EXHIBIT 10.1
COMPOSITE VERSION
(AS AMENDED BY AMENDMENT NO. 1 AND ANTICIPATING ASSIGNMENTS)
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PUBLISHED CUSIP NUMBER: 00437LAE6
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 21, 2004
among
ACCREDO HEALTH, INCORPORATED,
as Borrower,
CERTAIN SUBSIDIARIES OF THE BORROWER,
as Guarantors,
THE LENDERS NAMED HEREIN
and
BANK OF AMERICA, N.A.,
as Administrative Agent
Arranged by:
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Manager
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TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS............................................................................................ 1
1.1 Definitions.................................................................................... 1
1.2 Interpretive Provisions........................................................................ 26
1.3 Computation of Time Periods.................................................................... 27
1.4 Accounting Terms............................................................................... 27
1.5 Rounding....................................................................................... 27
SECTION 2 CREDIT FACILITIES...................................................................................... 27
2.1 Commitments.................................................................................... 27
2.2 Method of Borrowing............................................................................ 29
2.3 Interest....................................................................................... 30
2.4 Repayment...................................................................................... 30
2.5 Notes.......................................................................................... 31
2.6 Additional Provisions relating to Letters of Credit............................................ 31
2.7 Additional Provisions relating to Swingline Loans.............................................. 35
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES......................................................... 36
3.1 Default Rate................................................................................... 36
3.2 Continuation and Conversion.................................................................... 36
3.3 Prepayments.................................................................................... 37
3.4 Reduction and Termination of Commitments....................................................... 39
3.5 Fees........................................................................................... 39
3.6 Capital Adequacy............................................................................... 40
3.7 Limitation on Eurodollar Loans................................................................. 40
3.8 Illegality..................................................................................... 41
3.9 Requirements of Law............................................................................ 41
3.10 Treatment of Affected Loans.................................................................... 42
3.11 Taxes.......................................................................................... 42
3.12 Funding Losses................................................................................. 44
3.13 Pro Rata Treatment............................................................................. 44
3.14 Sharing of Payments............................................................................ 45
3.15 Payments, Computations, etc.................................................................... 46
3.16 Evidence of Debt............................................................................... 48
3.17 Treatment of Affected Lenders.................................................................. 48
SECTION 4 GUARANTY............................................................................................... 49
4.1 The Guaranty................................................................................... 49
4.2 Obligations Unconditional...................................................................... 49
4.3 Reinstatement.................................................................................. 50
4.4 Certain Additional Waivers..................................................................... 51
4.5 Remedies....................................................................................... 51
4.6 Rights of Contribution......................................................................... 51
4.7 Guarantee of Payment; Continuing Guarantee..................................................... 52
SECTION 5 CONDITIONS............................................................................................. 52
5.1 Closing Conditions............................................................................. 52
5.2 Conditions to all Extensions of Credit......................................................... 54
SECTION 6 REPRESENTATIONS AND WARRANTIES......................................................................... 55
6.1 Financial Condition............................................................................ 55
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6.2 No Changes or Restricted Payments.............................................................. 56
6.3 Organization; Existence; Compliance with Law................................................... 56
6.4 Power; Authorization; Enforceable Obligations.................................................. 57
6.5 No Legal Bar................................................................................... 57
6.6 No Material Litigation and Disputes............................................................ 58
6.7 No Defaults.................................................................................... 58
6.8 Ownership and Operation of Property............................................................ 58
6.9 Intellectual Property.......................................................................... 58
6.10 Taxes.......................................................................................... 59
6.11 ERISA.......................................................................................... 59
6.12 Governmental Regulations, etc.................................................................. 60
6.13 Subsidiaries................................................................................... 60
6.14 Purpose of Extensions of Credit................................................................ 61
6.15 Environmental Matters.......................................................................... 61
6.16 No Material Misstatements...................................................................... 62
6.17 Labor Matters.................................................................................. 62
6.18 Collateral Documents........................................................................... 62
6.19 Location of Real Property and Leased Premises.................................................. 63
6.20 Fraud and Abuse................................................................................ 63
6.21 Licensing and Accreditation.................................................................... 64
6.22 Solvency....................................................................................... 64
6.23 No Other Broker's Fees......................................................................... 64
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................. 65
7.1 Information Covenants.......................................................................... 65
7.2 Preservation of Existence and Franchises....................................................... 68
7.3 Books and Records.............................................................................. 68
7.4 Compliance with Law............................................................................ 69
7.5 Payment of Taxes and Other Lawful Claims....................................................... 69
7.6 Insurance...................................................................................... 69
7.7 Maintenance of Property........................................................................ 69
7.8 Use of Proceeds; Margin Stock.................................................................. 70
7.9 Audits/Inspections............................................................................. 70
7.10 Financial Covenants............................................................................ 70
7.11 Additional Guarantors; Foreign Subsidiaries.................................................... 71
7.12 Pledged Assets................................................................................. 71
7.13 Landlord Lien Waivers.......................................................................... 72
SECTION 8 NEGATIVE COVENANTS..................................................................................... 72
8.1 Indebtedness................................................................................... 72
8.2 Liens.......................................................................................... 73
8.3 Nature of Business............................................................................. 73
8.4 Merger and Consolidation, Dissolution and Acquisitions......................................... 73
8.5 Asset Dispositions............................................................................. 74
8.6 Investments.................................................................................... 75
8.7 Restricted Payments............................................................................ 75
8.8 Modifications and Payments in respect of Funded Debt........................................... 75
8.9 Transactions with Affiliates................................................................... 76
8.10 Fiscal Year.................................................................................... 76
8.11 Limitation on Restricted Actions; No Further Negative Pledges.................................. 76
8.12 Ownership of Subsidiaries...................................................................... 76
8.13 Sale Leasebacks................................................................................ 77
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SECTION 9 EVENTS OF DEFAULT...................................................................................... 77
9.1 Events of Default.............................................................................. 77
9.2 Acceleration; Remedies......................................................................... 79
SECTION 10 ADMINISTRATIVE AND COLLATERAL AGENT................................................................... 80
10.1 Appointment and Authorization.................................................................. 80
10.2 Delegation of Duties........................................................................... 80
10.3 Liability...................................................................................... 80
10.4 Reliance....................................................................................... 81
10.5 Notice of Default.............................................................................. 81
10.6 Credit Decision; Disclosure of Information..................................................... 82
10.7 Indemnification................................................................................ 82
10.8 Individual Capacity............................................................................ 83
10.9 Successor...................................................................................... 83
10.10 Other Agents; Lead Managers.................................................................... 84
SECTION 11 MISCELLANEOUS......................................................................................... 84
11.1 Notices........................................................................................ 84
11.2 Right of Set-Off; Adjustments.................................................................. 84
11.3 Successors and Assigns......................................................................... 84
11.4 No Waiver; Remedies Cumulative................................................................. 87
11.5 Expenses; Indemnification...................................................................... 87
11.6 Amendments, Waivers and Consents............................................................... 88
11.7 Payment Set Aside.............................................................................. 90
11.8 Counterparts................................................................................... 90
11.9 Headings....................................................................................... 91
11.10 Survival....................................................................................... 91
11.11 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial; Waiver of
Punitive and Exemplary Damages................................................................ 91
11.12 Severability................................................................................... 92
11.13 Entirety....................................................................................... 92
11.14 Binding Effect; Termination.................................................................... 92
11.15 Confidentiality................................................................................ 92
11.16 Source of Funds................................................................................ 93
11.17 Conflict....................................................................................... 93
11.18 USA PATRIOT Act................................................................................ 93
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SCHEDULES AND EXHIBITS
Schedule 2.1 Commitments
Schedule 5.1 Identified Real Property Leasehold Interests
Schedule 6.6 Certain Claims & Litigation
Schedule 6.8 Liens
Schedule 6.9 Intellectual Property
Schedule 6.13 Subsidiaries
Schedule 6.19(a) Locations of Owned and Leased Real Property
Schedule 6.19(b) Locations of Tangible Personal Property
Schedule 6.19(c) Legal Name, State of Formation and Chief Executive Office Location
Schedule 6.21 Matters Pertaining to Medicare Billing Numbers
Schedule 7.6 Insurance
Schedule 8.1 Indebtedness
Schedule 8.4 Specifically Permitted Acquisitions
Schedule 8.6 Investments
Schedule 8.11 Limitations on Restricted Actions; Negative Pledges
Schedule 8.12 Non-Wholly Owned Subsidiaries
Schedule 11.1 Notice Addresses
Exhibit 2.2(a)(i) Form of Notice of Revolving Loan Borrowing
Exhibit 2.2(a)(ii) Form of Notice of Request of Letter of Credit
Exhibit 2.2(a)(iii) Form of Notice of Swingline Loan Borrowing
Exhibit 2.5-1 Form of Revolving Note
Exhibit 2.5-2 Form of Tranche B Term Note
Exhibit 3.2 Form of Notice of Continuation/Conversion
Exhibit 5.1 Form of Officer's Certificate
Exhibit 7.1(c) Form of Officer's Compliance Certificate
Exhibit 7.11 Form of Joinder Agreement
Exhibit 11.3(b) Form of Assignment and Assumption
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COMPOSITE VERSION
(AS AMENDED BY AMENDMENT NO. 1 AND ANTICIPATING ASSIGNMENTS)
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the "Credit Agreement")
dated as of July 21, 2004 is by and among ACCREDO HEALTH, INCORPORATED, a
Delaware corporation (the "Borrower"), the Guarantors (defined herein), the
Lenders (defined herein) and BANK OF AMERICA, N.A., as Administrative Agent for
the Lenders (in such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, $60 million in credit facilities had been established in favor of
the Borrower pursuant to that credit agreement, dated as of June 5, 1997, among
the Borrower, the guarantors identified therein, the banks identified therein
and Bank of America, N.A., as agent;
WHEREAS, the Borrower requested, and the Lenders agreed pursuant to the
terms of that Amended and Restated Credit Agreement, dated as of June 13, 2002
(as amended, modified and supplemented, the "Existing Credit Agreement"), to
amend and restate the credit agreement in order to incorporate certain
modifications, including, among other things, an increase in the aggregate size
of the credit facilities from $60 million to $325 million;
WHEREAS, the Borrower has requested certain modifications to the credit
facilities, including, among other things, an increase in the aggregate size of
the credit facilities in an amount up to $550 million;
WHEREAS, the Lenders have agreed to make the requested credit facilities
available to the Borrower on the terms and conditions hereinafter set forth; and
WHEREAS, this Credit Agreement is given in amendment to, restatement of
and substitution for the Existing Credit Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Acquisition" means any transaction, or series of related transactions, by
which a Person directly or indirectly (a) acquires all or any substantial
portion of the Property of another Person (other than a Credit Party) or (b)
acquires control of at least a majority of the Voting Stock of another Person
(other than a Credit Party).
"Adjusted Base Rate" means the Base Rate plus the Applicable Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the Applicable
Percentage.
"Administrative Agent" shall have the meaning provided in the heading
hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter agreement,
dated as of July 11, 2004, between the Administrative Agent and the Borrower, as
amended, modified, restated or supplemented from time to time.
"Affiliate" means, with respect to any Person, (i) any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such Person and (ii) solely for purposes of Section 8.9, any
other Person directly or indirectly owning or holding five percent (5%) or more
of the Capital Stock in such Person. For purposes of this definition, "control"
when used with respect to any Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent-Related Persons" means the Administrative Agent (including any
successor administrative agent), together with its Affiliates (including, in the
case of Bank of America in its capacity as the Administrative Agent, the
Arranger), and the officers, directors, employees, agents and attorneys-in-fact
of such Persons and Affiliates.
"Aggregate Revolving Committed Amount" shall have the meaning provided in
Section 2.1(a).
"Applicable Lending Office" means, for each Lender, the office of such
Lender (or of an Affiliate of such Lender) as such Lender may from time to time
specify to the Administrative Agent and the Borrower by written notice as the
office by which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for any day, the rate per annum set forth
below opposite the applicable Consolidated Leverage Ratio then in effect, it
being understood that the Applicable Percentage for (i) Base Rate Loans shall be
the percentage set forth under the column titled "Base Rate Margin", (ii)
Eurodollar Loans shall be the percentage set forth under the column titled
"Eurodollar Margin", (iii) the Letter of Credit Fee shall be the percentage set
forth under the column titled "Letter of Credit Fee", and (iv) the Commitment
Fee shall be the percentage set forth under the column titled "Commitment Fee":
Tranche B Term
Revolving Loans Loan
---------------------- ---------------------
Consolidated Base Base
Pricing Leverage Eurodollar Rate Eurodollar Rate Letter of Commitment
Level Ratio Margin Margin Margin Margin Credit Fee Fee
- ------ -------------- ------ ------ ------ ------ ---------- ----------
I < or = 2.0:1.00 1.500% 0.000% 1.750% 0.500% 1.500% 0.250%
II < or = 2.5:1.00 but 1.750% 0.250% 1.750% 0.500% 1.750% 0.300%
> 2.0:1.00
III < or = 3.0:1.00 but 2.000% 0.500% 1.750% 0.500% 2.000% 0.375%
> 2.5:1.00
IV > 3.0:1.00 2.250% 0.750% 1.750% 0.500% 2.250% 0.500%
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The Applicable Percentage shall be determined and adjusted on each of the
following dates (each a "Rate Determination Date") five Business Days after the
date by which each annual and quarterly compliance certificates and related
financial statements and information are required in accordance with the
provisions of Sections 7.1(a), (b) and (c), as appropriate; provided that:
(i) the initial Applicable Percentages shall be based on pricing
level III and shall remain in effect at such pricing level (or any higher
(more expensive) pricing level as would otherwise apply) until the first
Rate Determination Date to occur in connection with the delivery of the
quarterly financial statements and appropriate compliance certificate for
the fiscal quarter ending September 30, 2004; and
(ii) notwithstanding the foregoing, in the event an annual or
quarterly compliance certificate and related financial statements and
information are not delivered timely to the Administrative Agent and the
Lenders by the date required by Section 7.1(a), (b) or (c), as
appropriate, the Applicable Percentages shall be based on pricing level IV
until the date five Business Days after the appropriate compliance
certificate and related financial statements and information are
delivered, whereupon the applicable pricing level shall be adjusted based
on the information contained in such compliance certificate and related
financial statements and information.
Subject to the qualifications set forth above, each Applicable Percentage
shall be effective from a Rate Determination Date until the next Rate
Determination Date. The Administrative Agent shall determine the appropriate
Applicable Percentages in the pricing matrix promptly upon receipt of the
quarterly or annual compliance certificate and related financial information and
shall promptly notify the Borrower and the Lenders of any change thereof. Such
determinations by the Administrative Agent shall be conclusive absent manifest
error. Adjustments in the Applicable Percentages shall be effective as to
existing Extensions of Credit as well as new Extensions of Credit made
thereafter.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, in its capacity as sole
lead arranger and sole book manager.
"Asset Disposition" shall mean and include the sale, lease or other
disposition of any Property (including the Capital Stock of a Subsidiary) by any
member of the Consolidated Group (including, without limitation, any Sale and
Leaseback Transaction), but for purposes hereof shall not include, in any event,
(A) the sale of inventory (including, without limitation, the sale of inventory
at wholesale cost to Joint Ventures) in the ordinary course of business or the
return of inventory to the manufacturer thereof, (B) the sale, lease or other
disposition of machinery and equipment no longer used or useful in the conduct
of business, (C) a sale, lease, transfer or disposition of Property to a Credit
Party, (D) the sublease of any real property and (E) the lease or sublease of
equipment, software and personnel pursuant to the Services and Transition
Agreement.
"Assignment and Assumption" means an assignment and assumption
substantially in the form of Exhibit 11.3(b) hereto executed and delivered in
accordance with the provisions of Section 11.3.
"Bank of America" means Bank of America, N.A., and its successors.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
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"Bankruptcy Event" means, with respect to any Person, the occurrence of
any of the following with respect to such Person: (i) a court or governmental
agency having jurisdiction in the premises shall enter a decree or order for
relief in respect of such Person in an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its Property
or ordering the winding up or liquidation of its affairs; or (ii) there shall be
commenced against such Person an involuntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or any
case, proceeding or other action for the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of such Person
or for any substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or other
action shall remain undismissed, undischarged or unbonded for a period of sixty
(60) consecutive days; or (iii) such Person 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
(or similar official) of such Person or for any substantial part of its Property
or make any general assignment for the benefit of creditors; or (iv) such Person
shall be unable to, or shall admit in writing its inability to, pay its debts
generally as they become due.
"Base Rate" means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate in effect on such day plus one half of one
percent (0.5%) and (b) the Prime Rate in effect on such day.
"Base Rate Loan" means any Loan bearing interest at a rate determined by
reference to the Base Rate.
"Borrower" shall have the meaning provided in the heading hereof, together
with any successors or assigns.
"Business Day" means a day other than a Saturday, Sunday or other day on
which commercial banks in Charlotte, North Carolina or New York, New York are
authorized or required by law to close, except that, when used in connection
with a Eurodollar Loan, such day shall also be a day on which dealings between
banks are carried on in Dollar deposits in London, England.
"Capital Lease" means, as applied to any Person, any lease of Property by
such Person as lessee that, in accordance with GAAP, is required to be accounted
for as a capital lease on the balance sheet of such Person.
"Capital Stock" means (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and fully
guaranteed or insured by the United States or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged
in support thereof) having maturities of not more than twelve months from the
date of acquisition, (b) Dollar denominated time deposits and certificates of
deposit of (i) any Revolving Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of $500 million or
(iii) any bank whose short-term commercial paper rating from S&P is at least A-1
or the equivalent thereof or
4
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 entered into by any Person with a bank or trust company
(including any of the Revolving Lenders) or recognized securities dealer having
capital and surplus in excess of $500 million for direct obligations issued by
or fully guaranteed by the United States in which such Person 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 one
hundred percent (100%) of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in money
market investment programs registered under the Investment Company Act of 1940,
as amended, that are administered by reputable financial institutions having
capital of at least $500 million and the portfolios of which are limited to
Investments of the character described in the foregoing subdivisions (a) through
(d).
"CHAMPUS" means the United States Department of Defense Civilian Health
and Medical Program of the Uniformed Services, and any successor thereof
including TRICARE.
"Change of Control" means the occurrence of any of the following events:
(i) any Person or two or more Persons acting in concert shall have acquired
beneficial ownership, directly or indirectly, of, or shall have acquired by
contract or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of or control
over, Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing thirty percent (30%) or more of the combined voting
power of all Voting Stock of the Borrower or (ii) during any period of up to
twenty-four consecutive months, commencing after the Closing Date, individuals
who at the beginning of such twenty-four month period were directors of the
Borrower (together with any new director whose election by the Borrower's board
of directors or whose nomination for election by the Borrower's shareholders was
approved by a vote of at least a majority of the directors then still in office
who either were directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of the directors of the Borrower then in office. As used
herein, "beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act.
"Closing Date" means the date hereof.
"Collateral" means a collective reference to the collateral that is
identified in, and at any time will be covered by, the Collateral Documents.
"Collateral Agent" means Bank of America in its capacity as "Collateral
Agent" under the Collateral Documents, together with any successors or assigns.
"Collateral Documents" means a collective reference to the Security
Agreement, the Pledge Agreement, the Mortgages and such other documents executed
and delivered in connection with the attachment and perfection of the
Administrative Agent's security interests and liens arising thereunder,
including, without limitation, UCC financing statements and patent and trademark
filings.
"Commitment Fee" shall have the meaning provided in Section 3.5(a).
"Commitments" means the Revolving Commitment, the LOC Commitment, the
Swingline Commitment and the Tranche B Term Loan Commitment, if any.
5
"Commitment Period" means the period from and including the Closing Date
to but not including the earlier of (i) the Termination Date or (ii) the date on
which the Commitments terminate in accordance with the provisions of this Credit
Agreement.
"Consolidated Accounts" means, as of any date of determination and without
duplication, the aggregate book value of all accounts receivable, receivables,
and obligations for payment created or arising from the sale of inventory or the
rendering of services in the ordinary course of business (collectively, the
"Receivables"), owned by or owing to any member of the Consolidated Group, net
of allowances and reserves for doubtful or uncollectible accounts and sales
adjustments consistent with such Person's internal policies and in any event in
accordance with GAAP, but excluding in any event (a) any Receivable that is (i)
not subject to a perfected, first priority Lien in favor of the Collateral Agent
pursuant to the Security Agreement or (ii) subject to any Lien that is not a
Permitted Lien, (b) Receivables owing by an account debtor located outside of
the United States (unless payment for the goods shipped is secured by an
irrevocable letter of credit in a form and from an institution acceptable to the
Administrative Agent), (c) Receivables owing by an account debtor that is not
solvent or is subject to any bankruptcy or insolvency proceeding of any kind and
(d) Receivables for which any Subsidiary or Joint Venture is the account debtor.
"Consolidated Asset Coverage Ratio" means, as of the last day of each
fiscal quarter, the ratio of (a) Consolidated Assets on such day to (b)
Consolidated Senior Funded Debt on such day; provided that for purposes of
calculating clause (a), the amount of Consolidated Inventory included in such
calculation shall not exceed an amount equal to thirty percent (30%) of the
amount of Consolidated Assets; provided, further, that for purposes of
calculating clause (a), the amount of Genzyme Inventory included in such
calculation shall not exceed an amount equal to fifteen percent (15%) of the
amount of Consolidated Assets.
"Consolidated Assets" means, as of any date of determination, the sum of
Consolidated Accounts on such day plus Consolidated Inventory on such day.
"Consolidated Capital Expenditures" means, for any period for the
Consolidated Group, without duplication, all expenditures (whether paid in cash
or other consideration) during such period that, in accordance with GAAP, are
required to be included in additions to property, plant and equipment or similar
items reflected in the consolidated statement of cash flows for such period
(including, without limitation, Capital Leases and capitalized software costs);
provided, that Consolidated Capital Expenditures shall not include, for purposes
hereof, (i) expenditures of proceeds of insurance settlements, condemnation
awards and other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or other property to the extent such expenditures are made to
replace or repair such lost, destroyed, damaged or condemned assets, equipment
or other property or otherwise to acquire assets or properties useful in the
business of the members of the Consolidated Group or (ii) any portion of the
acquisition cost in a Permitted Acquisition that might be accounted for as a
capital expenditure under GAAP.
"Consolidated EBITDA" means, for any period for the Consolidated Group,
the sum of (i) Consolidated Net Income, plus (ii) to the extent deducted in
determining Consolidated Net Income, (A) Consolidated Interest Expense, (B)
taxes, (C) depreciation and amortization, in each case on a consolidated basis
determined in accordance with GAAP; but excluding (1) one time non-recurring
cash and non-cash charges for debt financing costs and refinancing costs
relating to the Existing Credit Agreement and (2) one time non-recurring cash
and non-cash charges relating to restructuring and other costs up to $5 million
in the aggregate in connection with the HRA Acquisition and up to $10 million in
the aggregate in connection with all other Permitted Acquisitions following the
Closing Date; and provided that the portion of Consolidated EBITDA from or
otherwise attributable to non-Wholly Owned
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Subsidiaries shall not in any event, for purposes hereof, exceed fifteen percent
(15%) of Consolidated EBITDA (with amounts in excess thereof being excluded from
"Consolidated EBITDA" for purposes of determining compliance with the financial
covenants hereunder). Except as otherwise expressly provided, the applicable
period shall be the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated EBITDAR" means, for any period for the Consolidated Group,
the sum of (i) Consolidated EBITDA, plus (ii) rent and lease expense, minus
(iii) cash taxes paid, minus (iv) Consolidated Capital Expenditures, in each
case determined on a consolidated basis in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, as of the last day of
each fiscal quarter, the ratio of Consolidated EBITDAR for the period of four
consecutive fiscal quarters ending as of such day to Consolidated Fixed Charges
for the period of four consecutive fiscal quarters ending as of such day.
"Consolidated Fixed Charges" means, for any period for the Consolidated
Group, the sum of (a) the cash portion of Consolidated Interest Expense, plus
(b) rent and lease expense, plus (c) cash payments made for current scheduled
maturities of Consolidated Funded Debt (including current scheduled reductions
in commitments (but only to the extent the Funded Debt in respect of any such
commitment exceeded the reduced commitment on the date of such reduction), but
excluding current maturities of Revolving Loans and Swingline Loans), plus (d)
cash payments made to repurchase outstanding common stock of the Borrower.
"Consolidated Funded Debt" means Funded Debt of the Consolidated Group
determined on a consolidated basis in accordance with GAAP.
"Consolidated Group" means the Borrower and its consolidated subsidiaries,
as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period for the Consolidated
Group, all interest expense, including the amortization of debt discount and
premium, the interest component under Capital Leases and the implied interest
component under Securitization Transactions, in each case on a consolidated
basis determined in accordance with GAAP.
"Consolidated Inventory" means, as of any date of determination and
without duplication, the lower of the aggregate book value or fair market value
of all finished goods inventory held for sale owned by any member of the
Consolidated Group less appropriate reserves determined, as to any inventory
held for sale only, in accordance with GAAP but excluding in any event (a)
inventory that is (i) not subject to a perfected, first priority Lien in favor
for the Collateral Agent pursuant to the Security Agreement or (ii) subject to
any Lien that is not a Permitted Lien, (b) inventory located outside of the
United States, (c) inventory which is not in good condition or fails to meet
standards for sale or use imposed by governmental agencies, departments or
divisions having regulatory authority over such goods, (d) inventory that is not
either usable or salable, at prices approximating at least cost of such
inventory, in the ordinary course of business of the members of the Consolidated
Group, and inventory that is slow moving or stale, (e) inventory that is (i)
held or stored on premises not owned by a member of the Consolidated Group (or
in transit to such premises) if (A) the owner of such premises has a Lien
(whether by statute, contract or otherwise) on such inventory that is prior to
the Lien in favor of the Collateral Agent under the Security Agreement, (B) a
material amount of inventory is held or stored on such premises, (C) the
Administrative Agent has reasonably requested (and not subsequently waived) that
the owner of such premises deliver a lien subordination agreement for such
premises, and (D) within forty-five (45) days following such request (or such
longer period agreed to by the Administrative Agent) the
7
owner of such premises has not entered into a lien subordination agreement in
form and substance substantially similar to those delivered on the Closing Date,
delivered in connection with the Existing Credit Agreement or otherwise
reasonably satisfactory to the Administrative Agent ("Other Premises Inventory")
or (ii) consigned to a customer of a member of the Consolidated Group and
appropriate steps have been taken under the UCC as enacted in any applicable
jurisdiction to perfect such member's interest in such inventory ("Consigned
Inventory"), provided that (A) $5,000,000 of Other Premises Inventory and
Consigned Inventory in the aggregate shall not be excluded by this clause (e)
and (B) to the extent excluded by this clause (e), Other Premises Inventory
shall be excluded only to the extent of the outstanding obligations secured by
the Lien of the owner of such premises, and (f) inventory in possession of a
Person other than a member of the Consolidated Group (other than Other Premises
Inventory and Consigned Inventory), except for inventory in transit to a member
of the Consolidated Group.
"Consolidated Leverage Ratio" means, as of the last day of each fiscal
quarter, the ratio of Consolidated Total Funded Debt on such day to Consolidated
EBITDA for the period of four consecutive fiscal quarters ending as of such day.
"Consolidated Net Income" means, for any period for the Consolidated
Group, net income (or loss) determined on a consolidated basis in accordance
with GAAP, but excluding for the purpose of determining the Consolidated
Leverage Ratio and the Consolidated Fixed Charge Coverage Ratio any
extraordinary gains, nonrecurring gains and gains from the write-up of assets
and related tax effects thereon.
"Consolidated Net Worth" means, as of any date, consolidated stockholders'
equity of the Consolidated Group as determined in accordance with GAAP.
"Consolidated Senior Funded Debt" means the sum of Consolidated Total
Funded Debt minus Consolidated Subordinated Debt.
"Consolidated Subordinated Debt" means Subordinated Debt of the
Consolidated Group, as determined on a consolidated basis in accordance with
GAAP.
"Consolidated Total Funded Debt" means Funded Debt (including Subordinated
Debt) of the Consolidated Group, as determined on a consolidated basis in
accordance with GAAP.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 3.2 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"Contract Provider" means any Person or any employee, agent or
subcontractor of such Person who provides professional healthcare services under
or pursuant to any contract with any member of the Consolidated Group.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any material agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 3.2 or Sections 3.7 through 3.12, inclusive, of a Base Rate
Loan into a Eurodollar Loan.
"Credit Agreement" shall have then meaning provided in the preamble
hereof.
8
"Credit Documents" means, collectively, this Credit Agreement, the Notes,
the LOC Documents, the Collateral Documents, the Administrative Agent's Fee
Letter, and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
"Credit Party" means any or all of the Borrower and the Guarantors.
"Debt Transaction" means, with respect to any member of the Consolidated
Group, any sale, issuance, placement, assumption or guaranty of Funded Debt,
whether or not evidenced by promissory note or other written evidence of
indebtedness, except for Funded Debt permitted to be incurred pursuant to
Section 8.1.
"Debtor Relief Laws" means the Bankruptcy Code and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief applicable laws of the United States or other applicable
jurisdictions from time to time in effect and affecting the rights of creditors
generally.
"Default" means any event, act or condition that 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 within one Business Day of when due, (b) other than as
set forth in (a) above, 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 within one Business Day of when due, unless such amount is subject to
a good faith dispute or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or with respect to which (or with respect to
any of the assets of which) a receiver, trustee or similar official has been
appointed.
"Deferred Purchase Price Payments" means all payments on deferred purchase
price obligations incurred in connection with Acquisitions (including, without
limitation, earn out payments).
"Dollars" and "$" means dollars in lawful currency of the United States.
"Domestic Subsidiary" means any Subsidiary that is incorporated or
organized under the laws of any state of the United States or the District of
Columbia.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by (i) the Administrative Agent, (ii) in the case of an assignment of a
Revolving Commitment, the Issuing Lender and the Swingline Lender, and (iii)
unless an Event of Default has occurred and is continuing, the Borrower (each
such approval not to be unreasonably withheld or delayed, it being agreed that
the Borrower's withholding of consent to an assignment that would result in the
Borrower having to pay amounts under Section 3.11 shall be deemed to be
reasonable); provided that notwithstanding the foregoing, "Eligible Assignee"
shall not include the Borrower or any of the Borrower's Affiliates or
Subsidiaries.
"Environmental Laws" means any and all lawful and applicable federal,
state, local and foreign statutes, laws, regulations, ordinances, rules,
judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements and other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of Materials of
Environmental Concern into the environment including, without limitation,
ambient air, surface water, ground water, or land, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of Materials of Environmental Concern.
9
"Equity Transaction" means, with respect to any member of the Consolidated
Group, any issuance or sale of shares of its Capital Stock, other than an
issuance (i) to a member of the Consolidated Group, (ii) in connection with a
conversion of debt securities to equity, (iii) in connection with exercise by a
present or former employee, officer or director under a stock incentive plan,
stock option plan or other equity-based compensation plan or arrangement and
(iv) of Capital Stock of the Borrower in connection with a Permitted
Acquisition.
"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.
"ERISA Affiliate" means an entity that is under common control with any
member of the Consolidated Group within the meaning of Section 4001(a)(14) of
ERISA, or is a member of a group that includes any member of the Consolidated
Group and that is treated as a single employer under Sections 414(b) or (c) of
the Internal Revenue Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a
Reportable Event or the substantial cessation of operations (within the meaning
of Section 4062(e) of ERISA); (ii) the withdrawal by any member of the
Consolidated Group 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;
(iii) 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; (iv) the
institution of proceedings to terminate or the actual termination of a Plan by
the PBGC under Section 4042 of ERISA; (v) any event or condition that might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of any member of the Consolidated Group or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under Section
302(f) of ERISA exist with respect to any Plan; or (viii) 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 at a rate determined by
reference to the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of one percent (0.01%) determined by the Administrative Agent to be equal
to the quotient obtained by dividing (a) the Interbank Offered Rate for such
Eurodollar Loan for such Interest Period by (b) one minus the Eurodollar Reserve
Requirement for such Eurodollar Loan for such Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Eurodollar Reserve Requirement
shall reflect any other reserves required to be maintained by such member banks
with respect to (i) any category of liabilities that includes deposits by
reference to which the Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets that include Eurodollar Loans. The
Eurodollar Rate shall be adjusted automatically on and as of the effective date
of any change in the Eurodollar Reserve Requirement.
10
"Event of Default" shall have the meaning provided in Section 9.1.
"Excess Cash Flow" means, for any period for the Consolidated Group, an
amount equal to (a) Consolidated EBITDA minus (b) Consolidated Capital
Expenditures paid in cash minus (c) the cash portion of Consolidated Interest
Expense minus (d) cash taxes paid minus (e) cash payments of current scheduled
maturities of Consolidated Funded Debt minus (f) the amount of any voluntary
prepayments made on the Loans (other than Revolving Loans and Swingline Loans)
during such fiscal year, minus (g) cash consideration paid in connection with
Permitted Acquisitions, minus (h) Restricted Payments permitted under Section
8.7(b), plus (i) Net Changes in Working Capital, in each case on a consolidated
basis determined in accordance with GAAP
"Excluded Property" means, with respect to any member of the Consolidated
Group, including any Person that becomes a member of the Consolidated Group
after the Closing Date, any Property of such member of the Consolidated Group
that, subject to the terms of Section 8.11 and Section 8.13, is subject to a
Lien of the type described in clause (viii) of the definition of "Permitted
Liens" pursuant to documents that prohibit such member of the Consolidated Group
from granting any other Liens in such Property.
"Excluded Subsidiary" means Children's Hemophilia Services, a California
partnership, unless and until such time as such Subsidiary (i) accounts for more
than five percent (5%) of consolidated revenues for the Consolidated Group for
any period of four consecutive fiscal quarters, (ii) constitutes more than five
percent (5%) of consolidated assets for the Consolidated Group as of the end of
any fiscal quarter or (iii) is a Wholly Owned Subsidiary.
"Exclusion Event" means an event or related events resulting in the
exclusion of one or more members of the Consolidated Group from participation in
any Medical Reimbursement Program; provided, however, that "Exclusion Event"
shall not mean an event or related events resulting in any such exclusion of an
Immaterial Subsidiary.
"Existing Credit Agreement" shall have the meaning provided in the
recitals hereof.
"Extension of Credit" means, as to any Lender, the making of, or
participation in, a Loan by such Lender (including Continuations and Conversions
thereof) or the issuance or extension of, or participation in, a Letter of
Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of one percent (0.01%)) 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 on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to Bank of
America on such day on such transactions as determined by the Administrative
Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States, each state thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
11
"Foreign Subsidiary" means a Subsidiary that is not a Domestic Subsidiary.
"Fund" means any Person (other than a natural Person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Debt" means, with respect to any Person, without duplication, all
(i) obligations for borrowed money, (ii) obligations evidenced by bonds
debentures, notes or similar instruments or upon which interest payments are
customarily made, (iii) purchase money indebtedness (including, for purposes
hereof, indebtedness and obligations in respect of conditional sales and title
retention agreements relating to property purchased (other than customary
reservation or title retention arrangements under agreements entered into in the
ordinary course of business with suppliers)), (iv) the deferred purchase price
of property or services acquired that would constitute, and be accounted for as,
a liability under GAAP, (v) the attributed principal amount of obligations owing
under Capital Leases, (vi) the maximum amount available to be drawn under
standby letters of credit and bankers' acceptances issued or created for such
Person's account, (vii) the attributed principal amount of Securitization
Transactions, (viii) the attributed principal amount of obligations owing under
Synthetic Leases, (ix) all preferred stock or comparable equity interests
providing for mandatory redemption, sinking fund or other like payments, (x)
Support Obligations of such Person in respect of Funded Debt of another Person,
(xi) Funded Debt of another Person secured by a Lien on any of such first
Person's Property, whether or not such Funded Debt has been assumed, provided,
however, for purposes hereof, the amount of such Funded Debt shall be limited to
the lesser of the amount of Funded Debt as to which there is recourse or to the
fair market value of the Property that is the subject of such Lien, and (xii)
the Funded Debt of any partnership or joint venture or other similar entity in
which such Person is a general partner or joint venturer and, as such, has
personal liability for such Funded Debt, but only to the extent there is
recourse to such Person for payment thereof. Notwithstanding anything to the
contrary contained in this definition of elsewhere in this Credit Agreement or
any other Credit Document, in no event shall the term "Funded Debt" be deemed to
include any accounts payable or other trade debt incurred in the ordinary course
of business and due within six months of the incurrence thereof.
"GAAP" means generally accepted accounting principles in the United States
applied on a consistent basis and subject to the terms of Section 1.4.
"Genzyme Intercreditor Agreement" means the intercreditor agreement, dated
as of June 13, 2002, among Genzyme Corporation, Nova Factor, Inc. and the
Collateral Agent.
"Genzyme Inventory" means all inventory of the Borrower and its
Subsidiaries consisting of the prescription drug Ceredase and the prescription
drug Cerezyme in which Genzyme Corporation (or any Person other than the
Collateral Agent) has a perfected security interest.
"Governmental Authority" means the government of the United States or any
other nation, or of any political subdivision thereof, whether state or local,
and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions of or pertaining to government (including
any supra-national bodies such as the European Union or the European Central
Bank).
"Governmental Reimbursement Program Cost" means with respect to and
payable by the Borrower and its Subsidiaries the sum of:
12
(i) all amounts (including punitive and other similar amounts)
agreed to be paid or payable (A) in settlement of claims or (B) as a
result of a final, non-appealable judgment, award or similar order, in
each case, relating to participation in Medical Reimbursement Programs;
(ii) all final, non-appealable fines, penalties, forfeitures or
other amounts rendered pursuant to criminal indictments or other criminal
proceedings relating to participation in Medical Reimbursement Programs;
and
(iii) the amount of final, non-appealable recovery, damages, awards,
penalties, forfeitures or similar amounts rendered in any litigation,
suit, arbitration, investigation or other legal or administrative
proceeding of any kind relating to participation in Medical Reimbursement
Programs.
"Guaranteed Obligations" means, without duplication, (i) all of the
obligations of the Borrower to the Lenders (including the Issuing Lender and the
Swingline Lender), the Administrative Agent and the Collateral Agent, whenever
arising, under this Credit Agreement, the Notes, the Collateral Documents or any
of the other Credit Documents (including, without limitation, any interest
accruing after the occurrence of a Bankruptcy Event with respect to any Credit
Party, regardless of whether such interest is an allowed claim under any Debtor
Relief Laws) and (ii) all liabilities and obligations owing from any Credit
Party to any Lender, or any Affiliate of a Lender, whenever arising, under any
Hedging Agreement relating to the Obligations to the extent permitted hereunder.
"Guarantor" means each Person identified as a "Guarantor" on the signature
pages hereto and each other Person that joins as a Guarantor pursuant to Section
7.11, together with their successors and permitted assigns.
"HCFA" means the United States Health Care Financing Administration and
any successor thereof, including the Centers for Medicare and Medicaid Services.
"Hedging Agreements" means any interest rate protection agreement or
foreign currency exchange agreement.
"HHS" means the United States Department of Health and Human Services and
any successor thereof.
"HRA" means HRA Holding Corp., a New Jersey corporation.
"HRA Acquisition" means the Acquisition by a member of the Consolidated
Group of HRA and Hemophilia Resources of America, Inc., a New Jersey
corporation, pursuant to the terms of the HRA Acquisition Agreement.
"HRA Acquisition Agreement" means the Agreement and Plan of Merger dated
as of June 4, 2004 by and among HHS Merger Corp., Hemophilia Health Services,
Inc. and HRA Holding Corp.
"Immaterial Subsidiary" means any Domestic Subsidiary that owns Property
with an aggregate value of less than $200,000.
"Indebtedness" means, with respect to any Person, without duplication, all
(i) Funded Debt of such Person, (ii) obligations under take-or-pay or similar
arrangements or under commodities agreements, (iii) obligations under Hedging
Agreements, (iv) Support Obligations of such Person in respect of Indebtedness
of another Person, (v) Indebtedness of another Person secured by a Lien on any
of such first
13
Person's Property, whether or not such Indebtedness has been assumed, provided,
however, for purposes hereof, the amount of such Indebtedness shall be limited
to the lesser of the amount of Indebtedness as to which there is recourse or to
the fair market value of the Property that is the subject of such Lien and (vi)
Indebtedness of any partnership or joint venture or other similar entity in
which such Person is a general partner or joint venturer and, as such, has
personal liability for such Indebtedness, but only to the extent there is
recourse to such Person for payment thereof.
"Indemnified Liabilities" shall have the meaning provided in Section 11.5.
"Indemnitees" shall have the meaning provided in Section 11.5.
"Interbank Offered Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of one percent (0.01%)) in each case determined by the
Administrative Agent to be equal to:
(a) the offered rate that appears on the Dow Jones Telerate Screen
Page 3750 (or any successor page) that displays an average British Bankers
Association Interest Settlement Rate for deposits in Dollars (for delivery
on the first day of the applicable Interest Period) for a term equivalent
to the applicable Interest Period at approximately 11:00 A.M. (London,
England time) two Business Days prior to the first day of the applicable
Interest Period; or
(b) if for any reason the foregoing rate in clause (a) is
unavailable or undeterminable, the offered rate on such other page or
other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the
first day of the applicable Interest Period) for a term equivalent to the
applicable Interest Period at approximately 11:00 A.M. (London, England
time) two Business Days prior to the first day of the applicable Interest
Period; or
(c) if for any reason the foregoing rates in clauses (a) and (b)
are unavailable or undeterminable, the rate of interest at which deposits
in Dollars for delivery on the first day of the applicable Interest Period
in same day funds in the approximate amount of the applicable Eurodollar
Loan for a term equivalent to the applicable Interest Period would be
offered by the London branch of Bank of America to major banks in the
offshore Dollar market at approximately 11:00 A.M. (London, England time)
two Business Days prior to the first day of the applicable Interest
Period.
"Interest Payment Date" means (i) as to any Base Rate Loan and any
Swingline Loan, the last day of each March, June, September and December and the
Termination Date, in the case of Revolving Loans and Swingline Loans, or the
last day of each March, June, September and December and the maturity date of
the Tranche B Term Loan, in the case of Tranche B Term Loan, and (ii) as to any
Eurodollar Loan, the last day of each Interest Period for such Loan, the date of
repayment of principal of such Loan and the Termination Date or the maturity
date of the Tranche B Term Loan, and in addition where the applicable Interest
Period is more than three months, then also on 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 that is not a Business Day, such Interest
Payment Date shall be deemed to be the next succeeding Business Day.
"Interest Period" means a period of one, two, three, six months or ,
subject to availability, twelve months duration, as the Borrower may elect,
commencing on the date of the borrowing (including Conversions, Continuations
and renewals); provided, however, (i) if any Interest Period would end on a day
that is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day (except where the next succeeding Business Day falls in
the next succeeding calendar month, then on the next
14
preceding Business Day), (ii) with respect to Revolving Commitments, no
Interest Period shall extend beyond the Termination Date, (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 day of such calendar month and (iv) with respect to
Eurodollar Loans that are a portion of the Tranche B Term Loan, no Interest
Period shall extend beyond any principal installment payment date for the
Tranche B Term Loan unless the aggregate amount of the Tranche B Term Loan
comprised of Eurodollar Loans with Interest Periods expiring prior to such
principal installment payment together with the aggregate amount of the Tranche
B Term Loan comprised of Base Rate loans is at least equal to the amount of the
principal installment payment due on such principal installment payment date.
"Interest Rate Type" shall mean either Base Rate Loans or Eurodollar
Loans, as appropriate.
"Internal Revenue Code" means the Internal Revenue Code of 1986, 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 Internal Revenue Code shall be construed also to
refer to any successor sections.
"Investment" in any Person means (i) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise) of
Capital Stock, bonds, notes, debentures, partnership, joint ventures or other
ownership interests or other securities of such Person, (ii) any deposit with,
or advance, loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other assets in
the ordinary course of business and deposits with financial institutions in the
ordinary course of business) or (iii) any other capital contribution to or
investment in such Person, including, without limitation, any Support
Obligations (including any support for a letter of credit issued on behalf of
such Person) incurred for the benefit of such Person, but excluding any
Restricted Payment to such Person.
"Issuing Lender" means Bank of America and any successor in its such
capacity.
"Issuing Lender Fee" shall have the meaning provided in Section
3.5(b)(ii).
"Joinder Agreement" means a joinder agreement substantially in the form of
Exhibit 7.11 hereto executed and delivered by a Subsidiary in accordance with
the provisions of Section 7.11.
"Joint Venture" means any joint venture between the Borrower or any of its
Subsidiaries and any other Person, whether a corporation, partnership, limited
liability company or other entity; provided, however that the term "Joint
Venture" shall not include any Subsidiary of the Borrower.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and their successors and assigns.
"Letter of Credit" means any standby letter of credit issued by the
Issuing Lender for the account of the Borrower in accordance with the terms of
Section 2.1(b).
"Letter of Credit Fee" shall have the meaning provided in Section
3.5(b)(i).
"Licenses" means all licenses, permits and other grants of authority
obtained or required to be obtained from any Governmental Authorities in
connection with the management or operation of the business of the members of
the Consolidated Group or the ownership, lease, license or use of any Property
of the members of the Consolidated Group.
15
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise),
preference, priority or charge of any kind (including any agreement to give any
of the foregoing, any conditional sale or other title retention agreement and
any lease in the nature thereof).
"Loan" means any of the Revolving Loans, Swingline Loans and the Tranche B
Term Loan, and the Base Rate Loans, Eurodollar Loans and Quoted Rate Swingline
Loans comprising the Revolving Loans, Swingline Loans and the Tranche B Term
Loan.
"LOC Commitment" means, with respect to the Issuing Lender, the commitment
of the Issuing Lender to issue, and to honor payment obligations under, Letters
of Credit in an aggregate principal amount outstanding up to the LOC Committed
Amount and, with respect to each Revolving Lender, the commitment of such
Revolving Lender to purchase Participation Interests in the LOC Obligations in
an aggregate amount up to such Revolving Lender's Revolving Commitment
Percentage of the LOC Committed Amount.
"LOC Committed Amount" shall have the meaning provided in Section 2.1(b).
"LOC Documents" means, with respect to any Letter of Credit, such Letter
of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or at risk or (ii) any collateral security for such
obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum amount
that is, or at any time thereafter may become, available to be drawn under
Letters of Credit then outstanding, assuming compliance with all requirements
for drawings referred to in such Letters of Credit plus (ii) the aggregate
amount of all drawings under Letters of Credit honored by the Issuing Lender but
not yet reimbursed.
"Material Adverse Effect" means a material adverse effect on (i) the
financial condition, operations, business, assets, liabilities or prospects of
the Consolidated Group taken as a whole, (ii) the ability of any member of the
Consolidated Group to perform any material obligation under any Credit Document
to which it is a party or (iii) the material rights and remedies of the
Administrative Agent and the Lenders under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Laws, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Medicaid" means that means-tested entitlement program under Title XIX,
P.L. 89-87, of the Social Security Act that provides federal grants to states
for medical assistance based on specific eligibility criteria, as set forth at
Section 1396, et seq. of Title 42 of the United Sates Code, as amended.
"Medicaid Regulations" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (ii) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (i) above;
(iii) all state statutes and plans for medical
16
assistance enacted in connection with the statutes and provisions described in
clauses (i) and (ii) above; and (iv) all applicable provisions of all rules,
regulations, manuals and orders of all Governmental Authorities promulgated
pursuant to or in connection with the statutes described in clause (iii) above
and all state administrative, reimbursement and other guidelines of all
Governmental Authorities having the force of law promulgated pursuant to or in
connection with the statutes described in clause (ii) above, in each case as may
be amended, supplemented or otherwise modified from time to time.
"Medical Reimbursement Programs" means a collective reference to the
Medicare, Medicaid and CHAMPUS programs and any other health care program
operated by or financed in whole or in part by any foreign or domestic federal,
state or local government.
"Medicare" means that government-sponsored entitlement program under Title
XVIII, P.L. 89-87, of the Social Security Act that provides for a health
insurance system for eligible elderly and disabled individuals, as set forth at
Section 1395, et seq. of Title 42 of the United States Code, as amended.
"Medicare Regulations" means, 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, HCFA, HHS, OIG, or
any person succeeding to the functions of any of the foregoing) promulgated
pursuant to or in connection with any of the foregoing having the force of law,
as each may be amended, supplemented or otherwise modified from time to time.
"Moody's" means Moody's Investors Service, Inc., or any successor or
assignee of the business of such company in the business of rating securities.
"Mortgages" means any mortgages, deeds of trust, security deeds or like
instruments given to the Administrative Agent, for the ratable benefit of the
Lenders, to secure the obligations of the Credit Parties under the Credit
Documents, as such mortgages, deeds of trust, security deeds or like instruments
may be amended and modified from time to time.
"Multiemployer Plan" means a Plan that is a "multiemployer plan" as
defined in Section 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan (other than a Multiemployer Plan) to
which any member of the Consolidated Group or any ERISA Affiliate and at least
one employer other than the members of the Consolidated Group or any ERISA
Affiliate are contributing sponsors.
"Net Cash Proceeds" means the aggregate proceeds paid in cash or Cash
Equivalents received by any member of the Consolidated Group in connection with
any Asset Disposition, Equity Transaction or Debt Transaction, net of (a) direct
costs (including, without limitation, legal, accounting and investment banking
fees, and sales commissions), (b) taxes paid or payable as a result thereof and
(c) in the case of an Asset Disposition, the aggregate amount of Indebtedness
secured by any of the Property that is the subject of such Asset Disposition and
that is required by the terms thereof to be prepaid in connection with such
Asset Disposition; it being understood that "Net Cash Proceeds" shall include,
without limitation, any cash or Cash Equivalents received upon the sale or other
disposition of any non-cash consideration received by any such member of the
Consolidated Group in any Asset Disposition, Equity Transaction or Debt
Transaction.
"Net Changes in Working Capital" means, for any period for the
Consolidated Group, an amount (positive or negative) equal to the sum of (a) the
amount of decreases (minus the amount of increases) in
17
accounts receivable and inventory and (b) the amount of increases (minus the
amount of decreases) in accounts payable, in each case on a consolidated basis
determined in accordance with GAAP and as set forth in the audited annual
consolidated financial statements of the Consolidated Group delivered to the
Administrative Agent pursuant to Section 7.1(a).
"Note" means any of the Revolving Notes and the Tranche B Term Notes.
"Notice of Continuation/Conversion" means the written notice of
Continuation or Conversion in substantially the form of Exhibit 3.2, as required
by Section 3.2.
"Notice of Request of Letter of Credit" means a written notice (or
telephonic notice promptly confirmed in writing) in substantially the form of
Exhibit 2.2(a)(iii) that specifies (A) that a Letter of Credit is requested, (B)
the date of the requested issuance or extension, (C) the type, amount, expiry
date and terms on which the Letter of Credit is to be issued or extended, and
(D) the beneficiary.
"Notice of Revolving Loan Borrowing" means a written notice (or telephonic
notice promptly confirmed in writing) in substantially the form of Exhibit
2.2(a)(i) that specifies (A) that a Revolving Loan is requested, (B) the date of
the requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Eurodollar Loans or a combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor.
"Notice of Swingline Loan Borrowing" means a written notice (or telephonic
notice promptly confirmed in writing) in substantially the form of Exhibit
2.2(a)(iii) that specifies (A) that a Swingline Loan is requested, (B) the date
of the requested borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing shall be
comprised of Base Rate Loans, Quoted Rate Swingline Loans or a combination
thereof.
"Obligations" means the Revolving Loans, LOC Obligations, Swingline Loans
and the Tranche B Term Loan, including interest and fees that accrue after the
commencement by or against any Credit Party or any Affiliate thereof of any
proceeding under any Debtor Relief Laws naming such Person as the debtor in such
proceeding, regardless of whether such interest and fees are allowed claims in
such proceeding.
"OIG" means the Office of Inspector General of HHS and any successor
thereof.
"Operating Lease" means, as applied to any Person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time) of
any Property by such Person as lessee that is not a Capital Lease.
"Other Taxes" shall have the meaning provided in Section 3.11.
"Participant" has the meaning specified in Section 11.3(d).
"Participation Interest" means the purchase by a Lender of a participation
in LOC Obligations as provided in Section 2.6(b), in Swingline Loans as provided
in Section 2.7 and in Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA and any successor thereof.
18
"Permitted Acquisition" means (i) the HRA Acquisition, (ii) the
Acquisitions identified and described on Schedule 8.4 and (iii) any Acquisition
by a member of the Consolidated Group, provided that (a) the consideration paid
is not greater than the fair market value of the Property acquired; (b) the
Property acquired (or the Property of the Person acquired) in such Acquisition
shall be used or useful in the same or similar line of business as the members
of the Consolidated Group on the Closing Date; (c) all Property to be acquired
in connection with such Acquisition shall be located in the United States of
America; (d) 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 shall have duly approved such Acquisition; (e) no Default or Event
of Default shall exist immediately after giving effect to such Acquisition; (f)
the representations and warranties made by the Credit Parties in any Credit
Document shall be true and correct in all material respects at and as if made as
of the date of such Acquisition (after giving effect thereto) except to the
extent such representations and warranties expressly relate to an earlier date;
(g) the cash consideration (including, for purposes hereof, Indebtedness assumed
but excluding Deferred Purchase Price Payments) paid in connection with any
Acquisition (or series of related Acquisitions) shall not exceed $100,000,000;
and (h) the cash consideration (including, for purposes hereof, Indebtedness
assumed but excluding Deferred Purchase Price Payments) paid in connection with
all Acquisitions (other than the HRA Acquisition and the Acquisitions identified
and described on Schedule 8.4) shall not exceed $150,000,000 in any twelve-month
period commencing after the Closing Date.
"Permitted Investments" means Investments that are (i) cash and Cash
Equivalents; (ii) accounts receivable created, acquired or made in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (iii) Investments consisting of Capital Stock, obligations,
securities or other Property received in settlement of accounts receivable
(created in the ordinary course of business) from bankrupt obligors; (iv)
Investments existing on the Closing Date and set forth in Schedule 8.6; (v)
advances or loans to directors, officers and employees that do not exceed
$3,000,000 in the aggregate at any one time outstanding; (vi) Investments by
members of the Consolidated Group in and to Subsidiaries; (vii) Investments in
Joint Ventures, provided that such Investments in any particular Joint Venture
shall not exceed $10,000,000 in the aggregate at any time and Investments in all
such Joint Ventures shall not exceed $40,000,000 in the aggregate at any time;
(viii) Investments in Capital Stock received as consideration for an Asset
Disposition; (ix) Investments that constitute Permitted Acquisitions and (x)
Investments of a nature not contemplated in the foregoing subsections in an
amount not to exceed $10,000,000 in the aggregate at any time outstanding.
"Permitted Liens" means:
(i) Liens in favor of the Collateral Agent to secure the obligations
of the Credit Parties under the Credit Documents;
(ii) Liens in favor of a Lender or an Affiliate of a Lender pursuant
to a Hedging Agreement permitted hereunder, but only (A) to the extent
such Liens secure obligations under such agreements permitted under
Section 8.1, (B) to the extent such Liens are on the same collateral as to
which the Lenders hereunder also have a Lien, and (C) so long as the
obligations under such Hedging Agreement and the loans and obligations
hereunder and under the other Credit Documents shall share pari passu in
the collateral subject to such Liens;
(iii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or Liens
for taxes, assessments, charges, levies and claims not required to be paid
or discharged under Section 7.5 hereof;
(iv) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and suppliers and other Liens imposed
by law or pursuant to customary reservations or
19
retentions of title arising in the ordinary course of business, provided
that such Liens secure only amounts not yet due and payable or, if due and
payable, are unfiled and no other action has been taken to enforce the
same or are 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 or loss on account thereof);
(v) Liens (other than Liens created or imposed under ERISA) incurred
or deposits made by any member of the Consolidated Group in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the performance
of tenders, statutory obligations, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(vi) Liens in connection with attachments or judgments (including
judgment or appeal bonds) provided that the judgments secured shall,
within thirty (30) days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall have been discharged
within thirty (30) days after the expiration of any such stay;
(vii) easements, rights-of-way, covenants, restrictions (including
zoning restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
(viii) Liens on Property of any Person securing Indebtedness
(including Capital Leases and Synthetic Leases) of such Person permitted
under Section 8.1(c), provided that any such Lien attaches only to the
Property financed or leased and such Lien attaches concurrently with or
within ninety (90) days after the acquisition thereof;
(ix) leases or subleases granted to others not interfering in any
material respect with the business of any member of the Consolidated
Group;
(x) any interest or title of a lessor under, and Liens arising from
UCC financing statements (or equivalent filings, registrations or
agreements in foreign jurisdictions) relating to, leases permitted by this
Credit Agreement;
(xi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods;
(xii) Liens deemed to exist in connection with Investments in
repurchase agreements that constitute Permitted Investments;
(xiii) normal and customary rights of setoff upon deposits of cash
in favor of banks or other depository institutions;
(xiv) Liens of a collection bank arising under Section 4-210 of the
UCC on items in the course of collection;
(xv) (A) Liens in favor of Genzyme Corporation on all Genzyme
Inventory which Liens are prior to the Liens in favor of the Collateral
Agent, for the benefit of the Lenders, in the Genzyme Inventory pursuant
to the terms of the Genzyme Intercreditor Agreement and (B) Liens in favor
of Genzyme Corporation on all accounts receivable arising from the sale of
Genzyme Inventory which Liens are subject to the terms of the Genzyme
Intercreditor Agreement;
20
(xvi) Liens in favor of Biogen US Corporation on all inventory of
the Borrower and its Subsidiaries consisting of the prescription drug
AVONEX, provided that such Liens are subordinated to the Liens in favor of
the Collateral Agent to secure the obligations of the Credit Parties under
the Credit Documents on terms and conditions reasonably satisfactory to
the Collateral Agent;
(xvii) Liens created or deemed to exist by the establishment of
trusts for the purpose of satisfying Governmental Reimbursement Program
Costs; provided that the Borrower, in each case, shall have established
adequate reserves for such claims or actions; and
(xviii) Liens existing as of the Closing Date and set forth on
Schedule 6.8, provided that the scope of such Lien shall not be extended
to or cover any Property other than the Property subject thereto on the
Closing Date (and renewals, replacements and substitutions thereof and
proceeds thereof).
"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) that is covered by ERISA and with respect to which any member of the
Consolidated Group 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.
"Pledge Agreement" means the second amended and restated pledge agreement
dated as of the Closing Date given by the Credit Parties to the Collateral Agent
to secure the obligations of the Credit Parties under the Credit Documents, as
such pledge agreement may be amended and modified from time to time.
"Prime Rate" means, for any day, the rate per annum in effect for such day
as publicly announced from time to time by Bank of America as its "prime rate."
Such rate is a rate set by Bank of America based upon various factors including
Bank of America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate. Any change in such rate
announced by Bank of America shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Pro Forma Basis" means that, for purposes of calculating the financial
covenants set forth in Section 7.10 (including, without limitation, for purposes
of determining the applicable pricing level under the definition of "Applicable
Percentage"), any Acquisition, Asset Disposition or Restricted Payment
consummated during the applicable period shall be deemed to have occurred as of
the first day of such period. In furtherance of the foregoing, (a) in the case
of an Asset Disposition, (i) income statement items (whether positive or
negative) attributable to the property, entities or business units that are the
subject of such Asset Disposition shall be excluded to the extent relating to
any period prior to the date of such Asset Disposition and (ii) Indebtedness
paid or retired in connection with such Asset Disposition shall be deemed to
have been paid and retired as of the first day of the applicable period, and (b)
in the case of an Acquisition, income statement items (whether positive or
negative) attributable to the property, entities or business units that are the
subject of such Acquisition shall be included to the extent relating to any
period prior to the date of such Acquisition (provided that any Funded Debt
incurred to finance such Acquisition shall be deemed to have been incurred on
the date of such Acquisition).
"Pro Forma Statements" shall have the meaning provided in Section
5.1(c)(i).
21
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to a Quoted Rate Swingline Loan, the
fixed or floating percentage rate per annum, if any, offered by the Swingline
Lender and accepted by the Borrower in accordance with the provisions hereof.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing interest at
the Quoted Rate.
"Rate Determination Date" shall have the meaning provided in the
definition of "Applicable Percentage".
"Recovery Event" means the receipt by any member of the Consolidated Group
of any cash insurance proceeds, condemnation award or indemnification payments
from third parties by reason of theft, loss, physical destruction or damage,
taking or similar event with respect to any Property
"Register" shall have the meaning provided in Section 11.3(c).
"Regulation D, O, T, U, or X" means Regulation D, O, 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.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents and advisors
of such Person and of such Person's Affiliates.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the notice requirement has been
waived by regulation.
"Required Lenders" means, at any time, Lenders whose aggregate Credit
Exposure (as hereinafter defined) constitutes more than fifty percent (50%) of
the Credit Exposure of all the Lenders at such time; provided, however, that the
Credit Exposure of a Defaulting Lender shall be excluded for purposes of making
a determination of Required Lenders. As used in the preceding sentence, "Credit
Exposure" means, for any Lender, (a) at any time prior to the termination of the
Commitments, the sum of (i) such Lender's Revolving Committed Amount plus (ii)
the outstanding principal amount of the Tranche B Term Loan made by such Lender,
and (b) at any time after the termination of the Commitments, the aggregate
principal amount of Obligations held by such Lender (taking into account in each
case Participation Interests or obligations to participate therein).
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule, regulation or ordinance (including, without
limitation, Environmental Laws) or 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.
"Responsible Officer" of any Person means any of the chief executive
officer, chief operating officer, president, senior vice president or chief
financial officer of such Person.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any member of the Consolidated Group, now or hereafter
outstanding (including, without limitation, any payment in connection with any
dissolution, merger, consolidation or disposition involving any member of the
Consolidated Group), or to the holders, in their
22
capacity as such, of any shares of any class of Capital Stock of any member of
the Consolidated Group, now or hereafter outstanding (other than dividends or
distributions payable in the same class of Capital Stock of the applicable
Person or dividends or distributions payable to any Credit Party (directly or
indirectly through Subsidiaries)), (ii) any redemption, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any member of the Consolidated
Group, now or hereafter outstanding, and (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of Capital Stock of any member of the Consolidated
Group, now or hereafter outstanding. The term "Restricted Payment" shall in no
event include any distribution of Capital Stock of the Borrower or rights in
respect of Capital Stock of the Borrower made pursuant to the terms of, or
otherwise in connection with or relating to, a customary "poison pill" or
similar shareholder rights plan, as such plan may be amended, restated,
supplemented or otherwise modified from time to time.
"Revolving Commitment" means, with respect to each Revolving Lender, the
commitment of such Revolving Lender to make Revolving Loans in an aggregate
principal amount up to such Revolving Lender's Revolving Commitment Percentage
of the Aggregate Revolving Committed Amount.
"Revolving Commitment Percentage" means, for each Revolving Lender, a
fraction (expressed as a percentage) the numerator of which is the Revolving
Committed Amount of such Revolving Lender at such time and the denominator of
which is the Aggregate Revolving Committed Amount at such time. The initial
Revolving Commitment Percentage of each Revolving Lender is set forth on
Schedule 2.1.
"Revolving Committed Amount" means, with respect to each Revolving Lender,
the amount of such Revolving Lender's Revolving Commitment. The initial
Revolving Committed Amount of each Revolving Lender is set forth on Schedule
2.1.
"Revolving Lender" means each Lender identified as a "Revolving Lender" on
Schedule 2.1(a) and its successors and assigns.
"Revolving Loans" shall have the meaning provided in Section 2.1(a).
"Revolving Notes" means the promissory notes in favor of each of the
Revolving Lenders evidencing the Revolving Loans and Swingline Loans in
substantially the form attached as Exhibit 2.5-1, individually or collectively,
as appropriate, as such promissory notes may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"Revolving Obligations" means the Revolving Loans, LOC Obligations and
Swingline Loans.
"S&P" means Standard & Poor's Ratings Group, 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.
"Sale and Leaseback Transaction" means any arrangement pursuant to which
any member of the Consolidated Group, directly or indirectly, becomes liable as
lessee, guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any Property that such member of the
Consolidated Group (a) has sold or transferred (or is to sell or transfer) to,
or arranged the purchase by, a Person that is not a member of the Consolidated
Group or (b) intends to use for substantially the same purpose as any other
Property that has been sold or transferred (or is to be sold or transferred) by
such member of the Consolidated Group to another Person that is not a member of
the Consolidated Group in connection with such lease.
"Securities Exchange Act" means the Securities Exchange Act of 1934.
23
"Securitization Transaction" means any financing transaction or series of
financing transactions that have been or may be entered into by a member of the
Consolidated Group pursuant to which such member of the Consolidated Group may
sell, convey or otherwise transfer to (i) a Subsidiary (a "Securitization
Subsidiary"), or (ii) any other Person, or may grant a security interest in, any
accounts receivable, notes receivable, rights to future lease payments or
residuals or other similar rights to payment (the "Securitization Receivables")
(whether such Securitization Receivables are then existing or arising in the
future) of such member of the Consolidated Group, and any assets related
thereto, including, without limitation, all security interests in merchandise or
services financed thereby, the proceeds of such Securitization Receivables, and
other assets that are customarily sold or in respect of which security interests
are customarily granted in connection with securitization transactions involving
such assets. A Synthetic Lease shall not constitute a Securitization
Transaction.
"Security Agreement" means the second amended and restated security
agreement dated as of the Closing Date given by the Credit Parties to the
Collateral Agent to secure the obligations of the Credit Parties under the
Credit Documents, as such security agreement may be amended and modified from
time to time.
"Single Employer Plan" means any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan or a Multiple Employer Plan.
"Social Security Act" means the Social Security Act of 1965 as set forth
in Title 42 of the United States Code, as amended, and any successor statute
thereto, as interpreted by the rules and regulations issued thereunder, in each
case as in effect from time to time. References to sections of the Social
Security Act shall be construed to refer to any successor sections.
"Stark I and II" means Section 1877 of the Social Security Act as set
forth at Section 1395nn of 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.
"Subordinated Debt" means a collective reference to Indebtedness of a
member of the Consolidated Group that (a) by its terms is expressly subordinated
in right of payment to the prior payment of the Obligations on terms and
conditions acceptable to the Administrative Agent and the Required Lenders and
(b) contains covenant and default provisions that are acceptable to the
Administrative Agent and the Required Lenders.
"Subsidiary" means, as to any Person at any time, (a) any corporation more
than fifty percent (50%) of whose Voting 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 such 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 such time owned by such Person directly
or indirectly through Subsidiaries, and (b) any partnership, association, joint
venture or other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than fifty percent (50%) of the Voting
Stock. Unless otherwise provided, "Subsidiary" shall refer to a Subsidiary of
the Borrower.
"Support Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including, without limitation, any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any Property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including, without limitation, keep-well
24
agreements, maintenance agreements, comfort letters or similar agreements or
arrangements) for the benefit of any holder of Indebtedness of such other
Person, (iii) to lease or purchase Property, securities or services primarily
for the purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness against loss
in respect thereof. The amount of any Support 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 Support Obligation is made.
"Swingline Commitment" means, with respect to the Swingline Lender, the
commitment of the Swingline Lender to make Swingline Loans in an aggregate
principal amount outstanding up to the Swingline Committed Amount and, with
respect to each Revolving Lender, the commitment of such Revolving Lender to
purchase Participation Interests in Swingline Loans up to such Revolving
Lender's Revolving Commitment Percentage of the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning provided in Section
2.1(c).
"Swingline Lender" means Bank of America and any successor in its such
capacity.
"Swingline Loan" shall have the meaning provided in Section 2.1(c).
"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 under GAAP. A Securitization
Transaction shall not constitute a Synthetic Lease.
"Taxes" shall have the meaning provided in Section 3.11.
"Termination Date" means, with respect to the Revolving Commitments, July
21, 2009.
"Total Commitments" shall mean the aggregate amount of the Revolving
Commitments and the Tranche B Term Loan Commitments.
"Tranche B Term Lenders" shall mean, upon establishment of a Tranche B
Term Loan facility under Section 2.1(d) and until the funding of the Tranche B
Term Loan, Lenders holding Tranche B Term Loan Commitments and, thereafter,
Lenders holding a portion of the Tranche B Term Loan.
"Tranche B Term Loan" shall have the meaning given such term in Section
2.1(d).
"Tranche B Term Loan Commitment" shall mean, upon establishment of a
Tranche B Term Loan facility under Section 2.1(d), the commitment of each
Tranche B Term Lender to make its portion of the Tranche B Term Loan hereunder,
being the dollar amount set forth opposite such Lender's name on Schedule 2.1
hereto, provided that for purposes of making determinations of Required Lenders
hereunder and for other purposes after date of advance of Tranche B Term Loan,
the principal amount of the "Tranche B Term Loan Commitments" hereunder shall be
the outstanding principal amount of the Tranche B Term Loan.
"Tranche B Term Loan Commitment Percentage" shall mean with respect to any
Tranche B Term Lender, the percentage of the aggregate Tranche B Term Loan
Commitments represented by such Lender's Tranche B Term Loan Commitment.
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"Tranche B Term Notes" means the promissory notes in favor of each of the
Tranche B Term Lenders evidencing such Tranche B Term Lender's Tranche B Term
Loan Commitment in substantially the form attached as Exhibit 2.5-2,
individually or collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced from time to
time.
"UCC" means the Uniform Commercial Code in effect in any applicable
jurisdiction from time to time.
"Voting Stock" means, with respect to any Person, Capital Stock issued by
such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary one hundred
percent (100%) of whose Voting Stock (other than, with respect to Foreign
Subsidiaries, Capital Stock held pursuant to director's qualifying share
requirements under applicable law) is at the time owned by such Person directly
or indirectly through other Wholly Owned Subsidiaries.
1.2 Interpretive Provisions.
With reference to this Credit Agreement and each other Credit Document,
unless otherwise specified herein or in such other Credit Document:
(a) The definitions of terms herein shall apply equally to the singular
and plural forms of the terms defined. Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter forms.
The words "include", "includes" and "including" shall be deemed to be followed
by the phrase "without limitation". The word "will" shall be construed to have
the same meaning and effect as the word "shall". Unless the context requires
otherwise, (i) any definition of or reference to any agreement, instrument or
other document (including any Organization Document) shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein or in any other Credit
Document), (ii) any reference herein to any Person shall be construed to include
such Person's successors and assigns, (iii) the words "herein", "hereof" and
"hereunder," and words of similar import when used in any Credit Document, shall
be construed to refer to such Credit Document in its entirety and not to any
particular provision thereof, (iv) all references in a Credit Document to
"Articles", "Sections", "Exhibits" and "Schedules" shall be construed to refer
to articles and sections of, and exhibits and schedules to, the Credit Document
in which such references appear and (v) the words "asset" and "property" shall
be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights.
(b) In the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including."
(c) Section headings herein and in the other Credit Documents are included
for convenience of reference only and shall not affect the interpretation of
this Credit Agreement or any other Credit Document.
26
1.3 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from"
means "from and including" and the words "to" and "until" each mean "to but
excluding".
1.4 Accounting Terms.
(a) All accounting terms not specifically or completely defined herein
shall be construed in conformity with, and all financial data (including
financial ratios and other financial calculations) required to be submitted
pursuant to this Credit Agreement shall be prepared in conformity with, GAAP
applied on a consistent basis, as in effect from time to time, applied in a
manner consistent with that used in preparing the audited financial statements
of the Borrower referenced in Section 5.1(c), except as otherwise specifically
prescribed herein.
(b) Notwithstanding any provision herein to the contrary, determinations
of (i) the applicable pricing level under the definition of "Applicable
Percentage" and (ii) compliance with the financial covenants shall be made on a
Pro Forma Basis.
(c) The Borrower will provide a written summary of material changes in
GAAP or in the consistent application thereof that affect the computation of any
financial covenant, limitations or requirements set forth in any Credit Document
in any material respect, with each annual and quarterly officer's certificate
delivered in accordance with Section 7.1(c). If at any time any change in GAAP
or in the consistent application thereof would affect the computation of any
financial ratio or requirement set forth in any Credit Document, and either the
Borrower or the Required Lenders shall object in writing to determining
compliance based on such change, then such computations shall continue to be
made on a basis consistent with the most recent financial statements delivered
pursuant to Section 7.01(a) or (b) as to which no such objection has been made.
1.5 Rounding.
Any financial ratios required to be maintained by the Borrower pursuant to
this Credit Agreement shall be calculated by dividing the appropriate component
by the other component, carrying the result to one place more than the number of
places by which such ratio is expressed herein and rounding the result up or
down to the nearest number (with a rounding-up if there is no nearest number).
SECTION 1
CREDIT FACILITIES
2.1 Commitments.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Revolving Lender severally agrees to make
revolving credit loans (the "Revolving Loans") to the Borrower in Dollars from
time to time in the amount of such Revolving Lender's Revolving Commitment
Percentage of such Revolving Loans for the purposes hereinafter set forth;
provided that (i) with regard to the Revolving Lenders collectively, the
aggregate principal amount of Revolving Obligations outstanding at any time
shall not exceed ONE HUNDRED SEVENTY-FIVE MILLION DOLLARS ($175,000,000) (as
such amount may be reduced from time to time in accordance with the provisions
hereof, the "Aggregate Revolving Committed Amount"), and (ii) with regard to
each Revolving Lender individually, such Revolving Lender's Revolving Commitment
Percentage of
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Revolving Obligations outstanding at any time shall not exceed such Revolving
Lender's Revolving Committed Amount. Revolving Loans may consist of Base Rate
Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof.
(b) Letter of Credit Commitment. During the Commitment Period, in reliance
upon the agreements of the Revolving Lenders set forth in Section 2.6 and
subject to the terms and conditions hereof and of the LOC Documents, if any, the
Issuing Lender shall issue, and the Revolving Lenders shall participate in, such
standby Letters of Credit in Dollars as the Borrower may request for its own
account or for the account of another Credit Party as provided herein, in a form
acceptable to the Issuing Lender, for the purposes hereinafter set forth;
provided that (i) the aggregate principal amount of LOC Obligations shall not at
any time exceed FIFTEEN MILLION DOLLARS ($15,000,000) (as such amount may be
reduced from time to time in accordance with the provisions hereof, the "LOC
Committed Amount"), (ii) with regard to the Revolving Lenders collectively, the
aggregate principal amount of Revolving Obligations outstanding at any time
shall not exceed the Aggregate Revolving Committed Amount, and (xix) with regard
to each Revolving Lender individually, such Revolving Lender's Revolving
Commitment Percentage of Revolving Obligations outstanding at any time shall not
exceed such Revolving Lender's Revolving Committed Amount. Letters of Credit
shall not have an original expiry date more than one year from the date of
issuance or extension. No Letter of Credit shall have an expiry date, whether as
originally issued or by extension, extending beyond the date thirty (30) days
prior to the Termination Date. Each Letter of Credit shall comply with the
related LOC Documents. The issuance date of each Letter of Credit shall be a
Business Day. Without the consent of the Required Lenders, the Issuing Lender
shall not issue any Letter of Credit after the occurrence and during the
continuation of an Event of Default (subject to Section 10.5(b)).
(c) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender agrees to make revolving
credit loans (the "Swingline Loans") to the Borrower in Dollars from time to
time for the purposes hereinafter set forth; provided that (i) the aggregate
principal amount of Swingline Loans shall not at any time exceed TEN MILLION
DOLLARS ($10,000,000) (as such amount may be reduced from time to time in
accordance with the provisions hereof, the "Swingline Committed Amount"), and
(ii) with regard to the Revolving Lenders collectively, the aggregate principal
amount of Revolving Obligations outstanding at any time shall not exceed the
Aggregate Revolving Committed Amount. Swingline Loans may consist of Base Rate
Loans or Quoted Rate Swingline Loans, or a combination thereof, as the Borrower
may request and the Swingline Lender may agree, and may be repaid and reborrowed
in accordance with the provisions hereof. Without the consent of the Required
Lenders, the Swingline Lender shall not make any Swingline Loan after the
occurrence and during the continuation of an Event of Default (subject to
Section 10.5(b)).
(d) Tranche B Term Loan Commitment. At any time after the Closing Date,
the Borrower may elect, upon notice to the Administrative Agent and subject to
terms and conditions set forth herein, to establish a Tranche B Term Loan
hereunder, which may consist of Base Rate Loans or Eurodollar Loans or a
combination thereof. If a Tranche B Term Loan is established, each Lender with a
Tranche B Term Loan Commitment will severally agree to make its Tranche B Term
Loan Commitment Percentage of a term loan (the "Tranche B Term Loan") in Dollars
to the Borrower in the aggregate principal amount of the Tranche B Term Loan
established thereunder, provided that
(i) amounts repaid on the Tranche B Term Loan may not be reborrowed;
(ii) the Tranche B Term Loan shall be made in a single funding;
28
(iii) the conditions precedent to the making of a Loan set forth in
Section 5.1 shall be satisfied;
(iv) the Borrower shall obtain Tranche B Term Loan Commitments for
the amount of the Tranche B Term Loan from existing Lenders or other
commercial banks or financial institutions that would be Eligible
Assignees; provided that such other commercial banks and financial
institutions join in this Credit Agreement as Lenders by joinder agreement
or other arrangement reasonably acceptable to the Administrative Agent
(confirming, among other things, the Applicable Percentage for the Tranche
B Term Loan). Such Tranche B Term Loan shall not be more than $375
million, and the Total Commitments shall not exceed $550 million; and
(v) in connection with the Tranche B Term Loan, (A) Schedule 2.1
shall be revised to reflect the Revolving Commitments, Revolving
Commitment Percentages, Tranche B Term Loan Commitments and Tranche B Term
Loan Commitment Percentages of the Lenders after giving effect thereto,
and (B) the Borrower will provide supporting corporate resolutions, legal
opinions, notes and other items as may be reasonably requested by the
Administrative Agent and the Lenders in connection therewith.
2.2 Method of Borrowing.
(a) Notice of Request for Extensions of Credit. The Borrower shall request
an Extension of Credit by written notice (or telephonic notice promptly
confirmed in writing) as follows:
(i) Revolving Loans. In the case of Revolving Loans, the Borrower
shall submit a Notice of Revolving Loan Borrowing to the Administrative
Agent not later than 12:00 noon (Charlotte, North Carolina time) on the
Business Day of the requested borrowing in the case of Base Rate Loans,
and on the third Business Day prior to the date of the requested borrowing
in the case of Eurodollar Loans. The Administrative Agent shall give
notice to each Revolving Lender promptly upon receipt of each Notice of
Revolving Loan Borrowing pursuant to this Section 2.2(a)(i), the contents
thereof and each Revolving Lender's share of any borrowing to be made
pursuant thereto.
(ii) Letters of Credit. In the case of Letters of Credit, the
Borrower shall submit a Notice of Request of Letter of Credit to the
Issuing Lender with a copy to the Administrative Agent not later than
12:00 noon (Charlotte, North Carolina time) on the third Business Day
prior to the date of the requested issuance or extension (or such shorter
period as may be agreed by the Issuing Lender).
(iii) Swingline Loans. In the case of Swingline Loans, the Borrower
shall submit a Notice of Swingline Loan Borrowing to the Swingline Lender
with a copy to the Administrative Agent not later than 12:00 noon
(Charlotte, North Carolina time) on the Business Day of the requested
borrowing. The Borrower shall repay each Swingline Loan on the earliest to
occur of (i) demand by the Swingline Lender, (ii) the maturity date agreed
to by the Swingline Lender and (iii) the Termination Date.
(iv) Tranche B Term Loan. In the case of the Tranche B Term Loan, to
the Administrative Agent not later than 11:00 a.m. (Charlotte, North
Carolina time) on the day of the requested borrowing in the case of Base
Rate Loans, and on the third Business Day prior to the day of the
requested borrowing in the case of Eurodollar Loans. Such request for
borrowing of a Tranche B Term Loan shall be irrevocable and shall specify
(A) that an advance of the Tranche B Term Loan is requested, (B) the
aggregate principal amount to be borrowed, and (C) whether the borrowing
shall be comprised of Base Rate Loans, Eurodollar Loans or a combination
thereof,
29
and if Eurodollar Loans are requested, the Interest Period(s) therefor;
provided that if the Borrower shall fail to specify (i) an applicable
Interest Period in the case of a Eurodollar Loan, the Borrower shall be
deemed to have requested an Interest Period of one month or (ii) the
Interest Rate Type for such Tranche B Term Loan, the Borrower shall be
deemed to have requested a Base Rate Loan. The Administrative Agent shall
give notice to each Tranche B Term Lender promptly upon receipt of each
such Notice of Borrowing pursuant to this Section 2.2(a), the contents
thereof and such Term Lender's share of any borrowing to be made pursuant
thereto.
(b) Minimum Amounts. Each Revolving Loan advance shall be (i) in the case
of Eurodollar Loans, in a minimum principal amount of $2,500,000 and integral
multiples of $250,000 in excess thereof and (ii) in the case of Base Rate Loans,
$1,000,000 (or, if less, the remaining Aggregate Revolving Committed Amount) and
integral multiples of $250,000 in excess thereof. Each Swingline Loan advance
shall be in a minimum principal amount of $100,000 and integral multiples of
$100,000 in excess thereof (or the remaining amount of the Swingline Committed
Amount, if less).
(c) Information Not Provided. If in connection with any such request for a
Revolving Loan, the Borrower shall fail to specify (i) an applicable Interest
Period in the case of a Eurodollar Loan, the Borrower shall be deemed to have
requested an Interest Period of one month, or (ii) the type of loan requested,
the Borrower shall be deemed to have requested a Base Rate Loan.
(d) Maximum Number of Eurodollar Loans. Revolving Loans may be comprised
of no more than eight (8) Eurodollar Loans outstanding at any time. The Tranche
B Term Loan may be comprised of no more than four (4) Eurodollar Loans
outstanding at any time. For purposes hereof, Eurodollar Loans with separate or
different Interest Periods will be considered as separate Eurodollar Loans even
if their Interest Periods expire on the same date.
2.3 Interest.
Subject to Section 3.1, the Loans shall bear interest at a per annum rate,
payable in arrears on each applicable Interest Payment Date (or at such other
times as may be specified herein), as follows:
(a) Base Rate Loans. During such periods as the Loans shall be comprised
of Base Rate Loans, the Adjusted Base Rate;
(b) Eurodollar Loans. During such periods as the Loans shall be comprised
of Eurodollar Loans, the Adjusted Eurodollar Rate; and
(c) Quoted Rate Swingline Loans. During such periods as the Swingline
Loans shall be comprised of Quoted Rate Swingline Loans, the Quoted Rate.
2.4 Repayment.
(a) Revolving Loans. The principal amount of all Revolving Loans shall be
due and payable in full on the Termination Date.
(b) Swingline Loans. The principal amount of all Swingline Loans shall be
due and payable in full on the earlier of (A) the maturity date agreed to by the
Swingline Lender and the Borrower with respect to such Swingline Loan or (B) the
Termination Date.
(c) Tranche B Term Loan. The principal amount of the Tranche B Term Loan
shall be repaid in consecutive quarterly installments as follows, unless
accelerated sooner pursuant to Section 9.2:
30
Payment Date Payment Amount
- --------------------- ----------------
September 30, 2004 .25%
December 31, 2004 .25%
March 31, 2005 .25%
June 30, 2005 .25%
September 30, 2005 .25%
December 31, 2005 .25%
March 31, 2006 .25%
June 30, 2006 .25%
September 30, 2006 .25%
December 31, 2006 .25%
March 31, 2007 .25%
June 30, 2007 .25%
September 30, 2007 .25%
December 31, 2007 .25%
March 31, 2008 .25%
June 30, 2008 .25%
September 30, 2008 .25%
December 31, 2008 .25%
March 31, 2009 .25%
June 30, 2009 .25%
September 30, 2009 11.875%
December 31, 2009 11.875%
March 31, 2010 11.875%
June 30, 2010 11.875%
September 30, 2010 11.875%
December 31, 2010 11.875%
March 31, 2011 11.875%
June 30, 2011 Unpaid balance of the
Tranche B Term Loan
1.5 Notes.
The Revolving Loans and the Swingline Loans shall be evidenced by the
Revolving Notes. The Tranche B Term Loan, if any, shall be evidenced by the
Tranche B Term Notes.
2.6 Additional Provisions relating to Letters of Credit.
(a) Reports. The Issuing Lender will provide to the Administrative Agent
for dissemination to the Revolving Lenders at least quarterly, and more
frequently upon request, a detailed summary report on its Letters of Credit and
the activity thereon. The Issuing Lender will provide copies of the Letters of
31
Credit to the Administrative Agent, the Revolving Lenders or the
Borrower promptly upon request of such Person or Persons.
(b) Participation. Upon issuance of a Letter of Credit, each Revolving
Lender shall be deemed to have purchased without recourse a risk participation
from the Issuing Lender in such Letter of Credit and the obligations arising
thereunder, in each case in an amount equal to its pro rata share of the
obligations under such Letter of Credit (based on the respective Revolving
Commitment Percentages of the Revolving Lenders) and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and be obligated to pay to the Issuing Lender therefor and discharge when due,
its pro rata share of the obligations arising under such Letter of Credit.
Without limiting the scope and nature of each Revolving Lender's participation
in any Letter of Credit, to the extent that the Issuing Lender has not been
reimbursed as required hereunder or under any such Letter of Credit, each
Revolving Lender shall pay to the Issuing Lender its pro rata share of such
unreimbursed drawing in same day funds on the day of notification by the Issuing
Lender of an unreimbursed drawing pursuant to the provisions of subsection (d)
hereof. The obligation of each Revolving Lender to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be affected by the
occurrence of a Default, an Event of Default or any other occurrence or event.
Any such reimbursement shall not relieve or otherwise impair the obligation of
the Borrower to reimburse the Issuing Lender under any Letter of Credit,
together with interest as hereinafter provided.
(c) Reimbursement. In the event of any drawing under any Letter of Credit,
the Issuing Lender will promptly notify the Borrower. Unless the Borrower shall
immediately notify the Issuing Lender that the Borrower intends to otherwise
reimburse the Issuing Lender for such drawing, the Borrower shall be deemed to
have requested that the Revolving Lenders make a Revolving Loan in the amount of
the drawing as provided in subsection (d) hereof on the related Letter of
Credit, the proceeds of which will be used to satisfy the related reimbursement
obligations. The Borrower promises to reimburse the Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Revolving Loan
obtained hereunder or otherwise) in same day funds. If the Borrower shall fail
to reimburse the Issuing Lender as provided hereinabove, the unreimbursed amount
of such drawing shall bear interest at a per annum rate equal to the Adjusted
Base Rate plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of setoff, counterclaim or defense to payment the
Borrower may claim or have against the Issuing Lender, the Administrative Agent,
the Lenders, the beneficiary of the Letter of Credit drawn upon or any other
Person, including, without limitation, any defense based on any failure of the
Borrower or any other Credit Party to receive consideration or the legality,
validity, regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the Administrative Agent (who will promptly notify
the other Revolving Lenders) of the amount of any unreimbursed drawing and each
Revolving Lender shall promptly pay to the Administrative Agent for the account
of the Issuing Lender in Dollars and in immediately available funds, the amount
of such Revolving Lender's Revolving Commitment Percentage of such unreimbursed
drawing. Such payment shall be made on the day such notice is received by such
Revolving Lender from the Issuing Lender if such notice is received at or before
2:00 P.M. (Charlotte, North Carolina time) otherwise such payment shall be made
at or before 12:00 Noon (Charlotte, North Carolina time) on the Business Day
next succeeding the day such notice is received. If such Revolving Lender does
not pay such amount to the Issuing Lender in full upon such request, such
Revolving Lender shall, on demand, pay to the Administrative Agent for the
account of the Issuing Lender interest on the unpaid amount during the period
from the date of such drawing until such Revolving Lender pays such amount to
the Issuing Lender in full at a rate per annum equal to, if paid within two
Business Days of the date that such Revolving Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each Revolving Lender's
obligation to make such payment to the Issuing Lender, and the right of the
Issuing Lender to receive the same, shall be absolute and unconditional, shall
not be affected by any circumstance whatsoever and without regard to the
termination of this Credit Agreement or the Commitments hereunder, the existence
of a Default or Event of Default or the acceleration of the
32
obligations of the Borrower hereunder and shall be made without any offset,
abatement, withholding or reduction whatsoever. Simultaneously with the making
of each such payment by a Revolving Lender to the Issuing Lender, such Revolving
Lender shall, automatically and without any further action on the part of the
Issuing Lender or such Revolving Lender, acquire a participation in an amount
equal to such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed drawing
portion of the LOC Obligation and in the interest thereon and in the related LOC
Documents, and shall have a claim against the Borrower with respect thereto.
(d) Repayment with Revolving Loans. On any day on which the Borrower shall
have requested, or been deemed to have requested, a Revolving Loan advance to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Revolving Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan advance comprised of Base Rate
Loans (or Eurodollar Loans to the extent the Borrower has complied with the
procedures of Section 2.2(a)(i) with respect thereto) shall be promptly made to
the Borrower by all Revolving Lenders (notwithstanding any termination of the
Commitments pursuant to Section 9.2) pro rata based on the respective Revolving
Commitment Percentages of the Revolving Lenders (determined before giving effect
to any termination of the Commitments pursuant to Section 9.2) and the proceeds
thereof shall be paid directly to the Issuing Lender for application to the
respective LOC Obligations. Each such Revolving Lender hereby irrevocably agrees
to make its Revolving Commitment Percentage of each such Revolving Loan promptly
upon any such request or deemed request in the amount, in the manner and on the
date specified in the preceding sentence notwithstanding (i) the amount of such
borrowing may not comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (ii) whether any conditions specified in Section
5.2 are then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure for any such request or deemed request for Revolving Loan
to be made by the time otherwise required hereunder, (v) whether the date of
such borrowing is a date on which Revolving Loans are otherwise permitted to be
made hereunder or (vi) any termination of the Commitments relating thereto
immediately prior to or contemporaneously with such borrowing. In the event that
any Revolving Loan cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under any Debtor Relief Laws with respect to any Credit Party), then
each such Revolving Lender hereby agrees that it shall forthwith purchase (as of
the date such borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from the Issuing Lender such participation in the outstanding LOC
Obligations as shall be necessary to cause each such Revolving Lender to share
in such LOC Obligations ratably (based upon the respective Revolving Commitment
Percentages of the Revolving Lenders (determined before giving effect to any
termination of the Commitments pursuant to Section 9.2)), provided that in the
event such payment is not made on the day of drawing, such Revolving Lender
shall pay in addition to the Issuing Lender interest on the amount of its
unfunded Participation Interest at a rate equal to, if paid within two Business
Days of the date of drawing, the Federal Funds Rate, and thereafter at the Base
Rate.
(e) Designation of other Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including, without limitation, Sections 2.1(c) and 2.2(a)(ii) hereof, a Letter
of Credit issued hereunder may contain a statement to the effect that such
Letter of Credit is issued for the account of a Credit Party other than the
Borrower, provided that notwithstanding such statement, the Borrower shall be
the actual account party for all purposes of this Credit Agreement for such
Letter of Credit and such statement shall not affect the Borrower's
reimbursement obligations hereunder with respect to such Letter of Credit.
(f) Renewal, Extension. The renewal or extension of any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the issuance
of a new Letter of Credit hereunder.
33
(g) Applicability of ISP98. Unless otherwise expressly agreed by the
Issuing Lender and the Borrower when a Letter of Credit is issued, the rules of
the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each standby Letter of Credit.
(h) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section 2.6, the
Borrower hereby agrees to protect, indemnify, pay, save and hold the
Issuing Lender and the Revolving Lenders harmless from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees actually incurred and
expenses but excluding the allocated cost of internal counsel) that the
Issuing Lender or any Revolving Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions, herein called
"Government Acts").
(ii) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible: (A) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document submitted by any party in
connection with the application for and issuance of any Letter of Credit,
even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) for the validity or
sufficiency of any instrument transferring or assigning or purporting to
transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, that may prove to be
invalid or ineffective for any reason; (C) for errors, omissions,
interruptions or delays in transmission or delivery of any messages, by
mail, cable, telegraph, telex or otherwise, whether or not they be in
cipher; (D) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit or
of the proceeds thereof; and (E) for any consequences arising from causes
beyond the control of the Issuing Lender, including, without limitation,
any Government Acts. None of the above shall affect, impair, or prevent
the vesting of the Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or
the related certificates, if taken or omitted in good faith, shall not put
such Issuing Lender under any resulting liability to the Borrower or any
other Credit Party. It is the intention of the parties that this Credit
Agreement shall be construed and applied to protect and indemnify the
Issuing Lender against any and all risks involved in the issuance of the
Letters of Credit, all of which risks are hereby assumed by the Borrower
(on behalf of itself and each of the other Credit Parties), including,
without limitation, any and all Government Acts. The Issuing Lender shall
not, in any way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the Issuing
Lender.
(iv) Nothing in this subsection (h) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above, provided that the Borrower may have a claim against the Issuing
Lender, and the Issuing Lender may be liable to the Borrower, to the
extent, but only to the extent, of any direct damages (but not any
consequential or exemplary damages) suffered by the Borrower which the
Borrower proves were caused by the Issuing Lender's willful misconduct or
gross negligence or the Issuing Lender's willful failure to pay under any
Letter of
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Credit after the presentation to it by the beneficiary of a sight draft
and certificate(s) strictly complying with the terms and conditions of a
Letter of Credit. The obligations of the Borrower under this subsection
(h) shall survive the termination of this Credit Agreement. No act or
omissions of any current or prior beneficiary of a Letter of Credit shall
in any way affect or impair the rights of the Issuing Lender to enforce
any right, power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (h), the Borrower shall have no obligation to indemnify the
Issuing Lender or any Revolving Lender in respect of any liability
incurred by the Issuing Lender or such Revolving Lender (A) to the extent
arising out of the gross negligence or willful misconduct of the Issuing
Lender or such Revolving Lender, as the case may be, as determined by a
court of competent jurisdiction, or (B) caused by the Issuing Lender's
failure to pay under any Letter of Credit after presentation to it of a
request strictly complying with the terms and conditions of such Letter of
Credit, as determined by a court of competent jurisdiction, unless such
payment is prohibited by any law, regulation, court order or decree.
(i) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual knowledge
that any such condition precedent has not been satisfied; provided, however,
that nothing set forth in this Section 2.6 shall be deemed to prejudice the
right of any Revolving Lender to recover from the Issuing Lender any amounts
made available by such Revolving Lender to the Issuing Lender pursuant to this
Section 2.6 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit constituted
gross negligence or willful misconduct on the part of the Issuing Lender.
(j) Limitation on Obligation of the Issuing Lender. Notwithstanding
anything contained herein to the contrary, the Issuing Lender shall not be under
any obligation to issue, renew or extend any Letter of Credit if (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall by its
terms purport to enjoin or restrain the Issuing Lender from issuing a Letter of
Credit, or any applicable law, rule or regulation or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over the Issuing Lender shall prohibit, or request that the Issuing
Lender refrain from, the issuance of letters of credit generally or any such
Letter of Credit in particular, or shall impose upon the Issuing Lender with
respect to any such Letter of Credit any restriction, reserve or capital
requirement (for which the Issuing Lender is not otherwise compensated
hereunder) not in effect on the Closing Date, or shall impose upon the Issuing
Lender any unreimbursed loss, costs or expense that was not applicable on the
Closing Date and that the Issuing Lender should deem material to it in good
faith, or (ii) the issuance, renewal or extension would violate or otherwise
contravene its internal policy generally applicable to the issuance of letters
of credit.
(k) Conflict with LOC Documents. In the event of any conflict between this
Credit Agreement and any LOC Document (including any letter of credit
application but excluding any Letter of Credit), this Credit Agreement shall
control.
2.7 Additional Provisions relating to Swingline Loans.
The Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Revolving Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans in the amount of such Swingline Loans; provided, however, that
any such demand shall be deemed to have been given one Business Day prior to the
Termination Date and on the date of the occurrence
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of any Event of Default described in Section 9.1 and upon acceleration of the
indebtedness hereunder and the exercise of remedies in accordance with the
provisions of Section 9.2. Each Revolving Lender hereby irrevocably agrees to
make its Revolving Commitment Percentage of each such Revolving Loan in the
amount, in the manner and on the date specified in the preceding sentence
notwithstanding (a) the amount of such borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required hereunder, (b) whether
any conditions specified in Section 5.2 are then satisfied, (c) whether a
Default or an Event of Default then exists, (d) failure of any such request or
deemed request for Revolving Loan to be made by the time otherwise required
hereunder, (e) whether the date of such borrowing is a date on which Revolving
Loans are otherwise permitted to be made hereunder or (f) any termination of the
Commitments relating thereto immediately prior to or contemporaneously with such
borrowing. In the event that any Revolving Loan cannot for any reason be made on
the date otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under any Debtor Relief Laws with respect to
the Borrower or any other Credit Party), then each Revolving Lender hereby
agrees that it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the Swingline
Lender such Participation Interests in the outstanding Swingline Loans as shall
be necessary to cause each such Revolving Lender to share in such Swingline
Loans ratably based upon its Revolving Commitment Percentage (determined before
giving effect to any termination of the Commitments pursuant to Section 3.4),
provided that (i) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the respective
Participation Interest is funded and (ii) at the time any purchase of
Participation Interests pursuant to this sentence is actually made, the
purchasing Revolving Lender shall be required to pay to the Swingline Lender, to
the extent not paid to the Swingline Lender by the Borrower in accordance with
the terms of Section 2.3, interest on the principal amount of Participation
Interests purchased for each day from and including the day upon which such
borrowing would otherwise have occurred to but excluding the date of payment for
such Participation Interests, at the rate equal to the Federal Funds Rate.
SECTION 2
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of Default,
(i) the principal of and, to the extent permitted by law, interest on the Loans
and any other amounts owing hereunder or under the other Credit Documents shall
bear interest, payable on demand, at a per annum rate three percent (3%) greater
than the rate that would otherwise be applicable (or if no rate is applicable,
whether in respect of interest, fees or other amounts, then the Adjusted Base
Rate plus three percent (3%)) and (ii) the Letter of Credit Fee shall accrue at
a per annum rate three percent (3%) greater than the rate that would otherwise
be applicable.
3.2 Continuation and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if the
conditions precedent set forth in Section 5.2 are satisfied on the date of
Continuation or Conversion, (iii) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of "Interest
Period" and shall be in such minimum amounts as provided in Section 2.2(b), and
(iv) any request for Continuation or Conversion of a Eurodollar Loan that shall
fail to specify an Interest
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Period shall be deemed to be a request for an Interest Period of one month. Each
such Continuation or Conversion shall be effected by the Borrower by giving a
Notice of Continuation/Conversion (or telephonic notice promptly confirmed in
writing) to the office of the Administrative Agent specified in Section 11.1, or
at such other office as the Administrative Agent may designate to the Borrower
in writing, prior to 12:00 noon (Charlotte, North Carolina time), on the
Business Day of, in the case of the Conversion of a Eurodollar Loan into a Base
Rate Loan, and on the third Business Day prior to, in the case of the
Continuation of a Eurodollar Loan as, or Conversion of a Base Rate Loan into, a
Eurodollar Loan, the date of the proposed Continuation or Conversion, specifying
the date of the proposed Continuation or Conversion, the Loans to be so extended
or converted, the types of Loans into which such Loans are to be converted and,
if appropriate, the applicable Interest Periods with respect thereto. Each
request for Continuation or Conversion shall be irrevocable and shall constitute
a representation and warranty by the Borrower of the matters specified in
Section 5.2. In the event the Borrower fails to request Continuation or
Conversion of any Eurodollar Loan in accordance with this Section, or any such
Conversion or Continuation is not permitted or required by this Section, then
such Eurodollar Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable thereto. The Administrative Agent
shall give each affected Lender notice as promptly as practicable of any such
proposed Continuation or Conversion affecting any Loan.
3.3 Prepayments.
(a) Voluntary Prepayments. The Loans may be repaid in whole or in part
without premium or penalty; provided that (i) Eurodollar Loans may be prepaid
only upon three Business Days prior written notice to the Administrative Agent
and must be accompanied by payment of any amounts owing under Section 3.12, (ii)
partial prepayments on Revolving Loans shall be minimum principal amounts of
$2,500,000, in the case of Eurodollar Loans, and $1,000,000, in the case of Base
Rate Loans, and in integral multiples of $250,000 in excess thereof and (iii)
partial prepayments on Swingline Loans shall in minimum principal amounts of
$100,000 and integral multiples of $100,000 in excess thereof.
(b) Mandatory Prepayments.
(i) Committed Amounts. If at any time, including upon reduction of
the Aggregate Revolving Committed Amount pursuant to Section 3.4(b), (A)
the aggregate principal amount of Revolving Obligations shall exceed the
Aggregate Revolving Committed Amount, (B) the aggregate amount of LOC
Obligations shall exceed the LOC Committed Amount or (C) the aggregate
principal amount of Swingline Loans shall exceed the Swingline Committed
Amount, the Borrower shall immediately upon the Administrative Agent's
demand make payment on the Revolving Loans, on the Swingline Loans and/or
to a cash collateral account in respect of the LOC Obligations, in an
amount sufficient to eliminate the difference.
(ii) Asset Dispositions and Recovery Events. The Borrower shall
promptly prepay the Obligations as hereafter provided in an amount equal
to one hundred percent (100%) of the Net Cash Proceeds received from any
Asset Disposition or Recovery Event to the extent (A) such Net Cash
Proceeds are not reinvested in Property to be used by any member of the
Consolidated Group in the operation of its business within twelve (12)
months of the date of such Asset Disposition or Recovery Event, and (B)
the aggregate amount of such Net Cash Proceeds not reinvested in
accordance with the foregoing clause (A) shall exceed $10,000,000 in any
fiscal year.
(iii) Excess Cash Flow. For the fiscal year ending June 30, 2005 and
for each fiscal year thereafter, the Borrower shall promptly prepay the
Obligations as hereafter provided in an amount equal to fifty percent
(50%) of Excess Cash Flow of the Consolidated Group for the
37
immediately preceding fiscal year, but only if, and to the extent, that
the Consolidated Leverage Ratio is greater than 2.5:1.0.
(iv) Debt Transactions and Equity Transactions. The Borrower shall
immediately prepay the Obligations as hereafter provided in an amount
equal to:
(A) one hundred percent (100%) of the Net Cash Proceeds
received from any Debt Transaction; and
(B) fifty percent (50%) of the Net Cash Proceeds received from
any Equity Transaction, provided that the Borrower shall be required
to make such prepayment only in an amount sufficient to cause the
Consolidated Leverage Ratio as of the end of the immediately
preceding fiscal quarter to be less than or equal to 1.0:1.0 (after
giving effect to the application of such prepayment to the
Obligations as provided in the immediately following clause (v)).
(v) Effect of Application of Amounts on Consolidated Leverage Ratio.
For purposes of determining the effect of prepayments required under the
immediately preceding clause (iv) on the Consolidated Leverage Ratio, the
amount of any such prepayments shall be deemed to have been applied to the
Obligations as of the last day of the fiscal quarter most recently ended.
(c) Application.
(i) Voluntary Prepayments. Voluntary prepayments on the Tranche B
Term Loan shall be applied pro rata to the remaining principal
installments thereof and, within the foregoing parameters, first to Base
Rate Loans and then to Eurodollar Loans in direct order of interest period
maturities. Voluntary prepayments on the Revolving Obligations shall be
applied as directed by the Borrower or, if not so directed, first to Base
Rate Loans (other than Swingline Loans), then to Eurodollar Loans in
direct order of Interest Period maturities, then to Swingline Loans in
direct order of maturities and then to a cash collateral account to secure
LOC Obligations.
(ii) Mandatory Prepayments.
(A) Mandatory prepayments under Section 3.3(b)(i)
shall be applied as directed by the Borrower.
(B) Mandatory prepayments under Sections 3.3(b)(ii),
3.3(b)(iii), and 3.3(b)(iv) shall be applied to the Tranche B Term
Loan (to the remaining principal installments thereof in inverse
order of maturity) until the Tranche B Term Loan has repaid in full
and then to the Revolving Obligations. Within the parameters of the
immediately preceding sentence, mandatory prepayments shall be
applied first to Base Rate Loans, then to Eurodollar Loans in direct
order of Interest Period maturities, then to Quoted Rate Swingline
Loans in direct order of maturities and then to a cash collateral
account to secure LOC Obligations.
(iii) Prepayment Account. If the Borrower is required to make a
mandatory prepayment of Eurodollar Loans under Section 3.3(b)(ii), (iii)
or (iv), the Borrower shall have the right, in lieu of making such
prepayment in full, to deposit an amount equal to such mandatory
prepayment with the Administrative Agent in a cash collateral account
maintained (pursuant to documentation reasonably satisfactory to the
Administrative Agent) by and in the sole dominion and control of the
Administrative Agent. Any amounts so deposited shall be held by the
38
Administrative Agent as collateral for the prepayment of such Eurodollar
Loans and shall be applied to the prepayment of the applicable Eurodollar
Loans at the end of the current Interest Periods applicable thereto. At
the request of the Borrower, amounts so deposited shall be invested by the
Administrative Agent in Cash Equivalents maturing prior to the date or
dates on which it is anticipated that such amounts will be applied to
prepay such Eurodollar Loans; any interest earned on such Cash Equivalents
will be for the account of the Borrower and the Borrower will deposit with
the Administrative Agent the amount of any loss on any such Cash
Equivalents to the extent necessary in order that the amount of the
prepayment to be made with the deposited amounts may not be reduced.
3.4 Reduction and Termination of Commitments.
(a) Voluntary Reduction of Commitments. The Commitments may be terminated
or permanently reduced in whole or in part by the Borrower upon three Business
Days prior written notice to the Administrative Agent, provided that (i) after
giving effect to any voluntary reduction the aggregate amount of Revolving
Obligations shall not exceed the Aggregate Revolving Committed Amount, as
reduced, and (ii) partial reductions shall be in a minimum principal amount of
$2,500,000 and in integral multiples of $1,000,000 in excess thereof.
(b) Mandatory Reduction of Commitments. The Aggregate Revolving Committed
Amount shall be reduced dollar-for-dollar by the principal amount of the Tranche
B Term Loan established pursuant to Section 2.1(d), if any, until the Aggregate
Revolving Committed Amount does not exceed $175 million.
(c) Termination of Commitments. The Revolving Commitments shall terminate
on the Termination Date.
3.5 Fees.
(a) Commitment Fee. In consideration of the Revolving Commitments, the
Borrower agrees to pay to the Administrative Agent for the ratable benefit of
the Revolving Lenders a commitment fee (the "Commitment Fee") equal to the
Applicable Percentage per annum on the average daily unused amount of the
Aggregate Revolving Committed Amount for the applicable period. The Commitment
Fee shall be payable quarterly in arrears on the last day of each March, June,
September and December for the immediately preceding quarter (or a portion
thereof). For purposes of computation of the Commitment Fee, (i) Swingline Loans
shall not be counted toward or considered usage of the Aggregate Revolving
Committed Amount and (ii) LOC Obligations shall be counted toward and considered
usage of the Aggregate Revolving Committed Amount.
(b) Letter of Credit Fees.
(i) Letter of Credit Issuance Fee. In consideration of the issuance
of Letters of Credit, the Borrower promises to pay to the Administrative
Agent for the account of each Revolving Lender a fee (the "Letter of
Credit Fee") on such Revolving Lender's Revolving Commitment Percentage of
the average daily maximum amount available to be drawn under each such
Letter of Credit computed at a per annum rate for each day from the date
of issuance to the date of expiration equal to the Applicable Percentage.
The Letter of Credit Fee shall be payable quarterly in arrears on the last
day of each March, June, September and December for the immediately
preceding quarter (or a portion thereof).
39
(ii) Issuing Lender Fees. In addition to the Letter of Credit Fee,
the Borrower promises to pay to the Administrative Agent for the account
of the Issuing Lender without sharing by the other Lenders (i) a letter of
credit fronting fee (the "Issuing Lender Fee") of one-eighth of one
percent (0.125%) on the average daily maximum amount available to be drawn
under each Letter of Credit computed at a per annum rate for each day from
the date of issuance to the date of expiration and (ii) the customary
charges from time to time of the Issuing Lender with respect to the
issuance, amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit. The Issuing Lender Fee
hereunder shall be payable quarterly in arrears on the last day of each
March, June, September and December for the immediately preceding quarter
(or portion thereof) and on the Termination Date.
(c) Administrative Fees. The Borrower agrees to pay to the Administrative
Agent, for its own account, the fees referred to in the Administrative Agent's
Fee Letter.
3.6 Capital Adequacy.
If any Lender has reasonably determined, after the date hereof, that the
adoption or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's (including, for purposes hereof, the parent company of
such Lender) capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction. Each determination by any such Lender of amounts
owing under this Section shall, absent manifest error, be conclusive and binding
on the parties hereto. Each Lender agrees to notify the Borrower of any event
occurring after the date hereof entitling such Lender to compensation under this
Sections as promptly as practicable; provided, however, the failure of any
Lender to give such notice shall not release the Borrower from any of its
obligations hereunder; provided, further, however, a Lender shall be entitled to
compensation under this Section only for events occurring during the 180-day
period ending on the date the Borrower receives the notice described in this
sentence. Each Lender agrees to furnish to the Borrower a certificate setting
forth the basis and amount of each request by such Lender for compensation under
this Section.
3.7 Limitation on Eurodollar Loans.
If on or prior to the first day of any Interest Period for any Eurodollar
Loan:
(a) the Administrative Agent reasonably determines (which determination
shall be conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period; or
(b) the Required Lenders reasonably determine (which determination shall
be conclusive) and notify the Administrative Agent that the Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding Eurodollar
Loans for such Interest Period;
40
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, Continue Eurodollar Loans, or to
Convert Base Rate Loans into Eurodollar Loans with respect to the affected
currency.
3.8 Illegality.
Notwithstanding any other provision of this Credit Agreement, in the event
that it becomes unlawful for any Lender (or its Applicable Lending Office) to
make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
Continue Eurodollar Loans and to Convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 Requirements of Law.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(a) shall subject such Lender (or its Applicable Lending Office) to any
tax, duty, or other charge with respect to any Eurodollar Loans, its Notes, or
its obligation to make Eurodollar Loans, or change the basis of taxation of any
amounts payable to such Lender (or its Applicable Lending Office) under this
Credit Agreement or its Notes in respect of any Eurodollar Loans (other than
taxes imposed on the overall net income of such Lender by the jurisdiction in
which such Lender has its principal office or such Applicable Lending Office);
(b) shall impose, modify, or deem applicable any reserve, special deposit,
assessment, or similar requirement (other than the Eurodollar Reserve
Requirement utilized in the determination of the Eurodollar Rate) relating to
any extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (or its Applicable Lending Office),
including the Commitment of such Lender hereunder; or
(c) shall impose on such Lender (or its Applicable Lending Office) or the
London interbank market any other condition affecting this Credit Agreement or
its Notes or any of such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or Continue Eurodollar Loans, or to Convert Base Rate Loans into
Eurodollar Loans, until the event or condition giving rise to such request
ceases to be in effect (in which case the provisions of Section 3.10 shall be
applicable); provided that such suspension shall not affect the right of such
Lender to receive the compensation so requested. Each Lender shall promptly
notify the Borrower and the Administrative Agent of any event of which it has
knowledge, occurring after the date hereof, that will entitle such Lender to
compensation pursuant to this
41
Section 3.9 and will designate a different Applicable Lending Office if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the judgment of such Lender, be otherwise disadvantageous to
it. A Lender shall be entitled to compensation under this Section only for
events occurring during the 180-day period ending on the date the Borrower
receives the notice described in the immediately preceding sentence. Any Lender
claiming compensation under this Section 3.9 shall furnish to the Borrower and
the Administrative Agent a statement setting forth the additional amount or
amounts to be paid to it hereunder, which shall be prima facie evidence of the
matters stated therein. In determining such amount, such Lender may use any
reasonable averaging and attribution methods.
3.10 Treatment of Affected Loans.
If the obligation of any Lender to make any Eurodollar Loan or to
Continue, or to Convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.8 or 3.9 hereof, such Lender's Eurodollar Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of
then-current Interest Period(s) for such Eurodollar Loans (or, in the case of a
Conversion required by Section 3.8 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Administrative Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 3.8 or 3.9 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's Eurodollar Loans shall be applied instead to its Base
Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such Lender as
Eurodollar Loans shall be made or Continued instead as Base Rate Loans, and all
Base Rate Loans of such Lender that would otherwise be Converted into Eurodollar
Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.8 or 3.9 hereof that gave
rise to the Conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments.
3.11 Taxes.
(a) Any and all payments by any Credit Party to or for the account of any
Lender or the Administrative Agent hereunder or under any other Credit Document
shall be made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding, in the case of each Lender and
the Administrative Agent, (i) taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office) or the Administrative Agent (as the case may be) is
organized or any political subdivision thereof and (ii) taxes arising after the
Closing Date as a result of or attributable to a Lender changing its Applicable
Lending Office after the date on which such Lender becomes a party hereto (all
such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "Taxes"). If any
Credit Party shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable under this Credit Agreement or any other Credit
Document to any Lender or the Administrative Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions and
withholdings (including deductions and
42
withholdings applicable to additional sums payable under this Section 3.11) such
Lender or the Administrative Agent 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 and withholdings, (iii) such Credit Party shall pay the
full amount deducted or withheld to the relevant taxation authority or other
authority in accordance with applicable law, and (iv) such Credit Party shall
furnish to the Administrative Agent, at its address referred to in Section 11.1,
the original or a certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies that arise from any payment made under this Credit Agreement or
any other Credit Document or from the execution or delivery of, or otherwise
with respect to, this Credit Agreement or any other Credit Document (hereinafter
referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed or asserted by any jurisdiction on
amounts payable under this Section 3.11) paid by such Lender or such
Administrative Agent (as the case may be) and any liability (including
penalties, interest, and expenses) arising therefrom or with respect thereto.
(d) Each Lender that is not a United States person under Section
7701(a)(30) of the Internal Revenue Code, on or prior to the date of its
execution and delivery of this Credit Agreement in the case of each Lender
listed on the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative Agent
(but only so long as such Lender remains lawfully able to do so), shall provide
the Borrower and the Administrative Agent with (i) Internal Revenue Service Form
W-8 BEN or W-8 ECI, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled to benefits
under an income tax treaty to which the United States is a party that reduces to
zero the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Credit Agreement is effectively connected
with the conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and/or (iii) any other form or
certificate required by any taxing authority (including any certificate required
by Sections 871(h) and 881(c) of the Internal Revenue Code), certifying that
such Lender is entitled to an exemption from tax on payments pursuant to this
Credit Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Administrative Agent with the appropriate form pursuant to
Section 3.11(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Lender shall not be entitled to indemnification
under Section 3.11(a) or 3.11(b) with respect to Taxes imposed by the United
States; provided, however, that should a Lender that is otherwise exempt from or
subject to a reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower shall take such
steps as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) If any Credit Party is required to pay additional amounts to or for
the account of any Lender pursuant to this Section 3.11, then such Lender will
agree to use reasonable efforts to change the jurisdiction of its Applicable
Lending Office or take such other steps as the Borrower may reasonably request
so as to eliminate or reduce any such additional payment that may thereafter
accrue if such change or steps, in the reasonable judgment of such Lender, is
not otherwise materially disadvantageous to such Lender.
43
(g) Within thirty days after the date of any payment of Taxes, the
applicable Credit Party shall furnish to the Administrative Agent the original
or a certified copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the Credit
Parties hereunder, the agreements and obligations of the Credit Parties
contained in this Section 3.11 shall survive the repayment of the Loans, LOC
Obligations and other obligations under the Credit Documents and the termination
of the Commitments hereunder.
3.12 Funding Losses.
Upon demand of any Lender (with a copy to the Administrative Agent) from
time to time, the Borrower shall promptly compensate such Lender for and hold
such Lender harmless from any loss, cost or expense incurred by it as a result
of:
(a) any continuation, conversion, payment or prepayment of any Eurodollar
Loan on a day other than the last day of the Interest Period for such Loan
(whether voluntary, mandatory, automatic, by reason of acceleration, or
otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any
Eurodollar Loan on the date or in the amount notified by the Borrower;
including any loss or expense arising from the liquidation or reemployment of
funds obtained by it to maintain such Loan or from fees payable to terminate the
deposits from which such funds were obtained but excluding any loss of
anticipated profits. The Borrower shall also pay any customary and reasonable
administrative fees charged by such Lender in connection with the foregoing.
3.13 Pro Rata Treatment.
(a) Loans.
(i) Except to the extent otherwise provided herein, each Revolving
Loan advance, each payment or prepayment of principal of any Revolving
Loan or reimbursement obligations arising from drawings under Letters of
Credit, each payment of interest on any Revolving Loan, or reimbursement
obligations arising from drawings under Letters of Credit, each payment of
the Commitment Fee, each payment of the Letter of Credit Fee, each
reduction of Aggregate Revolving Committed Amount, and each conversion or
extension of Revolving Loan shall be allocated pro rata among the
Revolving Lenders according to their respective Revolving Commitment
Percentages.
(ii) Except to the extent otherwise provided herein, each payment or
prepayment of principal of any Tranche B Term Loan, each payment of
interest on any Tranche B Term Loan and each conversion or extension of
any Tranche B Term Loan shall be allocated pro rata among the Tranche B
Term Lenders according to their respective Tranche B Term Loan Commitment
Percentages.
(b) Advances. Except to the extent otherwise provided herein:
(i) No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make its ratable share of a borrowing
hereunder; provided, however, that the failure of
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any Lender to fulfill its obligations hereunder shall not relieve any
other Lender of its obligations hereunder.
(ii) Unless the Borrower or any Lender has notified the
Administrative Agent prior to the date any payment is required to be made
by it to the Administrative Agent hereunder, that the Borrower or such
Lender, as the case may be, will not make such payment, the Administrative
Agent may assume that the Borrower or such Lender, as the case may be, has
timely made such payment and may (but shall not be so required to), in
reliance thereon, make available a corresponding amount to the Person
entitled thereto. If and to the extent that such payment was not in fact
made to the Administrative Agent in immediately available funds, then:
(A) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the
portion of such assumed payment that was made available to such
Lender in immediately available funds, together with interest
thereon in respect of each day from and including the date such
amount was made available by the Administrative Agent to such Lender
to the date such amount is repaid to the Administrative Agent in
immediately available funds, at the Federal Funds Rate from time to
time in effect; and
(B) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest
thereon for the period from the date such amount was made available
by the Administrative Agent to the Borrower to the date such amount
is recovered by the Administrative Agent (the "Compensation Period")
at a rate per annum equal to the Federal Funds Rate from time to
time in effect. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum
equal to the rate of interest applicable to the applicable Loan.
Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Commitment or to prejudice any rights that
the Administrative Agent or the Borrower may have against any Lender
as a result of any default by such Lender hereunder. A notice of the
Administrative Agent to any Lender with respect to any amount owing
under this subsection (b)(ii)(B) shall be conclusive, absent
manifest error.
3.14 Sharing of Payments.
(a) Lenders. The Lenders agree that, in the event that any Lender shall
obtain payment in respect of any Loan, LOC Obligation or any other obligation
owing to such Lender under this Credit Agreement through the exercise of a right
of setoff, banker's lien or counterclaim, or pursuant to a secured claim under
any Debtor Relief Law 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 in this Credit Agreement, such
Lender shall promptly purchase from the other Lenders a Participation Interest
in such Loan, LOC Obligation and other obligations in such amounts, and make
such other adjustments from time to time, as shall be equitable to the end that
all the Lenders share such payment ratably in accordance with the provisions of
this Credit Agreement. The Lenders further agree that if payment to any such
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 that shall have shared the benefit of
such payment shall, by repurchase of a Participation Interest theretofore sold,
return its share of that benefit
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(together with its share of any accrued interest payable with respect thereto)
to each such 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, LOC
Obligation or other obligation in the amount of such participation. 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 3.14 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 3.14 to share in the benefits of any recovery on such secured claim.
(b) Lenders and Administrative Agent. Except as otherwise expressly
provided in this Credit Agreement, if any Lender or the Administrative Agent
shall fail to remit to the Administrative Agent or any other Lender an amount
payable by such Lender or the Administrative Agent to the Administrative Agent
or 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.
3.15 Payments, Computations, etc.
(a) Time of Payments. All payments shall be made to the Administrative
Agent not later than 2:00 P.M. (Charlotte, North Carolina time).
(b) Generally. Except as otherwise specifically provided herein, all
payments shall be made to the Administrative Agent in Dollars in immediately
available funds, and shall be made without condition or deduction for any
counterclaim, defense, recoupment or setoff. Payments received after the time
set forth in Section 3.15(a) shall be deemed to have been received on the next
succeeding Business Day. The Administrative Agent may (but shall not be
obligated to) debit the amount of any such payment that is not made by such time
to any ordinary deposit account of the Borrower maintained with such
Administrative Agent (with prompt notice to the Borrower). The Borrower shall,
at the time it makes any payment under this Credit Agreement, specify to the
Administrative Agent the Loans, LOC Obligations, Fees, interest or other amounts
payable by the Borrower hereunder to which such payment is to be applied (and in
the event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall distribute
such payment to the Lenders in such manner as the Administrative Agent may
determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 3.14(a) and Section 3.15(b)). The
Administrative Agent will distribute such payments to the Lenders if any such
payment is received prior to 12:00 Noon (Charlotte, North Carolina time) on a
Business Day in like funds as received prior to the end of such Business Day and
otherwise such Administrative Agent will distribute such payment to the Lenders
entitled thereto on the next succeeding Business Day. Whenever any payment
hereunder shall be stated to be due on a day that 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 as
expressly provided otherwise herein, all computations of interest and fees shall
be made on the basis of the actual number of days elapsed over a year of 360
days, except with respect to computation of interest on Base Rate Loans
determined by reference to the Prime Rate, which shall be calculated based on a
year of 365 or 366 days, as appropriate. Interest shall accrue from and include
the date of borrowing, but exclude the date of payment.
(c) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received on or in respect of the Obligations (or other amounts owing under the
Credit Documents in connection therewith) shall be paid over or delivered as
follows:
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FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including, without limitation, reasonable attorneys'
fees actually incurred and expenses but excluding the allocated cost
of internal counsel) of the Collateral Agent incurred in connection
with the execution of its duties as collateral agent in exercising
or attempting to exercise rights and remedies in respect of the
Collateral and all protective advances made with respect thereto;
SECOND, to the payment of all reasonable out-of-pocket costs
and expenses (including, without limitation, reasonable attorneys'
fees actually incurred and expenses but excluding the allocated cost
of internal counsel) of the Administrative Agent in connection with
enforcing the rights and remedies of the Lenders under the Credit
Documents and any protective advances made with respect thereto;
THIRD, to payment of any fees owed to the Administrative
Agent;
FOURTH, to the payment of all reasonable out-of-pocket costs
and expenses (including, without limitation, reasonable attorneys'
fees actually incurred and expenses but excluding the allocated cost
of internal counsel) of each of the Lenders hereunder in connection
with enforcing its rights under the Credit Documents or otherwise
with respect to the Obligations owing to such Lender;
FIFTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;
SIXTH, to the payment of the outstanding principal amount of
the Obligations (including the payment or cash collateralization of
the outstanding LOC Obligations) and obligations owing from any
Credit Party to a Lender or an Affiliate of a Lender under Hedging
Agreements relating to the Obligations to the extent permitted
hereunder;
SEVENTH, to all other Obligations and other obligations that
shall have become due and payable under the Credit Documents
otherwise and not repaid pursuant to clauses "FIRST" through "SIXTH"
above; and
EIGHTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category; (ii) except as otherwise provided, the Lenders
shall receive amounts ratably in accordance with their respective pro rata
share (based on the proportion that then outstanding Obligations held by
such Lenders bears to the aggregate amount of Obligations then
outstanding) of amounts available to be applied pursuant to clauses
"FOURTH", "FIFTH" and "SEVENTH" above; (iii) except as otherwise provided,
the Lenders and, with respect to Hedging Agreements, their Affiliates,
shall receive amounts ratably in accordance with their respective pro rata
share (based on the proportion that then outstanding Obligations and
obligations under such Hedging Agreements held by such Lender or such
Affiliate bears to the aggregate amount of then outstanding Obligations
and obligations under such Hedging Agreements held by all Lenders and
Affiliates) of amounts available to be applied pursuant to clauses "SIXTH"
above; and (iv) to the extent that any amounts available for distribution
pursuant to clause "SIXTH" above are attributable to the issued but
undrawn amount of outstanding Letters of Credit, such amounts shall be
held by the Administrative Agent in a cash collateral
47
account and applied (A) first, to reimburse the Issuing Lender for any
drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of the types
described in clauses "FIFTH" and "SIXTH" above in the manner provided in
this Section 3.15(b).
3.16 Evidence of Debt.
(a) Each Lender shall maintain an account or accounts evidencing each Loan
made by such Lender to the Borrower from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Credit Agreement. Each Lender will make reasonable efforts to maintain the
accuracy of its account or accounts and to promptly update its account or
accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each Loan hereunder, (ii) the amount of any principal or interest due
and payable or to become due and payable to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from or for the
account of the Borrower and each Lender's share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the subaccounts
referred to in the preceding sentence and to promptly update such subaccounts
from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts maintained
pursuant to subsection (b) of this Section 3.16 (and, if consistent with the
entries of the Administrative Agent, subsection (a)) shall be prima facie
evidence of the existence and amounts of the obligations of the Credit Parties
therein recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Credit Parties to repay the Obligations and other amounts
owing hereunder to such Lender.
3.17 Treatment of Affected Lenders.
If (a) a Lender requests compensation pursuant to Section 3.6, 3.9 or
3.11, (b) the obligation of a Lender to make Eurodollar Loans or to Continue, or
to Convert Base Rate Loans into, Eurodollar Loans shall be suspended pursuant to
Section 3.8 or 3.9, (c) any Lender fails to consent to any waiver, consent,
amendment or other modification to any Credit Document which (i) requires the
unanimous written consent of all the Lenders under Section 11.6 and (ii) has
been approved in writing by the Required Lenders, or (d) any Lender shall be a
Defaulting Lender (any of the events described in clauses (a) through (d) above
are "Replacement Events"), then, so long as there does not then exist any Event
of Default, the Borrower may demand that such Lender (the "Affected Lender"),
and upon such demand the Affected Lender shall promptly, assign all of its
Commitments, if any, and Loans to one or more Eligible Assignees arranged by the
Borrower in accordance with Section 11.3 for a purchase price equal to the
aggregate principal balance of Loans then owing to the Affected Lender plus any
accrued but unpaid interest thereon and any accrued but unpaid fees owing to the
Affected Lender, provided that (i) the Borrower shall notify the Affected Lender
of its intention to replace the Affected Lender within fifteen (15) days after
the applicable Replacement Event, (ii) the Borrower shall arrange for the
consummation of such assignment(s) within thirty (30) days after the applicable
Replacement Event, and (iii) in the case of an Affected Lender that has
requested compensation pursuant to Section 3.6, 3.9 or 3.11, the Borrower shall
have paid to the Affected Lender such compensation. If the Borrower does not
comply with clauses (i), (ii) and (iii) of the immediately preceding sentence,
the Borrower's rights under this Section 3.16 with respect to the applicable
Replacement Event shall terminate. Each of the Administrative Agent and the
Affected Lender shall reasonably cooperate in effectuating the replacement of an
Affected Lender under
48
this Section, but at no time shall the Administrative Agent or the Affected
Lender be obligated in any way whatsoever to initiate any such replacement. The
exercise by the Borrower of its rights under this Section shall be at the
Borrower's sole cost and expense.
SECTION 3
GUARANTY
4.1 The Guaranty.
(a) Each of the Guarantors hereby jointly and severally guarantees to the
Administrative Agent and to each of the holders of Guaranteed Obligations, as
hereinafter provided, as primary obligor and not as surety, the prompt payment
of the Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as a mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. Each of the Guarantors
hereby further agrees that if any of the Guaranteed Obligations are not paid in
full when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise), the
Guarantors will, jointly and severally, promptly pay the same, without any
demand or notice whatsoever, and that in the case of any extension of time of
payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or otherwise)
in accordance with the terms of such extension or renewal.
(b) Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state,
provincial or federal law relating to fraudulent conveyances or transfers or the
granting of financial assistance) then the obligations of each Guarantor under
this Credit Agreement and the other Credit Documents shall be limited to the
maximum amount that is permissible under applicable law (whether federal, state
or provincial and including, without limitation, Debtor Relief Laws). In such
case or otherwise at the request of the Administrative Agent, each Credit Party
shall take such action and shall execute and deliver all such further documents
required by the Administrative Agent to cause the obligations of such Guarantor
to be enforceable to the extent required by this Credit Agreement.
4.2 Obligations Unconditional.
The obligations of the Guarantors under Section 4.1 are joint and several,
absolute and unconditional, irrespective of the value, genuineness, validity,
regularity or enforceability of any of the Credit Documents or Hedging
Agreements, or any other agreement or instrument referred to therein, or any
substitution, release, impairment or exchange of any other guarantee of or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
that might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 4.2 that the
obligations of the Guarantors hereunder shall be absolute and unconditional
under any and all circumstances. Each Guarantor agrees that such Guarantor shall
have no right of subrogation, indemnity, reimbursement or contribution against
the Borrower or any other Guarantor for amounts paid under this Section 4 until
such time as the holders of the Guaranteed Obligations have been paid in full in
respect of all Guaranteed Obligations, all Commitments under this Credit
Agreement have been terminated and no Person or Governmental Authority shall
have any right to request any return or reimbursement of funds from the Lenders
in connection with monies received under the Credit Documents or Hedging
Agreements between any member of the Consolidated Group and any Lender, or any
Affiliate of a Lender. Without limiting the generality of the foregoing, it is
agreed that, to the fullest extent permitted by law, the
49
occurrence of any one or more of the following shall not alter or impair the
liability of any Guarantor hereunder, which shall remain absolute and
unconditional as described above:
(a) at any time or from time to time, without notice to any Guarantor, the
time for any performance of or compliance with any of the Guaranteed Obligations
shall be extended, or such performance or compliance shall be waived;
(b) any of the acts mentioned in any of the provisions of any of the
Credit Documents, any Hedging Agreement between any member of the Consolidated
Group and any Lender or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Credit Documents or such Hedging Agreements shall
be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the Credit
Documents, any Hedging Agreement between any member of the Consolidated Group
and any Lender or any Affiliate of a Lender, or any other agreement or
instrument referred to in the Credit Documents or such Hedging Agreements shall
be waived or any other guarantee of any of the Guaranteed Obligations or any
security therefor shall be released, impaired or exchanged in whole or in part
or otherwise dealt with;
(d) any Lien granted to, or in favor of, the Administrative Agent or any
Lender or Lenders as security for any of the Guaranteed Obligations shall fail
to attach or be perfected; or
(e) any of the Guaranteed Obligations shall be determined to be void or
voidable (including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement between any member of the
Consolidated Group and any Lender, or any Affiliate of a Lender, or any other
agreement or instrument referred to in the Credit Documents or such Hedging
Agreements, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
4.3 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 Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including, without limitation, reasonable attorneys' fees actually
incurred and expenses but excluding the allocated cost of internal counsel)
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 claim alleging that such payment constituted a preference,
fraudulent transfer or similar payment under any bankruptcy, insolvency or
similar law.
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4.4 Certain Additional Waivers.
Each Guarantor agrees that such Guarantor shall have no right of recourse
to security for the Guaranteed Obligations, except through the exercise of
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.6.
4.5 Remedies.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of Section 4.1. The
Guarantors acknowledge and agree that their obligations hereunder are secured in
accordance with the terms of the Collateral Documents and that the Lenders may
exercise their remedies thereunder in accordance with the terms thereof.
4.6 Rights of Contribution.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
hereof, (a) "Excess Funding Guarantor" shall mean, in respect of any obligations
arising under the other provisions of this Section 4 (hereafter, the "Guaranty
Obligations"), a Guarantor that has paid an amount in excess of its Pro Rata
Share of the Guaranty Obligations; (b) "Excess Payment" shall mean, in respect
of any Guaranty Obligations, the amount paid by an Excess Funding Guarantor in
excess of its Pro Rata Share of such Guaranty Obligations; and (c) "Pro Rata
Share", for the purposes of this Section 4.6, shall mean, for any Guarantor, the
ratio (expressed as a percentage) of (i) the amount by which the aggregate
present fair saleable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (ii) the amount by which the
aggregate present fair saleable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.6 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date).
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4.7 Guarantee of Payment; Continuing Guarantee.
The guarantee in this Section 4 is a guaranty of payment and not of
collection, is a continuing guarantee, and shall apply to all Guaranteed
Obligations whenever arising.
SECTION 4
CONDITIONS
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and to
make the initial Extensions of Credit shall be subject to satisfaction of the
following conditions (in form and substance acceptable to the Lenders):
(a) Executed Credit Documents. Receipt by the Administrative Agent of: (i)
multiple counterparts of this Credit Agreement, (ii) a Revolving Note for each
Revolving Lender, and (iii) multiple counterparts of the Collateral Documents,
in each case executed by a duly authorized officer of each party thereto and in
each case conforming to the requirements of this Credit Agreement.
(b) HRA Acquisition Documents. The Administrative Agent shall have
received a certified copy of the HRA Acquisition Agreement (including schedules
and exhibits), together with all amendments, modifications, supplements and
waivers. The aggregate merger consideration and the cash portion of the
aggregate merger consideration for the HRA Acquisition shall not be in excess of
the aggregate merger consideration contemplated by the HRA Acquisition
Agreement.
(c) Financial Information.
(i) The Administrative Agent shall have received (A) the
consolidated financial statements of the Borrower and its subsidiaries for
the fiscal years ended June 30, 2001, 2002 and 2003, including balance
sheets, income and cash flow statements, in each case audited by
independent public accountants of recognized national standing and
prepared in conformity with GAAP, (B) interim quarterly financial
statements of the Borrower and its subsidiaries for the fiscal quarter
ended March 31, 2004, and (C) a pro forma balance sheet and income
statement as of and for the four consecutive fiscal quarters ended March
31, 2004 of the Borrower and its subsidiaries giving effect to the HRA
Acquisition (the pro forma statements described in this clause (C) are
herein referred to as the "Pro Forma Statements").
(ii) The Administrative Agent shall have received and in each case
approved (A) the consolidated financial statements of HRA for the fiscal
years ended December 31, 2001, December 31, 2002, and December 31, 2003,
including balance sheets and statements of income and stockholders'
equity, in each case audited by independent public accountants of
recognized national standing and prepared in conformity with GAAP and (B)
interim quarterly financial statements of HRA for the fiscal quarter ended
March 31, 2004.
(iii) The Administrative Agent and the Lenders shall have received
such other financial information regarding the members of the Consolidated
Group as may be reasonably requested by the Administrative Agent and the
Lenders.
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(d) Legal Opinions. Receipt by the Administrative Agent of multiple
counterparts of opinions of counsel for the Credit Parties relating to the
Credit Documents and the transactions contemplated therein, in form and
substance satisfactory to the Administrative Agent and the Lenders, and
including, among other things, opinions regarding enforceability of the Credit
Documents and the perfection of the security interests created thereby.
(e) Corporate Documents. Receipt by the Administrative Agent of the
following (or the equivalent) for each of the Credit Parties:
(i) Charter Documents. Copies of the articles or certificates of
incorporation or other charter documents of such 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 incorporation and
certified by a secretary or assistant secretary (or individual performing
equivalent function) of such Credit Party to be true and correct as of the
Closing Date.
(ii) Bylaws. A copy of the bylaws, operating agreement or equivalent
of such Credit Party certified by a secretary or assistant secretary (or
individual performing equivalent function) of such Credit Party to be true
and correct and in force and effect as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the board of directors
(or comparable group of individuals) of such 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 (or individual performing
equivalent function) of such Credit Party to be true and correct and in
force and effect as of the Closing Date.
(iv) Good Standing. A copy of a certificate of good standing,
existence or its equivalent certified as of a recent date by the
appropriate governmental authorities of the state of incorporation and of
the state where such Credit Party maintains its principal place of
business.
(v) Officer's Certificate. An officer's certificate for each of the
Credit Parties dated as of the Closing Date substantially in the form of
Exhibit 5.1 with appropriate insertions and attachments.
(f) Officer's Certificates. The Administrative Agent shall have received a
certificate or certificates executed by a Responsible Officer of the Borrower as
of the Closing Date, in form and substance satisfactory to the Administrative
Agent, (i) confirming the matters contained in clauses (h) and (i) of this
Section 5.1 and (ii) stating that immediately after giving effect to the initial
Loans made and Letters of Credit issued on the Closing Date, (A) no Default or
Event of Default exists and (B) all representations and warranties contained
herein and in the other Credit Documents are true and correct in all material
respects.
(g) Personal Property Collateral. Receipt by the Administrative Agent of
the following:
(i) Uniform Commercial Code Searches. Searches of UCC filings in the
state of formation of each Credit Party, the jurisdiction of the chief
executive office of each Credit Party and each jurisdiction where any
Collateral is located and each other jurisdiction where a filing would
need to be made in order to perfect the Lender's security interest in the
Collateral, copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than Permitted Liens
and Liens to be released in connection with the consummation of the HRA
Acquisition.
53
(ii) Intellectual Property Searches. Searches of ownership of, and
Liens on, Intellectual Property of each Credit Party in the appropriate
governmental offices and evidence that no Liens exist other than Permitted
Liens and Liens to be released in connection with the consummation of the
HRA Acquisition;
(iii) Intellectual Property Filings. Such patent, trademark and
copyright notices and filings as necessary or appropriate, in the
Administrative Agent's discretion, to perfect the security interests in
Intellectual Property.
(iv) Certificated Interests. Original certificates evidencing the
Capital Stock pledged pursuant to the Collateral Documents, together with
undated stock transfer powers executed in blank.
(h) Consents. All material governmental, shareholder and third party
consents (including Hart-Scott Rodino clearance) and approvals necessary in
connection with the HRA Acquisition and the other transactions contemplated
hereby shall have been obtained (or appropriate waivers obtained); all such
consents and approvals shall be in force and effect; and all applicable waiting
periods shall have expired without any action being taken by any authority that
could restrain, prevent or impose any material adverse conditions on the HRA
Acquisition or such other transactions or that could seek or threaten any of the
foregoing.
(i) Judgments; Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding, which could reasonably be expected to
have a Material Adverse Effect.
(j) Leasehold Interests. In the case of each of the real property
leasehold interests of the Borrower and its Subsidiaries identified on Schedule
5.1, the Administrative Agent shall have received such estoppel letters,
consents and waivers from the landlords on such real property as may be required
by the Administrative Agent, which estoppel letters shall be in the form and
substance reasonably satisfactory to the Agent.
(k) Evidence of Insurance. Receipt by the Administrative Agent of copies
of insurance policies or certificates of insurance of the members of the
Consolidated Group evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, without limitation,
naming the Collateral Agent as additional insured (in the case of liability
insurance) or sole loss payee (in the case of casualty insurance) on behalf of
the Lenders.
(l) Payment of Existing Credit Agreement Obligations. Receipt by the
Administrative Agent of evidence reasonably acceptable to it that (i) the loans
and obligations owing to any Lender under the Existing Credit Agreement that
will not be a Lender hereunder on the Closing Date have been paid in full, and
(ii) the commitments of such Lenders thereunder have been terminated.
(m) Fees and Expenses. The Borrower shall have paid to the Administrative
Agent and the Lenders all fees and expenses required to be paid on or before the
Closing Date.
5.2 Conditions to all Extensions of Credit.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent:
54
(a) Representations and Warranties. The representations and warranties
made by the Credit Parties herein and in the other Credit Documents and that are
contained in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and as of the
date of such Extension of Credit as if made on and as of such date (except for
those that expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default shall
have occurred and be continuing on the date of such Extension of Credit or after
giving effect to such Extension of Credit unless such Default or Event of
Default shall have been waived in accordance with this Credit Agreement.
(c) Other Conditions. The Borrower shall have satisfied the conditions set
forth in Section 2 and, in the case of Continuations and Conversions, Section
3.2.
Each request for an Extension of Credit (including Continuations and
Conversions) and each acceptance by the Borrower of an Extension of Credit
(including Continuations and Conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such Extension of
Credit that the applicable conditions in this Section 5.2 have been satisfied.
SECTION 5
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make the
Extensions of Credit hereunder, each of the Credit Parties hereby represents and
warrants to the Administrative Agent and to each Lender that:
6.1 Financial Condition.
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders) have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly, in all material respects, the financial condition
and results from operations of the entities and for the periods specified,
subject in the case of interim company-prepared statements to normal year-end
adjustments and the absence of footnotes:
(a) the audited consolidated balance sheets of the Borrower and its
consolidated Subsidiaries dated as of June 30, 2001, June 30, 2002 and
June 30, 2003, together with the related audited statements of income,
stockholders' equity and cash flows for the respective fiscal years then
ended, certified by an independent accounting firm of nationally
recognized standing reasonably acceptable to the Administrative Agent;
(b) the unaudited, company-prepared balance sheet of the Borrower
and its consolidated Subsidiaries dated as of March 31, 2004, together
with the related unaudited, company-prepared statements of income,
stockholders' equity and cash flows for the fiscal quarter then ended;
(c) the audited consolidated balance sheet of HRA dated as of
December 31, 2001, December 31, 2002 and December 31, 2003, together with
the related audited statements of
55
income and stockholders' equity for the respective fiscal years then
ended, certified by Deloitte & Touche USA LLP;
(d) the unaudited, company-prepared consolidated balance sheet of
HRA dated as of March 31, 2004, together with the related unaudited,
company-prepared statements of income and cash flows for the fiscal
quarter then ended; and
(e) after the Closing Date, the annual and quarterly financial
statements provided in accordance with Sections 7.1(a) and (b).
The Pro Forma Statements are based upon reasonable assumptions made known
to the Lenders and upon information not known to be incorrect or misleading in
any material respect. The representations regarding the financial statements
referred to in the immediately preceding subsections (c) and (d) are only made
to the knowledge of the Responsible Officers of the Borrower as of the date such
representation is made.
6.2 No Changes or Restricted Payments.
Since June 30, 2003:
(a) for the period to the Closing Date, except as previously
disclosed in writing to the Administrative Agent and the Lenders or except
as disclosed in any public filings or reports filed by the Borrower with
the Securities and Exchange Commission, (i) there have been no material
sales, transfers or other dispositions of any material part of the
business or property of the members of the Consolidated Group, nor have
there been any material purchases or other acquisitions of any business or
property (including the Capital Stock of any other person) by the members
of the Consolidated Group, that are not reflected in the annual audited or
company-prepared quarterly financial statements referenced in Section
6.1(a) and (b) hereof, and (ii) no Restricted Payments have been declared
or paid by members of the Consolidated Group; and
(b) there has been no circumstance, development or event relating to
or affecting the members of the Consolidated Group that has had or could
reasonably be expected to have a Material Adverse Effect.
6.3 Organization; Existence; Compliance with Law.
Each of the members of the Consolidated Group (a) is duly organized or
formed, as the case may be, validly existing and in good standing under the laws
of the jurisdiction of its organization or formation, (b) has the corporate or
other necessary power and authority, and the legal right to own and operate its
Property, to lease the Property it leases as lessee and to conduct the business
in which it is currently engaged, (c) is duly qualified as a foreign entity and
in good standing under the laws of each jurisdiction where its ownership, lease
or operation of Property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not, in the aggregate, be reasonably
expected to have a Material Adverse Effect, and (d) is in compliance with all
Medicare Regulations, Medicaid Regulations and all other Requirements of Law
applicable to it, or to its Properties, except to the extent that the failure to
comply therewith could not, in the aggregate, be reasonably expected to have a
Material Adverse Effect. Set forth on Schedule 6.21 is a summary as of the
Closing Date of significant matters relating to matters of compliance, none of
which are reasonably expected to have a Material Adverse Effect. Without
limiting the generality of the foregoing, with respect to each member of
56
the Consolidated Group (and in each case, except as would not be reasonably
expected to have a Material Adverse Effect):
(i) There is (A) no member of the Consolidated Group or, to the
knowledge of the Responsible Officers of the Borrower, no individual
employed by any member of the Consolidated Group that would reasonably be
expected to have criminal culpability or has otherwise been excluded from
participation in any Medical Reimbursement Program for corporate or
individual actions or failures to act where such culpability or exclusion
has resulted or would reasonably be expected to result in an Exclusion
Event; and (B) to the knowledge of the Responsible Officers of the
Borrower, no officer continuing to be employed by the Consolidated Group
who may be reasonably expected to have individual culpability for matters
under investigation by the OIG or other Governmental Authority unless such
officer has been, within a reasonable period of time after discovery of
such actual or potential culpability, either suspended or removed from
positions of responsibility related to those activities under challenge by
the OIG or other Governmental Authority or otherwise dealt with in a
manner consistent with the corporate compliance program referred to in
Section 7.15 hereof;
(ii) Current billing policies, arrangements, protocols and
instructions comply with requirements of Medical Reimbursement Programs,
except where any such failure to comply could not reasonably be expected
to result in an Exclusion Event;
(iii) Current medical director compensation arrangements comply with
state and federal anti-kick back, fraud and abuse, and Stark I and II
requirements, except where any such failure to comply could not reasonably
be expected to result in an Exclusion Event.
6.4 Power; Authorization; Enforceable Obligations.
Each of the Credit Parties has the corporate or other necessary power and
authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and has taken all necessary corporate or other
action to authorize the execution, delivery and performance by it of the Credit
Documents to which it is a party. No material consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with acceptance of
Extensions of Credit or the making of the guaranties hereunder or with the
execution, delivery or performance of any Credit Documents by the Credit Parties
(other than those that have been obtained, such filings as are required by the
Securities and Exchange Commission and to fulfill other reporting requirements
with Governmental Authorities) or with the validity or enforceability of any
Credit Document against the Credit Parties (except such filings as are necessary
in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document constitutes a legal, valid and binding
obligation of each Credit Party party thereto enforceable against such Credit
Party in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
6.5 No Legal Bar.
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of the Properties or revenues of any member of the Consolidated
Group pursuant to any Requirement of Law or
57
Contractual Obligation other than the Liens arising under or contemplated in
connection with the Credit Documents.
6.6 No Material Litigation and Disputes.
(a) No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Responsible Officers of the Borrower, threatened by or against, any members of
the Consolidated Group or against any of their respective Properties or revenues
that (i) relate to the Credit Documents or any of the transactions contemplated
hereby or thereby or (ii) would reasonably be expected to have a Material
Adverse Effect. Set forth on Schedule 6.6 is a summary of significant claims,
litigation, investigations and proceedings pending or to the best of the
knowledge of the Credit Parties, threatened by or against members of the
Consolidated Group as of the Closing Date, but none of such actions are
reasonably expected to have a Material Adverse Effect.
(b) No default exists and, to the knowledge of the Responsible Officers of
the Borrower, no default has been asserted, under any Contractual Obligations to
which any members of the Consolidated Group are party that individually or in
the aggregate could reasonably be expected to have a Material Adverse Effect.
6.7 No Defaults.
No Default or Event of Default has occurred and is continuing.
6.8 Ownership and Operation of Property.
Each of the members of the Consolidated Group (i) has good and marketable
title to, or a valid leasehold interest in, all its material real property, and
good title to, or a valid leasehold interest in, all its other material
Property, and none of such Property is subject to any Lien, except for Permitted
Liens, and (ii) has obtained all licenses, permits, franchises or other
certifications, consents, approvals and authorizations, governmental or private,
required as a result of the ownership of its Property and to the conduct of its
business other than those the failure of which to obtain would not reasonably be
expected to have a Material Adverse Effect.
6.9 Intellectual Property.
(a) Each of the members of the Consolidated Group owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, patents,
technology, know-how and processes, if any, necessary for each of them to
conduct its business as currently conducted (the "Intellectual Property") except
for those the failure to own or have such legal right to use 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
such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does any Credit Party know of any such claim, and the
use of such Intellectual Property by the members of the Consolidated Group does
not infringe on the rights of any Person, except for such claims and
infringements that, in the aggregate, would not be reasonably expected to have a
Material Adverse Effect.
(b) Set forth on Schedule 6.9 is a list of the Intellectual Property as of
the Closing Date.
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6.10 Taxes.
Each of the members of the Consolidated Group has filed or caused to be
filed all material income tax returns (federal, state, local and foreign) and
all other material tax returns that are required to be filed and has paid (i)
all amounts shown therein to be due (including interest and penalties) and (ii)
all other material taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing, except for such taxes that are not yet delinquent or as are being
contested in good faith by appropriate proceedings for which adequate reserves,
if any, determined in accordance with GAAP have been established unless the
failure to make any such payment could give rise to an immediate right to
foreclose on a Lien securing such amounts. No tax claim or assessment has been
asserted against members of the Consolidated Group that would reasonably be
expected to have a Material Adverse Effect.
6.11 ERISA.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the knowledge of the Responsible Officers of the Borrower, 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 Internal Revenue Code, whether
or not waived, has occurred 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 Internal Revenue
Code, and any other applicable federal or state laws; and (iv) no lien in
favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior to
the date on which this representation is made or deemed made (determined,
in each case, in accordance with Financial Accounting Standards Board
Statement 87, utilizing the actuarial assumptions used in such Plan's most
recent actuarial valuation report), did not exceed as of such valuation
date the fair market value of the assets of such Plan.
(c) No member of the Consolidated Group nor any ERISA Affiliate has
incurred, or, to the knowledge of the Responsible Officers of the
Borrower, could be reasonably expected to incur, any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. No member
of the Consolidated Group nor any ERISA Affiliate would become subject to
any withdrawal liability under ERISA if any member of the Consolidated
Group or any ERISA Affiliate were to withdraw completely from all
Multiemployer Plans and Multiple Employer Plans as of the valuation date
most closely preceding the date on which this representation is made or
deemed made. No member of the Consolidated Group 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 knowledge of the Responsible Officers of the Borrower, reasonably
expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan that has subjected or
may subject any member of the Consolidated Group or any ERISA
59
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Internal Revenue Code, or under any agreement
or other instrument pursuant to which any member of the Consolidated Group
or any ERISA Affiliate has agreed or is required to indemnify any person
against any such liability.
(e) No member of the Consolidated Group nor any ERISA Affiliates has
any material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106. 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 Internal Revenue Code apply has been administered in
compliance in all material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement nor
the consummation of the financing transactions contemplated thereunder
will involve any transaction that is subject to the prohibitions of
Sections 404, 406 or 407 of ERISA or in connection with which a tax could
be imposed pursuant to Section 4975 of the Internal Revenue Code. The
representation by the Credit Parties in the preceding sentence is made in
reliance upon and subject to the accuracy of the Lenders' representation
in Section 11.16 with respect to their source of funds and is subject, in
the event that the source of the funds used by the Lenders in connection
with this transaction is an insurance company's general asset account, to
the application of Prohibited Transaction Class Exemption 95-60, 60 Fed.
Reg. 35,925 (1995), compliance with the regulations issued under Section
401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction
exemption or similar relief, to the effect that assets in an insurance
company's general asset account do not constitute assets of an "employee
benefit plan" within the meaning of Section 3(3) of ERISA of a "plan"
within the meaning of Section 4975(e)(1) of the Internal Revenue Code.
6.12 Governmental Regulations, etc.
(a) "Margin stock" (within the meaning of Regulation U) does not
constitute more than twenty-five percent (25%) of the value of the consolidated
assets of the Borrower and its Subsidiaries. None of the transactions
contemplated by this Credit Agreement (including, without limitation, the direct
or indirect use of the proceeds of the Loans) will violate or result in a
violation of the Securities Act of 1933, as amended, or the Securities Exchange
Act of 1934, as amended, or regulations issued pursuant thereto, or Regulation
T, U or X.
(b) None of the members of the Consolidated Group 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. In addition, none of the
members of the Consolidated Group is (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary" of a "holding company", within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any member
of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O.
6.13 Subsidiaries.
Set forth on Schedule 6.13 are all of the Subsidiaries of the Borrower as
of the Closing Date, including the jurisdiction of organization, classes of
Capital Stock (including options, warrants, rights of
60
subscription, conversion and exchangeability and other similar rights),
ownership and ownership percentages thereof. The outstanding shares of Capital
Stock of each Subsidiary have been validly issued, fully paid and are
non-assessable and owned free of Liens other than Permitted Liens and are not
the subject of buy-sell, voting trust or other shareholder agreement.
6.14 Purpose of Extensions of Credit.
The proceeds of the Loans shall be used by the Borrower solely to (i) pay
loans and obligations owing under the Existing Credit Agreement to any Lender
under the Existing Credit Agreement that will not be a Lender hereunder on the
Closing Date and (ii) provide for working capital and other general corporate
purposes of the Borrower and its Subsidiaries (including, without limitation,
Permitted Acquisitions).
6.15 Environmental Matters.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) Each of the facilities and properties owned, leased or operated by the
members of the Consolidated Group (the "Subject Properties") and all operations
at the Subject Properties are in compliance with all applicable Environmental
Laws, and there is no violation of any Environmental Law with respect to the
Subject Properties or the businesses operated by the members of the Consolidated
Group (the "Businesses"), and there are no conditions relating to the Businesses
or Subject Properties that could give rise to liability under any applicable
Environmental Laws.
(b) None of the Subject Properties contains, or has previously contained,
any Materials of Environmental Concern at, on or under the Subject Properties in
amounts or concentrations that constitute or constituted a violation of, or
could give rise to liability under, Environmental Laws.
(c) None of the members of the Consolidated Group has received any written
or verbal notice of, or inquiry from any Governmental Authority regarding, any
violation, alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws with
regard to any of the Subject Properties or the Businesses, nor does any
Responsible Officer of any member of the Consolidated Group have knowledge or
reason to believe that any such notice will be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other location,
in each case by or on behalf any members of the Consolidated Group in violation
of, or in a manner that would be reasonably likely to give rise to liability
under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Responsible Officers of any Credit Party,
threatened, under any Environmental Law to which any member of the Consolidated
Group 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 any member of the Consolidated Group, the Subject Properties or
the Businesses.
(f) There has been no release or, threat of release of Materials of
Environmental Concern at or from the Subject Properties, or arising from or
related to the operations (including, without limitation, disposal) of any
member of the Consolidated Group in connection with the Subject Properties or
otherwise in
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connection with the Businesses, in violation of or in amounts or in a manner
that could give rise to liability under Environmental Laws.
6.16 No Material Misstatements.
None of the information, reports, financial statements, exhibits or
schedules, taken as a whole, prepared by any member of the Consolidated Group
(or prepared by the Administrative Agent and approved by the Borrower) and
furnished by or on behalf of any member of the Consolidated Group to the
Administrative Agent or any Lender in connection with the negotiation of the
Credit Documents or included therein or delivered pursuant thereto contained,
contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein,
in light of the circumstances under which they were, are or will be made, not
materially misleading, provided that to the extent any such information, report,
financial statement, exhibit or schedule was based upon or constitutes a
forecast or projection, each of the Credit Parties represents only that such
forecast or projection was prepared in good faith and based upon assumptions
believed to be reasonable.
6.17 Labor Matters.
Except as could not reasonably be expected to have a Material Adverse
Effect:
(a) There are no strikes or lockouts against any members of the
Consolidated Group pending or, to the knowledge of the Responsible Officers of
the Borrower, threatened;
(b) The hours worked by and payments made to employees of the Consolidated
Group have not been in violation of the Fair Labor Standards Act or any other
applicable federal, state, local or foreign law dealing with such matters in any
case where a Material Adverse Effect could reasonably be expected to occur as a
result of the violation thereof;
(c) All payments due from members of the Consolidated Group, or for which
any claim may be made against a member of the Consolidated Group, on account of
wages and employee health and welfare insurance and other benefits, have been
paid or accrued as a liability on the books of the respective members of the
Consolidated Group; and
(d) None of the members of the Consolidated Group is party to a collective
bargaining agreement.
6.18 Collateral Documents.
(a) The Security Agreement is effective to create in favor of the
Collateral Agent, for the ratable benefit of the holders of the Obligations, a
legal, valid and enforceable security interest in the Collateral identified
therein, except to the extent the enforceability thereof may be limited by
applicable Debtor Relief Laws affecting creditors' rights generally and by
equitable principles of law (regardless of whether enforcement is ought in
equity or at law) and, when UCC financing statements (or other appropriate
notices) in appropriate form are duly filed with the central (or linked) UCC
index of the state of each of the locations identified on Schedule 6.19(c), the
Security Agreement shall create a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the grantors thereunder
in such Collateral, in each case prior and superior in right to any other Lien
(other than Permitted Liens).
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(b) The Pledge Agreement is effective to create in favor of the Collateral
Agent, for the ratable benefit of the holders of the Obligations, a legal, valid
and enforceable security interest in the Collateral identified therein, except
to the extent the enforceability thereof may be limited by applicable Debtor
Relief Laws affecting creditors' rights generally and by equitable principles of
law (regardless of whether enforcement is ought in equity or at law) and the
Pledge Agreement shall create a fully perfected first priority Lien on, and
security interest in, all right, title and interest of the pledgors thereunder
in such Collateral, in each case prior and superior in right to any other Lien
(i) with respect to any such Collateral that is a "security" (as such term is
defined in the UCC) and is evidenced by a certificate, when such Collateral is
delivered to the Collateral Agent with duly executed stock powers with respect
thereto, (ii) with respect to any such Collateral that is a "security" (as such
term is defined in the UCC) but is not evidenced by a certificate, when UCC
financing statements in appropriate form are filed in the appropriate filing
offices in the jurisdiction of organization of the pledgor or when "control" (as
such term is defined in the UCC) is established by the Collateral Agent over
such interests in accordance with the provision of Section 8-106 of the UCC, or
any successor provision, and (iii) with respect to any such Collateral that is
not a "security" (as such term is defined in the UCC), when UCC financing
statements in appropriate form are filed in the appropriate filing offices in
the jurisdiction of organization of the pledgor.
6.19 Location of Real Property and Leased Premises.
(a) Set forth on Schedule 6.19(a) is a complete and correct list of all
real property located in the United States and owned or leased by any Credit
Party as of the Closing Date with street address and state where located.
(b) Set forth on Schedule 6.19(b) is a list of all locations (other than
those locations set forth on Schedule 6.19(a)) where any tangible personal
property of any Credit Party is located as of the Closing Date, including street
address and state where located.
(c) Set forth on Schedule 6.19(c) is the chief executive office, state of
formation and legal name of each Credit Party as of the Closing Date. If any
Credit Party changes its state of formation or legal name, the Borrower shall
notify the Administrative Agent thereof within thirty days after the date of
such change.
6.20 Fraud and Abuse.
Except as would not reasonably be expected to constitute a Material
Adverse Effect, no member of the Consolidated Group or any of their respective
officers, directors or, to the knowledge of the Responsible Officers of the
Borrower, any Contract Providers have engaged in any activities that are
prohibited under Medicare Regulations or Medicaid Regulations, including,
without limitation, (i) knowingly and willfully making or causing to be made a
false statement or a misrepresentation of any material fact in any application
for any benefit or payment; (ii) knowingly and willfully making or causing to be
made any false statement or a misrepresentation of any material fact for use in
determining rights to any benefit or payment; (iii) failing to disclose
knowledge by a claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to secure such benefit or payment fraudulently; (iv)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash
or in kind or offering to pay such remuneration (A) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or other federal health care program, or (B) in return for purchasing,
leasing or ordering or arranging for or recommending the purchasing, leasing or
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ordering of any good, facility, service, or item for which payment may be made
in whole or in part by Medicare, Medicaid or other federal health program.
6.21 Licensing and Accreditation.
Except as set forth on Schedule 6.21 and as would not reasonably be
expected to constitute a Material Adverse Effect, each member of the
Consolidated Group and, to the knowledge of the Responsible Officers of the
Borrower, each Contract Provider, has, to the extent applicable: (i) obtained
(or been duly assigned) all required certificates of need or determinations of
need as required by the relevant state Governmental Authority for the
acquisition, construction, expansion of, investment in, operation of or
management of its businesses as currently operated; (ii) obtained and maintains
in good standing all required licenses, permits, authorizations and
qualifications required under applicable law in connection with the ownership,
operation or management of each of its Subsidiaries; (iii) to the extent prudent
and customary in the industry in which it is engaged, obtained and maintains
accreditation from all generally recognized accrediting agencies; and (iv)
entered into and maintains in good standing its status as a Medicare Supplier
and as a Medicaid Supplier. Except as set forth on Schedule 6.21 and as would
not reasonably be expected to constitute a Material Adverse Effect, to the
knowledge of the Responsible Officers of the Borrower, each Contract Provider is
duly licensed by each state, state agency, commission or other Governmental
Authority having jurisdiction over the provisions of such services by such
Person in the locations where the members of the Consolidated Group conduct
business, to the extent such licensing is required to enable such Person to
provide the professional services provided by such Person and otherwise as is
necessary to enable the Consolidated Group to operate as currently operated and
as contemplated to be operated, and all such required licenses are in full force
and effect on the date hereof and have not been revoked or suspended or
otherwise limited. Set forth on Schedule 6.21 is a summary as of the Closing
Date of significant matters relating to compliance with Medicare Regulations and
Medicaid Regulations, none of which are reasonably expected to have a Material
Adverse Effect.
6.22 Solvency.
Immediately after giving effect to the initial Extensions of Credit made
on the Closing Date, (i) the fair value of the assets of the Credit Parties
taken as a whole will exceed their consolidated debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of the Credit Parties taken as a whole will be greater than the
amount that will be required to pay the probable liability of their consolidated
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and mature; and (iii) the Credit
Parties taken as a whole will not have unreasonably small capital with which to
conduct the business in which they are engaged as such business is now conducted
and is proposed to be conducted following the Closing Date.
6.23 No Other Broker's Fees.
None of the members of the Consolidated Group owes to any Person other
than the Lenders and their affiliates, or otherwise has any obligation in
respect of any finder's fees, broker's fees, investment banker's fees or other
similar fees in connection with the transactions contemplated in the Credit
Agreement and the other Credit Documents, other than the fees payable to Thomas
Weisel Partners LLC.
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SECTION 7
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding or any Letter of Credit is outstanding,
and until all of the Commitments hereunder shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the
Administrative Agent:
(a) Annual Financial Statements. As soon as available, and in any event
within ninety (90) days after the close of each fiscal year of the Borrower, a
consolidated balance sheet of the Consolidated Group as of the end of such
fiscal year, together with related consolidated statements of income,
stockholders' equity and cash flows for such fiscal year, in each case setting
forth in comparative form consolidated figures for the preceding fiscal year,
all such financial information described above to be audited by Deloitte &
Touche USA LLP or another firm of national standing acceptable to the
Administrative Agent and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP (except for
changes with which such accountants concur) and shall not be limited as to the
scope of the audit or qualified as to the status of the members of the
Consolidated Group as a going concern or any other material qualifications or
exceptions.
(b) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the close of each fiscal quarter of the
Borrower (other than the fourth fiscal quarter), an unaudited consolidated
balance sheet of the Consolidated Group as of the end of such fiscal quarter,
together with related unaudited consolidated statements of income, stockholders'
equity and of cash flows for such fiscal quarter, in each case setting forth in
comparative form consolidated figures for the corresponding period of the
preceding fiscal year, all such financial information described above to be
accompanied by a certificate of a Responsible Officer of the Borrower to the
effect that such quarterly financial statements fairly present in all material
respects the financial condition of the Consolidated Group and have been
prepared in accordance with GAAP, subject to changes resulting from audit and
normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the financial
statements required by Sections 7.1(a) and 7.1(b) above, a certificate of a
Responsible Officer of the Borrower substantially in the form of Exhibit 7.1(c),
(i) demonstrating compliance with the financial covenants contained in Section
7.10 by calculation thereof as of the end of each such fiscal period and (ii)
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 Credit Parties propose to take with respect thereto.
(d) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 7.1(a), a certificate of the
accountants conducting the annual audit stating that they have reviewed this
Credit Agreement and stating further whether, in the course of their audit, they
have become aware of any Default or Event of Default under the financial
covenants set forth in Section 7.10 and, if any such Default or Event of Default
exists, specifying the nature and extent thereof.
(e) Schedule Updates. At the time of delivery of the financial
statements required by Sections 7.1(a) and 7.1(b) above, a certificate of a
Responsible Officer of the Borrower (i) listing of (A) all applications, if any,
for Copyrights, Patents or Trademarks made since the date of the prior
certificate (or, in the case of the first such certificate, the Closing Date)
and (B) all issuances of registrations or letters on existing applications for
Copyrights, Patents and Trademarks, and (ii) attaching the insurance binder or
other
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evidence of insurance for any insurance coverage of any member of the
Consolidated Group that was renewed, replaced or modified during the period
covered by such financial statements.
(f) Auditor's Reports. Promptly (and in any event within thirty (30)
days) upon receipt thereof, a copy of any other report or "management letter"
submitted by independent accountants to any member of the Consolidated Group in
connection with any annual, interim or special audit of the books of such
Person.
(g) Reports. Within ten (10) days of the filing thereof, copies of all
registration statements (excluding the exhibits thereto and any registration
statements on Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) and all other periodic reports which any member of the
Consolidated Group shall file with the Securities and Exchange Commission, or
any successor agency.
(h) Reports to Shareholders. Within ten (10) days of the mailing thereof
to the shareholders of the Borrower generally, copies of all financial
statements, reports and proxy statements so mailed.
(i) Environmental and OSHA Reports. Promptly (and in any event within
ten (10) days) of the request of the Administrative Agent, all reports and
written information to and from the United States Environmental Protection
Agency, or any state or local agency responsible for environmental matters, the
United States Occupational Safety and Health Administration, or any state or
local agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety matters.
(j) Notices. Upon any Responsible Officer of a Credit Party obtaining
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within five (5) Business Days)
of (i) the occurrence of a Default or Event of Default, specifying the nature
and existence thereof and what action the Credit Parties propose to take with
respect thereto, and (ii) the occurrence of any of the following with respect to
any member of the Consolidated Group: (A) the commencement of any litigation,
arbitral or governmental proceeding against such member that could reasonably be
expected to have a Material Adverse Effect; (B) the institution of any
proceedings against such member with respect to an alleged violation of any
federal, state or local law, rule or regulation, including, without limitation,
Environmental Laws, the violation of which could reasonably be expected to have
a Material Adverse Effect; (C) the institution of any proceeding against such
member to suspend, revoke or terminate its participation in a Medical
Reimbursement Program or notice of an Exclusion Event, that, in each case if not
promptly responded to, complied with or cured could reasonably be expected to
result in an Exclusion Event; (D) the receipt of a notice of intent to exclude
such member issued by the OIG that if not promptly responded to, complied with
or cured could reasonably be expected to result in an Exclusion Event; or (E) a
notice of loss of participation Medical Reimbursement Program or loss of
applicable health care license or certificate of authority, and all other
material deficiency notices, compliance orders or adverse reports issued by any
Governmental Authority that, if not promptly responded to, complied with or
cured, could reasonably be expected to result in the suspension or forfeiture of
any license or certification necessary for the Borrower or any of its
Subsidiaries to carry on its business as then conducted or the termination of
its participation in a Medical Reimbursement Program available to the Borrower
or any of its Subsidiaries.
(k) ERISA. Upon any Responsible Officer of a Credit Party obtaining
knowledge thereof, the Credit Parties will give written notice to the
Administrative Agent promptly (and in any event within ten (10) Business Days)
of: (i) any event or condition, including, without limitation, any Reportable
Event, that constitutes, or might reasonably lead to, 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 Credit Parties or
any ERISA Affiliates, 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
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the due date (including extensions) thereof of all amounts that any member of
the Consolidated Group 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 Internal Revenue Code with respect thereto, the
failure of which could reasonably be expected to have a Material Adverse Effect;
or (iv) any change in the funding status of any Plan that could reasonably be
expected to have a Material Adverse Effect, together with a description of any
such event or condition or a copy of any such notice and a statement by a
Responsible Officer of the Borrower briefly setting forth the details regarding
such event, condition, or notice, and the action, if any, that has been or is
being taken or is proposed to be taken by the Credit Parties 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, without limitation, 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 Internal Revenue Code,
respectively, for each "plan year" (within the meaning of Section 3(39) of
ERISA).
(l) Acquisitions. Promptly within 10 days upon the request of the
Administrative Agent or the Required Lenders, a compliance certificate signed by
a Responsible Officer demonstrating compliance with the financial covenants in
Section 7.10 for the most recent period of four consecutive fiscal quarters
after giving effect to any Acquisition during such period on a Pro Forma Basis
and reaffirming that the representations and warranties made hereunder are true
and correct in all material respects as of such date.
(m) Environmental.
(i) Upon the reasonable written request of the Administrative
Agent following the occurrence of any event or the discovery of any
condition that the Administrative Agent or the Required Lenders reasonably
believe has caused (or could be reasonably expected to cause) the
representations and warranties set forth in Section 6.15 to be untrue in
any material respect, the Borrower 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 Agent as to the
nature and extent of the presence of any Materials of Environmental
Concern on any Subject Properties (as defined in Section 6.15) and as to
the compliance by any member of the Consolidated Group with Environmental
Laws at such Subject Properties. 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 the
same, and the members of the Consolidated Group hereby grant to the
Administrative Agent and their representatives access to the Subject
Properties to reasonably 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 and added
to the obligations secured by the Collateral Documents.
(ii) The members of the Consolidated Group will conduct and
complete all investigations, studies, sampling, and testing and all
remedial, removal, and other actions necessary to address all Materials of
Environmental Concern on, from or affecting any of the Subject Properties
to the extent necessary to be in compliance with all Environmental Laws
and with the validly issued orders and directives of all Governmental
Authorities with jurisdiction over such Subject Properties to the extent
any failure could reasonably be expected to have a Material Adverse
Effect.
(n) Other Information. With reasonable promptness upon any such request,
such other information regarding the business, properties or financial condition
of any member of the Consolidated Group as the Administrative Agent or the
Required Lenders may reasonably request.
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Documents required to be delivered pursuant to Section 7.1(a) or (b) or
Section 7.1(g) (to the extent any such documents are included in materials
otherwise filed with the Securities and Exchange Commission) may be delivered
electronically and if so delivered, shall be deemed to have been delivered on
the date (i) on which the Borrower posts such documents, or provides a link
thereto on the Borrower's website on the internet at the website address listed
on Schedule 11.1; or (ii) on which such documents are posted on the Borrower's
behalf on an internet or intranet website, if any, to which each Lender and the
Administrative Agent have access (whether a commercial, third-party website or
whether sponsored by the Administrative Agent); provided that: (A) the Borrower
shall deliver paper copies of such documents to the Administrative Agent or any
Lender that requests the Borrower to deliver such paper copies until a written
request to cease delivering paper copies is given by the Administrative Agent or
such Lender and (B) the Borrower shall notify (which may be by facsimile or
electronic mail) the Administrative Agent and each Lender of the posting of any
such documents and provide to the Administrative Agent by electronic mail
electronic versions (i.e., soft copies) of such documents. Notwithstanding
anything contained herein, in every instance the Borrower shall be required to
provide paper copies of the certificate required by Section 7.1(c) to the
Administrative Agent. Except for the certificates required by Section 7.1(c),
the Administrative Agent shall have no obligation to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Borrower with any such request
for delivery, and each Lender shall be solely responsible for requesting
delivery to it or maintaining its copies of such documents.
The Credit Parties hereby acknowledge that the Administrative Agent will
make available to the Lenders materials and/or information provided by or on
behalf of the Credit Parties hereunder (collectively, the "Credit Party
Materials") by posting the Credit Party Materials on IntraLinks or another
similar electronic system (the "Platform") and that certain of the Lenders may
be "public-side" Lenders (i.e., Lenders that do not wish to receive material
non-public information with respect to the Credit Parties or their securities)
(each, a "Public Lender"). The Credit Parties hereby agree that (1) all Credit
Party Materials that are to be made available to Public Lenders shall be clearly
and conspicuously marked by a Credit Party "PUBLIC" (which, at a minimum, shall
mean that the word "PUBLIC" shall appear prominently on the first page thereof);
(2) by marking the Credit Party Materials "PUBLIC," the Credit Parties shall be
deemed to have authorized the Administrative Agent and the Lenders to treat such
Credit Party Materials as either publicly available information or not material
information (although it may be sensitive and proprietary) with respect to the
Credit Parties or their securities for purposes of United States federal and
state securities laws; (3) all Credit Party Materials marked "PUBLIC" are
permitted to be made available through a portion of the Platform designated as
"Public"; and (4) the Administrative Agent shall be entitled to treat any Credit
Party Materials that are not marked "PUBLIC" as being suitable only for posting
on a portion of the Platform not marked as "Public."
7.2 Preservation of Existence and Franchises.
Except as a result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.4 or 8.5, each Credit
Party will, and will cause each of its Subsidiaries to, do all things necessary
to preserve and keep in full force and effect (a) its existence and (b) except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect, its Licenses, rights, franchises and authority.
7.3 Books and Records.
Each Credit Party will, and will cause each of its Subsidiaries to, keep
complete and accurate books and records of its transactions in accordance with
good accounting practices on the basis of GAAP (including the establishment and
maintenance of appropriate reserves).
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7.4 Compliance with Law.
Each Credit Party will, and will cause each of its Subsidiaries to, comply
with all laws, rules, regulations and orders, and all applicable restrictions
imposed by all Governmental Authorities, applicable to it and its Property if
noncompliance with any such law, rule, regulation, order or restriction could
reasonably be expected to have a Material Adverse Effect. Specifically, but
without limiting the foregoing, and except where any such failure to comply
could not reasonably be expected to result in either an Exclusion Event or a
Material Adverse Effect: (i) billing policies, arrangements, protocols and
instructions will comply with reimbursement requirements under Medical
Reimbursement Programs; and (ii) medical director compensation arrangements will
comply with state and federal anti-kick back/fraud and abuse, and Stark I and
II, requirements.
7.5 Payment of Taxes and Other Lawful Claims.
Each Credit Party will, and will cause each of its Subsidiaries to, pay
and 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, and (b) all material lawful
claims (including claims for labor, materials and supplies) that, if unpaid,
might give rise to a Lien upon any of its properties; provided, however, that no
member of the Consolidated Group shall be required to pay or discharge any such
tax, assessment, charge, levy or claim that is being contested in good faith by
appropriate proceedings for which adequate reserves, if any, determined in
accordance with GAAP have been established, unless the failure to make any such
payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.
7.6 Insurance.
(a) Each Credit Party will, and will cause each of its Subsidiaries to,
at all times maintain in full force and effect insurance (including workers'
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice (or as otherwise required by the Collateral Documents).
The Collateral Agent shall be named as loss payee or mortgagee, as its interest
may appear, and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any such
insurance shall agree, by endorsement upon the policy or policies issued by it
or by independent instruments furnished to the Collateral Agent, that it will
give the Collateral Agent thirty days prior written notice before any such
policy or policies shall be altered or canceled, and that no act or default of
any member of the Consolidated Group or any other Person shall affect the rights
of the Collateral Agent or the Lenders under such policy or policies.
(b) The insurance coverage of the members of the Consolidated Group as
in effect on the Closing Date is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 7.6.
7.7 Maintenance of Property.
Except as a result of transactions permitted under Sections 8.4 and 8.5 of
this Credit Agreement, each Credit Party will, and will cause each of its
Subsidiaries to, maintain and preserve its properties and equipment material to
the conduct of its business in good repair, working order and condition, normal
wear and tear and casualty and condemnation 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
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improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
7.8 Use of Proceeds; Margin Stock.
The Borrower will use the proceeds of Extensions of Credit solely for the
purposes set forth in Section 6.14. No part of the proceeds of the Extensions of
Credit hereunder will be used, directly or indirectly, for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation U. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No indebtedness being reduced or retired out of the proceeds of
the Extensions of Credit hereunder was or will be incurred for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulation U or
any "margin security" within the meaning of Regulation T.
7.9 Audits/Inspections.
Upon reasonable notice and during normal business hours (or, following the
occurrence and during the continuation of an Event of Default, at any time
without notice), each Credit Party will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Administrative Agent, including,
without limitation, independent accountants, agents, attorneys, and appraisers
to visit and inspect its 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 or its representatives to investigate and verify the accuracy of
information provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of such Person and the accountants and
auditors of such Person. The Credit Parties agree that the Administrative Agent,
and its representatives, may conduct one audit of the Collateral each calendar
year and such audit shall be at the expense of the Credit Parties.
7.10 Financial Covenants.
(a) Consolidated Leverage Ratio. As of the end of each fiscal quarter
ending during the periods set forth below (commencing with the fiscal quarter
ending June 30, 2004), the Consolidated Leverage Ratio shall not be greater than
the ratio set forth below opposite such period:
- ------------------------------------------------------------------------------
Maximum Consolidated
Period Leverage Ratio
- ------------------------------------------------------------------------------
July 1, 2004 through June 30, 2005 3.25:1.0
July 1, 2005 through June 30, 2006 3.00:1.0
July 1, 2006 and each fiscal quarter thereafter 2.75:1.0
- ------------------------------------------------------------------------------
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of each
fiscal quarter (commencing with the fiscal quarter ending June 30, 2004), the
Consolidated Fixed Charge Coverage Ratio shall not be less than 1.5:1.0.
(c) Consolidated Net Worth. As of the end of each fiscal quarter
(commencing with the fiscal quarter ending June 30, 2004), the Consolidated Net
Worth shall not be less than the sum of (i) $500 million plus (ii) as of the end
of each fiscal quarter ending after March 31, 2004, an amount equal to
seventy-five percent (75%) of Consolidated Net Income (but not less than zero)
for such fiscal quarter, such increases to be cumulative, plus (iii) an amount
equal to one hundred percent (100%) of net proceeds from Equity Transactions
occurring after the Closing Date, minus (iv) stock repurchases permitted under
Section 8.7.
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(d) Consolidated Asset Coverage Ratio. As of the end of each fiscal
quarter ending during the periods set forth below (commencing with the fiscal
quarter ending June 30, 2004), the Consolidated Asset Coverage Ratio shall not
be less than the ratio set forth below opposite such period:
- ------------------------------------------------------------------------------
Minimum Asset Coverage
Period Ratio
- ------------------------------------------------------------------------------
July 1, 2004 through March 31, 2006 1.00:1.0
April 1, 2006 through June 30, 2007 1.25:1.0
July 1, 2007 and each fiscal quarter thereafter 1.50:1.0
- ------------------------------------------------------------------------------
(e) Calculation of Financial Covenants on a Pro Forma Basis.
Notwithstanding anything herein to the contrary, the calculation of the
financial covenants in clauses (a), (b), (c) and (d) of this Section 7.10
(including, without limitation, for purposes of determining the applicable
pricing level under the definition of "Applicable Percentage") shall be made on
a Pro Forma Basis.
7.11 Additional Guarantors; Foreign Subsidiaries.
(a) At any time the Borrower has any Domestic Subsidiary that is not a
Guarantor (other than any Immaterial Subsidiary, the Excluded Subsidiary and any
Securitization Subsidiary), the Borrower shall, within fifteen (15) days of the
acquisition of the entities in connection with the HRA Acquisition, and, in all
other cases, thirty (30) days of the formation or acquisition of such Domestic
Subsidiary, deliver, or cause such Domestic Subsidiary to deliver, to the
Administrative Agent (i) a Joinder Agreement duly executed by such Domestic
Subsidiary, (ii) such supporting resolutions, incumbency certificates, corporate
formation and organizational documentation and opinions of counsel as the
Administrative Agent may reasonably request, (iii) a certificate of a
Responsible Officer setting forth the legal name, the jurisdiction of
organization, classes of Capital Stock (including options, warrants, rights of
subscription, conversion and exchangeability and other similar rights),
ownership and ownership percentages of such Subsidiary, and any buy-sell, voting
trust or other shareholder agreement relating to such Subsidiary, and (iv) such
other items, including stock certificates and related stock powers and UCC
financing statements, as may be required under Section 7.13.
(b) The Borrower will not form or acquire any Foreign Subsidiaries.
7.12 Pledged Assets.
Pledge or cause to be pledged to the Collateral Agent to secure the
Obligations (a) 100% of the issued and outstanding Capital Stock of each
Domestic Subsidiary within thirty (30) days of its formation, acquisition or
other receipt of such interests and (b) 65% of the issued and outstanding
Capital Stock of each Foreign Subsidiary within sixty (60) days of its
formation, acquisition or other receipt of such interests, in each case pursuant
to the Pledge Agreement or pledge joinder agreements, together with opinions of
counsel and any filings and deliveries reasonably requested by the Collateral
Agent in connection therewith to perfect the security interests therein, all in
form and substance reasonably satisfactory to the Administrative Agent. The
requirement pursuant to clause (b) for the pledge of not more than 65% of the
Capital Stock in each Foreign Subsidiary is intended to avoid treatment of the
undistributed earnings of a Foreign Subsidiary as a deemed dividend to its
United States parent for United States federal income tax purposes. Each Credit
Party shall pledge or cause to be pledged any greater percentage of its interest
in a Foreign Subsidiary that (whether pursuant to existing applicable law or as
the result of changes to, or clarifications of, existing applicable law after
the date hereof) (i) would not reasonably be expected to cause the undistributed
earnings of such Foreign Subsidiary to be treated as a deemed dividend to the
United States parent of such Foreign Subsidiary, as determined for United States
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federal income tax purposes, and (ii) would not otherwise reasonably be expected
to result in material adverse tax consequences to such Foreign Subsidiary or its
United States parent.
7.13 Landlord Lien Waivers.
The Credit Parties shall use commercially reasonable efforts to obtain
landlord lien waivers, in form and substance substantially similar to those
delivered on the Closing Date or otherwise reasonably satisfactory to the
Administrative Agent, for (a) each of the real property leasehold interests
identified on Schedule 5.1 for which such landlord lien waivers were not
provided on or before the Closing Date and (b) each other real property
leasehold interests where Other Premises Inventory is stored or held, in each
case unless waived by the Administrative Agent.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding or any Letter of Credit is outstanding,
and until all of the Commitments hereunder shall have terminated:
8.1 Indebtedness.
The Credit Parties will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness existing or arising under this Credit Agreement or the
other Credit Documents;
(b) Indebtedness of the Borrower and its Subsidiaries existing on the
Closing Date and set forth on Schedule 8.1, and renewals, refinancings and
extensions thereof provided that (i) the aggregate principal amount thereof
outstanding on the date of such renewal, refinancing or extension shall not be
increased and (ii) the terms of such renewal, refinancing or extension shall not
be materially less favorable to the respective obligors than the terms of such
existing Indebtedness;
(c) purchase money Indebtedness (including obligations in respect of
Capital Leases or Synthetic Leases) hereafter incurred by the Borrower or any of
its Subsidiaries to finance the purchase of fixed assets provided that (i) the
total of all such Indebtedness for the Borrower and its Subsidiaries taken
together shall not exceed an aggregate principal amount of $50,000,000 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;
(d) obligations of the Borrower or any of its Subsidiaries owing under
interest rate, commodities and foreign currency exchange protection agreements
entered into in the ordinary course of business to manage existing or
anticipated risks and not for speculative purposes;
(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 8.6 in the case of the member of the
Consolidated Group extending the loan, advance or credit);
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(f) Subordinated Debt of the Borrower in a principal amount of up to
$250 million in the aggregate;
(g) Support Obligations of any member of the Consolidated Group with
respect to any member of the Consolidated Group that is permitted under this
Section 8.1, provided that Support Obligations given in respect of Subordinated
Debt shall be similarly subordinated to payment of the loans and obligations
hereunder on terms and conditions acceptable to the Administrative Agent and the
Required Lenders;
(h) Indebtedness arising or existing with respect to Governmental
Reimbursement Program Costs; and
(i) other unsecured Funded Debt of the Borrower and its Subsidiaries in
an aggregate outstanding principal amount of up to $15,000,000 at any time.
8.2 Liens.
The Credit Parties will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its Property, whether now owned or after acquired, except for Permitted
Liens.
8.3 Nature of Business.
The Credit Parties will not permit any member of the Consolidated Group to
substantively alter the character or conduct of the business conducted by such
Person as of the Closing Date; provided, the foregoing shall not prohibit any
member of the Consolidated Group from engaging in any type of business engaged
in by any other member of the Consolidated Group.
8.4 Merger and Consolidation, Dissolution and Acquisitions.
(a) No member of the Consolidated Group will enter into any transaction
of merger or consolidation, except that:
(i) a Credit Party may be party to a transaction of merger or
consolidation with another Credit Party, provided that if the Borrower is
a party to such transaction, it shall be the surviving entity;
(ii) a Foreign Subsidiary may be party to a transaction of merger
or consolidation with a Subsidiary of the Borrower, provided that (A) if a
Domestic Subsidiary is a party thereto, a Domestic Subsidiary shall be the
surviving entity, and (B) if a Foreign Subsidiary is a party thereto and a
Domestic Subsidiary is not a party thereto, the surviving entity shall be
a Foreign Subsidiary;
(iii) a Domestic Subsidiary of the Borrower may be a party to a
transaction of merger or consolidation with a Person other than a member
of the Consolidated Group, provided that (A) the surviving entity shall be
a Domestic Subsidiary of the Borrower and (B) the transaction shall
constitute a Permitted Acquisition; and
(iv) a Subsidiary of the Borrower may enter into a transaction of
merger or consolidation in connection with an Asset Disposition permitted
under Section 8.5.
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(b) No member of the Consolidated Group may dissolve, liquidate or wind
up its affairs; provided, however, (i) a Wholly Owned Subsidiary of the Borrower
may dissolve, liquidate or wind up its affairs so long as no Material Adverse
Effect could reasonably be expected to result on account thereof and (ii) any
other Subsidiary of the Borrower may dissolve, liquidate or wind up its affairs
so long as the Asset Disposition resulting from the disposition of Property
allocated or to be distributed to a Person other than the Borrower or any of its
Wholly Owned Subsidiaries in connection with such dissolution, liquidation or
winding up is otherwise permitted under Section 8.5 hereof.
(c) No member of the Consolidated Group shall make any Acquisition,
unless:
(i) in the case of an acquisition of Capital Stock of another
Person, such Acquisition shall either (x) constitute a Permitted
Acquisition or (y) the Required Lenders shall have consented to such
Acquisition and the Borrower shall have delivered to the Required Lenders
at least ten (10) Business Days prior to the date of such Acquisition the
information described in the paragraph immediately following clause (ii)
below with respect to such Acquisition;
(ii) in the case of an Acquisition of all or any substantial
portion of the Property (other than Capital Stock) of another Person, such
Acquisition shall either (x) constitute a Permitted Acquisition or (y) the
Required Lenders shall have consented to such Acquisition and the Borrower
shall have delivered to the Required Lenders at least ten (10) Business
Days prior to the date of such Acquisition the information described in
the paragraph below with respect to such Acquisition.
Within ten (10) Business Days of the consummation of any Permitted
Acquisition, the Borrower shall deliver to the Administrative Agent the
following information: (i) a copy of the signed acquisition agreement (together
with schedules and exhibits) and all other documents and instruments executed or
delivered in connection therewith that the Administrative Agent may reasonably
request; (ii) a written description of the Person (or Property) acquired,
including location and type of operations, key management, and real estate
assets (including legal descriptions of any owned real estate), if any; (iii) to
the extent available to the Borrower, audited or reviewed historical financial
statements of the Person (or Property) acquired for the prior two years and the
most recent interim statement; (iv) consolidated financial statements and
projections for each of the first four full fiscal quarters ending after the
closing of such Acquisition for both the Borrower and its Subsidiaries as well
as the Person (or Property) being acquired giving effect to such Acquisition on
a pro forma basis and (v) a copy of the package of financial and other
information delivered to the board of directors of the Borrower in connection
with their consideration of such Acquisition.
8.5 Asset Dispositions.
The Credit Parties will not permit any member of the Consolidated Group to
make any Asset Disposition unless (a) at least eighty-five percent (85%) of the
consideration paid therefor shall consist of cash and Cash Equivalents and any
consideration other than cash and Cash Equivalents shall be limited to the
Capital Stock of the purchaser, (b) if the subject transaction is a Sale and
Leaseback Transaction, such transaction shall be permitted by Section 8.13, (c)
if the subject transaction involves Capital Stock of a Subsidiary, the subject
transaction is of a controlling interest in such Subsidiary, (d) the aggregate
net book value of all assets sold, leased or otherwise disposed of in any fiscal
year shall not exceed five percent (5%) of the total assets of the Consolidated
Group determined on a consolidated basis in accordance with GAAP as of the end
of the immediately preceding fiscal year, (e) the assets sold, leased or
otherwise disposed of in any fiscal year shall not have generated or accounted
for more than five percent (5%) of Consolidated EBITDA as of the end of the
immediately preceding fiscal year, (f) no Default or Event of Default shall
exist immediately after giving effect thereto, (g) the Borrower shall have
74
delivered to the Administrative Agent a compliance certificate signed by a
Responsible Officer demonstrating compliance with the financial covenants in
Section 7.10 for the most recent period of four consecutive fiscal quarters
after giving effect to such Asset Disposition during such period on a Pro Forma
Basis and reaffirming that the representations and warranties made hereunder are
true and correct in all material respects as of such date, and (h) the Borrower
shall have given written notice to the Administrative Agent at least ten (10)
days in advance of the prospective disposition, and the terms thereof, in
sufficient detail as to the book value and consideration to be paid, terms of
disposition, and net proceeds expected therefrom and intended application
thereof.
The Administrative Agent will promptly deliver to the Borrower upon
request, at the Borrower's expense, such release documentation (including
delivery of applicable stock certificates) as may be reasonably requested to
give effect to the release of subject Property from the Credit Documents
securing the obligations hereunder in connection with Asset Dispositions
permitted hereunder.
8.6 Investments.
The Credit Parties will not permit any member of the Consolidated Group to
make or permit to exist Investments in or to any Person, except for Permitted
Investments.
8.7 Restricted Payments.
The Credit Parties will not make, or permit any member of the Consolidated
Group to make, any Restricted Payment, other than:
(a) any non-Wholly Owned Subsidiary may pay cash dividends to the
holders of its Capital Stock, provided that (i) such cash dividends shall be
allocated to such holders ratably based on their respective ownership
percentages of such Subsidiary, (ii) such cash dividends shall be paid solely
with the operating income of such Subsidiary and (iii) the aggregate revenues of
all non-Wholly Owned Subsidiaries as of the end of the immediately preceding
fiscal quarter shall not exceed 20% of the revenues of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP; and
(b) the Borrower may make cash payments to repurchase outstanding shares
of its common stock, provided that (i) such cash payments shall not exceed $100
million in the aggregate and (ii) prior to making any such cash payment the
Borrower shall deliver to the Administrative Agent a compliance certificate
signed by a Responsible Officer demonstrating compliance with the financial
covenants in Section 7.10 for the most recent period of four consecutive fiscal
quarters after giving effect to such cash payment during such period on a Pro
Forma Basis.
8.8 Modifications and Payments in respect of Funded Debt.
None of the members of the Consolidated Group will:
(a) After the issuance thereof, amend or modify (or permit the amendment
or modification of) the terms of any Funded Debt to shorten the maturity or
average life to maturity thereof, require any principal payment sooner than
previously scheduled or to increase the interest rate or fees applicable
thereto; or
(b) Except in connection with a refinancing or refunding permitted
hereunder, make any prepayment, redemption, defeasance or acquisition for value
of (including, without limitation, by way of depositing money or securities with
the trustee with respect thereto before due for the purpose of paying
75
when due), or refund, refinance or exchange of any Funded Debt (other than the
Indebtedness under the Credit Documents and intercompany Indebtedness permitted
hereunder) other than regularly scheduled payments of principal and interest on
such Funded Debt.
8.9 Transactions with Affiliates.
The Credit Parties will not permit any member of the Consolidated Group to
enter into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (a) transactions between Credit Parties or with Wholly Owned Subsidiaries,
(b) transactions permitted by Section 8.1, Section 8.4, Section 8.5, Section
8.6, or Section 8.7, (c) normal compensation and reimbursement of expenses of
officers and directors, (d) stock option and stock incentive plans and (e)
except as otherwise specifically limited in this Credit Agreement, other
transactions that are entered into in the ordinary course of such Person's
business on terms and conditions substantially as favorable to such Person as
would be obtainable by it in a comparable arms-length transaction with a Person
other than an officer, director, shareholder, Subsidiary or Affiliate.
8.10 Fiscal Year.
The Credit Parties will not permit any member of the Consolidated Group to
change its fiscal year (other than to allow acquired Subsidiaries to change
their respective fiscal year ends to match that of the Borrower).
8.11 Limitation on Restricted Actions; No Further Negative Pledges.
(a) The Credit Parties will not permit any member of the Consolidated
Group to, directly or indirectly, create or otherwise cause or suffer to exist
or become effective any encumbrance or restriction on the ability of any such
Person to (i) pay dividends or make any other distributions on its Capital Stock
or with respect to any other interest or participation in, or measured by, its
profits, (ii) pay any Indebtedness or other obligation, (iii) make loans,
advances or capital contributions, (iv) sell, lease or otherwise transfer any of
its properties or assets, or (v) guaranty any Indebtedness, in each case except
for (x) such encumbrances or restrictions existing under or by reason of this
Credit Agreement and the other Credit Documents and (y) as set forth on Schedule
8.11.
(b) The Credit Parties will not permit any member of the Consolidated
Group to enter into, assume or become subject to any agreement prohibiting or
otherwise restricting the creation or assumption of any Lien upon its properties
or assets, whether now owned or hereafter acquired, or requiring the grant of
any security for any obligation if security is given for any other obligation,
except (i) pursuant to this Credit Agreement and the other Credit Documents,
(ii) pursuant to the terms of any purchase money Indebtedness permitted by
Section 8.1(c) to the extent such limitations relate only to the property that
is the subject of such financing and (iii) as set forth on Schedule 8.11.
8.12 Ownership of Subsidiaries.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, the Credit Parties will not permit any member of the Consolidated
Group to (a) permit any Person (other than the Borrower or any Wholly Owned
Subsidiary of the Borrower) to own any Capital Stock of any Subsidiary of the
Borrower, except (i) the non-Wholly Owned Subsidiaries existing on the Closing
Date and identified on Schedule 8.12 and (ii) the Borrower can acquire or form a
non-Wholly Owned Subsidiary after the Closing Date if the aggregate revenues of
all non-Wholly Owned Subsidiaries as of the end of the immediately preceding
fiscal quarter do not exceed 10% of the revenues of the Borrower and its
Subsidiaries on a consolidated basis, as determined in accordance with GAAP, (b)
permit any non-Wholly Owned Subsidiary to issue
76
any shares of preferred Capital Stock to any Person other than to a member of
the Consolidated Group or (c) permit, create, incur, assume or suffer to exist
any Lien on any Capital Stock of any Subsidiary of the Borrower, except for
Permitted Liens.
8.13 Sale Leasebacks.
The Credit Parties will not permit any member of the Consolidated Group to
enter into any Sale and Leaseback Transaction unless such Sale and Leaseback
Transaction constitutes purchase money Indebtedness permitted by Section 8.1(c).
SECTION 9
EVENTS OF DEFAULT
9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. There shall occur a:
(i) default in the payment when due of any principal of any of the
Loans or of any reimbursement obligations arising from drawings under
Letters of Credit, or
(ii) default, and such default shall continue for three (3) or more
Business Days, in the payment when due of any interest on the Loans or on
any reimbursement obligations arising from drawings under Letters of
Credit, or of any Fees or other amounts owing hereunder, under any of the
other Credit Documents or in connection herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made by any Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered or required to be
delivered pursuant hereto or thereto shall prove untrue in any material respect
on the date as of which it was deemed to have been made; or
(c) Covenants. There shall occur a:
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(k)(i), 7.2, 7.8, 7.9,
7.10, 7.11, 7.12, 8.1, 8.2 or 8.4 through 8.13, inclusive;
(ii) default in the due performance or observance of any term,
covenant or agreement contained in Sections 7.1(a), (b), (c) or (d) and
such default shall continue unremedied for a period of at least five (5)
Business Days after the earlier of a Responsible Officer of a Credit Party
becoming aware of such default or notice thereof by the Administrative
Agent; or
(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), (c)(i) or (c)(ii) of this Section 9.1) contained in this Credit
Agreement or any other Credit Document and such default shall continue
unremedied for a period of at least thirty (30) days after the earlier of
a Responsible Officer of a Credit Party becoming aware of such default or
notice thereof by the Administrative Agent; or
77
(d) Other Credit Documents. Except as a result of or in connection with
a dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5, any Credit Document shall fail to be in full force and effect or
to give the Administrative Agent and/or the Lenders the Liens or material
rights, powers and privileges purported to be created thereby, or any Credit
Party shall so state in writing; or
(e) Guaranties. Except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under Section 8.4
or Section 8.5, the guaranty given by any Guarantor or any provision thereof
shall cease to be in full force and effect, or any Guarantor or any Person
acting by or on behalf of such Guarantor shall deny or disaffirm such
Guarantor's obligations under such guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any member of the Consolidated Group (other than an Immaterial Subsidiary); or
(g) Defaults under Other Agreements. With respect to any Indebtedness
(other than Indebtedness outstanding under this Credit Agreement) in excess of
$25,000,000 in the aggregate for the members of the Consolidated Group taken as
a whole, (i) any member of the Consolidated Group shall (A) default in any
payment (beyond the applicable grace period with respect thereto, if any) with
respect to any such Indebtedness, or (B) the occurrence and continuance of a
default in the observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or relating
thereto, or any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or to permit,
the holder or holders of such Indebtedness (or trustee or agent on behalf of
such holders) to cause (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 (ii) any such Indebtedness shall be declared due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; or
(h) Judgments. One or more judgments, settlements or decrees shall be
entered against or agreed to by one or more of the members of the Consolidated
Group (other than an Immaterial Subsidiary) involving a liability of $25,000,000
or more in the aggregate (to the extent not paid or fully covered by insurance
provided by a carrier who has acknowledged coverage and has the ability to
perform) and any such judgments, settlements or decrees shall not have been
vacated, discharged or stayed or bonded pending appeal within thirty (30) days
from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could 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 Internal Revenue Code, whether or not waived, shall
exist with respect to any Plan, or any lien shall arise on the assets of any
member of the Consolidated Group or any ERISA Affiliate in favor of the PBGC or
a Plan; (ii) an ERISA Event shall occur with respect to a Single Employer Plan,
that is, in the reasonable opinion of the Administrative Agent, 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, that is, in the reasonable opinion of the Administrative Agent,
likely to result in (A) the termination of such Plan for purposes of Title IV of
ERISA, or (B) any member of the Consolidated Group 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; or (iv) any prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Internal
Revenue Code) or breach of fiduciary responsibility shall occur that may subject
any member of the Consolidated Group or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the
Internal Revenue Code, or under any agreement or other instrument pursuant to
which any member of the Consolidated Group or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability;
78
(j) Invalidity of Credit Documents. Any Credit Party contests in any
manner the validity or enforceability of any Credit Document (except a Credit
Document that has been terminated with the consent of the Administrative Agent
or in accordance with its terms); or any Credit Party denies that it has any or
further liability or obligation under any Credit Document (except a Credit
Document that has been terminated with the consent of the Administrative Agent
and, if required, the Required Lenders or Lenders, in accordance with such
Credit Document's terms), or purports to revoke, terminate or rescind any Credit
Document; or
(k) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by, or cured to the
satisfaction of, the requisite Lenders (pursuant to the voting requirements of
Section 11.6), the Administrative Agent may, and upon the request and direction
of the Required Lenders shall, by written notice to the Credit Parties take any
of the following actions:
(a) Termination of Commitments. Declare the Commitments terminated,
whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans, any reimbursement obligations arising from
drawings under Letters of Credit and any and all other indebtedness or
obligations of any and every kind owing by the Credit Parties to the
Administrative Agent and/or any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Credit
Parties.
(c) Cash Collateral. Direct the Credit Parties to pay (and the Credit
Parties agree that upon receipt of such notice, or upon the occurrence of an
Event of Default under Section 9.1(f), they will immediately pay) to the
Administrative Agent additional cash, to be held by the Administrative Agent,
for the benefit of the Revolving Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent drawings
under all then-outstanding Letters of Credit in an amount equal to the maximum
aggregate amount that may be drawn under all then-outstanding Letters of Credit.
(d) Enforcement of Rights. Enforce any and all rights and interests
created and existing under the Credit Documents including, without limitation,
all rights and remedies existing under the Collateral Documents, 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 with respect to the Borrower, then the Commitments shall
automatically terminate and all Loans, all reimbursement obligations arising
from drawings under Letters of Credit, all accrued interest in respect thereof,
all accrued and unpaid Fees and other indebtedness or obligations owing to the
Administrative Agent and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or other
action by the Administrative Agent or the Lenders.
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SECTION 10
ADMINISTRATIVE AND COLLATERAL AGENT
10.1 Appointment and Authorization.
(a) Each Lender hereby irrevocably (subject to Section 10.9) appoints,
designates and authorizes each of the Administrative Agent and the Collateral
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. Each Lender authorizes and directs the
Administrative Agent and the Collateral Agent to enter into the Credit Documents
and the Genzyme Intercreditor Agreement. Each Lender further authorizes and
directs each of the Administrative Agent and the Collateral Agent to execute and
deliver releases (or similar agreements) to give effect to the provisions of
this Credit Agreement and the other Credit Documents, including specifically,
without limitation, the provisions of Sections 8.1, 8.4 and 8.5. Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Credit
Document, neither the Administrative Agent nor the Collateral Agent shall have
any duties or responsibilities, except those expressly set forth herein, and
neither shall have or be deemed to have any fiduciary relationship with any
Lender or participant, and no implied covenants, functions, responsibilities,
duties, obligations or liabilities shall be read into this Credit Agreement or
any other Credit Document or otherwise exist against either the Administrative
Agent or the Collateral 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 or the Collateral 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.
(b) The Issuing Lender shall act on behalf of the Lenders with respect
to any Letters of Credit issued by it and the documents associated therewith
until such time (and except for so long) as the Administrative Agent may agree
at the request of the Required Lenders to act for the Issuing Lender with
respect thereto; provided, however, that the Issuing Lender shall have all of
the benefits and immunities (i) provided to the Administrative Agent in this
Section 10 with respect to any acts taken or omissions suffered by the Issuing
Lender in connection with Letters of Credit issued by it or proposed to be
issued by it and the application and agreements for letters of credit pertaining
to the Letters of Credit as fully as if the term "Administrative Agent" as used
in this Section 10 included the Issuing Lender with respect to such acts or
omissions, and (ii) as additionally provided herein with respect to the Issuing
Lender.
10.2 Delegation of Duties.
Each of the Administrative Agent and the Collateral 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. Neither the Administrative Agent nor the Collateral Agent shall be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects in the absence of gross negligence or willful misconduct.
10.3 Liability.
No Agent-Related Person shall (a) be liable for any action taken or
omitted to be taken by any Agent-Related Person under or in connection with this
Credit Agreement or any other Credit Document
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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 or the Collateral 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.
(a) Each of the Administrative Agent and the Collateral 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 or the Collateral Agent. Each of the Administrative Agent and the
Collateral 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 that may be incurred by it by reason
of taking or continuing to take any such action. Each of the Administrative
Agent and the Collateral 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. Where this Credit Agreement expressly permits or prohibits an
action unless the Required Lenders otherwise determine, the Administrative Agent
or the Collateral Agent, as appropriate, shall, and in all other instances, the
Administrative Agent or the Collateral Agent, as appropriate, 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 or the
Collateral 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.
(a) Administrative Agent and Collateral Agent. Neither the
Administrative Agent nor the Collateral Agent shall 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 or the Collateral Agent, as appropriate, for
the account of the Lenders, unless such 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." Such agent will notify the Lenders of its receipt of any such notice.
Each of the Administrative Agent and the Collateral Agent shall take such action
with respect to such Default or Event of Default as
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may be directed by the Required Lenders in accordance with Section 9; provided,
however, that unless and until the Administrative Agent and the Collateral Agent
have received any such direction, each of the Administrative Agent and the
Collateral 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.
(b) Issuing Lender and Swingline Lender. Neither the Issuing Lender nor
the Swingline Lender shall be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default (including, without limitation,
for purposes of Sections 2.1(b) and 2.1(c)), unless the Issuing Lender or
Swingline Lender, as applicable, shall have received written notice from the
Administrative Agent, the Collateral Agent, 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 Issuing Lender and the
Swingline Lender will notify the Administrative Agent of its receipt of any such
notice.
10.6 Credit Decision; Disclosure of Information.
Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent or
the Collateral 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 and the Collateral Agent that
it has, independently and without reliance upon any Agent-Related Person 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 Subsidiaries, 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 and the other Credit Parties hereunder. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
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 and the other Credit Parties.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent or the Collateral Agent
under the Credit Documents, neither the Administrative Agent nor the Collateral
Agent shall 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 that 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, (a) that no Lender shall be liable for the
payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting from such Person's gross negligence or willful misconduct;
provided, however, 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 and (b) no
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Lender shall be liable for the payment of any portion of an Indemnified
Liability pursuant to this Section unless such Indemnified Liability was
incurred by the Administrative Agent in its capacity as such or by another
person acting for the Administrative Agent in such capacity. Without limitation
of the foregoing, each Lender shall reimburse each of the Administrative Agent
and the Collateral Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including reasonable attorneys' fees actually incurred
and expenses but excluding the allocated cost of internal counsel) incurred by
it 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 or the Collateral Agent, as appropriate, is not reimbursed
for such expenses by or on behalf of the Borrower. The undertaking in this
Section shall survive termination of the Commitments, the payment of all
Obligations hereunder and the resignation or replacement of either or both of
the Administrative Agent and the Collateral Agent.
10.8 Individual Capacity.
Bank of America and its Affiliates 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 Bank of America were not the Administrative Agent, the
Collateral Agent or the Issuing Lender hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America 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
acknowledge that each of the Administrative Agent, the Collateral Agent and the
Issuing Lender shall be under no obligation to provide such information to them.
With respect to its Loans, Bank of America 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, the Collateral Agent or
the Issuing Lender, and the terms "Lender" and "Lenders" include Bank of America
in its individual capacity.
10.9 Successor.
Either or both of the Administrative Agent and the Collateral Agent may
resign upon thirty days notice to the Lenders. If either the Administrative
Agent or the Collateral Agent resigns, the Required Lenders shall appoint from
among the Lenders a successor administrative agent or collateral agent, as
appropriate, for the Lenders, which successor administrative agent or collateral
agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent or
collateral agent is appointed prior to the effective date of the resignation of
the Administrative Agent or the Collateral Agent, such resigning agent may
appoint, after consulting with the Lenders and the Borrower, a successor
administrative agent or collateral agent, as appropriate, from among the
Lenders. Upon the acceptance of its appointment as successor administrative
agent or collateral agent hereunder, such successor agent shall succeed to all
the rights, powers and duties of the resigning Administrative Agent or
Collateral Agent, as appropriate, and thereafter the term "Administrative Agent"
or "Collateral Agent", as appropriate, shall mean such successor administrative
agent or collateral agent, as appropriate, and the resigning agent's
appointment, powers and duties as Administrative Agent or Collateral Agent shall
be terminated. After any such resignation hereunder, the provisions of this
Section 10 and Sections 11.4 and 11.10 shall inure to the benefit of such
resigning agent as to any actions taken or omitted to be taken by it while it
was Administrative Agent or Collateral Agent hereunder. If no successor has
accepted appointment as administrative agent or collateral agent, as
appropriate, by the date thirty days following such resigning agent's notice of
resignation, the resigning agent's resignation shall nevertheless thereupon
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become effective and the Lenders shall perform all of the duties of the
Administrative Agent or the Collateral Agent, as appropriate, under the Credit
Documents until such time, if any, as the Required Lenders appoint a successor
agent as provided above.
10.10 Other Agents; Lead Managers.
None of the Lenders identified on the facing page or signature pages of
this Credit Agreement as a "syndication agent", "documentation agent",
"co-agent" or "lead manager" shall have any right, power, obligation, liability,
responsibility or duty under this Credit Agreement other than those applicable
to all Lenders as such. Without limiting the foregoing, none of the Lenders so
identified shall have or be deemed to have any fiduciary relationship with any
Lender. Each Lender acknowledges that it has not relied, and will not rely, on
any of the Lenders so identified in deciding to enter into this Credit Agreement
or in taking or not taking action hereunder.
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), (c)
the Business Day following the day on which the same has been delivered prepaid
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 parties at the address (or, in
the case of (b) above, facsimile number) 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; Adjustments.
Upon the occurrence and during the continuance of any Event of Default,
each Lender (and each of its Affiliates) is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender (or any
of its Affiliates) to or for the credit or the account of any Credit Party
against any and all of the obligations of such Person now or hereafter existing
under this Credit Agreement, under the Notes, under any other Credit Document or
otherwise, irrespective of whether such Lender shall have made any demand under
hereunder or thereunder and although such obligations may be unmatured. Each
Lender agrees promptly to notify any affected Credit Party after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 11.2 are in addition
to other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
11.3 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Credit
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that
neither the Borrower nor any other Credit Party may assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations
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hereunder except (i) to an Eligible Assignee in accordance with the provisions
of subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this Section, or (iii) by way of pledge
or assignment of a security interest subject to the restrictions of subsection
(f) of this Section (and any other attempted assignment or transfer by any party
hereto shall be null and void). Nothing in this Credit Agreement, expressed or
implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in subsection (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent, the Issuing Lender and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Credit Agreement.
(b) Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Credit Agreement (including all or a portion of its Commitment and the
Loans (including for purposes of this subsection (b), participations in LOC
Obligations and in Swingline Loans) at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time
owing to it or in the case of an assignment to a Lender or an Affiliate of
a Lender or an Approved Fund with respect to a Lender, the aggregate
amount of the Commitment (which for this purpose includes Loans
outstanding thereunder) or, if the Commitment is not then in effect, the
principal outstanding balance of the Loans of the assigning Lender subject
to each such assignment, determined as of the date the Assignment and
Assumption with respect to such assignment is delivered to the
Administrative Agent or, if "Trade Date" is specified in the Assignment
and Assumption, as of the Trade Date, shall not be less than $5 million,
in the case of Revolving Commitments, and $1 million, in the case of the
Tranche B Term Loan, unless each of the Administrative Agent and, in the
case of assignment of Revolving Commitments and Revolving Obligations, so
long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed);
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Credit Agreement with respect to the Loans or the Commitment
assigned, except that this clause (ii) shall not apply to rights in
respect of Swingline Loans or the Tranche B Term Loan;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent and, with respect to any assignment of the Revolving
Commitments and Revolving Obligations, the Issuing Lender and the
Swingline Lender (each such consent not to be unreasonably withheld or
delayed) unless the Person that is the proposed assignee is itself a
Lender (whether or not the proposed assignee would otherwise qualify as an
Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500, and the Eligible Assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
administrative questionnaire supplied by the Administrative Agent.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Credit Agreement and, to the extent of the interest assigned by
such Assignment and Assumption, have the rights and obligations of a Lender
under this Credit Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be released
from its obligations under this Credit Agreement (and, in the
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case of an Assignment and Assumption covering all of the assigning Lender's
rights and obligations under this Credit Agreement, such Lender shall cease to
be a party hereto) but shall continue to be entitled to the benefits of Sections
3.6, 3.9, 3.11, 3.12, and 11.5 with respect to facts and circumstances occurring
prior to the effective date of such assignment. Upon request, the Borrower (at
its expense) shall execute and deliver a Note to the assignee Lender. Any
assignment or transfer by a Lender of rights or obligations under this Credit
Agreement that does not comply with this subsection shall be treated for
purposes of this Credit Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with subsection (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at the Administrative Agent's office
a copy of each Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans and LOC Obligations owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Borrower, the Administrative Agent and
the Lenders may treat each Person whose name is recorded in the Register
pursuant to the terms hereof as a Lender hereunder for all purposes of this
Credit Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by each of the Borrower and the Issuing Lender at any
reasonable time and from time to time upon reasonable prior notice. In addition,
at any time that a request for a consent for a material or substantive change to
the Credit Documents is pending, any Lender wishing to consult with other
Lenders in connection therewith may request and receive from the Administrative
Agent a copy of the Register.
(d) Participations. Any Lender may at any time, without the consent of,
or notice to, the Borrower or the Administrative Agent, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "Participant") in all or a portion of such
Lender's rights and/or obligations under this Credit Agreement (including all or
a portion of its Commitment and/or the Loans (including such Lender's
participations in LOC Obligations and/or Swingline Loans) owing to it); provided
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 and (iii) the Borrower, the
Administrative Agent, the Lenders and the Issuing Lender shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Credit Agreement and to approve any amendment, modification or
waiver of any provision of this Credit Agreement; provided that such agreement
or instrument may provide that such Lender will not, without the consent of the
Participant, agree to any amendment, waiver or other modification described in
the first proviso to Section 11.6 that affects such Participant. Subject to
subsection (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Sections 3.6, 3.9, 3.11 and 3.12 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to subsection (b) of this Section. To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 11.7 as though it
were a Lender, provided such Participant agrees to be subject to Section 3.14 as
though it were a Lender.
(e) Limitation upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Sections, 3.6, 3.9 or 3.11 than
the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 3.11 unless the Borrower is
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notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with Section 3.11 as though
it were a Lender.
(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Credit
Agreement (including under its Note(s), if any) to secure obligations of such
Lender, including any pledge or assignment to secure obligations to a Federal
Reserve Bank; provided that no such pledge or assignment shall release such
Lender from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
(g) Electronic Execution of Assignments. The words "execution",
"signed", "signature", and words of like import in any Assignment and Assumption
shall be deemed to include electronic signatures or the keeping of records in
electronic form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and
National Commerce Act, the New York State Electronic Signatures and Records Act,
or any other similar state laws based on the Uniform Electronic Transactions
Act.
(h) Resignation as Issuing Lender or Swingline Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Commitment and Loans pursuant to subsection (b)
above, Bank of America may, (i) upon thirty (30) days' notice to the Borrower
and the Lenders, resign as Issuing Lender and/or (ii) upon thirty (30) days'
notice to the Borrower, resign as Swingline Lender. In the event of any such
resignation as Issuing Lender or Swingline Lender, the Borrower shall be
entitled to appoint from among the Lenders a successor Issuing Lender or
Swingline Lender hereunder; provided, however, that no failure by the Borrower
to appoint any such successor shall affect the resignation of Bank of America as
Issuing Lender or Swingline Lender, as the case may be. If Bank of America
resigns as Issuing Lender, it shall retain all the rights and obligations of the
Issuing Lender hereunder with respect to all Letters of Credit outstanding as of
the effective date of its resignation as Issuing Lender and all LOC Obligations
with respect thereto (including the right to require the Lenders to make Base
Rate Loans or fund risk participations in unreimbursed amounts pursuant to
Section 2.6(c)). If Bank of America resigns as Swingline Lender, it shall retain
all the rights of the Swingline Lender provided for hereunder with respect to
Swingline Loans made by it and outstanding as of the effective date of such
resignation, including the right to require the Lenders to make Base Rate Loans
or fund risk participations in outstanding Swingline Loans pursuant to Section
2.7.
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 Administrative Agent or any Lender
and any of the Credit Parties 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 that the Administrative Agent or any Lender would otherwise
have. No notice to or demand on any Credit Party in any case shall entitle the
Credit Parties to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
11.5 Expenses; Indemnification.
(a) The Borrower agrees to pay on demand all reasonable costs and
expenses of the Administrative Agent in connection with the syndication,
preparation, execution, delivery, modification,
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and amendment of this Credit Agreement, the other Credit Documents and the other
documents to be delivered hereunder and in connection with advising the
Administrative Agent as to its rights and responsibilities under the Credit
Documents (in each case including, without limitation, reasonable attorneys'
fees actually incurred and expenses but excluding the allocated cost of internal
counsel). The Borrower agrees to pay on demand all reasonable costs and expenses
of the Administrative Agent and the Lenders, if any (including, without
limitation, reasonable attorneys' fees actually incurred and expenses but
excluding the allocated cost of internal counsel), in connection with the
enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Credit Documents and the other documents to be delivered thereunder. The
Borrower further agrees to permit the Administrative Agent to perform inventory
and accounts receivable field audits at the Borrower's expense, provided that
unless a Default shall then be in existence the Borrower's obligation to
reimburse the Administrative Agent for such field audits shall be limited to one
such field audit each fiscal year.
(b) Whether or not the transactions contemplated hereby are consummated,
the Borrower agrees to indemnify, save and hold harmless each Agent-Related
Person, each Lender and their respective Affiliates, directors, officers,
employees, counsel, agents and attorneys-in-fact (collectively the
"Indemnitees") from and against: (i) any and all claims, demands, actions or
causes of action that are asserted against any Indemnitee by any Person (other
than the Administrative Agent or any Lender) relating directly or indirectly to
a claim, demand, action or cause of action that such Person asserts or may
assert against any Credit Party, any Affiliate of any Credit Party or any of
their respective officers or directors; (ii) any and all claims, demands,
actions or causes of action that may at any time (including at any time
following repayment of the Obligations and the resignation or removal of the
Administrative Agent or the replacement of any Lender) be asserted or imposed
against any Indemnitee, arising out of or relating to, the Credit Documents, any
predecessor Credit Documents, the Commitments, the use or contemplated use of
the proceeds of any Extension of Credit, or the relationship of any Credit
Party, the Administrative Agent and the Lenders under this Credit Agreement or
any other Credit Document; (iii) any administrative or investigative proceeding
by any Governmental Authority arising out of or related to a claim, demand,
action or cause of action described in subsection (i) or (ii) above; and (iv)
any and all liabilities (including liabilities under indemnities), losses, costs
or expenses (including reasonable fees and costs of counsel) that any Indemnitee
suffers or incurs as a result of the assertion of any foregoing claim, demand,
action, cause of action or proceeding, or as a result of the preparation of any
defense in connection with any foregoing claim, demand, action, cause of action
or proceeding, in all cases, whether or not arising out of the negligence of an
Indemnitee, and whether or not an Indemnitee is a party to such claim, demand,
action, cause of action or proceeding (all the foregoing, collectively, the
"Indemnified Liabilities"); provided that no Indemnitee shall be entitled to
indemnification for any claim caused by its own gross negligence or willful
misconduct or for any loss asserted against it by another Indemnitee. The
agreements in this Section shall survive the termination of the Commitments and
repayment of all the other Obligations.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 11.5 shall survive the repayment of the Loans, LOC Obligations and
other obligations under the Credit Documents and the termination of the
Commitments hereunder.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the
terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, provided, however, that:
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(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any other Credit Document may be amended to
(i) extend the Termination Date or the final maturity of any Loan
or of any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit, or extend or waive any principal
amortization payment of the Tranche B Term Loan, or any portion thereof,
(ii) reduce the rate or extend the time of payment of interest on
any Loan or on any reimbursement obligation arising from drawings under
Letters of Credit (other than as a result of waiving the applicability of
any post-default increase in interest rates) or Fees,
(iii) reduce or waive the principal amount of any Loan or of any
reimbursement obligation, or any portion thereof, arising from drawings
under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount thereof in
effect (it being understood and agreed that a waiver of any Default or
Event of Default or mandatory reduction in the Commitments shall not
constitute a change in the terms of any Commitment of any Lender),
(v) release the Borrower or, except as the result of or in
connection with a dissolution, merger or disposition of a member of the
Consolidated Group permitted under Section 8.4 or 8.5, all or
substantially all of the Guarantors, from its or their obligations under
the Credit Documents,
(vi) except as the result of or in connection with an Asset
Disposition permitted under Section 8.5, release all or substantially all
of the Collateral,
(vii) amend, modify or waive any provision of this Section 11.6(a),
3.13, 3.14, 3.15(b), 3.15(c), 9.1(a), 11.2, 11.3, 11.5 or 11.10,
(viii) amend, modify or waive any provision of Section 3.6, 3.7,
3.8, 3.9, 3.10, 3.11 or 3.12 in a manner materially adverse to such
Lender,
(ix) reduce any percentage specified in, or otherwise modify, the
definition of Required Lenders, or
(x) consent to the assignment or transfer by the Borrower or all
or substantially all of the other Credit Parties of any of its or their
rights and obligations under (or in respect of) the Credit Documents
except as permitted thereby;
(b) (i) without the consent of the Revolving Lenders holding in the
aggregate more than 50% of the Revolving Commitments, or if the Revolving
Commitments have been terminated, Revolving Lenders holding in the
aggregate more than 50% of the aggregate principal amount of the Revolving
Obligations outstanding (taking into account in each case Participation
Interests or obligation to participate therein), (A) this Section
11.6(b)(i) may not be amended or waived and (B) Section 3.3(c) may not be
amended or waived with regard to the application of any mandatory
prepayment on the Revolving Obligations;
(ii) without the consent of the Tranche B Term Lenders holding in
the aggregate more than 50% of the aggregate principal amount of the
Tranche B Term Loan outstanding, (A) this Section 11.6(b)(ii) may not be
amended or waived and (B) Section 3.3(c) may not be
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amended or waived with regard to the application of any mandatory
prepayment on the Tranche B Term Loan; and
(c) without the consent of the Revolving Lenders holding in the
aggregate more than 50% of the Revolving Commitments, or if the Revolving
Commitments have been terminated, Revolving Lenders holding in the aggregate
more than 50% of the aggregate principal amount of the Revolving Obligations
outstanding (taking into account in each case Participation Interests or
obligation to participate therein), no Default or Event of Default may be waived
for purposes of Section 5.2(b);
(d) without the consent of the Administrative Agent and the Collateral
Agent, no provision of Section 10 may be amended;
(e) without the consent of the Issuing Lender, no provision of Section
2.1(b), 2.2(a)(ii), 2.6 or 3.5(b)(ii) may be amended; and
(f) without the consent of the Swingline Lender, no provision of Section
2.1(c), 2.2(a)(iii) and 2.7 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required
in certain circumstances as set forth above, (x) each Lender is entitled to vote
as such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
11.7 Payment Set Aside.
To the extent that any payment by or on behalf of the Borrower is made to
the Administrative Agent, the Issuing Lender or any Lender, or the
Administrative Agent, the Issuing Lender or any Lender exercises its right of
setoff, and such payment or the proceeds of such setoff or any part thereof is
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required (including pursuant to any settlement entered into by the
Administrative Agent, the Issuing Lender or such Lender in its discretion) to be
repaid to a trustee, receiver or any other party, in connection with any
proceeding under Debtor Relief Laws or otherwise, then (a) to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such setoff had not occurred, and (b) each Lender and the
Issuing Lender severally agrees to pay to the Administrative Agent on demand its
applicable share (without duplication) of any amount so recovered from or repaid
by the Administrative Agent, plus interest thereon from the date of such demand
to the date such payment is made at a rate per annum equal to the Federal Funds
Rate from time to time in effect. The obligations of the Lenders and the Issuing
Lender under clause (b) of the preceding sentence shall survive the payment in
full of the Obligations and the termination of this Credit Agreement.
11.8 Counterparts.
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. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
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11.9 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.
11.10 Survival.
All representations and warranties made hereunder and in any other Credit
Document or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof. Such representations and warranties have been or will be relied upon by
the Administrative Agent and each Lender, regardless of any investigation made
by the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default at the time of any Credit Extension, and shall continue in full
force and effect as long as any Loan or any other Obligation hereunder shall
remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.
11.11 Governing Law; Submission to Jurisdiction; Venue; Waiver of Jury Trial;
Waiver of Punitive and Exemplary Damages.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY PROVIDED
THEREIN, 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 state or federal courts located in Nashville,
Tennessee or Charlotte, North Carolina, and, by execution and delivery of this
Credit Agreement, each of the Credit Parties hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
nonexclusive jurisdiction of such courts. Nothing herein shall affect the right
of the Administrative Agent or any Lender to commence legal proceedings or to
otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
that it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Credit
Agreement or any other Credit Document brought in the courts referred to in
subsection (a) above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) EACH PARTY TO THIS CREDIT AGREEMENT HEREBY EXPRESSLY WAIVES ANY
RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER ANY CREDIT DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY CREDIT
DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
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(d) Each party to this Credit Agreement hereby agrees that it shall not
have a remedy of punitive or exemplary damages against any other party hereto in
any Dispute and hereby waives any right or claim to punitive or exemplary
damages they have now or which may arise in the future in connection with any
Dispute whether the Dispute is resolved by arbitration or judicially. As used is
this clause (d), "Dispute" means any claim, demand, action or cause of action
arising under any Credit Document or in any way connected with or related or
incidental to the dealings of the parties hereto with respect to any Credit
Document or the transactions related thereto, in each case whether now existing
or hereafter arising, and whether founded in contract or tort or otherwise.
11.12 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.
11.13 Entirety.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
11.14 Binding Effect; Termination.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by each Credit Party and
the Administrative Agent, and the Administrative Agent shall have received
copies hereof (telecopied 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 each Credit Party, the Administrative Agent and
each Lender and their respective successors and assigns.
(b) The term of this Credit Agreement shall be until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding, no Letters of Credit shall be
outstanding and all of the Commitments hereunder shall have expired or been
terminated.
11.15 Confidentiality.
Each of the Administrative Agent, the Lenders and the Issuing Lender
agrees to maintain the confidentiality of the Information (as defined below),
except that Information may be disclosed (a) to its Affiliates and to its and
its Affiliates' respective partners, directors, officers, employees, agents,
advisors and representatives (it being understood that the Persons to whom such
disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority purporting to have jurisdiction
over it (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
hereunder or under any other Credit Document or any action or proceeding
relating to this Credit Agreement or any other Credit Document or the
enforcement of rights hereunder or thereunder, (f) subject to an agreement
containing provisions substantially the same as those of this Section, to (i)
any assignee of or Participant in, or any prospective assignee of or Participant
in, any of its rights or obligations under this Credit Agreement or (ii) any
actual or prospective counterparty (or its advisors) to any swap or derivative
transaction relating to the Borrower and its obligations, (g) with the consent
of the Borrower or (h) to the extent such
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Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to the Administrative Agent, any Lender,
the Issuing Lender or any of their respective Affiliates on a nonconfidential
basis from a source other than the Borrower. If any Person required to keep
Information confidential by the terms of this Section (or any agreement
contemplated by this Section) is requested or required (by applicable laws or
regulations or by any subpoena or similar legal process) to disclose such
Information, such Person shall give the Borrower prompt notice of such request
or requirement so that the Borrower may seek an appropriate protective order or
waive compliance with the provisions of this Section.
For purposes of this Section, "Information" means all information received
from the Borrower or any Subsidiary relating to the Borrower or any Subsidiary
or any of their respective businesses, other than any such information that is
available to the Administrative Agent, any Lender or the Issuing Lender on a
nonconfidential basis prior to disclosure by the Borrower or any Subsidiary. Any
Person required to maintain the confidentiality of Information provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as is customary industry practice.
11.16 Source of Funds.
Each of the Lenders hereby represents and warrants to the Borrower that at
least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or its
related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender has
disclosed to the Borrower the name of each employee benefit plan whose assets in
such account exceed ten percent (10%) of the total assets of such account as of
the date of such purchase (and, for purposes of this subsection (b), all
employee benefit plans maintained by the same employer or employee organization
are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied with
all of the requirements of the regulations issued under Section 401(c)(1)(A) of
ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
that such Lender has identified in writing to the Borrower.
As used in this Section 11.16, the terms "employee benefit plan" and "separate
account" shall have the respective meanings provided in Section 3 of ERISA.
11.17 Conflict.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
11.18 USA PATRIOT Act.
Each Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of
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the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the "Act"), it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender or the Administrative
Agent, as applicable, to identify such Borrower in accordance with the Act.
[signature pages to follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of
this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: ACCREDO HEALTH, INCORPORATED,
a Delaware corporation
By: /s/ THOMAS W. BELL, JR.
------------------------------
Name: THOMAS W. BELL, JR.
Title: SR. VICE PRES.
GUARANTORS: ACCREDO HEALTH GROUP, INC.,
a Delaware corporation
ACCREDO HEALTH RESOURCES, INC. (NEW YORK),
a New York corporation
ACCREDO HEALTH SERVICES (INFUSION), INC.,
a Delaware corporation
BIO PARTNERS IN CARE, INC.,
a Missouri corporation
HEMOPHILIA HEALTH SERVICES, INC.,
a Tennessee corporation
HEMOPHILIA RESOURCES OF AMERICA, INC.
a New Jersey corporation
HOME HEALTHCARE RESOURCES, INC.
a Pennsylvania corporation
HOME HEALTHCARE RESOURCES, LIMITED
a Pennsylvania corporation
HRA HOLDING CORP.,
a New Jersey corporation
NOVA FACTOR, INC.,
a Tennessee corporation
PHARMACARE RESOURCES, INC.,
a New York corporation
SOUTHERN HEALTH SYSTEMS, INC.,
a Tennessee corporation
By: /s/ JOEL R. KIMBROUGH
---------------------------------
Name: JOEL R. KIMBROUGH
Title: CFO
of each of the Guarantors
[Signature Pages Continue]
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
it its capacity as Administrative Agent
By: /s/ KRISTINE THENNES
--------------------------------------
Name: KRISTINE THENNES
Title: VICE PRESIDENT
LENDER: BANK OF AMERICA, N.A.,
in its capacity as a Lender
By: /s/ ELIZABETH L. KNOX
--------------------------------------
Name: ELIZABETH L. KNOX
Title: SVP