set forth in
the Medicaid Regulations.
"Medicaid Provider Agreement" means an agreement entered into between a
state agency or other such entity administering the Medicaid program and a
health care provider or supplier under which the health care provider or
supplier agrees to provide services or items for Medicaid patients in accordance
with the terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (ii) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (i) above;
(iii) all state statutes and plans for medical assistance enacted in connection
with the statutes and provisions described in clauses (i) and (ii) above; and
(iv) all applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (iii) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (ii) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"Medical Reimbursement Programs" shall mean a collective reference to
Medicare, Medicaid and TRICARE programs and any other healthcare program
operated by or financed in whole or in part by any foreign, domestic, federal,
state or local government and any other non-government funded third party payor
programs.
17
"Medicare" shall mean that government-sponsored entitlement program
under Title XVIII of the Social Security Act that provides for a health
insurance system for eligible elderly and disabled individuals.
"Medicare Certification" means certification by CMS or an entity under
contract with CMS that the health care provider or supplier is in compliance
with all of the conditions of participation set forth in the Medicare
Regulations.
"Medicare Provider Agreement" means an agreement entered into between
CMS or other such entity administering the Medicare program on behalf of CMS,
and a health care provider or supplier under which the health care provider or
supplier agrees to provide services or items for Medicare patients in accordance
with the terms of the agreement and Medicare Regulations.
"Medicare Regulations" shall mean, collectively, all Federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto;
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including, without limitation, the
United States Department of Health and Human Services ("HHS"), CMS, the Office
of the Inspector General for HHS (the "OIG"), or any person succeeding to the
functions of any of the foregoing) promulgated pursuant to or in connection with
any of the foregoing having the force of law, as each may be amended,
supplemented or otherwise modified from time to time.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by
any Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs paid or payable as a result
thereof (including, without limitation, reasonable legal, accounting and
investment banking fees, and sales commissions) and (b) taxes paid or payable as
a result thereof; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received by any Credit Party or any Subsidiary in respect
of any Asset Disposition, Equity Issuance or Debt Issuance.
"Note" or "Notes" shall mean the Revolving Notes and/or the Swingline
Note, collectively, separately or individually, as appropriate.
"Notice of Borrowing" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.2(b)(i), as appropriate.
18
"Notice of Conversion/Extension" shall mean the written notice of
extension or conversion as referenced and defined in Section 2.9.
"Obligations" shall mean, collectively, Loans and LOC Obligations.
"Operating Lease" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which that Person is the lessor.
"Participant" shall have the meaning set forth in Section 9.6(b).
"Participation Interest" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.2 and in
Swingline Loans as provided in Section 2.3.
"Patent License" shall mean all agreements, whether written or oral,
providing for the grant by or to a Credit Party of any right to manufacture, use
or sell any invention covered by a Patent, including, without limitation, any
thereof referred to in Schedule 3.16.
"Patents" shall mean (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in Schedule 3.16.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"Permitted Acquisition" shall mean any acquisition or any series of
related acquisitions by a Credit Party of the assets or a majority of the Voting
Stock of a Person that is incorporated, formed or organized in the United
States, or any division, line of business or other business unit of a Person
that is incorporated, formed or organized in the United States (such Person or
such division, line of business or other business unit of such Person referred
to herein as the "Target"), so long as (a) no Default or Event of Default shall
then exist or would exist after giving effect thereto, (b) the entity acquired
shall be in the same or a similar line of business as the Borrower or its
Subsidiaries, (c) there shall be not less than $25,000,000 of Availability after
giving effect thereto, (d) the Credit Parties shall demonstrate to the
reasonable satisfaction of the Administrative Agent and the Required Lenders
that the Credit Parties will be in compliance on a Pro Forma Basis with all of
the terms and provisions of the financial covenants set forth in Section 5.9,
(e) the Administrative Agent, on behalf of the Lenders, shall have received (or
shall receive in connection with the closing of such acquisition), to the extent
provided in the Security Documents, a first priority perfected security interest
in all personal property (including, without limitation, Capital Stock) acquired
with respect to the Target and the Target, if a Person, shall have executed a
Joinder Agreement in accordance with the terms of Section 5.10, (f) such
acquisition is not a "hostile" acquisition and has been approved by the Board of
Directors and/or shareholders of the applicable Credit Party and the Target, (g)
19
the Administrative Agent shall have received a certificate from a Responsible
Officer of the Borrower certifying that, in the reasonable judgment of the
Borrower, the Credit Parties have conducted such financial, legal, environmental
and consulting due diligence with respect to the Target as a substantially
similarly situated prudent purchaser acquiring substantially similar property
and/or assets would customarily conduct and (h) total consideration (including,
without limitation, assumed Indebtedness, earnout payments and any other
deferred payment) for the net assets, Capital Stock, division, line of business
or other business unit acquired in such acquisition or series of related
acquisitions shall not exceed $200,000,000 (which shall be reduced by any amount
expended to acquire an interest in a Person that becomes a Permitted Joint
Venture (as distinguished from amounts expended in the establishment of a new
Permitted Joint Venture) pursuant to clause (ix) of the definition of Permitted
Investments) for any individual acquisition (or series of related acquisitions)
or $300,000,000 (which shall be reduced by any amount expended to acquire an
interest in a Person that becomes a Permitted Joint Venture (as distinguished
from amounts expended in the establishment of a new Permitted Joint Venture)
pursuant to clause (ix) of the definition of Permitted Investments) in the
aggregate for all acquisitions during any four fiscal quarter period; provided
that no more than $25,000,000 in aggregate consideration may be paid during any
four fiscal quarter period with respect to the acquisition of a Target with
earnings before interest, taxes, depreciation and amortization for the most
recent four fiscal quarters prior to the acquisition date for which financial
statements are available in an amount less than $0 (giving effect to adjustments
that the Borrower reasonably expects to occur as a result of the acquisition to
the extent permitted under Regulation S-X of the Securities Act of 1933, as
amended).
"Permitted Investments" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its
Subsidiaries or any receivables and advances to suppliers, in each case
if created, acquired or made in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iii) Investments in and loans by any Credit Party to any
other Credit Party;
(iv) loans and advances to officers, directors, employees and
Affiliates in the ordinary course of business in an aggregate amount
not to exceed $100,000 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;
(vi) Investments, acquisitions or transactions permitted under
Section 6.4(b);
(vii) Permitted Acquisitions;
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(viii) Investments in Subsidiaries (other than Permitted Joint
Ventures) which are not Credit Parties in an aggregate amount not to
exceed $5,000,000 at any one time outstanding;
(ix) Investments in Permitted Joint Ventures (excluding
Investments in Permitted Joint Ventures existing as of the Closing Date
as set forth on Schedule 1.1-7) in an aggregate amount not to exceed
$40,000,000 at any one time outstanding; and
(x) 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 (x)
shall not exceed an aggregate amount of $1,000,000.
"Permitted Joint Venture" shall mean any joint venture to which the
Borrower or any Subsidiary is or hereafter becomes a party that is engaged in a
business permitted by Section 6.3, including without limitation, NeighborCare
Pharmacy of Virginia, LLC, NeighborCare of New Hampshire, LLC, NeighborCare Home
Medical Equipment of Md., LLC, PPS-GBMC Joint Venture, LLC, SNALF, Inc., Long
Term Care Pharmacy Alliance, LLC and Pharmacy Services of Indiana, LLC.
"Permitted Liens" shall mean:
(i) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor
of the Lenders;
(ii) Liens in favor of a Hedging Agreement Provider in
connection with any Secured Hedging Agreement, but only (A) to the
extent such Liens are on the same collateral as to which the
Administrative Agent on behalf of the Lenders also has a Lien and (B)
if such Hedging Agreement Provider and the Lenders shall share pari
passu in the collateral subject to such Liens;
(iii) Liens securing purchase money Indebtedness and Capital
Lease Obligations to the extent permitted under Section 6.1(c);
provided, that (A) any such Lien attaches to such property concurrently
with or within 30 days after the acquisition thereof and (B) such Lien
attaches solely to the property so acquired in such transaction;
(iv) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of grace (not
to exceed 60 days), if any, related thereto has not expired or which
are being contested in good faith by appropriate proceedings, provided
that adequate reserves with respect thereto are maintained on the books
of the any Credit Party or its Subsidiaries, as the case may be, in
conformity with GAAP;
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
21
(vi) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements incurred in the ordinary
course of business;
(vii) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements), in whole or in part, of any Lien
referred to in the foregoing clauses; provided that such extension,
renewal or replacement Lien shall be limited to all or a part of the
property which secured the Lien so extended, renewed or replaced;
(ix) Liens existing on the Closing Date and set forth on
Schedule 1.1-3; provided that (a) no such Lien shall at any time be
extended to cover property or assets other than the property or assets
subject thereto on the Closing Date and (b) the principal amount of the
Indebtedness secured by such Liens shall not be extended, renewed,
refunded or refinanced;
(x) 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 the encumbered Property for its intended purposes; and
(xi) Liens on equipment arising from precautionary UCC
financing statements relating to the lease of such equipment to the
extent permitted by this Agreement.
"Person" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" shall mean, at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which any Credit Party
or a Commonly Controlled Entity is (or, if such plan were terminated at such
time, would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Closing Date executed by the Credit Parties in favor of the Administrative
Agent, as amended, modified, restated or supplemented from time to time.
"Prime Rate" shall have the meaning set forth in the definition of
Alternate Base Rate.
22
"Pro Forma Basis" shall mean, with respect to any transaction, that
such transaction shall be deemed to have occurred as of the first day of the
twelve-month period ending as of the most recent month end preceding the date of
such transaction.
"Properties" shall have the meaning set forth in Section 3.10(a).
"Purchasing Lenders" shall have the meaning set forth in Section
9.6(c).
"Recovery Event" shall mean the receipt by any Credit Party or any of
its Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"Register" shall have the meaning set forth in Section 9.6(d).
"Reorganization" shall mean, with respect to any Multiemployer Plan,
the condition that such Plan is in reorganization within the meaning of such
term as used in Section 4241 of ERISA.
"Related Fund" shall mean, with respect to any Lender, any fund or
trust or entity that invests in commercial bank loans in the ordinary course of
business and is advised or managed by (i) such Lender, (ii) an Affiliate of such
Lender, (iii) any other Lender or any Affiliate thereof or (iv) the same
investment advisor as any Person described in clauses (i) - (iii).
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under PBGC Reg. ss.4043.
"Required Lenders" shall mean, at any time, Lenders holding in the
aggregate a majority of (i) the Commitments (and Participation Interests
therein) or (ii) if the Commitments have been terminated, the outstanding Loans
and Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit and of the Swingline Lender in Swingline
Loans) provided, however, that if any Lender shall be a Defaulting Lender at
such time, then there shall be excluded from the determination of Required
Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after termination
of the Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.
"Requirement of Law" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
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"Responsible Officer" shall mean, as to (a) the Borrower, any of the
President and the Chief Executive Officer or the Chief Financial Officer or (b)
any other Credit Party, any duly authorized officer thereof.
"Restricted Payment" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (d) any payment with respect to any earnout obligation (excluding
agreed upon deferred purchase price payments that are not contingent or
performance based) or (e) any payment or prepayment of principal of, premium, if
any, or interest on, redemption, purchase, retirement, defeasance, sinking fund
or similar payment with respect to, any Subordinated Indebtedness.
"Revolving Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount.
"Revolving Commitment Percentage" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"Revolving Committed Amount" shall mean the amount of each Lender's
Revolving Commitment as specified on Schedule 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"Revolving Loans" shall have the meaning set forth in Section 2.1.
"Revolving Note" or "Revolving Notes" shall mean the promissory notes
of the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Rollover Notes" shall mean those certain secured notes of the Borrower
due 2007 in an original aggregate principal amount of $242,605,000.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"Scheduled Funded Debt Payments" shall mean, as of any date of
determination for the Borrower and its Subsidiaries, the sum of all scheduled
payments of principal on Funded Debt for the applied period ending on the date
of determination (including the principal component of payments due on Capital
Leases during the applicable period ending on the date of determination).
24
"Secured Hedging Agreement" shall mean any Hedging Agreement between a
Credit Party and a Hedging Agreement Provider, as amended, modified,
supplemented, extended or restated from time to time.
"Security Agreement" shall mean the Security Agreement dated as of the
Closing Date executed by the Credit Parties in favor of the Administrative
Agent, as amended, modified or supplemented from time to time in accordance with
its terms.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreement and such other documents executed and delivered in connection with the
attachment and perfection of the Administrative Agent's security interests and
liens arising thereunder, including, without limitation, UCC financing
statements.
"Single Employer Plan" shall mean any Plan which is not a Multiemployer
Plan.
"Social Security Act" means the Social Security Act of 1965 as set
forth in Title 42 of the United States Code, as amended, and any successor
statute thereto, as interpreted by the rules and regulations issued thereunder,
in each case as in effect from time to time. References to sections of the
Social Security Act shall be construed to refer to any successor sections.
"Spin-off" shall mean the spin-off by the Borrower of GHC to the
Borrower's shareholders by way of a pro rata distribution of all the shares of
Capital Stock of GHC.
"Spin-off Documents" shall mean (i) the GHC's Form 10 made effective by
the SEC on November 14, 2003 (as amended from time to time with (in the case of
material amendments) the consent of the Administrative Agent) and (ii) the
Separation and Distribution Agreement dated as of October 27, 2003, by and
between the Borrower and GHC.
"Subordinated Indebtedness" shall mean any Indebtedness (including the
Subordinated Notes) incurred by any Credit Party that is specifically
subordinated in right of payment to the prior payment of the Credit Party
Obligations on terms acceptable to the Administrative Agent and the Lenders,
including, without limitation, the Existing Subordinated Indebtedness.
"Subordinated Note Indenture" shall mean the Indenture dated as of
November 4, 2003 by and between the Borrower and Bank of New York, as trustee,
as the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms of Section 6.8.
"Subordinated Notes" shall mean the Borrower's 6% Senior Unsecured
Subordinated Notes due 2013 issued under the Subordinated Note Indenture in
aggregate principal amount not to exceed $250,000,000.
25
"Subsidiary" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of the Borrower.
"Swingline Commitment" shall mean the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any time
outstanding up to the Swingline Committed Amount, and the commitment of the
Lenders to purchase participation interests in the Swingline Loans as provided
in Section 2.3(b)(ii), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Swingline Committed Amount" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.3(a).
"Swingline Lender" shall mean Wachovia.
"Swingline Loan" or "Swingline Loans" shall have the meaning set forth
in Section 2.3(a).
"Swingline Note" shall mean the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans provided pursuant
to Section 2.3(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Syndication Agent" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"Taxes" shall have the meaning set forth in Section 2.17.
"Trademark License" shall means any agreement, written or oral,
providing for the grant by or to a Credit Party of any right to use any
Trademark, including, without limitation, any thereof referred to in Schedule
3.16.
"Trademarks" shall mean (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in Schedule 3.16, and (b) all renewals
thereof, including, without limitation, any thereof referred to in Schedule
3.16.
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"Tranche" shall mean the collective reference to (a) LIBOR Rate Loans
whose Interest Periods begin and end on the same day and (b) Alternate Base Rate
Loans made on the same day.
"Transfer Effective Date" shall have the meaning set forth in each
Commitment Transfer Supplement.
"TRICARE" shall mean the United States Department of Defense health
care program for service families (including TRICARE Prime, TRICARE Extra and
TRICARE Standard) and any successor or predecessor thereof.
"Type" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"Unrestricted Subsidiary" shall mean any Subsidiary of the Borrower
designated as such under the Subordinated Note Indenture or under any indenture
under which there is outstanding Indebtedness permitted to be incurred
hereunder.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
may be or have been suspended by the happening of such a contingency.
"Wachovia" shall mean Wachovia Bank, National Association, a national
banking association.
"WCM" shall mean Wachovia Capital Markets, LLC.
"Works" shall mean all works which are subject to copyright protection
pursuant to Title 17 of the United States Code.
Section 1.2 Other Definitional Provisions.
------------------------------
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes
or other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c) Any reference to a "Lender party to a Hedging Agreement"
or similar phrase shall include any Person (or Affiliate of such
Person) that was a Lender at the time it entered into a Hedging
Agreement permitted pursuant to Section 6.1(e) and has ceased to be a
Lender under the Credit Agreement.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) Unless otherwise expressly indicated, each time reference
in any Credit Document shall be to Charlotte, North Carolina time.
27
Section 1.3 Accounting Terms.
-----------------
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Borrower delivered to the Lenders;
provided that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 5.9
(including without limitation for purposes of the definition of "Pro Forma
Basis" set forth in Section 1.1), after consummation of any Permitted
Acquisition (or other acquisition consented to by the Required Lenders), or
Asset Disposition permitted pursuant to Section 6.4, (A) income statement items
and other balance sheet items (whether positive or negative) attributable to the
Target acquired in such transaction shall be included in such calculations to
the extent relating to such applicable period, and (B) Indebtedness of a Target
which is retired in connection with a Permitted Acquisition or Indebtedness
released or terminated in connection with an Asset Disposition, shall be
excluded from such calculations and deemed to have been retired as of the first
day of such applicable period.
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ARTICLE II
THE LOANS; AMOUNT AND TERMS
Section 2.1 Revolving Loans.
----------------
(a) Revolving Commitment. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally, but
not jointly, agrees to make revolving credit loans ("Revolving Loans")
to the Borrower from time to time in an aggregate principal amount of
up to ONE HUNDRED Million DOLLARS ($100,000,000) (as such aggregate
maximum amount may be reduced from time to time as provided in Section
2.5, the "Aggregate Revolving Committed Amount") for the purposes
hereinafter set forth; provided, however, that (i) with regard to each
Lender individually, the sum of such Lender's Revolving Commitment
Percentage of outstanding Revolving Loans plus such Lender's Revolving
Commitment Percentage of outstanding Swingline Loans plus such Lender's
LOC Commitment Percentage of LOC Obligations shall not exceed such
Lender's Revolving Committed Amount and (ii) with regard to the Lenders
collectively, the sum of the outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not exceed the
Aggregate Revolving Committed Amount. Revolving Loans may consist of
Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request, and may be repaid and reborrowed
in accordance with the provisions hereof; provided, however, Revolving
Loans made on any of three Business Days following the Closing Date may
only consist of Alternate Base Rate Loans. LIBOR Rate Loans shall be
made by each Lender at its LIBOR Lending Office and Alternate Base Rate
Loans at its Domestic Lending Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing which confirmation may be
by fax) to the Administrative Agent not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Business Day prior to
the date of requested borrowing in the case of Alternate Base
Rate Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of LIBOR Rate Loans. Each
such request for borrowing shall be irrevocable and shall
specify (A) that a Revolving Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day),
(C) the aggregate principal amount to be borrowed, (D) whether
the borrowing shall be comprised of Alternate Base Rate Loans,
LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. A form
of Notice of Borrowing (a "Notice of Borrowing") is attached
as Schedule 2.1(b)(i). If the Borrower shall fail to specify
in any such Notice of Borrowing (I) an applicable Interest
Period in the case of a LIBOR Rate Loan, then such notice
shall be deemed to be a request for an Interest Period of one
month, or (II) the type of Revolving Loan requested, then such
notice shall be deemed to be a request for an Alternate Base
Rate Loan hereunder. The Administrative Agent shall give
notice to each Lender promptly upon receipt of each Notice of
Borrowing, the contents thereof and each such Lender's share
thereof.
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(ii) Minimum Amounts. Each Revolving Loan, which is
an Alternate Base Rate Loan, shall be in a minimum aggregate
amount of $500,000 and in integral multiples of $250,000 in
excess thereof (or the remaining amount of the Aggregate
Revolving Committed Amount, if less). Each Revolving Loan,
which is a LIBOR Rate Loan, shall be in a minimum aggregate
amount of $1,000,000 and in integral multiples of $500,000 in
excess thereof (or the remaining amount of the Aggregate
Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified
in Section 9.2, or at such other office as the Administrative
Agent may designate in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice
of Borrowing in Dollars and in funds immediately available to
the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by
crediting the account of the Borrower on the books of such
office with the aggregate of the amounts made available to the
Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Maturity Date, unless
accelerated sooner pursuant to Section 7.2.
(d) Interest. Subject to the provisions of Section 2.8,
Revolving Loans shall bear interest as follows:
(i) Alternate Base Rate Loans. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate
Loans, each such Alternate Base Rate Loan shall bear interest
at a per annum rate equal to the sum of the Alternate Base
Rate plus the Applicable Percentage; and
(ii) LIBOR Rate Loans. During such periods as
Revolving Loans shall be comprised of LIBOR Rate Loans, each
such LIBOR Rate Loan shall bear interest at a per annum rate
equal to the sum of the LIBOR Rate plus the Applicable
Percentage.
30
Interest on Revolving Loans shall be payable in arrears on
each Interest Payment Date.
(e) Revolving Notes. Each Lender's Revolving Committed Amount
shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in substantially the form of Schedule 2.1(e).
Section 2.2 Letter of Credit Subfacility.
-----------------------------
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, during the Commitment Period
the Issuing Lender shall issue, and the Lenders shall participate in,
Letters of Credit for the account of the Borrower from time to time
upon request in a form acceptable to the Issuing Lender; provided,
however, that (i) the aggregate amount of LOC Obligations shall not at
any time exceed FIFTEEN MILLION DOLLARS ($15,000,000) (the "LOC
Committed Amount"), (ii) the sum of outstanding Revolving Loans plus
outstanding Swingline Loans plus LOC Obligations shall not at any time
exceed the Aggregate Revolving Committed Amount, (iii) all Letters of
Credit shall be denominated in U.S. Dollars and (iv) Letters of Credit
shall be issued for lawful corporate purposes and may be issued as
standby letters of credit, including in connection with workers'
compensation and other insurance programs, and trade letters of credit.
Except as otherwise expressly agreed upon by all the Lenders with a
Revolving Commitment, no Letter of Credit shall have an original expiry
date more than twelve (12) months from the date of issuance; provided,
however, so long as no Default or Event of Default has occurred and is
continuing and subject to the other terms and conditions to the
issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on
the request of the Borrower or by operation of the terms of the
applicable Letter of Credit to a date not more than twelve (12) months
from the date of extension; provided, further, that no Letter of
Credit, as originally issued or as extended, shall have an expiry date
extending beyond the Maturity Date. Each Letter of Credit shall comply
with the related LOC Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day. Any Letters of Credit issued
hereunder shall be in a minimum original face amount of $100,000.
Wachovia shall be the Issuing Lender on all Letters of Credit issued on
or after the Closing Date. The Borrower's reimbursement obligations in
respect of each Existing Letter of Credit, and each Lender's
participation obligations in connection therewith, shall be governed by
the terms of this Credit Agreement.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least five
(5) Business Days prior to the requested date of issuance. The Issuing
Lender will promptly upon request provide to the Administrative Agent
for dissemination to the Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any
activity with respect thereto which may have occurred since the date of
any prior report, and including therein, among other things, the
account party, the beneficiary, the face amount, expiry date as well as
any payments or expirations which may have occurred. The Issuing Lender
will further provide to the Administrative Agent promptly upon request
copies of the Letters of Credit. The Issuing Lender will provide to the
Administrative Agent promptly upon request a summary report of the
nature and extent of LOC Obligations then outstanding.
31
(c) Participations. Each Lender (i) on the Closing Date with
respect to each Existing Letter of Credit and (ii) upon issuance of a
Letter of Credit shall be deemed to have purchased without recourse a
risk participation from the Issuing Lender in such Letter of Credit and
the obligations arising thereunder and any collateral relating thereto,
in each case in an amount equal to its LOC Commitment Percentage of the
obligations under such Letter of Credit and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such unreimbursed
drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of
subsection (d) hereof. The obligation of each Lender to so reimburse
the Issuing Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default or any
other occurrence or event. Any such reimbursement shall not relieve or
otherwise impair the obligation of the Borrower to reimburse the
Issuing Lender under any Letter of Credit, together with interest as
hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower
and the Administrative Agent. The Borrower shall reimburse the Issuing
Lender on the day of drawing under any Letter of Credit (with the
proceeds of a Revolving Loan obtained hereunder or otherwise) in same
day funds as provided herein or in the LOC Documents. If the Borrower
shall fail to reimburse the Issuing Lender as provided herein
(including reimbursement through a Mandatory LOC Borrowing, as provided
below), the unreimbursed amount of such drawing shall bear interest at
a per annum rate equal to the Alternate Base Rate plus the Applicable
Percentage for Alternate Base Rate Loans in effect as of such date plus
two percent (2%). Unless the Borrower shall immediately notify the
Issuing Lender and the Administrative Agent of its intent to otherwise
reimburse the Issuing Lender, the Borrower shall be deemed to have
requested a Revolving Loan (a "Mandatory LOC Borrowing") in the amount
of the drawing as provided in subsection (e) hereof, the proceeds of
which will be used to satisfy the reimbursement obligations. The
Borrower's reimbursement obligations hereunder shall be absolute and
unconditional under all circumstances irrespective of any rights of
set-off, counterclaim or defense to payment the Borrower may claim or
have against the Issuing Lender, the Administrative Agent, the Lenders,
the beneficiary of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any failure of the
Borrower to receive consideration or the legality, validity, regularity
or unenforceability of the Letter of Credit. The Issuing Lender will
promptly notify the other Lenders of the amount of any unreimbursed
drawing and each Lender shall promptly pay to the Administrative Agent
for the account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's LOC Commitment Percentage
of such unreimbursed drawing. Such payment shall be made on the day
32
such notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 P.M. (Charlotte, North Carolina
time), otherwise such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next succeeding
the day such notice is received. If such Lender does not pay such
amount to the Issuing Lender in full upon such request, such Lender
shall, on demand, pay to the Administrative Agent for the account of
the Issuing Lender interest on the unpaid amount during the period from
the date of such drawing until such Lender pays such amount to the
Issuing Lender in full at a rate per annum equal to, if paid within two
(2) Business Days of the date of drawing, the Federal Funds Effective
Rate and thereafter at a rate equal to the Alternate Base Rate. Each
Lender's obligation to make such payment to the Issuing Lender, and the
right of the Issuing Lender to receive the same, shall be absolute and
unconditional, shall not be affected by any circumstance whatsoever and
without regard to the termination of this Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be
made without any offset, abatement, withholding or reduction
whatsoever.
(e) Repayment with Revolving Loans. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Lenders that a Mandatory
LOC Borrowing has been requested or deemed requested in connection with
a drawing under a Letter of Credit, in which case a Mandatory LOC
Borrowing comprised entirely of Alternate Base Rate Loans shall be
immediately made (without giving effect to any termination of the
Commitments pursuant to Section 7.2) pro rata based on each Lender's
respective Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to Section 7.2)
and the proceeds thereof shall be paid directly to the Issuing Lender
for application to the respective LOC Obligations. Each Lender hereby
irrevocably agrees to make such Revolving Loans immediately upon any
such request or deemed request on account of each Mandatory LOC
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 LOC Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii)
whether any conditions specified in Section 4.2 are then satisfied,
(iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be
made by the time otherwise required in Section 2.1(b), (v) the date of
such Mandatory LOC Borrowing, or (vi) any reduction in the Aggregate
Revolving Committed Amount after any such Letter of Credit may have
been drawn upon; provided, however, that in the event any such
Mandatory LOC Borrowing should be less than the minimum amount for
borrowings of Revolving Loans otherwise provided in Section 2.1(b)(ii),
the Borrower shall pay to the Administrative Agent for its own account
an administrative fee of $500. In the event that any Mandatory LOC
Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code), then each such Lender
hereby agrees that it shall forthwith fund (as of the date the
Mandatory LOC Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such date and prior
to such purchase) its Participation Interests in the LOC Obligations;
provided, further, that in the event any Lender shall fail to fund its
Participation Interest on the day the Mandatory LOC Borrowing would
otherwise have occurred, then the amount of such Lender's unfunded
Participation Interest therein shall bear interest payable by such
Lender to the Issuing Lender upon demand, at the rate equal to, if paid
within two (2) Business Days of such date, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Alternate Base Rate.
33
(f) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender shall
have the Letters of Credit be subject to The Uniform Customs and
Practice for Documentary Credits, as published as of the date of issue
by the International Chamber of Commerce (the "UCP"), in which case the
UCP may be incorporated therein and deemed in all respects to be a part
thereof.
Section 2.3 Swingline Loan Subfacility.
---------------------------
(a) Swingline Commitment. During the Commitment Period,
subject to the terms and conditions hereof, the Swingline Lender, in
its individual capacity, agrees to make certain revolving credit loans
to the Borrower (each a "Swingline Loan" and, collectively, the
"Swingline Loans") for the purposes hereinafter set forth; provided,
however, (i) the aggregate amount of Swingline Loans outstanding at any
time shall not exceed TWENTY MILLION DOLLARS ($20,000,000) (the
"Swingline Committed Amount"), and (ii) the sum of the outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC Obligations
shall not exceed the Aggregate Revolving Committed Amount. Swingline
Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The
Swingline Lender will make Swingline Loans available to the
Borrower on any Business Day upon request made by the Borrower
not later than 2:00 P.M. (Charlotte, North Carolina time) on
such Business Day. A notice of request for Swingline Loan
borrowing shall be made in the form of Schedule 2.1(b)(i) with
appropriate modifications. Swingline Loan borrowings hereunder
shall be made in minimum amounts of $100,000 and in integral
amounts of $100,000 in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline
Loan borrowing shall be due and payable on the Maturity Date.
The Swingline Lender may, at any time, in its sole discretion,
by written notice to the Borrower and the Administrative
Agent, demand repayment of its Swingline Loans by way of a
Revolving Loan borrowing, in which case the Borrower shall be
deemed to have requested a Revolving Loan borrowing comprised
entirely of Alternate Base Rate Loans in the amount of such
34
Swingline Loans; provided, however, that, in the following
circumstances, any such demand shall also be deemed to have
been given one Business Day prior to each of (i) the Maturity
Date, (ii) the occurrence of any Event of Default described in
Section 7.1(e), (iii) upon acceleration of the Credit Party
Obligations hereunder, whether on account of an Event of
Default described in Section 7.1(e) or any other Event of
Default, and (iv) the exercise of remedies in accordance with
the provisions of Section 7.2 hereof (each such Revolving Loan
borrowing made on account of any such deemed request therefor
as provided herein being hereinafter referred to as "Mandatory
Swingline Borrowing"). Each Lender hereby irrevocably agrees
to make such Revolving Loans promptly upon any such request or
deemed request on account of each Mandatory Swingline
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 Swingline Borrowing may not comply
with the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (II) whether any conditions
specified in Section 4.2 are then satisfied, (III) whether a
Default or an Event of Default then exists, (IV) failure of
any such request or deemed request for Revolving Loans to be
made by the time otherwise required in Section 2.1(b)(i), (V)
the date of such Mandatory Swingline Borrowing, or (VI) any
reduction in the Revolving Committed Amount or termination of
the Revolving Commitments immediately prior to such Mandatory
Swingline Borrowing or Contemporaneously therewith. In the
event that any Mandatory Swingline Borrowing cannot for any
reason be made on the date otherwise required above
(including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code), then
each Lender hereby agrees that it shall forthwith purchase (as
of the date the Mandatory Swingline 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 Lender to share in such Swingline Loans ratably
based upon its respective Revolving Commitment Percentage
(determined before giving effect to any termination of the
Commitments pursuant to Section 7.2). provided that (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 Lender shall be required to pay
to the Swingline Lender interest on the principal amount of
such participation purchased for each day from and including
the day upon which the Mandatory Swingline 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 Swingline
Borrowing, the Federal Funds Effective Rate, and thereafter at
a rate equal to the Alternate Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 2.8, Swingline Loans shall bear interest at a per annum rate
equal to the Alternate Base Rate plus the Applicable Percentage for
Revolving Loans that are Alternate Base Rate Loans. Interest on
Swingline Loans shall be payable in arrears on each Interest Payment
Date.
35
(d) Swingline Note. The Swingline Loans shall be evidenced by
a duly executed promissory note of the Borrower to the Swingline Lender
in the original amount of the Swingline Committed Amount and
substantially in the form of Schedule 2.3(d).
Section 2.4 Fees.
-----
(a) Commitment Fee. In consideration of the Revolving
Commitments, the Borrower agrees to pay to the Administrative Agent for
the ratable benefit of the Lenders holding Revolving Commitments a
commitment fee (the "Commitment Fee") in an amount equal to the
Applicable Percentage per annum for the Commitment Fee on the aggregate
Revolving Committed Amount during the period from and including the
Closing Date to, but excluding, the date on which the Revolving
Commitment terminates. The Commitment Fee shall be payable quarterly in
arrears on the last Business Day of March, June, September and December
of each year and on the date on which the Revolving Commitment
terminates, commencing on the first such date to occur after the date
hereof.
(b) Letter of Credit Fees. In consideration of the LOC
Commitments, the Borrower agrees to pay to the Issuing Lender a fee
(the "Letter of Credit Fee") equal to the Applicable Percentage per
annum for the Letter of Credit Fee on the average daily maximum amount
available to be drawn under each Letter of Credit from the date of
issuance to the date of expiration. In addition to such Letter of
Credit Fee, the Issuing Lender may charge, and retain for its own
account without sharing by the other Lenders, an additional facing fee
of one-eighth of one percent (0.125%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit
issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Lenders (including
the Issuing Lender) the Letter of Credit Fee. The Letter of Credit Fee
shall be payable quarterly in arrears on the last Business Day of
March, June, September and December of each year and on the date on
which the Revolving Commitment terminates, commencing on the first such
date to occur after the date hereof.
(c) Issuing Lender Fees. In addition to the Letter of Credit
Fees payable pursuant to subsection (b) hereof, the Borrower shall pay
to the Issuing Lender for its own account without sharing by the other
Lenders the reasonable and customary charges from time to time of the
Issuing Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of
Credit (collectively, the "Issuing Lender Fees").
(d) Administrative Fee. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the
Fee Letter.
36
Section 2.5 Commitment Reductions.
----------------------
(a) Voluntary Reductions. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Aggregate
Revolving Committed Amount at any time or from time to time upon not
less than five Business Days' prior notice to the Administrative Agent
(which shall notify the Lenders thereof as soon as practicable) of each
such termination or reduction, which notice shall specify the effective
date thereof and the amount of any such reduction which shall be in a
minimum amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof and shall be irrevocable and effective upon receipt by the
Administrative Agent, provided that no such reduction or termination
shall be permitted if after giving effect thereto, and to any
prepayments of the Loans made on the effective date thereof, the sum of
the outstanding Revolving Loans plus outstanding Swingline Loans plus
LOC Obligations would exceed the Aggregate Revolving Committed Amount.
(b) Maturity Date. The Revolving Commitment, the Swingline
Commitment and the LOC Commitment shall automatically terminate on the
Maturity Date.
Section 2.6 Prepayments.
------------
(a) Optional Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that each partial prepayment of (i) a Swingline Loan shall be in a
minimum principal amount of $100,000 and integral multiples of $100,000
in excess thereof, (ii) any Alternate Base Rate Loan shall be in a
minimum principal amount of $500,000 and integral multiples of $250,000
in excess thereof and (iii) any LIBOR Rate Loan shall be in a minimum
principal amount of $1,000,000 and in integral multiples of $500,000 in
excess thereof. The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and one Business
Day's irrevocable notice in the case of Alternate Base Rate Loans, to
the Administrative Agent (which shall notify the Lenders thereof as
soon as practicable). Amounts prepaid under this Section 2.6(a) shall
be applied to the outstanding Loans as the Borrower may elect; provided
that each Lender shall receive its pro rata share (except with respect
to prepayments of Swingline Loans) of any such prepayment based on its
Revolving Commitment Percentage. All prepayments under this Section
2.6(a) shall be subject to Section 2.16, but otherwise without premium
or penalty. Interest on the principal amount prepaid shall be payable
on the next occurring Interest Payment Date that would have occurred
had such Loans not been prepaid or, at the request of the
Administrative Agent, interest on the principal amount prepaid shall be
payable on any date that a prepayment is made hereunder through the
date of prepayment. Amounts prepaid on the Revolving Loans and the
Swingline Loans may be reborrowed in accordance with the terms hereof.
(b) Mandatory Prepayments.
(i) Aggregate Revolving Committed Amount. If at any
time after the Closing Date, the sum of the outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC
Obligations shall exceed the Aggregate Revolving Committed
Amount, the Borrower immediately shall prepay the Loans and
cash collateralize the LOC Obligations in an amount sufficient
to eliminate such excess (such prepayment to be applied as set
forth in clause (ii) below).
37
(ii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 2.6(b)
shall be applied first to Alternate Base Rate Loans and then
to LIBOR Rate Loans in direct order of Interest Period
maturities. Each Lender shall receive its pro rata share
(except with respect to prepayments of Swingline Loans) of any
such prepayment based on its Revolving Commitment Percentage.
All prepayments under this Section 2.6(b) shall be subject to
Section 2.16 and be accompanied by interest on the principal
amount prepaid through the date of prepayment.
(c) Hedging Obligations Unaffected. Any repayment or
prepayment made pursuant to this Section 2.6 shall not affect the
Borrower's obligation to continue to make payments under any Secured
Hedging Agreement, which shall remain in full force and effect
notwithstanding such repayment or prepayment, subject to the terms of
such Secured Hedging Agreement.
Section 2.7 Minimum Principal Amount of Tranches; Lending Offices.
-----------------------------------------------------
(a) All borrowings, payments and prepayments in respect of
Revolving Loans shall be in such amounts and be made pursuant to such
elections so that after giving effect thereto the aggregate principal
amount of the Revolving Loans comprising any Tranche shall be (i) with
respect to LIBOR Rate Loans $1,000,000 or a whole multiple of $500,000
in excess thereof and (ii) with respect to Alternate Base Rate Loans,
$500,000 or a whole multiple of $250,000 in excess thereof.
(b) LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
Section 2.8 Default Rate and Payment Dates.
-------------------------------
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate 2% greater than the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then the Alternate Base Rate plus
the Applicable Percentage with respect to Alternate Base Rate Loans plus 2%).
Section 2.9 Conversion Options.
-------------------
(a) The Borrower may, in the case of Revolving Loans, elect
from time to time to convert Alternate Base Rate Loans to LIBOR Rate
Loans, by giving the Administrative Agent at least three Business Days'
prior irrevocable written notice of such election. A form of Notice of
Conversion/Extension is attached as Schedule 2.9. If the date upon
which an Alternate Base Rate Loan is to be converted to a LIBOR Rate
Loan is not a Business Day, then such conversion shall be made on the
next succeeding Business Day and during the period from such last day
of an Interest Period to such succeeding Business Day such Loan shall
bear interest as if it were an Alternate Base Rate Loan. All or any
part of outstanding Alternate Base Rate Loans may be converted as
provided herein, provided that (i) no Loan may be converted into a
LIBOR Rate Loan when any Default or Event of Default has occurred and
is continuing and (ii) partial conversions shall be in an aggregate
principal amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof.
38
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by
the Borrower with the notice provisions contained in Section 2.9(a);
provided, that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, in which
case such Loan shall be automatically converted to an Alternate Base
Rate Loan at the end of the applicable Interest Period with respect
thereto. If the Borrower shall fail to give timely notice of an
election to continue a LIBOR Rate Loan, or the continuation of LIBOR
Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be
automatically converted to Alternate Base Rate Loans at the end of the
applicable Interest Period with respect thereto.
Section 2.10 Computation of Interest and Fees.
---------------------------------
(a) Interest payable hereunder with respect to Alternate Base
Rate Loans based on the Prime Rate shall be calculated on the basis of
a year of 365 days (or 366 days, as applicable) for the actual days
elapsed. All other fees, interest and all other amounts payable
hereunder shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of each determination
of a LIBOR Rate on the Business Day of the determination thereof. Any
change in the interest rate on a Loan resulting from a change in the
Alternate Base Rate shall become effective as of the opening of
business on the day on which such change in the Alternate Base Rate
shall become effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the Lenders of the effective date
and the amount of each such change.
(b) Each determination of an interest rate by the
Administrative Agent pursuant to any provision of this Agreement shall
be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the
request of the Borrower, deliver to the Borrower a statement showing
the computations used by the Administrative Agent in determining any
interest rate.
Section 2.11 Pro Rata Treatment and Payments.
--------------------------------
(a) Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made pro rata according to the
respective Revolving Commitment Percentages of the Lenders. Each
payment under this Agreement or any Note shall be applied, first, to
any fees then due and owing by the Borrower pursuant to Section 2.4,
second, to interest then due and owing in respect of the Notes of the
Borrower and, third, to principal then due and owing hereunder and
under the Notes of the Borrower. Each payment on account of any fees
39
pursuant to Section 2.4 shall be made pro rata in accordance with the
respective amounts due and owing (except as to the portion of the
Letter of Credit retained by the Issuing Lender and the Issuing Lender
Fees). Each payment (other than prepayments) by the Borrower on account
of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective amounts due and owing in accordance
with Section 2.6 hereof. Prepayments made pursuant to Section 2.14
shall be applied in accordance with such section. Each optional
prepayment on account of principal of the Loans shall be applied in
accordance with Section 2.6(a) and each mandatory prepayment on account
of principal of the Loans shall be applied in accordance with Section
2.6(b). All payments (including prepayments) to be made by the Borrower
on account of principal, interest and fees shall be made without
defense, set-off or counterclaim (except as provided in Section
2.17(b)) and shall be made to the Administrative Agent for the account
of the Lenders at the Administrative Agent's office specified on
Schedule 9.2 in Dollars and in immediately available funds not later
than 1:00 P.M. (Charlotte, North Carolina time) on the date when due.
The Administrative Agent shall distribute such payments to the Lenders
entitled thereto promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the LIBOR Rate Loans)
becomes due and payable on a day other than a Business Day, such
payment shall be extended to the next succeeding Business Day, and,
with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any
payment on a LIBOR Rate Loan becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to
extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provision of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Administrative
Agent or any Lender on account of the Credit Party Obligations or any
other amounts outstanding under any of the Credit Documents or in
respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation reasonable
attorneys' fees) of the Administrative Agent in connection
with enforcing the rights of the Lenders under the Credit
Documents and any protective advances made by the
Administrative Agent with respect to the Collateral under or
pursuant to the terms of the Collateral Documents;
40
SECOND, to payment of any fees owed to the
Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket
costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with
enforcing its rights under the Credit Documents or otherwise
with respect to the Credit Party Obligations owing to such
Lender;
FOURTH, to the payment of all of the Credit Party
Obligations consisting of accrued fees and interest including
with respect to any Secured Hedging Agreement any fees,
premiums and scheduled periodic payments due under such
Secured Hedging Agreement and any interest accrued thereon;
FIFTH, to the payment of the outstanding principal
amount of the Credit Party Obligations and the payment or cash
collateralization of the outstanding LOC Obligations
(including, without limitation, any breakage, termination or
other payments due under such Hedging Agreements and any
interest accrued thereon, arising under any Hedging Agreement
between any Credit Party and any Lender, or any Affiliate of a
Lender, to the extent such Hedging Agreement is permitted by
Section 6.1(e));
SIXTH, to all other Credit Party Obligations and
other obligations which shall have become due and payable
under the Credit Documents or otherwise and not repaid
pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be
applied in the numerical order provided until exhausted prior
to application to the next succeeding category; (ii) each of
the Lenders and Hedging Agreement Providers shall receive an
amount equal to its pro rata share (based on the proportion
that the then outstanding Loans and LOC Obligations held by
such Lender or the outstanding obligations payable to such
Hedging Agreement Provider bears to the aggregate then
outstanding Loans, LOC Obligations and obligations payable
under all Secured Hedging Agreements) of amounts available to
be applied pursuant to clauses "THIRD", "FOURTH", "FIFTH" and
"SIXTH" above; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above
are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by
the Administrative Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender from time
to time for any drawings under such Letters of Credit and (B)
then, following the expiration of all Letters of Credit, to
all other obligations of the types described in clauses
"FIFTH" and "SIXTH" above in the manner provided in this
Section 2.11(b). Notwithstanding the foregoing terms of this
Section 2.12(b), only Collateral proceeds and payments under
the Guaranty with respect to Secured Hedging Agreements shall
be applied to obligations under any Secured Hedging Agreement.
41
Section 2.12 Non-Receipt of Funds by the Administrative Agent.
------------------------------------------------
(a) Unless the Administrative Agent shall have been notified
in writing by a Lender prior to the date a Loan is to be made by such
Lender (which notice shall be effective upon receipt) that such Lender
does not intend to make the proceeds of such Loan available to the
Administrative Agent, the Administrative Agent may assume that such
Lender has made such proceeds available to the Administrative Agent on
such date, and the Administrative Agent may in reliance upon such
assumption (but shall not be required to) make available to the
Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent, the Administrative
Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the Administrative Agent.
The Administrative Agent shall also be entitled to recover from the
Lender or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to
the Borrower to the date such corresponding amount is recovered by the
Administrative Agent at a per annum rate equal to (i) from the Borrower
at the applicable rate for the applicable borrowing pursuant to the
Notice of Borrowing and (ii) from a Lender at the Federal Funds
Effective Rate.
(b) Unless the Administrative Agent shall have been notified
in writing by the Borrower, prior to the date on which any payment is
due from it hereunder (which notice shall be effective upon receipt)
that the Borrower does not intend to make such payment, the
Administrative Agent may assume that such Borrower has made such
payment when due, and the Administrative Agent may in reliance upon
such assumption (but shall not be required to) make available to each
Lender on such payment date an amount equal to the portion of such
assumed payment to which such Lender is entitled hereunder, and if the
Borrower has not in fact made such payment to the Administrative Agent,
such Lender shall, on demand, repay to the Administrative Agent the
amount made available to such Lender. If such amount is repaid to the
Administrative Agent on a date after the date such amount was made
available to such Lender, such Lender shall pay to the Administrative
Agent on demand interest on such amount in respect of each day from the
date such amount was made available by the Administrative Agent to such
Lender to the date such amount is recovered by the Administrative Agent
at a per annum rate equal to the Federal Funds Effective Rate.
(c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this
Section 2.12 shall be conclusive in the absence of manifest error.
Section 2.13 Inability to Determine Interest Rate.
-------------------------------------
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
42
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain as or be
converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.
Section 2.14 Illegality.
-----------
Notwithstanding any other provision of this Agreement, if the adoption
of or any change in any Requirement of Law or in the interpretation or
application thereof by the relevant Governmental Authority to any Lender shall
make it unlawful for such Lender or its LIBOR Lending Office to make or maintain
LIBOR Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until the Administrative Agent shall give notice that the condition or situation
which gave rise to the suspension shall no longer exist, and (c) such Lender's
Loans then outstanding as LIBOR Rate Loans, if any, shall be converted on the
last day of the Interest Period for such Loans or within such earlier period as
required by law to Alternate Base Rate Loans. The Borrower hereby agrees
promptly to pay any Lender, upon its demand, any additional amounts necessary to
compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; provided, however, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its sole discretion to be material.
Section 2.15 Requirements of Law.
--------------------
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any
Lender with any request or directive (whether or not having the force
of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
43
(i) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit or any
application relating thereto, any LIBOR Rate Loan made by it,
or change the basis of taxation of payments to such Lender in
respect thereof (except for changes in the rate of tax on the
overall net income of such Lender);
(ii) shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar
requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other acquisition of funds by,
any office of such Lender which is not otherwise included in
the determination of the LIBOR Rate hereunder; or
(iii) shall impose on such Lender any other
condition;
and the result of any of the foregoing is to increase the cost
to such Lender of making or maintaining LIBOR Rate Loans or the Letters
of Credit or to reduce any amount receivable hereunder or under any
Note, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate
such Lender for such additional cost or reduced amount receivable which
such Lender reasonably deems to be material as determined by such
Lender with respect to its LIBOR Rate Loans or Letters of Credit. A
certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender, through the Administrative Agent, to
the Borrower shall be conclusive in the absence of manifest error. Each
Lender agrees to use reasonable efforts (including reasonable efforts
to change its Domestic Lending Office or LIBOR Lending Office, as the
case may be) to avoid or to minimize any amounts which might otherwise
be payable pursuant to this paragraph of this Section; provided,
however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by
such Lender in its sole discretion to be material.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance
by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having
the force of law) from any central bank or Governmental Authority made
subsequent to the date hereof does or shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which
such Lender or such corporation could have achieved but for such
adoption, change or compliance (taking into consideration such Lender's
or such corporation's policies with respect to capital adequacy) by an
amount reasonably deemed by such Lender in its sole discretion to be
material, then from time to time, within fifteen (15) days after demand
by such Lender, the Borrower shall pay to such Lender such additional
amount as shall be certified by such Lender as being required to
compensate it for such reduction. Such a certificate as to any
additional amounts payable under this Section submitted by a Lender
(which certificate shall include a description of the basis for the
computation), through the Administrative Agent, to the Borrower shall
be conclusive absent manifest error.
44
(c) The agreements in this Section 2.15 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
Section 2.16 Indemnity.
----------
The Borrower hereby agrees to indemnify each Lender and to hold such
Lender harmless from any funding loss or expense which such Lender may sustain
or incur as a consequence of (a) default by the Borrower in payment of the
principal amount of or interest on any Loan by such Lender in accordance with
the terms hereof, (b) default by the Borrower in accepting a borrowing after the
Borrower has given a notice in accordance with the terms hereof, (c) default by
the Borrower in making any prepayment after the Borrower has given a notice in
accordance with the terms hereof, and/or (d) the making by the Borrower of a
prepayment of a Loan, or the conversion thereof, on a day which is not the last
day of the Interest Period with respect thereto, in each case including, but not
limited to, any such loss or expense arising from interest or fees payable by
such Lender to lenders of funds obtained by it in order to maintain its Loans
hereunder. A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender, through the Administrative Agent, to the
Borrower (which certificate must be delivered to the Administrative Agent within
thirty days following such default, prepayment or conversion) shall be
conclusive in the absence of manifest error. The agreements in this Section
shall survive termination of this Agreement and payment of the Notes and all
other amounts payable hereunder.
Section 2.17 Taxes.
------
(a) All payments made by the Borrower hereunder or under any
Note will be, except as provided in Section 2.17(b), made free and
clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other
charges of whatever nature now or hereafter imposed by any Governmental
Authority or by any political subdivision or taxing authority thereof
or therein with respect to such payments (but excluding any tax imposed
on or measured by the net income or profits of a Lender or any branch
profits tax (or similar tax), in each case imposed pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender
is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not
be less than the amount provided for herein or in such Note. The
Borrower will furnish to the Administrative Agent as soon as
practicable after the date the payment of any Taxes is due pursuant to
applicable law certified copies (to the extent reasonably available and
required by law) of tax receipts evidencing such payment by the
Borrower. The Borrower agrees to indemnify and hold harmless each
Lender, and reimburse such Lender upon its written request, for the
amount of any Taxes so levied or imposed and paid by such Lender.
45
(b) Each Lender that is created or organized under the laws of
the United States or any state thereof or the District of Columbia
agrees to deliver to the Borrower and the Administrative Agent on or
prior to the Closing Date, or in the case of a Lender that is an
assignee or transferee of an interest under this Agreement pursuant to
Section 9.6(d) (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Lender, two accurate and
complete original signed copies of Internal Revenue Service Form W-9
(or any subsequent versions thereof or successors thereto). Each Lender
that is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Closing Date, or in the case of
a Lender that is an assignee or transferee of an interest under this
Agreement pursuant to Section 9.6(d) (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or
transfer), on the date of such assignment or transfer to such Lender,
two accurate and complete original signed copies of Internal Revenue
Service Form W-8BEN or W-8ECI (or successor forms) certifying such
Lender's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this
Agreement and under any Note. In addition, each Lender agrees that it
will deliver upon the Borrower's request updated versions of the
foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together with
such other forms as may be required in order to confirm or establish
the entitlement of such Lender to a continued exemption from or
reduction in United States withholding tax with respect to payments
under this Agreement and any Note. To the extent necessary, the
Administrative Agent shall provide to the Borrower two accurate and
complete original, signed copies of Form W8IMY (or any subsequent
version thereof or successor thereto), together with all documentation
required to be supplied therewith. Notwithstanding anything to the
contrary contained in Section 2.17(a), but subject to the immediately
succeeding sentence, (x) each Borrower shall be entitled, to the extent
it is required to do so by law, to deduct or withhold Taxes imposed by
the United States (or any political subdivision or taxing authority
thereof or therein) from interest, fees or other amounts payable
hereunder for the account of any Lender for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 2.17(a) hereof to gross-up
payments to be made to a Lender in respect of Taxes imposed by the
United States if (I) such Lender has not provided to the Borrower the
Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 2.17(b) or (II) in the case of a payment,
other than interest, to a Lender described in clause (ii) above, to the
extent that such Forms do not establish a complete exemption from
withholding of such Taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 2.17,
the Borrower agrees to pay additional amounts and to indemnify each
Lender in the manner set forth in Section 2.17(a) (without regard to
the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as
described in the immediately preceding sentence as a result of any
changes after the Closing Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of
Taxes.
46
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR
Lending Office, as the case may be) to avoid or to minimize any amounts
which might otherwise be payable pursuant to this Section; provided,
however, that such efforts shall not cause the imposition on such
Lender of any additional costs or legal or regulatory burdens deemed by
such Lender in its sole discretion to be material.
(d) If the Borrower pays any additional amount pursuant to
this Section 2.17 with respect to a Lender, such Lender shall use
reasonable efforts to obtain a refund of tax or credit against its tax
liabilities on account of such payment; provided that such Lender shall
have no obligation to use such reasonable efforts if either (i) it is
in an excess foreign tax credit position or (ii) it believes in good
faith, in its sole discretion, that claiming a refund or credit would
cause adverse tax consequences to it. In the event that such Lender
receives such a refund or credit, such Lender shall pay to the Borrower
an amount that such Lender reasonably determines is equal to the net
tax benefit obtained by such Lender as a result of such payment by the
Borrower. In the event that no refund or credit is obtained with
respect to the Borrower's payments to such Lender pursuant to this
Section 2.17, then such Lender shall upon request provide a
certification that such Lender has not received a refund or credit for
such payments. Nothing contained in this Section 2.17 shall require a
Lender to disclose or detail the basis of its calculation of the amount
of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this
Section 2.17 to the Borrower or any other party.
(e) The agreements in this Section 2.17 shall survive the
termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder.
Section 2.18 Indemnification; Nature of Issuing Lender's Duties.
--------------------------------------------------
(a) In addition to its other obligations under Section 2.3,
the Borrower hereby agrees to protect, indemnify, pay and save each
Issuing Lender harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including
reasonable attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (i) the issuance of
any Letter of Credit or (ii) the failure of the Issuing Lender to honor
a drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
47
(b) As between the Borrower and the Issuing Lender, the
Borrower shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender shall
not be responsible for: (i) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, that may
prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of a Letter of Credit to comply fully with conditions
required in order to draw upon a Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they be in cipher; (v) errors in interpretation of technical terms;
(vi) any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (vii) any consequences arising from causes beyond
the control of the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted
by the Issuing Lender, under or in connection with any Letter of Credit
or the related certificates, if taken or omitted in good faith, shall
not put such Issuing Lender under any resulting liability to the
Borrower. It is the intention of the parties that this Agreement shall
be construed and applied to protect and indemnify the Issuing Lender
against any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts or
omissions, whether rightful or wrongful, of any Government Authority.
The Issuing Lender shall not, in any way, be liable for any failure by
the Issuing Lender or anyone else to pay any drawing under any Letter
of Credit as a result of any Government Acts or any other cause beyond
the control of the Issuing Lender.
(d) Nothing in this Section 2.18 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.3(d)
hereof. The obligations of the Borrower under this Section 2.18 shall
survive the termination of this Agreement. No act or omissions of any
current or prior beneficiary of a Letter of Credit shall in any way
affect or impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.18, the Borrower shall have no obligation to indemnify any
Issuing Lender in respect of any liability incurred by such Issuing
Lender arising out of the gross negligence or willful misconduct of the
Issuing Lender (including action not taken by an Issuing Lender), as
determined by a court of competent jurisdiction.
48
ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
Section 3.1 Financial Condition.
-------------------
The Borrower has delivered to the Administrative Agent and the Lenders
(a) balance sheets and the related statements of income and of cash flows of the
Borrower and its Subsidiaries for fiscal years ended on September 30, 2000,
September 30, 2001 and September 30, 2002 audited by KPMG LLP are complete and
correct and present fairly the financial condition of the Borrower and its
Subsidiaries as of such dates, (b) a company-prepared unaudited balance sheet
and related statements of income and cash flows for the quarter ending June 30,
2003, (c) an unaudited pro forma balance sheet as of June 30, 2003 in form and
substance satisfactory to the Administrative Agent and the Lenders and (d) the
five-year projections of the Borrower have been prepared in good faith based
upon reasonable assumptions. The financial statements referred to in subsection
(a) above are complete and correct and present fairly the financial condition of
the Borrower and its Subsidiaries as of such dates. All such financial
statements, including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved (except as disclosed therein).
Section 3.2 No Change.
---------
Since September 30, 2002 there has been no development or event which
has had or could reasonably be expected to have a Material Adverse Effect.
Section 3.3 Corporate Existence; Compliance with Law.
----------------------------------------
Each of the Borrower and the other Credit Parties (a) is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, (b) has the requisite power
and authority and the legal right and all requisite governmental licenses,
authorizations, consents and approvals to (i) own and operate all its property,
(ii) lease the property it operates as lessee and (iii) conduct the business in
which it is currently engaged, (c) is duly qualified and licensed to conduct
business and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to so qualify
or be in good standing could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with the requirements of
Laws (including state pharmacy laws, Medicare Regulations and Medicaid
Regulations) except to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
Without limiting the generality of the foregoing, each of the Borrower and the
other Credit Parties represents that:
49
(i) (A) There is no Credit Party or individual employed by any
Credit Party who may reasonably be expected to have criminal
culpability or to be excluded or suspended from participation in any
Medical Reimbursement Program for their corporate or individual actions
or failures to act where such culpability, exclusion and/or suspension
has or could be reasonably expected to result in a Material Adverse
Effect; and (B) there is no officer or other member of management
continuing to be employed by any Credit Party who may reasonably be
expected to have individual culpability for matters under investigation
by the OIG or any Governmental Authority unless such member of
management has been, within a reasonable period of time after discovery
of such actual or potential culpability, either suspended or removed
from positions of responsibility related to those activities under
challenge by the OIG or any Governmental Authority;
(ii) Current billing policies, arrangements, protocols and
instructions comply with requirements of Medical Reimbursement Programs
and are administered by properly trained personnel except where any
such failure to comply could not reasonably be expected to result in a
Material Adverse Effect; and
(iii) There has not been, nor does any Credit Party reasonably
anticipate that there will be, disruption in payments under Medicare or
other Medical Reimbursement Programs resulting from the Spin-off,
except where such disruption could not reasonably be expected to result
in a Material Adverse Effect.
Section 3.4 Corporate Power; Authorization; Enforceable Obligations.
-------------------------------------------------------
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained and are in full force and effect) or with the validity or
enforceability of any Credit Document against the Borrower or the other Credit
Parties (except such filings as are necessary in connection with the perfection
of the Liens created by such Credit Documents). Each Credit Document to which it
is a party has been duly executed and delivered on behalf of the Borrower or the
other Credit Parties, as the case may be. Each Credit Document to which it is a
party constitutes a legal, valid and binding obligation of the Borrower or the
other Credit Parties, as the case may be, enforceable against the Borrower or
such other Credit Party, as the case may be, in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
50
Section 3.5 No Legal Bar; No Default.
------------------------
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents or result in a
limitation on any licenses, permits or other approvals applicable to the
business operations or properties of any Credit Party or adversely affect the
ability of any Credit Party to participate in, or contract with, any Medical
Reimbursement Program. Neither the Borrower nor any other Credit Party is in
default under or with respect to any of its Contractual Obligations in any
respect which could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
Section 3.6 No Material Litigation.
----------------------
No litigation, investigation, claim, criminal prosecution, civil
investigative demand, imposition of criminal or civil fines and penalties, or
any other proceeding of or before any arbitrator or Governmental Authority
including but not limited to those regulatory agencies responsible for
licensing, accrediting or issuing Medicare or Medicaid certification is pending
or, to the best knowledge of the Credit Parties, threatened by or against any
Credit Party or any of its Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to the Credit Documents or
any Loan or any of the transactions contemplated hereby, or (b) which could
reasonably be expected to have a Material Adverse Effect.
Section 3.7 Investment Company Act.
----------------------
Neither the Borrower nor any other Credit Party is an "investment
company", or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
Section 3.8 Margin Regulations.
------------------
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Credit
Parties and their Subsidiaries taken as a group do not own "margin stock" except
as identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Credit Parties and their
Subsidiaries taken as a group does not exceed 25% of the value of their assets.
51
Section 3.9 ERISA.
-----
Except as set forth in Schedule 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan. Each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither any Credit Party nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
Section 3.10 Environmental Matters.
---------------------
Except for matters which, either individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and the other Credit
Parties, the facilities and properties owned, leased or operated by the
Borrower and the other Credit Parties or any of their Subsidiaries (the
"Properties") do not contain any Materials of Environmental Concern in
amounts or concentrations which (i) constitute a violation of, or (ii)
could give rise to liability under, any Environmental Law.
(b) To the best knowledge of the Borrower and the other Credit
Parties, the Properties and all operations of the Borrower and the
other Credit Parties and/or their Subsidiaries at the Properties are in
compliance, and have in the last five years been in compliance, in all
material respects with all applicable Environmental Laws, and there is
no contamination at, under or about the Properties or violation of any
Environmental Law with respect to the Properties or the business
operated by the Borrower and the other Credit Parties or any of their
Subsidiaries (the "Business").
(c) Neither the Borrower nor any of the other Credit Parties
has received any written or actual notice of violation, alleged
violation, non-compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with regard
to any of the Properties or the Business, nor does the Borrower or any
of the other Credit Parties nor any of their Subsidiaries have
knowledge or reason to believe that any such notice will be received or
is being threatened.
(d) To the best knowledge of the Borrower and the other Credit
Parties, Materials of Environmental Concern have not been transported
or disposed of from the Properties in violation of, or in a manner or
to a location which could give rise to liability under any
Environmental Law, nor have any Materials of Environmental Concern been
generated, treated, stored or disposed of at, on or under any of the
Properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Law.
52
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower and the other
Credit Parties, threatened, under any Environmental Law to which the
Borrower or any other Credit Party or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor
are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business.
(f) To the best knowledge of the Borrower and the other Credit
Parties, there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or
related to the operations of the Borrower or any other Credit Party or
any Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
Section 3.11 Use of Proceeds.
----------------
The proceeds of the Extensions of Credit shall be used solely by the
Borrower as follows:
(a) to (i) pay fees and expenses owing to the Lenders
and the Administrative Agent in connection with this Agreement
and (ii) provide for working capital and other general
corporate purposes, including, without limitation, Permitted
Acquisitions; and
(b) the Letters of Credit shall be used only for or
in connection with appeal bonds, reimbursement obligations
arising in connection with surety and reclamation bonds,
reinsurance, domestic or international trade transactions and
obligations not otherwise aforementioned relating to
transactions entered into by the applicable account party in
the ordinary course of business.
Section 3.12 Subsidiaries.
------------
Set forth on Schedule 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties as of the Closing Date. Information on the
attached Schedule includes state of incorporation or organization; the number of
shares of each class of Capital Stock or other equity interests outstanding; the
number and percentage of outstanding shares of each class of Capital Stock; and
the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding Capital
Stock and other equity interests of all such Subsidiaries is validly issued,
fully paid and non-assessable and is owned, free and clear of all Liens (other
than those arising under or contemplated in connection with the Credit
Documents).
53
Section 3.13 Ownership.
---------
Each Credit Party and its Subsidiaries is the owner of, and has good
and marketable title to, all of its respective assets, except as may be
permitted pursuant Section 6.13 hereof, and none of such assets is subject to
any Lien other than Permitted Liens.
Section 3.14 Indebtedness.
------------
Except as otherwise permitted under Section 6.1, the Credit Parties and
their Subsidiaries have no Indebtedness.
Section 3.15 Taxes.
-----
Each of the Credit Parties and its Subsidiaries has filed, or caused to
be filed, all tax returns (federal, state, local and foreign) required to be
filed and paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other taxes, fees, assessments and other
governmental charges (including mortgage recording taxes, documentary stamp
taxes and intangibles taxes) owing by it, except for such taxes (i) which are
not yet delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither any of the Credit Parties nor any of its
Subsidiaries are aware as of the Closing Date of any proposed tax assessments
against it or any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect.
Section 3.16 Intellectual Property.
---------------------
Each of the Credit Parties and its Subsidiaries owns, or has the legal
right to use, all material Intellectual Property necessary for each of them to
conduct its business as currently conducted. Set forth on Schedule 3.16 is a
list as of the Closing Date of all Intellectual Property owned by each of the
Credit Parties and its Subsidiaries or that each of the Credit Parties or any of
its Subsidiaries has the right to use. Except as disclosed in Schedule 3.16
hereto, (a) the specified Credit Party has the right to use the material
Intellectual Property disclosed in Schedule 3.16 hereto in perpetuity and
without payment of royalties, (b) all registrations with and applications to
Governmental Authorities in respect of such material Intellectual Property are
valid and in full force and effect and are not subject to the payment of any
taxes or maintenance fees or the taking of any interest therein, held by any of
the Credit Parties to maintain their validity or effectiveness, and (c) there
are no restrictions on the direct or indirect transfer of any Contractual
Obligation, or any interest therein, held by any of the Credit Parties in
respect of such material Intellectual Property. None of the Credit Parties is in
default (or with the giving of notice or lapse of time or both, would be in
default) under any license to use such material Intellectual Property; no claim
54
has been asserted and is pending by any Person challenging or questioning the
use of any such material Intellectual Property or the validity or effectiveness
of any such material Intellectual Property, nor do the Credit Parties or any of
their Subsidiaries know of any such claim; and, to the knowledge of the Credit
Parties or any of their Subsidiaries, the use of such material Intellectual
Property by any of the Credit Parties or any of its Subsidiaries does not
infringe on the rights of any Person. The Credit Parties have recorded or
deposited with and paid to the United States Copyright Office, the Register of
Copyrights, the Copyrights Royalty Tribunal or other Governmental Authority, all
notices, statements of account, royalty fees and other documents and instruments
required under the terms and conditions of any Contractual Obligation of the
Credit Parties and/or under Title 17 of the United States Code and the rules and
regulations issued thereunder (collectively, the "Copyright Act"), and are not
liable to any Person for copyright infringement under the Copyright Act or any
other law, rule, regulation, contract or license as a result of their business
operations. Schedule 3.16 may be updated from time to time by the Borrower to
include new Intellectual Property by giving written notice thereof to the
Administrative Agent.
Section 3.17 Solvency.
--------
The fair saleable value of each Credit Party's assets, measured on a
going concern basis, exceeds all probable liabilities, including those to be
incurred pursuant to this Credit Agreement. None of the Credit Parties (a) has
unreasonably small capital in relation to the business in which it is or
proposes to be engaged or (b) has incurred, or believes that it will incur after
giving effect to the transactions contemplated by this Credit Agreement, debts
beyond its ability to pay such debts as they become due.
Section 3.18 Investments.
-----------
All Investments of each of the Credit Parties and its Subsidiaries are
Permitted Investments.
Section 3.19 Location of Collateral.
----------------------
Set forth on Schedule 3.19(a) is a list as of the Closing Date of the
Properties of the Credit Parties and their Subsidiaries with street address,
county and state where located. Set forth on Schedule 3.19(b) is a list as of
the Closing Date of all locations where any tangible personal property of the
Credit Parties and their Subsidiaries is located, including county and state
where located. Set forth on Schedule 3.19(c) is the chief executive office and
principal place of business of each of the Credit Parties and their Subsidiaries
and the State of incorporation or organization of each such Person as of the
Closing Date. Schedule 3.19(a), 3.19(b) and 3.19(c) may be updated from time to
time by the Borrower to include new properties or locations by giving written
notice thereof to the Administrative Agent.
Section 3.20 No Burdensome Restrictions.
--------------------------
None of the Credit Parties or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
55
Section 3.21 Brokers' Fees.
-------------
None of the Credit Parties or any of its Subsidiaries has any
obligation to any Person in respect of any finder's, broker's, investment
banking or other similar fee in connection with any of the transactions
contemplated under the Credit Documents other than the closing and other fees
payable pursuant to this Credit Agreement.
Section 3.22 Labor Matters.
-------------
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of any of the Credit Parties or any of its Subsidiaries
as of the Closing Date, other than as set forth in Schedule 3.22 hereto, and as
of the Closing Date, none of the Credit Parties or any of its Subsidiaries (i)
has suffered any strikes, walkouts, work stoppages or other material labor
difficulty within the last five years, other than as set forth in Schedule 3.22
hereto or (ii) has knowledge of any potential or pending strike, walkout or work
stoppage. Other than as set forth on Schedule 3.22, as of the Closing Date, no
unfair labor practice complaint is pending against any Credit Party or any of
its Subsidiaries or, to the best knowledge of the Credit Parties, before any
Governmental Authority.
Section 3.23 Security Documents.
------------------
The Security Documents create valid security interests in, and Liens
on, the Collateral purported to be covered thereby, which security interests and
Liens are currently (or will be, upon the filing of appropriate financing
statements in favor of the Administrative Agent, on behalf of the Lenders)
perfected security interests and Liens, prior to all other Liens other than
Permitted Liens.
Section 3.24 Accuracy and Completeness of Information.
----------------------------------------
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries to the
Administrative Agent or any Lender for purposes of or in connection with this
Agreement or any other Credit Document, or any transaction contemplated hereby
or thereby, is or will be true and accurate in all material respects and not
incomplete by omitting to state any material fact necessary to make such
information not misleading. There is no fact now known to the Borrower, any
other Credit Party or any of their Subsidiaries which has, or could reasonably
be expected to have, a Material Adverse Effect which fact has not been set forth
herein, in the financial statements of the Borrower and its Subsidiaries
furnished to the Administrative Agent and/or the Lenders, or in any certificate,
opinion or other written statement made or furnished by any Credit Party to the
Administrative Agent and/or the Lenders.
56
Section 3.25 Consummation of Spin-off; Representations and
---------------------------------------------
Warranties from Other Documents.
- --------------------------------
The Spin-off and related transactions have been (or concurrently
herewith will be) consummated substantially in accordance with the terms of the
Spin-off Documents. As of the Closing Date, the Spin-off Documents have not been
altered, amended or otherwise modified or supplemented or any condition thereof
waived in any material respect without the prior written consent of the
Administrative Agent. Each of the representations and warranties made in the
Spin-off Documents by each of the parties thereto is true and correct, except
for any representation or warranty therein the failure of which to be true and
correct, does not have or could not reasonably be expected to have a Material
Adverse Effect.
Section 3.26 Fraud and Abuse.
---------------
Neither the Credit Parties nor, to the knowledge of the officers of the
Credit Parties, any of their stockholders (other than stockholders of the
Borrower), officers or directors (in their capacities as such or as employees of
any Credit Party), have engaged in any activities which are prohibited under
federal Medicare and Medicaid statutes, Medicare Regulations, Medicaid
Regulations, 42 U.S.C. ss.1320a-7b, or 42 U.S.C. ss.1395nn or the regulations
promulgated pursuant to such statutes or related state or local statutes or
regulations, or which are prohibited by binding rules of professional conduct,
including but not limited to the following: (a) knowingly and willfully making
or causing to be made a false statement or representation of a material fact in
any applications for any benefit or payment; (b) knowingly and willfully making
or causing to be made any false statement or representation of a material fact
for use in determining rights to any benefit or payment; (c) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another with the intent to secure such benefit or payment fraudulently; (d)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
or in kind or offering to pay such remuneration (i) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or other applicable third party payors, or (ii) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service, or item for which payment
may be made in whole or in part by Medicare, Medicaid or other applicable third
party payors.
Section 3.27 Licensing and Accreditation.
---------------------------
Except for matters that could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, each of the Credit Parties has, to
the extent applicable: (i) obtained (or been duly assigned) all required
certificates of need or determinations of need as required by any Governmental
Authority for the acquisition, construction, expansion of, investment in or
operation of its businesses as currently operated; (ii) obtained and maintains
in good standing all required licenses permits, authorizations and approvals of
each Governmental Authority necessary to the conduct of its businesses; (iii) to
the extent prudent and customary in the industry in which it is engaged,
obtained and maintains accreditation from all generally recognized accrediting
agencies; (iv) obtained and maintains Medicaid Certification and Medicare
Certification; and (v) entered into and maintains in good standing its Medicare
Provider Agreement and its Medicaid Provider Agreement. To the knowledge of the
officers of the Credit Parties, all material required licenses are in full force
and effect on the date hereof and have not been revoked or suspended or
otherwise limited.
57
Section 3.28 Other Regulatory Protection.
---------------------------
Each of the Credit Parties and its Subsidiaries represent that it does
not manufacture pharmaceutical products and is in compliance with all rules,
regulations and other requirements of the Food and Drug Administration ("FDA"),
the Drug Enforcement Administration ("DEA"), the Federal Trade Commission
("FTC"), the Occupational Safety and Health Administration ("OSHA"), the
Department of Agriculture ("USDA"), the Consumer Product Safety Commission, the
United States Customs Service and the United States Postal Service and other
state or federal regulatory authorities or jurisdictions in which any of the
Credit Parties or any of its Subsidiaries do business or distribute and market
pharmaceutical products, except to the extent that any such noncompliance would
not have a Material Adverse Effect. Except as so disclosed, neither the FDA, the
DEA, the FTC, OSHA, the USDA, the Consumer Product Safety Commission, nor any
other such regulatory authority has requested (or, to the Credit Parties'
knowledge, are considering requesting) any product recalls or other enforcement
actions that (a) if not complied with would result in a Material Adverse Effect
and (b) with which the Credit Parties have not complied within the time period
allowed.
Section 3.29 Material Contracts.
------------------
Schedule 3.29 sets forth a true and correct and complete list of all
contracts or other arrangements, whether written or oral, to which any Credit
Party or any of its Subsidiaries is a party (a) as to which the breach,
nonperformance, cancellation or failure to renew by any party thereto could
reasonably be expected to have a Material Adverse Effect or (b) which the
Borrower, in its business judgment, has determined to include on Schedule 3.29
on the basis that such contracts or other arrangements are significant to the
business of the Borrower and its Subsidiaries. All of the Material Contracts are
in full force and effect (other than any Material Contract that has expired in
accordance with its terms to the extent such expiration could not reasonably be
expected to have a Material Adverse Effect) and no material defaults currently
exist thereunder.
58
Section 3.30 Insurance.
---------
The present insurance coverage of the Credit Parties and their
Subsidiaries is outlined as to carrier, policy number, expiration date, type and
amount on Schedule 3.30 and such insurance coverage complies the requirements
set forth in Section 5.5(b).
Section 3.31 Reimbursement from Third Party Payors.
-------------------------------------
The accounts receivable of the Credit Parties have been and will
continue to be adjusted to reflect the reimbursement policies (both those most
recently published in writing as well as those not in writing which have been
verbally communicated) of Medical Reimbursement Programs such as Medicare,
Medicaid, Blue Cross/Blue Shield, private insurance companies, health
maintenance organizations, preferred provider organizations, alternative
delivery systems, managed care systems, government contacting agencies and other
third party payors. In particular, accounts receivable relating to third party
payors do not and shall not exceed amounts any obligee is entitled to receive
under any capitation arrangement, fee schedule, discount formula, cost-based
reimbursement or other adjustment or limitation to its usual charges.
Section 3.32 Other Agreements.
----------------
No Credit Party is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any Medicaid Provider Agreement, Medicare Provider Agreement or other agreement
or instrument to which a Credit Party is a party, which default has resulted in,
or if not remedied within any applicable grace period could result in, the
revocation, termination, cancellation or suspension of Medicaid Certification or
Medicare Certification of any Credit Party or (ii) any other agreement or
instrument to which any Credit Party is a party, which default has, or if not
remedied within any applicable grace period could reasonably be likely to have,
a Material Adverse Effect.
Section 3.33 Classification as Senior Indebtedness.
-------------------------------------
The Credit Party Obligations constitute "Senior Indebtedness" and
"Designated Senior Debt" under and as defined in any agreement governing the
outstanding Subordinated Indebtedness and the subordination provisions set forth
in each such agreement are legally valid and enforceable against the parties
thereto.
Section 3.34 Tax Shelter Regulations.
-----------------------
The Borrower does not intend to treat the Loans or Letters of Credit
and related transactions as being a "reportable transaction" (within the meaning
of Treasury Regulation Section 1.6011-4). In the event the Borrower determines
to take any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. If the Borrower so notifies Agent, the Borrower
acknowledges that one or more of the Lenders may treat its Loans and/or Letters
of Credit as part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as applicable, will maintain the
lists and other records required by such treasury regulation.
Section 3.35 Medicare and Medicaid Notices and Filings Related to
----------------------------------------------------
Business.
- ---------
Except for matters that could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect, with respect to each Credit Party to
the extent applicable: (i) each has timely filed all reports required to be
filed in connection with Medicare and applicable Medicaid programs and all
required reports and administrative forms and filings are true and complete in
all material respects; (ii) there are no claims, actions, proceedings or appeals
pending (and no Credit Party has filed anything that would result in any claims,
actions or appeals) before any Governmental Authority with respect to any
Medicare or Medicaid reports or claims filed by any Credit Party on or before
the date hereof, or with respect to any adjustments, denials, recoupments or
disallowances by any intermediary, carrier, other insurer, commission, board or
agency in connection with any cost reports or claims; (iii) no validation
review, survey, inspection, audit, investigation or program integrity review
related to any Credit Party has been conducted by any Governmental Authority or
government contractor in connection with the Medicare or Medicaid programs, and,
to the knowledge of the Credit Parties, no such reviews are scheduled, pending
or, threatened against or affecting any Credit Party; and (iv) each has timely
filed all material reports, data and other information required by any other
Governmental Authority with authority to regulate any Credit Party or its
business in any manner.
59
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions to Closing Date and Initial Extensions of
----------------------------------------------------
Credit.
- ------
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans and the Swingline Loans on the
Closing Date is subject to, the satisfaction of the following conditions
precedent:
(a) Execution of Agreements. The Administrative Agent shall
have received (i) counterparts of this Agreement, (ii) for the account
of each applicable Lender, a Revolving Note, (iii) for the account of
the Swingline Lender, the Swingline Note, and (iv) counterparts of the
Security Agreement and the Pledge Agreement, in each case conforming to
the requirements of this Agreement and executed by a duly authorized
officer of each party thereto, and in each case in form and substance
satisfactory to the Lenders.
(b) Authority Documents. The Administrative Agent shall have
received the following:
(i) Articles of Incorporation/Charter Documents.
Copies of the articles of incorporation or other charter
documents, as applicable, of each Credit Party 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 each Credit Party approving and adopting the
Credit Documents, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a
secretary or assistant secretary of such Credit Party
(pursuant to a secretary's certificate in substantially the
form of Schedule 4.1-1 attached hereto) as of the Closing Date
to be true and correct and in force and effect as of such
date.
(iii) Bylaws/Operating Agreement. A copy of the
bylaws or comparable operating agreement of each Credit Party
certified by a secretary or assistant secretary of such Credit
Party (pursuant to a secretary's certificate in substantially
the form of Schedule 4.1-1 attached hereto) as of the Closing
Date to be true and correct and in force and effect as of such
date.
60
(iv) Good Standing. Copies of (i) certificates of
good standing, existence or its equivalent with respect to the
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state of
incorporation or organization and each other state in which
the failure to so qualify and be in good standing could
reasonably be expected to have a Material Adverse Effect on
the business or operations of the Credit Parties and their
Subsidiaries in such state and (ii) a certificate indicating
payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing
authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
(pursuant to a secretary's certificate in substantially the
form of Schedule 4.1-1 attached hereto) to be true and correct
as of the Closing Date.
(c) Legal Opinions of Counsel. The Administrative Agent shall
have received opinions of legal counsel (including local counsel to the
extent required by the Administrative Agent) for the Credit Parties,
dated the Closing Date and addressed to the Administrative Agent and
the Lenders, which opinions shall provide, among other things, that the
Spin-off and the transactions contemplated herein do not violate
regulatory requirements, corporate instruments and material agreements
as of the Closing Date, and shall otherwise be in form and substance
acceptable to the Administrative Agent.
(d) Reliance. The Administrative Agent shall have received a
copy of each opinion, report, agreement, and other document required to
be delivered pursuant to the Spin-off Documents and related
transactions, together with evidence that the Administrative Agent and
the Lenders have been authorized to rely on each such opinion, all in
form and substance reasonably satisfactory to the Administrative Agent.
(e) Personal Property Collateral. The Administrative Agent
shall have received, in form and substance satisfactory to the
Administrative Agent:
(i) searches of Uniform Commercial Code filings in
the jurisdiction of the chief executive office of each Credit
Party, the State of incorporation or organization of each
Credit Party and each jurisdiction where any Collateral is
located or where a filing would need to be made in order to
perfect the Administrative Agent's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
61
(ii) completed UCC financing statements for each
appropriate jurisdiction as is necessary, in the
Administrative Agent's sole discretion, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the
Lenders' security interest in the Collateral; and
(iv) in the case of any warehouse, plant or other
real property material to the Credit Parties' business that is
leased by a Credit Party, such estoppel letters, consents and
waivers from the landlords on such real property as may be
required by the Administrative Agent.
(f) Subordinated Note Proceeds. The Borrower shall have
received (or simultaneously with the closing of the Loans hereunder,
the Borrower will receive) gross proceeds (before expenses and
underwriting and initial purchase discounts) from the issuance of the
Subordinated Notes in an amount not less than $250,000,000 on terms and
conditions reasonably acceptable to the Administrative Agent.
(g) Liability, Casualty and Business Interruption Insurance.
The Administrative Agent shall have received copies of insurance
policies or certificates of insurance evidencing liability and casualty
insurance meeting the requirements set forth herein or in the Security
Documents and business interruption insurance satisfactory to the
Administrative Agent. The Administrative Agent shall be named as loss
payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Administrative Agent, that
it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled.
(h) Fees. The Administrative Agent and the Lenders shall have
received all fees, if any, owing pursuant to the Fee Letter and Section
2.4.
(i) Litigation. There shall not exist any pending or
threatened litigation, investigation, audit, action, bankruptcy or
insolvency, injunction, order or claim affecting or relating to any
Credit Party or any of its Subsidiaries, this Agreement and the other
Credit Documents or the Spin-off, that could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect and
that has not been settled, dismissed, vacated, discharged or terminated
prior to the Closing Date.
(j) Solvency Certificate. The Administrative Agent shall have
received an officer's certificate prepared by the chief financial
officer of the Borrower as to the financial condition, solvency and
related matters of each Credit Party, in each case after giving effect
to the Spin-off and the initial borrowings under the Credit Documents,
in substantially the form of Schedule 4.1-2 hereto.
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(k) Account Designation Letter. The Administrative Agent shall
have received the executed Account Designation Letter in the form of
Schedule 1.1-1 hereto.
(l) Corporate Structure. The corporate, capital and ownership
structure of the Credit Parties and their Subsidiaries shall be as
described in Schedule 3.12, and shall otherwise be satisfactory to the
Administrative Agent and the Lenders. The Administrative Agent and the
Lenders shall be satisfied with the management of the Credit Parties
and their Subsidiaries and with all legal, tax, accounting, business
and other matters relating to the Credit Parties and their
Subsidiaries.
(m) Spin-off Documents. The Administrative Agent shall have
reviewed and approved in its sole discretion all of the Spin-off
Documents and there shall not have been any material modification,
amendment, supplement or waiver to the Spin-off Documents without the
prior written consent of the Administrative Agent, and the Spin-off
shall have been consummated in accordance with the terms of the
Spin-off Documents (without waiver of any material conditions precedent
to the obligations of any party thereto that has not been approved by
the Administrative Agent). The Administrative Agent shall have received
a copy, certified by an officer of the Borrower as true and complete,
of each Spin-off Document as originally executed and delivered,
together with all exhibits and schedules thereto.
(n) Private Letter Ruling. The Administrative Agent shall have
received evidence of a private letter ruling or opinion of a nationally
recognized tax counsel satisfactory to the Administrative Agent to the
effect that the Spin-off will be tax free.
(o) Consents. The Administrative Agent shall have received
evidence that all governmental, shareholder, board of director and
material third party consents and approvals necessary in connection
with the financings, the Spin-off and other transactions contemplated
hereby have been obtained and all applicable waiting periods have
expired without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of such transactions.
(p) Compliance with Laws. The financings and other
transactions contemplated hereby shall be in compliance with all
applicable Laws and regulations (including all applicable securities
and banking laws, rules and regulations).
(q) Bankruptcy. There shall be no bankruptcy or insolvency
proceedings with respect to any Credit Party or any of its
Subsidiaries.
(r) Material Adverse Effect. No change shall have occurred
since September 30, 2002 in the business, assets, properties,
operations or condition (financial or otherwise) of the Borrower or of
the Credit Parties and their Subsidiaries taken as a whole that has
had, or could reasonably be expected to have, a Material Adverse
Effect.
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(s) Funded Debt. After giving effect to the closing of this
Agreement and the initial Extensions of Credit hereunder, there shall
be no more than $270,000,000 (of which at least $250,000,000 shall be
Subordinated Indebtedness) in total Funded Debt of the Credit Parties
and their Subsidiaries on a consolidated basis (including the initial
Extensions of Credit hereunder).
(t) Maximum Leverage Ratio. The Administrative Agent shall
receive evidence satisfactory thereto provided by the Borrower that the
Leverage Ratio of the Credit Parties and their Subsidiaries as of the
Closing Date on a Pro Forma Basis is less than or equal to 2.75 to 1.0.
(u) Financial Statements. The Administrative Agent and the
Lenders shall have received copies of the financial statements referred
to in Section 3.1 hereof, each in form and substance satisfactory to
it.
(v) Termination of Existing Indebtedness. All existing
Indebtedness for borrowed money of the Credit Parties and their
Subsidiaries (including the Existing Credit Agreement and the Rollover
Notes) shall have been repaid in full and terminated and all Liens
relating thereto shall have been terminated.
(w) Officer's Certificates. The Administrative Agent shall
have received a certificate executed by a Responsible Officer of the
Borrower as of the Closing Date stating that (i) no action, suit,
investigation or proceeding is pending or, to the knowledge of any
Credit Party, threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect any Credit Party
or any other transaction contemplated by the Credit Documents and the
Spin-off Documents, if such action, suit, investigation or proceeding
could reasonably be expected to have a Material Adverse Effect and (ii)
immediately after giving effect to this Credit Agreement (including the
initial Extensions of Credit hereunder), the other Credit Documents and
the Spin-off Documents and all the transactions contemplated therein to
occur on such date, (A) no Default or Event of Default exists, (B) all
representations and warranties contained herein and in the other Credit
Documents are true and correct, and (C) the Credit Parties are in
compliance with each of the financial covenants set forth in Section
5.9 on a Pro Forma Basis, and demonstrating compliance with such
financial covenants.
(x) Credit Rating. The Borrower shall have obtained senior
secured credit ratings of "Ba1" from Moody's and "BB+" from S&P with a
no less than "stable" outlook from both Moody's and S&P.
(y) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.
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Section 4.2 Conditions to All Extensions of Credit.
--------------------------------------
The obligation of each Lender to make any Extension of Credit hereunder
is subject to the satisfaction of the following conditions precedent on the date
of making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Credit Parties herein, in the Security Documents
or which are contained in any certificate furnished at any time under
or in connection herewith shall be (i) if qualified by their terms with
a standard of materiality, including "Material Adverse Effect", true
and correct and (ii) if not so qualified, true and correct in all
material respects, in each case on and as of the date of such Extension
of Credit as if made on and as of such date, except for representations
and warranties that are expressly made as of a different date.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Extension of Credit to be made on such date unless
such Default or Event of Default shall have been waived in accordance
with this Agreement.
(c) Compliance with Commitments. Immediately after giving
effect to the making of any such Extension of Credit (and the
application of the proceeds thereof), (i) the sum of outstanding
Revolving Loans plus outstanding Swingline Loans plus LOC Obligations
shall not exceed the Aggregate Revolving Committed Amount, (ii) the LOC
Obligations shall not exceed the LOC Committed Amount and (iii) the
Swingline Loans shall not exceed the Swingline Committed Amount.
(d) Additional Conditions to Extensions of Credit. If such
Extension of Credit is made pursuant to Sections 2.1, 2.2 or 2.3, all
conditions set forth in such Section shall have been satisfied.
Each request for an Extension of Credit and each acceptance by the
Borrower of any such Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in paragraphs (a) through (d) of this
Section have been satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fees and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full, the Credit Parties shall, and shall cause each of their Subsidiaries, to:
65
Section 5.1 Financial Statements.
--------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in
any event within ninety (90) days (plus the period of any extensions
obtained pursuant to Rule 12b-25 of the Securities Exchange Act of
1934) after the end of each fiscal year of the Borrower, a copy of the
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such fiscal year and the related
consolidated statements of income and retained earnings and of cash
flows of the Borrower and its consolidated Subsidiaries for such year,
audited (with respect to the consolidated statements only) by KPMG LLP
or another firm of independent certified public accountants of
nationally recognized standing reasonably acceptable to the
Administrative Agent, in each case setting forth in comparative form
consolidated and consolidating figures for the preceding fiscal year,
reported on without a "going concern" or like qualification or
exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification;
(b) Quarterly Financial Statements. As soon as available and
in any event within forty-five (45) days (plus the period of any
extensions obtained pursuant to Rule 12b-25 of the Securities Exchange
Act of 1934) after the end of each of the first three fiscal quarters
of the Borrower, a company-prepared consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such period
and related company-prepared consolidating statements of income and
retained earnings and of cash flows for the Borrower and its
consolidated Subsidiaries for such quarterly period and for the portion
of the fiscal year ending with such period, in each case setting forth
in comparative form consolidated figures for the corresponding period
or periods of the preceding fiscal year (subject to normal recurring
year-end audit adjustments) and including management discussion and
analysis of operating results inclusive of operating metrics in
comparative form and a summary of accounts receivable and accounts
payable aging reports in form satisfactory to the Lenders; and
(c) Annual Budget Plan. As soon as available, but in any event
within sixty (60) days after the beginning of each fiscal year, a copy
of the detailed annual budget or plan of the Borrower for the next
fiscal year on a quarterly basis, in form and detail reasonably
acceptable to the Administrative Agent and the Required Lenders,
together with a summary of the material assumptions made in the
preparation of such annual budget or plan;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and to be prepared in reasonable detail and, in the
case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change, if any, in the application of accounting principles as
provided in Section 1.3.
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Section 5.2 Certificates; Other Information.
-------------------------------
Furnish to the Administrative Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above, a certificate of the independent
certified public accountants reporting on such financial statements
stating (to the extent such accountants may do so, consistent with
applicable professional standards, without performing procedures beyond
those required by generally accepted auditing standards in connection
with their audit of the annual financial statements) that in making the
examination necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and 5.1(b) above, a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, during such period each of the Credit Parties
observed or performed in all material respects all of its covenants and
other agreements, and satisfied in all material respects every
condition, contained in this Agreement to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in
such certificate and such certificate shall include the calculations in
reasonable detail required to indicate compliance with Section 5.9 as
of the last day of such period;
(c) within ten (10) days after the same are sent, copies of
all reports (other than those otherwise provided pursuant to Section
5.1 and those which are of a promotional nature) and other financial
information which the Borrower sends to its members and equity holders,
and within ten (10) days after the same are filed, copies of all
financial statements and non-confidential reports which the Borrower
may make to, or file with the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year
of the Borrower, a certificate containing information regarding the
amount of all Asset Dispositions, Debt Issuances, and Equity Issuances
that were made during the prior fiscal year and amounts received in
connection with any Recovery Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any other report
or "management letter" submitted by independent accountants to any
Credit Party or any of its Subsidiaries in connection with any annual,
interim or special audit of the books of such Person; and
(f) promptly, such additional financial and other information
as the Administrative Agent, on behalf of any Lender, may from time to
time reasonably request (including, without limitation, any statistical
and operating information that the Administrative Agent may reasonably
request).
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Section 5.3 Payment of Obligations.
----------------------
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all its taxes (Federal, state, local
and any other taxes) and all its other obligations and liabilities of whatever
nature and any additional costs that are imposed as a result of any failure to
so pay, discharge or otherwise satisfy such obligations and liabilities, except
when the amount or validity of such obligations, liabilities and costs is
currently being contested in good faith by appropriate proceedings and reserves,
if applicable, in conformity with GAAP with respect thereto have been provided
on the books of the Borrower or its Subsidiaries, as the case may be.
Section 5.4 Conduct of Business and Maintenance of Existence.
------------------------------------------------
Continue to engage in business of the same general type as now
conducted by it on the Closing Date and, except as permitted by Section 6.4,
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business; comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
Section 5.5 Maintenance of Property; Insurance.
----------------------------------
(a) Keep all material property useful and necessary in its
business in good working order and condition (ordinary wear and tear
and obsolescence excepted);
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property (including without
limitation its material tangible Collateral) in at least such amounts
and against at least such risks as are usually insured against in the
same general area by companies engaged in the same or a similar
business; and furnish to the Administrative Agent, upon written
request, full information as to the insurance carried; provided,
however, that the Credit Parties and their Subsidiaries may maintain
self insurance plans to the extent companies of similar size and in
similar businesses do so. The Administrative Agent shall be named as
loss payee or mortgagee, as its interest may appear, and/or additional
insured with respect to any such insurance providing coverage in
respect of any Collateral, and each provider of any such insurance
shall agree, by endorsement upon the policy or policies issued by it or
by independent instruments furnished to the Administrative Agent, that
it will give the Administrative Agent thirty (30) days prior written
notice before any such policy or policies shall be altered or canceled,
and that no act or default of any Credit Party or any of its
Subsidiaries or any other Person shall affect the rights of the
Administrative Agent or the Lenders under such policy or policies; and
(c) In case of any material loss, damage to or destruction of
the Collateral of any Credit Party or any part thereof, such Credit
Party shall promptly give written notice thereof to the Administrative
Agent generally describing the nature and extent of such damage or
destruction. In case of any loss, damage to or destruction of the
Collateral of any Credit Party or any part thereof, such Credit Party,
whether or not the insurance proceeds, if any, received on account of
such damage or destruction shall be sufficient for that purpose, at
such Credit Party's cost and expense, will promptly repair or replace
the Collateral of such Credit Party so lost, damaged or destroyed, to
the extent reasonably required for the ongoing conduct of the Credit
Parties' business. So long as no Default or Event of Default shall have
occurred and be continuing at such time, the Administrative Agent shall
make any insurance proceeds paid to it available to the Credit Parties
for such purpose.
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Section 5.6 Inspection of Property; Books and Records; Discussions.
------------------------------------------------------
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent or any Lender, the Administrative Agent or any
Lender to visit and inspect any of its properties and examine and make abstracts
from any of its books and records (other than materials protected by the
attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired, and to discuss the
business, operations, properties and financial and other condition of the Credit
Parties and their Subsidiaries with officers and employees of the Credit Parties
and their Subsidiaries and with its independent certified public accountants, in
each case at the Borrower's expense.
Section 5.7 Notices.
-------
Give notice in writing to the Administrative Agent (which shall
promptly transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business Days
after any Credit Party knows or has reason to know thereof, the
occurrence of any Default or Event of Default;
(b) promptly, but in any event within three (3) Business Days
after any Credit Party knows or has reason to know thereof, any default
or event of default under any Contractual Obligation of any Credit
Party or any of its Subsidiaries which could reasonably be expected to
have a Material Adverse Effect or involve a monetary claim in excess of
$5,000,000;
(c) promptly, any litigation, or any investigation or
proceeding known to a Credit Party, affecting any Credit Party or any
of its Subsidiaries which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within thirty (30)
days after any executive officer of a Credit Party knows of: (i) the
occurrence or expected occurrence of any Reportable Event with respect
to any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC (other than a Permitted Lien)
or a Plan, (ii) the institution of proceedings or the taking of any
other action, with respect to any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (iii) the
institution of proceedings or the taking of any other action by the
PBGC or any Credit Party or any Commonly Controlled Entity with respect
to the withdrawal from, or the terminating, Reorganization or
Insolvency of, any Plan;
69
(e) promptly, but in any event within two (2) Business Days
after any Credit Party knows or has reason to know thereof, after any
Credit Party becomes involved in a pending civil or criminal
investigation, criminal action or civil proposed debarment, exclusion
or other sanctioning action related to any Federal or state healthcare
program that could reasonably be expected to result in liability or
loss of revenue in excess of $1,000,000;
(f) promptly, but in any event within two (2) Business Days
after any Credit Party knows or has reason to know thereof, any other
development or event which could reasonably be expected to have a
Material Adverse Effect;
(g) promptly, but in any event within two (2) Business Days
after any Credit Party knows or has reason to know thereof, any
intention by the Borrower to treat the Loans and/or Letters of Credit
and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4), a duly completed
copy of IRS Form 8886 or any successor form; and
(h) promptly, but in any event within five (5) Business Days
thereof, notify the Administrative Agent of (i) the institution of any
investigation, review or proceeding against such Person to suspend,
revoke or terminate (or that may result in the termination of) any
Medicare Provider Agreement or Medicaid Provider Agreement, or any such
investigation or proceeding that may result in an Exclusion Event, (ii)
receipt by any Credit Party of any notice of intent to exclude or any
notice of proposal to exclude issued by the OIG or any other Exclusion
Event, (iii) all notices of loss or threatened loss of accreditation,
loss of participation under, or contract with, any Medical
Reimbursement Program or loss of applicable health care license or
certificate of authority of any Credit Party, and all other material
deficiency notices, compliance orders or adverse reports issued by any
Governmental Authority or private insurance company pursuant to a
provider agreement that, if not promptly complied with or cured, could
result in the suspension or forfeiture of any license, certification,
or accreditation necessary for such Credit Party to carry on its
business as then conducted or the termination of any insurance or
reimbursement program available to any Credit Party, and (iv) all
correspondence received by any Credit Party from any Governmental
Authority asserting that any Credit Party is not in compliance in all
material respects with applicable regulations or threatening action
against any Credit Party under any applicable regulation.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto. In
the case of any notice of a Default or Event of Default, the Borrower shall
specify that such notice is a Default or Event of Default notice on the face
thereof.
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Section 5.8 Environmental Laws.
------------------
(a) Comply in all material respects with, and ensure
compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in
all material respects with and maintain, and ensure that all tenants
and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws except to the
extent that failure to do so could not reasonably be expected to have a
Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings and the
pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents, officers
and directors and affiliates, from and against any and all claims,
demands, penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable
to the operations of the any Credit Party or any of its Subsidiaries or
the Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor. The
agreements in this paragraph shall survive repayment of the Notes and
all other amounts payable hereunder.
Section 5.9 Financial Covenants.
-------------------
Commencing on the day immediately following the Closing Date, each of
the Credit Parties shall, and shall cause each of its Subsidiaries to, comply
with the following financial covenants:
71
(a) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Borrower, shall be less than or equal to
3.25 to 1.00.
(b) Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Borrower shall
be greater than or equal to 1.75 to 1.0
(c) Consolidated Capital Expenditures. Consolidated Capital
Expenditures as of the end of each fiscal year of the Borrower
indicated below shall be less than or equal to the following:
Fiscal Year Amount
----------- ------
2003 $35,000,000
2004 $35,000,000
2005 $35,000,000
2006 $35,000,000
2007 $40,000,000
2008 $40,000,000
plus 50% of the unused amount available for Consolidated Capital
Expenditures under this Section 5.9 for the immediately preceding
fiscal year (excluding any carry forward available from any prior
fiscal year), provided, that with respect to any fiscal year, Capital
Expenditures made during any such fiscal year shall be deemed to be
made first with respect to the applicable limitation for such year and
then with respect to any carry forward amount to the extent applicable.
Section 5.10 Additional Subsidiary Guarantors.
--------------------------------
The Credit Parties will cause each of their Domestic Subsidiaries other
than any Excluded Subsidiary, whether newly formed, after acquired or otherwise
existing, to promptly become a Guarantor hereunder by way of execution of a
Joinder Agreement. The guaranty obligations of any such Additional Credit Party
shall be secured by, among other things, the Collateral of the Additional Credit
Party and such Domestic Subsidiary shall execute and deliver to the
Administrative Agent such Security Documents, legal opinions and related
documents as the Administrative Agent may reasonably request with respect to
such Collateral.
Section 5.11 Compliance with Law.
-------------------
Each Credit Party will, and will cause each of its Subsidiaries, in all
material respects, to (a) comply with all Laws, rules, regulations and orders,
and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property if noncompliance with any such law, rule,
regulation, order or restriction could reasonably be expected to have a Material
Adverse Effect and (b) conform with and duly observe in all material respects
all Laws, rules and regulations and all other valid requirements of any
regulatory authority with respect to the conduct of its business, including
without limitation HIPAA, Titles XVIII and XIX of the Social Security Act,
Medicare Regulations, Medicaid Regulations, and all Laws, rules and regulations
of Governmental Authorities, pertaining to the business of the Credit Parties;
(c) obtain and maintain all licenses, permits, certifications and approvals of
all applicable Governmental Authorities as are required for the conduct of its
business as currently conducted and herein contemplated, including without
limitation professional and pharmacy licenses, Medicaid Certifications and
Medicare Certifications, if failure to do so could reasonably be expected to
have a Material Adverse Effect, (d) make commercially reasonable efforts to
implement policies or other measures that are consistent with HIPAA, on or
before the compliance date for any provision of HIPAA, or any final rule or
regulation thereunder and (e) maintain a compliance program for the Credit
Parties that is reasonably designed to provide effective internal controls that
promote adherence to, prevent and detect material violations of, any Laws
applicable to the Credit Parties and which includes the implementation of
internal audits and monitoring on a regular basis to monitor compliance with the
compliance program and with Laws. Specifically, but without limiting the
foregoing, and except where any such failure to comply could not reasonably be
expected to have a Material Adverse Effect: (i) ensure that billing policies,
arrangements, protocols and instructions will comply with reimbursement
requirements under Medicare, Medicaid and other Medical Reimbursement Programs
and will be administered by properly trained personnel; and (ii) medical
director compensation arrangements and other arrangements with referring
physicians will comply with applicable state and federal self-referral and
anti-kickback laws, including without limitation 42 U.S.C. Section
1320a-7b(b)(1) - (b)(2) 42 U.S.C. and 42 U.S.C. Section 1395nn.
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Section 5.12 Pledged Assets.
--------------
Each Credit Party will, and will cause each of its Subsidiaries (other
than Foreign Subsidiaries and Excluded Subsidiaries) to be subject at all times
to a first priority, perfected Lien with respect to all of such Subsidiary's
tangible and intangible personal property (subject in each case to Permitted
Liens) in favor of the Administrative Agent pursuant to the terms and conditions
of the Security Documents or such other security documents as the Administrative
Agent shall reasonably request, except that no Credit Party shall be required to
pledge more than 65% of the Capital Stock of any Foreign Subsidiary of which it
is the owner if by doing so, it would result in adverse tax consequences for
such Credit Party. Each Credit Party shall, and shall cause each of its
Subsidiaries (other than Foreign Subsidiaries and Excluded Subsidiaries) to,
adhere to the covenants set forth in the Security Documents.
Section 5.13 Further Assurances.
-------------------
(a) Within 90 days after the Closing Date, the Borrower shall use its
commercially reasonable best efforts to deliver or cause to be delivered to the
Administrative Agent, in the case of any warehouse, plant or other real property
material to the Credit Parties' business that is leased by a Credit Party at
such locations set forth on Schedule 5.13, such estoppel letters, consents and
waivers from the landlords on such real property as may be required by the
Administrative Agent.
(b) Within 60 days after the Closing Date, the Borrower shall deliver,
or cause to be delivered, to the Administrative Agent, evidence satisfactory to
the Administrative Agent that the Liens, if any, evidenced by (i) that certain
financing statement filed on March 13, 1997 with the Maryland State Department
of Assessments and Taxation in favor of the Mayor and City Council of Baltimore,
Maryland against Health Objects Corporation and (ii) that certain financing
statement filed on October 4, 1991 with the Maryland State Department of
Assessments and Taxation in favor of Invacare Corporation against Eastern
Medical Supplies have been terminated or satisfied.
ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date,
and thereafter for so long as this Agreement is in effect and until the
Commitments have terminated, no Note remains outstanding and unpaid and the
Credit Party Obligations, together with interest, Commitment Fee and all other
amounts owing to the Administrative Agent or any Lender hereunder, are paid in
full that:
Section 6.1 Indebtedness.
-------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents;
73
(b) Indebtedness of the Borrower and its Subsidiaries existing
as of the Closing Date as referenced in the financial statements
referenced in Section 3.1 (or incurred after the date of the most
recent such financial statement and set out in Schedule 6.1(b)) hereto
and renewals, refinancings or extensions thereof in a principal amount
not in excess of that outstanding as of the date of such renewal,
refinancing or extension;
(c) Indebtedness of the Borrower and its Subsidiaries (x)
existing as of the Closing Date and not otherwise set forth on Schedule
6.1(b) hereto or (y) incurred after the Closing Date, consisting of
Capital Leases or Indebtedness incurred to provide all or a portion of
the purchase price or cost of construction of an asset provided that
(i) such Indebtedness when incurred shall not exceed the purchase price
or cost of construction of such asset; (ii) no such Indebtedness shall
be refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and (iii) the
total amount of all such Indebtedness shall not exceed $25,000,000 at
any time outstanding;
(d) Unsecured intercompany Indebtedness among the Credit
Parties, provided that any such Indebtedness shall be (i) fully
subordinated to the Credit Party Obligations hereunder on terms
reasonably satisfactory to the Administrative Agent and (ii) evidenced
by promissory notes which shall be pledged and delivered to the
Administrative Agent as Collateral for the Credit Party Obligations;
(e) Indebtedness and obligations owing under Secured Hedging
Agreements and other Hedging Agreements entered into in order to manage
existing or anticipated interest rate, exchange rate or commodity price
risks and not for speculative purposes;
(f) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of
credit except for the Letters of Credit hereunder) generally;
(g) the Subordinated Notes as in effect on the Closing Date;
(h) Guaranty Obligations in respect of Indebtedness of a
Credit Party to the extent such Indebtedness is permitted to exist or
be incurred pursuant to this Section 6.1 (other than clause (g));
(i) accrual of interest and accretion of discount relating to
Indebtedness otherwise permitted under this Section 6.1;
(j) Indebtedness incurred to finance Permitted Acquisitions;
and
(k) other Indebtedness of the Borrower and its Subsidiaries
which does not exceed $10,000,000 in the aggregate at any time
outstanding.
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Section 6.2 Liens.
-----
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, contract, create, incur, assume or permit to exist any Lien with respect to
any of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
Section 6.3 Nature of Business.
------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, alter the character of its business in any material respect from that
conducted as of the Closing Date.
Section 6.4 Consolidation, Merger, Sale or Purchase of Assets, etc.
------------------------------------------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to,
(a) dissolve, liquidate or wind up its affairs, sell,
transfer, lease or otherwise dispose of its property or assets or agree
to do so at a future time (unless such agreement is expressly
conditioned on obtaining any necessary consent under this Agreement)
except the following, without duplication, shall be expressly
permitted:
(i) the sale, transfer, lease or other disposition of
inventory in the ordinary course of business;
(ii) the sale, transfer or other disposition of cash
and Cash Equivalents;
(iii) (A) the disposition of property or assets as a
direct result of a Recovery Event or (B) the sale, lease,
transfer or other disposition of machinery, parts and
equipment no longer used or useful in the conduct of the
business of the Borrower or any of its Subsidiaries, so long
as the Net Cash Proceeds therefrom are used to replace such
machinery, parts and equipment or to purchase or otherwise
acquire new assets or property within 180 days of receipt of
the net proceeds to the extent reasonably required for the
continuing conduct of the business of the Borrower and its
Subsidiaries not to exceed $25,000,000 in the aggregate in Net
Cash Proceeds in any fiscal year for all assets not replaced;
(iv) the sale, lease or transfer of property or
assets from the Borrower to any Guarantor, whether for
consideration or as a capital contribution;
(v) the sale, lease or transfer of property or assets
from a Credit Party other than the Borrower to another Credit
Party whether for consideration or as a capital contribution;
(vi) the termination of any Hedging Agreement
permitted pursuant to Section 6.1;
(vii) the Spin-off; and
(viii) the sale, lease or transfer of property or
assets not to exceed $25,000,000 in the aggregate in any
fiscal year;
provided, that, (A) in the case of clause (viii) above, at least 75% of
the consideration received therefor by the Borrower or any other Credit
Party is in the form of cash or Cash Equivalents and (B) in the case of
clause (v) above the transferring Credit Party may liquidate or
dissolve; provided, further, that with respect to sales of assets
permitted hereunder only, the Administrative Agent shall be entitled,
without the consent of the Required Lenders, to release, and shall
release, its Liens relating to the particular assets sold; or
(b) (i) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets
of any Person (other than purchases or other acquisitions of inventory,
leases, materials, property and equipment in the ordinary course of
business, except as otherwise limited or prohibited herein) or (ii)
enter into any transaction of merger or consolidation, except for (A)
investments or acquisitions permitted pursuant to Section 6.5, and (B)
the merger or consolidation of a Credit Party with and into another
Credit Party; provided that if the Borrower is a party thereto, the
Borrower will be the surviving corporation.
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Section 6.5 Advances, Investments and Loans.
-------------------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, make any Investment except for Permitted Investments.
Section 6.6 Transactions with Affiliates.
----------------------------
Except as permitted in subsection (iv) of the definition of Permitted
Investments, and except for Restricted Payments permitted under Section 6.10,
and except for transactions with Permitted Joint Ventures, each of the Credit
Parties will not, nor will it permit any Subsidiary to, enter into any
transaction or series of transactions, whether or not in the ordinary course of
business, with any officer, director, shareholder or Affiliate other than on
terms and conditions substantially as favorable as would be obtainable in a
comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
Section 6.7 Ownership of Subsidiaries; Restrictions.
---------------------------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, create, form or acquire any Subsidiaries, except for (a) Domestic
Subsidiaries which are joined as Additional Credit Parties in accordance with
the terms hereof and (b) Permitted Joint Ventures. The Borrower will not sell,
transfer, pledge or otherwise dispose of any Capital Stock or other equity
interests in any of its Subsidiaries, nor will it permit any of its Subsidiaries
to issue, sell, transfer, pledge or otherwise dispose of any of their Capital
Stock or other equity interests, except in a transaction permitted by Section
6.4.
Section 6.8 Fiscal Year; Organizational Documents; Material
-----------------------------------------------
Contracts.
- ---------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, change its fiscal year or its accounting policies (except as required to
reflect changes in GAAP). Each of the Credit Parties will not, nor will it
permit any Subsidiary or any Permitted Joint Venture to, amend, modify or change
its articles of incorporation (or corporate charter or other similar
organizational document) or bylaws (or other similar document) in any manner
that adversely affects the interest of the Lenders (including, without
limitation, any amendment, modification or change to the governing documents of
any Permitted Joint Venture that affects the distribution of cash flows to the
owners thereof) without the prior written consent of the Required Lenders. Each
of the Credit Parties will not, nor will it permit any Subsidiary to, without
the prior written consent of the Administrative Agent, amend, modify, cancel or
terminate or fail to renew or extend or permit the amendment, modification,
cancellation or termination of any of the Material Contracts, except in the
event that such amendments, modifications, cancellations or terminations could
not reasonably be expected to have a Material Adverse Effect. The Borrower will
not, without the prior written consent of the Required Lenders, amend, modify,
waive or extend or permit the amendment, modification, waiver or extension of
any Subordinated Indebtedness or of any documentation governing or evidencing
such Subordinated Indebtedness in a manner that is adverse to the interests of
the Lenders or the issuer of such Subordinated Indebtedness.
76
Section 6.9 Limitation on Restricted Actions.
--------------------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
(other than a Permitted Joint Venture) to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Person to (a) pay dividends or make any
other distributions to any Credit Party on its Capital Stock or with respect to
any other interest or participation in, or measured by, its profits, (b) pay any
Indebtedness or other obligation owed to any Credit Party, (c) make loans or
advances to any Credit Party, (d) sell, lease or transfer any of its properties
or assets to any Credit Party, or (e) act as a Guarantor and pledge its assets
pursuant to the Credit Documents or any renewals, refinancings, exchanges,
refundings or extension thereof, except (in respect of any of the matters
referred to in clauses (a)-(d) above) for such encumbrances or restrictions
existing under or by reason of (i) this Agreement and the other Credit
Documents, (ii) applicable law, (iii) any document or instrument governing
Indebtedness incurred pursuant to Section 6.1(c); provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith, (iv) any Permitted Lien or any document or
instrument governing any Permitted Lien or (v) any agreement permitted hereunder
for the sale of such Credit Party or a substantial portion of its assets;
provided that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien.
Section 6.10 Restricted Payments.
-------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, directly or indirectly, declare, order, make or set apart any sum for or pay
any Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person and (b) to make dividends or other
distributions payable to any Credit Party (directly or indirectly through
Subsidiaries) and, in the case of Permitted Joint Ventures, the other owners
thereof, (c) so long as no Default or Event of Default shall have occurred and
be continuing or would result therefrom and so long as, after giving effect to
such payment on a pro forma basis, the Credit Parties would be in compliance
with the financial covenants set forth in Section 5.9 as of the last fiscal
quarter end, to pay regularly scheduled cash interest on such Subordinated
Indebtedness in an amount reasonably acceptable to the Administrative Agent, (d)
so long as no Default or Event of Default has occurred and is continuing or
would result therefrom after giving effect thereto on a pro forma basis, to pay
cash interest on the Subordinated Notes in an amount not to exceed 6% per annum,
(e) Restricted Payments necessary to consummate the Spin-off on the Closing Date
or contemporaneously therewith, (f) so long as no Default or Event of Default
shall have occurred and be continuing or would result therefrom, to make
payments in respect of earnout obligations in connection with a Permitted
Acquisition then due and owing, and (g) so long as (1) no Default or Event of
Default shall have occurred and be continuing or would result therefrom and (2)
after giving effect to any such payment the Leverage Ratio of the Credit Parties
and their Subsidiaries shall be less than or equal to 2.50 to 1.0 on a Pro Forma
Basis, the Borrower may pay dividends to its shareholders if the amount thereof,
together with the aggregate amount of all other dividends made by the Borrower
after the Closing Date, is less than the sum, without duplication, of:
77
(A) 50% of the Consolidated Net Income of the Credit Parties
and their Subsidiaries for the period (taken as one accounting period)
from June 30, 2003 to the end of the Borrower's most recently ended
fiscal quarter for which internal financial statements are available at
the time of such Restricted Payment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate Net Cash Proceeds received by the
Borrower since the Closing Date as a contribution to its common equity
capital or from the issue or sale of Capital Stock of the Borrower
(other than Disqualified Stock) or from the issue or sale of
convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Borrower that have been converted
into or exchanged for such Capital Stock (other than Capital Stock or
Disqualified Stock or debt securities sold to a Subsidiary of the
Borrower).
Section 6.11 Sale Leasebacks.
---------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which any Credit Party or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not another Credit
Party or Subsidiary or (b) which any Credit Party or any Subsidiary intends to
use for substantially the same purpose as any other property which has been sold
or is to be sold or transferred by such Credit Party or such Subsidiary to
another Person which is not another Credit Party or Subsidiary in connection
with such lease. Notwithstanding the foregoing, the Credit Parties may enter
into sale leaseback transactions provided that the Capital Lease is permitted
under Section 6.1(c) and that the sale or transfer of assets is permitted under
Section 6.4.
Section 6.12 No Further Negative Pledges.
---------------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
(other than a Permitted Joint Venture) to, enter into, assume or become subject
to any agreement prohibiting or otherwise restricting the creation or assumption
of any Lien upon its properties or assets, whether now owned or hereafter
acquired, or requiring the grant of any security for such obligation if security
is given for some other obligation, except (a) pursuant to this Agreement and
the other Credit Documents, (b) pursuant to any document or instrument governing
Indebtedness incurred pursuant to Section 6.1(c), provided that any such
restriction contained therein relates only to the asset or assets constructed or
acquired in connection therewith, (c) in connection with any Permitted Lien or
any document or instrument governing any Permitted Lien, provided that any such
restriction contained therein relates only to the asset or assets subject to
such Permitted Lien and (d) in connection with an agreement described in clause
(v) of Section 6.9.
78
Section 6.13 Operating Lease Obligations.
---------------------------
Each of the Credit Parties will not, nor will it permit any Subsidiary
to, enter into, assume or permit to exist any obligations for the payment of
rent under Operating Leases which in the aggregate for all such Persons would
exceed $25,000,000 in any fiscal year.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 Events of Default.
-----------------
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment Default. The Borrower shall fail to pay any
principal on any Loan when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to reimburse the Issuing Lender for
any LOC Obligations when due in accordance with the terms hereof
(whether by direct reimbursement or from the proceeds of a Revolving
Loan, including a Mandatory LOC Borrowing); or the Borrower shall fail
to pay any interest on any Loan or any fee or other amount payable
hereunder when due in accordance with the terms thereof or hereof and
such failure shall continue unremedied for three (3) Business Days (or
any Guarantor shall fail to pay on the Guaranty in respect of any of
the foregoing or in respect of any other Guaranty Obligations
thereunder within the aforesaid period of time); or
(b) Misrepresentation. Any representation or warranty made or
deemed made herein, in the Security Documents or in any of the other
Credit Documents or which is contained in any certificate, document or
financial or other statement furnished at any time under or in
connection with this Agreement shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made
or deemed made; or
(c) Covenant Default. (i) Any Credit Party shall fail to
perform, comply with or observe any term, covenant or agreement
applicable to it contained in Section 5.1(a), Section 5.1(b), Section
5.2, Section 5.4, Section 5.7(a), Section 5.9 or Article VI hereof; or
(ii) any Credit Party shall fail to comply with any other covenant,
contained in this Credit Agreement or the other Credit Documents or any
other agreement, document or instrument among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in
favor of the Administrative Agent or the Lenders (other than as
described in Sections 7.1(a), 7.1(b) or 7.1(c)(i) above), and in the
event such breach or failure to comply is capable of cure, is not cured
within thirty (30) days of its occurrence; or
79
(d) Debt Cross-Default. Any Credit Party or any of its
Subsidiaries shall (i) default in any payment of principal of or
interest on any Indebtedness (other than the Notes) in a principal
amount outstanding of at least $2,500,000 in the aggregate for the
Credit Parties and their Subsidiaries beyond the period of grace (not
to exceed 30 days), if any, provided in the instrument or agreement
under which such Indebtedness was created; (ii) default in the
observance or performance of any other agreement or condition relating
to any Indebtedness in a principal amount outstanding of at least
$2,500,000 in the aggregate for the Credit Parties and their
Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such
Indebtedness or beneficiary or beneficiaries of such Indebtedness (or a
trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (iii) breach
or default any Secured Hedging Agreement; or
(e) Bankruptcy Default. (i) The Borrower or any of the
Borrower's Subsidiaries shall commence any case, proceeding or other
action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization
or relief of debtors, seeking to have an order for relief entered with
respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to
it or its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for all or
any substantial part of its assets, or the Borrower or any Subsidiary
shall make a general assignment for the benefit of its creditors; or
(ii) there shall be commenced against the Borrower or any of the
Borrower's Subsidiaries any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the entry
of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days;
or (iii) there shall be commenced against the Borrower or any of the
Borrower's Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days
from the entry thereof; or (iv) the Borrower or any of the Borrower's
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in clauses (i), (ii), or (iii) above; or (v) the Parent, the Borrower
or any of the Borrower's Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as
they become due; or
(f) Judgement Default. One or more judgments or decrees shall
be entered against any Credit Party or any of its Subsidiaries
involving in the aggregate a liability (to the extent not paid when due
or covered by insurance) of $2,500,000 or more and all such judgments
or decrees shall not have been paid and satisfied, vacated, discharged,
stayed or bonded pending appeal within 20 days from the entry thereof;
or
80
(g) ERISA Default. (i) Any Person shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan or any Lien in favor of
the PBGC or a Plan (other than a Permitted Lien) shall arise on the
assets of any Credit Party or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall
commence to have a trustee appointed, or a trustee shall be appointed,
to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a
Trustee is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) any Credit Party or any of its Subsidiaries or
any Commonly Controlled Entity shall, or in the reasonable opinion of
the Required Lenders is likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, any
Multiemployer Plan or (vi) any other similar event or condition shall
occur or exist with respect to a Plan; and in each case in clauses (i)
through (vi) above, such event or condition, together with all other
such events or conditions, if any, could have a Material Adverse
Effect; or
(h) Change of Control. There shall occur a Change of Control;
or
(i) Failure of Guaranty. The Guaranty or any provision thereof
shall cease to be in full force and effect or any Guarantor or any
Person acting by or on behalf of any Guarantor shall deny or disaffirm
any Guarantor's obligations under the Guaranty; or
(j) Failure of Credit Documents. Any other Credit Document
shall fail to be in full force and effect or to give the Administrative
Agent and/or the Lenders the security interests, liens, rights, powers
and privileges purported to be created thereby (except as such
documents may be terminated or no longer in force and effect in
accordance with the terms thereof, other than those indemnities and
provisions which by their terms shall survive); or
(k) Subordinated Debt Cross-Default. Any default (which is not
waived or cured within the applicable period of grace) or event of
default shall occur under any of document governing or evidencing any
Subordinated Indebtedness or the subordination provisions contained
therein shall cease to be in full force and effect or to give the
Lenders the rights, powers and privileges purported to be created
thereby;
(l) Medicaid/Medicare Default. Any Medicaid Provider
Agreement, Medicaid Certification, Medicare Provider Agreement,
Medicare Certification of any Credit Party shall be terminated,
suspended or otherwise limited or (ii) the participation of any Credit
Party in any Medical Reimbursement Program shall be terminated or
suspended, where such termination or suspension arises from fraud or
other claims or allegations which could reasonably be expected to have
a Material Adverse Effect; or
(m) Exclusion Event Default. There shall occur an Exclusion
Event that could reasonably be expected to have a Material Adverse
Effect.
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Section 7.2 Acceleration; Remedies.
----------------------
Upon the occurrence of an Event of Default and during the continuation
thereof, then, and in any such event, (a) if such event is an Event of Default
specified in Section 7.1(e) above, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon), and all
other amounts under the Credit Documents (including without limitation the
maximum amount of all contingent liabilities under Letters of Credit) shall
immediately become due and payable, and (b) if such event is any other Event of
Default, any or all of the following actions may be taken: (i) with the written
consent of the Required Lenders, the Administrative Agent may, or upon the
written request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower declare the Commitments to be terminated forthwith,
whereupon the Commitments shall immediately terminate; (ii) the Administrative
Agent may, or upon the written request of the Required Lenders, the
Administrative Agent shall, by notice of default to the Borrower, declare the
Loans (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith and direct the Borrower
to pay to the Administrative Agent cash collateral as security for the LOC
Obligations for subsequent drawings under then outstanding Letters of Credit in
an amount equal to the maximum amount of which may be drawn under Letters of
Credit then outstanding, whereupon the same shall immediately become due and
payable; (iii) the Administrative Agent may, or upon the written request of the
Required Lenders, the Administrative Agent shall, exercise any rights or
remedies of the Administrative Agent or the Lenders under this Agreement or any
other Credit Document, including, without limitation, any rights or remedies
with respect to the Collateral; and (iv) the Administrative Agent may, or upon
the written request of the Required Lenders, the Administrative Agent shall,
exercise any rights or remedies available to the Administrative Agent or Lenders
under applicable law.
ARTICLE VIII
THE AGENT
Section 8.1 Appointment.
-----------
Each Lender hereby irrevocably designates and appoints Wachovia Bank,
National Association as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes Wachovia Bank, National
Association, as the Administrative Agent for such Lender, to take such action on
its behalf under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
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Section 8.2 Delegation of Duties.
--------------------
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint one of its
affiliates as its agent to perform the functions of the Administrative Agent
hereunder relating to the advancing of funds to the Borrower and distribution of
funds to the Lenders and to perform such other related functions of the
Administrative Agent hereunder as are reasonably incidental to such functions.
Section 8.3 Exculpatory Provisions.
----------------------
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in this Agreement or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, this
Agreement or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Credit Documents or for any failure of the Borrower
to perform its obligations hereunder or thereunder. The Administrative Agent
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance by the Borrower of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower.
Section 8.4 Reliance by Administrative Agent.
--------------------------------
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
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Section 8.5 Notice of Default.
----------------
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided, however, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.
Section 8.6 Non-Reliance on Administrative Agent and Other
----------------------------------------------
Lenders.
- -------
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
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Section 8.7 Indemnification.
---------------
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided, however, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Agent's gross negligence or willful misconduct,
as determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.
Section 8.8 Administrative Agent in Its Individual Capacity.
-----------------------------------------------
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
Section 8.9 Successor Administrative Agent.
------------------------------
The Administrative Agent may resign as Administrative Agent upon 30
days' prior notice to the Borrower and the Lenders. If the Administrative Agent
shall resign as Administrative Agent under this Agreement and the Notes, then
the Required Lenders shall appoint from among the Lenders a successor agent for
the Lenders, which successor agent shall be approved by the Borrower, whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Agent's resignation as Administrative Agent, the
provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
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Section 8.10 Other Agents.
------------
Each of the Syndication Agent and the Documentation Agent shall have no
duties or obligations, and thus no liabilities, in their capacity as a
Syndication Agent and Documentation, respectively, under this Agreement and the
other Credit Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Amendments, Waivers and Release of Collateral.
---------------------------------------------
Neither this Agreement, nor any of the other Credit Documents, nor any
terms hereof or thereof may be amended, supplemented, waived or modified except
in accordance with the provisions of this Section. The Required Lenders may, or,
with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to the other Credit Documents for the
purpose of adding any provisions to this Agreement or the other Credit Documents
or changing in any manner the rights of the Lenders or of the Borrower hereunder
or thereunder or (b) waive, on such terms and conditions as the Required Lenders
may specify in such instrument, any of the requirements of this Agreement or the
other Credit Documents or any Default or Event of Default and its consequences;
provided, however, that no such waiver and no such amendment, waiver,
supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of
maturity of any Loan or Note or any installment thereon, or
reduce the stated rate of any interest or fee payable
hereunder (except in connection with a waiver of interest at
the increased post-default rate) or extend the scheduled date
of any payment thereof or increase the amount or extend the
expiration date of any Lender's Commitment, in each case
without the written consent of each Lender directly affected
thereby; or
(ii) amend, modify or waive any provision of this
Section 9.1 or reduce the percentage specified in the
definition of Required Lenders, without the written consent of
all the Lenders; or
(iii) amend, modify or waive any provision of Article
VIII without the written consent of the then Administrative
Agent; or
(iv) release all or substantially all of the
Guarantors from their obligations under the Guaranty, without
the written consent of all of the Lenders and any Hedging
Agreement Provider; or
(v) release all or substantially all of the
Collateral, without the written consent of all of the Lenders
and any Hedging Agreement Provider; or
(vi) amend, modify or waive any provision of the
Credit Documents requiring consent, approval or request of the
Required Lenders or all Lenders, without the written consent
of all of the Required Lenders or Lenders as appropriate;
86
provided, further, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent, the Issuing Lender or the Swingline Lender
under any Credit Document shall in any event be effective, unless in writing and
signed by the Administrative Agent, the Issuing Lender and/or the Swingline
Lender, as applicable, in addition to the Lenders required hereinabove to take
such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default permanently waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of
the Borrower shall not be required for any amendment, modification or waiver of
the provisions of Article VIII (other than the provisions of Section 8.9);
provided, however, that the Administrative Agent will provide written notice to
the Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing Schedule 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; provided further, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
Section 9.2 Notices.
-------
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the Business Day following the day on which the same
has been delivered prepaid (or pursuant to an invoice arrangement) to a
reputable national overnight air courier service, or (d) the third Business Day
following the day on which the same is sent by certified or registered mail,
postage prepaid, in each case addressed as follows in the case of the Borrower,
the other Credit Parties and the Administrative Agent, and as set forth on
Schedule 9.2 in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
87
The Borrower NeighborCare, Inc.
and the other 7 East Lee Street
Credit Parties: Baltimore, Maryland 21202
Attention: Mr. Rick Sunderland, Chief
Financial Officer
Telecopier: (410) 385-4386
Telephone: (410) 385-9649
The Administrative Agent: Wachovia Bank, National Association,
as Administrative Agent
Charlotte Plaza
201 South College Street, CP-8
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 383-6481
with a copy to:
Wachovia Bank, National Association
One Wachovia Center, DC-5
Charlotte, North Carolina 28288-0737
Attention: Scott Santa Cruz
Telecopier: (704) 374-4793
Telephone: (704) 383-1998
Section 9.3 No Waiver; Cumulative Remedies.
------------------------------
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
Section 9.4 Survival of Representations and Warranties.
------------------------------------------
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans; provided that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
Credit Party Obligations have been paid in full.
88
Section 9.5 Payment of Expenses and Taxes.
-----------------------------
The Borrower agrees (a) to pay or reimburse the Administrative Agent
and the Arranger for all their reasonable out-of-pocket costs and expenses
incurred in connection with the development, preparation, negotiation, printing
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, together with the reasonable fees
and disbursements of counsel to the Administrative Agent and the Arranger, (b)
to pay or reimburse each Lender and the Administrative Agent for all its
reasonable costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement and the other Credit Documents,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent and to the Lenders (including reasonable allocated
costs of in-house legal counsel), and (c) on demand, to pay, indemnify, and hold
each Lender and the Administrative Agent harmless from, any and all recording
and filing fees and any and all liabilities with respect to, or resulting from
any delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their Affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other documents and the use, or proposed
use, of proceeds of the Loans (all of the foregoing, collectively, the
"indemnified liabilities"); provided, however, that the Borrower shall not have
any obligation hereunder to the Administrative Agent or any Lender with respect
to indemnified liabilities arising from the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, as determined by a
court of competent jurisdiction pursuant to a final non-appealable judgment. The
agreements in this Section 9.5 shall survive repayment of the Loans, Notes and
all other Credit Party Obligations.
Section 9.6 Successors and Assigns; Participations; Purchasing
--------------------------------------------------
Lenders.
- -------
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement or the other Credit
Documents without the prior written consent of each Lender.
89
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender, or any other interest of
such Lender hereunder. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement. No Lender shall transfer or grant any
participation under which the Participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit
Document except to the extent such amendment or waiver would (i) extend
the scheduled maturity of any Loan or Note or any installment thereon
in which such Participant is participating, or reduce the stated rate
or extend the time of payment of interest or fees thereon (except in
connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of
the Participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
consent of any participant if the Participant's participation is not
increased as a result thereof), (ii) release all or substantially all
of the Guarantors from their obligations under the Guaranty, (iii)
release all or substantially all of the Collateral, or (iv) consent to
the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement. In the case of any such
participation, the Participant shall not have any rights under this
Agreement or any of the other Credit Documents (the Participant's
rights against such Lender in respect of such participation to be those
set forth in the agreement executed by such Lender in favor of the
Participant relating thereto) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation; provided that each Participant shall be entitled to the
benefits of Sections 2.14, 2.15, 2.16 and 9.5 with respect to its
participation in the Commitments and the Loans outstanding from time to
time; provided further, that no Participant shall be entitled to
receive any greater amount pursuant to such Sections than the
transferor Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender to
such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time,
sell or assign to any Lender or any Affiliate or Related Fund thereof
and, with the consent of the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, the Borrower (in each
case, which consent shall not be unreasonably withheld or delayed), to
one or more additional banks or financial institutions or entities
(each a "Purchasing Lender"), all or any part of its rights and
obligations under this Agreement and the Notes in minimum amounts of
$5,000,000 with respect to its Revolving Commitment or its Revolving
Loans (or, if less, the entire amount of such Lender's obligations),
pursuant to a Commitment Transfer Supplement, executed by such
Purchasing Lender and such transferor Lender (and, to the extent
required above, the Administrative Agent and the Borrower), and
delivered to the Administrative Agent for its acceptance and recording
in the Register; provided, however, that any sale or assignment to an
existing Lender shall not require the consent of the Administrative
Agent or the Borrower nor shall any such sale or assignment be subject
90
to the minimum assignment amounts specified herein. Upon such
execution, delivery, acceptance and recording, from and after the
Transfer Effective Date specified in such Commitment Transfer
Supplement, (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the
remaining portion of a transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party
hereto; provided, however, that such Lender shall still be entitled to
any indemnification rights that expressly survive hereunder). Such
Commitment Transfer Supplement shall be deemed to amend this Agreement
to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of
Commitment Percentages arising from the purchase by such Purchasing
Lender of all or a portion of the rights and obligations of such
transferor Lender under this Agreement and the Notes. On or prior to
the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and deliver
to the Administrative Agent in exchange for the Notes delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement
new Notes to the order of such Purchasing Lender in an amount equal to
the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, new Notes to the order of the transferor Lender
in an amount equal to the Commitment retained by it hereunder. Such new
Notes shall be dated the Closing Date and shall otherwise be in the
form of the Notes replaced thereby. The Notes surrendered by the
transferor Lender shall be returned by the Administrative Agent to the
Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in
the Register as the owner of the Loan recorded therein for all purposes
of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of
a registration and processing fee of $3,500.00 for each Purchasing
Lender listed in such Commitment Transfer Supplement and the Notes
subject to such Commitment Transfer Supplement, the Administrative
Agent shall (i) accept such Commitment Transfer Supplement, (ii) record
the information contained therein in the Register and (iii) give prompt
notice of such acceptance and recordation to the Lenders and the
Borrower.
91
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates which
has been delivered to such Lender by or on behalf of the Borrower
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrower in connection with such Lender's credit
evaluation of the Borrower and its Subsidiaries prior to becoming a
party to this Agreement, in each case subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the
Administrative Agent the appropriate Internal Revenue Service Forms
described in Section 2.17.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of principal and interest under any
Note) to any Federal Reserve Bank in accordance with applicable laws.
Section 9.7 Adjustments; Set-off.
--------------------
(a) Each Lender agrees that if any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in Section 7.1(e), or
otherwise) in a greater proportion than any such payment to or
collateral received by any other Lender, if any, in respect of such
other Lender's Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in
such portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
benefited Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to any
Credit Party, any such notice being expressly waived by the Credit
Parties to the extent permitted by applicable law, upon the occurrence
and during the continuance of any Event of Default, to setoff and
appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for
92
the credit or the account of any Credit Party, or any part thereof in
such amounts as such Lender may elect, against and on account of the
obligations and liabilities of the Borrower and the other Credit
Parties to such Lender hereunder and claims of every nature and
description of such Lender against the Borrower and the other Credit
Parties, in any currency, whether arising hereunder, under the Notes or
under any documents contemplated by or referred to herein or therein,
as such Lender may elect, whether or not such Lender has made any
demand for payment and although such obligations, liabilities and
claims may be contingent or unmatured. The aforesaid right of set-off
may be exercised by such Lender against any Credit Party or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit
of creditors, receiver or execution, judgment or attachment creditor of
any such Credit Party, or against anyone else claiming through or
against any such Credit Party or any such trustee in bankruptcy, debtor
in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact
that such right of set-off shall not have been exercised by such Lender
prior to the occurrence of any Event of Default. Each Lender agrees
promptly to notify the applicable Credit Party and the Administrative
Agent after any such set-off and application made by such Lender;
provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.
Section 9.8 Table of Contents and Section Headings.
--------------------------------------
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
Section 9.9 Counterparts.
------------
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same agreement.
Section 9.10 Effectiveness.
-------------
This Credit Agreement shall become effective on the date on which all
of the parties have signed a copy hereof (whether the same or different copies)
and shall have delivered the same to the Administrative Agent pursuant to
Section 9.2 or, in the case of the Lenders, shall have given to the
Administrative Agent written, telecopied or telex notice (actually received) at
such office that the same has been signed and mailed to it.
Section 9.11 Severability.
------------
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
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Section 9.12 Integration.
-----------
This Agreement and the other Credit Documents represent the agreement
of the Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent, the Borrower or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or in
the other Credit Documents.
Section 9.13 Governing Law.
-------------
This Agreement and the other Credit Documents and the rights and
obligations of the parties under this Agreement and the other Credit Documents
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
Section 9.14 Consent to Jurisdiction and Service of Process.
----------------------------------------------
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of New York, and, by execution and delivery of this Agreement, each
of the Borrower and the other Credit Parties accepts, for itself and in
connection with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be bound by any
final judgment rendered thereby in connection with this Agreement, any Note or
any other Credit Document from which no appeal has been taken or is available.
Each of the Borrower and the other Credit Parties irrevocably agrees that all
service of process in any such proceedings in any such court may be effected by
mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at its address set forth in
Section 9.2 or at such other address of which the Administrative Agent shall
have been notified pursuant thereto, such service being hereby acknowledged by
the each of the Borrower and the other Credit Parties to be effective and
binding service in every respect. Each of the Borrower, the other Credit
Parties, the Administrative Agent and the Lenders irrevocably waives any
objection, including, without limitation, any objection to the laying of venue
based on the grounds of forum non conveniens which it may now or hereafter have
to the bringing of any such action or proceeding in any such jurisdiction.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of any Lender to bring proceedings
against the Borrower or the other Credit Parties in the court of any other
jurisdiction.
Section 9.15 [Intentionally Omitted].
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Section 9.16 Confidentiality.
---------------
The Administrative Agent and each of the Lenders agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Credit Parties and their
Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein and
which is designated by the Borrower to the Lenders in writing as confidential or
as to which it is otherwise reasonably clear such information is not public,
except that any Lender may disclose any such information (a) as has become
generally available to the public other than by a breach of this Section 9.16,
(b) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or federal regulatory body having or claiming
to have jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or the OCC or the NAIC or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
any law, order, regulation or ruling applicable to such Lender, (d) to any
prospective Participant or assignee in connection with any contemplated transfer
pursuant to Section 9.6; provided that such prospective transferee shall agree
to be bound by this Section 9.16 (e) to Gold Sheets and other similar bank trade
publications, such information to consist of deal terms and other information
regarding the credit facilities evidenced by this Credit Agreement customarily
found in such publications or (g) in connection with any suit, action or
proceeding for the purpose of defending itself, reducing its liability, or
protecting or exercising its claims, rights remedies or interests under or in
connection with the Credit Documents or any Secured Hedging Agreement.
Notwithstanding anything herein to the contrary, the Administrative Agent and
each Lender may disclose to any and all Persons, without limitation of any kind,
any information with respect to the "tax treatment" and "tax structure" (in each
case, within the meaning of Treasury Regulation Section 1.6011-4) of the
transactions contemplated hereby and all materials of any kind (including
opinions or other tax analyses) that are provided to the Administrative Agent or
such Lender relating to such tax treatment and tax structure; provided that with
respect to any document or similar item that in either case contains information
concerning the tax treatment or tax structure of the transaction as well as
other information, this sentence shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Loans, Letters of Credit and transactions contemplated hereby.
Section 9.17 Acknowledgments.
---------------
The Borrower and the other Credit Parties each hereby acknowledges
that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in connection with this Agreement and the
relationship between Administrative Agent and Lenders, on one hand, and
the Borrower and the other Credit Parties, on the other hand, in
connection herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower or the other Credit Parties and the Lenders.
95
Section 9.18 Waivers of Jury Trial.
---------------------
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT AND
THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.
ARTICLE X
GUARANTY
Section 10.1 The Guaranty.
------------
In order to induce the Lenders to enter into this Credit Agreement and
any Hedging Agreement Provider to enter into any Secured Hedging Agreement and
to extend credit hereunder and thereunder and in recognition of the direct
benefits to be received by the Guarantors from the Extensions of Credit
hereunder and any Secured Hedging Agreement, each of the Guarantors hereby
agrees with the Administrative Agent and the Lenders as follows: the Guarantor
hereby unconditionally and irrevocably jointly and severally guarantees as
primary obligor and not merely as surety the full and prompt payment when due,
whether upon maturity, by acceleration or otherwise, of any and all Credit Party
Obligations. If any or all of the Credit Party Obligations becomes due and
payable hereunder or under any Secured Hedging Agreement, each Guarantor
unconditionally promises to pay such Credit Party Obligations to the
Administrative Agent, the Lenders and the Hedging Agreement Providers, on order,
or demand, together with any and all reasonable expenses which may be incurred
by the Administrative Agent or the Lenders in collecting any of the Credit Party
Obligations.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
96
Section 10.2 Bankruptcy.
----------
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all Credit Party
Obligations of the Borrower to the Lenders and any Hedging Agreement Provider
whether or not due or payable by the Borrower upon the occurrence of any of the
events specified in Section 7.1(e), and unconditionally promises to pay such
Credit Party Obligations to the Administrative Agent for the account of the
Lenders and to any such Hedging Agreement Provider, or order, on demand, in
lawful money of the United States. Each of the Guarantors further agrees that to
the extent that the Borrower or a Guarantor shall make a payment or a transfer
of an interest in any property to the Administrative Agent, any Lender or any
Hedging Agreement Provider, which payment or transfer or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, or
otherwise is avoided, and/or required to be repaid to the Borrower or a
Guarantor, the estate of the Borrower or a Guarantor, a trustee, receiver or any
other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.
Section 10.3 Nature of Liability.
-------------------
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the Credit Party Obligations of the
Borrower whether executed by any such Guarantor, any other guarantor or by any
other party, and no Guarantor's liability hereunder shall be affected or
impaired by (a) any direction as to application of payment by the Borrower or by
any other party, or (b) any other continuing or other guaranty, undertaking or
maximum liability of a guarantor or of any other party as to the Credit Party
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking, or (d) any dissolution, termination or increase,
decrease or change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent, the Lenders or any Hedging Agreement Provider on the
Credit Party Obligations which the Administrative Agent, such Lenders or such
Hedging Agreement Provider repay the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each of the Guarantors waives any right to the deferral or
modification of its obligations hereunder by reason of any such proceeding.
Section 10.4 Independent Obligation.
----------------------
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
97
Section 10.5 Authorization.
-------------
Each of the Guarantors authorizes the Administrative Agent, each Lender
and each Hedging Agreement Provider without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to (a) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Credit Party Obligations or any part thereof
in accordance with this Agreement, including any increase or decrease of the
rate of interest thereon, (b) take and hold security from any guarantor or any
other party for the payment of this Guaranty or the Credit Party Obligations and
exchange, enforce waive and release any such security, (c) apply such security
and direct the order or manner of sale thereof as the Administrative Agent, the
Lenders and the Hedging Agreement Providers in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors.
Section 10.6 Reliance.
--------
It is not necessary for the Administrative Agent, the Lenders or
Hedging Agreement Providers to inquire into the capacity or powers of the
Borrower or the officers, directors, members, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
Section 10.7 Waiver.
------
(a) Each of the Guarantors waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent, any Lender or any Hedging Agreement Provider to
(i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the
Borrower, any other guarantor or any other party, or (iii) pursue any
other remedy in the Administrative Agent's, any Lender's or any Hedging
Agreement Provider's power whatsoever. Each of the Guarantors waives
any defense based on or arising out of any defense of the Borrower, any
other guarantor or any other party other than payment in full of the
Credit Party Obligations, including without limitation any defense
based on or arising out of the disability of the Borrower, any other
guarantor or any other party, or the unenforceability of the Credit
Party Obligations or any part thereof from any cause, or the cessation
from any cause of the liability of the Borrower other than payment in
full of the Credit Party Obligations. The Administrative Agent, any
Lender or any Hedging Agreement Provider may, at their election,
foreclose on any security held by the Administrative Agent, any Lender
or any Hedging Agreement Provider by one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the
Administrative Agent, any Lender or any Hedging Agreement Provider may
have against the Borrower or any other party, or any security, without
affecting or impairing in any way the liability of any Guarantor
hereunder except to the extent the Credit Party Obligations have been
paid in full. Each of the Guarantors waives any defense arising out of
any such election by the Administrative Agent, each of the Lenders and
each Hedging Agreement Provider, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other
right or remedy of the Guarantors against the Borrower or any other
party or any security.
98
(b) Each of the Guarantors waives all presentments, demands
for performance, protests and notices, including without limitation
notices of nonperformance, notice of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional Credit Party Obligations.
Each Guarantor assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all
other circumstances bearing upon the risk of nonpayment of the Credit
Party Obligations and the nature, scope and extent of the risks which
such Guarantor assumes and incurs hereunder, and agrees that neither
the Administrative Agent nor any Lender nor any Hedging Agreement
Provider shall have any duty to advise such Guarantor of information
known to it regarding such circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise
any rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrower or any other guarantor of the Credit Party
Obligations of the Borrower owing to the Lenders (collectively, the
"Other Parties") and all contractual, statutory or common law rights of
reimbursement, contribution or indemnity from any Other Party which it
may at any time otherwise have as a result of this Guaranty until such
time as the Credit Party Obligations shall have been paid in full and
the Commitments have been terminated. Each of the Guarantors hereby
further agrees not to exercise any right to enforce any other remedy
which the Administrative Agent, any Lender or any Hedging Agreement
Provider now have or may hereafter have against any Other Party, any
endorser or any other guarantor of all or any part of the Credit Party
Obligations of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the Credit Party Obligations of the
Borrower until such time as the Credit Party Obligations shall have
been paid in full and the Commitments have been terminated.
Section 10.8 Limitation on Enforcement.
-------------------------
The Lenders and the Hedging Agreement Providers agree that this
Guaranty may be enforced only by the action of the Administrative Agent acting
upon the instructions of the Required Lenders or such Hedging Agreement Provider
(only with respect to obligations under the applicable Secured Hedging
Agreement) and that and that no Lender or Hedging Agreement Provider shall have
any right individually to seek to enforce or to enforce this Guaranty, it being
understood and agreed that such rights and remedies may be exercised by the
Administrative Agent for the benefit of the Lenders under the terms of this
Agreement and for the benefit of any Hedging Agreement Provider under any
Secured Hedging Agreement. The Lenders and the Hedging Agreement Providers
further agree that this Guaranty may not be enforced against any director,
officer, employee or stockholder of the Guarantors.
Section 10.9 Confirmation of Payment.
-----------------------
The Administrative Agent and the Lenders will, upon request after
payment of the Credit Party Obligations which are the subject of this Guaranty
and termination of the Commitments relating thereto, confirm to the Borrower,
the Guarantors or any other Person that the Credit Party Obligations have been
paid in full and the Commitments relating thereto terminated, subject to the
provisions of Section 10.2.
99
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWER: GENESIS HEALTH VENTURES, INC.
- --------
(to be renamed NeighborCare, Inc.),
a Pennsylvania corporation
By: /s/ Richard W. Sunderland, Jr.
--------------------------------------
Name: Richard W. Sunderland Jr.
Title: Chief Financial Officer
GUARANTORS: ACCUMED, INC.
- -----------
ASCO HEALTHCARE OF NEW ENGLAND, INC.
ASCO HEALTHCARE, INC.
CARECARD, INC.
COMPASS HEALTH SERVICES, INC.
CONCORD PHARMACY SERVICES, INC.
DELCO APOTHECARY, INC.
EASTERN MEDICAL SUPPLIES, INC.
EASTERN REHAB SERVICES, INC.
ENCARE OF MASSACHUSETTS, INC.
GENESIS HEALTH SERVICES CORPORATION t/b/n
NeighborCare Services Corporation
GENESIS HOLDINGS, INC. t/b/n NeighborCare Holdings,
Inc.
GENEVA SUB, INC.
H.O. SUBSIDIARY, INC.
HEALTH CONCEPTS AND SERVICES, INC.
HEALTHOBJECTS CORPORATION
HORIZON MEDICAL EQUIPMENT AND SUPPLY, INC.
100
INSTITUTIONAL HEALTH CARE SERVICES, INC.
MEDICAL SERVICES GROUP, INC.
NEIGHBORCARE HOME MEDICAL EQUIPMENT, INC.
NEIGHBORCARE INFUSION SERVICES, INC.
NEIGHBORCARE OF CALIFORNIA, INC.
NEIGHBORCARE OF INDIANA, INC.
NEIGHBORCARE OF NORTHERN CALIFORNIA, INC.
NEIGHBORCARE OF OHIO, INC.
NEIGHBORCARE OF OKLAHOMA, INC.
NEIGHBORCARE OF TEXAS, INC.
NEIGHBORCARE OF VIRGINIA, INC.
NEIGHBORCARE OF WISCONSIN, INC.
NEIGHBORCARE PHARMACIES, INC.
NEIGHBORCARE PHARMACY SERVICES, INC.
NEIGHBORCARE-MEDISCO, INC.
NEIGHBORCARE-ORCA, INC.
NEIGHBORCARE-TCI, INC.
PROFESSIONAL PHARMACY SERVICES, INC.
SUBURBAN MEDICAL SERVICES, INC.
THE TIDEWATER HEALTHCARE SHARED SERVICES GROUP,
INC.
By: /s/ Richard W. Sunderland, Jr.
----------------------------------
Name: Richard W. Sunderland, Jr.
On behalf of the foregoing entities as Chief
Financial Officer of such entities
101
ASCO HEALTHCARE OF NEW ENGLAND, LIMITED
PARTNERSHIP, by ASCO Healthcare of New England,
Inc., its General Partner
CARE4, L.P., by Institutional Health Care Services,
Inc., its General Partner
By: /s/ Richard W. Sunderland, Jr.
----------------------------------
Name: Richard W. Sunderland, Jr.
On behalf of the foregoing entities
as Chief Financial Officer of each
respective authorized General
Partner
AUTOMATED HOMECARE SYSTEM, LLC, by Health Objects
Corporation, its authorized Member
MAIN STREET PHARMACY, L.L.C., by Professional
Pharmacy Services, Inc. and NeighborCare
Pharmacies, Inc., its authorized Members
NEIGHBORCARE PHARMACY OF OKLAHOMA LLC, by
NeighborCare Pharmacy Services, Inc., its
authorized Member
By: /s/ Richard W. Sunderland, Jr.
----------------------------------
Name: Richard W. Sunderland, Jr.
On behalf of the foregoing entities as Chief
Financial Officer of each respective authorized
Member
ADMINISTRATIVE AGENT
AND LENDERS: WACHOVIA BANK, NATIONAL ASSOCIATION,
- ------------
as Administrative Agent and as a Lender
By: /s/ Richard M. Schmersal
----------------------------
Name: Richard M. Schmersal
Title: Director
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Sarah Rusher
------------------------------
Name: Sarah Rusher
Title: First Vice President
ING CAPITAL LLC
By: /s/ Michael P. Garvin, Jr.
------------------------------
Michael P. Garvin, Jr.
Director
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Brian S. Beckwith
----------------------------------
Name: Brian S. Beckwith
Title: Duly Authorized Signatory
U.S. BANK, NATIONAL ASSOCIATION
By: /s/ S. Walker Choppin
----------------------------------
Name: S. Walker Choppin
Title: Senior Vice President
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ William W. Archer
----------------------------------
Name: William W. Archer
Title: Authorized Signatory
JPMORGAN CHASE BANK
By: /s/ Dawn Lee Lum
----------------------------------
Name: Dawn Lee Lum
Title: Vice President
UBS LOAN FINANCE LLC
By: /s/ Patricia O'Kicki
----------------------------------
Patricia O'Kicki
Director
By: /s/ Wilfred V. Saint
----------------------------------
Wilfred V. Saint
Associate Director
Banking Products
Services, US