Exhibit 10.15
TERM LOAN
CREDIT AGREEMENT
among
QUEST DIAGNOSTICS INCORPORATED
as Borrower,
AND
CERTAIN SUBSIDIARIES OF THE BORROWER
as Guarantors,
AND
THE LENDERS PARTIES HERETO FROM TIME TO TIME,
AND
SUMITOMO MITSUI BANKING CORPORATION
as Administrative Agent and Initial Lender
DATED AS OF DECEMBER 19, 2003
TABLE OF CONTENTS
[omitted]
SCHEDULES
Schedule 1.1(a) Commitment Percentages/Lending Offices
Schedule 6.10 Litigation
Schedule 6.21 Subsidiaries
Schedule 8.1 Indebtedness
Schedule 8.2 Liens
Schedule 8.6 Investments
Schedule 8.7 Affiliate Transactions
Schedule 11.1 Notices
EXHIBITS
Exhibit 2.1(b) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Term Note
Exhibit 2.2 Form of Notice of Continuation/Conversion
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.12 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment Agreement
i
TERM LOAN CREDIT AGREEMENT
THIS TERM LOAN CREDIT AGREEMENT (this "Credit Agreement"), is entered into
as of December 19, 2003 among QUEST DIAGNOSTICS INCORPORATED, a Delaware
corporation (the "Borrower"), certain of the Subsidiaries of the Borrower
(individually a "Guarantor" and collectively the "Guarantors"), the Lenders (as
defined herein), and SUMITOMO MITSUI BANKING CORPORATION, as Administrative
Agent for the Lenders.
RECITALS
WHEREAS, the Borrower and the Guarantors have requested the Initial Lender
to provide a term loan credit facility to the Borrower in an aggregate principal
amount of up to $75,000,000; and
WHEREAS, the Initial Lender hereto has agreed to make the requested term
loan credit facility available to the Borrower on the terms and conditions
hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Acquisition" means the acquisition by any Person of (a) more than 50%
of the Capital Stock of another Person, (b) all or substantially all of the
assets of another Person or (c) all or substantially all of a line of
business of another Person, in each case whether or not involving a merger
or consolidation with such other Person.
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date, as provided in Section 7.12 or otherwise.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" means Sumitomo Mitsui Banking Corporation (or
any successor thereto) or any successor administrative agent appointed
pursuant to Section 10.9.
"Administrative Fees" has the meaning set forth in Section 3.4.
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by or under direct or
indirect common control with such Person. A Person shall be deemed to
control a corporation if such Person possesses, directly or indirectly, the
power (a) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such corporation or (b) to direct or
cause direction of the management and policies of such corporation, whether
through the ownership of voting securities, by contract or otherwise.
"Agent-Related Person" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates, and their
respective officers, directors, employees, agents, counsel and
attorneys-in-fact.
"Applicable Percentage" means the appropriate applicable percentages
corresponding to the Debt Rating of the Borrower in effect from time to
time as described below:
================================================================
Applicable
Percentage for
Pricing Level Debt Rating Eurodollar Loans
----------------------------------------------------------------
I >=BBB+ from S&P/ 0.500%
>=Baa1 from Moody's
----------------------------------------------------------------
II >=BBB but *BBB+ from S&P/ 0.550%
>=Baa2 but *Baa1 from Moody's
----------------------------------------------------------------
III >=BBB- but *BBB from S&P/ 0.800%
>=Baa3 but *Baa2 from Moody's
----------------------------------------------------------------
IV >=BB+ but *BBB- from S&P/ 1.250%
>=Ba1 but *Baa3 from Moody's
----------------------------------------------------------------
V *BB+ or unrated by S&P/ 1.6875%
*Ba1 or unrated by Moody's
================================================================
The Applicable Percentage for Eurodollar Loans shall, in each case, be
determined and adjusted on the date (each a "Calculation Date") one
Business Day after the date on which the Borrower's Debt Rating is upgraded
or downgraded in a manner which requires a change in the then applicable
Pricing Level set forth above. If at any time there is a split in the
Borrower's Debt Ratings between S&P and Moody's, the Applicable Percentages
shall be determined by the higher of the two Debt Ratings (i.e. the lower
pricing); provided that if the two Debt Ratings are more than one level
apart, the Applicable Percentage shall be based on the Debt Rating which is
one level higher than the lower rating. Each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date. Any
adjustment in the Applicable Percentage shall be applicable to all existing
Eurodollar Loans as well as any new Eurodollar Loans made.
"Attorneys' Costs" means all reasonable fees and disbursements of any
law firm or other external counsel and the reasonable allocated cost of
internal legal services and all disbursements of internal counsel.
-2-
"Attributable Debt" means, with respect to a Sale and Leaseback
Transaction, an amount equal to the lesser of: (a) the fair market value of
the Principal Property (as determined in good faith by the Borrower's board
of directors); and (b) the present value of the total net amount of rent
payments to be made under the lease during its remaining term, discounted
at the rate of interest set forth or implicit in the terms of the lease,
compounded semi-annually.
"Authorized Officer" means any of the chief executive officer,
president, chief financial officer, corporate controller, treasurer or
assistant treasurer of the Borrower.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate" means, for any day, the rate per annum equal to the
greater of (a) the Federal Funds Rate in effect on such day plus 1/2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable after due inquiry to
ascertain the Federal Funds Rate for any reason, including the inability or
failure of the Administrative Agent to obtain sufficient quotations in
accordance with the terms hereof, the Base Rate shall be determined without
regard to clause (a) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective at the opening of business on the day specified in the
public announcement of such change.
"Base Rate Loan" means any Term Loan when it bears interest at a rate
determined by reference to the Base Rate.
"Borrower" means Quest Diagnostics Incorporated, a Delaware
corporation, together with any successors and permitted assigns.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized or required
by law or other governmental action to close in New York, New York;
provided that in the case of Eurodollar Loans, such day is also a day on
which dealings between banks are carried on in U.S. dollar deposits in the
London interbank market.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
"CAP" means the College of American Pathologists.
"Capital Expenditures" means all expenditures of the Borrower and its
Subsidiaries on a consolidated basis which, in accordance with GAAP, would
be classified as capital
-3-
expenditures, including, without limitation, Capital Leases which would be
so classified in accordance with GAAP.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee which,
in accordance with GAAP, is or should be accounted for as a capital lease
on the balance sheet of that Person and the amount of such obligation shall
be the capitalized amount thereof determined in accordance with GAAP.
"Capital Stock" means (a) in the case of a corporation, all classes of
capital stock of such corporation, (b) in the case of a partnership,
partnership interests (whether general or limited), (c) in the case of a
limited liability company, membership interests and (d) 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" means (a) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities
of not more than eighteen months from the date of acquisition, (b) Dollar
denominated time and demand deposits, certificates of deposit and banker's
acceptances of (i) any Lender, (ii) any domestic commercial bank having
capital and surplus in excess of $500,000,000 or (iii) any bank whose
short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Moody's is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes issued
by, or guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better by
Moody's and maturing within six months of the date of acquisition, (d)
repurchase agreements with a bank or trust company (including any of the
Lenders) or recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully guaranteed
by the United States of America in which the Borrower shall have a
perfected first priority security interest (subject to no other Liens) and
having, on the date of purchase thereof, a fair market value of at least
100% of the amount of the repurchase obligations, (e) Investments in
tax-exempt municipal bonds rated A (or the equivalent thereof) or better by
S&P or MIG2 (or the equivalent thereof) or better by Moody's and (f)
Investments, classified in accordance with GAAP as current assets, in money
market investment programs registered under the Investment Company Act of
1940, as amended, which are administered by reputable financial
institutions having capital of at least $500,000,000 and the portfolios of
which are limited to Investments of the character described in the
foregoing subdivisions (a) through (e).
"Cash Interest Expenses" means all Interest Expense actually paid in
cash by the Borrower and its Subsidiaries.
-4-
"Cash Taxes" means the total amount of federal, state, foreign or
other income or franchise taxes, paid in cash, of the Borrower and its
Subsidiaries on a consolidated basis.
"CHAMPUS" means the United States Department of Defense Civilian
Health and Medical Program of the United States or any successor thereto
including, without limitation, TRICARE.
"Change of Control" means either of the following events:
(a) any "person" or "group" (within the meaning of Section 13(d)
or 14(d) of the Exchange Act) has become, directly or indirectly, the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), by way of merger, consolidation or otherwise of 35% or
more of the Voting Stock of the Borrower on a fully-diluted basis,
after giving effect to the conversion and exercise of all outstanding
warrants, options and other securities of the Borrower convertible
into or exercisable for Voting Stock of the Borrower (whether or not
such securities are then currently convertible or exercisable); or
(b) during any period of twelve calendar months, individuals who
at the beginning of such period constituted the board of directors of
the Borrower together with any new members of such board of directors
whose elections by such board or board of directors or whose
nomination for election by the stockholders of the Borrower was
approved by a vote of a majority of the members of such board of
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 cease for any reason to constitute a
majority of the directors of the Borrower then in office.
"CLIA" means the Clinical Laboratory Improvement Act as set forth at
42 U.S.C. 263a and the regulations promulgated thereunder, as amended.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986 and the rules and
regulations promulgated thereunder, as amended, modified, succeeded or
replaced from time to time.
"Commitment" means the commitment of the Initial Lender in the amount
of $75,000,000.
"Convertible Notes" means those certain 1 3/4% contingent convertible
debentures due November 30, 2021 issued by the Borrower in an aggregate
principal amount of $250,000,000.
"Credit Documents" means this Credit Agreement, the Notes, any Joinder
Agreement and any Notice of Borrowing.
-5-
"Credit Exposure" has the meaning set forth in the definition of
Required Lenders in this Section 1.1.
"Credit Parties" means the Borrower and the Guarantors and "Credit
Party" means any one of them.
"Credit Party Obligations" means, without duplication, all of the
obligations of the Credit Parties to the Lenders and the Administrative
Agent, whenever arising, under this Credit Agreement, the Notes, or any of
the other Credit Documents.
"Debt Rating" means the long-term senior unsecured, non-credit
enhanced debt rating of the Borrower from S&P and Moody's.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the terms of this Credit Agreement (but only for so long as
such Loan is not made or such Participation Interest is not purchased), (b)
has failed to pay to the Administrative Agent or any Lender an amount owed
by such Lender pursuant to the terms of this Credit Agreement (but only for
so long as such amount has not been repaid) or (c) has been deemed
insolvent or has become subject to a bankruptcy or insolvency proceeding or
to a receiver, trustee or similar official.
"Dividends" means any payment of dividends or any other distribution
upon any shares of any class of Capital Stock of the Borrower.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means each direct and indirect Subsidiary of the
Borrower that is domiciled or organized under the laws of any State of the
United States or the District of Columbia.
"EBITDA" means, for any period, with respect to the Borrower and its
Subsidiaries on a consolidated basis, (a) Net Income for such period
(excluding the effect of any extraordinary or other non-recurring gains and
losses (including any gain or loss from the sale of Property)) plus (b) an
amount which, in the determination of Net Income for such period, has been
deducted for (i) Interest Expense for such period, (ii) total Federal,
state, foreign or other income or franchise taxes for such period, (iii)
all depreciation and amortization for such period, (iv) other items of
expense during such period that do not involve a cash payment at any time
(other than the provision for bad debt in connection with uncollectible
accounts receivable), (v) cash charges during such period for which the
Borrower and its Subsidiaries are reimbursed by a third party during such
period and (vi) special or restructuring items during any such period
included in Net Income that do not involve a cash payment during such
period (collectively, "Non-Cash Items") minus (c) any actual cash payments
during the applicable period related to Non-Cash Items
-6-
expensed or reserved under clause (vi) above during an applicable period
beginning after March 31, 2001 plus (d) Tender Costs during such period.
"Eligible Assets" means (a) MedPlus and its Subsidiaries and (b) any
assets or any business (or any substantial part thereof) used or useful in
the same or a similar line of business as the Borrower and its Subsidiaries
are engaged on the Closing Date or other healthcare-related businesses.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender;
and (c) any other Person approved by the Administrative Agent and the
Borrower (such approval not to be unreasonably withheld or delayed);
provided that (i) the Borrower's consent is not required during the
existence and continuation of a Default or an Event of Default, (ii)
approval by the Borrower shall be deemed given if no objection is received
by the assigning Lender and the Administrative Agent from the Borrower
within five Business Days after notice of such proposed assignment has been
delivered to the Borrower; (iii) neither the Borrower nor an Affiliate of
the Borrower shall qualify as an Eligible Assignee; and (iv) no competitor
of the Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any current or future legally enforceable
requirement of any Governmental Authority pertaining to (a) the protection
of the indoor or outdoor environment, (b) the conservation, management, or
use of natural resources and wildlife, (c) the protection or use of surface
water and groundwater or (d) the management, manufacture, possession,
presence, use, generation, transportation, treatment, storage, disposal,
release, threatened release, abatement, removal, remediation or handling
of, or exposure to, any hazardous or toxic substance or material or (e)
pollution (including any release to land surface water and groundwater) and
includes, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 USC 9601 et seq., Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery
Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC 6901
et seq., Federal Water Pollution Control Act, as amended by the Clean Water
Act of 1977, 33 USC 1251 et seq., Clean Air Act of 1966, as amended, 42 USC
7401 et seq., Toxic Substances Control Act of 1976, 15 USC 2601 et seq.,
Hazardous Materials Transportation Act, 49 USC App. 1801 et seq.,
Occupational Safety and Health Act of 1970, as amended, 29 USC 651 et seq.,
Oil Pollution Act of 1990, 33 USC 2701 et seq., Emergency Planning and
Community Right-to-Know Act of 1986, 42 USC 11001 et seq., National
Environmental Policy Act of 1969, 42 USC 4321 et seq., Safe Drinking Water
Act of 1974, as amended, 42 USC 300(f) et seq., any analogous implementing
or successor law, and any amendment, rule, regulation, order, or directive
issued thereunder.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
-7-
"ERISA Affiliate" means an entity, whether or not incorporated, which
is treated as a single employer with the Borrower or any Subsidiary of the
Borrower under Sections 414(b) or (c) of the Code and solely for purposes
of Section 412 of the Code under Section 414(m) of the Code.
"ERISA Event" means (a) with respect to any Single Employer or
Multiple Employer Plan, the occurrence of a Reportable Event or the
substantial cessation of operations (within the meaning of Section 4062(e)
of ERISA); (b) the withdrawal of the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan
year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer
Plan; (c) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (d)
the institution of proceedings to terminate or the actual termination of
any Plan by the PBGC under Section 4042 of ERISA; (e) any event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Plan; (f) the complete or partial withdrawal of the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate from a Multiemployer Plan
or notification that a Multiemployer Plan is in reorganization; (g) the
conditions for imposition of a lien under Section 302(f) of ERISA exist
with respect to any Plan; or (h) the adoption of an amendment to any Plan
requiring the provision of security to such Plan pursuant to Section 307 of
ERISA.
"Eurodollar Loan" means any Loan bearing interest based at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions,
extensions and renewals), a per annum interest rate equal to the London
Interbank Offered Rate.
"Eurodollar Reserve Percentage" means, with respect to each Lender,
the percentage (expressed as a decimal) applicable to such Lender which is
in effect from time to time under Regulation D as the reserve requirement
(including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to its Eurocurrency
liabilities, as that term is defined in Regulation D (or against any other
category of liabilities that includes deposits by reference to which the
interest rate of Eurodollar Loans is determined). Eurodollar Loans made by
a Lender shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements, if applicable, without
benefits of credits for proration, exceptions or offsets that may be
available from time to time to such Lender.
"Event of Default" means any of the events or circumstances specified
in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.
-8-
"Extension of Credit" means, as to any Lender, the making of a Loan by
such Lender (or a participation therein by a Lender).
"Federal Funds Rate" means for any day the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; provided that (a) if such day is not
a Business Day, the Federal Funds Rate for such day shall be such rate on
such transactions on the next preceding Business Day and (b) if no such
rate is so published on such next preceding Business Day, the Federal Funds
Rate for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions from three Federal Funds brokers of
recognized standing selected by it.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Credit Parties for the twelve month period ending on such
date, with respect to the Borrower and its Subsidiaries on a consolidated
basis, the ratio of (a) the sum of (i) EBITDA for such period minus (ii)
Capital Expenditures for such period minus (iii) Cash Taxes for such period
to (b) the sum of (i) Cash Interest Expense for such period plus (ii)
Scheduled Funded Debt Payments, after giving effect to any reductions
arising from voluntary prepayments previously made, for such period, plus
(iii) cash Dividends for such period.
"Foreign Subsidiary" means any Subsidiary of the Borrower that is not
a Domestic Subsidiary.
"Funded Debt" means, without duplication, the sum of (a) all
Indebtedness of the Borrower and its Subsidiaries for borrowed money, (b)
all purchase money Indebtedness of the Borrower and its Subsidiaries, (c)
the principal portion of all obligations of the Borrower and its
Subsidiaries under Capital Leases, (d) all drawn but unreimbursed amounts
under all letters of credit (other than letters of credit supporting trade
payables in the ordinary course of business) issued for the account of the
Borrower or any of its Subsidiaries, (e) all Funded Debt of another Person
secured by a Lien on any Property of the Borrower and its Subsidiaries
whether or not such Funded Debt has been assumed by a Borrower or any of
its Subsidiaries, (f) all Funded Debt of any partnership or unincorporated
joint venture to the extent the Borrower or one of its Subsidiaries is
legally obligated with respect thereto and (g) the amount of principal
attributable under any outstanding Synthetic Lease. It is understood and
agreed that Indebtedness incurred pursuant to Hedging Agreements is not
Funded Debt.
"Funding Date" means the date on which all of the conditions set forth
in Section 5.2 have been fulfilled (or waived in the sole discretion of the
Initial Lender) and on which the initial Loans are made.
"GAAP" means generally accepted accounting principles in the United
States applied on a consistent basis and subject to Section 1.3.
-9-
"Governmental Authority" means any Federal, state, local, provincial
or foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of the Material Domestic Subsidiaries of the
Borrower, any other Subsidiary of the Borrower that guaranties the Senior
Unsecured Notes or the 2001 Senior Credit Agreement and each Additional
Credit Party, together with their successors and assigns.
"Guaranty" means the guaranty of the Credit Party Obligations provided
by the Guarantors pursuant to Section 4.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection)
guaranteeing any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (a) to purchase any such Indebtedness or other
obligation or any Property constituting security therefor, (b) to advance
or provide funds or other support for the payment or purchase of such
Indebtedness or obligation or to maintain working capital, solvency or
other balance sheet condition of such other Person (including, without
limitation, maintenance agreements, comfort letters, take or pay
arrangements, put agreements or similar agreements or arrangements) for the
benefit of the holder of Indebtedness of such other Person, (c) to lease or
purchase Property, securities or services primarily for the purpose of
assuring the owner of such Indebtedness or (d) to otherwise assure or hold
harmless the owner of such Indebtedness or obligation 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.
"Hazardous Materials" means any substance, material or waste defined
in or regulated under any Environmental Laws.
"HCFA" means the United States Health Care Financing Administration
and any successor thereto.
"Hedging Agreements" means, collectively, interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements, in each case, entered into or purchased by a Credit
Party.
"Indebtedness" of any Person means, 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 to the extent of the value of
such Property (other than customary reservations or retentions of title
under agreements with
-10-
suppliers entered into in the ordinary course of business), (d) all
obligations, other than intercompany items, of such Person issued or
assumed as the deferred purchase price of property or services purchased by
such Person which would appear as liabilities on a balance sheet of such
Person, (e) 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, (f) all Guaranty Obligations of such
Person, (g) the principal portion of all obligations of such Person under
(i) Capital Leases and (ii) any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product of such Person where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP, (h) all obligations of such Person to repurchase any
securities which repurchase obligation is related to the issuance thereof,
including, without limitation, obligations commonly known as residual
equity appreciation potential shares, (i) all net obligations of such
Person in respect of Hedging Agreements, (j) the maximum amount of all
performance and standby 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), and (k) the
aggregate amount of uncollected accounts receivable of such Person subject
at such time to a sale of receivables (or similar transaction) regardless
of whether such transaction is effected without recourse to such Person or
in a manner that would not be reflected on the balance sheet of such Person
in accordance with GAAP. The Indebtedness of any Person shall include the
Indebtedness of any partnership or unincorporated joint venture in which
such Person is legally obligated.
"Indemnified Liabilities" has the meaning set forth in Section 11.5.
"Initial Lender" means Sumitomo Mitsui Banking Corporation.
"Intellectual Property" has the meaning set forth in Section 6.20.
"Interest Expense" means, for any period, with respect to the Borrower
and its Subsidiaries on a consolidated basis, all interest expense,
including, without duplication, the interest component under Capital
Leases, as determined in accordance with GAAP.
"Interest Payment Date" means (a) as to Base Rate Loans, the last day
of each calendar quarter and the Maturity Date and (b) as to Eurodollar
Loans, the last day of each applicable Interest Period and the Maturity
Date and in addition, where the applicable Interest Period for a Eurodollar
Loan is greater than three months, then also the date three months from the
beginning of the Interest Period and each three months thereafter. If an
Interest Payment Date falls on a date which is not a Business Day, such
Interest Payment Date shall be deemed to be the next succeeding Business
Day, except that in the case of Eurodollar Loans where the next succeeding
Business Day falls in the next succeeding calendar month, then on the next
preceding Business Day.
"Interest Period" means, as to Eurodollar Loans, a period of two
weeks' or one, two, three or six months' duration, as the Borrower may
elect, commencing, in each case, on the
-11-
date of the borrowing (including continuations and conversions thereof);
provided, however, (i) if any Interest Period would end on a day which is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding
Business Day), (ii) no Interest Period shall extend beyond the Maturity
Date and (iii) where an Interest Period begins on a day for which there is
no numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes, debentures,
partnership, joint ventures or other ownership interests or other
securities of such other Person or (b) any deposit with, or advance, loan
or other extension of credit to, such Person (other than deposits or
advances made in connection with the purchase of equipment or other assets
or services in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including, without
limitation, any Guaranty Obligation (including any support for a letter of
credit issued on behalf of such Person) incurred for the benefit of such
Person.
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Exhibit 7.12.
"Lender" means the Initial Lender and any Eligible Assignee which may
become a Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Lending Office" means, as to any Lender, the office or offices of
such Lender described as such on Schedule 1.1(a), or such other office or
offices as a Lender may from time notify to the Borrower and the
Administrative Agent.
"Leverage Ratio" means, as of the last day of each fiscal quarter, the
ratio of (a)(i) Funded Debt on such date less (ii) if no Competitive Bid
Loans, Revolving Loans or Swing Line Loans (as all such terms are defined
in the 2001 Senior Credit Agreement) are outstanding on such date, the
amount of Available Cash (as defined below) on such date to (b) EBITDA for
the twelve month period ending on such date. For the purposes hereof,
"Available Cash" means all cash and Cash Equivalents of the Borrower and
its Subsidiaries located in the United States and reflected in its
consolidated balance sheet in excess of $40,000,000.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind, including, without limitation,
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, and any lease in the nature thereof (other than
operating leases).
-12-
"Loan" or "Loans" means the Term Loans (or any portion thereof),
individually or collectively, as appropriate, subject to Section 2.3.
"London Interbank Offered Rate" means, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the rate of interest per
annum 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; provided, however, if
more than one rate is specified on Telerate Page 3750, the applicable rate
shall be the arithmetic mean of all such rates. If, for any reason, such
rate is not available, the term "London Interbank Offered Rate" shall mean,
with respect to any Eurodollar Loan for the Interest Period applicable
thereto, the rate of interest per annum 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.
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations or financial condition of the Borrower and its
Subsidiaries taken as a whole, (b) the ability of a Credit Party to perform
its obligations under this Credit Agreement or any of the other Credit
Documents, or (c) the validity or enforceability of this Credit Agreement,
any of the other Credit Documents, or the rights and remedies of the
Lenders hereunder or thereunder taken as a whole.
"Material Domestic Subsidiary" means any wholly-owned Domestic
Subsidiary of the Borrower that, directly or indirectly, (a) owns assets in
excess of $20,000,000 or (b) has annual revenues, as of the most recently
ended fiscal year of the Borrower, in excess of two percent (2%) of the
total revenues of the Borrower and its Subsidiaries on a consolidated
basis; provided that Quest Receivables shall not be deemed to be a Material
Domestic Subsidiary.
"Maturity Date" means December 31, 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 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 for Medicaid patients in accordance
with the terms of the agreement and Medicaid Regulations.
"Medicaid Regulations" means, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical
-13-
assistance program established by Title XIX of the Social Security Act and
any statutes succeeding thereto; (b) all applicable provisions of all
federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes
described in clause (a) above and all federal administrative, reimbursement
and other guidelines of all Governmental Authorities having the force of
law promulgated pursuant to or in connection with the statutes described in
clause (a) above; (c) all state statutes and plans for medical assistance
enacted in connection with the statutes and provisions described in clauses
(a) and (b) above; and (d) all applicable provisions of all rules,
regulations, manuals and orders of all Governmental Authorities promulgated
pursuant to or in connection with the statutes described in clause (c)
above and all state administrative, reimbursement and other guidelines of
all Governmental Authorities having the force of law promulgated pursuant
to or in connection with the statutes described in clause (b) above, in
each case as may be amended, supplemented or otherwise modified from time
to time.
"Medical Reimbursement Programs" shall mean Medicare, Medicaid,
CHAMPUS 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.
"Medicare Provider Agreement" means an agreement entered into between
HCFA or other such entity administering the Medicare program on behalf of
the HCFA, and a health care provider or supplier under which the health
care provider or supplier agrees to provide services for Medicare patients
in accordance with the terms of the agreement and Medicare Regulations.
"Medicare" shall mean that government-sponsored entitlement program
under Title XVIII of the Social Security Act that provides for a health
insurance system for eligible elderly and disabled individuals.
"Medicare Regulations" shall mean, collectively, all Federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act and any statutes
succeeding thereto; together with all applicable provisions of all rules,
regulations, manuals and orders and administrative, reimbursement and other
guidelines having the force of law of all Governmental Authorities
(including, without limitation, the United States Department of Health and
Human Services ("HHS"), HCFA, 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.
"MedPlus" means MedPlus, Inc., an Ohio corporation.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating
securities.
-14-
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan covered by Title IV of ERISA
(other than a Multiemployer Plan) in which the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate and at least one employer other than
the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate are
contributing sponsors.
"Net Income" means, for any period, the net income after taxes for
such period of the Borrower and its Subsidiaries on a consolidated basis,
as determined in accordance with GAAP.
"Non-Cash Items" has the meaning set forth in the definition of EBITDA
in Section 1.1.
"Non-Material Domestic Subsidiary" means any wholly-owned Domestic
Subsidiary that is not a Guarantor other than Quest Receivables.
"Note" or "Notes" means the Term Notes, individually or collectively,
as appropriate.
"Notice of Borrowing" means the request by the Borrower for the
initial Loans in the form of Exhibit 2.1(b).
"Notice of Continuation/Conversion" means a request by the Borrower to
continue an existing Eurodollar Loan to a new Interest Period or Interest
Periods or to convert a Eurodollar Loan to a Base Rate Loan or a Base Rate
Loan to a Eurodollar Loan, in the form of Exhibit 2.2.
"OIG" means the Office of Inspector General of the United States
Department of Health and Human Services.
"Participation Interest" means the Extension of Credit by a Lender by
way of a purchase of a participation in any Loans as provided in Section
3.8.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereto.
"Permitted Acquisition" means any Acquisition by the Borrower or any
of its Subsidiaries; provided that (i) substantially all of the Property
acquired (or the Property of the Person acquired) in such Acquisition
constitutes Eligible Assets (or goodwill associated therewith), (ii) in the
case of an Acquisition of the Capital Stock of another Person, the board of
directors (or other comparable governing body) of such other Person or its
parent shall have duly approved such Acquisition, (iii) the Leverage Ratio
(A) as of the most recently ended fiscal quarter for which an officer's
certificate has been delivered pursuant to Section 7.1(c) is less than 2.75
to 1.0 and (B) on a Pro Forma Basis giving
-15-
effect to such Acquisition is less than 2.75 to 1.0, (iv) if such
Acquisition involves total consideration (cash and non-cash) in excess of
$100,000,000, the Borrower shall deliver to the Administrative Agent, prior
to the closing of such Acquisition, a certificate of an Authorized Officer
of the Borrower providing calculations showing that the requirement in
clause (b)(iii)(B) above is accurate, (v) on the date of such Acquisition
no Event of Default exists, (vi) after giving effect to such Acquisition,
no Default or Event of Default shall exist, (vii) if such Acquisition
involves the formation of a new Subsidiary of the Borrower, such Subsidiary
complies with Section 7.12 and (viii) such Acquisition is undertaken in
accordance with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees and awards to which any party to such Acquisition may
be subject.
"Permitted Investments" means Investments which constitute the
following: (a) cash or Cash Equivalents, (b) trade accounts receivable
created, acquired or made in the ordinary course of business, (c)
inventory, raw materials, general intangibles and other current assets
acquired in the ordinary course of business, (d) Investments by the
Borrower or one of its Subsidiaries in each other, (e) Permitted
Acquisitions, (f) advances to management personnel and employees in the
ordinary course of business, (g) Investments existing as of the Closing
Date; provided that any such Investment in excess of $2,000,000 is set
forth on Schedule 8.6, (h) Investments consisting of non-cash consideration
received in the form of securities, notes or similar obligations in
connection with any conveyance, sale, lease, assignment, transfer or other
disposition of any Property by the Borrower or one of its Subsidiaries to
any Person, and which are permitted hereunder, (i) increases in the value
of Persons in the Strategic Investment Portfolio that did not result from
any incremental investment by the Borrower or one of its Subsidiaries, (j)
other Investments (in addition to those set forth above) not to exceed, in
the aggregate, during any consecutive period during the term of this Credit
Agreement that the Leverage Ratio is greater than or equal to 2.75 to 1.0,
the sum of (i) $50,000,000 plus (ii) the amount of cash proceeds from sales
of assets in the Strategic Investment Portfolio and (k) any other
Investment as long as (i) the Leverage Ratio (A) as of the end of the most
recent fiscal quarter for which an officer's certificate has been delivered
pursuant to Section 7.1(c) is less than 2.75 to 1.0 and (B) on a Pro Forma
Basis giving effect to such Investment is less than 2.75 to 1.0, (ii) if
such Investment involves total consideration (cash and non-cash) in excess
of $100,000,000, the Borrower shall deliver to the Administrative Agent,
prior to the closing of such Investment, a certificate of an Authorized
Officer of the Borrower providing calculations showing that the requirement
in clause (k)(i)(B) above is accurate, (iii) on the date of such
Investment, no Event of Default exists and (iv) after giving effect to such
Investment no Default or Event of Default shall exist.
"Permitted Liens" means (a) Liens securing Credit Party Obligations,
if any, (b) Liens for taxes not yet due or Liens for taxes being contested
in good faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to foreclosure,
sale, collection, levy or loss on account thereof), (c) Liens in respect of
Property imposed by law arising in the ordinary course of business such as
materialmen's, mechanics', warehousemen's, carrier's, landlords' and other
nonconsensual statutory Liens which are not yet due and payable or which
are being contested in good faith by appropriate
-16-
proceedings for which adequate reserves determined in accordance with GAAP
have been established (and as to which the Property subject to any such
Lien is not yet subject to foreclosure, sale or loss on account thereof),
(d) Liens (other than Liens imposed under ERISA) consisting of pledges or
deposits made in the ordinary course of business to secure payment of
worker's compensation insurance, unemployment insurance, pensions or social
security programs, (e) Liens arising from good faith deposits in connection
with or to secure performance of tenders, bids, leases, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (other than
obligations in respect of the payment of borrowed money), (f) Liens arising
from good faith deposits in connection with or to secure performance of
statutory obligations and surety and appeal bonds, (g) easements,
rights-of-way, restrictions (including zoning restrictions), matters of
plat, 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, (h) judgment Liens that
would not constitute an Event of Default, (i) Liens in connection with
Indebtedness permitted by Sections 8.1(d), (j) Liens arising by virtue of
any statutory or common law provision relating to banker's liens, rights of
setoff or similar rights as to deposit accounts or other funds maintained
with a creditor depository institution, (k) Liens existing on the Closing
Date and identified on Schedule 8.2, (l) Liens upon Property acquired (or
the Property of a Subsidiary that is acquired) after the Closing Date by
the Borrower or its Subsidiaries, which Liens either (i) existed on such
Property before the time of such acquisition and was not created in
anticipation thereof or (ii) were created solely for the purpose of
securing Indebtedness representing, or incurred to finance or refinance,
the cost of such Property or improvements thereon; provided, however; that
(A) no such Lien shall extend to or cover any Property of any Credit Party
other than the Property so acquired and improvements thereon and proceeds
thereof, (B) the principal amount of Indebtedness secured by any such Lien
shall at no time exceed 100% of the fair market value of such Property at
the time it was acquired or constructed and (C) the Indebtedness secured by
any such Lien is permitted hereunder; provided that (x) no such Lien shall
extend to any Property other than the Property subject thereto on the
closing date of such acquisition and (y) the principal amount of the
Indebtedness secured by such Liens shall not be increased, (m) Liens in
connection with Permitted Receivables Financing, (n) Liens with respect to
lease filings for notice purposes only, (o) Liens on purchase money
Indebtedness incurred by the Borrower in an amount not to exceed, in the
aggregate, $50,000,000 less Indebtedness incurred by Subsidiaries of the
Borrower pursuant to Section 8.1(d), (p) Liens on Property of non-wholly
owned Subsidiaries of the Borrowers incurred to finance working capital and
(q) renewals and extensions of the foregoing so long as such Lien (i) does
not cover any additional Property, (ii) does not secure additional
Indebtedness and (iii) is not otherwise prohibited by this Credit
Agreement.
"Permitted Receivables Financing" means any transaction entered into
pursuant to documentation reasonably acceptable to the Administrative Agent
in which (a) one or more Credit Parties sells, conveys or otherwise
transfers to Quest Receivables and (b) Quest Receivables sells, conveys or
otherwise transfers to any other Person or grants a security interest to
any Person in, any Receivables (whether now existing or hereafter acquired)
of a Credit Party, and any assets related thereto including all collateral
securing such Receivables, all contracts and all Guaranty Obligations or
other obligations in respect of
-17-
such Receivables, all proceeds of such Receivables and all other assets
that are customarily transferred or in respect of which security interests
are customarily granted in connection with asset securitization
transactions involving Receivables.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated), or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section 3(3) of
ERISA) which is covered by ERISA and with respect to which the Borrower,
any Subsidiary of the Borrower or any ERISA Affiliate is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA be deemed
to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Prime Rate" means the per annum rate of interest established from
time to time by the Administrative Agent at the office of its New York
Branch in New York, New York (or such other principal office of the
Administrative Agent as communicated in writing to the Borrower and the
Lenders) as its Prime Rate. Any change in the interest rate resulting from
a change in the Prime Rate shall become effective as of 12:01 a.m. of the
Business Day on which each change in the Prime Rate is announced by the
Administrative Agent. The Prime Rate is a reference rate used by the
Administrative Agent in determining interest rates on certain loans and is
not intended to be the lowest rate of interest charged on any extension of
credit to any debtor.
"Principal Property" means any real property and any related
buildings, fixtures or other improvements located in the United States
owned by the Borrower or its Subsidiaries (a) on or in which one of its 30
largest domestic clinical laboratories conducts operations, as determined
by net revenues for the four most recent fiscal quarters for which
financial statements have been filed with the Securities and Exchange
Commission, or (b) the net book value of which at the time of the
determination exceeds 1% of Total Assets.
"Prior Senior Subordinated Notes" means those certain 10 3/4% senior
subordinated notes due 2006 that were issued by the Borrower and were
tendered for in connection with the closing of the 2001 Senior Credit
Agreement.
"Pro Forma Basis" means, in connection with any Permitted Acquisition,
Permitted Investment or Stock Repurchase, that such Acquisition,
Investment, or Stock Repurchase occurred as of the end of the last fiscal
quarter for which the Borrower has delivered an officer's certificate
pursuant to Section 7.1(c).
"Property" means any right, title or interest in or to any property or
asset of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible.
"Quest Receivables" means Quest Diagnostics Receivables Incorporated,
a Delaware corporation, a wholly-owned, bankruptcy-remote, special purpose
Subsidiary of the Borrower.
-18-
"Real Properties" has the meaning given thereto in Section 6.19.
"Receivable" means the indebtedness and payment obligations of any
Person to any Credit Party or acquired by any Credit Party (including
obligations constituting an account or general intangible or evidenced by a
note, instrument, contract, security agreement, chattel paper or other
evidence of indebtedness or security) arising from a sale of merchandise or
the provision of services in the ordinary course of business by such Credit
Party or the Person from which such indebtedness and payment obligation
were acquired by any Credit Party, including (a) any right to payment for
goods sold or for services rendered and (b) the right to payment of any
interest, sales taxes, finance charges, returned check or late charges and
other obligations of such Person with respect thereto.
"Regulation A, D, T, U or X" means Regulation A, D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion thereof.
"Required Lenders" means Lenders whose aggregate Credit Exposure (as
hereinafter defined) constitutes more than 50% of the Credit Exposure of
all Lenders at such time; provided, however, that if any Lender shall be a
Defaulting Lender at such time then the aggregate principal amount of
Credit Exposure of such Lender at such time shall be excluded from the
determination of Required Lenders. For purposes hereof, the term "Credit
Exposure" as applied to each Lender shall mean (a) at any time prior to the
termination of the Commitments, the Term Loan Percentage of such Lender
multiplied by the Commitment and (b) at any time after the termination of
the Commitments, the principal balance of the outstanding Loans of such
Lender.
"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or regulation
or final, non-appealable determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or to which any of its material Property is subject.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation or by the PBGC.
"Sale and Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Borrower or one of its Subsidiaries of any
Principal Property that has been or is to be sold or transferred by the
Borrower or any Guarantor to such Person, as the case may be.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor or assignee of the business of
such division in the business of rating securities.
-19-
"SBCL Acquisition Agreement" means the Stock and Asset Purchase
Agreement, dated as of February 9, 1999, among the Borrower, SmithKline
Beecham plc and SmithKline Beecham Corporation, as amended.
"Scheduled Funded Debt Payments" means, for any period, with respect
to the Borrower and its Subsidiaries on a consolidated basis, the sum of
all scheduled payments of principal on Funded Debt (including the implied
principal component of payments due on Capital Leases and Synthetic
Leases). It is understood and agreed that any amortization payments made in
connection with a Permitted Receivables Financing are not Scheduled Funded
Debt Payments; provided, however, should such Indebtedness pursuant to a
Permitted Receivables Financing be required to be repaid due to the
termination (whether at its stated maturity or otherwise) of such Permitted
Receivables Financing and should no replacement facility be in effect on
such termination date, the repayment of such Indebtedness shall constitute
a Scheduled Funded Debt Payment.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as amended, modified,
succeeded or replaced from time to time.
"Senior Unsecured Notes" means those certain senior unsecured notes
issued by the Borrower on June 27, 2001.
"Single Employer Plan" means any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Social Security Act" means the Social Security Act as set forth in
Title 42 of the United States Code, as amended, and any successor statute
thereto, as interpreted by the rules and regulations issued thereunder, in
each case as in effect from time to time. References to sections of the
Social Security Act shall be construed also to refer to any successor
sections.
"Solvent" means, with respect to any Person as of a particular date,
that on such date (a) such Person is able to pay its debts and other
liabilities, contingent obligations and other commitments as they mature in
the normal course of business, (b) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature in their ordinary
course, (c) such Person is not engaged in a business or a transaction, and
is not about to engage in a business or a transaction, for which such
Person's assets would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in which such
Person is engaged or is to engage, (d) the fair value of the assets of such
Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present fair
saleable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured. In computing the amount of
contingent liabilities at any time, it is intended that such liabilities
will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can
reasonably be
-20-
expected to become an actual or matured liability reduced by the amount of
any contribution or indemnity that can reasonably be expected to be
received.
"Stock Repurchase" has the meaning set forth in Section 8.9.
"Strategic Investment Portfolio" means all Investments in Persons in
which the Borrower and its Subsidiaries own less than 50% of the Voting
Stock of such Person.
"Subsidiary" means, as to any Person, (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or
classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person
directly or indirectly through Subsidiaries, and (b) any partnership,
association, joint venture or other entity in which such person directly or
indirectly through Subsidiaries has more than a 50% equity interest at any
time.
"Synthetic Lease" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money indebtedness
for tax purposes but is classified as an operating lease in accordance with
GAAP.
"Tender Costs" means the costs incurred by the Borrower in connection
with the tender for the Prior Senior Subordinated Notes and the termination
of the interest rate swap contracts existing prior to June 27, 2001 in an
aggregate amount not to exceed $20,000,000.
"Term Loans" means the Term Loans made to the Borrower pursuant to
Section 2.1.
"Term Loan Percentage" means, for each Lender, the percentage
identified as its Term Loan Percentage on Schedule 1.1(a), as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Term Notes" means the promissory notes of the Borrower in favor of
each of the Lenders evidencing the Term Loans provided pursuant to Section
2.1, individually or collectively, as appropriate, as such promissory notes
may be amended, modified, supplemented, extended, renewed or replaced from
time to time and as evidenced in the form of Exhibit 2.1(f).
"Total Assets" means all items that in accordance with GAAP would be
classified as assets of the Borrower and its Subsidiaries on a consolidated
basis.
"TRICARE" means the United States Department of Defense health care
program for service families including, but not limited to, TRICARE Prime,
TRICARE Extra and TRICARE Standard, and any successor to or predecessor
thereof (including, without limitation, CHAMPUS).
-21-
"2001 Senior Credit Agreement" means that certain Credit Agreement,
dated as of June 27, 2001, among the Borrower, as borrower, the guarantors
party thereto, the lenders signatories thereto, and Bank of America, N.A.,
as administrative agent, as amended or modified from time to time.
"2002 Term Loan Agreement" means that certain Term Loan Credit
Agreement, dated as of June 21, 2002, among the Borrower, as borrower, the
guarantors party thereto, the lenders signatories thereto, and Bank of
America, N.A., as administrative agent, as amended or modified from time to
time.
"Voting Stock" means all classes of the Capital Stock of such Person
then outstanding and normally entitled to vote in the election of directors
(or similar governing authority).
1.2 Computation of Time Periods and Other Definitional Provisions.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 Accounting Terms/Calculation of Financial Covenants.
(a) Except as otherwise expressly provided herein, all accounting
terms used herein shall be interpreted, and all financial statements and
certificates and reports as to financial matters required to be delivered
to the Lenders hereunder shall be prepared, in accordance with GAAP applied
on a consistent basis. All calculations made for the purposes of
determining compliance with this Credit Agreement shall (except as
otherwise expressly provided herein) be made by application of GAAP applied
on a basis consistent with the most recent annual or quarterly financial
statements delivered pursuant to Section 7.1 (or, prior to the delivery of
the first financial statements pursuant to Section 7.1, consistent with the
financial statements delivered to the Lenders prior to the Funding Date);
provided, however, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial
statements due to any change in GAAP or the rules promulgated with respect
thereto or (b) the Administrative Agent or the Required Lenders shall so
object in writing within 30 days after delivery of such financial
statements, then such calculations shall be made on a basis consistent with
GAAP as in effect as of the date of the most recent financial statements
delivered by the Borrower to the Lenders to which no such objection shall
have been made.
(b) Notwithstanding anything herein to the contrary, for the purposes
of calculating the financial covenants set forth in Section 7.2, (i) income
statement items (positive or negative) attributable to any Person or
Property acquired in a Permitted Acquisition and Indebtedness incurred in
connection with such Permitted Acquisition
-22-
shall, without duplication, be treated as if such Person or Property was
acquired or such Indebtedness incurred as of the first day of the twelve
month period ending as of the most recently completely fiscal quarter of
the Borrower and (ii) income statement items (positive or negative)
attributable to Property disposed of in any asset sale permitted by Section
8.5(g) and Indebtedness retired in connection with such sale shall, without
duplication, be treated as if such sale occurred as of the first day of the
twelve month period ending as of the most recently completed fiscal quarter
of the Borrower.
1.4 Time.
All references to time herein shall be references to Eastern Standard Time
or Eastern Daylight time, as the case may be, unless specified otherwise.
SECTION 2
CREDIT FACILITY
2.1 Term Loans.
(a) Term Loans. Subject to the terms and conditions set forth herein,
the Initial Lender agrees to make a term loan or loans (the "Term Loans" or
"Loans") to the Borrower, in Dollars, in an amount equal to the Commitment.
Once repaid or prepaid, the Term Loans cannot be reborrowed.
(b) Method of Borrowing Term Loans. By no later than 11:00 a.m. (i) on
the date of the requested borrowing if the Term Loan requested will be a
Base Rate Loan or (ii) three Business Days prior to the date of the
requested borrowing if the Term Loan requested will be a Eurodollar Loan or
Loans, the Borrower shall provide telephonic notice to the Initial Lender
followed promptly by a written Notice of Borrowing in the form of Exhibit
2.1(b) (which may be submitted by telecopy), setting forth (A) the amount
requested, (B) whether such Term Loan shall be a Base Rate Loan or
Eurodollar Loans, (C) if the Term Loan is to be a Eurodollar Loan, the
Interest Period or Interest Periods applicable thereto and (D)
certification that the Borrower has complied in all respects with Section
5.3. Notwithstanding anything to the contrary herein, (x) the Borrower may
not request more than one (1) borrowing under this Section 2.1 and (y) the
Borrower may not request any borrowing subsequent to January 31, 2004.
(c) Funding of Loans. Upon receipt of the Notice of Borrowing, the
Initial Lender shall make the Term Loans available to the Borrower in the
amount of its Commitment on the Funding Date as directed by the Borrower.
-23-
(d) Amortization. The principal amount of the Term Loans shall be
repaid on the dates set forth below:
----------------------------------------------------------
Principal Amortization Term Loan Principal
Payment Dates Amortization Payments
----------------------------------------------------------
Third Anniversary of Funding Date 20% of Initial Loans
----------------------------------------------------------
Fourth Anniversary of Funding Date 20% of Initial Loans
----------------------------------------------------------
Maturity Date outstanding balance
----------------------------------------------------------
(e) Term Notes. The Term Loans shall initially be evidenced by a duly
executed promissory note of the Borrower to the Initial Lender in
substantially the form of Exhibit 2.1(e) and upon any assignment pursuant
to Section 11.3(b), the Loans shall be evidenced by promissory notes in
substantially such form payable to each Lender requesting issuance of a
Note.
2.2 Continuations and Conversions.
Subject to the terms below, the Borrower shall have the option, on any
Business Day, to continue existing Eurodollar Loans for a subsequent Interest
Period, to convert Base Rate Loans into Eurodollar Loans or to convert
Eurodollar Loans into Base Rate Loans. Subject to the limitations of Section 2.3
and this Section, the initial borrowing may bear more than one Interest Period,
and the continuation or conversion of any Loan may be to more than one Interest
Period. By no later than 11:00 a.m. (a) on the date of the requested conversion
of a Eurodollar Loan to a Base Rate Loan or (b) three Business Days prior to the
date of the requested continuation of a Eurodollar Loan or conversion of a Base
Rate Loan to a Eurodollar Loan, the Borrower shall provide telephonic notice to
the Initial Lender if such Lender is the sole lender at such time, or to the
Administrative Agent, followed promptly by a written Notice of
Continuation/Conversion, in the form of Exhibit 2.2 setting forth (i) whether
the Borrower wishes to continue or convert such Loans and (ii) if the request is
to continue a Eurodollar Loan or convert a Base Rate Loan to a Eurodollar Loan,
the Interest Period(s) applicable thereto. Notwithstanding anything herein to
the contrary, (A) except as provided in Section 3.11, Eurodollar Loans may only
be continued or converted into Base Rate Loans on the last day of the Interest
Period applicable thereto, (B) Eurodollar Loans may not be continued nor may
Base Rate Loans be converted into Eurodollar Loans during the existence and
continuation of a Default or an Event of Default, (C) any request to continue a
Eurodollar Loan that fails to comply with the terms hereof or any failure to
request a continuation of a Eurodollar Loan at the end of an Interest Period
shall constitute a conversion to a Base Rate Loan on the last day of the
applicable Interest Period and (D) any failure to state the Interest Period with
respect to the continuation of a Eurodollar Loan or the conversion of a Base
Rate Loan to a Eurodollar Loan shall constitute a request for a one month
Interest Period.
2.3 Minimum Amounts.
Each request for a conversion or continuation shall be subject to the
requirements that (a) each Eurodollar Loan shall be in a minimum amount of
$10,000,000 and in integral multiples of $1,000,000 in excess thereof, (b) each
Base Rate Loan shall be in a minimum amount of the lesser of $5,000,000 (and in
integral multiples of $1,000,000 in excess thereof) and (c) no more than four
-24-
Eurodollar Loans shall be outstanding hereunder at any one time. For the
purposes of this Section 2.3, all Eurodollar Loans with the same Interest
Periods that begin and end on the same date shall be considered as one
Eurodollar Loan, but Eurodollar Loans with different Interest Periods, even if
they begin on the same date, shall be considered as separate Eurodollar Loans.
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS
3.1 Interest.
(a) Interest Rate. Subject to Section 3.1(b), (i) all Base Rate Loans
shall accrue interest at the Base Rate and (ii) all Eurodollar Loans shall
accrue interest at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during the
continuation of an Event of Default pursuant to Section 9.1(a), 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
(including without limitation fees and expenses) shall bear interest,
payable on demand, at a per annum rate equal to 2% plus the rate which
would otherwise be applicable (or if no rate is applicable, then the Base
Rate plus two percent (2%) per annum).
(c) Interest Payments. Interest on Loans shall be due and payable in
arrears on each Interest Payment Date.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts to be
made by a Credit Party under this Credit Agreement shall be made unconditionally
and without any setoff, deduction, counterclaim, defense, recoupment or
withholding of any kind and received not later than 2:00 p.m. on the date when
due, in Dollars and in immediately available funds, by the Administrative Agent.
Payments received after such time shall be deemed to have been received on the
next Business Day. The Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Administrative Agent the Loans, fees or
other amounts payable by the Borrower hereunder to which such payment is to be
applied (and in the event that it fails to specify, or if such application would
be inconsistent with the terms hereof, the Administrative Agent shall, subject
to Section 3.7, distribute such payment to the Lenders in such manner as the
Administrative Agent may reasonably deem appropriate). The Administrative Agent
will distribute such payments to the Lenders on the same Business Day if any
such payment is received at or before 2:00 p.m.; otherwise the Administrative
Agent will distribute such payment to the Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day (subject to accrual of interest and fees for the period
of such extension), except that, in the case of Eurodollar Loans (or interest
payable with respect thereto), if the extension would cause the payment to be
made in the
-25-
next following calendar month, then such payment shall instead be made on the
next preceding Business Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (i) Eurodollar Loans may only be prepaid on three
Business Days' prior written notice to the Administrative Agent and (ii)
each such partial prepayment of Eurodollar Loans or Base Rate Loans shall
be in the minimum principal amount of $5,000,000 and integral multiples of
$1,000,000. Amounts prepaid pursuant to this Section 3.3(a) shall be
applied (A) first to the next scheduled amortization payment set forth in
Section 2.1(d) and (B) second to the remaining scheduled amortization
payments set forth in Section 2.1(d) on a pro rata basis. Within the
foregoing parameters, amounts prepaid pursuant to this Section 3.3(a) shall
be applied first to Base Rate Loans and then to Eurodollar Loans in direct
order of Interest Period maturities. All prepayments under this Section
3.3(a) shall be subject to Section 3.14.
(b) Revision of Amortization Schedule. If the Borrower makes a
prepayment in accordance with this Section 3.3, and the Initial Lender is
not the sole Lender at the time, the Administrative Agent shall recalculate
the outstanding principal amount of the Term Loans following such
prepayment, reschedule the remaining amortization payments giving effect to
such prepayment, and promptly distribute to the Borrower and to each of the
Lenders a revised version of the schedule which appears in Section 2.1(d).
3.4 [intentionally omitted]
3.5 Payment in full at Maturity or Otherwise.
The entire outstanding principal balance of all Loans, together with
accrued but unpaid interest and all other sums owing with respect thereto, shall
be due and payable in full, unless accelerated sooner pursuant to Section 9 on
the Maturity Date.
3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans that are based upon the Prime Rate, in
which case interest shall be computed on the basis of the actual number of
days elapsed over a year of 365 or 366 days, as the case may be, all
computations of interest and fees hereunder shall be made on the basis of
the actual number of days elapsed over a year of 360 days. Interest shall
accrue from and include the date of borrowing (or continuation or
conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to conform
to and contract in strict compliance with applicable usury law from time to
time in effect. All agreements between the Lenders and the Credit Parties
are hereby limited by the provisions of this paragraph which shall override
and control all such agreements, whether now
-26-
existing or hereafter arising and whether written or oral. In no way, nor
in any event or contingency (including but not limited to prepayment or
acceleration of the maturity of any obligation), shall the interest taken,
reserved, contracted for, charged, or received under this Credit Agreement,
under the Notes or otherwise, exceed the maximum nonusurious amount
permissible under applicable law. If, from any possible construction of any
of the Credit Documents or any other document, interest would otherwise be
payable in excess of the maximum nonusurious amount, any such construction
shall be subject to the provisions of this paragraph and such documents
shall be automatically reduced to the maximum nonusurious amount permitted
under applicable law, without the necessity of execution of any amendment
or new document. If any Lender shall ever receive anything of value which
is characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have been excessive
interest shall, without penalty, be applied to the reduction of the
principal amount owing on the Loans and not to the payment of interest, or
refunded to the Borrower or the other payor thereof if and to the extent
such amount which would have been excessive exceeds such unpaid principal
amount of the Loans. The right to demand payment of the Loans or any other
Indebtedness evidenced by any of the Credit Documents does not include the
right to accelerate the payment of any interest which has not otherwise
accrued on the date of such demand, and the Lenders do not intend to charge
or receive any unearned interest in the event of such demand. All interest
paid or agreed to be paid to the Lenders with respect to the Loans shall,
to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any
renewal or extension) of the Loans so that the amount of interest on
account of such Indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein or when the Initial Lender
is the sole Lender, each payment or prepayment of principal of any Loan, and
each conversion or continuation of any Loan shall (except as otherwise provided
in Section 3.11) be allocated pro rata among the Lenders in accordance with the
respective principal amounts of the outstanding Loans and Participation
Interests of the Lenders); provided that, in the event any amount paid to any
Lender pursuant to this Section 3.7 is rescinded or must otherwise be returned
by the Administrative Agent, each Lender shall, upon the request of the
Administrative Agent, repay to the Administrative Agent the amount so paid to
such Lender, with interest for the period commencing on the date such payment is
returned by the Administrative Agent until the date the Administrative Agent
receives such repayment at a rate per annum equal to, during the period to but
excluding the date two Business Days after such request, the Federal Funds Rate,
and thereafter, the Base Rate plus two percent (2%) per annum.
3.8 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's
-27-
lien or counterclaim, or pursuant to a secured claim under Section 506 of the
Bankruptcy Code or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise, or by any other means, in excess
of its pro rata share of such payment as provided for in this Credit Agreement,
such Lender shall promptly pay in cash or purchase from the other Lenders a
participation in such Loans, and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end that
all Lenders share such payment in accordance with their respective ratable
shares as provided for in this Credit Agreement. The Lenders further agree among
themselves that if payment to a Lender obtained by such Lender through the
exercise of a right of setoff, banker's lien, counterclaim or other event as
aforesaid shall be rescinded or must otherwise be restored, each Lender which
shall have shared the benefit of such payment shall, by payment in cash or a
repurchase of a participation theretofore sold, return its share of that benefit
(together with its share of any accrued interest payable with respect thereto)
to each Lender whose payment shall have been rescinded or otherwise restored.
The Borrower agrees that any Lender so purchasing such a participation may, to
the fullest extent permitted by law, exercise all rights of payment, including
setoff, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Loan, or other obligation in the
amount of such participation. Except as otherwise expressly provided in this
Credit Agreement, if any Lender or the Administrative Agent shall fail to remit
to any other Lender an amount payable by such Lender or the Administrative Agent
to such other Lender pursuant to this Credit Agreement on the date when such
amount is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount is paid to
the Administrative Agent or such other Lender at a rate per annum equal to the
Federal Funds Rate. If under any applicable bankruptcy, insolvency or other
similar law, any Lender receives a secured claim in lieu of a setoff to which
this Section 3.8 applies, such Lender shall, to the extent practicable, exercise
its rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.8 to share in the benefits of any
recovery on such secured claim.
3.9 Capital Adequacy/Regulation D.
(a) If, after the date thereof, any Lender determines that the
introduction after the Closing Date of any law, rule or regulation or other
Requirement of Law regarding capital adequacy or any change therein or in
the interpretation thereof, or compliance by such Lender (or its Lending
Office) therewith, has or would have the effect of reducing the rate of
return on the capital or assets of such Lender or any corporation
controlling such Lender as a consequence of such Lender's obligations
hereunder (taking into consideration its policies with respect to capital
adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such
additional amounts as will compensate such Lender for such reduction.
(b) The Borrower shall pay to each Lender, as long as such Lender
shall be required under regulations of the Board of Governors of the
Federal Reserve System of the United States of America to maintain reserves
with respect to liabilities or assets consisting of or including
Eurocurrency funds or deposits (currently known as "Eurocurrency
liabilities"), additional interest on the unpaid principal amount of each
Eurodollar Loan
-28-
equal to (i) (A) the applicable Eurodollar Rate divided by (B) one minus
the Eurodollar Reserve Percentage minus (ii) the applicable Eurodollar
Rate. Such additional interest shall be due and payable on each date on
which interest is payable on such Loan; provided the Borrower shall have
received at least five days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a
Lender fails to give notice five days prior to the relevant Interest
Payment Date, such additional interest shall be due and payable five days
from the receipt by the Borrower of such notice.
3.10 Inability To Determine Interest Rate.
If the Administrative Agent (the Initial Lender if it is the sole Lender)
determines (which determination shall be conclusive and binding upon the
Borrower) in connection with any request for a Eurodollar Loan or a conversion
to or continuation of a Eurodollar Loan that (a) Dollar deposits are not being
offered to banks in the applicable offshore Dollar market for the applicable
amount and Interest Period of such Eurodollar Loan, (b) adequate and reasonable
means do not exist for determining the Eurodollar Rate for such Eurodollar Loan,
or (c) the Eurodollar Rate for such Eurodollar Loan does not adequately and
fairly reflect the cost to the Lenders of funding such Eurodollar Loan, the
Administrative Agent will promptly notify the Borrower and all the Lenders.
Thereafter, the obligation of the Lenders to make or maintain Eurodollar Loans
shall be suspended until the Administrative Agent revokes such notice. Upon
receipt of such notice, the Borrower may revoke any pending Notice of Borrowing
or Notice of Continuation/Conversion with respect to Eurodollar Loans or,
failing that, will be deemed to have converted such request into a request for a
borrowing of or conversion into a Base Rate Loan in the amount specified
therein.
3.11 Illegality.
If any Lender determines that any Requirement of Law has made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for any
Lender or its applicable Lending Office to make, maintain or fund Eurodollar
Loans, or materially restricts the authority of such Lender to purchase or sell,
or to take deposits of, Dollars in the applicable offshore Dollar market, or to
determine or charge interest rates based upon the Eurodollar Rate, then, on
notice thereof by such Lender to the Borrower through the Administrative Agent,
any obligation of such Lender to make or continue Eurodollar Loans or to convert
Base Rate Loans to Eurodollar Loans shall be suspended until such Lender
notifies the Administrative Agent and the Borrower that the circumstances giving
rise to such determination no longer exist. Upon receipt of such notice, the
Borrower shall, upon demand from such Lender (with a copy to the Administrative
Agent), prepay or, if applicable, convert all Eurodollar Loans of such Lender to
Base Rate Loans, either on the last day of the Interest Period thereof, if such
Lender may lawfully continue to maintain such Eurodollar Loans to such day, or
immediately, if such Lender may not lawfully continue to maintain such
Eurodollar Loans. Upon any such prepayment or conversion, the Borrower shall
also pay interest on the amount so prepaid or converted, together with any
amounts due with respect thereto pursuant to Section 3.14. Each Lender agrees to
designate a different Lending Office if such designation will avoid the need for
such notice and will not, in the good faith judgment of such Lender, otherwise
be materially disadvantageous to such Lender.
-29-
3.12 Requirements of Law.
If any Lender determines that as a result of the introduction of or any
change in, or in the interpretation of, any Requirement of Law, or such Lender's
compliance therewith, there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining Eurodollar Loans or a
reduction in the amount received or receivable by such Lender in connection with
any of the foregoing (excluding for purposes of this subsection (a) any such
increased costs or reduction in amount resulting from (i) Taxes or Other Taxes
(as to which Section 3.13 shall govern) and (ii) reserve requirements utilized
in the determination of the Eurodollar Rate), then from time to time, within 10
days of demand of such Lender (with a copy of such demand to the Administrative
Agent), the Borrower shall pay to such Lender such additional amounts as will
compensate such Lender for such increased cost or reduction in yield.
3.13 Taxes.
(a) Any and all payments by a Credit Party to or for the account of
the Administrative Agent or any Lender under any Credit Document shall be
made free and clear of and without deduction for any and all present or
future income, stamp or other taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities
with respect thereto, but excluding, in the case of the Administrative
Agent and each Lender, taxes imposed on or measured by its net income, and
franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the laws of which
the Administrative Agent or such Lender, as the case may be, is organized
or maintains its Lending Office (all such non-excluded present or future
income, stamp or other taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and liabilities being
hereinafter referred to as "Taxes"). If a Credit Party shall be required by
any Requirement of Law to deduct any Taxes from or in respect of any sum
payable under any Credit Document to the Administrative Agent or any
Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this Section 3.13(a)), the Administrative
Agent or such Lender, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) such
Credit Party shall make such deductions, (iii) such Credit Party shall pay
the full amount deducted to the relevant taxation authority or other
Governmental Authority in accordance with applicable Requirements of Law,
and (iv) within 30 days after the date of such payment, such Credit Party
shall furnish to the Administrative Agent (which shall forward the same to
such Lender) the original or a certified copy of a receipt evidencing
payment thereof, to the extent such receipt is issued therefor, or other
written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent.
(b) In addition, each Credit Party agrees to pay any and all present
or future stamp, court or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment
made under any Credit Document or from
-30-
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Credit Document (hereinafter referred to as
"Other Taxes").
(c) If a Credit Party shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Credit Document
to the Administrative Agent or any Lender, such Credit Party shall also pay
to the Administrative Agent (for the account of such Lender) or to such
Lender, at the time interest is paid, such additional amount that such
Lender reasonably specifies by written notice to such Credit Party as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would
have received if such Taxes or Other Taxes had not been imposed; provided
that if such Lender fails to provide such notice to such Credit Party
before the date which is five days prior to the date such interest is paid,
such Credit Party shall pay at the time such interest is paid such amount
as such Credit Party reasonably estimates will preserve such Lender's
after-tax yield (after factoring in only such Taxes or Other Taxes) and pay
the balance within five days after receiving such notice.
(d) Each Credit Party agrees to indemnify the Administrative Agent and
each Lender for (i) the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed or asserted by any jurisdiction on amounts
payable under this Section 3.13(d)) paid by the Administrative Agent and
such Lender, and (ii) any liability (including penalties, interest and
reasonable expenses) arising therefrom or with respect thereto.
(e) In the case of any payment hereunder or under any other Credit
Document by or on behalf of a Credit Party through an account or branch
outside the United States, or on behalf of a Credit Party by a payor that
is not a United States person, if such Credit Party determines that no
taxes are payable in respect thereof, such Credit Party shall furnish, or
shall cause such payor to furnish, to the Administrative Agent, an opinion
of counsel reasonably acceptable to the Administrative Agent stating that
such payment is exempt from Taxes. For purposes of this subsection (e), the
terms "United States" and "United States person" shall have the meanings
specified in Section 7701 of the Code.
(f) Each Lender that is a foreign corporation, foreign partnership or
foreign trust within the meaning of the Code shall deliver to the
Administrative Agent, prior to receipt of any payment subject to
withholding under the Code, two duly signed completed copies of either IRS
Form W-8BEN or any successor thereto (relating to such Lender and entitling
it to an exemption from, or reduction of, withholding tax on all payments
to be made to such Lender by the Credit Parties pursuant to this Credit
Agreement) or IRS Form W-8ECI or any successor thereto (relating to all
payments to be made to such Lender by a Credit Party pursuant to this
Credit Agreement), as appropriate, or such other evidence satisfactory to
the Borrower and the Administrative Agent that such Lender is entitled to
an exemption from, or reduction of, United States withholding tax.
Thereafter and from time to time, each such Lender shall (i) promptly
submit to the Administrative Agent such additional duly completed and
signed copies of one of such forms (or such successor forms as shall be
adopted from time to time by the relevant
-31-
United States taxing authorities), as appropriate, as may reasonably be
requested by the Borrower or the Administrative Agent and then be available
under then current United States laws and regulations to avoid, or such
evidence as is satisfactory to the Borrower and the Administrative Agent of
any available exemption from or reduction of, United States withholding
taxes in respect of all payments to be made to such Lender by the Borrower
pursuant to this Credit Agreement, (ii) promptly notify the Administrative
Agent of any change in circumstances which would modify or render invalid
any claimed exemption or reduction, and (iii) take such steps as shall not
be materially disadvantageous to it, in the reasonable judgment of such
Lender, and as may be reasonably necessary (including the re-designation of
its Lending Office) to avoid any Requirement of Law that the Credit Parties
make any deduction or withholding for taxes from amounts payable to such
Lender. If the forms or other evidence provided by such Lender at the time
such Lender first becomes a party to this Credit Agreement indicate a
United States interest withholding tax rate in excess of zero, withholding
tax at such rate shall be considered excluded from Taxes unless and until
such Lender provides the appropriate forms certifying that a lesser rate
applies, whereupon withholding tax at such lesser rate only shall be
considered excluded from Taxes for periods governed by such forms;
provided, however, that, if at the date of any assignment pursuant to which
a Lender becomes a party to this Credit Agreement, the Lender assignor was
entitled to payments under subsection (a) of this Section 3.13 in respect
of United States withholding tax with respect to interest paid at such
date, then, to such extent, the term Taxes shall include (in addition to
withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender assignee on such date. If such Lender
fails to deliver the above forms or other evidence, then the Administrative
Agent may withhold from any interest payment to such Lender an amount equal
to the applicable withholding tax imposed by Sections 1441 and 1442 of the
Code, without reduction. If any Governmental Authority asserts that the
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of such Lender, such Lender shall indemnify the
Administrative Agent therefor, including all penalties and interest, any
taxes imposed by any jurisdiction on the amounts payable to the
Administrative Agent under this Section 3.13(f), and costs and expenses
(including Attorney Costs) of the Administrative Agent. For any period with
respect to which a Lender has failed to provide the Borrower with the above
forms or other evidence (other than if such failure is due to a change in
the applicable law, or in the interpretation or application thereof,
occurring after the date on which such form or other evidence originally
was required to be provided or if such form or other evidence otherwise is
not required, such Lender shall not be entitled to indemnification under
subsection (a) or (c) of this Section 3.13 with respect to Taxes imposed by
the United States by reason of such failure; provided, however, that should
a Lender become subject to Taxes because of its failure to deliver such
form or other evidence required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender in
recovering such Taxes. The obligation of the Lenders under this Section
3.13(f) shall survive the payment of all Credit Party Obligations and the
resignation or replacement of the Administrative Agent.
-32-
(g) In the event that an additional payment is made under Section
3.13(a) or (c) for the account of any Lender and such Lender, in its
reasonable judgment, determines that it has finally and irrevocably
received or been granted a credit against or release or remission for, or
repayment of, any tax paid or payable by it in respect of or calculated
with reference to the deduction or withholding giving rise to such payment,
such Lender shall, to the extent that it determines that it can do so
without prejudice to the retention of the amount of such credit, relief,
remission or repayment, pay to the Borrower such amount as such Lender
shall, in its reasonable judgment, have determined to be attributable to
such deduction or withholding and which will leave such Lender (after such
payment) in no worse position than it would have been in if the Borrower
had not been required to make such deduction or withholding. Nothing herein
contained shall interfere with the right of a Lender to arrange its tax
affairs in whatever manner it thinks fit nor oblige any Lender to claim any
tax credit or to disclose any information relating to its tax affairs or
any computations in respect thereof or require any Lender to do anything
that would prejudice its ability to benefit from any other credits,
reliefs, remissions or repayments to which it may be entitled.
3.14 Compensation.
Upon the written demand of any Lender, the Borrower shall promptly
compensate such Lender for and hold such Lender harmless from any loss, cost or
expense incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any
Eurodollar Loan on a day other than the last day of the Interest Period for
such Eurodollar Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure
of such Lender to make a Eurodollar Loan) to prepay, borrow, continue or
convert any Eurodollar Loan on the date or in the amount previously
requested by the Borrower.
The amount each such Lender shall be compensated pursuant to this Section 3.14
shall include, without limitation, (i) any loss incurred by such Lender in
connection with the re-employment of funds prepaid, repaid, not borrowed or
paid, as the case may be and (ii) any reasonable out-of-pocket expenses
(including Attorney Costs) incurred and reasonably attributable thereto.
For purposes of calculating amounts payable by the Borrower to the Lenders under
this Section 3.14, each Lender may deem that it funded each Eurodollar Loan made
by it at the Eurodollar Rate for such Eurodollar Loan by a matching deposit or
other borrowing in the applicable offshore Dollar interbank market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Loan was in fact so funded.
3.15 Determination and Survival of Provisions.
All determinations by the Administrative Agent or a Lender of amounts owing
under Sections 3.9 through 3.14, inclusive, shall, absent manifest error, be
conclusive and binding on
-33-
the parties hereto. In determining such amount, the Administrative Agent or such
Lender may use any reasonable averaging and attribution methods. Section 3.9
through 3.14, inclusive, shall survive the termination of this Credit Agreement
and the payment of all Credit Party Obligations.
3.16 Notification by Lenders.
Subject to Section 3.13(c), each Lender shall notify the Borrower (and any
applicable Credit Party) of any event that will entitle such Lender to
compensation under Section 3.9, 3.12, 3.13 or 3.14 as promptly as practicable,
but in any event within 90 days after such Lender obtains actual knowledge
thereof; provided, however, that if any Lender fails to give such notice within
90 days after it obtains actual knowledge of such an event, such Lender shall,
with respect to compensation payable pursuant to Section 3.9, 3.12, 3.13 or 3.14
in respect of any costs resulting from such event, only be entitled to payment
under Section 3.9, 3.12, 3.13 or 3.14 for costs incurred from and after the date
90 days prior to the date that such Lender gives such notice. If requested by
the Borrower, each Lender will furnish to Borrower within ten Business Days of
the time the Lender requests compensation under Section 3.9, 3.12, 3.13 or 3.14,
a certificate setting forth the basis, amount and reasonable detail of
computation of each request by such Lender for compensation under Section 3.9,
3.12, 3.13 or 3.14, which certificate shall, except for demonstrable error, be
final, conclusive and binding for all purposes.
3.17 Mitigation; Mandatory Assignment.
Each Lender shall use reasonable efforts to avoid or mitigate any increased
cost or suspension of the availability of an interest rate under Sections 3.9
through 3.14 above to the greatest extent practicable (including transferring
the Loans to another Lending Office or Affiliate of a Lender) unless, in the
reasonable opinion of such Lender, such efforts would be likely to have an
adverse effect upon it. In the event a Lender makes a request to the Borrower
for additional payments in accordance with Section 3.9, 3.11, 3.12, 3.13 or
3.14, then, provided that no Default or Event of Default has occurred and is
continuing at such time, the Borrower may, at its own expense (such expense to
include, without limitation, any transfer fee payable to the Administrative
Agent under Section 11.3(b)) and in its sole discretion, require such Lender to
transfer and assign in whole (but not in part), without recourse (in accordance
with and subject to the terms and conditions of Section 11.3(b)), all of its
interests, rights and obligations under this Credit Agreement to an Eligible
Assignee which shall assume such assigned obligations (which assignee may be
another Lender, if a Lender accepts such assignment); provided that (a) such
assignment shall not conflict with any law, rule or regulation or order of any
court or other Governmental Authority and (b) the Borrower or such assignee
shall have paid to the assigning Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the portion of
the Loans hereunder held by such assigning Lender and all other amounts owed to
such assigning Lender hereunder, including amounts owed pursuant to Sections 3.9
through 3.14 hereof.
-34-
SECTION 4
GUARANTY
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly and
severally, unconditionally guarantees to each Lender and the Administrative
Agent the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) and the timely performance of all other obligations under the Credit
Documents. This Guaranty is a guaranty of payment and not of collection and is a
continuing guaranty and shall apply to all Credit Party Obligations whenever
arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents, or any other agreement or instrument referred to
therein, to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor. Each Guarantor agrees
that this Guaranty may be enforced by the Lenders without the necessity at any
time of resorting to or exhausting any other security or collateral and without
the necessity at any time of having recourse to the Notes or any other of the
Credit Documents or any collateral, if any, hereafter securing the Credit Party
Obligations or otherwise and each Guarantor hereby waives the right to require
the Lenders to proceed against the Borrower or any other Person (including a
co-guarantor) or to require the Lenders to pursue any other remedy or enforce
any other right. Each Guarantor further agrees that it shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Credit Party Obligations for amounts paid under this
Guaranty until such time as the Lenders have been paid in full and all
Commitments under the Credit Agreement have been terminated. Each Guarantor
further agrees that nothing contained herein shall prevent the Lenders from
suing on the Notes or any of the other Credit Documents or foreclosing its
security interest in or Lien on any collateral, if any, securing the Credit
Party Obligations or from exercising any other rights available to it under this
Credit Agreement, the Notes, any other of the Credit Documents, or any other
instrument of security, if any, and the exercise of any of the aforesaid rights
and the completion of any foreclosure proceedings shall not constitute a
discharge of any of such Guarantor's obligations hereunder; it being the purpose
and intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances. Neither any
Guarantor's obligations under this Guaranty nor any remedy for the enforcement
thereof shall be impaired, modified, changed or released in any manner
whatsoever by an impairment, modification, change, release or limitation of the
liability of the Borrower or by reason of the bankruptcy or insolvency of the
Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Administrative Agent or any Lender upon this
Guaranty or acceptance of this Guaranty. The Credit Party Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty. All dealings between the Borrower and any of the Guarantors, on the
one hand, and
-35-
the Administrative Agent and the Lenders, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this
Guaranty. The Guarantors further agree to all rights of set-off as set forth in
Section 11.2.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the collateral, if any,
now or hereafter held for the Credit Party Obligations, if any, may be
exchanged, compromised or surrendered from time to time; (b) the Lenders shall
not have any obligation to protect, perfect, secure or insure any such security
interests, liens or encumbrances now or hereafter held, if any, for the Credit
Party Obligations or the properties subject thereto; (c) the time or place of
payment of the Credit Party Obligations may be changed or extended, in whole or
in part, to a time certain or otherwise, and may be renewed or accelerated, in
whole or in part; (d) the Borrower and any other party liable for payment under
the Credit Documents may be granted indulgences generally; (e) any of the
provisions of the Notes or any of the other Credit Documents may be modified,
amended or waived; (f) any party (including any co-guarantor) liable for the
payment thereof may be granted indulgences or be released; and (g) any deposit
balance for the credit of the Borrower or any other party liable for the payment
of the Credit Party Obligations or liable upon any security therefor may be
released, in whole or in part, at, before or after the stated, extended or
accelerated maturity of the Credit Party Obligations, all without notice to or
further assent by such Guarantor, which shall remain bound thereon,
notwithstanding any such exchange, compromise, surrender, extension, renewal,
acceleration, modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this Guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; and (e) all other notices to which
such Guarantor might otherwise be entitled.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable Attorney Costs) incurred by
the Administrative Agent or such Lender in connection with such rescission or
restoration, including any such costs and expenses incurred in defending against
any
-36-
claim alleging that such payment constituted a preference, fraudulent transfer
or similar payment under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand, and
the Administrative Agent and the Lenders, on the other hand, the Credit Party
Obligations may be declared to be forthwith due and payable as provided in
Section 9 (and shall be deemed to have become automatically due and payable in
the circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in any of
the other Credit Documents, to the extent the obligations of any 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 such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state or otherwise and including, without
limitation, the Bankruptcy Code).
4.8 Rights of Contribution.
The Credit Parties agree among themselves that, in connection with payments
made hereunder, each Credit Party shall have contribution rights against the
other Credit Parties as permitted under applicable law. Such contribution rights
shall be subordinate and subject in right of payment to the obligations of the
Credit Parties under the Credit Documents and no Credit Party shall exercise
such rights of contribution until all Credit Party Obligations have been paid in
full and the Commitments terminated.
4.9 Release of Guarantors.
Subject to Section 7.12(b), if any of the Guarantors shall cease to be a
Material Domestic Subsidiary of the Borrower for any reason subject to and in
accordance with the terms of the Credit Agreement, then such Guarantor shall,
automatically and without any further action on the part of any party to any
Credit Document, and upon notice to the Administrative Agent, be fully released
and discharged from all its liabilities and obligations under or in respect of
the Credit Documents to which such Guarantor is a party (other than liabilities
and obligations resulting from a demand on such Guarantor's Guaranty pursuant to
Section 9.2) and, promptly upon the request of the Borrower and at the expense
of the Borrower, the Administrative Agent shall execute such documents and take
such other action as is reasonably requested by the Borrower to evidence the
release and discharge of such Guarantor from all such liabilities and
obligations and
-37-
shall, if applicable, certify to the Borrower that such Guarantor has no
liabilities or obligations resulting from a demand on such Guarantor's Guaranty
pursuant to Section 9.2.
SECTION 5
CONDITIONS PRECEDENT
5.1 Closing Conditions.
This Credit Agreement shall become effective upon, and the obligation of
the Initial Lender to enter into this Credit Agreement is subject to, the
receipt by the Initial Lender of duly executed copies of this Credit Agreement.
5.2 Conditions to Funding of the Term Loan.
The obligation of the Initial Lender to make the initial Term Loan is
subject to satisfaction (or waiver) of the following conditions:
(a) Credit Documents. Receipt by the Initial Lender of duly executed
copies of the Note prior to the Funding Date.
(b) Authority Documents. Receipt by the Initial Lender of the
following with respect to each Credit Party, subject to the understanding
that the Initial Lender has already received organizational documents in
connection with the execution and delivery of the 2002 Credit Agreement and
will deem the conditions of subclause (i), (ii) and (iv) below satisfied
upon delivery of long form good standing certificates and organizational
documents as to the Borrower and any Credit Party which was not a party to
the 2002 Credit Agreement, together with bring-down telegrams with respect
to the other Credit Parties whose good standing certificates and
organizational documents were furnished previously:
(i) Organizational Documents. Copies of the articles or
certificates of incorporation or other organizational documents of
each Credit Party certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or other
jurisdiction of its formation and certified by a secretary or
assistant secretary of such Credit Party to be true and correct as of
the Funding Date.
(ii) Bylaws. A copy of the bylaws or other governing documents of
each Credit Party certified by a secretary or assistant secretary of
such Credit Party to be true and correct as of the Funding Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors or other governing body of each Credit Party approving and
adopting the Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery thereof,
certified by a secretary or assistant secretary of such Credit Party
to be true and correct and in full force and effect as of the Funding
Date.
-38-
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date in relation to the Funding Date by the
appropriate Governmental Authority of the state or other jurisdiction
of its formation.
(v) Incumbency. An incumbency certificate of each Credit Party
certified by a secretary or assistant secretary of such Credit Party
to be true and correct as of the Funding Date.
(c) Opinions of Counsel. Receipt by the Administrative Agent of
opinions reasonably satisfactory to the Administrative Agent, addressed to
the Administrative Agent on behalf of the Lenders and dated as of the
Funding Date.
(d) Officer's Certificates. The Administrative Agent shall have
received a certificate or certificates executed by an Authorized Officer of
the Borrower as of the Funding Date stating that (i) the financial
statements and information delivered to the Administrative Agent on or
before the Funding Date were prepared in good faith and that such financial
statements were prepared in accordance with GAAP and (ii) immediately after
giving effect to this Credit Agreement, the other Credit Documents and all
the transactions contemplated herein or therein to occur on such date, (A)
each Credit Party is Solvent and the Borrower and its Subsidiaries taken as
a whole are Solvent, (B) no Default or Event of Default exists, (C) all
representations and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, (D) the Credit
Parties are in compliance with each of the financial covenants set forth in
Section 7.2 and (E) the Borrower and each of its Material Domestic
Subsidiaries are in compliance with the terms of all of their material debt
obligations, including, without limitation, (I) the 2001 Senior Credit
Agreement, (II) the Senior Unsecured Notes and (III) the Convertible Notes.
(e) Material Adverse Effect. Since December 31, 2002 there shall not
have occurred a Material Adverse Effect.
(f) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably and timely requested
by any Lender through the Administrative Agent.
5.3 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
Initial Lender shall not be obligated to make the initial Loan unless:
(a) Notice. The Borrower shall have delivered to the Initial Lender,
an appropriate Notice of Borrowing, duly executed and completed, by the
time specified in Section 2.1.
-39-
(b) Representations and Warranties. The representations and warranties
made by the Credit Parties in any Credit Document are true and correct in
all material respects at and as if made as of such date except to the
extent they expressly and exclusively relate to an earlier date.
(c) No Default. No Default or Event of Default shall exist and be
continuing either prior to or after giving effect to such Loan.
(d) the date of the requested borrowing is on or prior to January 31,
2004.
The delivery of each Notice of Borrowing shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), and (d) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
The Credit Parties hereby represent to the Administrative Agent and each
Lender that:
6.1 Organization and Good Standing.
Each Credit Party (a) is either a partnership, a corporation or a limited
liability company duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) is duly qualified and in
good standing as a foreign organization and authorized to do business in every
other jurisdiction where its ownership or operation of property or the conduct
of its business would require it to be qualified, in good standing and
authorized, unless the failure to be so qualified, in good standing or
authorized would not have or would not reasonably be expected to have a Material
Adverse Effect and (c) has the power and authority to own and operate its
properties and to carry on its business as now conducted and as currently
proposed to be conducted.
6.2 Due Authorization.
Each Credit Party (a) has the power and authority to execute, deliver and
perform this Credit Agreement and the other Credit Documents to which it is a
party and to incur the obligations herein and therein provided for and (b) has
duly taken all necessary action to authorize, and is duly authorized, to
execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party.
6.3 Enforceable Obligations.
Each Credit Party has duly executed this Credit Agreement and each other
Credit Document to which such Credit Party is a party and this Credit Agreement
and such other Credit Documents constitute legal, valid and binding obligations
of such Credit Party enforceable against such Credit Party in accordance with
their respective terms, except as may be limited by bankruptcy or
-40-
insolvency laws or similar laws affecting creditors' rights generally or by
general equitable principles.
6.4 No Conflicts.
Neither the execution and delivery of the Credit Documents to which it is a
party, nor the consummation of the transactions contemplated herein and therein,
nor the performance of or compliance with the terms and provisions hereof and
thereof by a Credit Party will (a) violate, contravene or conflict with any
provision of such Credit Party's organizational documents, (b) violate,
contravene or conflict with any Requirement of Law (including, without
limitation, Regulations T, U or X), order, writ, judgment, injunction, decree,
license or permit applicable to such Credit Party which violation would have or
would reasonably be expected to have a Material Adverse Effect, (c) violate,
contravene or conflict with contractual provisions of, or cause an event of
default under, any indenture, loan agreement, mortgage, deed of trust, contract
or other agreement or instrument to which such Credit Party is a party or by
which it or its properties may be bound which violation would have or would
reasonably be expected to have a Material Adverse Effect, or (d) result in or
require the creation of any Lien upon or with respect to the properties of such
Credit Party.
6.5 Consents.
Except for consents, approvals and authorizations which have been obtained
or the absence of which would not have or would not reasonably be expected to
have a Material Adverse Effect, no consent, approval, authorization or order of,
or filing, registration or qualification with, any Governmental Authority,
equity owner or third party in respect of any Credit Party is required in
connection with the execution, delivery or performance of this Credit Agreement
or any of the other Credit Documents, or the consummation of any transaction
contemplated herein or therein by such Credit Party.
6.6 Financial Condition.
The financial statements delivered to the Administrative Agent and the
Lenders pursuant to Sections 7.1(a) and (b): (a) have been prepared in
accordance with GAAP and (b) present fairly the consolidated financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries as of such date and for such periods. Since December 31, 2002,
there has been no sale, transfer or other disposition by the Borrower or any of
its Subsidiaries of any material part of the business or property of the
Borrower and its Subsidiaries, taken as a whole, or purchase or other
acquisition by any such Person of any business or property (including any
Capital Stock of any other Person) material in relation to the consolidated
financial condition of the Borrower and its Subsidiaries, taken as a whole, in
each case, which, is not (i) reflected in the most recent financial statements
delivered to the Lenders prior to the Funding Date or pursuant to Section 7.1 or
in the notes thereto or (ii) otherwise permitted by the terms of this Credit
Agreement and communicated to the Administrative Agent and the Lenders.
-41-
6.7 No Material Change.
Since December 31, 2002, there has been no development or event relating to
or affecting the Borrower or any of its Subsidiaries which has had or would
reasonably be expected to have a Material Adverse Effect.
6.8 Disclosure.
Neither this Credit Agreement, nor any other Credit Document, nor any
financial statements delivered to the Administrative Agent or the Lenders nor
any other document, certificate or statement furnished to the Administrative
Agent or the Lenders by or on behalf of any Credit Party in connection with the
transactions contemplated hereby, taken as a whole, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained therein or herein not misleading.
6.9 No Default.
No Default or Event of Default has occurred and is continuing or would
result from the consummation of the transactions contemplated by this Credit
Agreement and the other Credit Documents.
6.10 Litigation.
Except as set forth in Schedule 6.10, 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 is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any of its Subsidiaries or against any
of its or their respective Properties (a) with respect to the Credit Documents
or any Loan or any of the transactions contemplated hereby or (b) which would
reasonably be expected to have a Material Adverse Effect.
6.11 Taxes.
The Borrower and each of its Subsidiaries has filed, or caused to be filed,
all material tax returns (federal, state, local and foreign) required to be
filed and has paid (a) all amounts of taxes shown thereon to be due (including
interest and penalties) and (b) all other material 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.
6.12 Compliance with Law.
Except to the extent the same would not have or would not reasonably be
expected to have a Material Adverse Effect:
-42-
(a) The Borrower and each of its Subsidiaries is in compliance with
all Requirements of Law (including, without limitation, Environmental Laws,
ERISA, Medicaid Regulations, Medicare Regulations, 42 U.S.C. Section
1320a-7b and 42 U.S.C. Section 1395nn) and all material orders, writs,
injunctions and decrees applicable to it, or to its Properties.
(b) (i) Neither the Borrower nor any of its Subsidiaries nor any
individual employed by the Borrower or any of its Subsidiaries who may
reasonably be expected to be excluded or suspended from participation in
any Medical Reimbursement Program for their corporate or individual actions
or failures to act; and (ii) there is no member of management continuing to
be employed by the Borrower or any of its Subsidiaries who may reasonably
be expected to have individual criminal culpability for healthcare matters
under investigation by 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 Governmental Authority.
(c) Current billing policies, arrangements, protocols and instructions
comply with all material requirements of Medical Reimbursement Programs and
are administered by properly trained personnel.
(d) Current medical director compensation arrangements and other
arrangements with referring physicians comply with state and federal
self-referral and anti-kickback laws, including without limitation 42
U.S.C. Section 1320a-7b(b)(1) - (b)(2) and 42 U.S.C. Section 1395nn.
6.13 Licensing and Accreditation.
Except to the extent the same would not have or would not be reasonably
expected to have a Material Adverse Effect, each of the Credit Parties has, to
the extent applicable: (a) obtained and maintains in good standing all required
licenses, permits, authorization and approvals of each Governmental Authority
necessary to the conduct of its business; (b) to the extent prudent and
customary in the industry in which it is engaged, obtained and maintains
accreditation from all generally recognized accrediting agencies (including, but
not limited to, CAP); (c) obtained and maintains CLIA certification; (d) entered
into and maintains in good standing its Medicare Provider Agreements and its
Medicaid Provider Agreements; and (e) ensured that all such required licenses,
certifications and accreditations are in full force and effect on the date
hereof and have not been revoked or suspended or otherwise limited.
6.14 Title to Properties, Liens.
The Borrower and each of its Subsidiaries, is the owner of, and has good
title to, or has a valid license or lease to use, all of its material
Properties. All Liens on the Properties of the Borrower and its Subsidiaries are
Permitted Liens.
-43-
6.15 Insurance.
The properties of the Borrower and each of its Subsidiaries are insured
with financially sound and reputable insurance companies that are not Affiliates
of the Borrower (except to the extent that self-insurance is maintained in
reasonable amounts), in such amounts, with such deductibles and covering such
risks, as is reasonable and prudent.
6.16 Use of Proceeds.
The proceeds of the Loans will be used solely for the purposes specified in
Section 7.10.
6.17 Government Regulation.
(a) "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the
Borrower and its Subsidiaries. None of the transactions contemplated by the
Credit Documents (including, without limitation, the direct or indirect use
of the proceeds of the Loans) will violate or result in a violation of (i)
the Securities Act, (ii) the Exchange Act or (iii) Regulations T, U or X.
(b) Neither the Borrower nor any of its Subsidiaries is subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act or the Investment Company Act of 1940, each as amended.
6.18 ERISA.
Except as would not result in or would not reasonably be expected to result
in a Material Adverse Effect:
(a) (i) No ERISA Event has occurred, and, to the best knowledge of the
Borrower, each of its Subsidiaries and each ERISA Affiliate, no event or
condition has occurred or exists as a result of which any ERISA Event could
reasonably be expected to occur, with respect to any Plan; (ii) no
"accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Code, whether or not waived, has occurred with
respect to any Plan and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code has been
made with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other applicable
federal or state laws; (iv) each Plan that is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter
from the IRS or an application for such a letter is currently being
processed by the IRS with respect thereto and, to the best knowledge of the
Borrower, each of its Subsidiaries and each ERISA Affiliate, nothing has
occurred which would prevent, or cause the loss of, such qualification; and
(v) no Lien in favor or the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.
-44-
(b) Neither the Borrower nor any Subsidiary of the Borrower nor any
ERISA Affiliate has incurred, or, to the best of each such party's
knowledge, is reasonably expected to incur, any liability under Title IV of
ERISA with respect to any Single Employer Plan, or any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither
the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has
received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the
meaning of Section 4245 of ERISA), or has been terminated (within the
meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best of
each such Person's knowledge, reasonably expected to be in reorganization,
insolvent, or terminated. Neither the Borrower nor any Subsidiary of the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
(c) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
has occurred with respect to a Plan which has subjected or may subject the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section
4975 of the Code, or under any agreement or other instrument pursuant to
which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
has agreed or is required to indemnify any person against any such
liability. There are no pending or, to the best knowledge of the Borrower,
each of its Subsidiaries and each ERISA Affiliate, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect
to any Plan that could reasonably be expected to have a Material Adverse
Effect.
(d) Each Plan that is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Code
apply has been administered in compliance in all material respects with
such sections.
6.19 Environmental Matters.
(a) Except as would not result in or would not reasonably be expected
to result in a Material Adverse Effect:
(i) Each of the real properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "Real Properties") and all
operations at the Real Properties are in compliance with all
applicable Environmental Laws, and there is no violation of any
Environmental Law with respect to the Real Properties or the
businesses operated by the Borrower or any of its Subsidiaries (the
"Businesses"), and there are no conditions relating to the Businesses
or Real Properties that would reasonably be expected to give rise to
liability under any applicable Environmental Laws.
(ii) No Credit Party has received any written notice of, or
inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding Hazardous Materials or compliance with Environmental Laws
with regard to any of the Real Properties or
-45-
the Businesses, nor, to the knowledge of the Borrower or any of its
Subsidiaries, is any such notice being threatened.
(iii) Hazardous Materials have not been transported or disposed
of from the Real Properties, or generated, treated, stored or disposed
of at, on or under any of the Real Properties or any other location,
in each case by, or on behalf or with the permission of, the Borrower
or any of its Subsidiaries in a manner that would give rise to
liability under any applicable Environmental Laws.
(iv) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened, under any Environmental Law to which the
Borrower or any of its Subsidiaries is or will be named as a party,
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 Borrower or any of its Subsidiaries, the Real
Properties or the Businesses.
(v) There has been no release (including, without limitation,
disposal) or threat of release of Hazardous Materials at or from the
Real Properties, or arising from or related to the operations of the
Borrower or any of its Subsidiaries in connection with the Real
Properties or otherwise in connection with the Businesses where such
release constituted a violation of, or would give rise to liability
under, any applicable Environmental Laws.
(vi) None of the Real Properties contains, or has previously
contained, any Hazardous Materials at, on or under the Real Properties
in amounts or concentrations that, if released, constitute or
constituted a violation of, or could give rise to liability under,
Environmental Laws.
(vii) Neither the Borrower, nor any of its Subsidiaries, has
assumed any liability of any Person (other than among themselves)
under any Environmental Law.
(b) The Credit Parties have adopted procedures that are designed to
(i) ensure that each Credit Party, any of its operations and each of the
Real Properties complies with applicable Environmental Laws and (ii)
minimize any liabilities or potential liabilities that each Credit Party,
any of its operations and each of the Real Properties may have under
applicable Environmental Laws.
6.20 Intellectual Property.
The Borrower and each of its Subsidiaries owns, or has the legal right to
use, all material patents, trademarks, tradenames, copyrights, technology,
know-how and processes (the "Intellectual Property") necessary for each of them
to conduct its business as currently conducted other than as would not have or
would not be reasonably expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any
-46-
Intellectual Property owned by the Borrower or any of its Subsidiaries or that
the Borrower or any of its Subsidiaries has a right to use or the validity or
effectiveness of any such Intellectual Property, nor does the Borrower or any of
its Subsidiaries have knowledge of any such claim, and, to the knowledge of the
Borrower and its Subsidiaries, the use of any Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person,
except for such claims and infringements that in the aggregate, would not have
or would not reasonably be expected to have a Material Adverse Effect.
6.21 Subsidiaries.
As of the Closing Date, set forth on Schedule 6.21 is a complete and
accurate list of all Subsidiaries of the Borrower and which of such Subsidiaries
are Material Domestic Subsidiaries.
6.22 Solvency.
Each Credit Party is and, after consummation of the transactions
contemplated by this Credit Agreement, will be Solvent.
SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest and fees and
other obligations then due and payable hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
7.1 Information Covenants.
It is agreed that so long as the Initial Lender is the sole Lender
hereunder and receives the information below in its capacity as a party to the
2001 Senior Credit Agreement or the 2002 Term Loan Credit Agreement, the
information covenant herein stated will be deemed satisfied. If such information
is not furnished as described in the preceding sentence, the Credit Parties will
furnish, or cause to be furnished, to the Administrative Agent and each of the
Lenders an electronic (if readily available) and a hard copy of:
(a) Annual Financial Statements. As soon as available, and in any
event within 95 days after the close of each fiscal year of the Borrower, a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated statements of operations, cash flows and changes in
stockholders' equity for such fiscal year, setting forth in comparative
form consolidated figures for the preceding fiscal year, all such
consolidated financial information described above to be audited by
independent certified public accountants of recognized national standing
and whose opinion shall be to the effect that such financial statements
fairly present in all material respects the consolidated financial
position, results of operations and cash flows of the Borrower and its
Subsidiaries as at the end of, and for, such fiscal year in
-47-
accordance with GAAP and shall not be limited as to the scope of the audit
or qualified in any manner.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 50 days after the close of each of the first three fiscal
quarters of the Borrower, a consolidated balance sheet and income statement
of the Borrower and its Subsidiaries, as of the end of such fiscal quarter,
together with related consolidated statements of operations, cash flows and
changes in stockholders' equity for such fiscal quarter setting forth in
each case in comparative form the corresponding consolidated statements of
operations and cash flows for the corresponding period of the preceding
fiscal year, and accompanied by a certificate of an Authorized Officer of
the Borrower to the effect that such quarterly financial statements fairly
present in all material respects the consolidated financial condition of
the Borrower and its Subsidiaries and in accordance with GAAP, subject to
changes resulting from audit and normal year-end audit adjustments.
Notwithstanding the above, it is understood and agreed that delivery of the
Borrower's applicable Form 10-Q shall satisfy the requirements of this
Section 7.1(b).
(c) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 7.1(a) and 7.1(b) above, a certificate
of an Authorized Officer of the Borrower substantially in the form of
Exhibit 7.1(c), (i) demonstrating compliance with the financial covenants
contained in Section 7.2 and the covenant requirements in Sections 7.12(b)
and 7.13 by calculation thereof as of the end of each such fiscal period,
(ii) demonstrating compliance with any other terms of this Credit Agreement
as reasonably requested by the Administrative Agent, (iii) stating that no
Default or Event of Default exists, or if any Default or Event of Default
does exist, specifying the nature and extent thereof and what action the
Borrower proposes to take with respect thereto and (iv) updating Schedule
6.21 as of the end of such fiscal period.
(d) Reports. Promptly upon transmission or receipt thereof, copies of
all financial statements, proxy statements, notices and reports as the
Borrower or any of its Subsidiaries shall send to shareholders of the
Borrower generally and, upon request of the Administrative Agent, copies of
any filings and registrations with, and reports to or from, any
Governmental Authority which has regulatory authority with respect to the
Borrower and its Subsidiaries.
(e) Notices. Upon a Credit Party obtaining knowledge thereof, the
Borrower will give written notice to the Administrative Agent promptly (and
in any event within five Business Days) of (i) the occurrence of an event
or condition consisting of a Default or Event of Default, specifying the
nature and existence thereof and what action the Borrower proposes to take
with respect thereto, (ii) the occurrence of any of the following with
respect to the Borrower or any of its Subsidiaries (A) the pendency or
commencement of any litigation, arbitration or governmental proceeding
against the Borrower or any of its Subsidiaries which (x) would have or
would reasonably be expected to have a Material Adverse Effect, or (y)
would result in a significant liability to the Credit Parties or (B)
material non-compliance with, or the institution of any proceedings against
the Borrower or any of its Subsidiaries with respect to, or the receipt of
written notice by such Person of
-48-
potential liability or responsibility for violation, or alleged violation
of, any Requirement of Law (including, without limitation, Environmental
Laws) the violation of which would have or would reasonably be expected to
have a Material Adverse Effect (iii) any change to the Debt Rating of the
Borrower, (iv) any investigation or proceeding against the Borrower or any
of its Subsidiaries to suspend, revoke or terminate, any Medicaid Provider
Agreement, Medicare Provider Agreement, or exclusion from any Medical
Reimbursement Program, which is reasonably expected to have a Material
Adverse Effect; and (v) any breach by the Borrower or any of its
Subsidiaries or any predecessor of the Borrower or any of its Subsidiaries
of the Corporate Integrity Agreement entered into with the OIG if such
breach causes the OIG to take any adverse action as a result of such
breach.
(f) ERISA. Upon the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate obtaining knowledge thereof, such Person shall give written
notice to the Administrative Agent and each of the Lenders promptly (and in
any event within two Business Days) of the occurrence of any of the
following events which has had or would be reasonably expected to have a
Material Adverse Effect: (i) any Reportable Event, that constitutes an
ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of
notice as prescribed in ERISA or otherwise of any withdrawal liability
assessed against the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of ERISA);
(iii) the failure to make full payment on or before the due date (including
extensions) thereof of all amounts which the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate is required to contribute to each Plan
pursuant to its terms and as required to meet the minimum funding standard
set forth in ERISA and the Code with respect thereto; or (iv) any change in
the funding status of any Plan that could have a Material Adverse Effect;
in each case together with a description of any such event or condition or
a copy of any such notice and a statement by an Authorized Officer of the
Borrower briefly setting forth the details regarding such event, condition,
or notice, and the action, if any, which has been or is being taken or is
proposed to be taken by such Person with respect thereto. Promptly upon
request, the Credit Parties shall furnish the Administrative Agent and the
Lenders with such additional information concerning any Plan as may be
reasonably requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and attachments
thereto required to be filed with the Department of Labor and/or the
Internal Revenue Service pursuant to ERISA and the Code, respectively, for
each "plan year" (within the meaning of Section 3(39) of ERISA).
(g) Environmental.
(i) Subsequent to a written notice from any Governmental
Authority that would reasonably be expected to result in a Material
Adverse Effect, or during the existence of an Event of Default, and
upon the written request of Administrative Agent, the Credit Parties
will furnish or cause to be furnished to the Administrative Agent, at
the Credit Parties' expense, a report of an environmental assessment
of reasonable scope, form and depth, including, where appropriate,
invasive soil or groundwater sampling, by a consultant reasonably
acceptable to the Administrative
-49-
Agent addressing the subject of such notice or, if during the
existence of an Event of Default, regarding any release or threat of
release of Hazardous Materials on any Property owned, leased or
operated by a Credit Party and the compliance by the Credit Parties
with Environmental Laws. If the Credit Parties fail to deliver such an
environmental report within seventy-five (75) days after receipt of
such written request, then the Administrative Agent may arrange for
same, and the Credit Parties hereby grant to the Administrative Agent
and its representatives access to the Real Properties and a license of
a scope reasonably necessary to undertake such an assessment
(including, where appropriate, invasive soil or groundwater sampling).
The reasonable cost of any assessment arranged for by the
Administrative Agent pursuant to this provision will be payable by the
Credit Parties on demand.
(ii) Each Credit Party will conduct and complete, or cause to be
conducted and completed, all investigations, studies, sampling, and
testing and all remedial, removal, and other actions necessary to
address all Hazardous Materials on, from, or affecting any Real
Properties to the extent necessary to be in compliance with all
Environmental Laws and all other applicable federal, state, and local
laws, regulations, rules and policies and with the orders and
directives of all Governmental Authorities exercising jurisdiction
over such Real Properties to the extent any failure would have or
would reasonably be expected to have a Material Adverse Effect.
(h) Other Information. With reasonable promptness upon any such request,
such other information regarding the business, properties or financial
condition of the Borrower and its Subsidiaries as the Administrative Agent
may reasonably request.
7.2 Financial Covenants.
(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 1.0.
(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 1.5 to 1.0.
7.3 Preservation of Existence and Franchises.
The Borrower will, and will cause its Subsidiaries to, do all things
necessary to preserve and keep in full force and effect its existence, rights,
franchises, Intellectual Property and authority except as permitted by Section
8.4; provided that neither the Borrower nor any of its Subsidiaries shall be
required to preserve any rights, franchises, Intellectual Property or authority
if the Borrower or such Subsidiary shall determine that the preservation thereof
is no longer desirable in the conduct of its business and if the loss thereof
would not have or would not reasonably be expected to have a Material Adverse
Effect.
-50-
7.4 Books and Records.
The Borrower will, and will cause its Subsidiaries to, keep complete and
accurate books and records of its transactions in order to produce its financial
statements in accordance with GAAP (including the establishment and maintenance
of appropriate reserves).
7.5 Compliance with Law.
Except to the extent the failure to do so would not have or would not
reasonably be expected to have a Material Adverse Effect, the Borrower will, and
will cause each of its Subsidiaries to, (a) comply with all Requirements of Law,
and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property (including, without limitation, Environmental
Laws and ERISA), (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 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 licenses, CLIA certifications, Medicare Provider
Agreements and Medicaid Provider Agreements; and (d) ensure that (i) 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.
7.6 Payment of Taxes and Other Indebtedness.
The Borrower will, and will cause its Subsidiaries to, pay, settle or
discharge (a) all material taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent, (b) all material lawful claims (including
claims for labor, materials and supplies) which, if unpaid, might give rise to a
Lien upon any of its properties, and (c) all of its other material Indebtedness
as it shall become due (to the extent such repayment is not otherwise prohibited
by this Credit Agreement); provided, however, that a Credit Party shall not be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would give rise to an immediate
right to foreclose or collect on a Lien securing such amounts or (ii) would have
or would reasonably be expected to have a Material Adverse Effect.
-51-
7.7 Insurance.
The Borrower will, and will cause each of its Subsidiaries to, at all times
maintain in full force and effect insurance (including worker's compensation,
liability, casualty and business interruption insurance) with reputable national
companies that are not Affiliates of the Borrower (except to the extent that
self-insurance is maintained in reasonable amounts), in such amounts, covering
such risks and liabilities as is reasonable and prudent.
7.8 Maintenance of Property.
The Borrower will, and will cause its Subsidiaries to, maintain and
preserve its properties and equipment in good repair, working order and
condition, normal wear and tear excepted, and will make, or cause to be made, in
such properties and equipment from time to time all repairs, renewals,
replacements, extensions, additions, betterments and improvements thereto as may
be needed or proper, in each case to the extent and in the manner customary for
companies in similar businesses.
7.9 Performance of Obligations.
Except to the extent the failure to do so would not have or would not
reasonably be expected to have a Material Adverse Effect, the Borrower will, and
will cause its Subsidiaries to, perform all of its obligations under the terms
of all contracts, agreements or other agreements not evidencing Indebtedness to
which it is a party or by which it or its Properties may be bound.
7.10 Use of Proceeds.
The Borrower will use the proceeds of the Loans for its general corporate
purposes.
7.11 Audits/Inspections.
Upon reasonable notice and during normal business hours, but not more than
once per calendar year, the Borrower will, and will cause each of its
Subsidiaries to, permit representatives appointed by the Administrative Agent or
any Lender, including, without limitation, independent accountants, agents,
attorneys and appraisers to visit and inspect the Borrower's or any Subsidiary's
Property, including its books and records, its accounts receivable and
inventory, its facilities and its other business assets, and to make photocopies
or photographs thereof and to write down and record any information such
representative obtains and shall permit the Administrative Agent, any Lender or
its representatives to investigate and verify the accuracy of information
provided to the Administrative Agent or the Lenders and to discuss all such
matters with the officers, employees and representatives of the Borrower and/or
its Subsidiaries; provided, however, during the existence of a Default or Event
of Default, the Administrative Agent and the Lenders may request as many
inspections as reasonable under the circumstances. Any expenses incurred in
connection with this Section 7.11 shall be for the account of the Lenders unless
an Event of Default exists in which case such expenses shall be for the account
of the Borrower. Any representatives appointed by the Administrative Agent shall
sign a confidentiality agreement reasonably acceptable to the Borrower prior to
any visit, investigation, inspection or verification permitted by this Section
7.11.
-52-
7.12 Additional Credit Parties.
(a) At the time any Person becomes a Material Domestic Subsidiary or
at the time any Subsidiary of the Borrower guaranties the 2001 Senior
Credit Agreement or the Senior Unsecured Notes (if it is not already a
Guarantor), the Borrower shall so notify the Administrative Agent and
promptly thereafter (but in any event within 30 days) shall cause such
Person to (i) execute a Joinder Agreement in substantially the same form as
Exhibit 7.12, and (ii) deliver such other documentation as the
Administrative Agent may reasonably request in connection with the
foregoing, including, without limitation, certified resolutions and other
organizational and authorizing documents of such Person and favorable
opinions of counsel to such Person (which shall cover, among other things,
the legality, validity, binding effect and enforceability of the
documentation referred to above), all in form, content and scope reasonably
satisfactory to the Administrative Agent.
(b) If at any time Non-Material Domestic Subsidiaries own assets in an
aggregate amount greater than five percent (5%) of Total Assets or produce
revenues in an aggregate amount greater than five percent (5%) of the total
revenues of the Borrower and its Subsidiaries on a consolidated basis, the
Borrower will designate one or more Non-Material Domestic Subsidiaries to
become a Guarantor (and such Non-Material Domestic Subsidiary shall become
a Guarantor in accordance with clause (a) above) so that after giving
effect to such designation and action, Non-Material Domestic Subsidiaries
own assets in the aggregate of equal to or less than five percent (5%) of
Total Assets and produce revenues in an aggregate amount equal to or less
than five percent (5%) of the total revenues of the Borrower and its
Subsidiaries on a consolidated basis.
7.13 Credit Party Revenues.
The Borrower will take such action as is necessary to cause the aggregate
annual net revenues of the Credit Parties, as of the end of each fiscal quarter
for the prior twelve month period, to be greater than or equal to the lesser of
(a) $2,800,000,000 or (b) 80% of the total consolidated annual net revenues of
the Borrower and its Subsidiaries for the prior twelve month period.
7.14 Compliance Program.
The Borrower will, and will cause each of its Domestic Subsidiaries that
operates a clinical laboratory to, maintain, and be operated in accordance with,
a compliance program which is reasonably designed to provide effective internal
controls that promote adherence to applicable federal and state law and the
program requirements of federal and state health plans, and which includes the
implementation of internal audits and monitoring on a regular basis to monitor
compliance with the requirements of the compliance program and applicable law,
regulations and company policies.
-53-
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest, fees and
other obligations then due and payable hereunder, have been paid in full and the
Commitments hereunder shall have terminated:
8.1 Indebtedness.
The Borrower will not permit any of its Subsidiaries to, contract, create,
incur, assume or permit to exist any Indebtedness, other than:
(a) Guaranty Obligations arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness in respect of current accounts payable and accrued
expenses incurred in the ordinary course of business;
(c) Indebtedness owing by a Subsidiary of the Borrower to the Borrower
or another Subsidiary of the Borrower;
(d) purchase money Indebtedness (including Capital Leases) to finance
the purchase of fixed assets (including equipment); provided that (i) the
total of all such Indebtedness shall not exceed an aggregate principal
amount of $50,000,000 (less any purchase money Indebtedness incurred by the
Borrower) at any one time outstanding; (ii) such Indebtedness when incurred
shall not exceed the purchase price of the asset(s) financed; and (iii) no
such Indebtedness shall be refinanced for a principal amount in excess of
the principal balance outstanding thereon at the time of such refinancing;
(e) Indebtedness arising from Permitted Receivables Financings in an
amount not to exceed $450,000,000, in the aggregate (less any Indebtedness
incurred by the Borrower arising from Permitted Receivables Financings), at
any one time outstanding;
(f) Indebtedness evidenced by Hedging Agreements entered into in the
ordinary course of business and not for speculative purposes;
(g) any guaranty of Indebtedness of the Borrower;
(h) Indebtedness incurred after the Closing Date in connection with
the acquisition of a Person or Property as long as such Indebtedness
existed prior to such acquisition and was not created in anticipation
thereof;
(i) Indebtedness existing on the Closing Date as set forth on Schedule
8.1; and
-54-
(j) other unsecured Indebtedness in an amount not to exceed
$200,000,000, in the aggregate, at any one time outstanding.
8.2 Liens.
The Borrower will not, nor will it permit its Subsidiaries to, contract,
create, incur, assume or permit to exist any Lien with respect to any of its
Property of any kind (whether real or personal, tangible or intangible), whether
now owned or after acquired, other than Permitted Liens.
8.3 Nature of Business.
The Borrower will not, nor will it permit its Subsidiaries to, alter the
character of its business from that conducted as of the Closing Date or engage
in any substantial manner in any business other than (a) the business conducted
by the Borrower and its Subsidiaries as of the Closing Date, (b) the business of
MedPlus and its Subsidiaries and (c) other healthcare-related businesses.
8.4 Consolidation and Merger.
The Borrower will not, nor will it permit any Subsidiary to, enter into any
transaction of merger or consolidation or liquidate, wind up or dissolve itself,
or suffer any such liquidation, wind-up or dissolution; provided that (subject
to Sections 7.12 and 7.13) (a) a Subsidiary of the Borrower may merge into the
Borrower or another Subsidiary of the Borrower, (b) a Subsidiary of the Borrower
may merge or consolidate with another Person in a transaction otherwise
permitted by Section 8.5 or (c) the Borrower or a Subsidiary of the Borrower may
merge or consolidate with or into another Person if the following conditions are
satisfied:
(i) if such transaction involves total consideration (cash and
non-cash) in excess of $100,000,000, the Administrative Agent is given
prior written notice of such action;
(ii) if the merger or consolidation involves a Credit Party, the
surviving entity of such merger or consolidation shall either (A) be such
Credit Party or (B) be a Subsidiary of the Borrower and expressly assume in
writing all of the obligations of such Credit Party under the Credit
Documents; provided that if the transaction is between the Borrower and
another Person, the Borrower must be the surviving entity;
(iii) the Credit Parties execute and deliver such documents,
instruments and certificates as the Administrative Agent may reasonably
request; and
(iv) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing.
8.5 Sale or Lease of Assets.
The Borrower will not, nor will it permit its Subsidiaries to, convey,
sell, lease, transfer or otherwise voluntarily dispose of, in one transaction or
a series of transactions, all or any part of its
-55-
business or assets whether now owned or hereafter acquired, including, without
limitation, inventory, receivables, equipment, real property interests (whether
owned or leasehold) and securities, other than a sale, lease, transfer or other
disposal of (a) subject to Sections 7.12 and 7.13, assets from the Borrower or
one of its Subsidiaries to each other; (b) inventory and supplies in the
ordinary course of business; (c) obsolete, surplus, slow-moving, idle or
worn-out assets no longer used or useful in the business of such Credit Party or
the trade-in of equipment for equipment in better condition or of better
quality; (d) assets which constitute a Permitted Investment in the ordinary
course of business; (e) Receivables pursuant to a Permitted Receivables
Financing; (f) Investments in the Strategic Investments Portfolio; and (g)
assets of the Borrower and its Subsidiaries, in addition to those permitted
above in this Section 8.5; provided that in the case of this clause (g) (i) no
Event of Default exists prior to such transfer, (ii) no Default or Event of
Default exists after giving effect to such transfer and (iii) after giving
effect to such transfer, the aggregate amount of all such transfers, calculated
on a net book value basis, does not exceed ten percent (10%) of Total Assets, as
determined on the last day of the most recently ended fiscal quarter of the
Borrower for which an officer's certificate has been delivered pursuant to
Section 7.1(c).
8.6 Investments.
The Borrower will not, nor will it permit its Subsidiaries to, make or
permit to exist any Investments except for Permitted Investments.
8.7 Transactions with Affiliates.
The Borrower will not, nor will it permit its Subsidiaries to, enter into
any transaction or series of transactions, whether or not in the ordinary course
of business, with any officer, director, shareholder, Subsidiary or Affiliate
other than on terms and conditions substantially as favorable as would be
obtainable in a comparable arm's-length transaction with a Person other than an
officer, director, shareholder, Subsidiary or Affiliate, except that,
notwithstanding the foregoing, each of the following shall be permitted: (a)
transactions between or among the Credit Parties; (b) transactions between or
among the Borrower and its wholly owned Subsidiaries as long as such transaction
is not disadvantageous to the Lenders in any material respect; (c) transactions
between or among the Borrower or one or more of its wholly owned Subsidiaries
(on the one hand) and one of the non-wholly owned Subsidiaries of the Borrower
(on the other hand) as long as none of the equity of such non-wholly owned
Subsidiary is owned or controlled by an officer or director of any Credit Party;
(d) advances to employees permitted by clause (f) of the definition of Permitted
Investments; (e) Dividends; (f) fees, compensation and other benefits paid to,
and customary indemnity and reimbursement provided on behalf of, officers,
directors and employees of any Credit Party in the ordinary course of business;
(g) any employment agreements entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business; (h) any Permitted Receivables
Financing; (i) the SBCL Acquisition Agreement and each agreement contemplated
thereunder (including any registration rights agreement or purchase agreement
related thereto) as in effect on June 27, 2001 and (j) transactions and
agreements in existence on the Closing Date and listed on Schedule 8.7 and, in
each case, any amendment thereto, that is not disadvantageous to the Lenders in
any material respect.
-56-
8.8 Fiscal Year; Accounting; Organizational Documents.
The Borrower will not, nor will it permit its Subsidiaries to, unless such
action would not affect the calculation of the financial covenants in Section
7.2 or would not or would not reasonably be likely to affect the rights of the
Lenders under the Credit Documents: (a) change its fiscal year other than
changing the fiscal year of a Subsidiary of the Borrower to a calendar year end,
(b) change its accounting procedures, except as a result of changes in GAAP and
in accordance with Section 1.3 or (c) change its organizational or governing
documents.
8.9 Stock Repurchases.
The Borrower will not, nor will it permit its Subsidiaries to, directly or
indirectly, purchase, redeem or otherwise acquire or retire or make any
provisions for redemption, acquisition or retirement of any shares of the
Capital Stock of the Borrower of any class or any warrants or options to
purchase any such shares (collectively, a "Stock Repurchase"); provided that the
Borrower or its Subsidiaries may consummate Stock Repurchases (a) in an amount
up to $50,000,000, in the aggregate, during any consecutive period during the
term of this Credit Agreement that the Leverage Ratio is greater than or equal
to 2.75 to 1.0 and (b) in an unlimited amount as long as (i) the Leverage Ratio
(A) as of the end of the most recent fiscal quarter of the Borrower for which an
officer's certificate has been delivered pursuant to Section 7.1(c) is less than
2.75 to 1.0 and (B) on a Pro Forma Basis giving effect to such Stock Repurchase,
is less than 2.75 to 1.0, (ii) if (A) the amount of Stock Repurchases during the
lesser of (x) the twelve month period preceding the anticipated Stock Repurchase
or (y) the period from the date of the last certificate delivered pursuant to
this clause (ii) and the date of the anticipated Stock Repurchase plus (B) the
amount of the anticipated Stock Repurchase exceeds, in the aggregate,
$100,000,000, the Borrower shall deliver to the Administrative Agent, prior to
making such Stock Repurchase, a certificate of an Authorized Officer of the
Borrower providing calculations showing that the requirement in clause (b)(i)(B)
above is accurate, (iii) on the date of such Stock Repurchase no Event of
Default exists and (iv) after giving effect to such Stock Repurchase no Default
or Event of Default exists.
8.10 Sale/Leasebacks.
(a) Except as set forth in clause (b) below, the Borrower will not,
and will not permit any Subsidiary to, enter into any Sale and Leaseback
Transaction with respect to any Principal Property unless:
(i) the Sale and Leaseback Transaction is solely with the
Borrower or a Guarantor; or
(ii) the lease is for a period not in excess of five years,
including renewal rights; or
(iii) prior to or within 270 days after the completion of the
sale of such Principal Property in connection with the Sale and
Leaseback Transaction, the Borrower or its Subsidiary applies the net
cash proceeds of the sale of such
-57-
Principal Property to: (A) the prepayment of the Revolving Loans (as
defined in the 2001 Senior Credit Agreement) under the 2001 Senior
Credit Agreement (with a corresponding permanent reduction in the
Revolving Committed Amount (as defined in the 2001 Senior Credit
Agreement)) or the prepayment of debt ranking equally with such
Revolving Loans; or (B) the acquisition of different property,
facilities or equipment or the expansion of the Borrower and its
Subsidiaries' existing business, including the acquisition of other
businesses.
(b) In addition to the Sale and Leaseback Transactions permitted by
clause (a) above, the Borrower or any of its Subsidiaries may enter into
any Sale and Leaseback Transactions if all Attributable Debt (measured, in
each case, at the time such Sale and Leaseback Transaction is entered into
by the Borrower or its Subsidiary) in respect of such Sale and Leaseback
Transactions (not including any Sale and Leaseback Transactions permitted
under clause (a) above), in the aggregate, does not exceed 5% of Total
Assets.
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence, and during the
continuation, of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall default in the payment (i) when
due of any principal of any of the Loans or (ii) within three Business Days
of when due of any interest on the Loans or any fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith.
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material
respect on the date as of which it was made or deemed to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.2, 7.3, 7.10, 7.12, 7.13
or 7.15 or Section 8 inclusive;
(ii) default in the due performance or observance by it of any
term, covenant or agreement contained in Section 7.1 (excepting
Section 7.1(e) for which the unremedied period shall only be five
Business Days) and 7.11 and such default shall continue unremedied for
a period of ten Business Days; or
-58-
(iii) default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in
subsections (a), (b) or (c)(i) or (ii) of this Section 9.1) contained
in this Credit Agreement and such default shall continue unremedied
for a period of at least 30 days after the earlier of an Authorized
Officer of the Borrower becoming aware of such default or notice
thereof given by the Administrative Agent.
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of
the other Credit Documents and such default shall continue unremedied for a
period of at least 30 days after the earlier of an Authorized Officer of
the Borrower becoming aware of such default or notice thereof given by the
Administrative Agent, (ii) any Credit Document shall fail to be in full
force and effect or any Credit Party shall so assert or (iii) any Credit
Document shall fail to give the Administrative Agent and/or the Lenders the
rights, powers and privileges purported to be created by such Credit
Document.
(e) Guaranties. The guaranty given by the Credit Parties hereunder or
by any Additional Credit Party or material provision thereof shall cease to
be in full force and effect, or any Guarantor or any Person acting by or on
behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under such guaranty or such Guarantor shall default in the due
payment or performance of such guaranty.
(f) Bankruptcy, etc. The occurrence of any of the following with
respect to a Credit Party (i) a court or governmental agency having
jurisdiction in the premises shall enter a decree or order for relief in
respect of a Credit Party in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator,
administrator or similar official of a Credit Party or for any substantial
part of its Property or ordering the winding up or liquidation of, or an
administrator in respect of, its affairs; or (ii) an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter
in effect is commenced against a Credit Party and such petition remains
unstayed and in effect for a period of 60 consecutive days; or (iii) a
Credit Party shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under
any such law, or consent to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator,
administrator or similar official of such Person or any substantial part of
its Property or make any general assignment for the benefit of creditors;
or (iv) a Credit Party shall fail generally, or shall admit in writing its
inability, to pay its debts as they become due or any action shall be taken
by such Person in furtherance of any of the aforesaid purposes.
(g) Defaults under Other Indebtedness. With respect to any
Indebtedness in excess of $50,000,000 (other than Indebtedness outstanding
under this Credit Agreement) of the Borrower or any of its Subsidiaries (A)
such Person shall (x) default in any payment (beyond the applicable grace
period with respect thereto, if any) with respect to any such
-59-
Indebtedness, or (y) default (after giving effect to any applicable grace
period) in the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition exist,
the effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or agent on
behalf of such holders, if any) to require (determined without regard to
whether any notice or lapse of time is required) any such Indebtedness to
become due prior to its stated maturity; or (B) any such Indebtedness shall
be declared due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment prior to the stated maturity
thereof; or (C) any such Indebtedness shall mature and remain unpaid.
(h) Judgments. One or more judgments, orders, or decrees shall be
entered against any one or more of the Borrower and its Subsidiaries
involving a liability of $50,000,000 or more, in the aggregate, (to the
extent not paid, covered by insurance provided by a carrier who has
acknowledged coverage or covered by an indemnification from Corning
Incorporated or SmithKline Beecham PLC) and such judgments, orders or
decrees (i) are the subject of any enforcement proceeding commenced by any
creditor or (ii) shall continue unsatisfied, undischarged and unstayed for
a period ending on the first to occur of (A) the last day on which such
judgment, order or decree becomes final and unappealable or (B) 60 days.
(i) ERISA. The occurrence of any of the following events or conditions
which individually or in the aggregate has had or would reasonably be
expected to have a Material Adverse Effect: (i) any "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, shall exist with respect to any
Plan, other than a Multiemployer Plan, or any Lien shall arise on the
assets of the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate in favor of the PBGC or a Plan, other than a Multiemployer Plan;
(ii) an ERISA Event shall occur with respect to a Single Employer Plan,
which is reasonably likely to result in the termination of such Plan for
purposes of Title IV of ERISA; (iii) an ERISA Event shall occur with
respect to a Multiemployer Plan or Multiple Employer Plan, which is
reasonably likely to result in (A) the termination of such plan for
purposes of Title IV of ERISA, or (B) the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate incurring any liability in connection with
a withdrawal from, reorganization of (within the meaning of Section 4241 of
ERISA), or insolvency (within the meaning of Section 4245 of ERISA) of such
plan; (iv) any prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) or breach of fiduciary responsibility
shall occur which may subject the Borrower, any Subsidiary of the Borrower
or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or
502(l) of ERISA or Section 4975 of the Code, or under any agreement or
other instrument pursuant to which the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate has agreed or is required to indemnify any
Person against any such liability; or (v) the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate fails to pay when due, after the
expiration of any applicable grace period, any installment payment with
respect to its withdrawal liability under Section 4201 of ERISA under a
Multiemployer Plan in an aggregate amount in excess of $50,000,000.
-60-
(j) Ownership. There shall occur a Change of Control.
(k) Cross Default. There shall occur an Event of Default as defined in
the 2001 Senior Credit Agreement to the extent the 2001 Senior Credit
Agreement has not been terminated, or an Event of Default as defined in the
2002 Term Loan Agreement, unless the 2002 Term Loan Agreement has been
fully repaid and the obligations thereunder satisfied (other than
contingent obligations therein stated to survive termination).
9.2 Acceleration; Remedies.
Upon the occurrence and during the continuation of an Event of Default, the
Administrative Agent may or shall, upon the request and direction of the
Required Lenders, take the following actions without prejudice to the rights of
the Administrative Agent or any Lender to enforce its claims against the Credit
Parties, except as otherwise specifically provided for herein:
(a) Termination of Commitments. Declare the Commitment terminated
whereupon the Commitment shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other Indebtedness
or obligations of any and every kind owing by a Credit Party to any of the
Lenders under the Credit Documents to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Credit Parties.
(c) Enforcement of Rights. To the extent permitted by law, enforce any
and all rights and interests created and existing under the Credit
Documents, including, without limitation, all rights and remedies against a
Guarantor and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitment shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid fees and
other indebtedness or obligations owing to the Lenders hereunder shall
immediately become due and payable without the giving of any notice or other
action by the Administrative Agent or the Lenders, which notice or other action
is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Administrative Agent, each Lender has, to the extent permitted by law, a
separate right of payment and shall be considered a separate "creditor" holding
a separate "claim" within the meaning of Section 101(5) of the Bankruptcy Code
or any other insolvency statute.
9.3 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after the
occurrence and during the continuation of an Event of Default, all amounts
collected or received by the
-61-
Administrative Agent or any Lender on account of amounts outstanding under any
of the Credit Documents 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' Costs) of the
Administrative Agent or any of the Lenders in connection with enforcing the
rights of the Lenders under the Credit Documents, pro rata as set forth
below;
SECOND, to payment of any fees owed to the Administrative Agent or any
Lender, pro rata as set forth below;
THIRD, to the payment of all accrued interest payable to the Lenders
hereunder, pro rata as set forth below;
FOURTH, to the payment of the outstanding principal amount of the
Loans, pro rata as set forth below;
FIFTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FOURTH" above; and
SIXTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (b) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding Loans
held by such Lender bears to the aggregate then outstanding Loans of amounts
available to be applied).
SECTION 10
AGENCY PROVISIONS
10.1 Appointment. Each Lender hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Credit Agreement and each other Credit Document and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Credit Agreement or any other Credit Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere herein or in any other Credit Document, the
Administrative Agent shall not have any duties or responsibilities, except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary or trustee relationship with any Lender or participant,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit
-62-
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "agent" herein and in the other Credit Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
10.2 Delegation of Duties.
The Administrative Agent may execute any of its duties under this Credit
Agreement or any other Credit Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects with reasonable care.
10.3 Exculpatory Provisions.
No Agent-Related Person shall (a) be liable for any action taken or omitted
to be taken by any of them under or in connection with this Credit Agreement or
any other Credit Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct in connection with its duties
expressly set forth herein), or (b) be responsible in any manner to any Lender
or participant for any recital, statement, representation or warranty made by
any Credit Party or any officer thereof, contained herein or in any other Credit
Document, 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 Credit Agreement or any other Credit Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Credit Agreement or any other Credit Document, or for any failure of any Credit
Party or any other party to any Credit Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender or participant to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this Credit
Agreement or any other Credit Document, or to inspect the properties, books or
records of any Credit Party or any Affiliate thereof.
10.4 Reliance on Communications.
(a) The Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, communication, signature,
resolution, representation, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon
advice and statements of legal counsel (including counsel to any Credit
Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat each
Lender as the owner of its interests hereunder for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have
been delivered to the Administrative Agent in accordance with
-63-
Section 11.3(b). The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Credit Document unless it
shall first receive such advice or concurrence of the Required Lenders as
it deems appropriate and, if it so requests, 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 this Credit
Agreement or any other Credit Document in accordance with a request or
consent of the Required Lenders or all the Lenders, if required hereunder,
and such request and any action taken or failure to act pursuant thereto
shall be binding upon all the Lenders and participants, and their
respective successors and assigns. Where this Credit Agreement expressly
permits or prohibits an action unless the Required Lenders otherwise
determine, the Administrative Agent shall, and in all other instances, the
Administrative Agent may, but shall not be required to, initiate any
solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 5.1, each Lender that has signed this Credit Agreement
shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the
Administrative Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to a Lender.
10.5 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, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Administrative Agent for the account of the Lenders, unless the
Administrative Agent shall have received written notice from a Lender or the
Borrower referring to this Credit Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be reasonably directed by the Required Lenders in
accordance with Section 9.2; provided, however, that unless and until the
Administrative Agent has received any such direction, 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 or in the best interest of the Lenders.
10.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person or any
-64-
other Lender and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
prospects, operations, Property, financial and other condition and
creditworthiness of the Credit Parties and their respective Affiliates, and all
applicable bank or other regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Credit
Agreement and to extend credit to the Borrower hereunder. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person 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 Credit Agreement and the other Credit Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, 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 herein, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, Property, financial and other
condition or creditworthiness of any of the Credit Parties or any of their
respective Affiliates which may come into the possession of any Agent-Related
Person.
10.7 Indemnification.
Whether or not the transactions contemplated hereby are consummated, the
Lenders shall indemnify upon demand each Agent-Related Person (to the extent not
reimbursed by or on behalf of any Credit Party and without limiting the
obligation of any Credit Party to do so), pro rata, and hold harmless each
Agent-Related Person from and against any and all Indemnified Liabilities
incurred by it; provided, however, that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Agent-Related Person's gross negligence or
willful misconduct; it being understood that no action taken in accordance with
the directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section 10.7. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Credit Agreement, any other Credit Document, or any document contemplated
by or referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Credit Parties. The
undertaking in this Section 10.7 shall survive termination of the Commitments,
the payment of all Obligations hereunder and the resignation or replacement of
the Administrative Agent.
10.8 Administrative Agent in Its Individual Capacity.
Sumitomo Mitsui Banking Corporation ("SMBC") may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Credit Parties and
their respective Affiliates as though SMBC were not the Administrative Agent
-65-
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, SMBC or its Affiliates may
receive information regarding any Credit Party or its Affiliates (including
information that may be subject to confidentiality obligations in favor of such
Credit Party or such Affiliate) and that the Administrative Agent shall be under
no obligation to provide such information to them. With respect to its Loan,
SMBC shall have the same rights and powers under this Credit Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" include SMBC in its
individual capacity.
10.9 Successor Agent.
The Administrative Agent may resign as Administrative Agent upon 30 days'
notice to the Lenders. If the Administrative Agent resigns under this Credit
Agreement, the Required Lenders shall appoint from among the Lenders a successor
administrative agent for the Lenders which successor administrative agent (such
appointment, absent the existence of an Event of Default, to be subject to the
consent of the Borrower, which consent of the Borrower shall not be unreasonably
withheld or delayed). If no successor administrative agent is appointed prior to
the effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Borrower, a successor administrative agent from among the Lenders. Upon the
acceptance of its appointment as successor administrative agent hereunder, such
successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "Administrative Agent"
shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Section 10 and Sections 11.5 and
11.10 shall continue to inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Credit Agreement.
If no successor administrative agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
SECTION 11
MISCELLANEOUS
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set forth on Schedule 11.1, (c) the Business Day following the day on
which the same has been delivered prepaid (or subject 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 to the respective
-66-
parties at the address or telecopy numbers set forth on Schedule 11.1, or at
such other address as such party may specify by written notice to the other
parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable
law or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies
described in Section 9.2, each Lender is authorized at any time and from
time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set-off and to
appropriate and apply any and all deposits (general or special) and any
other indebtedness at any time held or owing by such Lender (including,
without limitation, branches, agencies or Affiliates of such Lender
wherever located) to or for the credit or the account of any Credit Party
against obligations and liabilities of such Credit Party to the Lenders
hereunder, under the Notes, the other Credit Documents or otherwise,
irrespective of whether the Administrative Agent or the Lenders shall have
made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such
set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the
books of such Lender subsequent thereto. The Credit Parties hereby agree
that any Person purchasing a participation in the Loans and Commitments
hereunder pursuant to Sections 11.3(e) or 3.8 may exercise all rights of
set-off with respect to its participation interest as fully as if such
Person were a Lender hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and inure
to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that none of the Credit Parties may
assign and transfer any of its interests (except as permitted by Section
8.4 or 8.5) without the prior written consent of the Lenders; and provided
further that the rights of each Lender to transfer, assign or grant
participations in its rights and/or obligations hereunder shall be limited
as set forth below in this Section 11.3.
(b) Assignments. Each Lender may assign to one or more Eligible
Assignees all or a portion of its rights and obligations under this Credit
Agreement (including, without limitation, all or a portion of its Loans,
its Notes and its Commitments); provided, however, that:
(i) each such assignment shall be to an Eligible Assignee;
(ii) except (A) in the case of an assignment to another Lender,
(B) in the case of an assignment of all of a Lender's rights and
obligations under this Credit Agreement, or (C) with the consent of
the Administrative Agent and the Borrower, any such partial assignment
shall be in an amount at least equal to $5,000,000 (or, if less, the
remaining amount of the outstanding Term Loan, of such assigning
Lender) or an integral multiple of $500,000 in excess thereof;
-67-
(iii) each such assignment by a Lender shall be of a constant,
and not varying, percentage of all of its rights and obligations under
this Credit Agreement and the Notes; and
(iv) the parties to such assignment shall execute and deliver to
the Administrative Agent for its acceptance an Assignment Agreement in
substantially the form of Exhibit 11.3(b), together with a processing
fee from the assignor of $3,500.
Upon execution, delivery, and acceptance of such Assignment Agreement, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender
hereunder and the assigning Lender shall, to the extent of such assignment,
relinquish its rights and be released from its obligations under this
Credit Agreement. Upon the consummation of any assignment pursuant to this
Section 11.3(b), the assignor, the Administrative Agent and the Borrower
shall make appropriate arrangements so that, if required or requested, new
Notes are issued to the assignor and the assignee. If the assignee is a
foreign corporation, foreign partnership or foreign trust within the
meaning of the Code, it shall deliver to the Borrower and the
Administrative Agent certification as to exemption from deduction or
withholding of taxes in accordance with Section 3.13.
By executing and delivering an assignment agreement in accordance with this
Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and the
other parties hereto as follows: (A) such assigning Lender warrants that it
is the legal and beneficial owner of the interest being assigned thereby
free and clear of any adverse claim and the assignee warrants that it is an
Eligible Assignee; (B) except as set forth in clause (A) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of any
Credit Party or the performance or observance by any Credit Party of any of
its obligations under this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto; (C) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (D) such assignee
confirms that it has received a copy of this Credit Agreement, the other
Credit Documents and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
assignment agreement; (E) such assignee will independently and without
reliance upon the Administrative Agent, such assigning Lender or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Credit Agreement and the other
Credit Documents; (F) such assignee appoints and authorizes the
Administrative Agent to take such action on its behalf and to
-68-
exercise such powers under this Credit Agreement or any other Credit
Document as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto;
and (G) such assignee agrees that it will perform in accordance with their
terms all the obligations which by the terms of this Credit Agreement and
the other Credit Documents are required to be performed by it as a Lender.
(c) Register. The Administrative Agent shall maintain a copy of each
Assignment Agreement delivered to and accepted by it and a 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 "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Credit 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.
(d) Acceptance. Upon its receipt of an Assignment Agreement executed
by the parties thereto, together with any Note subject to such assignment
and payment of the processing fee, the Administrative Agent shall, if such
Assignment Agreement has been completed and is in substantially the form of
Exhibit 11.3(b), (i) accept such Assignment Agreement, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(e) Participations. Each Lender may sell participations to one or more
Persons in all or a portion of its rights, obligations or rights and
obligations under this Credit Agreement (including all or a portion of its
Commitment and its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Sections 3.9
through 3.15, inclusive (but not for a greater amount than the Lender would
be entitled to), and of the right of set-off contained in Section 11.2,
(iv) the Borrower shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Credit Agreement, and (v) such Lender shall retain the sole right to
enforce the obligations of the Borrower relating to its Loans and its Notes
and to approve any amendment, modification, or waiver of any provision of
this Credit Agreement (other than amendments, modifications, or waivers
decreasing the amount of principal of or the rate at which interest is
payable on such Loans or Notes, extending any scheduled principal payment
date or date fixed for the payment of interest on such Loans or Notes,
extending its Commitment or releasing the Borrower or all or substantially
all of the Guarantors from its or their respective obligations under the
Credit Documents).
(f) Unrestricted Assignments. Notwithstanding any other provision set
forth in this Credit Agreement, any Lender may at any time (i) assign and
pledge all or any portion of its Loans and its Notes to any Federal Reserve
Bank as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve
-69-
Bank or (ii) pledge all or any portion of its rights (but not its
obligations to make Loans hereunder to any trustee or holders of
obligations owed, or securities issued, by such Lender as security for such
obligations or securities or to any other representative of such holders;
provided that such trustee or holder shall not have the right to become a
Lender hereunder. No such assignment shall release the assigning Lender
from its obligations hereunder.
(g) Information. Any Lender may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Lender from
time to time to assignees and participants (including prospective assignees
and participants), subject, however, to the provisions of Section 11.15.
(h) CLO's. Notwithstanding anything to the contrary contained herein,
any Lender, (a "Granting Lender") may grant to a special purpose funding
vehicle (an "SPC") the option to fund all or any part of any Loan that such
Granting Lender would otherwise be obligated to fund pursuant to this
Credit Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to fund any Loan, (ii) if an SPC elects not to
exercise such option or otherwise fails to fund all or any part of such
Loan, the Granting Lender shall be obligated to fund such Loan pursuant to
the terms hereof, (iii) no SPC shall have any voting rights pursuant to
Section 11.6 and (iv) with respect to notices, payments and other matters
hereunder, the Credit Parties, the Administrative Agent and the Lenders
shall not be obligated to deal with an SPC, but may limit their
communications and other dealings relevant to such SPC to the applicable
Granting Lender. The funding of a Loan by an SPC hereunder shall utilize
the Loan Commitment of the Granting Lender to the same extent that, and as
if, such Loan were funded by such Granting Lender. Each party hereto hereby
agrees that no SPC shall be liable for any indemnity or payment under this
Credit Agreement for which a Lender would otherwise be liable for so long
as, and to the extent, the Granting Lender provides such indemnity or makes
such payment. Notwithstanding anything to the contrary contained in this
Credit Agreement, any SPC may disclose on a confidential basis any
non-public information relating to its funding of Loans to any rating
agency, commercial paper dealer or provider of any surety or guarantee to
such SPC. This clause (h) may not be amended without the prior written
consent of each Granting Lender, all or any part of whose Loan is being
funded by an SPC at the time of such amendment.
11.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the Administrative Agent or any Lender
in exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between the Borrower or any Credit Party and
the Administrative Agent or any Lender shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle any Credit Party to any other or further notice or demand in
similar or
-70-
other circumstances or constitute a waiver of the rights of the Administrative
Agent or the Lenders to any other or further action in any circumstances without
notice or demand.
11.5 Payment of Expenses; Indemnification.
The Borrower agrees to: (a) pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent and the Lenders in connection with (A)
enforcement of the Credit Documents and the documents and instruments referred
to therein, including, without limitation, in connection with any such
enforcement, the reasonable Attorneys' Costs of the Administrative Agent and
each of the Lenders and (B) any bankruptcy or insolvency proceeding of any
Credit Party, and (b) indemnify the Administrative Agent and each Lender, its
officers, directors, employees, representatives, counsel and agents from and
hold each of them harmless against any and all losses, liabilities, claims,
damages or expenses incurred by any of them as a result of, or arising out of,
or in any way related to, or by reason of, any investigation, litigation or
other proceeding (whether or not the Administrative Agent or any Lender is a
party thereto) related to the entering into and/or performance of any Credit
Document or the use of proceeds of any Loans (including other extensions of
credit) hereunder or the consummation of any other transactions contemplated in
any Credit Document, including, without limitation, reasonable Attorneys' Costs
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason of gross negligence or willful
misconduct on the part of the Person to be indemnified), (all of the foregoing,
collectively, "Indemnified Liabilities"). The agreements in this Section 11.5
shall survive the termination of the Commitments and the repayment of the Credit
Party Obligations.
11.6 Amendments, Waivers and Consents.
So long as the Initial Lender is the sole Lender under this Agreement and
is party to the 2001 Senior Credit Agreement, any amendment to the covenants of
the 2001 Senior Credit Agreement adopted in accordance with the terms thereof
and to which the Initial Lender shall have consented in its capacity as party to
the 2001 Senior Credit Agreement, shall represent the Initial Lender's consent
to amend this Agreement in a corresponding manner. It is agreed that, if lenders
party to the 2001 Senior Credit Agreement receive any fee in connection with any
such amendment, the Initial Lender shall receive a fee with respect to the
foregoing amendment of this Agreement, which shall be calculated in the same
manner as the fees received by the lenders parties to the 2001 Senior Credit
Agreement in connection with such amendment. If the Initial Lender participates
as a lender in a facility that replaces the 2001 Senior Credit Agreement (a
"Replacement Facility"), such participation shall represent its agreement to
amend this Agreement to conform to the covenants of such Replacement Facility,
and the Initial Lender agrees that it shall not be entitled to fees commensurate
with those paid to lenders in the Replacement Facility in connection with such
conforming amendment to this facility. The Initial Lender (or the Administrative
Agent if the Initial Lender is not the sole Lender under this facility) agrees
to use its best efforts to limit the cost to the Borrower of documenting any and
all amendments hereto, including the use of its internal legal counsel to
prepare documentation when feasible. In all other cases, neither this Credit
Agreement nor any other Credit Document nor any of the terms hereof or thereof
may be amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing and signed by the
Required Lenders and the then Credit Parties; provided that no such
-71-
amendment, change, waiver, discharge or termination shall without the consent of
each Lender affected thereby:
(a) extend the Maturity Date or extend or postpone the time for any
payment or prepayment of principal;
(b) reduce the rate or extend the time of payment of interest (other
than as a result of waiving the applicability of any post-default increase
in interest rates) thereon or fees hereunder;
(c) reduce or waive the principal amount of any Loan;
(d) increase or extend the Commitment of a Lender (it being understood
and agreed that a waiver of any Default or Event of Default shall not
constitute a change in the terms of any Commitment of any Lender);
(e) release the Borrower from its obligations or consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under (or in respect of) the Credit Documents or release all or
substantially all of the Guarantors from their respective obligations under
the Credit Documents;
(f) amend, modify or waive any provision of this Section 11.6 or
Sections 3.7, 3.8, 5.2, 9.1(a), 11.2, 11.3 or 11.5; or
(g) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders.
Notwithstanding the above, no provisions of Section 10 or Section 3.4 may be
amended or modified without the consent of the Administrative Agent.
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 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.
11.7 Counterparts/Telecopy.
This Credit Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. Delivery of executed counterparts
by telecopy shall be as effective as an original and shall constitute a
representation that an original will be delivered.
-72-
11.8 Headings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders; provided,
however, that all other benefits and obligations under the Credit Documents
shall apply to such Defaulting Lender.
11.10 Survival of Indemnification.
All indemnities set forth herein shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the repayment of the Loans
and other obligations and the termination of the Commitments hereunder.
11.11 Governing Law; Venue; Jurisdiction.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the courts
of the State of New York or of the United States sitting in New York City,
and, by execution and delivery of this Credit Agreement, each Credit Party
hereby irrevocably accepts for itself and in respect of its Property,
generally and unconditionally, the jurisdiction of such courts. Each Credit
Party irrevocably consents to the service of process in any action or
proceeding with respect to this Credit Agreement or any other Credit
Document by the mailing of copies thereof by registered or certified mail,
postage prepaid, to it at the address for notices pursuant to Section 11.1,
such service to become effective 10 days after such mailing. Nothing herein
shall affect the right of a Lender to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed
against a Credit Party in any other jurisdiction. Each Credit Party agrees
that a final judgment in any action or proceeding shall be conclusive and
may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law; provided that nothing in this Section
11.11(a) is intended to impair a Credit Party's right under applicable law
to appeal or seek a stay of any judgment.
(b) Each Credit Party hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Credit
Agreement or any other Credit Document in the courts referred to in
subsection (a) hereof and hereby further irrevocably waives and
-73-
agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
11.12 Waiver of Jury Trial; Waiver of Consequential Damages.
EACH OF THE PARTIES TO THIS CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY. Each Credit Party agrees not to assert any
claim against the Administrative Agent, any Lender, any of their Affiliates, or
any of their respective directors, officers, employees, attorneys or agents, on
any theory of liability, for special, indirect, consequential or punitive
damages arising out of or otherwise relating to any of the transactions
contemplated herein.
11.13 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.14 Further Assurances.
The Credit Parties agree, upon the request of the Administrative Agent, to
promptly take such actions, as reasonably requested, as is necessary to carry
out the intent of this Credit Agreement and the other Credit Documents.
11.15 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall prevent
the disclosure of any such information to (a) the extent a Lender in good faith
believes such disclosure is required by Requirement of Law, (b) counsel for a
Lender or to its accountants, (c) bank examiners or auditors or comparable
Persons, (d) any Affiliate of a Lender, (e) any other Lender, or any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Credit Agreement who is
notified of the confidential nature of the information or (f) any other Person
in connection with any litigation to which any one or more of the Lenders is a
party if required by a court of law of competent jurisdiction or (g) that a
Lender may disclose (without limitation) the tax treatment and tax structure of
this financing and any materials provided to any Lender relating to such tax
treatment or tax structure. No Lender shall have any obligation under this
Section 11.15 to the extent any such information becomes available on a
non-confidential basis from a source other than a Credit Party or that any
information becomes publicly available other than by a breach of this Section
11.15 by any Lender or representative thereof.
-74-
11.16 Entirety.
This Credit Agreement together with the other Credit Documents represents
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.17 Binding Effect; Continuing Agreement.
(a) This Credit Agreement shall become effective at such time when all
of the conditions set forth in Section 5.1 have been satisfied or waived by
the Lenders and it shall have been executed by the Borrower, the Guarantors
and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together,
bear the signatures of each Lender, and thereafter this Credit Agreement
shall be binding upon and inure to the benefit of the Borrower, the
Guarantors, the Administrative Agent and each Lender and their respective
successors and assigns.
(b) This Credit Agreement shall be a continuing agreement and shall
remain in full force and effect until all Loans, interest, fees and other
Credit Party Obligations have been paid in full and the Commitments have
been terminated. Upon termination, the Credit Parties shall have no further
obligations (other than the indemnification provisions that survive) under
the Credit Documents; provided that should any payment, in whole or in
part, of the Credit Party Obligations be rescinded or otherwise required to
be restored or returned by the Administrative Agent or any Lender, whether
as a result of any proceedings in bankruptcy or reorganization or
otherwise, then the Credit Documents shall automatically be reinstated and
all amounts required to be restored or returned and all costs and expenses
incurred by the Administrative Agent or any Lender in connection therewith
shall be deemed included as part of the Credit Party Obligations.
-75-
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER:
QUEST DIAGNOSTICS INCORPORATED,
a Delaware corporation
By: /s/ Joseph P. Manory
-------------------------------------------
Name: Joseph P. Manory
Title: Vice President and Treasurer
GUARANTORS:
QUEST DIAGNOSTICS HOLDINGS
INCORPORATED,
a Delaware corporation
QUEST DIAGNOSTICS CLINICAL
LABORATORIES, INC.,
a Delaware corporation
QUEST DIAGNOSTICS INCORPORATED,
a California corporation
QUEST DIAGNOSTICS INCORPORATED,
a Maryland corporation
QUEST DIAGNOSTICS INCORPORATED,
a Michigan corporation
QUEST DIAGNOSTICS OF PENNSYLVANIA, INC.,
a Delaware corporation
METWEST, INC.,
a Delaware corporation
NICHOLS INSTITUTE DIAGNOSTICS,
a California corporation
DPD HOLDINGS, INC.,
a Delaware corporation
DIAGNOSTICS REFERENCE SERVICES INC.,
a Maryland corporation
AMERICAN MEDICAL LABORATORIES,
INCORPORATED,
a Delaware corporation
AML INC.,
a Delaware corporation
QUEST DIAGNOSTICS INCORPORATED (NV),
a Nevada corporation
QUEST DIAGNOSTICHOLS INSTITUTE, INC.,
f/k/a /MEDICAL LABORATORIES CORPORATION,
a Virginia corporation
QUEST DIAGNOSTICS LLC,
an Illinois limited liability company
QUEST DIAGNOSTICS LLC,
a Connecticut limited liability company
QUEST DIAGNOSTICS LLC,
a Massachusetts limited liability company
APL PROPERTIES LIMITED LIABILITY COMPANY
a Nevada limited liability company
UNILAB ACQUISITION CORPORATION,
A Delaware corporation
UNILAB CORPORATION,
A Delaware corporation
By: /s/ Joseph P. Manory
-------------------------------------------
Name: Joseph P. Manory
Title: Vice President and Treasurer
Of each of the Above Guarantors
QUEST DIAGNOSTICS INVESTMENTS
INCORPORATED,
a Delaware corporation
By: /s/ Stephen A. Calamari
-------------------------------------------
Name: Stephen A. Calamari
Title: Treasurer
QUEST DIAGNOSTICS FINANCE INCORPORATED,
a Delaware corporation
By: /s/ Stephen A. Calamari
-------------------------------------------
Name: Stephen A. Calamari
Title: Treasurer
PATHOLOGY BUILDING PARTNERSHIP,
A Maryland general partnership
By: Quest Diagnostics Incorporated, a Maryland
Corporation, its general partner
By: /s/ Joseph P. Manory
-------------------------------------------
Name: Joseph P. Manory
Title: Vice President and Treasurer
ADMINISTRATIVE
AGENT AND
INITIAL LENDER: SUMITOMO MITSUI BANKING CORPORATION
By: /s/ Robert H. Riley III
-------------------------------------------
Name: Robert H. Riley III
Title: Senior Vice President