<Page>
Exhibit 10.4
- --------------------------------------------------------------------------------
$170,000,000
CREDIT AGREEMENT
among
MEDEX, INC.,
as Borrower,
MEDVEST HOLDINGS CORPORATION,
as Parent,
and
THE DOMESTIC SUBSIDIARIES OF THE BORROWER
FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS PARTIES HERETO,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent,
LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent,
BANC ONE MEZZANINE CORPORATION,
THE HUNTINGTON NATIONAL BANK
and
LASALLE BANK NATIONAL ASSOCIATION,
as Co-Documentation Agents
Dated as of May 21, 2003
WACHOVIA SECURITIES, INC.
and
LEHMAN BROTHERS INC.,
as Arrangers and Joint Book Runners
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TABLE OF CONTENTS
<Table>
<Caption>
Page
----
ARTICLE I DEFINITIONS......................................................................1
Section 1.1 DEFINED TERMS...........................................................1
Section 1.2 OTHER DEFINITIONAL PROVISIONS..........................................32
Section 1.3 ACCOUNTING TERMS.......................................................32
ARTICLE II THE LOANS; AMOUNT AND TERMS....................................................33
Section 2.1 REVOLVING LOANS........................................................33
Section 2.2 TERM LOAN FACILITY.....................................................35
Section 2.3 LETTER OF CREDIT SUBFACILITY...........................................37
Section 2.4 SWINGLINE LOAN SUBFACILITY.............................................40
Section 2.5 FEES...................................................................42
Section 2.6 COMMITMENT REDUCTIONS..................................................42
Section 2.7 PREPAYMENTS............................................................43
Section 2.8 MINIMUM PRINCIPAL AMOUNT OF TRANCHES; LENDING OFFICES..................46
Section 2.9 DEFAULT RATE AND PAYMENT DATES.........................................46
Section 2.10 CONVERSION OPTIONS.....................................................46
Section 2.11 COMPUTATION OF INTEREST AND FEES.......................................47
Section 2.12 PRO RATA TREATMENT AND PAYMENTS........................................48
Section 2.13 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.......................50
Section 2.14 INABILITY TO DETERMINE INTEREST RATE...................................51
Section 2.15 ILLEGALITY.............................................................51
Section 2.16 REQUIREMENTS OF LAW....................................................52
Section 2.17 INDEMNITY..............................................................54
Section 2.18 TAXES..................................................................54
Section 2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.....................57
Section 2.20 REPLACEMENT OF LENDERS.................................................58
ARTICLE III REPRESENTATIONS AND WARRANTIES................................................59
Section 3.1 FINANCIAL CONDITION....................................................59
Section 3.2 NO CHANGE..............................................................59
Section 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW...............................59
Section 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS................61
Section 3.5 NO LEGAL BAR; NO DEFAULT...............................................61
Section 3.6 NO MATERIAL LITIGATION.................................................61
Section 3.7 INVESTMENT COMPANY ACT.................................................62
Section 3.8 MARGIN REGULATIONS.....................................................62
Section 3.9 ERISA..................................................................62
Section 3.10 ENVIRONMENTAL MATTERS..................................................62
Section 3.11 USE OF PROCEEDS........................................................63
Section 3.12 SUBSIDIARIES...........................................................64
Section 3.13 OWNERSHIP..............................................................64
Section 3.14 INDEBTEDNESS...........................................................64
Section 3.15 TAXES..................................................................64
</Table>
<Page>
<Table>
Section 3.16 INTELLECTUAL PROPERTY..................................................64
Section 3.17 SOLVENCY...............................................................65
Section 3.18 INVESTMENTS............................................................65
Section 3.19 LOCATION OF COLLATERAL.................................................65
Section 3.20 NO BURDENSOME RESTRICTIONS.............................................66
Section 3.21 BROKERS' FEES..........................................................66
Section 3.22 LABOR MATTERS..........................................................66
Section 3.23 SECURITY DOCUMENTS.....................................................66
Section 3.24 ACCURACY AND COMPLETENESS OF INFORMATION...............................67
Section 3.25 CONSUMMATION OF ACQUISITION; REPRESENTATIONS AND WARRANTIES FROM
OTHER DOCUMENTS........................................................67
Section 3.26 FRAUD AND ABUSE........................................................67
Section 3.27 LICENSING AND ACCREDITATION............................................68
Section 3.28 MATERIAL CONTRACTS.....................................................68
Section 3.29 INSURANCE..............................................................68
Section 3.30 REIMBURSEMENT FROM THIRD PARTY PAYORS..................................68
Section 3.31 OTHER AGREEMENTS.......................................................68
Section 3.32 CLASSIFICATION AS SENIOR INDEBTEDNESS..................................69
Section 3.33 CAPITAL STRUCTURE......................................................69
Section 3.34 TAX SHELTER REGULATIONS................................................69
ARTICLE IV CONDITIONS PRECEDENT...........................................................69
Section 4.1 CONDITIONS TO CLOSING DATE AND INITIAL EXTENSIONS OF CREDIT............69
Section 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.................................76
ARTICLE V AFFIRMATIVE COVENANTS...........................................................77
Section 5.1 FINANCIAL STATEMENTS...................................................77
Section 5.2 CERTIFICATES; OTHER INFORMATION........................................79
Section 5.3 PAYMENT OF TAXES.......................................................80
Section 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.......................80
Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE.....................................81
Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.................81
Section 5.7 NOTICES................................................................82
Section 5.8 ENVIRONMENTAL LAWS.....................................................83
Section 5.9 FINANCIAL COVENANTS....................................................84
Section 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.......................................87
Section 5.11 COMPLIANCE WITH LAW....................................................87
Section 5.12 PLEDGED ASSETS.........................................................87
Section 5.13 FIXED RATE INTEREST....................................................88
Section 5.14 POST-CLOSING COVENANT..................................................88
ARTICLE VI NEGATIVE COVENANTS.............................................................89
Section 6.1 INDEBTEDNESS...........................................................89
Section 6.2 LIENS..................................................................91
Section 6.3 NATURE OF BUSINESS.....................................................91
Section 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.................91
Section 6.5 ADVANCES, INVESTMENTS AND LOANS........................................93
</Table>
<Page>
<Table>
Section 6.6 TRANSACTIONS WITH AFFILIATES...........................................93
Section 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS................................94
Section 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS;
SUBORDINATED INDEBTEDNESS..............................................94
Section 6.9 LIMITATION ON RESTRICTED ACTIONS.......................................95
Section 6.10 RESTRICTED PAYMENTS....................................................95
Section 6.11 SALE LEASEBACKS........................................................96
Section 6.13 OPERATING LEASE OBLIGATIONS............................................97
Section 6.14 RESTRICTIONS ON PARENT.................................................97
ARTICLE VII EVENTS OF DEFAULT.............................................................98
Section 7.1 EVENTS OF DEFAULT......................................................98
Section 7.2 ACCELERATION; REMEDIES................................................100
ARTICLE VIII THE AGENT...................................................................101
Section 8.1 APPOINTMENT...........................................................101
Section 8.2 DELEGATION OF DUTIES..................................................101
Section 8.3 EXCULPATORY PROVISIONS................................................101
Section 8.4 RELIANCE BY ADMINISTRATIVE AGENT......................................102
Section 8.5 NOTICE OF DEFAULT.....................................................102
Section 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS................103
Section 8.7 INDEMNIFICATION.......................................................103
Section 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.......................104
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT........................................104
Section 8.10 OTHER AGENTS..........................................................104
ARTICLE IX MISCELLANEOUS.................................................................104
Section 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.........................104
Section 9.2 NOTICES...............................................................106
Section 9.3 NO WAIVER; CUMULATIVE REMEDIES........................................108
Section 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES............................108
Section 9.5 PAYMENT OF EXPENSES AND TAXES.........................................108
Section 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS............109
Section 9.7 ADJUSTMENTS; SET-OFF..................................................112
Section 9.8 TABLE OF CONTENTS AND SECTION HEADINGS................................113
Section 9.9 COUNTERPARTS..........................................................113
Section 9.10 EFFECTIVENESS.........................................................113
Section 9.11 SEVERABILITY..........................................................113
Section 9.12 INTEGRATION...........................................................113
Section 9.13 GOVERNING LAW.........................................................113
Section 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS........................114
Section 9.15 CONFIDENTIALITY.......................................................114
Section 9.16 ACKNOWLEDGMENTS.......................................................115
Section 9.17 WAIVERS OF JURY TRIAL.................................................115
Section 9.18 RELEASE OF COLLATERAL.................................................115
Section 9.19 RELATIONSHIP OF BANC ONE MEZZANINE CORPORATION........................116
</Table>
<Page>
<Table>
ARTICLE X GUARANTY.......................................................................116
Section 10.1 THE GUARANTY..........................................................116
Section 10.2 BANKRUPTCY............................................................117
Section 10.3 NATURE OF LIABILITY...................................................117
Section 10.4 INDEPENDENT OBLIGATION................................................118
Section 10.5 AUTHORIZATION.........................................................118
Section 10.6 RELIANCE..............................................................118
Section 10.7 WAIVER................................................................118
Section 10.8 LIMITATION ON ENFORCEMENT.............................................120
Section 10.9 CONFIRMATION OF PAYMENT...............................................120
Section 10.10 RELEASE OF GUARANTORS.................................................120
Section 10.11 TERMINATION OF GUARANTY...............................................120
</Table>
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SCHEDULES*
Schedule 1.1-1 Account Designation Letter
Schedule 1.1-2(a) Consolidated EBITDA Adjustments
Schedule 1.1-2(b) Historical EBITDA and Capital Expenditures
Schedule 1.1-3 Permitted Investments
Schedule 1.1-4 Permitted Liens
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Term Note
Schedule 2.4(d) Form of Swingline Note
Schedule 2.10 Form of Notice of Conversion/Extension
Schedule 2.18 Tax Exemption Certificate
Schedule 3.9 ERISA
Schedule 3.10 Environmental Matters
Schedule 3.12 Subsidiaries
Schedule 3.16 Intellectual Property
Schedule 3.19(a) Location of Real Property
Schedule 3.19(b) Location of Collateral
Schedule 3.19(c) Chief Executive Offices
Schedule 3.21 Broker's Fees
Schedule 3.22 Labor Matters
Schedule 3.28 Material Contracts
Schedule 3.29 Insurance
Schedule 3.33 Capital Structure
Schedule 4.1-1 Form of Secretary's Certificate
Schedule 4.1-2 Form of Solvency Certificate
Schedule 5.2(b) Form of Compliance Certificate
Schedule 5.10 Form of Joinder Agreement
Schedule 6.1(b) Indebtedness
Schedule 6.6 Transactions with Affiliates
Schedule 6.9 Existing Limitations on Restricted Actions
Schedule 9.2 Schedule of Lenders' Lending Offices
Schedule 9.6(c) Form of Commitment Transfer Supplement
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* The Registrant will furnish supplementally a copy of any schedule to the
Commission upon request.
<Page>
CREDIT AGREEMENT, dated as of May 21, 2003, among MEDEX, INC., an Ohio
corporation (the "BORROWER"), MEDVEST HOLDINGS CORPORATION, an Ohio corporation
(the "PARENT"), those Domestic Subsidiaries of the Borrower as may from time to
time become a party hereto, as Guarantors, the several banks and other financial
institutions as may from time to time become parties to this Agreement
(collectively, the "LENDERS"; and individually, a "LENDER"), and WACHOVIA BANK,
NATIONAL ASSOCIATION, a national banking association, as administrative agent
for the Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT"), LEHMAN
COMMERCIAL PAPER INC., as syndication agent for the Lenders hereunder (in such
capacity, the "SYNDICATION AGENT") and BANC ONE MEZZANINE CORPORATION, as
documentation agent for the Lenders hereunder (in such capacity, the
"DOCUMENTATION AGENT").
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Lenders make loans and other
financial accommodations to the Borrower in the amount of up to $170,000,000 as
more particularly described herein; and
WHEREAS, the Lenders have agreed to make such loans and other financial
accommodations to the Borrower on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this Agreement
have the meanings therein indicated, and the following terms have the following
meanings:
"ACCOUNT DESIGNATION LETTER" shall mean the Notice of Account Designation
Letter dated the Closing Date from the Borrower to the Administrative Agent
substantially in the form attached hereto as SCHEDULE 1.1-1.
"ACQUIRED BUSINESS" shall mean substantially all of the assets (other than
accounts receivable and certain other excluded assets) of the intravenous
catheter business of the Seller, as more particularly described as the
"Business" (as such term is defined in the Purchase Agreement).
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"ACQUISITION" shall mean the acquisition of the Acquired Business by the
Borrower pursuant to the Acquisition Documents.
"ACQUISITION DOCUMENTS" shall mean (a) that certain Purchase Agreement,
dated as of April 2, 2003 (the "PURCHASE AGREEMENT"), by and between Ethicon
Endo-Surgery, Inc. and the Borrower, together with any schedules and exhibits
thereto and (b) any other material agreement, document or instrument executed
pursuant to the Purchase Agreement (including, without limitation, any
employment agreements and any material contracts), together with any schedules
and exhibits thereto, in each case as amended, restated, modified or
supplemented from time to time.
"ADDITIONAL CREDIT PARTY" shall mean each Person that becomes a Guarantor
by execution of a Joinder Agreement in accordance with Section 5.10.
"ADMINISTRATIVE AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"AFFILIATE" shall mean as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition, a
Person shall be deemed to be "controlled by" a Person if such Person possesses,
directly or indirectly, power either (a) to vote 10% or more of the securities
having ordinary voting power for the election of directors of such Person or (b)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"AGENTS" shall mean a collective reference to the Administrative Agent and
the Syndication Agent.
"AGGREGATE REVOLVING COMMITTED AMOUNT" shall have the meaning set forth in
Section 2.1(a).
"AGREEMENT" or "CREDIT AGREEMENT" shall mean this Credit Agreement, as
amended, restated, modified or supplemented from time to time in accordance with
its terms.
"ALTERNATE BASE RATE" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof:
"PRIME RATE" shall mean, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia at its principal office in Charlotte,
North Carolina as its prime commercial lending rate. Each change in the Prime
Rate shall be effective as of the opening of business on the day such change in
the Prime Rate occurs. The parties hereto acknowledge that the rate announced
publicly by Wachovia as its Prime Rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other banks;
and "FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published on
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the next succeeding Business Day, the average of the quotations for the day of
such transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive in the absence of manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, for any reason, including the inability or failure
of the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard to
clause (b) of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the opening of business on the date of such
change.
"ALTERNATE BASE RATE LOANS" shall mean Loans that bear interest at an
interest rate based on the Alternate Base Rate.
"APPLICABLE PERCENTAGE" shall mean, for any day, the rate per annum set
forth below opposite the applicable level then in effect, it being understood
that the Applicable Percentage for (i) Revolving Loans that are Alternate Base
Rate Loans shall be the percentage set forth under the column "Alternate Base
Rate Margin for Revolving Loans", (ii) Revolving Loans that are LIBOR Rate Loans
shall be the percentage set forth under the column "LIBOR Rate Margin for
Revolving Loans and Letter of Credit Fee", (iii) Term Loans that are Alternate
Base Rate Loans shall be the percentage set forth under the column "Alternate
Base Rate Margin for Term Loans", (iv) Term Loans that are LIBOR Rate Loans
shall be the percentage set forth under the column "LIBOR Rate Margin for Term
Loans", (v) the Letter of Credit Fee shall be the percentage set forth under the
column "LIBOR Rate Margin for Revolving Loans and Letter of Credit Fee", and
(vi) the Commitment Fee shall be the percentage set forth under the column
"Commitment Fee":
<Table>
<Caption>
LIBOR Rate
Alternate Margin for
Base Rate Revolving Loans Alternate Base LIBOR Rate
Leverage Margin for and Letter of Rate Margin for Margin for Term Commitment
Level Ratio Revolving Loans Credit Fee Term Loans Loans Fee
- -----------------------------------------------------------------------------------------------------------------------------
I GREATER THAN OR
EQUAL TO 4.50 to
1.0 2.75% 3.75% 2.75% 3.75% .50%
II GREATER THAN OR
EQUAL TO 4.00 to
1.0 but
LESS THAN 4.50
to 1.0 2.50% 3.50% 2.75% 3.75% .50%
III GREATER THAN OR
EQUAL TO 3.50 to
1.0 but
LESS THAN 4.00
to 1.0 2.25% 3.25% 2.75% 3.75% .50%
IV GREATER THAN OR
EQUAL TO 3.00 to
1.0 but
LESS THAN 3.50 to
1.0 2.00% 3.00% 2.75% 3.75% .50%
V LESS THAN 3.00
to 1.0 1.75% 2.75% 2.75% 3.75% .50%
</Table>
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date on which the
Administrative Agent has received from the Borrower the financial information
and certifications required to be delivered to the
3
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Administrative Agent and the Lenders in accordance with the provisions of
Sections 5.1(a) and (b) and Section 5.2(b) (each an "INTEREST DETERMINATION
DATE"), and shall be based upon the Leverage Ratio set forth in the certificate
delivered pursuant to Section 5.2(b). Such Applicable Percentage shall be
effective from such Interest Determination Date until the next such Interest
Determination Date. The initial Applicable Percentages shall be based on Level
II until the first Interest Determination Date occurring after the delivery of
the officer's compliance certificate pursuant to Section 5.2(b) for the quarter
ended September 30, 2003.
After the Closing Date, if the Borrower shall fail to provide the quarterly
financial information and certifications in accordance with the provisions of
Sections 5.1(a) and (b) and Section 5.2(b) (including for the quarter ended June
30, 2003) the Applicable Percentage shall, commencing on the date five (5)
Business Days after the date by which the Borrower was so required to provide
such financial information and certifications to the Administrative Agent and
the Lenders, be based on Level I until such time as such information and
certifications are provided, whereupon the Level shall be determined by the then
current Leverage Ratio set forth in the officer's compliance certificate.
"ARRANGERS" shall mean Wachovia Securities, Inc., and Lehman Brothers Inc.,
together with their successors and/or assigns.
"ASSET DISPOSITION" shall mean the disposition of any or all of the assets
(including, without limitation, the Capital Stock of a Subsidiary or any
ownership interest in a joint venture) of any Credit Party or any Subsidiary
whether by sale, lease, transfer or otherwise. The term "Asset Disposition"
shall not include (i) the sale, lease, transfer or other disposition of assets
permitted by Section 6.4(a)(i), (ii), (iii)(A), (iv), (v), (vi), (vii) or (viii)
hereof, (ii) any Equity Issuance, (iii) any issuance by any Credit Party or its
Subsidiaries of shares of its Capital Stock or warrants, options or other
similar rights which are exercisable for or convertible into shares or interests
of its Capital Stock and (iv) a Recovery Event.
"BANKRUPTCY CODE" shall mean the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"BORROWER" shall have the meaning set forth in the first paragraph of this
Agreement.
"BORROWING DATE" shall mean, in respect of any Loan, the date such Loan is
made.
"BUSINESS" shall have the meaning set forth in Section 3.10(a).
"BUSINESS DAY" shall mean a day other than a Saturday, Sunday or other day
on which commercial banks in Charlotte, North Carolina, Columbus, Ohio or New
York, New York are authorized or required by law to close; PROVIDED, HOWEVER,
that when used in connection with a rate determination, borrowing or payment in
respect of a LIBOR Rate Loan, the term "Business Day" shall also exclude any day
on which banks in London, England are not open for dealings in Dollar deposits
in the London interbank market.
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"CAPITAL LEASE" shall mean any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a balance
sheet of the lessee in accordance with GAAP.
"CAPITAL LEASE OBLIGATIONS" shall mean at any date of determination, the
amount of the liability in respect of a Capital Lease which would on such date
be required to be capitalized on a balance sheet of the lessee in accordance
with GAAP.
"CAPITAL STOCK" shall mean (i) in the case of a corporation, capital stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
capital stock, (iii) in the case of a partnership, partnership interests
(whether general or limited), (iv) in the case of a limited liability company,
membership interests and (v) any other interest or participation that confers on
a Person the right to receive a share of the profits and losses of, or
distributions of assets of, the issuing Person.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition ("GOVERNMENT OBLIGATIONS"), (ii)
U.S. dollar denominated (or foreign currency fully hedged) time deposits,
certificates of deposit, Eurodollar time deposits and Eurodollar certificates of
deposit of (y) any domestic commercial bank of recognized standing having
capital and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such bank being an
"APPROVED BANK"), in each case with maturities of not more than one year from
the date of acquisition, (iii) bankers acceptances issued by an Approved Bank,
(iv) 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 270 days of the date of acquisition, (v) repurchase agreements
with a bank or trust company (including a Lender) or a recognized securities
dealer having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of America, (vi)
obligations of any state of the United States or any political subdivision
thereof for the payment of the principal and redemption price of and interest on
which there shall have been irrevocably deposited Government Obligations
maturing as to principal and interest at times and in amounts sufficient to
provide such payment, (vii) auction preferred stock rated in the highest
short-term credit rating category by S&P or Moody's, (viii) demand deposits with
any Approved Bank, (ix) money market accounts and (x) with respect to the
Foreign Subsidiaries, short-term investments comparable to the foregoing.
"CHAMPUS" shall mean the United States Department of Defense Civilian
Health and Medical Program of the United States.
"CHANGE OF CONTROL" shall mean the occurrence of any of the following
events: (a) prior to a Qualifying IPO, (i) the Sponsor shall fail to have or
maintain beneficial ownership of, directly or indirectly, at least 51% of the
outstanding Voting Stock and economic interests of the
5
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Parent, or (ii) the Parent shall fail to directly own 100% of the outstanding
Capital Stock and economic interests of the Borrower, (b) after a Qualifying
IPO, (i) the Sponsor shall fail to have or maintain beneficial ownership of,
directly or indirectly, (A) at least 25% of the outstanding Voting Stock and
economic interests of the Parent and (B) a greater percentage of the outstanding
Voting Stock and economic interests of the Parent than the percentage of such
outstanding Voting Stock and economic interests held by any other "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act) other than the Sponsor, (ii) the Parent shall fail to directly own
100% of the outstanding Capital Stock and economic interests of the Borrower, or
(iii) Continuing Directors shall cease for any reason to constitute a majority
(excluding any vacancies) of the members of the board of directors of the Parent
then in office or (c) the occurrence of a "Change of Control" (or any comparable
term) under, and as defined in, the Senior Subordinated Indenture. As used
herein, "beneficial ownership" shall have the meaning provided in Rule 13d-3 of
the Securities and Exchange Commission promulgated under the Securities Exchange
Act.
"CLOSING DATE" shall mean the date of this Agreement.
"CMS" shall mean the Center for Medicare and Medicaid Services and any
successor thereto.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" shall mean a collective reference to the collateral which is
identified in, and at any time will be covered by, the Security Documents.
"COMMITMENT" shall mean the Revolving Commitment, the LOC Commitment, the
Swingline Commitment and the Term Loan Commitment, individually or collectively,
as appropriate.
"COMMITMENT FEE" shall have the meaning set forth in Section 2.5(a).
"COMMITMENT PERCENTAGE" shall mean the Revolving Commitment Percentage, the
LOC Commitment Percentage and/or the Term Loan Commitment Percentage, as
appropriate.
"COMMITMENT PERIOD" shall mean the period from and including the Closing
Date to but not including the Revolving Commitment Termination Date.
"COMMITMENT TRANSFER SUPPLEMENT" shall mean a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(c).
"COMMONLY CONTROLLED ENTITY" shall mean an entity, whether or not
incorporated, which is under common control with the Borrower within the meaning
of Section 4001(a)(14) of ERISA or is part of a group which includes the
Borrower and which is treated as a single employer under Section 414 of the
Code; provided, however, that a Commonly Controlled Entity will not include
entities, other than the Borrower, in which One Equity Partners has an ownership
interest.
6
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"CONSOLIDATED CAPITAL EXPENDITURES" shall mean, for any period, all capital
expenditures of the Credit Parties and their Subsidiaries on a consolidated
basis for such period which should be capitalized, as determined in accordance
with GAAP. The term "Consolidated Capital Expenditures" shall not include (i)
capital expenditures in respect of the reinvestment of proceeds derived from
Recovery Events received by the Credit Parties and their Subsidiaries to the
extent that such reinvestment is permitted under the Credit Documents and (ii)
any one-time charges described in clause (vii) of the definition of Consolidated
EBITDA that are capitalized. For determinations utilizing any of the second
fiscal quarter of 2003 or any of the first three fiscal quarters immediately
preceding the Closing Date, Consolidated Capital Expenditures for each such
fiscal quarter shall be deemed the amount set forth on SCHEDULE 1.1-2(b)
corresponding to such fiscal quarter.
"CONSOLIDATED EBITDA" shall mean, for any period, the sum of (a)
Consolidated Net Income for such period, plus (b) an amount which, in the
determination of Consolidated Net Income for such period, has been deducted for
(i) Consolidated Interest Expense, (ii) total federal, state, local and foreign
income taxes, (iii) depreciation and amortization expense (including
amortization of deferred financing costs), (iv) non-cash charges, including,
without limitation, non-cash charges associated with management stock and option
plans (all such non-cash charges not to exceed $2,000,000 in the aggregate
during any four fiscal quarter period), (v) pay-in-kind interest expense related
to any Subordinated Indebtedness or preferred equity securities of the Borrower,
(vi) management fees paid or accrued by the Borrower to the Sponsor as permitted
by Section 6.10(c), (vii) one-time charges incurred in conjunction with the
Acquisition as described on SCHEDULE 1.1-2(a) in an aggregate amount not to
exceed $13,000,000, (viii) other charges resulting from the write up of
inventory in conjunction with the Acquisition in an aggregate amount not to
exceed $25,000,000, (ix) non-recurring charges related to facility
rationalization in an aggregate amount not to exceed $510,000 and (x) retention
incentive payments and non-compete fees identified to the Lenders as of the
Closing Date paid to certain officers of the Credit Parties in an aggregate
amount not to exceed $8,200,000 during the term of this Agreement. For
determinations utilizing any of the second fiscal quarter of 2003 or any of the
first three fiscal quarters immediately preceding the Closing Date, Consolidated
EBITDA for each such fiscal quarter shall be deemed the amount set forth on
SCHEDULE 1.1-2(b) corresponding to such fiscal quarter (which amount shall
include the add backs set forth on SCHEDULE 1.1-2(b) relating to certain cost
adjustments*) all as determined in accordance with GAAP. Consolidated EBITDA
shall be deemed to include, without duplication, the EBITDA for a Target
acquired in a Permitted Acquisition but shall exclude EBITDA related to any
Subsidiary, division, line of business or other material assets disposed of
during any measurement period. The EBITDA of any Target acquired and operated by
the Borrower or any Subsidiary after the commencement of the relevant
measurement period, shall be included as if such business had been acquired by
the Borrower or such Subsidiary as of the first day of such measurement period,
subject to pro forma revenue and expense adjustments acceptable to the Agents;
PROVIDED that such EBITDA is supported by financial statements, tax returns or
other financial data acceptable to the Agents.
- ----------
* Such costs adjustments will be consistent with the pro forma financial
statements prepared by Deloitte & Touche LLP.
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"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, all cash
interest expense of the Credit Parties and their Subsidiaries (including,
without limitation, the interest component under Capital Leases and any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product), as determined in accordance with
GAAP. For purposes hereof, Consolidated Interest Expense for the first three
complete fiscal quarters to occur after the Closing Date shall be determined by
annualizing Consolidated Interest Expense such that for the first complete
fiscal quarter to occur after the Closing Date such components would be
multiplied by four (4), the first two complete fiscal quarters would be
multiplied by two (2) and the first three fiscal quarters would be multiplied by
one and one-third (1 1/3).
"CONSOLIDATED NET INCOME" shall mean, for any period, net income (excluding
extraordinary items) after taxes for such period of the Credit Parties and their
Subsidiaries on a consolidated basis, as determined in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" shall mean, at any time, the excess of (i)
current assets (excluding cash and Cash Equivalents) of the Credit Parties and
their Subsidiaries on a consolidated basis at such time less (ii) current
liabilities (but excluding the current portion of any long-term Indebtedness) of
the Credit Parties and their Subsidiaries on a consolidated basis at such time,
all as determined in accordance with GAAP.
"CONTINUING DIRECTORS" shall mean, during any period of up to 24
consecutive months commencing after the Closing Date, individuals who at the
beginning of such 24 month period were directors of the Parent (together with
any new director whose election by the Parent's board of directors or whose
nomination for election by the Parent'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).
"CONTRACTUAL OBLIGATION" shall mean, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"COPYRIGHT LICENSES" shall mean any written agreement naming any Obligor as
licensor and granting any right under any Copyright including, without
limitation, any thereof referred to in SCHEDULE 3.16.
"COPYRIGHTS" shall mean (a) all registered United States copyrights in all
Works, now existing or hereafter created or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, registrations, recordings and applications in the United
States Copyright Office including, without limitation, any thereof referred to
in SCHEDULE 3.16, and (b) all renewals thereof including, without limitation,
any thereof referred to in SCHEDULE 3.16.
"CREDIT DOCUMENTS" shall mean this Agreement, each of the Notes, any
Joinder Agreement, the LOC Documents, the Security Documents and each other
agreement, certificate, document or instrument delivered in connection with any
Credit Document (other than any
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agreement, certificate, document or instrument related to a Hedging Agreement),
whether or not specifically mentioned herein or therein.
"CREDIT PARTY" shall mean any of the Borrower or the Guarantors.
"CREDIT PARTY OBLIGATIONS" shall mean, without duplication, all of the
obligations (including the Obligations) of the Credit Parties to the Lenders
(including the Issuing Lender) and the Administrative Agent, whenever arising,
under this Agreement, the Notes or any of the other Credit Documents (including,
but not limited to, any interest accruing after the occurrence of a filing of a
petition of bankruptcy under the Bankruptcy Code with respect to any Credit
Party, regardless of whether such interest is an allowed claim under the
Bankruptcy Code).
"DEBT ISSUANCE" shall mean the issuance of any Indebtedness for borrowed
money by any Credit Party or any of its Subsidiaries (excluding, for purposes
hereof, (i) any Equity Issuance or (ii) any Indebtedness of any Credit Party and
its Subsidiaries permitted to be incurred pursuant to Section 6.1 or (iii) the
issuance of the Senior Subordinated Notes on the Closing Date, any conversion of
the Senior Subordinated Notes consisting of interim loans to term loans, the
exchange of any such interim loans for exchange notes or the refinancing of any
such interim loans, term loans or exchange notes).
"DEFAULT" shall mean any of the events specified in Section 7.1, whether or
not any requirement for the giving of notice or the lapse of time, or both, or
any other condition, has been satisfied.
"DEFAULTING LENDER" shall mean, at any time, any Lender that, at such time
(a) has failed to make a Loan required pursuant to the term of this Credit
Agreement, including the funding of a Participation Interest in accordance with
the terms hereof, (b) has failed to pay to the Administrative Agent or any
Lender an amount owed by such Lender pursuant to the terms of this Credit
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or similar
official.
"DOCUMENTATION AGENT" shall have the meaning set forth in the first
paragraph of this Agreement and any successors in such capacity.
"DOLLARS" and "$" shall mean dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's Domestic Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which Alternate Base Rate Loans of such Lender are to be made.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary that is organized and
existing under the laws of the United States or any state or commonwealth
thereof or under the laws of the District of Columbia.
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"ENVIRONMENTAL LAWS" shall mean any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or other Requirement of Law regulating, relating to
or imposing liability or standards of conduct concerning protection of human
health or the environment, as now or may at any time be in effect during the
term of this Agreement.
"EQUITY INVESTMENT" shall have the meaning set forth in Section 4.1(p).
"EQUITY ISSUANCE" shall mean any issuance by any Credit Party or any
Subsidiary to any Person which is not a Credit Party or an Existing Equityholder
(other than an Equity Issuance to an Existing Equityholder for the purpose of
avoiding a Default or Event of Default under Section 5.9) of (a) shares or
interests of its Capital Stock, (b) any shares or interests of its Capital Stock
pursuant to the exercise of options or warrants or other similar rights, (c) any
shares or interests of its Capital Stock pursuant to the conversion of any debt
securities to equity or (d) warrants or options or other similar rights which
are exercisable for or convertible into shares or interests of its Capital
Stock. The term "Equity Issuance" shall not include any (i) Asset Disposition,
(ii) Debt Issuance, (iii) issuance of Capital Stock of the Parent to any
director, officer or employee of the Parent or any of its Subsidiaries, (iv)
issuance of Capital Stock of the Parent as consideration for a Permitted
Acquisition and (v) the issuance of Capital Stock, the proceeds of which are
used to make a cash payment to the trustee of the Parent's ESOP and other
European employee stock benefit plans in connection with the termination of such
ESOP and benefit plans in an aggregate amount not to exceed $7,400,000.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EURODOLLAR RESERVE PERCENTAGE" shall mean for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities, as defined in Regulation D of such Board as
in effect from time to time, or any similar category of liabilities for a member
bank of the Federal Reserve System in New York City.
"EVENT OF DEFAULT" shall mean any of the events specified in Section 7.1;
PROVIDED, HOWEVER, with respect to any such event, that any requirement for the
giving of notice or the lapse of time, or both, or any other condition with
respect thereto, has been satisfied.
"EXCESS CASH FLOW" shall mean with respect to the fiscal year ending
December 31, 2004 and each fiscal year ending thereafter for the Credit Parties
and their Subsidiaries on a consolidated basis, an amount equal to (a)
Consolidated EBITDA for such period, MINUS (b) Consolidated Capital Expenditures
actually made by any Credit Party or Subsidiary for such period to the extent
not financed with the proceeds of Indebtedness, MINUS (c) Scheduled Funded Debt
Payments made during such period and any voluntary prepayments of the Term Loan
pursuant to Section 2.7(a), MINUS (d) Consolidated Interest Expense actually
paid in cash by a Credit Party or Subsidiary for such period, MINUS (e) amounts
actually paid in cash in respect of
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federal, state, local and foreign income taxes with respect to such period,
MINUS (f) increases (or plus decreases) in Consolidated Working Capital for such
period from the same period in the prior fiscal year, MINUS (g) management fees
paid in cash during such period to the extent permitted pursuant to Section
6.10(c), MINUS (h) one-time charges incurred in conjunction with the Acquisition
that are included in the calculation of Consolidated EBITDA for such period
pursuant to clause (vii) of the definition of Consolidated EBITDA, MINUS (i)
other charges resulting from the write-up of inventory that are included in the
calculation of Consolidated EBITDA for such period pursuant to clause (viii) of
the definition of Consolidated EBITDA, MINUS (j) Restricted Payments made in
cash during such period pursuant to Section 6.10(d).
"EXISTING EQUITYHOLDERS" shall mean those stockholders of the Parent set
forth on SCHEDULE 1.1-6 attached hereto.
"EXTENSION OF CREDIT" shall mean, as to any Lender, the making,
continuation or conversion of a Loan by such Lender or the issuance of, or
participation in, a Letter of Credit by such Lender.
"FEDERAL FUNDS EFFECTIVE RATE" shall have the meaning set forth in the
definition of "Alternate Base Rate".
"FEE LETTER" shall mean the letter agreement dated April 2, 2003 addressed
to the Borrower from the Agents, the Documentation Agent and the Arrangers, as
amended, restated, modified, supplemented or otherwise replaced from time to
time.
"FIXED CHARGE COVERAGE RATIO" shall mean, with respect to the Credit
Parties and their Subsidiaries on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter of the Borrower, the ratio
of (i) the sum of Consolidated EBITDA for such period, MINUS Consolidated
Capital Expenditures made during such period to (ii) the sum of Consolidated
Interest Expense for such period, PLUS Scheduled Funded Debt Payments made
during such period, PLUS cash taxes paid during such period. Notwithstanding the
foregoing, for purposes of calculating the Fixed Charge Coverage Ratio for the
first three complete fiscal quarters to occur after the Closing Date, the Fixed
Charge Coverage Ratio shall be determined by annualizing the components of the
denominator thereof such that for the first complete fiscal quarter to occur
after the Closing Date such components would be multiplied by four (4), the
first two complete fiscal quarters would be multiplied by two (2) and the first
three complete fiscal quarters would be multiplied by one and one-third (1 1/3).
"FLOOD HAZARD PROPERTY" shall have the meaning set forth in Section
4.1(f)(iv).
"FOREIGN SUBSIDIARY" shall mean any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" shall mean, with respect to any Person, without duplication,
(a) all Indebtedness of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of
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title under agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the deferred
purchase price of property or services purchased by such Person (other than
trade debt and accrued expenses incurred in the ordinary course of business and
due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person and including, in any event,
earnout obligations, (e) the principal portion of all obligations of such Person
under Capital Leases, (f) all net obligations of such Person under Hedging
Agreements (such net obligations to be equal at any time to the termination
value of such Hedging Agreements that would be payable by or to such Person at
such time), excluding any portion thereof which would be accounted for as
interest expense under GAAP, (g) the maximum available stated amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (h) all preferred Capital Stock issued by such Person
that by the terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration prior to the date that is 6 months after the Term Loan Maturity
Date, (i) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product, (j) all Indebtedness of others of the type referred to in
clauses (a) - (i) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on,
or payable out of the proceeds of production from, property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
with the amount of such Indebtedness limited to the value of the property
secured in cases where the obligations secured thereby have not been assumed by
such Person, (k) all Guaranty Obligations of such Person with respect to
Indebtedness of the type referred to in clauses (a) - (j) above of another
Person and (l) Indebtedness of the type referred to in clauses (a) - (k) above
of any partnership or unincorporated joint venture in which such Person legally
obligated or has a reasonable expectation of being liable with respect thereto,
except to the extent such Indebtedness is expressly non-recourse to such Person.
"GAAP" shall mean generally accepted accounting principles in effect in the
United States of America applied on a consistent basis, SUBJECT, HOWEVER, in the
case of determination of compliance with the financial covenants set forth in
Section 5.9, to the provisions of Section 1.3.
"GOVERNMENT ACTS" shall have the meaning set forth in Section 2.19(a).
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GUARANTOR" shall mean any of the Parent, the Domestic Subsidiaries of the
Borrower identified as Guarantors on the signature pages hereto and the
Additional Credit Parties which execute a Joinder Agreement, together with their
successors and permitted assigns, in each case to the extent such Person has not
been released from its Guaranty Obligations under the Guaranty (whether by sale
or otherwise) in accordance with the terms of this Credit Agreement.
"GUARANTY" shall mean the guaranty of the Guarantors set forth in Article
X.
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"GUARANTY OBLIGATIONS" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Indebtedness of any other Person in
any manner, whether direct or indirect, and including without limitation any
obligation, whether or not contingent, (i) to purchase any such Indebtedness or
any property constituting security therefor, (ii) to advance or provide funds or
other support for the payment or purchase of any such Indebtedness or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Indebtedness of such other Person, (iii) to lease or
purchase Property, securities or services primarily for the purpose of assuring
the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless
the holder of such Indebtedness against loss in respect thereof. The amount of
any Guaranty Obligation hereunder shall (subject to any limitations set forth
therein, including limited recourse provisions) be deemed to be an amount equal
to the outstanding principal amount (or maximum principal amount, if larger) of
the Indebtedness in respect of which such Guaranty Obligation is made.
"HEDGING AGREEMENT PROVIDER" shall mean any Person that enters into a
Hedging Agreement with a Credit Party or any of its Subsidiaries that is
permitted by Section 6.1(e) to the extent such Person is a Lender, an Affiliate
of a Lender or any other Person that was a Lender (or an Affiliate of a Lender)
at the time it entered into the Hedging Agreement but has ceased to be a Lender
(or whose Affiliate has ceased to be a Lender) under the Credit Agreement.
"HEDGING AGREEMENTS" shall mean, with respect to any Person, any agreement
entered into to protect such Person against fluctuations in interest rates, or
currency or raw materials values, including, without limitation, any interest
rate swap, cap or collar agreement or similar arrangement between such Person
and one or more counterparties, any foreign currency exchange agreement,
currency protection agreements, commodity purchase or option agreements or other
interest or exchange rate or commodity price hedging agreements.
"INDEBTEDNESS" shall mean, with respect to any Person, without duplication,
(a) all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, or
upon which interest payments are customarily made, (c) all obligations of such
Person under conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the ordinary
course of business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such Person (other
than trade debt and accrued expenses arising in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all Guaranty Obligations of such Person
with respect to Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all net obligations of such
Person under
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Hedging Agreements (such net obligations to be equal at any time to the
termination value of such Hedging Agreements that would be payable by or to such
Person at such time), excluding any portion thereof which would be accounted for
as interest expense under GAAP, (j) the maximum available stated amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (k) all preferred Capital Stock issued by such Person
and which by the terms thereof could be (at the request of the holders thereof
or otherwise) subject to mandatory sinking fund payments, redemption or other
acceleration prior to the date which is six months after the Maturity Date, (l)
the principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet financing
product plus any accrued interest thereon, and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is legally
obligated or has a reasonable expectation of being liable with respect thereto,
except to the extent such Indebtedness is expressly non-recourse to such Person.
"INSOLVENCY" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term as used in
Section 4245 of ERISA.
"INSOLVENT" shall mean being in a condition of Insolvency.
"INTELLECTUAL PROPERTY" shall mean, collectively, all Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses.
"INTEREST COVERAGE RATIO" shall mean, with respect to the Credit Parties
and their Subsidiaries on a consolidated basis for the twelve month period
ending on the last day of any fiscal quarter of the Borrower, the ratio of (a)
Consolidated EBITDA for such period to (b) Consolidated Interest Expense for
such period.
"INTEREST DETERMINATION DATE" shall have the meaning assigned thereto in
the definition of "Applicable Percentage".
"INTEREST PAYMENT DATE" shall mean (a) as to any Alternate Base Rate Loan,
Swingline Loan or fee payable pursuant to Section 2.5(a) or (b), the last
Business Day of each March, June, September and December during the term of this
Agreement and on the applicable Maturity Date, (b) as to any LIBOR Rate Loan
having an Interest Period of three months or less, the last day of such Interest
Period, (c) as to any LIBOR Rate Loan having an Interest Period longer than
three months, each day which is three months after the first day of such
Interest Period and the last day of such Interest Period and (d) as to any Loan
which is the subject of a mandatory prepayment required pursuant to Section
2.7(b) hereof, the date of such prepayment.
"INTEREST PERIOD" shall mean, with respect to any LIBOR Rate Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such LIBOR Rate Loan
and ending one, two, three or six months (or, subject to availability, nine
or twelve months) thereafter, as selected by the Borrower in the notice of
borrowing or notice of conversion given with respect thereto; and
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(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such LIBOR Rate Loan
and ending one, two, three or six months and, if available, nine or twelve
months thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last
day of the then current Interest Period with respect thereto;
PROVIDED that the foregoing provisions are subject to the
following:
(A) if any Interest Period pertaining to a LIBOR Rate Loan
would otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless
the result of such extension would be to carry such Interest Period
into another calendar month in which event such Interest Period shall
end on the immediately preceding Business Day;
(B) any Interest Period pertaining to a LIBOR Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided
above, the Borrower shall be deemed to have selected an Alternate Base
Rate Loan to replace the affected LIBOR Rate Loan;
(D) any Interest Period in respect of any Loan that would
otherwise extend beyond the applicable Maturity Date for such Loan
shall end on such Maturity Date;
(E) with regard to the Term Loans, no Interest Period
shall extend beyond any principal amortization payment date unless the
portion of the Term Loan consisting of Alternate Base Rate Loans
together with the portion of the Term Loan consisting of LIBOR Rate
Loans with Interest Periods expiring prior to or concurrently with the
date such principal amortization payment date is due, is at least
equal to the amount of such principal amortization payment due on such
date; and
(F) no more than ten (10) LIBOR Rate Loans may be in
effect at any time; PROVIDED that, for purposes hereof, LIBOR Rate
Loans with different Interest Periods shall be considered as separate
LIBOR Rate Loans, even if they shall begin on the same date and have
the same duration, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the end
of existing Interest Periods to constitute a new LIBOR Rate Loan with
a single Interest Period.
"INVESTMENT" shall mean all investments made directly or indirectly in, to
or from any Person, whether in cash or by acquisition of shares of Capital
Stock, property and assets (other
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than in the ordinary course of business), indebtedness or other obligations or
securities or by loan advance, capital contribution or otherwise.
"ISSUING LENDER" shall mean Wachovia or such other Lender as designated by
the Borrower and agreed to by such Lender with respect to any Letter of Credit
requested by the Borrower that Wachovia is unable to provide.
"ISSUING LENDER FEES" shall have the meaning set forth in Section 2.5(c).
"JOINDER AGREEMENT" shall mean a Joinder Agreement substantially in the
form of SCHEDULE 5.10, executed and delivered by an Additional Credit Party in
accordance with the provisions of Section 5.10.
"LENDER" shall have the meaning set forth in the first paragraph of this
Agreement.
"LETTER OF CREDIT FEE" shall have the meaning set forth in Section 2.5(b).
"LETTERS OF CREDIT" shall mean any letter of credit issued by the Issuing
Lender pursuant to the terms hereof, as such letters of credit may be amended,
restated, modified, extended, renewed or replaced from time to time.
"LEVERAGE RATIO" shall mean, with respect to the Credit Parties and their
Subsidiaries on a consolidated basis for the twelve month period ending on the
last day of any fiscal quarter of the Borrower, the ratio of (a) Funded Debt of
the Credit Parties and their Subsidiaries on a consolidated basis on the last
day of such period to (b) Consolidated EBITDA for such period.
"LIBOR" shall mean, for any LIBOR Rate Loan for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
A.M. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR" shall mean, for any LIBOR Rate Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates (rounded upwards, if necessary, to the
nearest 1/100 of 1%). If, for any reason, neither of such rates is available,
then "LIBOR" shall mean the rate per annum at which, as determined by the
Administrative Agent, Dollars in an amount comparable to the Loans then
requested are being offered to leading banks at approximately 11:00 A.M. London
time, two (2) Business Days prior to the commencement of the applicable Interest
Period for settlement in immediately available funds by leading banks in the
London interbank market for a period equal to the Interest Period selected.
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"LIBOR LENDING OFFICE" shall mean, initially, the office of each Lender
designated as such Lender's LIBOR Lending Office shown on SCHEDULE 9.2; and
thereafter, such other office of such Lender as such Lender may from time to
time specify to the Administrative Agent and the Borrower as the office of such
Lender at which the LIBOR Rate Loans of such Lender are to be made.
"LIBOR RATE" shall mean a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
"LIBOR RATE LOAN" shall mean Loans the rate of interest applicable to which
is based on the LIBOR Rate.
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any Capital Lease having
substantially the same economic effect as any of the foregoing).
"LOAN" shall mean a Revolving Loan, a Swingline Loan and/or the Term Loan
as appropriate.
"LOC COMMITMENT" shall mean the commitment of the Issuing Lender to issue
Letters of Credit and with respect to each Lender, the commitment of such Lender
to purchase participation interests in the Letters of Credit up to such Lender's
LOC Committed Amount as specified in SCHEDULE 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof.
"LOC COMMITMENT PERCENTAGE" shall mean, for each Lender, the percentage
identified as its LOC Commitment Percentage on SCHEDULE 2.1(a), as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 9.6(c).
"LOC COMMITTED AMOUNT" shall mean, collectively, the aggregate amount of
all of the LOC Commitments of the Lenders to issue and participate in Letters of
Credit as referenced in Section 2.3(c) and, individually, the amount of each
Lender's LOC Commitment as specified in SCHEDULE 2.1(a).
"LOC DOCUMENTS" shall mean, with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in connection
therewith, any application therefor, and any agreements, instruments, guarantees
or other documents (whether general in application or applicable only to such
Letter of Credit) governing or providing for (i) the rights and obligations of
the parties concerned or (ii) any collateral security for such obligations.
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"LOC OBLIGATIONS" shall mean, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to be drawn
under Letters of Credit then outstanding, assuming compliance with all
requirements for drawings referred to in such Letters of Credit PLUS (ii) the
aggregate amount of all drawings under Letters of Credit honored by the Issuing
Lender but not theretofore reimbursed.
"MANDATORY BORROWING" shall have the meaning set forth in Section 2.3(e)
and Section 2.4(b)(ii), as the context may require.
"MATERIAL ADVERSE CHANGE" shall have the meaning set forth in Section
4.1(t).
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on (a) the
business, operations, property or financial condition of the Credit Parties and
their Subsidiaries taken as a whole, (b) the ability of the Borrower or any
Guarantor to perform its respective obligations in any material respect, when
such obligations are required to be performed, under this Agreement, any of the
Notes or any other Credit Document or (c) the validity or enforceability of this
Agreement, any of the Notes or any of the other Credit Documents as against the
Borrower or any Guarantor party hereto or thereto, or the rights or remedies of
the Administrative Agent or the Lenders hereunder or thereunder.
"MATERIAL CONTRACT" shall mean any contract or other arrangement, whether
written or oral, to which any Credit Party or any of its Subsidiaries is a party
as to which the breach, nonperformance or cancellation by any party thereto
could reasonably be expected to have a Material Adverse Effect.
"MATERIAL FIRST-TIER FOREIGN SUBSIDIARY" shall mean each first-tier Foreign
Subsidiary of the Credit Parties other than Medex de Costa Rica Limitada.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances or wastes, defined or regulated as such in or
under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" shall mean (i) with respect to the Term Loan, the Term Loan
Maturity Date and (ii) with respect to the Revolving Loans, the Revolving
Commitment Termination Date.
"MEDICAID" shall mean that entitlement program under Title XIX of the
Social Security Act that provides federal grants to states for medical
assistance based on specific eligibility criteria.
"MEDICAID CERTIFICATION" means certification by a state agency or other
such entity administering the Medicaid program that a health care provider or
supplier is in compliance with all the conditions of participation set forth in
the Medicaid Regulations.
"MEDICAID PROVIDER AGREEMENT" means an agreement entered into between a
state agency
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or other such entity administering the Medicaid program and a health care
provider or supplier under which the health care provider or supplier agrees to
provide services for Medicaid patients in accordance with the terms of the
agreement and Medicaid Regulations.
"MEDICAID REGULATIONS" means, collectively, (i) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act and any statutes succeeding thereto; (ii) all applicable provisions
of all federal rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (i) above and all federal administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (i) above;
(iii) all state statutes and plans for medical assistance enacted in connection
with the statutes and provisions described in clauses (i) and (ii) above; and
(iv) all applicable provisions of all rules, regulations, manuals and orders of
all Governmental Authorities promulgated pursuant to or in connection with the
statutes described in clause (iii) above and all state administrative,
reimbursement and other guidelines of all Governmental Authorities having the
force of law promulgated pursuant to or in connection with the statutes
described in clause (ii) above, in each case as may be amended, supplemented or
otherwise modified from time to time.
"MEDICAL REIMBURSEMENT PROGRAMS" shall mean Medicare, Medicaid and CHAMPUS
programs and any other healthcare program operated by or financed in whole or in
part by any foreign, domestic, federal, state or local government and any other
non-government funded third party payor programs.
"MEDICARE" shall mean that government-sponsored entitlement program under
Title XVIII of the Social Security Act that provides for a health insurance
system for eligible elderly and disabled individuals.
"MEDICARE CERTIFICATION" means certification by CMS or an entity under
contract with CMS that the health care provider or supplier is in compliance
with all of the conditions of participation set forth in the Medicare
Regulations.
"MEDICARE PROVIDER AGREEMENT" means an agreement entered into between CMS
or other such entity administering the Medicare program on behalf of CMS, and a
health care provider or supplier under which the health care provider or
supplier agrees to provide services for Medicare patients in accordance with the
terms of the agreement and Medicare Regulations.
"MEDICARE REGULATIONS" shall mean, collectively, all Federal statutes
(whether set forth in Title XVIII of the Social Security Act or elsewhere)
affecting the health insurance program for the aged and disabled established by
Title XVIII of the Social Security Act and any statutes succeeding thereto;
together with all applicable provisions of all rules, regulations, manuals and
orders and administrative, reimbursement and other guidelines having the force
of law of all Governmental Authorities (including, without limitation, the
United States Department of Health and Human Services ("HHS"), CMS, the Office
of the Inspector General for HHS, or any person succeeding to the functions of
any of the foregoing) promulgated pursuant to or in connection
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with any of the foregoing having the force of law, as each may be amended,
supplemented or otherwise modified from time to time.
"MOODY'S" shall mean Moody's Investors Service, Inc. or any successor to
the rating agency business thereof.
"MORTGAGE INSTRUMENTS" shall have the meaning set forth in Section
4.1(f)(i).
"MORTGAGE POLICIES" shall have the meaning set forth in Section
4.1(f)(iii).
"MORTGAGED PROPERTIES" shall have the meaning set forth in Section
4.1(f)(i).
"MULTIEMPLOYER PLAN" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" shall mean the aggregate cash proceeds received by any
Credit Party or any Subsidiary in respect of any Asset Disposition, Equity
Issuance or Debt Issuance, net of (a) direct costs and expenses paid or payable
as a result thereof (including, without limitation, reasonable legal, accounting
and investment banking fees, and sales commissions, and the payment of any
Indebtedness (other than Subordinated Indebtedness) required to be repaid as a
result thereof), (b) taxes paid or payable as a result thereof and (c) any
portion of such proceeds reserved for post-closing adjustments or
indemnifications for a period not to exceed 180 days (or if contractually
obligated otherwise, a longer period, but in any event not to exceed 365 days)
from the date of receipt of such Net Cash Proceeds and in an amount not to
exceed 10% of the aggregate amount thereof; it being understood that "Net Cash
Proceeds" shall include, without limitation, any cash received upon the sale or
other disposition of any non-cash consideration received by any Credit Party or
any Subsidiary in respect of any Asset Disposition, Equity Issuance or Debt
Issuance.
"NOTE" or "NOTES" shall mean the Revolving Notes, the Swingline Note and/or
the Term Notes, collectively, separately or individually, as appropriate.
"NOTICE OF BORROWING" shall mean the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or as referenced in 2.4(b)(i), as
appropriate.
"NOTICE OF CONVERSION/EXTENSION" shall mean the written notice of extension
or conversion as referenced and defined in Section 2.10(a).
"OBLIGATIONS" shall mean, collectively, Loans and LOC Obligations.
"OPERATING LEASE" shall mean, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the lessee at
any time) of any property (whether real, personal or mixed) which is not a
Capital Lease other than any such lease in which any Credit Party or any
Subsidiary is the lessor.
"PARENT" shall have the meaning set forth in the first paragraph of this
Agreement.
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"PARTICIPANTS" shall have the meaning set forth in Section 9.6(b).
"PARTICIPATION INTEREST" shall mean the purchase by a Lender of a
participation interest in Letters of Credit as provided in Section 2.3(c) and in
Swingline Loans as provided in Section 2.4(b)(ii).
"PATENT LICENSE" shall mean all agreements, whether written or oral,
providing for the grant by or to a Credit Party of any right to manufacture, use
or sell any invention covered by a Patent, including, without limitation, any
thereof referred to in SCHEDULE 3.16.
"PATENTS" shall mean (a) all letters patent of the United States or any
other country and all reissues and extensions thereof, including, without
limitation, any thereof referred to in SCHEDULE 3.16, and (b) all applications
for letters patent of the United States or any other country and all divisions,
continuations and continuations-in-part thereof, including, without limitation,
any thereof referred to in SCHEDULE 3.16.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED ACQUISITION" shall mean any acquisition or any series of related
acquisitions by a Credit Party of the assets or a majority of the Voting Stock
of a Person that is incorporated, formed or organized in the United States, or
any division, line of business or other business unit of a Person that is
incorporated, formed or organized in the United States (such Person or such
division, line of business or other business unit of such Person referred to
herein as the "TARGET"), in each case that is a type of business (or assets used
in a type of business) permitted to be engaged in by the Credit Parties and
their Subsidiaries pursuant to Section 6.3 hereof, so long as (a) no Default or
Event of Default shall then exist or would exist after giving effect thereto,
(b) the Credit Parties shall demonstrate to the reasonable satisfaction of the
Agents that the Credit Parties will be in compliance on a Pro Forma Basis with
all of the terms and provisions of the financial covenants set forth in Section
5.9, (c) the Administrative Agent, on behalf of the Lenders, shall have received
(or shall receive in connection with the closing of such acquisition), to the
extent provided in the Security Documents, a first priority (subject to
Permitted Liens) perfected security interest in all property (including, without
limitation, Capital Stock) acquired with respect to the Target (excluding the
assets of any Foreign Subsidiary of the Target and limited to 65% of the Capital
Stock of any Material First-Tier Foreign Subsidiary) and the Target, if a
Person, shall have executed a Joinder Agreement in accordance with the terms of
Section 5.10, (d) the Target has pro forma Consolidated EBITDA for the most
recent four fiscal quarters prior to the acquisition date for which financial
statements are available in an amount greater than $0, (e) such acquisition is
not a "hostile" acquisition and has been approved by the Board of Directors
and/or shareholders of the applicable Credit Party and the Target, (f) after
giving effect to such acquisition, there shall be at least $10,000,000 of
borrowing availability under the Aggregate Revolving Committed Amount, (g) the
Administrative Agent shall have received a certificate from a Responsible
Financial Officer of the Borrower certifying that, in the reasonable judgment of
the Borrower, the Credit Parties and/or the Sponsor have conducted such
financial, legal and environmental due diligence with respect to the Target as a
substantially
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similarly situated prudent purchaser acquiring substantially similar property
and/or assets would customarily conduct and (h) (i) the total cash consideration
for any individual acquisition shall not exceed $35,000,000 in the aggregate and
(ii) the total consideration (including, without limitation, cash, Capital
Stock, assumed Indebtedness, earnout payments, seller notes and any other
deferred payment) for the net assets, Capital Stock, division, line of business
or other business unit acquired in such acquisition or series of related
acquisitions shall not exceed $50,000,000 in the aggregate for all acquisitions
during any four consecutive fiscal quarter period. For purposes of determining
"total consideration" under clause (h) above, the amount of any earnout payment
or other contingent payment shall be considered the maximum anticipated amount
of such earnout payment or contingent payment as reasonably determined by the
Borrower and approved by the Administrative Agent in its reasonable discretion.
"PERMITTED INVESTMENTS" shall mean:
(i) cash and Cash Equivalents;
(ii) receivables owing to the Borrower or any of its Subsidiaries
or any receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms;
(iii) Investments in and loans or advances by any Credit Party to
any other Credit Party;
(iv) loans and advances to officers, directors, employees and
Affiliates in the ordinary course of business in an aggregate amount not to
exceed $250,000 at any time outstanding;
(v) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers
and in settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vi) Investments, acquisitions or transactions permitted under
Section 6.4(b);
(vii) Permitted Acquisitions;
(viii) Investments existing on the Closing Date and identified on
SCHEDULE 1.1-3;
(ix) Hedging Agreements permitted under Section 6.1(e);
(x) deposits made in the ordinary course to secure the
performance of leases or as a Permitted Lien;
(xi) Guaranty Obligations permitted under Section 6.1(g);
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(xii) Investments constituting non-cash consideration received in
any sale or other disposition of any asset to the extent permitted pursuant
to Section 6.4;
(xiii) the Parent or the Borrower may hold promissory notes from
any officer, director or employee of the Parent, the Borrower or any
Subsidiary solely as consideration for the purchase of Capital Stock of the
Parent;
(xiv) Investments in and loans or advances by (A) the Credit
Parties to the Foreign Subsidiaries of the Credit Parties or the Foreign
Subsidiaries of the Credit Parties to the Credit Parties in an aggregate
amount not to exceed $2,500,000 at any time outstanding; and (B) any
Foreign Subsidiary to any other Foreign Subsidiary; and
(xv) additional loans, advances and/or Investments; PROVIDED that
such loans, advances and/or Investments made pursuant to this clause shall
not exceed an aggregate amount of $1,000,000.
"PERMITTED LIENS" shall mean:
(i) Liens created by or otherwise existing, under or in
connection with this Agreement or the other Credit Documents in favor of
the Lenders;
(ii) Liens in favor of a Hedging Agreement Provider in connection
with any Secured Hedging Agreement, but only (A) to the extent such Liens
are on the same collateral as to which the Administrative Agent on behalf
of the Lenders also has a Lien and (B) if such Hedging Agreement Provider
and the Lenders shall share PARI PASSU in the collateral subject to such
Liens;
(iii) Liens securing purchase money Indebtedness and Capital Lease
Obligations to the extent permitted under Section 6.1(c); provided, that
(A) any such Lien attaches to such asset concurrently with or within 90
days after the acquisition or improvement thereof, (B) such Lien attaches
solely to the asset so acquired or improved in such transaction and (C) the
Indebtedness secured thereby does not exceed 100% of the fair market value
of the asset purchased, constructed or improved at the time of such
acquisition, construction or improvement;
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to exceed 60
days), if any, related thereto has not expired or which are being contested
in good faith by appropriate proceedings, PROVIDED that adequate reserves
with respect thereto are maintained on the books of the any Credit Party or
its Subsidiaries, as the case may be, in conformity with GAAP;
(v) carriers', warehousemen's, landlord's, mechanics',
materialmen's, processor's, repairmen's or other like Liens (including
statutory and common law landlord's Liens under leases) arising in the
ordinary course of business which are not
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overdue for a period of more than 60 days or which are being contested in
good faith by appropriate proceedings;
(vi) Liens incurred or pledges or deposits made in connection
with workers' compensation, unemployment insurance and other social
security legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements incurred in the ordinary
course of business;
(vii) Liens incurred or deposits made to secure the performance of
bids, fee and expense arrangements with trustees and fiscal agents, trade
contracts (other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;
(viii) Liens existing on the Closing Date and set forth on SCHEDULE
1.1-4; provided that (a) no such Lien shall at any time be extended to
cover property or assets other than the property or assets subject thereto
on the Closing Date and improvements thereon and (b) the principal amount
of the Indebtedness secured by such Lien shall not be extended, renewed,
refunded or refinanced;
(ix) (A) Liens, encumbrances and other matters affecting title to
any Mortgaged Property listed in the Mortgage Policies in respect thereof
and found, on the date of delivery of such Mortgage Policies to the
Administrative Agent in accordance with the terms hereof, (B) as to any
particular parcel of real property at any time, such easements,
encroachments, covenants, conditions, rights of way, minor defects,
irregularities or encumbrances on title which do not materially impair such
parcel of real property for the purpose for which it is held by the user
thereof, (C) municipal and zoning ordinances which are not violated in any
material respect by the existing improvements and the present use made by
the mortgagor thereof of the premises and (D) general real estate taxes and
assessments not yet delinquent;
(x) so long as no Default or Event of Default shall have
occurred and be continuing, attachment, judgment or other similar Liens
arising in connection with court or arbitration proceedings, provided the
same are discharged, or that execution or enforcement thereof is stayed
pending appeal, within 60 days or, in the case of any stay of execution or
enforcement pending appeal, within such lesser time during which such
appeal may be taken;
(xi) leases or subleases granted to others not interfering in any
material respect with the business of any Credit Party and any interest or
title of a lessor under any lease (whether a Capitalized Lease or an
operating lease) permitted by this Agreement;
(xii) customary rights of set off, revocation, refund or
chargeback under deposit agreements or under the UCC of banks or other
financial institutions where any Credit Party maintains deposits in the
ordinary course of business permitted by this Agreement;
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(xiii) Liens arising from the granting of a license to any Person
in the ordinary course of business of any Credit Party and its
Subsidiaries;
(xiv) Liens attaching solely to cash earnest money deposits made
by any Credit Party or any of its Subsidiaries in connection with any
letter of intent or purchase agreement entered into by it in connection
with a Permitted Acquisition;
(xv) Liens deemed to exist in connection with repurchase
agreements and other similar Investments to the extent such are Permitted
Investments;
(xvi) Liens arising by operation of law on insurance policies and
proceeds thereof to secure premiums thereunder;
(xvii) Liens on equipment arising from precautionary UCC financing
statements relating to the lease of such equipment to the extent permitted
by this Agreement;
(xviii) Liens on property or assets owned by Foreign Subsidiaries
securing Indebtedness permitted under Section 6.1(k);
(xix) extensions, renewals or replacements of any Lien referred to
above; PROVIDED that such extension, renewal or replacement is limited to
the Indebtedness and property (including improvements thereon) originally
encumbered thereby; and
(xx) additional Liens so long as the Indebtedness and other
obligations secured thereby does not exceed $1,000,000 in the aggregate.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PLAN" shall mean, at any particular time, any employee benefit plan which
is covered by Title IV of ERISA and in respect of which any Credit Party or a
Commonly Controlled Entity is an "employer" as defined in Section 3(5) of ERISA
(or, if such Plan were terminated at such time, would under Section 4069 of
ERISA be subject to liability).
"PLEDGE AGREEMENT" shall mean the Pledge Agreement dated as of the Closing
Date executed by the Credit Parties in favor of the Administrative Agent, as
amended, modified, restated or supplemented from time to time.
"PRIME RATE" shall have the meaning set forth in the definition of
Alternate Base Rate.
"PRO FORMA ADJUSTED EBITDA" shall mean Consolidated EBITDA of the Parent
and its Subsidiaries (including the Acquired Business) for the twelve month
period ended as of the most recent calendar month end for which financial
statements have been provided, with adjustments permitted for pro forma
financial statements prepared in accordance with Regulation S-X and such other
adjustments as may be approved by the Agents in their reasonable discretion.
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"PRO FORMA BASIS" shall mean, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
twelve-month period ending as of the most recent month end preceding the date of
such transaction.
"PROJECTIONS" shall have the meaning set forth in Section 3.1.
"PROPERTIES" shall have the meaning set forth in Section 3.10(a).
"PURCHASE AGREEMENT" shall have the meaning set forth in the definition of
Acquisition Documents.
"PURCHASING LENDERS" shall have the meaning set forth in Section 9.6(c).
"QUALIFYING IPO" means an Equity Issuance by the Parent consisting of an
underwritten primary public offering (other than a public offering pursuant to a
registration statement on Form S-8) of the common Capital Stock of the Parent
(i) pursuant to an effective registration statement filed with the Securities
and Exchange Commission in accordance with the Securities Act (whether alone or
in connection with a secondary public offering) and (ii) resulting in gross
proceeds to the Parent of at least $75,000,000.
"RECOVERY EVENT" shall mean the receipt by any Credit Party or any of its
Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.
"REGISTER" shall have the meaning set forth in Section 9.6(d).
"REGULATION S-X" shall mean Regulation S-X of the Securities Act or any
successor regulation thereto.
"RELATED FUND" shall mean, with respect to any Lender, any fund or trust or
entity that invests in commercial bank loans in the ordinary course of business
and is advised or managed by (i) such Lender, (ii) an Affiliate of such Lender
or (iii) any other Lender or any Affiliate thereof.
"REORGANIZATION" shall mean, with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of such term as
used in Section 4241 of ERISA.
"REPLACED LENDER" shall have the meaning set forth in Section 2.20.
"REPLACEMENT LENDER" shall have the meaning set forth in Section 2.20.
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"REPORTABLE EVENT" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day notice
period is waived under ERISA Reg. Section 4043.
"REQUIRED LENDERS" shall mean, at any time, Lenders holding in the
aggregate more than 50% of (i) the Commitments (and Participation Interests
therein) or (ii) if the Commitments have been terminated, the outstanding Loans
and Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit and of the Swingline Lender in Swingline
Loans); PROVIDED, HOWEVER, that if any Lender shall be a Defaulting Lender at
such time, then there shall be excluded from the determination of Required
Lenders, Obligations (including Participation Interests) owing to such
Defaulting Lender and such Defaulting Lender's Commitments, or after termination
of the Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.
"REQUIREMENT OF LAW" shall mean, as to any Person, the Certificate of
Incorporation and By-laws or other organizational or governing documents of such
Person, and each law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE FINANCIAL OFFICER" shall mean, as to the Borrower, the Chief
Financial Officer, the Treasurer or any other financial officer.
"RESPONSIBLE OFFICER" shall mean, as to (a) the Borrower, any of the
President, the Chief Executive Officer, the Chief Financial Officer, the
Treasurer, the General Counsel or any Vice President or (b) any other Credit
Party, any duly authorized officer thereof.
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of Capital Stock of
any Credit Party or any of its Subsidiaries, now or hereafter outstanding, (b)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any shares of any class of Capital
Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (c) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any class of
Capital Stock of any Credit Party or any of its Subsidiaries, now or hereafter
outstanding, (d) any payment with respect to any earnout obligation, (e) any
payment or prepayment of principal of, premium, if any, or interest or fees on,
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Subordinated Indebtedness, (f) the payment by any Credit
Party or any of its Subsidiaries of any management or other similar fee to any
Person or (g) any payment or prepayment of principal or interest on any seller
note permitted by Section 6.1(h).
"REVOLVING COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate principal
amount at any time outstanding up to such Lender's Revolving Committed Amount.
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"REVOLVING COMMITMENT PERCENTAGE" shall mean, for each Lender, the
percentage identified as its Revolving Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6(c).
"REVOLVING COMMITMENT TERMINATION DATE" shall mean May 21, 2008.
"REVOLVING COMMITTED AMOUNT" shall mean the amount of each Lender's
Revolving Commitment as specified on SCHEDULE 2.1(a), as such amount may be
reduced from time to time in accordance with the provisions hereof, with the
aggregate amount of all Revolving Committed Amounts for all Revolving Lenders
equal to $40,000,000 as of the Closing Date.
"REVOLVING LENDER" shall mean each Lender with a Revolving Commitment.
"REVOLVING LOANS" shall have the meaning set forth in Section 2.1.
"REVOLVING NOTE" or "REVOLVING NOTES" shall mean the promissory notes of
the Borrower in favor of each of the Lenders evidencing the Revolving Loans
provided pursuant to Section 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, restated, modified,
supplemented, extended, renewed or replaced from time to time.
"S&P" shall mean Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc, or any successor to the rating agency business thereof.
"SCHEDULED FUNDED DEBT PAYMENTS" shall mean, as of any date of
determination for the Credit Parties and their Subsidiaries, the sum of all
scheduled payments on Funded Debt (but excluding any repayments of revolving
Indebtedness unless accompanied by a reduction in commitments and excluding
payments of interest and fees) for the applicable period ending on the date of
determination (including the principal component of payments due on Capital
Leases during the applicable period ending on the date of determination).
"SECURED HEDGING AGREEMENT" shall mean any Hedging Agreement between a
Credit Party and a Hedging Agreement Provider, as amended, modified,
supplemented, extended or restated from time to time.
"SECURED OBLIGATIONS" shall mean, without duplication, (i) all Credit Party
Obligations and (ii) all liabilities and obligations, whenever arising, under
all Secured Hedging Agreements.
"SECURITIES ACT" shall mean the Securities Act of 1933, together with any
amendment thereto or successor thereof and any rules or regulations promulgated
thereunder.
"SECURITIES EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
together with any amendment thereto or successor thereof and any rules or
regulations promulgated thereunder.
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"SECURITY AGREEMENT" shall mean the Security Agreement dated as of the
Closing Date executed by the Credit Parties in favor of the Administrative
Agent, as amended, restated, modified or supplemented from time to time in
accordance with its terms.
"SECURITY DOCUMENTS" shall mean the Security Agreement, the Pledge
Agreement, the Mortgage Instruments and such other documents executed and/or
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 any collateral documentation (in
addition to the Pledge Agreement) with respect to the pledge of 65% of the
Capital Stock of any Material First-Tier Foreign Subsidiary.
"SELLER" shall mean, Ethicon Endo-Surgery, Inc., an Ohio corporation.
"SENIOR FUNDED DEBT" shall mean all Funded Debt of the Credit Parties and
their Subsidiaries which is not Subordinated Indebtedness.
"SENIOR LEVERAGE RATIO" shall mean, with respect to the Credit Parties and
their Subsidiaries on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter of the Parent, the ratio of (a) Senior Funded
Debt of the Credit Parties and their Subsidiaries on a consolidated basis on the
last day of such period to (b) Consolidated EBITDA for such period.
"SENIOR SUBORDINATED INDENTURE" shall mean the Indenture dated as of the
Closing Date by and between the Borrower and The Bank of New York, as trustee,
as the same may be amended, restated, supplemented or otherwise modified from
time to time in accordance with the terms of Section 6.8.
"SENIOR SUBORDINATED NOTES" shall mean the Borrower's 8 7/8% Senior
Subordinated Notes due 2013 in the initial aggregate principal amount of
$200,000,000.
"SINGLE EMPLOYER PLAN" shall mean any Plan which is not a Multiemployer
Plan.
"SPONSOR" shall mean One Equity Partners and its Affiliates.
"SUBORDINATED INDEBTEDNESS" shall mean any unsecured Indebtedness incurred
by any Credit Party that is specifically subordinated in right of payment to the
prior payment of the Secured Obligations, which Indebtedness shall be in all
respects on terms reasonably acceptable to the Agents. Subordinated Indebtedness
shall include, without limitation, the Indebtedness evidenced by the Senior
Subordinated Notes.
"SUBSIDIARY" shall mean, as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a
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"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a Subsidiary
or Subsidiaries of the Borrower.
"SWINGLINE COMMITMENT" shall mean the commitment of the Swingline Lender to
make Swingline Loans in an aggregate principal amount at any time outstanding up
to the Swingline Committed Amount, and the commitment of the Lenders to purchase
participation interests in the Swingline Loans as provided in Section
2.4(b)(ii), as such amounts may be reduced from time to time in accordance with
the provisions hereof.
"SWINGLINE COMMITTED AMOUNT" shall mean the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.4(a).
"SWINGLINE LENDER" shall mean Wachovia.
"SWINGLINE LOAN" or "SWINGLINE LOANS" shall have the meaning set forth in
Section 2.4(a).
"SWINGLINE NOTE" shall mean the promissory note of the Borrower in favor of
the Swingline Lender evidencing the Swingline Loans provided pursuant to Section
2.4(d), as such promissory note may be amended, modified, supplemented,
extended, renewed or replaced from time to time.
"SYNDICATION AGENT" shall have the meaning set forth in the first paragraph
of this Agreement and any successors in such capacity.
"TARGET" shall have the meaning set forth in the definition of Permitted
Acquisition.
"TAX EXEMPTION CERTIFICATE" shall have the meaning set forth in Section
2.18(b).
"TAXES" shall have the meaning set forth in Section 2.18(a).
"TERM LOAN" shall have the meaning set forth in Section 2.2(a).
"TERM LOAN COMMITMENT" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan in a principal
amount equal to such Lender's Term Loan Commitment Percentage of the Term Loan
Committed Amount (and for purposes of making determinations of Required Lenders
hereunder after the Closing Date, the principal amount outstanding on the Term
Loan).
"TERM LOAN COMMITMENT PERCENTAGE" shall mean, for any Lender, the
percentage identified as its Term Loan Commitment Percentage on SCHEDULE 2.1(a),
as such percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 9.6.
"TERM LOAN COMMITTED AMOUNT" shall have the meaning set forth in Section
2.2(a).
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"TERM LOAN MATURITY DATE" shall mean May 21, 2009.
"TERM NOTE" or "TERM NOTES" shall mean the promissory notes of the Borrower
in favor of each of the Lenders evidencing the portion of the Term Loan provided
pursuant to Section 2.2(d), individually or collectively, as appropriate, as
such promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"TERMINATION DATE" shall mean the date upon which all Credit Party
Obligations have been paid in full in cash (other than indemnification
obligations with respect to which no claim as been asserted, which shall survive
the termination of the Credit Documents), all Commitments have been terminated,
and all Letters of Credit have expired undrawn or been terminated.
"TITLE INSURANCE COMPANY" shall have the meaning set forth in Section
4.1(f)(iii).
"TRADEMARK LICENSE" shall means any agreement, written or oral, providing
for the grant by or to a Credit Party of any right to use any Trademark,
including, without limitation, any thereof referred to in SCHEDULE 3.16.
"TRADEMARKS" shall mean (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade dress and
service marks, logos and other source or business identifiers, and the goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in SCHEDULE 3.16, and (b) all renewals
thereof, including, without limitation, any thereof referred to in SCHEDULE
3.16.
"TRANCHE" shall mean the collective reference to LIBOR Rate Loans whose
Interest Periods begin and end on the same day. A Tranche may sometimes be
referred to as a "LIBOR Tranche".
"TRANSFER EFFECTIVE DATE" shall have the meaning set forth in each
Commitment Transfer Supplement.
"TYPE" shall mean, as to any Loan, its nature as an Alternate Base Rate
Loan or LIBOR Rate Loan, as the case may be.
"VOTING STOCK" shall mean, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
may be or have been suspended by the happening of such a contingency.
"WACHOVIA" shall mean Wachovia Bank, National Association, together with
its successors and/or assigns.
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"WORKS" shall mean all works which are subject to copyright protection
pursuant to Title 17 of the United States Code.
Section 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes or
other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as
a whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
Section 1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein shall
be interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent with the most recent audited
consolidated financial statements of the Parent delivered to the Lenders;
PROVIDED that, if the Borrower notifies the Administrative Agent that it wishes
to amend any covenant in Section 5.9 to eliminate the effect of any change in
GAAP on the operation of such covenant (or if the Administrative Agent notifies
the Borrower that the Required Lenders wish to amend Section 5.9 for such
purpose), then the Borrower's compliance with such covenant shall be determined
on the basis of GAAP in effect immediately before the relevant change in GAAP
became effective, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to the Borrower and the Required Lenders.
The Borrower shall deliver to the Administrative Agent and each Lender at
the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
Notwithstanding the above, the parties hereto acknowledge and agree that,
for purposes of all calculations made in determining compliance for any
applicable period with the financial covenants set forth in Section 5.9
(including without limitation for purposes of the definition of "Pro Forma
Basis" set forth in Section 1.1), after consummation of any Permitted
Acquisition, (A) income statement items and other balance sheet items (whether
positive or negative) attributable to the Target acquired in such transaction
shall be included in such calculations to
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the extent relating to such applicable period, and (B) Indebtedness of a Target
which is retired in connection with a Permitted Acquisition shall be excluded
from such calculations and deemed to have been retired as of the first day of
such applicable period.
ARTICLE II
THE LOANS; AMOUNT AND TERMS
Section 2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. During the Commitment Period, subject
to the terms and conditions hereof, each Revolving Lender severally, but
not jointly, agrees to make revolving credit loans ("REVOLVING LOANS") to
the Borrower from time to time in an aggregate principal amount of up to
FORTY MILLION DOLLARS ($40,000,000) (as such aggregate maximum amount may
be reduced from time to time as provided in Section 2.7, the "AGGREGATE
REVOLVING COMMITTED AMOUNT") for the purposes hereinafter set forth;
PROVIDED, HOWEVER, that (i) with regard to each Revolving Lender
individually, the sum of such Revolving Lender's Revolving Commitment
Percentage of outstanding Revolving Loans PLUS such Revolving Lender's
Revolving Commitment Percentage of outstanding Swingline Loans PLUS such
Revolving Lender's LOC Commitment Percentage of LOC Obligations shall not
exceed such Lender's Revolving Committed Amount and (ii) with regard to the
Revolving Lenders collectively, the sum of the outstanding Revolving Loans
PLUS outstanding Swingline Loans PLUS LOC Obligations shall not exceed the
Aggregate Revolving Committed Amount. No Revolving Loans shall be borrowed
on the Closing Date. Revolving Loans may consist of Alternate Base Rate
Loans or LIBOR Rate Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof; PROVIDED, HOWEVER, Revolving Loans made on any of the three
Business Days following the Closing Date may only consist of Alternate Base
Rate Loans unless the Borrower executes a funding indemnity letter in form
and substance satisfactory to the Administrative Agent. LIBOR Rate Loans
shall be made by each Revolving Lender at its LIBOR Lending Office and
Alternate Base Rate Loans at its Domestic Lending Office.
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone notice
promptly confirmed in writing which confirmation may be by fax) to
the Administrative Agent not later than 12:00 Noon (Charlotte,
North Carolina time) on the date of the requested borrowing in the
case of Alternate Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of LIBOR
Rate Loans. Each such request for borrowing shall be irrevocable
and shall specify (A) that a Revolving Loan is requested, (B) the
date of the requested borrowing (which shall be a Business Day),
(C) the aggregate principal amount to be borrowed, (D) whether the
borrowing shall be comprised of Alternate Base Rate
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Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate
Loans are requested, the Interest Period(s) therefor. A form of
Notice of Borrowing (a "NOTICE OF BORROWING") is attached as
SCHEDULE 2.1(b)(i). If the Borrower shall fail to specify in any
such Notice of Borrowing (I) an applicable Interest Period in the
case of a LIBOR Rate Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (II) the type of
Revolving Loan requested, then such notice shall be deemed to be a
request for an Alternate Base Rate Loan hereunder. The
Administrative Agent shall give notice to each Revolving Lender
promptly upon receipt of each Notice of Borrowing, the contents
thereof and each such Revolving Lender's share thereof.
(ii) MINIMUM AMOUNTS. Each Revolving Loan (A) that is an
Alternate Base Rate Loan shall be in a minimum aggregate amount of
$500,000 and in integral multiples of $100,000 in excess thereof
(or the remaining amount of the Aggregate Revolving Committed
Amount, if less) and (B) that is a LIBOR Rate Loan shall be in a
minimum aggregate amount of $1,000,000 and in integral multiples of
$500,000 in excess thereof, except for Mandatory Borrowings under
Section 2.3(e) or 2.4(b)(ii).
(iii) ADVANCES. Each Revolving Lender will make its
Revolving Commitment Percentage of each Revolving Loan borrowing
available to the Administrative Agent for the account of the
Borrower at the office of the Administrative Agent specified in
Section 9.2, or at such other office as the Administrative Agent
may designate in writing, by 2:00 P.M. (Charlotte, North Carolina
time) on the date specified in the applicable Notice of Borrowing
in Dollars and in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent by crediting the account of the
Borrower on the books of such office with the aggregate of the
amounts made available to the Administrative Agent by the Revolving
Lenders and in like funds as received by the Administrative Agent.
(c) REPAYMENT. The principal amount of all Revolving Loans shall
be due and payable in full on the Revolving Commitment Termination Date,
unless accelerated sooner pursuant to Section 7.2.
(d) INTEREST. Subject to the provisions of Section 2.9,
Revolving Loans shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as
Revolving Loans shall be comprised of Alternate Base Rate Loans,
each such Alternate Base Rate Loan shall bear interest at a per
annum rate equal to the sum of the Alternate Base Rate PLUS the
Applicable Percentage; and
(ii) LIBOR RATE LOANS. During such periods as Revolving
Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
Loan shall bear
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interest at a per annum rate equal to the sum of the LIBOR Rate
PLUS the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) REVOLVING NOTES. Each Revolving Lender's Revolving Committed
Amount shall be evidenced by a duly executed promissory note of the
Borrower to such Revolving Lender in substantially the form of SCHEDULE
2.1(e).
Section 2.2 TERM LOAN FACILITY.
(a) TERM LOAN. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each
Lender severally, but not jointly, agrees to make available to the Borrower
on the Closing Date such Lender's Term Loan Commitment Percentage of a term
loan in Dollars (the "TERM LOAN") in the aggregate principal amount of ONE
HUNDRED THIRTY MILLION DOLLARS ($130,000,000) (the "TERM LOAN COMMITTED
AMOUNT") for the purposes set forth in Section 3.11. The Term Loan may
consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination
thereof, as the Borrower may request; PROVIDED, HOWEVER, the Term Loan made
on the Closing Date may only consist of Alternate Base Rate Loans unless
the Borrower executes a funding indemnity letter in form and substance
satisfactory to the Administrative Agent. Amounts repaid on the Term Loan
may not be reborrowed.
(b) REPAYMENT OF TERM LOAN. The principal amount of the Term
Loan shall be repaid in twenty-four (24) consecutive quarterly installments
as follows:
<Table>
<Caption>
Principal Amortization Term Loan Principal
Payment Date Amortization Payment
-----------------------------------------------------------
September 30, 2003 $ 325,000
December 31, 2003 $ 325,000
March 31, 2004 $ 325,000
June 30, 2004 $ 325,000
September 30, 2004 $ 325,000
December 31, 2004 $ 325,000
March 31, 2005 $ 325,000
June 30, 2005 $ 325,000
September 30, 2005 $ 325,000
December 31, 2005 $ 325,000
</Table>
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<Table>
<Caption>
Principal Amortization Term Loan Principal
Payment Date Amortization Payment
-----------------------------------------------------------
March 31, 2006 $ 325,000
June 30, 2006 $ 325,000
September 30, 2006 $ 325,000
December 31, 2006 $ 325,000
March 31, 2007 $ 325,000
June 30, 2007 $ 325,000
September 30, 2007 $ 325,000
December 31, 2007 $ 325,000
March 31, 2008 $ 325,000
June 30, 2008 $ 325,000
September 30, 2008 $ 30,875,000
December 31, 2008 $ 30,875,000
March 31, 2009 $ 30,875,000
Term Loan Maturity Date $ 30,875,000
</Table>
(c) INTEREST ON THE TERM LOAN. Subject to the provisions of
Section 2.9, the Term Loan shall bear interest as follows:
(i) ALTERNATE BASE RATE LOANS. During such periods as
the Term Loan shall be comprised of Alternate Base Rate Loans, each
such Alternate Base Rate Loan shall bear interest at a per annum
rate equal to the sum of the Alternate Base Rate PLUS the
Applicable Percentage; and
(ii) LIBOR RATE LOANS. During such periods as the Term
Loan shall be comprised of LIBOR Rate Loans, each such LIBOR Rate
Loan shall bear interest at a per annum rate equal to the sum of
the LIBOR Rate PLUS the Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each
Interest Payment Date.
(d) TERM NOTES. Each Lender's Term Loan Commitment Percentage of
the Term Loan Committed Amount shall be evidenced by a duly executed
promissory note of the Borrower to such Lender in substantially the form of
SCHEDULE 2.2(d).
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Section 2.3 LETTER OF CREDIT SUBFACILITY.
(a) ISSUANCE. Subject to the terms and conditions hereof and of
the LOC Documents, if any, and any other terms and conditions which the
Issuing Lender may reasonably require, during the Commitment Period the
Issuing Lender shall issue, and the Revolving Lenders shall participate in,
Letters of Credit for the account of the Borrower from time to time upon
request in a form acceptable to the Issuing Lender; PROVIDED, HOWEVER, that
(i) the aggregate amount of LOC Obligations shall not at any time exceed
TWO MILLION DOLLARS ($2,000,000) (the "LOC COMMITTED AMOUNT"), (ii) the sum
of outstanding Revolving Loans PLUS outstanding Swingline Loans PLUS LOC
Obligations shall not at any time exceed the Aggregate Revolving Committed
Amount, (iii) all Letters of Credit shall be denominated in U.S. Dollars
and (iv) Letters of Credit shall be issued for lawful corporate purposes
(subject to Section 3.11) and may be issued as standby letters of credit,
including in connection with workers' compensation and other insurance
programs, and trade letters of credit. Except as otherwise expressly agreed
upon by all the Revolving Lenders, no Letter of Credit shall have an
original expiry date more than twelve (12) months from the date of
issuance; PROVIDED, HOWEVER, so long as no Default or Event of Default has
occurred and is continuing and subject to the other terms and conditions to
the issuance of Letters of Credit hereunder, the expiry dates of Letters of
Credit may be extended annually or periodically from time to time on the
request of the Borrower or by operation of the terms of the applicable
Letter of Credit to a date not more than twelve (12) months from the date
of extension; PROVIDED, FURTHER, that no Letter of Credit, as originally
issued or as extended, shall have an expiry date extending beyond the date
which is five (5) Business Days prior to the Revolving Commitment
Termination Date. Each Letter of Credit shall comply with the related LOC
Documents. The issuance and expiry date of each Letter of Credit shall be a
Business Day. Any Letters of Credit issued hereunder shall be in a minimum
original face amount of $50,000 or such lesser amount as the Issuing Lender
may agree.
(b) NOTICE AND REPORTS. The request for the issuance of a Letter
of Credit shall be submitted to the Issuing Lender at least five (5)
Business Days prior to the requested date of issuance. The Issuing Lender
will promptly upon request provide to the Administrative Agent for
dissemination to the Revolving Lenders a detailed report specifying the
Letters of Credit which are then issued and outstanding and any activity
with respect thereto which may have occurred since the date of any prior
report, and including therein, among other things, the account party, the
beneficiary, the face amount, expiry date as well as any payments or
expirations which may have occurred; PROVIDED that, to the extent the
Issuing Lender with respect to a Letter of Credit is a Lender other than
Wachovia, the Issuing Lender will provide to the Administrative Agent
prompt notice of any payment with respect to such Letter of Credit or the
expiration or termination of such Letter of Credit. The Issuing Lender will
further provide to the Administrative Agent promptly upon request copies of
the Letters of Credit; PROVIDED that, to the extent the Issuing Lender with
respect to a Letter of Credit is a Lender other than Wachovia, the Borrower
will provide to the Administrative Agent a copy of such Letter of Credit
promptly after the issuance thereof. The Issuing Lender will provide to
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the Administrative Agent promptly upon request a summary report of the
nature and extent of LOC Obligations then outstanding.
(c) PARTICIPATIONS. Each Revolving Lender upon issuance of a
Letter of Credit shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in each
case in an amount equal to its LOC Commitment Percentage of the obligations
under each such Letter of Credit and shall absolutely, unconditionally and
irrevocably assume, as primary obligor and not as surety, and be obligated
to pay to the Issuing Lender therefor and discharge when due, its LOC
Commitment Percentage of the obligations arising under each 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 LOC
Document, each such Revolving Lender shall pay to the Issuing Lender its
LOC Commitment Percentage of such unreimbursed drawing in same day funds on
the day of notification by the Issuing Lender of an unreimbursed drawing
pursuant to the provisions of subsection (d) hereof. The obligation of each
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.
(d) REIMBURSEMENT. In the event of any drawing under any Letter
of Credit, the Issuing Lender will promptly notify the Borrower and the
Administrative Agent. The Borrower shall reimburse the Issuing Lender on
the day of drawing under any Letter of Credit (with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds as
provided herein or in the LOC Documents. If the Borrower shall fail to
reimburse the Issuing Lender as provided herein (including through an
automatic borrowing of Revolving Loans pursuant to the immediately
succeeding sentence), the unreimbursed amount of such drawing shall bear
interest at a per annum rate equal to the sum of the Alternate Base Rate
plus the Applicable Percentage for Revolving Loans that are Alternate Base
Rate Loans plus two percent (2%). Unless the Borrower shall immediately
notify the Issuing Lender and the Administrative Agent of its intent to
otherwise reimburse the Issuing Lender, the Borrower shall be deemed to
have requested a Revolving Loan in the amount of the drawing as provided in
subsection (e) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or defense to payment
the Borrower may claim or have against the Issuing Lender, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit
drawn upon or any other Person, including without limitation any defense
based on any failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit.
The Issuing Lender will promptly notify the 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
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available funds, the amount of such Revolving Lender's LOC 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 (2)
Business Days of the date of drawing, the Federal Funds Effective Rate and
thereafter at a rate equal to the Alternate Base Rate. Each 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 Agreement or the Commitments
hereunder, the existence of a Default or Event of Default or the
acceleration of the Credit Party Obligations hereunder and shall be made
without any offset, abatement, withholding or reduction whatsoever.
(e) REPAYMENT WITH REVOLVING LOANS. On any day on which the
Borrower shall have requested, or been deemed to have requested, a
Revolving Loan to reimburse a drawing under a Letter of Credit, the
Administrative Agent shall give notice to the Revolving Lenders that a
Revolving Loan has been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving Loan borrowing
comprised entirely of Alternate Base Rate Loans (each such borrowing, a
"MANDATORY BORROWING") shall be immediately made (without giving effect to
any termination of the Commitments pursuant to Section 7.2) PRO RATA based
on each Revolving Lender's respective Revolving Commitment Percentage
(determined before giving effect to any termination of the Commitments
pursuant to Section 7.2) and the proceeds thereof shall be paid directly to
the Issuing Lender for application to the respective LOC Obligations. Each
Revolving Lender hereby irrevocably agrees to make such Revolving Loans
promptly upon any such request or deemed request on account of each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date NOTWITHSTANDING (i) the amount
of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (ii) whether
any conditions specified in Section 4.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure for any such
request or deemed request for Revolving Loan to be made by the time
otherwise required in Section 2.1(b), (v) the date of such Mandatory
Borrowing, or (vi) any reduction in the Aggregate Revolving Committed
Amount after any such Letter of Credit may have been drawn upon. In the
event that any Mandatory Borrowing cannot for any reason be made on the
date otherwise required above (including, without limitation, as a result
of the commencement of a proceeding under the Bankruptcy Code), then each
such Revolving Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and prior
to such purchase) its
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Participation Interests in the LOC Obligations; PROVIDED, FURTHER, that in
the event any Revolving Lender shall fail to fund its Participation
Interest on the day the Mandatory Borrowing would otherwise have occurred,
then the amount of such Revolving Lender's unfunded Participation Interest
therein shall bear interest payable by such Revolving Lender to the Issuing
Lender upon demand, at the rate equal to, if paid within two (2) Business
Days of such date, the Federal Funds Effective Rate, and thereafter at a
rate equal to the Alternate Base Rate.
(f) MODIFICATION, EXTENSION. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit
shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(g) UNIFORM CUSTOMS AND PRACTICES. The Issuing Lender shall have
the Letters of Credit be subject to The Uniform Customs and Practice for
Documentary Credits, as published as of the date of issue by the
International Chamber of Commerce (the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part thereof.
Section 2.4 SWINGLINE LOAN SUBFACILITY.
(a) SWINGLINE COMMITMENT. During the Commitment Period, subject
to the terms and conditions hereof, the Swingline Lender, in its individual
capacity, agrees to make certain revolving credit loans to the Borrower
(each a "SWINGLINE LOAN" and, collectively, the "SWINGLINE LOANS") for the
purposes hereinafter set forth; PROVIDED, HOWEVER, (i) the aggregate amount
of Swingline Loans outstanding at any time shall not exceed FIVE MILLION
DOLLARS ($5,000,000) (the "SWINGLINE COMMITTED AMOUNT"), and (ii) the sum
of the outstanding Revolving Loans PLUS outstanding Swingline Loans PLUS
LOC Obligations shall not exceed the Aggregate Revolving Committed Amount.
Swingline Loans hereunder may be repaid and reborrowed in accordance with
the provisions hereof.
(b) SWINGLINE LOAN BORROWINGS.
(i) NOTICE OF BORROWING AND DISBURSEMENT. The Swingline Lender
will make Swingline Loans available to the Borrower on any Business Day
upon request made by the Borrower not later than 2:00 P.M. (Charlotte,
North Carolina time) on such Business Day. A notice of request for
Swingline Loan borrowing shall be made in the form of SCHEDULE 2.1(b)(i)
with appropriate modifications. Swingline Loan borrowings hereunder shall
be made in minimum amounts of $100,000 and in integral amounts of $50,000
in excess thereof.
(ii) REPAYMENT OF SWINGLINE LOANS. Each Swingline Loan borrowing
shall be due and payable on the Revolving Commitment Termination Date. The
Swingline Lender may, at any time, in its sole discretion, by written
notice to the Borrower and the Administrative Agent, demand repayment of
its Swingline Loans by way of a Revolving Loan borrowing, in which case the
Borrower shall be deemed to have requested a
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Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans in
the amount of such Swingline Loans; PROVIDED, HOWEVER, that, in the
following circumstances, any such demand shall also be deemed to have been
given one Business Day prior to each of (i) the Revolving Commitment
Termination Date, (ii) the occurrence of any Event of Default described in
Section 7.1(e), (iii) upon acceleration of the Credit Party Obligations
hereunder, whether on account of an Event of Default described in Section
7.1(e) or any other Event of Default, and (iv) the exercise of remedies in
accordance with the provisions of Section 7.2 hereof (each such Revolving
Loan borrowing made on account of any such deemed request therefor as
provided herein being hereinafter referred to as "MANDATORY BORROWING").
Each Revolving Lender hereby irrevocably agrees to make such Revolving
Loans promptly upon any such request or deemed request on account of each
Mandatory Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date NOTWITHSTANDING (I) the amount
of Mandatory Borrowing may not comply with the minimum amount for
borrowings of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 4.2 are then satisfied, (III) whether a
Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loans to be made by the time
otherwise required in Section 2.1(b)(i), (V) the date of such Mandatory
Borrowing, or (VI) any reduction in the Revolving Committed Amount or
termination of the Revolving Commitments immediately prior to such
Mandatory Borrowing or contemporaneously therewith. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code), then each
Revolving Lender hereby agrees that it shall forthwith purchase (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Borrower on or after such date and prior
to such purchase) from the Swingline Lender such participations in the
outstanding Swingline Loans as shall be necessary to cause each such
Revolving Lender to share in such Swingline Loans ratably based upon its
respective Revolving Commitment Percentage (determined before giving effect
to any termination of the Commitments pursuant to Section 7.2); PROVIDED
that (A) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the respective
participation is purchased, and (B) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing
Revolving Lender shall be required to pay to the Swingline Lender interest
on the principal amount of such participation purchased for each day from
and including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such participation,
at the rate equal to, if paid within two (2) Business Days of the date of
the Mandatory Borrowing, the Federal Funds Effective Rate, and thereafter
at a rate equal to the Alternate Base Rate.
(c) INTEREST ON SWINGLINE LOANS. Subject to the provisions of
Section 2.9, Swingline Loans shall bear interest at a per annum rate equal
to the Alternate Base Rate PLUS the Applicable Percentage for Revolving
Loans that are Alternate Base Rate Loans. Interest on Swingline Loans shall
be payable in arrears on each Interest Payment Date.
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(d) SWINGLINE NOTE. The Swingline Loans shall be evidenced by a
duly executed promissory note of the Borrower to the Swingline Lender in
the original amount of the Swingline Committed Amount and substantially in
the form of SCHEDULE 2.4(d).
Section 2.5 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 Lenders holding Revolving Commitments a commitment
fee (the "COMMITMENT FEE") in an amount equal to the Applicable Percentage
per annum on the average daily unused amount of the Aggregate Revolving
Committed Amount. For purposes of computation of the Commitment Fee, LOC
Obligations and Swingline Loans shall be considered usage of the Aggregate
Revolving Committed Amount. The Commitment Fee shall be payable quarterly
in arrears on each Interest Payment Date.
(b) LETTER OF CREDIT FEES. In consideration of the LOC
Commitments, the Borrower agrees to pay to the Issuing Lender a fee (the
"LETTER OF CREDIT FEE") equal to the Applicable Percentage per annum on the
average daily maximum amount available to be drawn under each Letter of
Credit from the date of issuance to the date of expiration. In addition to
such Letter of Credit Fee, the Issuing Lender may charge, and retain for
its own account without sharing by the other Lenders, an additional facing
fee of one-fourth of one percent (0.25%) per annum on the average daily
maximum amount available to be drawn under each such Letter of Credit
issued by it. The Issuing Lender shall promptly pay over to the
Administrative Agent for the ratable benefit of the Revolving Lenders
(including the Issuing Lender) the Letter of Credit Fee. The Letter of
Credit Fee shall be payable quarterly in arrears on each Interest Payment
Date.
(c) ISSUING LENDER FEES. In addition to the Letter of Credit
Fees payable pursuant to subsection (b) hereof, the Borrower shall pay to
the Issuing Lender for its own account without sharing by the other Lenders
the reasonable and customary charges from time to time of the Issuing
Lender with respect to the amendment, transfer, administration,
cancellation and conversion of, and drawings under, such Letters of Credit
(collectively, the "ISSUING LENDER FEES").
(d) ADMINISTRATIVE FEE. The Borrower agrees to pay to the
Administrative Agent the annual administrative fee as described in the Fee
Letter.
Section 2.6 COMMITMENT REDUCTIONS.
(a) VOLUNTARY REDUCTIONS. The Borrower shall have the right to
terminate or permanently reduce the unused portion of the Aggregate
Revolving Committed Amount at any time or from time to time upon not less
than five Business Days' prior notice to the Administrative Agent (which
shall notify the Lenders thereof as soon as practicable) of each such
termination or reduction, which notice shall specify the effective date
thereof and the amount of any such reduction which shall be in a minimum
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and
shall be irrevocable
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and effective upon receipt by the Administrative Agent, PROVIDED that no
such reduction or termination shall be permitted if after giving effect
thereto, and to any prepayments of the Loans made on the effective date
thereof, the sum of the outstanding Revolving Loans PLUS outstanding
Swingline Loans PLUS LOC Obligations would exceed the Aggregate Revolving
Committed Amount.
(b) MANDATORY REDUCTIONS. On any date that the Revolving Loans
are required to be prepaid pursuant to the terms of Section 2.7(b) (ii),
(iii) and (iv), the Aggregate Revolving Committed Amount shall be
automatically permanently reduced by the amount of such required prepayment
and/or reduction.
(c) REVOLVING COMMITMENT TERMINATION DATE. The Revolving
Commitment, the Swingline Commitment and the LOC Commitment shall
automatically terminate on the Revolving Commitment Termination Date.
Section 2.7 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; PROVIDED, HOWEVER, that
each partial prepayment of (i) that portion of the Term Loan that consists
of Alternate Base Rate Loans shall be in a minimum principal amount of
$500,000 and integral multiples of $100,000 in excess thereof, (ii) that
portion of the Term Loan that consists of LIBOR Rate Loans shall be in a
minimum principal amount of $1,000,000 and integral multiples of $500,000
in excess thereof and (iii) each partial prepayment of a Swingline Loan
shall be in a minimum principal amount of $100,000 and integral multiples
of $50,000 in excess thereof. The Borrower shall give three Business Days'
irrevocable notice in the case of LIBOR Rate Loans and one Business Day's
irrevocable notice in the case of Alternate Base Rate Loans, to the
Administrative Agent (which shall notify the Lenders thereof as soon as
practicable). Amounts prepaid under this Section 2.7(a) shall be applied to
the outstanding Revolving Loans or the Term Loan as the Borrower may elect;
provided, that each voluntary prepayment of the Term Loan shall be applied
(1) first, to the Term Loan amortization payments set forth in Section
2.2(b) that are scheduled to occur in the following 12 months in direct
order of maturity, (2) second, to the remaining Term Loan amortization
payments set forth in Section 2.2(b) in inverse order of maturity until
paid in full; PROVIDED, FURTHER, that each Lender shall receive its pro
rata share (except with respect to prepayments of Swingline Loans) of any
such prepayment based on its Revolving Commitment Percentage or Term Loan
Commitment Percentage, as applicable. All prepayments under this Section
2.7(a) shall be subject to Section 2.17, but otherwise without premium or
penalty. Interest on the principal amount prepaid shall be payable on the
next occurring Interest Payment Date that would have occurred had such
Loans not been prepaid or, at the request of the Administrative Agent,
interest on the principal amount prepaid shall be payable on any date that
a prepayment is made hereunder through the date of prepayment. Amounts
prepaid on the Revolving Loans and the Swingline Loans may be reborrowed in
accordance with the terms hereof. Amounts prepaid on the Term Loan may not
be reborrowed.
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(b) MANDATORY PREPAYMENTS.
(i) AGGREGATE REVOLVING COMMITTED AMOUNT. If at any time
after the Closing Date, the sum of the outstanding Revolving Loans
PLUS outstanding Swingline Loans PLUS LOC Obligations shall exceed
the Aggregate Revolving Committed Amount, the Borrower immediately
shall prepay the Loans and cash collateralize the LOC Obligations
in an amount sufficient to eliminate such excess (such prepayment
to be applied as set forth in clause (vi) below).
(ii) ASSET DISPOSITIONS. Promptly following any Asset
Disposition in excess of $1,000,000 in the aggregate in any fiscal
year, the Borrower shall prepay the Loans and cash collateralize
the LOC Obligations in an aggregate amount equal to the Net Cash
Proceeds derived from such Asset Disposition (such prepayment to be
applied as set forth in clause (vi) below); PROVIDED, HOWEVER, that
such Net Cash Proceeds shall not be required to be so applied to
the extent the Borrower delivers to the Administrative Agent
promptly following such Asset Disposition a certificate stating
that it intends to use such Net Cash Proceeds to acquire fixed or
capital assets used in the Credit Parties' business within 180 days
(or, if contractually obligated otherwise, a longer period, but in
any event not to exceed 365 days) of the receipt of such Net Cash
Proceeds, it being expressly agreed that any Net Cash Proceeds not
so reinvested shall be applied to prepay the Loans and cash
collateralize the LOC Obligations immediately thereafter (such
prepayment to be applied as set forth in clause (vi) below).
(iii) ISSUANCES. Immediately upon receipt by any Credit
Party of proceeds from (A) any Debt Issuance, the Borrower shall
prepay the Loans and cash collateralize the LOC Obligations in an
aggregate amount equal to one hundred percent (100%) of the Net
Cash Proceeds of such Debt Issuance to the Lenders (such prepayment
to be applied as set forth in clause (vi) below) or (B) any Equity
Issuance, the Borrower shall prepay the Loans and cash
collateralize the LOC Obligations in an aggregate amount equal to
one hundred percent (100%) of the Net Cash Proceeds of such Equity
Issuance (such prepayment to be applied as set forth in clause (vi)
below); PROVIDED, HOWEVER, if such Equity Issuance is a Qualifying
IPO and if after giving effect to such Qualifying IPO on a pro
forma basis (taking into account any repayments of Indebtedness in
connection with such Qualifying IPO) (1) the pro forma Leverage
Ratio is greater than 3.0 to 1.0 at such time, then the Borrower
shall prepay the Loans and cash collateralize the LOC Obligations
in an aggregate amount equal to fifty percent (50%) of the Net Cash
Proceeds of such Equity Issuance (such prepayment to be applied as
set forth in clause (vi) below) or (2) the pro forma Leverage Ratio
is less than or equal to 3.0 to 1.0 at such time, then the Borrower
shall not be required to prepay the Loans and cash collateralize
the LOC Obligations with the Net Cash Proceeds of such Equity
Issuance.
(iv) RECOVERY EVENT. To the extent of cash proceeds
received in connection with a Recovery Event in excess of
$1,000,000 in the aggregate in any
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fiscal year which are not applied toward the repair, replacement or
relocation of the property subject to such Recovery Event within
180 days (or, if contractually obligated otherwise, a longer
period, but in any event not to exceed 365 days) of the receipt of
such cash proceeds, immediately following the expiration of such
180 day or longer period, the Borrower shall prepay the Loans and
cash collateralize the LOC Obligations in an aggregate amount equal
to one hundred percent (100%) of such cash proceeds (such
prepayment to be applied as set forth in clause (vi) below).
(v) EXCESS CASH FLOW. Within 90 days after the end of
each fiscal year (commencing with the fiscal year ending December
31, 2004), the Borrower shall prepay the Loans and cash
collateralize the LOC Obligations in an amount equal to 75% of the
Excess Cash Flow earned during such fiscal year (such prepayments
to be applied as set forth in clause (vi) below); PROVIDED, HOWEVER
that to the extent that the Leverage Ratio was less than or equal
to 3.0 to 1.0 as of the end of any fiscal year, then the Borrower
shall prepay the Loans and cash collateralize the LOC Obligations
in an amount equal to 50% of the Excess Cash Flow earned during
such fiscal year.
(vi) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to this Section 2.7(b) shall be
applied as follows: (A) with respect to all amounts prepaid
pursuant to Section 2.7(b)(i), to the Revolving Loans and then
(after all Revolving Loans have been repaid) to a cash collateral
account in respect of LOC Obligations, (B) with respect to all
amounts prepaid pursuant to Sections 2.8(b)(ii) through (v), (1)
first, to the Term Loan amortization payments set forth in Section
2.2(b) that are scheduled to occur in the following 12 months in
direct order of maturity, (2) second, to the remaining Term Loan
amortization payments set forth in Section 2.2(b) in inverse order
of maturity until paid in full and (3) third, to the Revolving
Loans with a corresponding permanent pro rata reduction (other than
with respect to amounts prepaid pursuant to Section 2.7(b)(v)) of
the Revolving Commitments and (after all Revolving Loans have been
repaid) to a cash collateral account in respect of LOC Obligations.
Within the parameters of the applications set forth above,
prepayments shall be applied first to Alternate Base Rate Loans and
then to LIBOR Rate Loans in direct order of Interest Period
maturities. Each Lender shall receive its pro rata share (except
with respect to prepayments of Swingline Loans) of any such
prepayment based on its Revolving Commitment Percentage or Term
Loan Commitment Percentage, as applicable. All prepayments under
this Section 2.7(b) shall be subject to Section 2.17 and be
accompanied by interest on the principal amount prepaid through the
date of prepayment.
(c) HEDGING OBLIGATIONS UNAFFECTED. Any prepayment made pursuant
to this Section 2.7 shall not affect the Borrower's obligation to continue
to make payments under any Hedging Agreement, which shall remain in full
force and effect notwithstanding such prepayment, subject to the terms of
such Hedging Agreement.
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Section 2.8 MINIMUM PRINCIPAL AMOUNT OF TRANCHES; LENDING OFFICES.
(a) All borrowings, payments and prepayments in respect of
Revolving Loans and the Term Loan shall be in such amounts and be made
pursuant to such elections so that after giving effect thereto the
aggregate principal amount of the Revolving Loans and the Term Loan
comprising any borrowing, payment or prepayment shall be (i) with respect
to LIBOR Rate Loans, $1,000,000 or a whole multiple of $500,000 in excess
thereof and (ii) with respect to Alternate Base Rate Loans, $500,000 or a
whole multiple of $100,000 in excess thereof.
(b) LIBOR Rate Loans shall be made by each Lender at its LIBOR
Lending Office and Alternate Base Rate Loans at its Domestic Lending
Office.
Section 2.9 DEFAULT RATE AND PAYMENT DATES.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder (including, without limitation, the fees
payable pursuant to Section 2.5) or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Alternate Base Rate PLUS the
Applicable Percentage then in effect with respect to Alternate Base Rate Loans
PLUS 2%).
Section 2.10 CONVERSION OPTIONS.
(a) The Borrower may, in the case of Revolving Loans and the
Term Loan, elect from time to time to convert Alternate Base Rate Loans to
LIBOR Rate Loans, by giving the Administrative Agent at least three
Business Days' prior irrevocable written notice of such election. A form of
Notice of Conversion/Extension (a "Notice of Conversion/Extension") is
attached as SCHEDULE 2.10. If the date upon which an Alternate Base Rate
Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then
such conversion shall be made on the next succeeding Business Day and
during the period from such last day of an Interest Period to such
succeeding Business Day such Loan shall bear interest as if it were an
Alternate Base Rate Loan. All or any part of outstanding Alternate Base
Rate Loans may be converted as provided herein, PROVIDED that (i) no Loan
may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing and (ii) partial conversions shall
be in an aggregate principal amount of (A) in the case of Alternate Base
Rate Loans $500,000 or a whole multiple of $100,000 in excess thereof and
(B) in the case of LIBOR Rate Loans, $1,000,000 or a whole multiple of
$500,000 in excess thereof.
(b) Any LIBOR Rate Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the notice provisions contained in Section 2.10(a); PROVIDED,
that no LIBOR Rate Loan may be continued as such when any Default or Event
of Default has occurred and is continuing, in which case such Loan shall be
automatically converted to an Alternate Base Rate Loan
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at the end of the applicable Interest Period with respect thereto. If the
Borrower shall fail to give timely notice of an election to continue a
LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted
hereunder, such LIBOR Rate Loans shall be automatically converted to
Alternate Base Rate Loans at the end of the applicable Interest Period with
respect thereto.
Section 2.11 COMPUTATION OF INTEREST AND FEES.
(a) Interest payable hereunder with respect to Alternate Base
Rate Loans based on the Prime Rate shall be calculated on the basis of a
year of 365 days (or 366 days, as applicable) for the actual days elapsed.
All other fees, interest and all other amounts payable hereunder shall be
calculated on the basis of a 360 day year for the actual days elapsed. The
Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of each determination of a LIBOR Rate on the Business Day of
the determination thereof. Any change in the interest rate on a Loan
resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change in the
Alternate Base Rate shall become effective. The Administrative Agent shall
as soon as practicable notify the Borrower and the Lenders of the effective
date and the amount of each such change.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error.
The Administrative Agent shall, at the request of the Borrower, deliver to
the Borrower a statement showing the computations used by the
Administrative Agent in determining any interest rate.
(c) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law from
time to time in effect. All agreements between the Lenders and the Credit
Parties are hereby limited by the provisions of this paragraph which shall
override and control all such agreements, whether now existing or hereafter
arising and whether written or oral. In no way, nor in any event or
contingency (including but not limited to prepayment or acceleration of the
maturity of any obligation), shall the interest taken, reserved, contracted
for, charged, or received under this Credit Agreement, under the Notes or
otherwise, exceed the maximum nonusurious amount permissible under
applicable law. If, from any possible construction of any of the Credit
Documents or any other document, interest would otherwise be payable in
excess of the maximum nonusurious amount, any such construction shall be
subject to the provisions of this paragraph and such interest shall be
automatically reduced to the maximum nonusurious amount permitted under
applicable law, without the necessity of execution of any amendment or new
document. If any Lender shall ever receive anything of value which is
characterized as interest on the Loans under applicable law and which
would, apart from this provision, be in excess of the maximum nonusurious
amount, an amount equal to the amount which would have
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been excessive interest shall, without penalty, be applied to the reduction
of the principal amount owing on the Loans and not to the payment of
interest, or refunded to the Borrower or the other payor thereof if and to
the extent such amount which would have been excessive exceeds such unpaid
principal amount of the Loans. The right to demand payment of the Loans or
any other Indebtedness evidenced by any of the Credit Documents does not
include the right to receive any interest which has not otherwise accrued
on the date of such demand, and the Lenders do not intend to charge or
receive any unearned interest in the event of such demand. All interest
paid or agreed to be paid to the Lenders with respect to the Loans shall,
to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full stated term (including any
renewal or extension) of this Agreement so that the amount of interest on
account of such Indebtedness does not exceed the maximum nonusurious amount
permitted by applicable law.
Section 2.12 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing of Revolving Loans and any reduction of the
Revolving Commitments shall be made PRO RATA according to the respective
Revolving Commitment Percentages of the Lenders. Each payment on account of
any fees pursuant to Sections 2.5(a) and (b) shall be made PRO RATA in
accordance with the respective amounts due and owing. Each payment by the
Borrower on account of interest on the Revolving Loans and the Term Loan
shall be made PRO RATA according to the respective amounts due and owing.
Each optional prepayment on account of principal of the Loans shall be
applied in accordance with Section 2.7(a) and each mandatory prepayment on
account of principal of the Loans shall be applied in accordance with
Section 2.7(b). All payments (including prepayments) to be made by the
Borrower on account of principal, interest and fees shall be made without
defense, set-off or counterclaim (except as provided in Section 2.18(b))
and shall be made to the Administrative Agent for the account of the
Lenders at the Administrative Agent's office specified on SCHEDULE 9.2 in
Dollars and in immediately available funds not later than 2:00 P.M.
(Charlotte, North Carolina time) on the date when due. The Administrative
Agent shall distribute such payments to the Lenders entitled thereto
promptly upon receipt in like funds as received. If any payment hereunder
(other than payments on the LIBOR Rate Loans) becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal,
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a LIBOR Rate Loan becomes due and payable on a
day other than a Business Day, the maturity thereof shall be extended to
the next succeeding Business Day unless the result of such extension would
be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day.
(b) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provision of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Administrative Agent or
any Lender on account of the Credit Party Obligations or any other amounts
outstanding under any of the Credit Documents or in respect of the
Collateral shall, upon written notice to the Borrower by the Administrative
Agent (in its discretion or at the direction of the Required Lenders) that
the application thereof shall be made in accordance with this Section
2.12(b), be paid over or applied 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) of the Administrative Agent in connection with enforcing the
rights of the Lenders under the Credit Documents and any protective
advances made by the Administrative Agent with respect to the
Collateral under or pursuant to the terms of the Security
Documents;
SECOND, to payment of any fees owed to the Administrative
Agent in its capacity as Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its
rights under the Credit Documents or otherwise with respect to the
Secured Obligations owing to such Lender;
FOURTH, to the payment of (1) all of the Credit Party
Obligations consisting of accrued fees and interest and (2) with
respect to any Secured Hedging Agreement, all fees, premiums and
scheduled periodic payments due under such Secured Hedging
Agreement and any interest accrued thereon;
FIFTH, to the payment of (1) the outstanding principal
amount of the Credit Party Obligations and the payment or cash
collateralization of the outstanding LOC Obligations and (2) with
respect to any Secured Hedging Agreement, all breakage, termination
or other payments due under such Secured Hedging Agreement and any
interest accrued thereon;
SIXTH, to the payment of (1) all other Credit Party
Obligations and other obligations which shall have become due and
payable under the Credit Documents or otherwise and (2) with
respect to any Secured Hedging Agreement, all other obligations
under such Secured Hedging Agreement, in each case to the extent
not repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whomever
may be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be
applied in the numerical order provided until exhausted prior to
application to the next succeeding category; (ii) each of the
Lenders and Hedging Agreement Providers shall receive an amount
equal to its pro rata share (based on the proportion that the then
outstanding Loans and LOC Obligations held by such Lender or the
outstanding obligations payable to such Hedging Agreement Provider
bears to the aggregate then outstanding Loans, LOC Obligations and
obligations payable under all Secured Hedging Agreements) of
amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that
any amounts available for distribution pursuant to clause
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"FIFTH" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be held by the
Administrative Agent in a cash collateral account and applied (A)
first, to reimburse the Issuing Lender from time to time for any
drawings under such Letters of Credit and (B) then, following the
expiration of all Letters of Credit, to all other obligations of
the types described in clauses "FIFTH" and "SIXTH" above in the
manner provided in this Section 2.12(b). Notwithstanding the
foregoing terms of this Section 2.12(b), only Collateral proceeds
and payments under the Guaranty with respect to Secured Hedging
Agreements shall be applied to obligations under any Secured
Hedging Agreement.
Section 2.13 NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT.
(a) Unless the Administrative Agent shall have been notified in
writing by a Lender prior to the date a Loan is to be made by such Lender
(which notice shall be effective upon receipt) that such Lender does not
intend to make the proceeds of such Loan available to the Administrative
Agent, the Administrative Agent may assume that such Lender has made such
proceeds available to the Administrative Agent on such date, and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative
Agent, the Administrative Agent shall be able to recover such corresponding
amount from such Lender. If such Lender does not pay such corresponding
amount forthwith upon the Administrative Agent's demand therefor, the
Administrative Agent will promptly notify the Borrower, and the Borrower
shall immediately pay such corresponding amount to the Administrative
Agent. The Administrative Agent shall also be entitled to recover from the
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was
made available by the Administrative Agent to the Borrower to the date such
corresponding amount is recovered by the Administrative Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for the
applicable borrowing pursuant to the Notice of Borrowing and (ii) from a
Lender at the Federal Funds Effective Rate. Nothing herein shall be deemed
to relieve any Lender from its obligation to fulfill its Commitment
hereunder or to prejudice any rights which the Borrower may have against
the Lender as a result of any default by such Lender hereunder.
(b) Unless the Administrative Agent shall have been notified in
writing by the Borrower, prior to the date on which any payment is due from
it hereunder (which notice shall be effective upon receipt) that the
Borrower does not intend to make such payment, the Administrative Agent may
assume that such Borrower has made such payment when due, and the
Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to each Lender on such payment date an amount
equal to the portion of such assumed payment to which such Lender is
entitled hereunder, and if the Borrower has not in fact made such payment
to the Administrative Agent, such Lender shall, on demand, repay to the
Administrative Agent the amount made available to such Lender. If such
amount is repaid to the Administrative Agent on a date after the
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date such amount was made available to such Lender, such Lender shall pay
to the Administrative Agent on demand interest on such amount in respect of
each day from the date such amount was made available by the Administrative
Agent to such Lender to the date such amount is recovered by the
Administrative Agent at a per annum rate equal to the Federal Funds
Effective Rate.
(c) A certificate of the Administrative Agent submitted to the
Borrower or any Lender with respect to any amount owing under this Section
2.13 shall be conclusive in the absence of manifest error.
Section 2.14 INABILITY TO DETERMINE INTEREST RATE.
Notwithstanding any other provision of this Agreement, if (i) the
Administrative Agent shall reasonably determine (which determination shall be
conclusive and binding absent manifest error) that, by reason of circumstances
affecting the relevant market, reasonable and adequate means do not exist for
ascertaining LIBOR for such Interest Period, or (ii) the Required Lenders shall
reasonably determine (which determination shall be conclusive and binding absent
manifest error) that the LIBOR Rate does not adequately and fairly reflect the
cost to such Lenders of funding LIBOR Rate Loans that the Borrower has requested
be outstanding as a LIBOR Tranche during such Interest Period, the
Administrative Agent shall forthwith give telephone notice of such
determination, confirmed in writing, to the Borrower, and the Lenders at least
two Business Days prior to the first day of such Interest Period. Unless the
Borrower shall have notified the Administrative Agent upon receipt of such
telephone notice that it wishes to rescind or modify its request regarding such
LIBOR Rate Loans, any Loans that were requested to be made as LIBOR Rate Loans
shall be made as Alternate Base Rate Loans and any Loans that were requested to
be converted into or continued as LIBOR Rate Loans shall remain as or be
converted into Alternate Base Rate Loans. Until any such notice has been
withdrawn by the Administrative Agent, no further Loans shall be made as,
continued as, or converted into, LIBOR Rate Loans for the Interest Periods so
affected.
Section 2.15 ILLEGALITY.
Notwithstanding any other provision of this Agreement, if the adoption of
or any change in any Requirement of Law or in the interpretation or application
thereof by the relevant Governmental Authority to any Lender shall make it
unlawful for such Lender or its LIBOR Lending Office to make or maintain LIBOR
Rate Loans as contemplated by this Agreement or to obtain in the interbank
eurodollar market through its LIBOR Lending Office the funds with which to make
such Loans, (a) such Lender shall promptly notify the Administrative Agent and
the Borrower thereof, (b) the commitment of such Lender hereunder to make LIBOR
Rate Loans or continue LIBOR Rate Loans as such shall forthwith be suspended
until such Lender shall give notice to the Administrative Agent that the
condition or situation which gave rise to the suspension shall no longer exist,
and (c) such Lender's Loans then outstanding as LIBOR Rate Loans, if any, shall
be converted on the last day of the Interest Period for such Loans or within
such earlier period as required by law to Alternate Base Rate Loans. The
Borrower hereby agrees promptly to pay any Lender, upon its demand (which demand
shall be made within 90 days after such Lender obtains knowledge thereof), any
additional amounts necessary to
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compensate such Lender for actual and direct costs (but not including
anticipated profits) reasonably incurred by such Lender including, but not
limited to, any interest or fees payable by such Lender to lenders of funds
obtained by it in order to make or maintain its LIBOR Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to this Section
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its LIBOR Lending
Office) to avoid or to minimize any amounts which may otherwise be payable
pursuant to this Section; PROVIDED, HOWEVER, that such efforts shall not cause
the imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender in its sole discretion to be material. In
determining such additional amounts pursuant to this Section, each Lender shall
act reasonably and in good faith and will, to the extent the increased costs or
reductions in amounts receivable relate to such Lender's loans in general and
are not specifically attributable to a Loan hereunder, use averaging and
attribution methods which are reasonable and which cover all loans similar to
the Loans made by such Lender whether or not the loan documentation for such
other loans permits the Lender to receive increased costs of the type described
in this Section.
Section 2.16 REQUIREMENTS OF LAW.
(a) If the adoption of or any change in any Requirement of Law
or in the interpretation or application thereof or compliance by any Lender
with any request or directive (whether or not having the force of law) from
any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject such Lender to any Tax of any kind
whatsoever with respect to any Letter of Credit or any application
relating thereto, any LIBOR Rate Loan made by it, or change the
basis of taxation of payments to such Lender in respect thereof
(except, if such Lender is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code), to the extent of
withholding taxes that would be avoided if such Lender provided the
required forms under Section 2.18(b));
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against
assets held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate
hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to
such Lender of making or maintaining LIBOR Rate Loans or the Letters of
Credit or to reduce any amount receivable hereunder or under any Note,
then, in any such case, the Borrower shall promptly pay such Lender, upon
its demand (which demand shall be made within 90 days after such Lender
obtains knowledge thereof), any additional amounts necessary to compensate
such Lender for such additional cost or reduced amount receivable with
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respect to its LIBOR Rate Loans or Letters of Credit. A certificate as to
any additional amounts payable pursuant to this Section submitted by such
Lender, through the Administrative Agent, to the Borrower shall be
conclusive in the absence of manifest error. Each Lender agrees to use
reasonable efforts (including reasonable efforts to change its Domestic
Lending Office or LIBOR Lending Office, as the case may be) to avoid or to
minimize any amounts which might otherwise be payable pursuant to this
paragraph of this Section; PROVIDED, HOWEVER, that such efforts shall not
cause the imposition on such Lender of any additional costs or legal or
regulatory burdens deemed by such Lender in its sole discretion to be
material. In determining such additional amounts, each Lender will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable and which will, to the extent the increased costs or
reduction in the rate of return relates to such Lender's extensions of
credit in general and are not specifically attributable to the Extensions
of Credit hereunder, cover all extensions of credit similar to the
Extensions of Credit of such Lender hereunder whether or not the loan
documentation for such other extensions of credit permits the Lender to
make the determination specified in this Section. Each Lender, upon
determining that any additional amounts will be payable pursuant to this
Section, will give prompt written notice thereof to Borrower, which notice
shall show in reasonable detail the basis for calculation of such
additional amounts.
(b) If any Lender shall have reasonably determined that the
adoption of or any change in any Requirement of Law regarding capital
adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of
law) from any central bank or Governmental Authority made subsequent to the
date hereof does or shall have the effect of reducing the rate of return on
such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies
with respect to capital adequacy), then from time to time, within fifteen
(15) days after demand (which demand shall be made within 90 days after
such Lender obtains knowledge thereof) by such Lender, the Borrower shall
pay to such Lender such additional amount as shall be certified by such
Lender as being required to compensate it for such reduction. Such a
certificate as to any additional amounts payable under this Section
submitted by a Lender (which certificate shall include a description of the
basis for the computation), through the Administrative Agent, to the
Borrower shall be conclusive absent manifest error. In determining such
additional amounts, each Lender will act reasonably and in good faith and
will use averaging and attribution methods which are reasonable and which
will, to the extent the increased costs or reduction in the rate of return
relates to such Lender's commitments or obligations in general and are not
specifically attributable to the Commitments and obligations hereunder,
cover all commitments and obligations similar to the Commitments and
obligations of such Lender hereunder whether or not the loan documentation
for such other commitments or obligations permits the Lender to make the
determination specified in this Section. Each Lender, upon determining that
any additional amounts will be payable pursuant to this
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Section, will give prompt written notice thereof to Borrower, which notice
shall show in reasonable detail the basis for calculation of such
additional amounts.
(c) The agreements in this Section 2.16 shall survive the
termination of this Agreement and payment of the Notes and all other
amounts payable hereunder.
Section 2.17 INDEMNITY.
The Borrower hereby agrees to indemnify each Lender and to hold such Lender
harmless from any funding loss or expense (other than taxes) which such Lender
may sustain or incur as a consequence of (a) default by the Borrower in payment
of the principal amount of or interest on any Loan by such Lender in accordance
with the terms hereof, (b) default by the Borrower in accepting a borrowing
after the Borrower has given a notice in accordance with the terms hereof, (c)
default by the Borrower in making any prepayment after the Borrower has given a
notice in accordance with the terms hereof, and/or (d) the making by the
Borrower of a prepayment of a Loan, or the conversion thereof, on a day which is
not the last day of the Interest Period with respect thereto, in each case
including, but not limited to, any such loss or expense arising from interest or
fees payable by such Lender to lenders of funds obtained by it in order to
maintain its Loans hereunder. A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender, through the Administrative
Agent, to the Borrower (which certificate must be delivered to the
Administrative Agent within thirty days following such default, prepayment or
conversion) shall be conclusive in the absence of manifest error. The agreements
in this Section shall survive termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.
Section 2.18 TAXES.
(a) All payments made by the Borrower hereunder or under any
Note will be, except as provided in Section 2.18(b), made free and clear
of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any Governmental Authority or by any
political subdivision or taxing authority thereof or therein with respect
to such payments (but excluding any tax imposed on or measured by the net
income or profits of a Lender (including any franchise taxes) pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction
in which the principal office or applicable lending office of such Lender
is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "TAXES"). If any Taxes are so
levied or imposed, the Borrower agrees to pay the full amount of such
Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. The Borrower will
furnish to the Administrative Agent as soon as practicable after the date
the payment of any Taxes is due pursuant to applicable law certified copies
(to the extent reasonably available and required by law) of tax receipts
evidencing such payment by the Borrower; PROVIDED, HOWEVER, that no
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Transferee of any Lender pursuant to Section 9.6 shall be entitled to
receive a greater payment under this Section 2.18(a) than such Lender would
have received with respect to the rights assigned, sold or participated or
otherwise transferred, unless such assignment, participation or transfer
shall have been made when the circumstances (including change of law)
giving rise to such payment did not exist or had not yet occurred. The
Borrower agrees to indemnify and hold harmless each Lender, and reimburse
such Lender upon its written request, for the amount of any Taxes so levied
or imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) agrees to deliver to the
Borrower and the Administrative Agent on or prior to the Closing Date or,
in the case of a Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 9.6(c) (unless the respective
Lender was already a Lender hereunder immediately prior to such assignment
or transfer), on the date of such assignment or transfer to such Lender,
(i) if the Lender is a "bank" within the meaning of Section 881(c)(3)(A) of
the Code, two accurate and complete original signed copies of Internal
Revenue Service Form W-8BEN or W-8ECI or W-8IMY (or successor forms)
certifying such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Lender is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code, either Internal Revenue
Service Form W-8BEN or W-8ECI or W-8IMY as set forth in clause (i) above,
or (x) a certificate substantially in the form of SCHEDULE 2.18 (any such
certificate, a "TAX EXEMPTION CERTIFICATE") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8BEN (or
successor form) certifying such Lender's entitlement to an exemption from
United States withholding tax with respect to payments of interest to be
made under this Agreement and under any Note. Each Lender that is a United
States person (as defined in Section 7701(A)(30) of the Code) and which is
not organized as a corporation for U.S. Federal income tax purposes shall
deliver to the Borrower and the Administrative Agent on or prior to the
Closing Date or, in the case of a Lender that is an assignee or transferee
of an interest under this Agreement pursuant to Section 9.6(c) (unless the
respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Lender, an Internal Revenue Service Form W-9 certifying such Lender's
entitlement to a complete exemption from United States back-up withholding
on all payments under this Agreement or a Note. In addition, each Lender
agrees that it will deliver upon the Borrower's request updated versions of
the foregoing, as applicable, whenever the previous certification has
become obsolete or inaccurate in any material respect, together with such
other forms as may be required in order to confirm or establish the
entitlement of such Lender to a continued exemption from or reduction in
United States withholding tax with respect to payments under this Agreement
and any Note. Notwithstanding anything to the contrary contained in Section
2.18(a), but subject to the immediately succeeding sentence, (x) each
Borrower shall be entitled, to the extent it is required to do so by law,
to deduct or withhold Taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or
other amounts payable hereunder for the account of any Lender which is not
a United States person (as
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such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Lender has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not
be obligated pursuant to Section 2.18(a) hereof to gross-up payments to be
made to a Lender in respect of Taxes imposed by the United States if (I)
such Lender has not provided to the Borrower the Internal Revenue Service
Forms required to be provided to the Borrower pursuant to this Section
2.18(b)(ii) or (II) in the case of a payment, other than interest, to a
Lender described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such Taxes.
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 2.18, the Borrower agrees to pay
additional amounts and to indemnify each Lender in the manner set forth in
Section 2.18(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted
or withheld by it as described in the immediately preceding sentence as a
result of any changes after the Closing Date (or in the case of a
Transferee under Section 9.6, changes after the date of such Transfer) in
any applicable law, treaty, governmental rule, regulation, guideline or
order, or in the interpretation thereof, relating to the deducting or
withholding of Taxes.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change its Domestic Lending Office or LIBOR Lending
Office, as the case may be) to avoid or to minimize any amounts which might
otherwise be payable pursuant to this Section; PROVIDED, HOWEVER, that such
efforts shall not cause the imposition on such Lender of any additional
costs or legal or regulatory burdens deemed by such Lender in its sole
discretion to be material.
(d) If the Borrower pays any additional amount pursuant to this
Section 2.18 with respect to a Lender, such Lender shall, following its
receipt of a written request from the Borrower to pursue such a refund, use
commercially reasonable efforts to obtain a refund of tax or credit against
its tax liabilities on account of such payment; PROVIDED that such Lender
shall have no obligation to use such reasonable efforts if either (i) it is
in an excess foreign tax credit position or (ii) it believes in good faith,
in its sole discretion, that claiming a refund or credit would cause
adverse tax consequences to it. In the event that such Lender receives such
a refund or credit, such Lender shall pay to the Borrower an amount that
such Lender reasonably determines is equal to the net tax benefit obtained
by such Lender as a result of such payment by the Borrower, which amount
shall be net of, among other things, any costs and expenses incurred by or
on behalf of such Lender under this subsection (d). In the event that no
refund or credit is obtained with respect to the Borrower's payments to
such Lender pursuant to this Section 2.18, then such Lender shall upon
written request provide a certification that such Lender has not received a
refund or credit for such payments. Nothing contained in this Section 2.18
shall require a Lender to disclose or detail the basis of its calculation
of the amount of any tax benefit or any other amount or the basis of its
determination referred to in the proviso to the first sentence of this
Section 2.18 to the Borrower or any other party. Any and all costs and
expenses incurred by or on behalf of a Lender under this subsection (d)
shall be for the account of the Borrower.
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(e) The agreements in this Section 2.18 shall survive the
termination of this Agreement and the payment of the Notes and all other
amounts payable hereunder.
Section 2.19 INDEMNIFICATION; NATURE OF ISSUING LENDER'S DUTIES.
(a) In addition to its other obligations under Section 2.3, the
Borrower hereby agrees to protect, indemnify, pay and save each Issuing
Lender harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) (other than for Taxes, which shall be covered by 2.18(a))
that the Issuing Lender may incur or be subject to as a consequence, direct
or indirect, of (i) the issuance of any Letter of Credit, except to the
extent resulting from the gross negligence, bad faith or willful misconduct
of the Issuing Lender or (ii) the failure of the Issuing Lender to honor a
drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de facto
government or governmental authority (all such acts or omissions, herein
called "GOVERNMENT ACTS").
(b) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Lender shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any document submitted by any party in connection with
the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (ii) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or ineffective
for any reason; (iii) failure of the beneficiary of a Letter of Credit to
comply fully with conditions required in order to draw upon a Letter of
Credit; (iv) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they be in cipher; (v) errors in interpretation of technical
terms; (vi) any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under a Letter of Credit or of
the proceeds thereof; and (vii) any consequences arising from causes beyond
the control of the Issuing Lender, including, without limitation, any
Government Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Lender, under or in connection with any Letter of Credit or the
related certificates, if taken or omitted in good faith, shall not put such
Issuing Lender under any resulting liability to the Borrower. It is the
intention of the parties that this Agreement shall be construed and applied
to protect and indemnify the Issuing Lender against any and all risks
involved in the issuance of the Letters of Credit, all of which risks are
hereby assumed by the Borrower, including, without limitation, any and all
risks of the acts or omissions,
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whether rightful or wrongful, of any Government Authority. The Issuing
Lender shall not, in any way, be liable for any failure by the Issuing
Lender or anyone else to pay any drawing under any Letter of Credit as a
result of any Government Acts or any other cause beyond the control of the
Issuing Lender.
(d) Nothing in this Section 2.19 is intended to limit the
reimbursement obligation of the Borrower contained in Section 2.3 hereof.
The obligations of the Borrower under this Section 2.19 shall survive the
termination of this Agreement. No act or omissions of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Lender to enforce any right, power or benefit under
this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 2.19, the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any liability incurred by the Issuing Lender
arising out of the gross negligence, bad faith or willful misconduct of the
Issuing Lender (including action not taken by an Issuing Lender), as
determined by a court of competent jurisdiction.
Section 2.20 REPLACEMENT OF LENDERS.
If any Lender shall become affected by any of the changes or events
described in Sections 2.15, 2.16, 2.17 or 2.19 (any such Lender being
hereinafter referred to as a "REPLACED LENDER") and shall petition the Borrower
for any increased cost or amounts thereunder, then in such case, the Borrower
may, upon at least fifteen (15) Business Days' notice to the Administrative
Agent and such Replaced Lender, designate a replacement lender (a "REPLACEMENT
LENDER") acceptable to the Administrative Agent in its reasonable discretion, to
which such Replaced Lender shall, subject to its receipt (unless a later date
for the remittance thereof shall be agreed upon by the Borrower and the Replaced
Lender) of all amounts owed to such Replaced Lender under Sections 2.15, 2.16,
2.17 or 2.19, assign all (but not less than all) of its rights, obligations,
Loans and Commitment hereunder; PROVIDED, that all amounts owed to such Replaced
Lender by the Borrower (except liabilities which by the terms hereof survive the
payment in full of the Loans and termination of this Agreement) shall be paid in
full as of the date of such assignment. Upon any assignment by any Lender
pursuant to this Section 2.20 becoming effective, the Replacement Lender shall
thereupon be deemed to be a "Lender" for all purposes of this Agreement and such
Replaced Lender shall thereupon cease to be a "Lender" for all purposes of this
Agreement and shall have no further rights or obligations hereunder (other than
pursuant to Sections 2.15, 2.16, 2.17, 2.19, and 9.5 while such Replaced Lender
was a Lender). If any Replaced Lender shall refuse to assign its rights,
obligations, Loans and Commitment in accordance with the terms of this Section
2.20, the Replaced Lender shall cease to be a "Lender" for all purposes of this
Agreement upon payment to the Replaced Lender of all amounts owing to such
Replaced Lender in accordance with the terms of this Section 2.20 without any
further action of such Replaced Lender.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, the Credit Parties hereby represent
and warrant to the Administrative Agent and to each Lender that:
Section 3.1 FINANCIAL CONDITION.
The Borrower has delivered to the Administrative Agent and the Lenders (a)
balance sheets and the related statements of income and of cash flows of the
Parent and its Subsidiaries reflecting information for the period from February
9, 2001 to December 31, 2001 audited by Ernst & Young LLP and for the complete
fiscal year ended December 31, 2002 audited by Deloitte & Touche LLP, (b)
balance sheets and the related statements of income and of cash flows of the
Acquired Business for fiscal years ended December 31, 2000, December 30, 2001
and December 29, 2002 audited by PriceWaterhouseCoopers LLC, (c) a
company-prepared unaudited balance sheet and related statements of income for
the months of January, February, March and, if available, April of 2003, (d) a
company-prepared pro forma balance sheet as of March 31, 2003 in form and
substance reasonably satisfactory to the Arrangers and the Agents and (e) the
six-year projections of the Borrower (the "PROJECTIONS") have been prepared in
good faith based upon reasonable assumptions. The financial statements referred
to in subsection (a) above have been prepared in accordance with GAAP
consistently applied and are complete and correct and present fairly in all
material respects the financial condition of the Parent and its Subsidiaries as
of such dates. The financial statements referred to in subsection (b) above have
been prepared in accordance with GAAP as described in Note 2 to such financial
statements and are complete and correct and present fairly in all material
respects the direct assets and liabilities of the Acquired Business as at
December 31, 2000, December 30, 2001 and December 29, 2002, respectively, and
the direct revenues and expenses of the Acquired Business for the fiscal years
then ended. The financial statements referred to in subsection (c) above have
been prepared in accordance with GAAP consistently applied (subject to normal
recurring year-end audit adjustments and the absence of footnote disclosure) and
are complete and correct and present fairly in all material respects the
financial condition of the Parent and its Subsidiaries as of such dates.
Section 3.2 NO CHANGE.
Since December 31, 2002 (and after delivery of annual audited financial
statements in accordance Section 5.1(a), since the date of the most recently
delivered annual audited financial statements) there has been no development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
Section 3.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrower and the other Credit Parties (a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, (b)
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has the requisite power and authority and the legal right to own and operate all
its property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified to conduct
business and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification except to the extent that the failure to so qualify
or be in good standing could not, in the aggregate, reasonably be expected to
have a Material Adverse Effect and (d) is in compliance with all Requirements of
Law (including, without limitation, rules, regulations and other requirements of
the Food and Drug Administration, the Drug Enforcement Administration, the
Federal Trade Commission, the Occupational Safety and Health Administration, the
Department of Agriculture, the Consumer Product Safety Commission, the United
States Customs Service and the United States Postal Service and other state or
federal regulatory authorities or jurisdictions in which any of the Credit
Parties or any of its Subsidiaries do business or distribute and market
pharmaceutical products) except to the extent that the failure to comply
therewith could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect. Without limiting the generality of the foregoing, each of the
Borrower and the other Credit Parties represents that:
(i) (A) There is no Credit Party or individual employed by any
Credit Party who may reasonably be expected to have criminal culpability or
to be excluded or suspended from participation in any Medical Reimbursement
Program for their corporate or individual actions or failures to act where
such culpability, exclusion and/or suspension has or could be reasonably
expected to result in a Material Adverse Effect; and (B) there is no member
of management continuing to be employed by any Credit Party who may
reasonably be expected to have individual culpability for matters under
investigation by any Governmental Authority unless such member of
management has been, within a reasonable period of time after discovery of
such actual or potential culpability, either suspended or removed from
positions of responsibility related to those activities under challenge by
the Governmental Authority;
(ii) Current billing policies, arrangements, protocols and
instructions comply with requirements of Medical Reimbursement Programs and
are administered by properly trained personnel except where any such
failure to comply could not reasonably be expected to result in a Material
Adverse Effect;
(iii) Current medical director compensation arrangements and other
arrangements with referring physicians comply with state and federal
self-referral and anti-kickback laws, including without limitation 42
U.S.C. Section 1320a-7b(b)(1) - (b)(2) and 42 U.S.C. Section 1395nn, except
where any such failure to comply could not reasonably be expected to result
in a Material Adverse Effect; and
(iv) There has not been, nor is it reasonably anticipated that
there will be, disruption in payments under Medicare or other Medical
Reimbursement Programs related to the Acquisition contemplated in
connection herewith, except where such disruption could not reasonably be
expected to result in a Material Adverse Effect.
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Section 3.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit Documents
to which it is party and has taken all necessary limited liability company or
corporate action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrower or the other Credit Parties (other than those which have been
obtained or made) or with the validity or enforceability of any Credit Document
against the Borrower or the other Credit Parties (except such filings as are
necessary in connection with the perfection of the Liens created by such Credit
Documents). Each Credit Document to which it is a party has been duly executed
and delivered on behalf of the Borrower or the other Credit Parties, as the case
may be. Each Credit Document to which it is a party constitutes a legal, valid
and binding obligation of the Borrower or the other Credit Parties, as the case
may be, enforceable against the Borrower or such other Credit Party, as the case
may be, in accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
Section 3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrower or any
other Credit Party (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its or their respective properties or revenues pursuant to any
Requirement of Law or Contractual Obligation other than the Liens arising under
or contemplated in connection with the Credit Documents. Neither the Borrower
nor any other Credit Party is in default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
Section 3.6 NO MATERIAL LITIGATION.
No litigation, investigation, claim, criminal prosecution, civil
investigative demand, imposition of criminal or civil fines and penalties, or
any other proceeding of or before any arbitrator or Governmental Authority
including but not limited to those regulatory agencies responsible for
licensing, accrediting or issuing Medicare or Medicaid certification to any
Credit Party is pending or, to the best knowledge of the Credit Parties,
threatened by or against any Credit Party or any of its Subsidiaries or against
any of its or their respective properties or revenues (a) which purports to
affect the legality, validity or enforceability of any Credit Document or any
Loan or any of the transactions contemplated hereby, or (b) which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
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Section 3.7 INVESTMENT COMPANY ACT.
Neither the Borrower nor any other Credit Party is an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
Section 3.8 MARGIN REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System as now and from time to time hereafter in effect. The Credit
Parties and their Subsidiaries taken as a group do not own "margin stock" except
as identified in the financial statements referred to in Section 3.1 and the
aggregate value of all "margin stock" owned by the Credit Parties and their
Subsidiaries taken as a group does not exceed 25% of the value of their assets.
Section 3.9 ERISA.
Except as set forth in SCHEDULE 3.9, neither a Reportable Event nor an
"accumulated funding deficiency" (within the meaning of Section 412 of the Code
or Section 302 of ERISA) has occurred during the five-year period prior to the
date on which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the applicable
provisions of ERISA and the Code, except to the extent that any such occurrence
or failure to comply would not reasonably be expected to have a Material Adverse
Effect. No termination of a Single Employer Plan has occurred resulting in any
liability that has remained underfunded, and no Lien in favor of the PBGC or a
Plan has arisen, during such five-year period which could reasonably be expected
to have a Material Adverse Effect. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by an amount which, as determined
in accordance with GAAP, could reasonably be expected to have a Material Adverse
Effect. Neither any Credit Party nor any Commonly Controlled Entity is currently
subject to any liability for a complete or partial withdrawal from a
Multiemployer Plan which could reasonably be expected to have a Material Adverse
Effect.
Section 3.10 ENVIRONMENTAL MATTERS.
Except as set forth on SCHEDULE 3.10:
(a) To the knowledge of the Credit Parties, the facilities and
properties owned or leased by the Credit Parties or any of their
Subsidiaries (the "PROPERTIES"), and all operations of the Credit Parties
and/or their Subsidiaries at the Properties are in compliance, and have in
the last five years been in compliance, in all material respects, with all
applicable Environmental Laws, and to the knowledge of the Credit Parties,
there is no contamination at, under or about the Properties in material
violation of any
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Environmental Law with respect to the Properties or the business operated
by the Credit Parties or any of their Subsidiaries (the "BUSINESS").
(b) The Credit Parties have not received any written or actual
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding compliance with Environmental Laws with
regard to any of the Properties or the Business which has not been
resolved, nor do the Credit Parties or any of their Subsidiaries have
knowledge that any such notice is being threatened.
(c) To the knowledge of the Credit Parties, Materials of
Environmental Concern have not been transported or disposed of from the
Properties in material violation of, or in a manner or to a location which
could give rise to material liability under any Environmental Law, nor have
any Materials of Environmental Concern been generated, treated, stored or
disposed of at, on or under any of the Properties in material violation of,
or in a manner that could give rise to material liability under, any
applicable Environmental Law.
(d) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower and the other Credit
Parties, threatened, under any Environmental Law to which the Borrower or
any other Credit Party or any Subsidiary is or will be named as a party
with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other
orders, or other administrative or judicial requirements outstanding under
any Environmental Law with respect to the Properties or the Business, in
each case which could reasonably be expected to have a Material Adverse
Effect.
(e) To the knowledge of the Credit Parties there has been no
release or threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of any
Credit Party or any Subsidiary in connection with the Properties or
otherwise in connection with the Business, in material violation of or in
amounts or in a manner that could give rise to material liability under
Environmental Laws.
Section 3.11 USE OF PROCEEDS.
The proceeds of the Extensions of Credit shall be used solely by the
Borrower as follows:
(a) with respect to the Revolving Loans and the Term Loan, to
(i) finance in part the Acquisition and to pay certain costs, fees and
expenses in connection therewith, (ii) refinance certain existing
Indebtedness of the Borrower and its Subsidiaries, (iii) pay fees and
expenses owing to the Lenders and the Administrative Agent in connection
with this Agreement, and (iv) provide for working capital and other general
corporate purposes, including, without limitation, Permitted Acquisitions;
and
(b) the Letters of Credit shall be used only for or in
connection with appeal bonds, reimbursement obligations arising in
connection with surety and reclamation bonds,
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reinsurance, domestic or international trade transactions and obligations
not otherwise aforementioned relating to transactions entered into by the
applicable account party in the ordinary course of business.
Section 3.12 SUBSIDIARIES.
Set forth on SCHEDULE 3.12 is a complete and accurate list of all
Subsidiaries of the Credit Parties as of the Closing Date. As of the Closing
Date, the information on the attached Schedule includes, for each Subsidiary of
a Credit Party, the state of incorporation or organization; the authorized
shares of each class of Capital Stock or other equity interests; the number of
shares of each class of Capital Stock or other equity interests outstanding; the
name of each equity owner of such Credit Party; the percentage of outstanding
shares held by each such equity owner; and the number and effect, if exercised,
of all outstanding options, warrants, rights of conversion or purchase and
similar rights. The outstanding Capital Stock and other equity interests of all
such Subsidiaries is validly issued, fully paid and non-assessable and is owned,
free and clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents).
Section 3.13 OWNERSHIP.
Each Credit Party and its Subsidiaries is the owner of, and has good and
marketable title to, or a leasehold interest in or right to use, all of its
respective material assets, except as may be permitted pursuant Section 6.12
hereof, and none of such assets is subject to any Lien other than Permitted
Liens.
Section 3.14 INDEBTEDNESS.
Except as otherwise permitted under Section 6.1, the Credit Parties and
their Subsidiaries have no Indebtedness.
Section 3.15 TAXES.
Each of the Credit Parties and its Subsidiaries has filed, or caused to be
filed, all income tax returns (whether federal, state, local, foreign or
otherwise) and all other material tax returns required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (i) which are not yet
delinquent or (ii) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. Neither any of the Credit Parties nor any of its
Subsidiaries are aware as of the Closing Date of any proposed tax assessments
against it or any of its Subsidiaries which could reasonably be expected to have
a Material Adverse Effect.
Section 3.16 INTELLECTUAL PROPERTY.
Each of the Credit Parties and its Subsidiaries owns, or has the legal
right to use, all Intellectual Property necessary for each of them to conduct
its business as currently conducted.
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As of the Closing Date, set forth on SCHEDULE 3.16 is a list of all Intellectual
Property owned by each of the Credit Parties and its Subsidiaries or that each
of the Credit Parties or any of its Subsidiaries has the right to use. Except as
set forth on SCHEDULE 3.16 hereto, to the best of the Credit Parties' knowledge,
none of the Credit Parties is in default (or with the giving of notice or lapse
of time or both, would be in default) in any material respect under any license
to use any material Intellectual Property; no material claim has been asserted
in writing and is pending by any Person challenging or questioning the use of
any material Intellectual Property or the validity or effectiveness of any
material Intellectual Property, nor does the Credit Parties or any of their
Subsidiaries know of any such claim; and, to the knowledge of the Credit Parties
or any of their Subsidiaries, the use of any material Intellectual Property by
any of the Credit Parties or any of its Subsidiaries does not infringe in any
material respect on the rights of any Person. Except as set forth on SCHEDULE
3.16, to the best of the Credit Parties' knowledge, the Credit Parties have, in
all material respects, recorded or deposited with and paid to the United States
Copyright Office, the Register of Copyrights, the Copyrights Royalty Tribunal or
other Governmental Authority, all material notices, statements of account,
royalty fees and other documents and instruments required under the terms and
conditions of any Contractual Obligation of the Credit Parties and/or under
Title 17 of the United States Code and the rules and regulations issued
thereunder (collectively, the "COPYRIGHT ACT"), and are not liable in any
material respect to any Person for copyright infringement under the Copyright
Act or any other law, rule, regulation, contract or license as a result of their
business operations.
Section 3.17 SOLVENCY.
The fair saleable value of the Credit Parties' (on a consolidated basis)
assets, measured on a going concern basis, exceeds all probable liabilities,
including those to be incurred pursuant to this Credit Agreement. The Credit
Parties (on a consolidated basis) (a) do not have unreasonably small capital in
relation to the business in which they are or propose to be engaged or (b) have
not incurred, or believe that they will incur after giving effect to the
transactions contemplated by this Credit Agreement, debts beyond their ability
to pay such debts as they become due.
Section 3.18 INVESTMENTS.
All Investments of each of the Credit Parties and its Subsidiaries are
Permitted Investments.
Section 3.19 LOCATION OF COLLATERAL.
As of the Closing Date, set forth on SCHEDULE 3.19(a) is a list of the
Properties of the Credit Parties and their Subsidiaries with street address,
county and state. As of the Closing Date, set forth on SCHEDULE 3.19(b) is a
list of all locations where any tangible personal property of the Credit Parties
and their Subsidiaries is located, including county and state where located
except for de minimis amounts of tangible personal property and property which
is in transit or under repair or modification. Set forth on SCHEDULE 3.19(c) is
the chief executive office and principal place of business of each of the Credit
Parties and their Subsidiaries (as of the Closing
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Date) and the State of incorporation or organization of each of the Credit
Parties and their Subsidiaries. SCHEDULE 3.19(a), 3.19(b) and 3.19(c) may be
updated from time to time by the Borrower to include new properties or locations
by giving written notice thereof to the Administrative Agent.
Section 3.20 NO BURDENSOME RESTRICTIONS.
None of the Credit Parties or any of its Subsidiaries is a party to any
agreement or instrument or subject to any other obligation or any charter or
corporate restriction or any provision of any applicable law, rule or regulation
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
Section 3.21 BROKERS' FEES.
None of the Credit Parties or any of its Subsidiaries (excluding the
Sellers) has any obligation to any Person in respect of any finder's, broker's,
investment banking or other similar fee in connection with any of the
transactions contemplated under the Credit Documents other than the fees set
forth on SCHEDULE 3.21.
Section 3.22 LABOR MATTERS.
As of the Closing Date, there are no collective bargaining agreements or
Multiemployer Plans covering the employees of any of the Credit Parties or any
of its Subsidiaries, other than as set forth in SCHEDULE 3.22 hereto, and none
of the Credit Parties or any of its Subsidiaries (i) has suffered any material
strikes, walkouts, work stoppages or other material labor difficulty within the
last three years, other than as set forth in SCHEDULE 3.22 hereto or (ii) has
knowledge of any potential or pending strike, walkout or work stoppage. As of
the Closing Date, other than as set forth on SCHEDULE 3.22, no material unfair
labor practice complaint is pending against any Credit Party or any of its
Subsidiaries or, to the best knowledge of the Credit Parties, before any
Governmental Authority.
Section 3.23 SECURITY DOCUMENTS.
The Security Documents create valid security interests in, and Liens on,
the Collateral purported to be covered thereby. Except as set forth in the
Security Documents, such security interests and Liens are currently (or will be,
upon (a) the filing of appropriate financing statements with the Secretary of
State of the state of incorporation for each Credit Party, the filing of
appropriate assignments or notices with the United States Patent and Trademark
Office and the United States Copyright Office, and the recordation of the
applicable Mortgage Instruments, in each case in favor of the Administrative
Agent, on behalf of the Lenders, and (b) the Administrative Agent obtaining
Control (as defined in the Security Agreement) over those items of Collateral in
which a security interest is perfected through Control) perfected security
interests and Liens, prior to all other Liens other than Permitted Liens.
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Section 3.24 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of any Credit Party or any of its Subsidiaries in
writing to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any other Credit Document, or any transaction
contemplated hereby or thereby (other than projections), is or will be (and,
solely with respect to any such information furnished on behalf of the Borrower
or any of its Subsidiaries by a third party, to the best knowledge of the
Borrower after due inquiry are and will be) true and accurate in all material
respects and not incomplete by omitting to state any material fact necessary to
make such information not misleading in any material respect at such time in
light of the circumstances under which such information was provided. There is
no fact now known to the Borrower, any other Credit Party or any of their
Subsidiaries which has, or could reasonably be expected to have, a Material
Adverse Effect which fact has not been set forth herein, in the financial
statements of the Borrower and its Subsidiaries furnished to the Administrative
Agent and/or the Lenders, or in any certificate, opinion or other written
statement made or furnished by any Credit Party to the Administrative Agent
and/or the Lenders.
Section 3.25 CONSUMMATION OF ACQUISITION; REPRESENTATIONS AND WARRANTIES
FROM OTHER DOCUMENTS.
The Acquisition and related transactions have been consummated
substantially in accordance with the terms of the Acquisition Documents. As of
the Closing Date, the Acquisition Documents have not been altered, amended or
otherwise modified or supplemented in any material respect or any material
condition thereof waived without the prior written consent of the Administrative
Agent. Each of the representations and warranties made in the Acquisition
Documents by the Borrower and its Subsidiaries or, to the best knowledge of the
Borrower, made by any third party is true and correct, except for any
representation or warranty therein the failure of which to be true and correct,
does not have or could not reasonably be expected to have a Material Adverse
Effect.
Section 3.26 FRAUD AND ABUSE.
Neither the Credit Parties nor, to the knowledge of the officers of the
Credit Parties, any of their stockholders, officers or directors, have engaged
in any activities which are prohibited under federal Medicare and Medicaid
statutes, 42 U.S.C. Section 1320a-7b, or 42 U.S.C. Section 1395nn or the
regulations promulgated pursuant to such statutes or related state or local
statutes or regulations, including but not limited to the following: (a)
knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any applications for any benefit or
payment; (b) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment; (c) failing to disclose knowledge by a claimant of the
occurrence of any event affecting the initial or continued right to any benefit
or payment on its own behalf or on behalf of another with the intent to secure
such benefit or payment fraudulently; (d) knowingly and willfully soliciting or
receiving any remuneration (including any kickback, bribe or rebate), directly
or indirectly, overtly or covertly, in cash or in kind or offering to pay such
remuneration (i) in return for referring an individual to a Person for the
furnishing or arranging for the furnishing of
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any item or service for which payment may be made in whole or in part by
Medicare, Medicaid or other applicable third party payors, or (ii) in return for
purchasing, leasing or ordering or arranging for or recommending the purchasing,
leasing or ordering of any good, facility, service, or item for which payment
may be made in whole or in part by Medicare, Medicaid or other applicable third
party payors, in each case if the result of engaging in such prohibited activity
has resulted or could be reasonably expected to result in material damages,
fees, penalties and/or liabilities for the Credit Parties.
Section 3.27 LICENSING AND ACCREDITATION.
Each of the Credit Parties has, to the extent applicable: (i) obtained and
maintains in good standing all required licenses 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; (ii) to the extent prudent and customary in the
industry in which it is engaged, obtained and maintains accreditation from all
generally recognized accrediting agencies; (iii) obtained and maintains Medicaid
Certification and Medicare Certification; and (iv) entered into and maintains in
good standing its Medicare Provider Agreement and its Medicaid Provider
Agreement, except in each case for clauses (i) - (iv) above, where the failure
could not reasonably be expected to have a Material Adverse Effect.
Section 3.28 MATERIAL CONTRACTS.
SCHEDULE 3.28 sets forth a true and correct and complete list of all
Material Contracts in effect as of the Closing Date. All of the Material
Contracts are in full force and effect and no material defaults by the Borrower
or any Subsidiary or, to the best knowledge of the Borrower, by any third party,
currently exist thereunder.
Section 3.29 INSURANCE.
The present insurance coverage of the Credit Parties and their Subsidiaries
is outlined as to carrier, policy number, expiration date, type and amount on
SCHEDULE 3.29 and such insurance coverage complies the requirements set forth in
Section 5.5(b).
Section 3.30 REIMBURSEMENT FROM THIRD PARTY PAYORS.
The accounts receivable of the Credit Parties have been and will in all
material respects continue to be adjusted to reflect the reimbursement policies
(both those most recently published in writing as well as those not in writing
which have been verbally communicated) of any Medical Reimbursement Program
applicable to any Credit Party, including without limitation, Medicare,
Medicaid, Blue Cross/Blue Shield, private insurance companies, health
maintenance organizations, preferred provider organizations, alternative
delivery systems, managed care systems, government contacting agencies and other
third party payors.
Section 3.31 OTHER AGREEMENTS.
No Credit Party is in default in the performance, observance or fulfillment
of any of the obligations, covenants or conditions contained in (i) any Medicaid
Provider Agreement,
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Medicare Provider Agreement or other agreement or instrument to which a Credit
Party is a party, which default has resulted in, or if not remedied within any
applicable grace period could result in, the revocation, termination,
cancellation or suspension of Medicaid Certification or Medicare Certification
of any Credit Party or (ii) any other agreement or instrument to which any
Credit Party is a party, which default has or could reasonably be expected to
have a Material Adverse Effect.
Section 3.32 CLASSIFICATION AS SENIOR INDEBTEDNESS.
The Secured Obligations constitute "Senior Indebtedness" under and as
defined in any agreement governing any outstanding Subordinated Indebtedness and
the subordination provisions set forth in each such agreement are legally valid
and enforceable against the parties thereto.
Section 3.33 CAPITAL STRUCTURE.
SCHEDULE 3.33 sets forth the true and correct and complete list of all of
the shareholders of the Parent and the Borrower as of the Closing Date, complete
with each shareholder's Capital Stock ownership.
Section 3.34 TAX SHELTER REGULATIONS.
The Borrower does not intend to treat the Loans and the Letters of Credit
and related transactions as being a "reportable transaction" (within the meaning
of Treasury Regulation Section 1.6011-4). In the event the Borrower determines
to take any action inconsistent with such intention, it will promptly notify the
Administrative Agent thereof. If the Borrower so notifies the Administrative
Agent, the Borrower acknowledges that one or more of the Lenders may treat its
Loans, Letters of Credit and Participation Interests in Swingline Loans and
Letters of Credit as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 CONDITIONS TO CLOSING DATE AND INITIAL EXTENSIONS OF CREDIT.
This Agreement shall become effective upon, and the obligation of each
Lender to make the initial Revolving Loans, the Swingline Loans and the Term
Loan on the Closing Date is subject to, the satisfaction of the following
conditions precedent:
(a) EXECUTION OF AGREEMENT. The Administrative Agent shall have
received (i) counterparts of this Agreement, (ii) for the account of each
applicable Lender, a Revolving Note and a Term Note, (iii) for the account
of the Swingline Lender, the
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Swingline Note, and (iv) counterparts of the Security Agreement, the Pledge
Agreement and each Mortgage Instrument, in each case conforming to the
requirements of this Agreement and executed by a duly authorized officer of
each party thereto, and in each case in form and substance reasonably
satisfactory to the Lenders.
(b) AUTHORITY DOCUMENTS. The Administrative Agent shall have
received the following:
(i) ARTICLES OF INCORPORATION/CHARTER DOCUMENTS. Copies
of the articles of incorporation or other charter documents, as
applicable, of each Credit Party certified to be true and complete
as of a recent date by the appropriate Governmental Authority of
the state of its organization.
(ii) RESOLUTIONS. Copies of resolutions of the board of
directors of each Credit Party approving and adopting the Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or
assistant secretary of such Credit Party (pursuant to a secretary's
certificate in substantially the form of SCHEDULE 4.1-1 attached
hereto) as of the Closing Date to be true and correct and in force
and effect as of such date.
(iii) BYLAWS/OPERATING AGREEMENT. A copy of the bylaws or
comparable operating agreement of each Credit Party certified by a
secretary or assistant secretary of such Credit Party (pursuant to
a secretary's certificate in substantially the form of SCHEDULE
4.1-1 attached hereto) as of the Closing Date to be true and
correct and in force and effect as of such date.
(iv) GOOD STANDING. Copies of certificates of good
standing, existence or its equivalent with respect to the each
Credit Party certified as of a recent date by the appropriate
Governmental Authorities of the state of incorporation or
organization and each other state in which the failure to so
qualify and be in good standing could reasonably be expected to
have a Material Adverse Effect on the business or operations of the
Credit Parties and their Subsidiaries in such state.
(v) INCUMBENCY. An incumbency certificate of each Credit
Party certified by a secretary or assistant secretary (pursuant to
a secretary's certificate in substantially the form of SCHEDULE
4.1-1 attached hereto) to be true and correct as of the Closing
Date.
(c) LEGAL OPINIONS OF COUNSEL. The Agents shall have received
(i) an opinion of counsel, which shall include, without limitation, a
customary "no conflicts" opinion, (ii) to the extent required by either
Agent, a local counsel opinion for each state (other than Illinois and
Delaware) in which the Parent, the Borrower or a Guarantor has been
incorporated or organized and (iii) evidence that the Administrative Agent
and the Lenders have been permitted to rely on each opinion delivered by
the Borrower in connection with the Acquisition and have used reasonable
efforts to obtain reliance for
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each opinion delivered by Seller in connection with the Acquisition, each
of the foregoing opinions to be in form and substance reasonably
satisfactory to the Agents.
(d) REPORTS. The Administrative Agent shall have received a copy
of each report required to be delivered pursuant to the Acquisition
Documents in connection with the Acquisition and related transactions, in
form and substance reasonably satisfactory to the Administrative Agent.
(e) PERSONAL PROPERTY COLLATERAL. The Administrative Agent
shall have received, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of each Credit Party,
the State of incorporation or organization of each Credit Party and
each jurisdiction where any Collateral is located or where a filing
would need to be made in order to perfect the Administrative
Agent's security interest in the Collateral, copies of the
financing statements on file in such jurisdictions and evidence
that no Liens exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agents' reasonable
discretion, to perfect the Administrative Agent's security interest
in the Collateral;
(iii) duly executed consents as are necessary, in the
Administrative Agent's reasonable discretion, to perfect the
Lenders' security interest in the Collateral;
(iv) original stock certificates or other certificates
evidencing the Capital Stock pledged pursuant to the Pledge
Agreement (other than Capital Stock of any Material First-Tier
Foreign Subsidiary) to the extent such Capital Stock is
certificated, together with an undated stock power for each such
certificate duly executed in blank by the registered owner thereof.
(f) REAL PROPERTY COLLATERAL. The Administrative Agent shall
have received, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) fully executed and notarized mortgages, deeds of
trust or deeds to secure debt (each, as the same may be amended,
modified, restated or supplemented from time to time, a "MORTGAGE
INSTRUMENT" and collectively the "MORTGAGE INSTRUMENTS")
encumbering the fee interest in the properties listed in SCHEDULE
3.19(a) as properties owned by the Credit Parties and, to the
extent required by the Administrative Agent, subject to the terms
of the subject leases and consent of the respective landlords
thereto, the leasehold interest in the properties listed in
SCHEDULE 3.19(a) as properties that are warehouses, plants or
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other real properties material to the conduct of the Credit
Parties' business and are leased by the Credit Parties (each a
"MORTGAGED PROPERTY" and collectively the "MORTGAGED PROPERTIES");
(ii) a title report in respect of each of the Mortgaged
Properties;
(iii) with respect to each Mortgaged Property, a marked-up
commitment to issue an ALTA mortgagee title insurance policy (each
a "MORTGAGE POLICY" and collectively, the "MORTGAGE POLICIES")
issued by a nationally-recognized title insurance company (the
"TITLE INSURANCE COMPANY") reasonably acceptable to the
Administrative Agent, in an amount satisfactory to the
Administrative Agent (but, in any event, not in excess of the
approximated fair market value of the Mortgaged Property), assuring
the Administrative Agent that each of the Mortgage Instruments
creates a valid and enforceable first priority mortgage lien on the
applicable Mortgaged Property, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policies shall
be in form and substance reasonably satisfactory to the
Administrative Agent and shall provide for affirmative insurance
and such reinsurance as the Administrative Agent may reasonably
request, all of the foregoing in form and substance reasonably
satisfactory to the Administrative Agent;
(iv) evidence as to (A) whether any Mortgaged Property is
in an area designated by the Federal Emergency Management Agency as
having special flood or mud slide hazards (a "FLOOD HAZARD
PROPERTY") and (B) if any Mortgaged Property is a Flood Hazard
Property, (1) to the extent required by law, the applicable Credit
Party's written acknowledgment of receipt of written notification
from the Administrative Agent (y) as to the fact that such
Mortgaged Property is a Flood Hazard Property and (z) as to whether
the community in which each such Flood Hazard Property is located
is participating in the National Flood Insurance Program and (2)
copies of insurance policies or certificates of insurance of the
Credit Parties and their Subsidiaries evidencing flood insurance
reasonably satisfactory to the Administrative Agent and naming the
Administrative Agent as loss payee on behalf of the Lenders;
(v) maps or plats of an as-built survey of the sites of
the material Mortgaged Properties certified to the Administrative
Agent and the Title Insurance Company in a manner reasonably
satisfactory to them, dated a date satisfactory to each of the
Administrative Agent and the Title Insurance Company by an
independent professional licensed land surveyor reasonably
satisfactory to each of the Administrative Agent and the Title
Insurance Company, which maps or plats and the surveys on which
they are based shall be sufficient to delete any standard printed
survey exception contained in the applicable title policy and be
made in accordance with the Minimum Standard Detail Requirements
for Land Title Surveys jointly established and adopted by the
American Land Title Association and the American Congress on
Surveying and Mapping in 1992, and, without limiting the generality
of the foregoing, there shall be surveyed and
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shown on such maps, plats or surveys the following: (A) the
locations on such sites of all the buildings, structures and other
improvements and the established building setback lines; (B) the
lines of streets abutting the sites and width thereof; (C) all
access and other easements appurtenant to the sites necessary to
use the sites; (D) all roadways, paths, driveways, easements,
encroachments and overhanging projections and similar encumbrances
affecting the site, whether recorded, apparent from a physical
inspection of the sites or otherwise known to the surveyor; (E) any
encroachments on any adjoining property by the building structures
and improvements on the sites; and (F) if the site is described as
being on a filed map, a legend relating the survey to said map;
(vi) satisfactory environmental reviews of all
manufacturing facilities and all other material real property in
the United States owned by the Borrower or any of its Domestic
Subsidiaries or by the Acquired Business, including but not limited
to Phase I environmental assessments, together with reliance
letters in favor of the Lenders;
(vii) opinions of counsel to the Credit Parties for each
jurisdiction in which the Mortgaged Properties are located; and
(viii) to the extent required by the Title Insurance
Company for issuance of a zoning endorsement to a Mortgage Policy
for any Mortgaged Property, zoning letters from the municipality or
other Governmental Authority for the jurisdiction in which the
Mortgaged Property is located.
(g) INSURANCE. The Agents shall have received a summary report
regarding the Borrower's insurance status and coverage, with the scope and
results of such report to be reasonably acceptable to the Agents. The
Administrative Agent shall have received certificates of insurance
evidencing liability and casualty insurance meeting the requirements set
forth herein or in the Security Documents and business interruption
insurance satisfactory to the Administrative Agent. The Administrative
Agent shall be named as loss payee or mortgagee, as its interest may
appear, and/or additional insured with respect to any such insurance
providing coverage in respect of any Collateral, and each provider of any
such insurance shall agree, by endorsement upon the policy or policies
issued by it or by independent instruments furnished to the Administrative
Agent, that it will give the Administrative Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or
canceled.
(h) FEES. The Administrative Agent and the Lenders shall have
received all fees, if any, owing pursuant to the Fee Letter and Section
2.5.
(i) LITIGATION. There shall not exist any pending or threatened
litigation, investigation, bankruptcy or insolvency, injunction, order or
claim affecting or relating to any Credit Party or any of its Subsidiaries,
the Acquired Business, this Agreement and the other Credit Documents or the
Acquisition, that has not been settled, dismissed,
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vacated, discharged or terminated prior to the Closing Date which could
reasonably be expected to result in a Material Adverse Change.
(j) SOLVENCY CERTIFICATE. The Agents shall have received an
officer's certificate executed by the chief financial officer of the
Borrower as to the financial condition, solvency and related matters of (i)
the Borrower and (ii) the Credit Parties taken as a whole, in each case
after giving effect to the Acquisition and the initial borrowings under the
Credit Documents, in substantially the form of SCHEDULE 4.1-2 hereto.
(k) ACCOUNT DESIGNATION LETTER. The Administrative Agent shall
have received the executed Account Designation Letter in the form of
SCHEDULE 1.1-1 hereto.
(l) NOTICE OF BORROWING. The Administrative Agent shall have
received a Notice of Borrowing with respect to the Revolving Loans to be
made on the Closing Date.
(m) SENIOR SUBORDINATED NOTES. The Borrower shall have received
proceeds under the Senior Subordinated Notes in a gross amount of not less
than $200,000,000 on terms and conditions reasonably acceptable to the
Agents.
(n) CORPORATE STRUCTURE. The number of shares of each class of
Capital Stock issued and outstanding and the ownership thereof of the
Credit Parties and their Subsidiaries as of the Closing Date (after giving
effect to the Acquisition and the Equity Investment) shall be as described
in SCHEDULE 3.12 and SCHEDULE 3.33, and shall otherwise be reasonably
satisfactory to the Agents. The Administrative Agent and the Lenders shall
be reasonably satisfied with the management of the Credit Parties and their
Subsidiaries and of the Acquired Business and with all legal, tax,
accounting, business and other matters relating the Acquisition or to the
Credit Parties and their Subsidiaries or the Acquired Business, in each
case after giving effect to the Acquisition.
(o) ACQUISITION DOCUMENTS. The Agents shall have reviewed and
approved in their reasonable discretion certified copies of all of the
Acquisition Documents and there shall not have been any material
modification, amendment, supplement or waiver to the Acquisition Documents
without the prior written consent of the Agents, including, but not limited
to, any modification, amendment, supplement or waiver relating to the
amount or type of consideration to be paid in connection with the
Acquisition and the contents of all disclosure schedules and exhibits, and
the Acquisition shall have been consummated in accordance with the terms of
the Acquisition Documents (without waiver of any material conditions
precedent to the obligations of any party thereto) for an aggregate
purchase price not exceeding $358,000,000 including fees and expenses
payable in connection therewith which shall not exceed $23,000,000 in the
aggregate.
(p) EQUITY INVESTMENT. On or before the Closing Date, (i) the
Parent shall have received (A) cash equity proceeds from the Sponsor in an
amount not less than $101,000,000 and (B) rollover equity from the
management of the Parent and/or the
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Borrower representing approximately 18.3% of the outstanding equity
interests of the Parent, (ii) the Sponsor and Garrett Capital Advisors
shall have purchased equity directly from the management of the Parent
and/or the Borrower equal to approximately $10,754,000 (collectively, the
"EQUITY INVESTMENT"), and (iii) the Borrower shall have received on or
before the Closing Date a cash capital contribution from the Parent in an
amount not less than $101,000,000, each of the foregoing to be on terms and
conditions reasonably acceptable to the Agents.
(q) CONSENTS. The Agents shall have received evidence that all
governmental, shareholder, board of director and material third party
consents and approvals necessary in connection with the financings and
other transactions contemplated hereby (including the Acquisition and the
Equity Investment) have been obtained and all applicable waiting periods
have expired without any action being taken by any authority that could
restrain, prevent or impose any material adverse conditions on such
transactions or that could seek or threaten any of such transactions.
(r) COMPLIANCE WITH LAWS. The financings and other transactions
contemplated hereby shall be in compliance in all material respects with
all applicable laws and regulations (including all applicable securities
and banking laws, rules and regulations).
(s) BANKRUPTCY. There shall be no bankruptcy or insolvency
proceedings with respect to the any Credit Party or any of its
Subsidiaries.
(t) MATERIAL ADVERSE EFFECT. No material adverse condition or
material adverse change (a "MATERIAL ADVERSE CHANGE") shall have occurred
in or affecting (i) the business, properties, operations or financial
condition of the Credit Parties and their Subsidiaries taken as a whole or
the Acquired Business or (ii) the Projections previously supplied to the
Agents and the Documentation Agent, including the material assumptions,
taken as a whole, upon which the Projections were prepared.
(u) LEVERAGE RATIO. After giving effect to the Acquisition and
the closing of this Agreement, (i) the ratio of Funded Debt to Pro Forma
Adjusted EBITDA (as reasonably determined by the Agents) of the Credit
Parties and their Subsidiaries and the Acquired Business shall not exceed
4.50 to 1.0 as of the Closing Date, and (ii) the ratio of Senior Funded
Debt to Pro Forma Adjusted EBITDA (as reasonably determined by the Agents)
of the Credit Parties and their Subsidiaries and the Acquired Business
shall not exceed 2.25 to 1.0 as of the Closing Date.
(v) MINIMUM PRO FORMA ADJUSTED EBITDA. The Administrative Agent
shall have received evidence reasonably satisfactory thereto provided by
the Borrower that Pro Forma Adjusted EBITDA is not less than $71,000,000.
(w) FINANCIAL STATEMENTS. The Agents, the Documentation Agent
and the Lenders shall have received copies of the financial statements and
Projections referred to
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in Section 3.1 hereof and such financial statements and Projections shall
be in form and substance reasonably satisfactory to the Agents.
(x) TERMINATION OF EXISTING INDEBTEDNESS. All existing
Indebtedness for borrowed money of the Credit Parties and their
Subsidiaries and the Acquired Business (other than the Indebtedness listed
on SCHEDULE 6.1(b)) shall have been repaid in full and terminated and all
Liens and guarantees relating thereto shall have been terminated.
(y) OFFICER'S CERTIFICATES. The Administrative Agent shall have
received a certificate executed by a Responsible Officer of the Borrower as
of the Closing Date stating that (i) no action, suit, investigation or
proceeding is pending or, to the knowledge of any Credit Party, threatened
in any court or before any arbitrator or governmental instrumentality that
purports to affect any Credit Party or the Acquisition or any other
transaction contemplated by the Credit Documents and the Acquisition
Documents, if such action, suit, investigation or proceeding could
reasonably be expected to have a Material Adverse Effect and (ii)
immediately after giving effect to this Credit Agreement (including the
initial Extensions of Credit hereunder), the other Credit Documents, the
Acquisition, the Acquisition Documents and the Equity Investment and all
the transactions contemplated therein or thereby to occur on such 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.
(z) ADDITIONAL MATTERS. All other documents and legal matters in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent
and its counsel.
Section 4.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent on the date of
making such Extension of Credit:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Credit Parties herein, in the Security Documents or
which are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in on and as of the date of
such Extension of Credit as if made on and as of such date, except to the
extent such representations and warranties are expressly made as of a
specified date, in which event such representations and warranties shall be
true and correct as of such specified date.
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date or after giving
effect to the Extension of Credit to be made on such date unless such
Default or Event of Default shall have been waived in accordance with this
Agreement.
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(c) COMPLIANCE WITH COMMITMENTS. Immediately after giving effect
to the making of any such Extension of Credit (and the application of the
proceeds thereof and any repayments or reimbursements being made
contemporaneously therewith), (i) the sum of outstanding Revolving Loans
PLUS outstanding Swingline Loans PLUS LOC Obligations shall not exceed the
Aggregate Revolving Committed Amount, (ii) the LOC Obligations shall not
exceed the LOC Committed Amount and (iii) the Swingline Loans shall not
exceed the Swingline Committed Amount.
(d) ADDITIONAL CONDITIONS TO EXTENSIONS OF CREDIT. If such
Extension of Credit is made pursuant to Sections 2.1, 2.2, 2.3 or 2.4, all
conditions set forth in such Section shall have been satisfied.
(e) ADDITIONAL CONDITIONS TO REVOLVING LOANS MADE TO FUND
PERMITTED ACQUISITIONS. If a Revolving Loan is requested to fund a
Permitted Acquisition, in addition to the conditions set forth in Section
2.1, the Borrower shall deliver to the Administrative Agent a compliance
certificate attaching pro forma financial and other information with
respect to the Credit Parties and their Subsidiaries (after giving effect
to the Permitted Acquisition and the making of the related Revolving Loan),
which compliance certificate shall be in form and substance reasonably
satisfactory to the Administrative Agent.
Each request for an Extension of Credit and each acceptance by the Borrower
of any such Extension of Credit shall be deemed to constitute a representation
and warranty by the Borrower as of the date of such Extension of Credit that the
applicable conditions in paragraphs (a) through (e) of this Section have been
satisfied.
ARTICLE V
AFFIRMATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations (other than contingent indemnity obligations that expressly survive
the termination of this Agreement), together with interest, Commitment Fees and
all other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full, the Credit Parties shall, and shall cause each of their
Subsidiaries, to:
Section 5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent (which will furnish to each of the
Lenders):
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event no later than the earlier to occur of (i) the date which is
ninety (90) days after the end of each fiscal year of the Parent and (ii)
the date upon which the Parent makes its Form 10-K
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filing, a copy of the consolidated and consolidating balance sheet of the
Parent and its consolidated Subsidiaries as at the end of such fiscal year
and the related consolidated and consolidating statements of income and
retained earnings and of cash flows (with respect to the consolidated
statements only) of the Parent and its consolidated Subsidiaries for such
year (such financial statements to include the financial information
required to be contained in a Form 10-K filing with the Securities and
Exchange Commission regardless of whether the Parent and its consolidated
Subsidiaries are required to make such a filing), audited (with respect to
the consolidated statements only) by a firm of independent certified public
accountants of nationally recognized standing or as otherwise may be
reasonably acceptable to the Administrative Agent, in each case setting
forth in comparative form consolidated and consolidating figures (where
applicable) for the preceding fiscal year, reported on without a "going
concern" or like qualification or exception, or qualification indicating
that the scope of the audit was inadequate to permit such independent
certified public accountants to certify such financial statements without
such qualification;
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available, but in
any event no later than the earlier to occur of (i) the date which is
forty-five (45) days after the end of each fiscal quarter of the Parent
(provided that the quarterly financial statements for the fiscal quarter
ending March 31, 2003 shall be furnished as soon as practicable after the
Closing Date but in no event later than July 31, 2003) and (ii) the date
upon which the Borrower makes its Form 10-Q filing, a company-prepared
unaudited consolidated and consolidating balance sheet of the Parent and
its consolidated Subsidiaries as at the end of such period and related
company-prepared unaudited consolidated and consolidating statements of
income and retained earnings and of cash flows (with respect to the
consolidated statements only) for the Parent and its consolidated
Subsidiaries for such quarterly period and for the portion of the fiscal
year ending with such period (such financial statements to include the
financial information required to be contained in a Form 10-Q filing with
the Securities and Exchange Commission regardless of whether the Parent and
its consolidated Subsidiaries are required to make such a filing), in each
case setting forth in comparative form consolidated and consolidating
figures (where applicable) for the corresponding period or periods of the
preceding fiscal year (subject to normal recurring year-end audit
adjustments and the absence of footnote disclosure) and including
management discussion and analysis of operating results inclusive of
operating metrics in comparative form and a summary of accounts receivable
aging reports in form reasonably satisfactory to the Agents;
(c) MONTHLY FINANCIAL STATEMENTS. As soon as available and in
any event within forty-five (45) days after the end of each fiscal month of
the Parent during the first twelve (12) months following the Closing Date,
a company-prepared unaudited consolidated balance sheet of the Parent and
its consolidated Subsidiaries as at the end of such period and related
company-prepared unaudited consolidated statements of income and retained
earnings and of cash flows for the Parent and its consolidated Subsidiaries
for such monthly period and for the portion of the fiscal year ending with
such period, in each case setting forth in comparative form consolidated
figures for the corresponding
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period or periods of the preceding fiscal year (subject to normal recurring
year-end audit adjustments and the absence of footnote disclosure); and
(d) ANNUAL BUDGET PLAN. As soon as available, but in any event
within thirty (30) days after the end of each fiscal year, a copy of the
detailed annual budget or plan (including cash flow projections) of the
Borrower for the next fiscal year on a quarterly basis, in form and detail
substantially similar to the plan and projections delivered to the Lenders
prior to the Closing Date, or in such other form and detail reasonably
acceptable to the Agents and the Required Lenders (which approval shall be
deemed given upon the failure to object to such annual budget or plan
within a reasonable period of time after receipt of a copy thereof),
together with a summary of the material assumptions made in the preparation
of such annual budget or plan;
all such financial statements to be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments and the absence of footnote disclosure) and to be
prepared in reasonable detail and, in the case of the annual and quarterly
financial statements provided in accordance with subsections (a) and (b) above,
in accordance with GAAP applied consistently throughout the periods reflected
therein and further accompanied by a description of, and an estimation of the
effect on the financial statements on account of, a change, if any, in the
application of accounting principles as provided in Section 1.3.
Section 5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent (which will furnish to each of the
Lenders):
(a) on the date the financial statements referred to in Section
5.1(a) above are required to be delivered pursuant to such Section, a
certificate of the independent certified public accountants reporting on
such financial statements stating that in making the examination necessary
therefor no knowledge was obtained of any Default or Event of Default,
except as specified in such certificate; PROVIDED that such certificate
shall not be required if, at the time such certificate is required to be
delivered to the Administrative Agent and the Lenders, such certificates
are not provided by nationally recognized accounting firms in similar
commercial transactions in the general course of business;
(b) on the date the financial statements referred to in Sections
5.1(a) and 5.1(b) above are required to be delivered pursuant to such
Section, a certificate of a Responsible Financial Officer of the Borrower
substantially in the form of SCHEDULE 5.2(b) stating that, to the best of
such Responsible Officer's knowledge, during such period each of the Credit
Parties observed or performed in all material respects all of its covenants
and other agreements, and satisfied in all material respects every
condition, contained in this Agreement to be observed, performed or
satisfied by it, and that such Responsible Officer has obtained no
knowledge of any Default or Event of Default except as specified in such
certificate and such certificate shall include the calculations in
reasonable detail required to indicate compliance with Section 5.9 as of
the last day of such period;
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(c) within ten (10) days after the same are filed, copies of all
financial statements and non-confidential reports which the Parent may make
to, or file with the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) within ninety (90) days after the end of each fiscal year of
the Borrower, a certificate containing information regarding the amount of
all Asset Dispositions, Debt Issuances, and Equity Issuances that were made
during the prior fiscal year and amounts received in connection with any
Recovery Event during the prior fiscal year;
(e) promptly upon receipt thereof, a copy of any final report or
"management letter" submitted by independent accountants to any Credit
Party or any of its Subsidiaries in connection with any annual, interim or
special audit of the books of such Person;
(f) concurrently with the delivery of the financial statements
referred to in Section 5.1(a) above (or more frequently at the Borrower's
discretion), an updated copy of SCHEDULE 3.12 and SCHEDULE 3.16;
(g) promptly after the Borrower has notified the Administrative
Agent of its intention to treat the Loans and the Letters of Credit and
related transactions as being a "reportable transaction" (within the
meaning of Treasury Regulation Section 1.6011-4), a duly completed copy of
IRS Form 8886 or any successor form; and
(h) promptly, such additional financial and other information as
the Administrative Agent, on behalf of any Lender, may from time to time
reasonably request.
Section 5.3 PAYMENT OF TAXES.
Pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent, as the case may be, all its income taxes (Federal, state, and
foreign) and other material taxes, except when the amount or validity of such
taxes is currently being contested in good faith by appropriate proceedings and
reserves, if applicable, in conformity with GAAP with respect thereto have been
provided on the books of the Credit Parties or their Subsidiaries, as the case
may be.
Section 5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now conducted by
it on the Closing Date and preserve, renew and keep in full force and effect its
organizational existence and take all reasonable action to maintain all rights,
privileges and franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to Section 6.4; comply with all
Contractual Obligations and Requirements of Law applicable to it except to the
extent that failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
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Section 5.5 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Keep all material property useful and necessary in its
business in good working order and condition (ordinary wear and tear,
damage by casualty and obsolescence excepted, and subject to any actions
taken pursuant to Section 6.4);
(b) Maintain with financially sound and reputable insurance
companies insurance on all its material property (including, without
limitation, its material tangible Collateral) in at least such amounts and
against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business; and
furnish to the Administrative Agent, upon written request, full information
as to the insurance carried; PROVIDED, HOWEVER, that the Credit Parties and
their Subsidiaries may maintain self insurance plans to the extent
companies of similar size and in similar businesses do so. The
Administrative Agent shall be named as loss payee or mortgagee, as its
interest may appear, and/or additional insured with respect to any such
insurance providing coverage in respect of any Collateral, and each
provider of any such insurance shall agree (unless otherwise consented to
by the Administrative Agent), by endorsement upon the policy or policies
issued by it or by independent instruments furnished to the Administrative
Agent, that it will give the Administrative Agent thirty (30) days prior
written notice before any such policy or policies shall be altered or
canceled. The Borrower shall provide prompt written notice to the
Administrative Agent of the cancellation of any insurance maintained in
accordance with this Section 5.5(b), unless such notification has
previously been provided by the applicable provider of such insurance
policy; and
(c) In case of any material loss, damage to or destruction of a
material portion of the Collateral, such Credit Party shall promptly give
written notice thereof to the Administrative Agent generally describing the
nature and extent of such damage or destruction. In case of any loss,
damage to or destruction of a material portion of the Collateral, such
Credit Party, whether or not the insurance proceeds, if any, received on
account of such damage or destruction shall be sufficient for that purpose,
at such Credit Party's cost and expense, will promptly repair or replace
the Collateral of such Credit Party so lost, damaged or destroyed unless
such Credit Party takes any action permitted by Section 6.4.
Section 5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which complete entries in
conformity with GAAP and all Requirements of Law shall be made of its dealings
and transactions in relation to its businesses and activities; and permit,
during regular business hours and upon reasonable prior notice by the
Administrative Agent, the Administrative Agent (which may be accompanied by any
Lender) to visit and inspect any of its properties and examine and make
abstracts from any of its books and records (other than materials protected by
the attorney-client privilege and materials which the Borrower may not disclose
without violation of a confidentiality obligation binding upon it) at any
reasonable time and as often as may reasonably be desired (provided that
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the number of inspections shall be limited to one (1) per year if no Default or
Event of Default shall have occurred during such year), and to discuss the
business, operations, properties and financial and other condition of the Credit
Parties and their Subsidiaries with officers and employees of the Credit Parties
and their Subsidiaries and with its independent certified public accountants (it
being acknowledged and agreed that, so long as no Default or Event of Default
shall have occurred and be continuing, the Borrower shall be afforded the
reasonable opportunity to participate in any such discussion), in each case at
the Borrower's expense if a Default or Event of Default shall have occurred and
be continuing.
Section 5.7 NOTICES.
Give notice in writing to the Administrative Agent (which shall promptly
transmit such notice to each Lender) of:
(a) promptly, but in any event within two (2) Business Days
after a Responsible Officer of the Borrower has knowledge thereof the
occurrence of any Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of any Credit Party or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect or involve a
monetary claim in excess of $2,000,000;
(c) promptly, any litigation, or any investigation or proceeding
known to a Credit Party, affecting any Credit Party or any of its
Subsidiaries (i) which could reasonably be expected to be adversely
determined and, if adversely determined, could reasonably be expected to
have a Material Adverse Effect or involve a monetary claim in excess of
$2,000,000 or (ii) involving or directly affecting this Agreement or any
other Credit Document;
(d) as soon as possible and in any event within thirty (30) days
after a Responsible Officer of the Borrower has knowledge thereof: (i) the
occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution to a Plan, the
creation of any Lien in favor of the PBGC (other than a Permitted Lien) or
a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or any Credit
Party or any Commonly Controlled Entity or any Multiemployer Plan with
respect to the termination of any Plan or the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Multiemployer Plan;
(e) any written notice of any material violation of any
Requirement of Law received by any Credit Party or any of its Subsidiaries
from any Governmental Authority (including, without limitation, any notice
of violation of Environmental Laws) involving potential liability in excess
of $2,000,000;
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(f) any labor controversy that has resulted in, or could
reasonably be expected to result in, a strike or other work action against
any Credit Party or any of its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect;
(g) any attachment, judgment, lien, levy or order exceeding
$2,000,000 that may be assessed against any Credit Party or any of its
Subsidiaries other than Permitted Liens;
(h) promptly, of the institution of any investigation or
proceeding against any Credit Party by any Governmental Authority to
suspend, revoke or terminate or which may result in the termination of any
Medicaid Provider Agreement, Medicaid Certification, Medicare Provider
Agreement, Medicare Certification, exclusion from any Medical Reimbursement
Program or any other material authorization under any Requirements of Law
necessary for such Credit Party to do business as presently conducted;
(i) promptly, after any Credit Party becomes involved in a
pending civil or criminal investigation, criminal action or civil proposed
debarment, exclusion or other sanctioning action related to any Federal or
state healthcare program or that is initiated by the Food and Drug
Administration; and
(j) promptly, any other development or event which could
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the Borrower proposes to take with
respect thereto. In the case of any notice of a Default or Event of Default, the
Borrower shall specify that such notice is a Default or Event of Default notice
on the face thereof.
Section 5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and make good faith
efforts to ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and obtain and
comply in all material respects with and maintain, and make good faith
efforts to ensure that all tenants and subtenants obtain and comply in all
material respects with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so could not
reasonably be expected to have a Material Adverse Effect;
(b) Conduct and complete in all material respects all
investigations, studies, sampling and testing, and all remedial, removal
and other actions required under Environmental Laws and promptly comply in
all material respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to the extent
that the same are being contested in good faith by appropriate proceedings
and
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the pendency of such proceedings could not reasonably be expected to have a
Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative Agent
and the Lenders, and their respective employees, agents, officers and
directors and affiliates, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising
out of, or in any way relating to the violation of, noncompliance with or
liability under, any Environmental Law applicable to the operations of any
Credit Party or any of its Subsidiaries or the Properties, or any orders,
requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and
litigation expenses, except to the extent that any of the foregoing arise
out of the gross negligence, bad faith or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph shall
survive repayment of the Notes and all other amounts payable hereunder.
Section 5.9 FINANCIAL COVENANTS.
Commencing on the day immediately following the Closing Date, each of the
Credit Parties shall, and shall cause each of its Subsidiaries to, comply with
the following financial covenants:
(a) LEVERAGE RATIO. The Leverage Ratio, as of the last day of
each fiscal quarter of the Borrower (beginning with the fiscal quarter
ending September 30, 2003) occurring during the periods indicated below,
shall be less than or equal to the following:
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<Table>
<Caption>
Fiscal Quarter Ending Required Ratio
--------------------- --------------
September 30, 2003 4.90 to 1.00
December 31, 2003 4.90 to 1.00
March 31, 2004 4.90 to 1.00
June 30, 2004 4.85 to 1.00
September 30, 2004 4.75 to 1.00
December 31, 2004 4.50 to 1.00
March 31, 2005 4.25 to 1.00
June 30, 2005 4.00 to 1.00
September 30, 2005 4.00 to 1.00
December 31, 2005 3.75 to 1.00
March 31, 2006 3.25 to 1.00
June 30, 2006 3.25 to 1.00
September 30, 2006 3.25 to 1.00
December 31, 2006 3.25 to 1.00
March 31, 2007 3.00 to 1.00
June 30, 2007 3.00 to 1.00
September 30, 2007 3.00 to 1.00
December 31, 2007 3.00 to 1.00
March 31, 2008 and thereafter 2.75 to 1.00
</Table>
(b) SENIOR LEVERAGE RATIO. The Senior Leverage Ratio, as of the
last day of each fiscal quarter of the Borrower (beginning with the fiscal
quarter ending September 30, 2003) occurring during the periods indicated
below, shall be less than or equal to the following:
<Table>
<Caption>
Fiscal Quarter Ending Required Ratio
--------------------- --------------
September 30, 2003 2.25 to 1.00
December 31, 2003 2.25 to 1.00
March 31, 2004 2.25 to 1.00
June 30, 2004 2.25 to 1.00
September 30, 2004 2.25 to 1.00
December 31, 2004 2.00 to 1.00
March 31, 2005 2.00 to 1.00
June 30, 2005 1.75 to 1.00
September 30, 2005 1.75 to 1.00
December 31, 2005 and thereafter 1.50 to 1.00
</Table>
(c) FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Borrower (beginning
with the fiscal quarter ending September 30, 2003) shall be greater than or
equal to 1.35 to 1.00.
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(d) INTEREST COVERAGE RATIO. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Borrower (beginning with the
fiscal quarter ending September 30, 2003) occurring during the periods indicated
below, shall be greater than or equal to the following:
<Table>
<Caption>
Fiscal Quarter Ending Required Ratio
--------------------- --------------
September 30, 2003 2.50 to 1.00
December 31, 2003 2.50 to 1.00
March 31, 2004 2.50 to 1.00
June 30, 2004 2.50 to 1.00
September 30, 2004 2.50 to 1.00
December 31, 2004 2.50 to 1.00
March 31, 2005 2.50 to 1.00
June 30, 2005 2.75 to 1.00
September 30, 2005 2.75 to 1.00
December 31, 2005 2.75 to 1.00
March 31, 2006 3.00 to 1.00
June 30, 2006 3.00 to 1.00
September 30, 2006 3.00 to 1.00
December 31, 2006 3.00 to 1.00
March 31, 2007 3.50 to 1.00
June 30, 2007 3.50 to 1.00
September 30, 2007 3.50 to 1.00
December 31, 2007 3.50 to 1.00
March 31, 2008 and thereafter 3.75 to 1.00
</Table>
(e) CONSOLIDATED CAPITAL EXPENDITURES. Consolidated Capital
Expenditures (excluding Consolidated Capital Expenditures constituting
Permitted Acquisitions and the Acquisition and Consolidated Capital
Expenditures made with the proceeds of Asset Dispositions in accordance
with Section 2.7(b)(ii)) made during each fiscal year of the Borrower
(including, without limitation, the fiscal year 2003) shall be less than or
equal to the sum of (i) $13,250,000, PLUS (ii) the unused amount available
for Consolidated Capital Expenditures under this Section 5.9 for the
immediately preceding fiscal year (excluding any carry forward available
from any prior fiscal year); PROVIDED, that with respect to any fiscal
year, Capital Expenditures made during any such fiscal year shall be deemed
to be made first with respect to the applicable limitation for such year
and then with respect to any carry forward amount to the extent applicable,
PLUS (iii) an amount equal to 10% of the pro forma Consolidated EBITDA of
any Target acquired in a Permitted Acquisition during such fiscal year for
the most recent four fiscal quarters prior to the acquisition date for
which financial statements are available.
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Section 5.10 ADDITIONAL SUBSIDIARY GUARANTORS.
The Credit Parties will cause each of their Domestic Subsidiaries, whether
newly formed, after acquired or otherwise existing, and any other Subsidiary
that guarantees the Senior Subordinated Notes to become a Guarantor (within ten
(10) Business Days of the date on which it was acquired in the case of a newly
formed or acquired Subsidiary, and immediately in the case of any other
Subsidiary which guarantees the Senior Subordinated Notes) hereunder by way of
execution of a Joinder Agreement. The guaranty obligations of any such
Additional Credit Party shall be secured by, among other things, the Collateral
of the Additional Credit Party and such Domestic Subsidiary shall execute and
deliver to the Administrative Agent such Security Documents, legal opinions and
related documents as the Administrative Agent may reasonably request with
respect to such Collateral.
Section 5.11 COMPLIANCE WITH LAW.
Each Credit Party will, and will cause each of its Subsidiaries to, (a)
comply with all laws, rules, regulations and orders, and all applicable
restrictions imposed by all Governmental Authorities, applicable to it and its
Property if noncompliance with any such law, rule, regulation, order or
restriction could reasonably be expected to have a Material Adverse Effect and
(b) conform with and duly observe in all material respects all laws, rules and
regulations and all other valid requirements of any regulatory authority with
respect to the conduct of its business, including without limitation Titles
XVIII and XIX of the Social Security Act, Medicare Regulations, Medicaid
Regulations; and (c) obtain and maintain all licenses, permits, certifications
and approvals of all applicable Governmental Authorities as are required for the
conduct of its business as currently conducted and herein contemplated,
including without limitation professional licenses, Medicaid Certifications and
Medicare Certifications, if failure to do so could 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 have a Material
Adverse Effect: (i) billing policies, arrangements, protocols and instructions
will comply with reimbursement requirements under Medicare, Medicaid and other
Medical Reimbursement Programs and will be administered by properly trained
personnel; and (ii) medical director compensation arrangements and other
arrangements with referring physicians will comply with applicable state and
federal self-referral and anti-kickback laws, including without limitation 42
U.S.C. Section 1320a-7b(b)(1) - (b)(2) 42 U.S.C. and 42 U.S.C. Section 1395nn.
Section 5.12 PLEDGED ASSETS.
Subject to the terms of Section 5.14, each Credit Party will, and will
cause each of its Domestic Subsidiaries to, be subject at all times to a first
priority, perfected Lien with respect to all of such Domestic Subsidiary's real
property (with a fair market value in excess of $250,000) and tangible and
intangible personal property (subject in each case to Permitted Liens) in favor
of the Administrative Agent pursuant to the terms and conditions of the Security
Documents or such other security documents as the Administrative Agent shall
reasonably request; PROVIDED, that the Credit Parties shall not be required to
pledge more than 65% of the Capital Stock of their Material First-Tier Foreign
Subsidiaries. Subject to the terms of Section 5.14, if at any time after the
Closing Date the fair market value of the assets of any Material First-Tier
Foreign Subsidiary
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exceed 10% of the fair market value of the assets of all of the Credit Parties,
or if at any time the portion of Consolidated EBITDA allocable to any Material
First-Tier Foreign Subsidiary shall exceed 10% of Consolidated EBITDA, the
Borrower shall, within 60 days thereafter (or such longer period of time as
agreed to by the Administrative Agent), execute (or cause the applicable
Subsidiary to execute) documentation providing the Administrative Agent with a
valid and perfected, first priority security interest in 65% of the outstanding
Capital Stock of such Material First-Tier Foreign Subsidiary under the laws of
the jurisdiction of organization of such Material First-Tier Foreign Subsidiary,
together with such foreign counsel opinions as the Administrative Agent may
request, in form and substance reasonably satisfactory to the Administrative
Agent. Each Credit Party shall, and shall cause each of its Domestic
Subsidiaries to, adhere to the covenants set forth in the Security Documents.
Section 5.13 FIXED RATE INTEREST.
The Credit Parties shall maintain at all times a fixed rate of interest (or
a floating rate subject to a cap or exchanged for a fixed rate) owing with
respect to not less than 35% of all outstanding Funded Debt of such Persons
unless otherwise agreed by the Administrative Agent in consultation with the
Borrower.
Section 5.14 POST-CLOSING COVENANT.
(a) FOREIGN STOCK PLEDGE. Within 90 days after the Closing Date
(or such extended period of time as agreed to by the Administrative Agent),
the Borrower shall deliver to the Administrative Agent, with respect to the
pledge to the Administrative Agent of 65% of the outstanding Capital Stock
of each Material First-Tier Foreign Subsidiary, (i) collateral
documentation with respect to such pledge that is sufficient to perfect the
Lien of the Administrative Agent on such Capital Stock in accordance with
the laws of the jurisdiction of organization of each such Material
First-Tier Foreign Subsidiary, such documentation to be in form and
substance reasonably satisfactory to the Administrative Agent, (ii)
original stock certificates or other certificates evidencing such Capital
Stock (to the extent such Capital Stock is certificated), together with an
undated stock power for each such certificate duly executed in blank by the
registered owner thereof and (iii) a legal opinion from counsel in each
country in which a Material First-Tier Foreign Subsidiary is located.
(b) LANDLORD WAIVERS. Within 30 days after the Closing Date (or
such extended period of time as agreed to by the Administrative Agent), the
Borrower shall deliver to the Administrative Agent a landlord waiver and
estoppel for the leased property of the Borrower located in Duluth,
Georgia, such landlord and estoppel to be in form and substance reasonably
satisfactory to the Administrative Agent. The Borrower shall use its
commercially reasonable best efforts to deliver to the Administrative Agent
landlord waivers and estoppels for the leased property of the Borrower
located in Bristol, Connecticut and for the leased property of Medex
Cardio-Pulmonary, Inc. located in Chicago, Illinois, such landlord waivers
and estoppels to be in form and substance reasonably satisfactory to the
Administrative Agent.
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ARTICLE VI
NEGATIVE COVENANTS
The Credit Parties hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Credit Party
Obligations (other than contingent indemnity obligations that expressly survive
the termination of this Agreement), together with interest, Commitment Fee and
all other amounts owing to the Administrative Agent or any Lender hereunder, are
paid in full that:
Section 6.1 INDEBTEDNESS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents;
(b) Indebtedness of the Parent and its Subsidiaries existing as
of the Closing Date as referenced in the financial statements referenced in
Section 3.1 (and set out more specifically in SCHEDULE 6.1(b)) hereto and
renewals, refinancings or extensions thereof in a principal amount not in
excess of that outstanding as of the date of such renewal, refinancing or
extension;
(c) Indebtedness of the Borrower and its Subsidiaries incurred
after the Closing Date consisting of Capital Leases or Indebtedness
incurred to provide all or a portion of the purchase price or cost of
construction or improvement of an asset provided that (i) such Indebtedness
when incurred shall not exceed 100% of the fair market value of the asset
purchased, constructed or improved at the time of such acquisition,
construction or improvement; (ii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; and (iii) the total amount of all
such Indebtedness shall not exceed $2,500,000 at any time outstanding;
(d) (i) Unsecured intercompany Indebtedness among the Credit
Parties, PROVIDED that any such Indebtedness shall be (x) fully
subordinated to the Secured Obligations on terms reasonably satisfactory to
the Administrative Agent and (y) evidenced by promissory notes which shall
be pledged to the Administrative Agent as Collateral for the Secured
Obligations, (ii) unsecured intercompany Indebtedness among Foreign
Subsidiaries and (iii) loans or advances by the Credit Parties to the
Foreign Subsidiaries and by the Foreign Subsidiaries to the Credit Parties
as permitted by clause (xiv) of the definition of Permitted Investments;
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(e) Indebtedness and obligations owing under Hedging Agreements
entered into in order to manage existing or anticipated interest rate,
exchange rate or commodity price risks and not for speculative purposes;
(f) Indebtedness and obligations of Credit Parties owing under
documentary letters of credit for the purchase of goods or other
merchandise (but not under standby, direct pay or other letters of credit
except for the Letters of Credit hereunder) generally;
(g) Guaranty Obligations in respect of Indebtedness of a Credit
Party to the extent such Indebtedness is permitted to exist or be incurred
pursuant to this Section 6.1;
(h) Indebtedness evidenced by seller notes issued as
consideration in a Permitted Acquisition in an aggregate principal amount
not to exceed $10,000,000 at any time outstanding; PROVIDED that such
seller notes shall be fully subordinated to the Secured Obligations on
terms reasonably satisfactory to the Agents;
(i) Indebtedness of any Target acquired in a Permitted
Acquisition and assumed by the Borrower or any Subsidiary pursuant to such
Permitted Acquisition in an aggregate principal amount not to exceed
$1,000,000 at any time outstanding; PROVIDED that such Indebtedness was in
existence prior to such Permitted Acquisition and was not incurred in
contemplation thereof;
(j) customary earn-out obligations owing in connection with any
Permitted Acquisition and constituting all or a portion of the
consideration in such Permitted Acquisition;
(k) Indebtedness of Foreign Subsidiaries consisting of working
capital lines of credit in an aggregate amount not to exceed the dollar
equivalent of $5,000,000 at any time outstanding;
(l) customary indemnification provisions and purchase price
adjustments entered into in connection with any Permitted Acquisition or
Asset Disposition;
(m) performance, surety, bid, appeal or similar bonds arising in
the ordinary course of business;
(n) Indebtedness owing in respect of the Senior Subordinated
Notes in an aggregate principal amount not to exceed $200,000,000;
(o) overdraft facilities of the Foreign Subsidiaries not to
exceed $1,000,000 in the aggregate at any time outstanding;
(p) Indebtedness of the Parent owing to the Sponsor in an
aggregate amount not to exceed $7,400,000, the proceeds of which the Parent
shall receive in cash and use to make a cash payment to the trustee of the
Parent's ESOP and other European employee stock benefit plans in connection
with the termination of such ESOP and
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benefit plans, provided that such Indebtedness shall be, contemporaneously
with the incurrence thereof, fully extinguished solely through the issuance
of Capital Stock of the Parent; and
(q) other Indebtedness of the Borrower and its Subsidiaries
which does not exceed $2,000,000 in the aggregate at any time outstanding.
Section 6.2 LIENS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or hereafter acquired, except for Permitted
Liens.
Section 6.3 NATURE OF BUSINESS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
alter the character of its business in any material respect from that conducted
(including substantially similar lines of business and any incidental activities
reasonably related thereto) as of the Closing Date.
Section 6.4 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease to or otherwise dispose of its property or assets or agree to do so
at a future time except the following, without duplication, shall be
expressly permitted:
(i) the sale, transfer, lease or other disposition of
inventory and materials in the ordinary course of business;
(ii) the sale, transfer or other disposition of cash and
Cash Equivalents;
(iii) (A) the disposition of property or assets as a
direct result of a Recovery Event or (B) the sale, lease, transfer
or other disposition of assets no longer used or useful in the
conduct of the business of the Borrower or any of its Subsidiaries;
(iv) the sale, lease or transfer of property or assets
from one Credit Party to another Credit Party (other than the
Parent) or from one Foreign Subsidiary to another Foreign
Subsidiary;
(v) the sale, lease or transfer of Investments made in
accordance with clause (xv) of the definition of Permitted
Investments;
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(vi) the Borrower and its Subsidiaries may enter into
leases and licenses in the ordinary course of business, including
Capital Leases permitted hereunder;
(vii) the sale or discount (without recourse) in the
ordinary course of business of accounts receivable which are
overdue or which are difficult to collect, in each case in
connection with the compromise or collection thereof;
(viii) any Subsidiary of the Borrower may be dissolved or
liquidated into, or merged or consolidated with, the Borrower or
any other Domestic Subsidiary of the Borrower and any Foreign
Subsidiary may be dissolved or liquidated into, or merged or
consolidated with, another Foreign Subsidiary;
(ix) the Borrower and its Subsidiaries may consummate the
Acquisition and the transactions related thereto;
(x) the cancellation of any promissory notes permitted
by clause (xiii) of the definition of Permitted Investments;
(xi) the Credit Parties may terminate any Hedging
Agreement permitted pursuant to Section 6.1(e);
(xii) any Equity Issuance and any issuance by any Credit
Party or any Subsidiary thereof of shares of Capital Stock or
warrants, or similar rights, which are exercisable for or
convertible into shares or interests of Capital Stock;
(xiii) the Borrower may sell approximately 6.8 acres of
unimproved land at its headquarters in Dublin, Ohio for a purchase
price determined by the Borrower's board of directors in good
faith;
(xiv) the Credit Parties may sell the assets or
outstanding Capital Stock of Medex de Costa Rica Limitada for fair
market value; and
(xv) the sale, lease or transfer of property or assets
not to exceed $2,000,000 in the aggregate in any fiscal year;
PROVIDED, that, in the case of clauses (i), (ii), (iii)(A), (vii) and (xv)
above, at least 75% of the consideration received by the Borrower or any
other Credit Party in connection with any sale, lease or transfer involving
property or assets with a fair market value in excess of $250,000 is in the
form of cash or Cash Equivalents; PROVIDED, FURTHER, that with respect to
sales of property or assets permitted hereunder only, the Administrative
Agent shall be entitled, without the consent of the Required Lenders, to
release its Liens relating to the particular property or assets sold; or
(b) (i) purchase, lease from or otherwise acquire (in a single
transaction or a series of related transactions) the property or assets of
any Person (other than purchases
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or other acquisitions of inventory and other assets in the ordinary course
of business, except as otherwise limited or prohibited herein) or (ii)
enter into any transaction of merger or consolidation, except for (A)
investments or acquisitions permitted pursuant to Section 6.5, (B) the
merger, dissolution, liquidation or consolidation of a Credit Party (other
than the Parent) with and into another Credit Party (other than the
Parent); PROVIDED that the surviving entity shall be a Credit Party and if
the Borrower is a party thereto, the Borrower will be the surviving entity,
(C) Consolidated Capital Expenditures permitted hereunder, (D) the
Acquisition and the transactions related thereto, (E) the merger,
dissolution, liquidation or consolidation of a Foreign Subsidiary with or
into another Foreign Subsidiary, (F) the purchase, lease or acquisition of
property or assets by one Credit Party (other than the Parent) from another
Credit Party or by one Foreign Subsidiary from another Foreign Subsidiary
and (G) leases and licenses in the ordinary course of business, including
Capital Leases permitted hereunder.
Section 6.5 ADVANCES, INVESTMENTS AND LOANS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
make any Investment except for Permitted Investments.
Section 6.6 TRANSACTIONS WITH AFFILIATES.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director or Affiliate (other than
with any Credit Party or any Subsidiary of any Credit Party) other than on terms
and conditions substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer, director or
Affiliate; PROVIDED, HOWEVER, that the following shall be permitted: (a)
reasonable fees and compensation paid to officers, directors, employees, agents
or consultants of the Credit Parties or any of their Subsidiaries as determined
in good faith by the Borrower's board of directors or senior officers; (b)
reasonable indemnification provided on behalf of officers, directors, employees,
agents or consultants of the Credit Parties or any of their Subsidiaries as
determined in good faith by the Borrower's board of directors or senior
officers; (c) any agreement as in effect on the Closing Date and set forth on
SCHEDULE 6.6, together with any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Credit Parties or any of their
Subsidiaries, as the case may be, in any material respect than the original
agreement as in effect on the Closing Date; (d) any issuance of securities of
the Parent or other payments, awards or grants in cash, securities of the Parent
or otherwise pursuant to, or the funding of, employment arrangement, stock
options and stock ownership plans of the Parent or the Borrower entered into the
ordinary course and approved by the Parent's or the Borrower's board of
directors, as applicable; (e) so long as no Default or Event of Default has
occurred and be continuing both before and after giving effect thereto, the
payment of reasonable out-of-pocket expenses of the Sponsor to the extent
actually incurred in connection with its investment in the Parent; (f) loans and
advances to officers, directors, employees and Affiliates in the ordinary course
of business to the extent permitted by clause (iv) of the definition of
Permitted Investments; (g) indemnification agreements provided for the
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benefit of the Credit Parties or any of their Subsidiaries from officers,
directors or employees of the Credit Parties or any of their Subsidiaries; (h)
the acceptance of promissory notes pursuant to clause (xiii) of the definition
of Permitted Investments and the cancellation of any such promissory notes; (i)
transactions permitted under Section 6.10, including without limitation, the
payment of management fees to the Sponsor to the extent permitted by Section
6.10(c); (j) so long as no Event of Default pursuant to Section 7.1(a) shall
have occurred and be continuing or would result therefrom, the payment in cash
of retention incentive payments and non-compete fees to certain officers of the
Credit Parties in an aggregate amount not to exceed $8,200,000, $5,100,000 of
which will be paid on the Closing Date, $2,100,000 of which will be paid on
January 1, 2004 and $1,000,000 of which will be paid on January 1, 2005; and (k)
in connection with the termination of the Parent's ESOP and other European
employee stock benefit plans, the issuance of Capital Stock of the Parent and/or
the payment of cash to the participants in the ESOP and other benefit plans,
with the payment of cash not exceeding $7,400,000 in the aggregate and made
solely with the proceeds of funds advanced to the Parent by the Sponsor in
accordance with Section 6.1(p).
Section 6.7 OWNERSHIP OF SUBSIDIARIES; RESTRICTIONS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
create, form or acquire any Subsidiaries, except for Domestic Subsidiaries which
are joined as Additional Credit Parties in accordance with the terms hereof and
Foreign Subsidiaries. The Borrower will not sell, transfer, pledge or otherwise
dispose of any Capital Stock or other equity interests in any of its
Subsidiaries, nor will it permit any of its Subsidiaries to issue, sell,
transfer, pledge or otherwise dispose of any of their Capital Stock or other
equity interests, except (i) for issuances and sales of Capital Stock to the
Borrower or any other Credit Party (other than the Parent), (ii) issuances or
sales of Capital Stock by any Foreign Subsidiary to another Foreign Subsidiary
or in accordance with local law requirements and (iii) in a transaction
permitted by Section 6.4.
Section 6.8 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS; MATERIAL CONTRACTS;
SUBORDINATED INDEBTEDNESS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
change its fiscal year. Each of the Credit Parties will not, nor will it permit
any Subsidiary to, amend, modify or change its articles of incorporation (or
corporate charter or other similar organizational document) or bylaws (or other
similar document) in any manner materially adverse to the interests of the
Lenders without the prior written consent of the Required Lenders. Each of the
Credit Parties will not, nor will it permit any Subsidiary to, without the prior
written consent of the Administrative Agent, amend, modify, cancel or terminate
or fail to renew or extend or permit the amendment, modification, cancellation
or termination of any of the Material Contracts or Acquisition Documents, except
in the event that such amendments, modifications, cancellations or terminations
could not reasonably be expected to have a Material Adverse Effect. The Credit
Parties will not, without the prior written consent of the Required Lenders,
amend, modify, waive or extend or permit the amendment, modification, waiver or
extension of any term of (i) the Senior Subordinated Indenture or the Senior
Subordinated Notes in a manner that is adverse to the interests of the Lenders
or (ii) any other Subordinated Indebtedness in a manner that is materially
adverse to the interests of the Lenders.
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Section 6.9 LIMITATION ON RESTRICTED ACTIONS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions to any Credit Party on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any Indebtedness or other obligation owed to
any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its properties or assets to any Credit Party, or (e)
act as a Guarantor and pledge its assets pursuant to the Credit Documents,
except for such encumbrances or restrictions existing under or by reason of (i)
this Agreement and the other Credit Documents, (ii) applicable law, (iii) any
document or instrument governing Indebtedness incurred pursuant to Section
6.1(c); PROVIDED that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith, (iv) any
Permitted Lien or any document or instrument governing any Permitted Lien;
PROVIDED that any such restriction contained therein relates only to the asset
or assets subject to such Permitted Lien, (v) any encumbrance or restriction
pursuant to an agreement in effect at or entered into on the Closing Date and
reflected on SCHEDULE 6.9 hereto together with any amendment to such agreement
or any replacement agreement thereto (to the extent permitted hereunder) so long
as any such amendment or replacement agreement is not more disadvantageous to
the Credit Parties or any of their Subsidiaries, as the case may be, in any
material respect than the original agreement as in effect on the Closing Date,
(vi) any encumbrance or restriction with respect to a Subsidiary of the Borrower
acquired in a Permitted Acquisition pursuant to an agreement relating to any
Indebtedness issued by such Subsidiary on or prior to the consummation of such
Permitted Acquisition (other than Indebtedness issued in contemplation of such
Permitted Acquisition), (vii) any such encumbrance or restriction consisting of
customary non-assignment provisions in leases or licenses governing leasehold
interests or licenses, as applicable, to the extent such provisions restrict the
transfer of the lease or license, as applicable, (viii) any encumbrance or
restriction relating solely to assets to be sold in any Asset Disposition
permitted hereunder and arising pursuant to any sale agreement entered into in
connection with such Asset Disposition and (ix) any document or agreement
governing Indebtedness permitted by Section 6.1(k) or 6.1(o) with respect to
Foreign Subsidiaries.
Section 6.10 RESTRICTED PAYMENTS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
directly or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (a) to make dividends payable solely in the same
class of Capital Stock of such Person, (b) to make dividends or other
distributions payable to any Credit Party, (c) so long as no Default or Event of
Default shall have occurred and be continuing both before and after giving
effect thereto, the Borrower may pay the Sponsor a management fee in an amount
not to exceed $2,400,000 per annum; PROVIDED that any portion of such management
fee not paid due to the existence of a Default or Event of Default may accrue
and be paid at such time as no Default or Event of Default exists or would be
caused by the payment thereof, (d) so long as no Default or Event of Default
shall have occurred and be continuing both before and after giving effect
thereto, the Parent and the Borrower may make payments (whether in cash or
through the
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issuance of promissory notes pursuant to Section 6.1) (i) with respect to stock
option plans and stock appreciation rights programs of the Parent and the
Borrower and repurchase options in an aggregate amount not to exceed $1,500,000
during any twelve-month period and (ii) with respect to the repurchase of
Capital Stock of the Parent upon the termination of employment, death, permanent
disability or retirement of its employees or management; PROVIDED, that the
aggregate amount of cash expended by the Parent and the Borrower pursuant to
this clause (d) shall not exceed (A) prior to a Qualifying IPO, $5,000,000
during any twelve-month period and $10,000,000 in the aggregate during the term
of this Agreement and (B) after a Qualifying IPO, $1,500,000 during any
twelve-month period and $10,000,000 in the aggregate during the term of this
Agreement, (e) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, to make payments of principal and interest
with respect to any seller note permitted under Section 6.1(h), (f) so long as
no Default or Event of Default shall have occurred and be continuing pursuant to
Section 7.1(a) or 7.1(e) and subject to the provisions of Article 11 of the
Senior Subordinated Indenture, to make regularly scheduled payments of interest
and principal (at the stated maturity thereof) on the Senior Subordinated Notes,
(g) so long as no Event of Default has occurred and is continuing or would
result therefrom and so long as at least $5,000,000 of availability shall remain
under the Aggregate Revolving Committed Amount both before and after giving
effect to each such payment, the Credit Parties may make payments with respect
to earnout obligations in connection with a Permitted Acquisition, (h) the
Equity Investment and related transactions occurring on the Closing Date, (i) so
long as no Event of Default pursuant to Section 7.1(a) shall have occurred and
be continuing or would result therefrom, the payment in cash of retention
incentive payments and non-compete fees to certain officers of the Credit
Parties in accordance with clause (j) of Section 6.6 and (j) in connection with
the termination of the Parent's ESOP and other European employee stock benefit
plans, the issuance of Capital Stock of the Parent and/or the payment of cash to
the participants thereof in accordance with clause (k) of Section 6.6.
Section 6.11 SALE LEASEBACKS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
directly or indirectly become or remain liable as lessee or as guarantor or
other surety with respect to any lease, whether an operating lease or a Capital
Lease, of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (a) which any Credit Party or any Subsidiary has sold or
transferred or is to sell or transfer to a Person which is not another Credit
Party or Subsidiary or (b) which any Credit Party or any Subsidiary intends to
use for substantially the same purpose as any other property which has been sold
or is to be sold or transferred by such Credit Party or such Subsidiary to
another Person which is not another Credit Party or Subsidiary in connection
with such lease.
Section 6.12 NO FURTHER NEGATIVE PLEDGES.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
enter into, assume or become subject to any agreement prohibiting or otherwise
restricting the creation or assumption of any Lien upon its properties or
assets, whether now owned or hereafter acquired, or requiring the grant of any
security for such obligation if security is given for some other obligation,
except (a) pursuant to this Agreement and the other Credit Documents, (b)
pursuant
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to any document or instrument governing Indebtedness incurred pursuant to
Section 6.1(c), PROVIDED that any such restriction contained therein relates
only to the asset or assets constructed, improved or acquired in connection
therewith, (c) in connection with any Permitted Lien or any document or
instrument governing any Permitted Lien, PROVIDED that any such restriction
contained therein relates only to the asset or assets subject to such Permitted
Lien, (d) pursuant to an agreement in effect at or entered into on the Closing
Date and reflected on SCHEDULE 6.9 hereto together with any amendment to such
agreement or any replacement agreement thereto (to the extent permitted
hereunder) so long as any such amendment or replacement agreement is not more
disadvantageous to the Credit Parties or any of their Subsidiaries, as the case
may be, in any material respect than the original agreement as in effect on the
Closing Date, (e) pursuant to an agreement relating to any Indebtedness issued
by a Subsidiary acquired in a Permitted Acquisition on or prior to the
consummation of such Permitted Acquisition (other than Indebtedness issued in
contemplation of such Permitted Acquisition), (f) customary non-assignment
provisions in leases or licenses governing leasehold interests or licenses, as
applicable, to the extent such provisions restrict the transfer of the lease or
license, as applicable, (g) pursuant to any sale agreement entered into in
connection with any Asset Disposition permitted hereunder and (h) pursuant to
any agreement evidencing Indebtedness permitted by Sections 6.1(b), (e), (k),
(n), and (p).
Section 6.13 OPERATING LEASE OBLIGATIONS.
Each of the Credit Parties will not, nor will it permit any Subsidiary to,
enter into, assume or permit to exist any obligations for the payment of rent
under Operating Leases which in the aggregate for all such Persons would exceed
$5,000,000 in any fiscal year.
Section 6.14 RESTRICTIONS ON PARENT.
Notwithstanding any provision herein or in any other Credit Document to the
contrary, the Parent shall not incur any Indebtedness nor grant any Liens upon
any of its properties or assets (other than Liens granted pursuant to the
Security Documents) nor engage in any operations, business or activity other
than (a) holding 100% of the Capital Stock of the Borrower and (b) activities
that are (i) incidental to the maintenance of its corporate existence in
compliance with applicable law, (ii) legal, tax and accounting matters and (iii)
entering into, and performing its obligations under, the Credit Documents and
the documents evidencing or pertaining to Subordinated Indebtedness, including
the Parent's guaranty of the Senior Subordinated Notes.
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ARTICLE VII
EVENTS OF DEFAULT
Section 7.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the following
specified events (each an "EVENT OF DEFAULT"):
(a) The Borrower shall fail to pay any principal on any Loan
when due in accordance with the terms thereof or hereof; or the Borrower
shall fail to reimburse the Issuing Lender for any LOC Obligations when due
in accordance with the terms hereof; or the Borrower shall fail to pay any
interest on any Loan or any fee or other amount payable hereunder when due
in accordance with the terms thereof or hereof and such failure shall
continue unremedied for three (3) Business Days (or any Guarantor shall
fail to pay on the Guaranty in respect of any of the foregoing or in
respect of any other Guaranty Obligations thereunder within the aforesaid
period of time); or
(b) Any representation or warranty made or deemed made herein,
in the Security Documents or in any of the other Credit Documents or which
is contained in any certificate, document or financial or other written
statement delivered pursuant hereto shall prove to have been incorrect,
false or misleading in any material respect on or as of the date made or
deemed made; or
(c) (i) Any Credit Party shall fail to perform, comply with or
observe any term, covenant or agreement applicable to it contained in
Section 5.4, Section 5.7(a), Section 5.9 or Article VI hereof; or (ii) any
Credit Party shall fail to comply with any other covenant, contained in
this Credit Agreement or the other Credit Documents or any other agreement,
document or instrument among any Credit Party, the Administrative Agent and
the Lenders or executed by any Credit Party in favor of the Administrative
Agent or the Lenders (other than as described in Sections 7.1(a), 7.1(b) or
7.1(c)(i) above), and in the event such breach or failure to comply is
capable of cure, is not cured within thirty (30) days of its occurrence; or
(d) Any Credit Party or any of its Subsidiaries shall (i)
default in any payment of principal of or interest on any Indebtedness
(other than the Notes) in a principal amount outstanding of at least
$2,000,000 in the aggregate for the Credit Parties and their Subsidiaries
beyond the period of grace (not to exceed 30 days), if any, provided in the
instrument or agreement under which such Indebtedness was created; or (ii)
default in the observance or performance of any other agreement or
condition relating to any Indebtedness in a principal amount outstanding of
at least $2,000,000 in the aggregate for the Credit Parties and their
Subsidiaries or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause,
or to permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Indebtedness (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to
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cause, with the giving of notice if required, such Indebtedness to become
due prior to its stated maturity; or
(e) (i) The Parent, the Borrower or any of their Subsidiaries
shall commence any case, proceeding or other action (A) under any existing
or future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Parent, the
Borrower or any Subsidiary shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against any of the
Parent, the Borrower or any of their Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment
or (B) remains undismissed, undischarged or unbonded for a period of 60
days; or (iii) there shall be commenced against the Parent, the Borrower or
any of their Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Parent, the Borrower or any of their
Subsidiaries shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clauses (i), (ii), or (iii) above; or (v) the Parent, the Borrower or any
of their Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against
any Credit Party or any of its Subsidiaries involving in the aggregate a
liability (to the extent not paid when due or covered by insurance or by
third party indemnification for which funds have been deposited into
escrow) of $2,000,000 or more and all such judgments or decrees shall not
have been paid and satisfied, vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving
any Plan, (ii) any "accumulated funding deficiency" (as defined in Section
302 of ERISA), whether or not waived, shall exist with respect to any Plan
or any Lien in favor of the PBGC or a Plan (other than a Permitted Lien)
shall arise on the assets of any Credit Party or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall
be appointed, to administer or to terminate, any Single Employer Plan,
which Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely to
result in the termination of such Plan for purposes of Title IV of ERISA,
(iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) any Credit Party or any of its Subsidiaries or any Commonly
Controlled
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Entity shall, or in the reasonable opinion of the Required Lenders is
likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, any Multiemployer Plan or (vi) any other
similar event or condition shall occur or exist with respect to a Plan; and
in each case in clauses (i) through (vi) above, such event or condition,
together with all other such events or conditions, if any, could reasonably
be expected to have a Material Adverse Effect; or
(h) There shall occur a Change of Control; or
(i) The Guaranty or any provision thereof shall cease to be in
full force and effect or any Guarantor or any Person acting by or on behalf
of any Guarantor shall deny or disaffirm any Guarantor's obligations under
the Guaranty; or
(j) Any other Credit Document shall fail to be in full force and
effect in accordance with the terms thereof or to give the Administrative
Agent and/or the Lenders the security interests, liens, rights, powers and
privileges purported to be created thereby (except as such documents may be
terminated or no longer in force and effect in accordance with the terms
thereof, other than those indemnities and provisions which by their terms
shall survive); or
(k) The subordination provisions contained in the documentation
evidencing (or relating to) any Subordinated Indebtedness shall cease to be
in full force and effect or to give the Lenders the rights, powers and
privileges purported to be created thereby; or
(l) any Credit Party shall be suspended or excluded from any
Medicaid Provider Agreement, Medicaid Certification, Medicare Provider
Agreement, Medicare Certification or any Medical Reimbursement Program,
where such exclusion or suspension arises from fraud or other claims or
allegations which could reasonably be expected to have a Material Adverse
Effect.
Section 7.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, then, and in any such event,
(a) if such event is an Event of Default specified in Section 7.1(e) above,
automatically the Commitments shall immediately terminate and the Loans (with
accrued interest thereon), and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall immediately become due and payable, and (b) if
such event is any other Event of Default, any or all of the following actions
may be taken: (i) with the written consent of the Required Lenders, the
Administrative Agent may, or upon the written request of the Required Lenders,
the Administrative Agent shall, by written notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; (ii) the Administrative Agent may, or upon the written
request of the Required Lenders, the Administrative Agent shall, by written
notice of default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith and direct the Borrower to pay to the Administrative
Agent cash collateral as security for the LOC Obligations for subsequent
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drawings under then outstanding Letters of Credit in an amount equal to the
maximum amount of which may be drawn under Letters of Credit then outstanding,
whereupon the same shall immediately become due and payable; (iii) exercise any
rights or remedies of the Administrative Agent or the Lenders under this
Agreement or any other Credit Document, including, without limitation, any
rights or remedies with respect to the Collateral; and (iv) exercise any rights
or remedies available to the Administrative Agent or Lenders under applicable
law.
ARTICLE VIII
THE AGENT
Section 8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints Wachovia Bank,
National Association as the Administrative Agent of such Lender under this
Agreement, and each such Lender irrevocably authorizes Wachovia Bank, National
Association, as the Administrative Agent for such Lender, to take such action on
its behalf under the provisions of this Agreement and to exercise such powers
and perform such duties as are expressly delegated to the Administrative Agent
by the terms of this Agreement, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agent shall not have any duties
or responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or otherwise exist against the Administrative Agent.
Section 8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this Agreement
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care. Without limiting the
foregoing, the Administrative Agent may appoint one of its affiliates as its
agent to perform the functions of the Administrative Agent hereunder relating to
the advancing of funds to the Borrower and distribution of funds to the Lenders
and to perform such other related functions of the Administrative Agent
hereunder as are reasonably incidental to such functions.
Section 8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence, bad faith or willful misconduct) or (ii) responsible in any manner
to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any officer thereof contained in this
Agreement or in any certificate, report,
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statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any of the Credit Documents or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance by the Borrower of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower.
Section 8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it in
good faith to be genuine and correct and to have been signed, sent or made by
the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
any of the Credit Documents in accordance with a request of the Required Lenders
or all of the Lenders, as may be required under this Agreement, and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Notes.
Section 8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative Agent
receives such a notice, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; PROVIDED, HOWEVER, that unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders except to the extent that
this Credit Agreement expressly requires that such action be taken, or not
taken, only with the consent or upon the authorization of the Required Lenders,
or all of the Lenders, as the case may be.
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Section 8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representation or warranty to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this Section, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Agent's gross negligence or willful misconduct,
as determined by a court of competent jurisdiction. The agreements in this
Section 8.7 shall survive the termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.
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Section 8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrower as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent upon 30 days'
prior notice to the Borrower and the Lenders. If the Administrative Agent shall
resign as Administrative Agent under this Agreement and the Notes, then the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be approved by the Borrower, whereupon such
successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term "Administrative Agent" shall mean such
successor agent effective upon such appointment and approval, and the former
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holders of
the Notes. After any retiring Agent's resignation as Administrative Agent, the
provisions of this Section 8.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Administrative Agent under this
Agreement.
Section 8.10 OTHER AGENTS.
Except as expressly set forth herein or therein, each of the Syndication
Agent and the Documentation Agent shall have no duties or obligations, and thus
no liabilities, in their capacity as Syndication Agent and Documentation Agent,
respectively, under this Agreement and the other Credit Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the other Credit Documents, nor any
terms hereof or thereof may be amended, supplemented, waived or modified except
in accordance with the provisions of this Section. The Required Lenders may, or,
with the written consent of the Required Lenders, the Administrative Agent may,
from time to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to the other Credit Documents for the
purpose of adding any provisions to this Agreement or the other Credit
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Documents or changing in any manner the rights of the Lenders or of the Borrower
hereunder or thereunder or (b) waive, on such terms and conditions as the
Required Lenders may specify in such instrument, any of the requirements of this
Agreement or the other Credit Documents or any Default or Event of Default and
its consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
waiver, supplement, modification or release shall:
(i) reduce the amount or extend the scheduled date of
any principal installment or the final maturity of any Loan or
Note, or reduce the stated rate or extend or defer the scheduled
payment date of any interest (or form in which interest is paid; it
being acknowledged and agreed that amendments, waivers or consents
which modify the definition of Leverage Ratio with the approval of
the Required Lenders shall not be effective to change the
Applicable Percentage hereunder without the consent of all the
Lenders) or fee payable hereunder (except in connection with a
waiver of interest at the increased post-default rate set forth in
Section 2.9 which shall be determined by a vote of the Required
Lenders) or increase the amount or extend the expiration date of
any Lender's Commitment, in each case without the written consent
of each Lender directly affected thereby; PROVIDED that, it is
understood and agreed that no waiver, reduction or deferral of a
mandatory prepayment required pursuant to Section 2.7(b), nor any
amendment of Section 2.7(b) or the definitions of Asset
Disposition, Debt Issuance, Equity Issuance, Excess Cash Flow,
Leverage Ratio, Qualifying IPO or Recovery Event, shall constitute
a reduction of the amount of, or an extension of the scheduled date
of, any principal installment of any Loan or Note; or
(ii) amend, modify or waive any provision of this Section
9.1 or reduce the percentage specified in the definition of
Required Lenders without the written consent of all the Lenders; or
(iii) amend, modify or waive any provision of Article VIII
without the written consent of the then Administrative Agent; or
(iv) release the Parent (or any successor thereto by way
of merger or consolidation) or all or substantially all of the
other Guarantors from their obligations under the Guaranty without
the written consent of all of the Lenders; or
(v) release of the Administrative Agent's Lien on all or
substantially all of the Collateral without the written consent of
all of the Lenders; or
(vi) amend, modify or waive any provision of the Credit
Documents requiring consent, approval or request of the Required
Lenders or all Lenders without the written consent of all of the
Required Lenders or Lenders as appropriate; or
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(vii) amend, modify or waive the provisions of Section
2.12(b) without the written consent of all of the Lenders;
PROVIDED, FURTHER, that no amendment, waiver or consent affecting the rights or
duties of the Administrative Agent, the Issuing Lender or the Swingline Lender
under any Credit Document shall in any event be effective unless in writing and
signed by the Administrative Agent, the Issuing Lender and/or the Swingline
Lender, as applicable, in addition to the Lenders required hereinabove to take
such action.
Any such waiver, any such amendment, supplement or modification and any
such release shall apply equally to each of the Lenders and shall be binding
upon the Borrower, the other Credit Parties, the Lenders, the Administrative
Agent and all future holders of the Notes. In the case of any waiver, the
Borrower, the other Credit Parties, the Lenders and the Administrative Agent
shall be restored to their former position and rights hereunder and under the
outstanding Loans and Notes and other Credit Documents, and any Default or Event
of Default permanently waived shall be deemed to be cured and not continuing;
but no such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
Notwithstanding any of the foregoing to the contrary, the consent of the
Borrower shall not be required for any amendment, modification or waiver of the
provisions of Article VIII (other than the provisions of Section 8.9); PROVIDED,
HOWEVER, that the Administrative Agent will provide written notice to the
Borrower of any such amendment, modification or waiver. In addition, the
Borrower and the Lenders hereby authorize the Administrative Agent to modify
this Credit Agreement by unilaterally amending or supplementing SCHEDULE 2.1(a)
from time to time in the manner requested by the Borrower, the Administrative
Agent or any Lender in order to reflect any assignments or transfers of the
Loans as provided for hereunder; PROVIDED FURTHER, HOWEVER, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Borrower and each Lender.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
Section 9.2 NOTICES.
Except as otherwise provided in Article II, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid (or pursuant to an invoice arrangement) to a reputable
national overnight air courier service, or (d) the third Business Day following
the day on which the same is sent by certified or registered mail, postage
prepaid, in each case addressed as follows in the case of the Borrower,
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the other Credit Parties and the Administrative Agent, and as set forth on
SCHEDULE 9.2 in the case of the Lenders, or to such other address as may be
hereafter notified by the respective parties hereto and any future holders of
the Notes:
The Borrower Medex, Inc.
and the other 6250 Shier-Rings Road
Credit Parties: Dublin, Ohio 43016-1295
Attention: Michael I. Dobrovic
Chief Financial Officer
Telecopier: (614) 791-5464
Telephone: (614) 791-5538
With a copy to: Kip Kirkpatrick
One Equity Partners
55 West Monroe, 16th Floor
Chicago, Illinois 60670-0610
Telephone: (312) 732-8151
Telecopier: (312) 336-3541
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attention: Brian S. Hart
Telephone: (312) 558-5702
Telecopier: (312) 558-5700
The Administrative Wachovia Bank, National Association, as
Agent: Administrative Agent Charlotte Plaza
201 South College Street, CP-8
Charlotte, North Carolina 28288-0680
Attention: Syndication Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 383-0835
with a copy to:
Wachovia Bank, National Association
301 South College Street
5th Floor-NC0760
Charlotte, NC 28288
Attention: Leanne Phillips
Telecopier: (704) 383-7236
Telephone: (704) 374-6278
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Section 9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
Section 9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans; PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
Credit Party Obligations have been paid in full.
Section 9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees (a) to pay or reimburse the Agents, the Arrangers and
the Documentation Agent for all their reasonable out-of-pocket costs and
expenses incurred in connection with the development, preparation, negotiation,
printing and execution of, and any amendment, supplement or modification to,
this Agreement and the other Credit Documents and any other documents prepared
in connection herewith or therewith, and the consummation and administration of
the transactions contemplated hereby and thereby, together with the reasonable
fees and disbursements of Moore & Van Allen, PLLC, counsel to the Agents and the
Arrangers, (b) to pay or reimburse each Agent and each Lender for all its costs
and expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement and the other Credit Documents, including, without
limitation, the reasonable fees and disbursements of counsel to the Agents and
the Lenders, and (c) on demand, to pay, indemnify, and hold each Agent and each
Lender harmless from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other similar taxes, if any, which may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
the Credit Documents and any such other documents, and (d) to pay, indemnify,
and hold each Agent and each Lender and their respective Affiliates (each an
"INDEMNIFIED PERSON") harmless from and against, any and all other liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of the Credit
Documents and any such other documents and the use, or proposed use, of proceeds
of the Loans (all of the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, HOWEVER, that the Borrower shall not have any
obligation hereunder to an Indemnified Person with respect to indemnified
liabilities to the extent arising from the gross negligence, bad faith or
willful misconduct of such Indemnified Person, as determined by a court of
competent
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jurisdiction. The agreements in this Section 9.5 shall survive repayment of the
Loans, Notes and all other Credit Party Obligations.
Section 9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its rights or
obligations under this Agreement or the other Credit Documents without the
prior written consent of each Lender.
(b) Any Lender may, in accordance with applicable law, at any
time sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender, or any other interest, right
and/or obligation of such Lender hereunder. In the event of any such sale
by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement
shall remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Note
for all purposes under this Agreement, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. No Lender shall transfer or grant any participation under which
the Participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the scheduled maturity of any Loan or
Note or any installment thereon in which such Participant is participating,
or reduce the stated rate or extend the time of payment of interest or fees
thereon (except in connection with a waiver of interest at the increased
post-default rate) or reduce the principal amount thereof, or increase the
amount of the Participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of
Default shall not constitute a change in the terms of such participation,
and that an increase in any Commitment or Loan shall be permitted without
consent of any participant if the Participant's participation is not
increased as a result thereof), (ii) release all or substantially all of
the Guarantors from their obligations under the Guaranty, (iii) release all
or substantially all of the Collateral, or (iv) consent to the assignment
or transfer by the Borrower of any of its rights and obligations under this
Agreement. In the case of any such participation, the Participant shall not
have any rights under this Agreement or any of the other Credit Documents
(the Participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such
Lender in favor of the Participant relating thereto) and all amounts
payable by the Borrower hereunder shall be determined as if such Lender had
not sold such participation; PROVIDED that each Participant shall be
entitled to the benefits of Sections 2.15, 2.16, 2.17 and 9.5 with respect
to its participation in the Commitments and the Loans outstanding from time
to time; PROVIDED FURTHER, that no Participant shall be entitled to receive
any greater amount pursuant to such Sections than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had
no such transfer occurred.
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(c) Any Lender may, in accordance with applicable law, at any
time, sell or assign to any Lender or any Affiliate or Related Fund thereof
and, with the consent of the Administrative Agent and, so long as no Event
of Default has occurred and is continuing, the Borrower (in each case,
which consent shall not be unreasonably withheld or delayed), to one or
more additional banks or financial institutions or entities (each a
"PURCHASING LENDER"), all or any part of its rights and obligations under
this Agreement and the Notes in minimum amounts of $1,000,000 with respect
to its Revolving Commitment, its Revolving Loans or its Term Loan (or, if
less, the entire amount of such Lender's obligations), pursuant to a
Commitment Transfer Supplement, executed by such Purchasing Lender and such
transferor Lender (and, to the extent required above, the Administrative
Agent and the Borrower), and delivered to the Administrative Agent for its
acceptance and recording in the Register; PROVIDED, HOWEVER, that, if after
giving effect to any sale or assignment to any existing Lender, the
transferor Lender and the Purchasing Lender will each hold a Commitment of
at least $1,000,000, such assignment shall not be subject to the minimum
assignment amounts specified herein. Upon such execution, delivery,
acceptance and recording, from and after the Transfer Effective Date
specified in such Commitment Transfer Supplement, (x) the Purchasing Lender
thereunder shall be a party hereto and, to the extent provided in such
Commitment Transfer Supplement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the transferor
Lender thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and, in
the case of a Commitment Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under this
Agreement, such transferor Lender shall cease to be a party hereto;
provided, however, that such Lender shall still be entitled to any
indemnification rights that expressly survive hereunder). Such Commitment
Transfer Supplement shall be deemed to amend this Agreement to the extent,
and only to the extent, necessary to reflect the addition of such
Purchasing Lender and the resulting adjustment of Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a portion of
the rights and obligations of such transferor Lender under this Agreement
and the Notes. On or prior to the Transfer Effective Date specified in such
Commitment Transfer Supplement, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the Notes
delivered to the Administrative Agent pursuant to such Commitment Transfer
Supplement new Notes to the order of such Purchasing Lender in an amount
equal to the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a Commitment
hereunder, new Notes to the order of the transferor Lender in an amount
equal to the Commitment retained by it hereunder. Such new Notes shall be
dated the Closing Date and shall otherwise be in the form of the Notes
replaced thereby. The Notes surrendered by the transferor Lender shall be
returned by the Administrative Agent to the Borrower marked "canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer Supplement
delivered to it and a register (the "REGISTER") for the recordation of the
names and addresses of the Lenders
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and the Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be conclusive,
in the absence of manifest error, and the Borrower, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a duly executed Commitment Transfer
Supplement, together with payment to the Administrative Agent by the
transferor Lender or the Purchasing Lender, as agreed between them, of a
registration and processing fee of $3,500.00 for each Purchasing Lender
listed in such Commitment Transfer Supplement and the Notes subject to such
Commitment Transfer Supplement, the Administrative Agent shall (i) accept
such Commitment Transfer Supplement, (ii) record the information contained
therein in the Register and (iii) give prompt notice of such acceptance and
recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "TRANSFEREE") and any prospective
Transferee any and all financial information in such Lender's possession
concerning the Borrower and its Affiliates which has been delivered to such
Lender by or on behalf of the Borrower pursuant to this Agreement or which
has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Subsidiaries prior to becoming a party to this Agreement, in each case
subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section 9.6
to a Person which is not already a Lender hereunder and which is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) for Federal income tax purposes, the Transferee shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue
Service Forms (and, if applicable, a Tax Exemption Certificate) described
in Section 2.18. At the time of each sale to any Participant under this
Section 9.6 by any Lender, such Lender shall, if required by applicable
law, at the time of such sale, provide Borrower and the Administrative
Agent with revised forms required under Section 2.18(b)(ii) reflecting the
portion of the Notes and Revolving Commitments sold and that portion of its
Notes and Revolving Commitment retained.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Credit Agreement (including, without
limitation, any right to payment of principal and interest under any Note)
to secure obligations of such Lender, including without limitation, (i) any
pledge or assignment to secure obligations to a Federal Reserve Bank and
(ii) in the case of any Lender that is a fund, any pledge or assignment to
any holders of obligations owed, or securities issued, by such Lender
including to any trustee for, or any other representative of, such holders;
it being understood that the requirements for assignments set forth in this
Section 9.6 shall not apply to any such pledge or assignment of a security
interest, except with respect to any
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foreclosure or similar action taken by such pledgee or assignee with
respect to such pledge or assignment; PROVIDED that no such pledge or
assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
Section 9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "BENEFITED LENDER")
shall at any time receive any payment of all or part of its Loans, or
interest thereon, or receive any collateral in respect thereof (whether
voluntarily or involuntarily, by set-off, pursuant to events or proceedings
of the nature referred to in Section 7.1(e), or otherwise) in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such benefited Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause
such benefited Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; PROVIDED, HOWEVER,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such benefited Lender, such purchase shall be rescinded, and
the purchase price and benefits returned, to the extent of such recovery,
but without interest. The Borrower agrees that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of set-off),
each Lender shall have the right, without prior notice to any Credit Party,
any such notice being expressly waived by the Credit Parties to the extent
permitted by applicable law, upon the occurrence of any Event of Default,
to setoff and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case
whether direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Lender or any branch or agency thereof to
or for the credit or the account of any Credit Party, or any part thereof
in such amounts as such Lender may elect, against and on account of the
obligations and liabilities of the Borrower and the other Credit Parties to
such Lender hereunder and claims of every nature and description of such
Lender against the Borrower and the other Credit Parties, in any currency,
whether arising hereunder, under the Notes or under any documents
contemplated by or referred to herein or therein, as such Lender may elect,
whether or not such Lender has made any demand for payment and although
such obligations, liabilities and claims may be contingent or unmatured.
The aforesaid right of set-off may be exercised by such Lender against any
Credit Party or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor of any such Credit Party, or against anyone else
claiming through or against any such Credit Party or any such trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
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receiver, or execution, judgment or attachment creditor, notwithstanding
the fact that such right of set-off shall not have been exercised by such
Lender prior to the occurrence of any Event of Default. Each Lender agrees
promptly to notify the applicable Credit Party and the Administrative Agent
after any such set-off and application made by such Lender; PROVIDED,
HOWEVER, that the failure to give such notice shall not affect the validity
of such set-off and application.
Section 9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein are
intended for convenience only and shall be ignored in construing this Agreement.
Section 9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same agreement.
Section 9.10 EFFECTIVENESS.
This Credit Agreement shall become effective on the date on which all of
the parties have signed a copy hereof (whether the same or different copies) and
shall have delivered the same to the Administrative Agent pursuant to Section
9.2 or, in the case of the Lenders, shall have given to the Administrative Agent
written, telecopied or telex notice (actually received) at such office that the
same has been signed and mailed to it.
Section 9.11 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 9.12 INTEGRATION.
This Agreement and the other Credit Documents represent the agreement of
the Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof, and there are no promises, undertakings, representations
or warranties by the Administrative Agent, the Borrower or any Lender relative
to the subject matter hereof not expressly set forth or referred to herein or in
the other Credit Documents.
Section 9.13 GOVERNING LAW.
This Agreement and, unless otherwise specified therein, each other Credit
Document and the rights and obligations of the parties under this Agreement and
such other Credit Document
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shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York; PROVIDED, HOWEVER, that each Mortgage Instrument shall
be governed by, and construed and interpreted in accordance with, the law of the
State in which the Mortgaged Property is located.
Section 9.14 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrower and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in any state or federal court of competent jurisdiction
in the State of New York, and, by execution and delivery of this Agreement, each
of the Administrative Agent, the Lenders, the Borrower and the other Credit
Parties accepts, for itself and in connection with its properties, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
irrevocably agrees to be bound by any final judgment rendered thereby in
connection with this Agreement, any Note or any other Credit Document from which
no appeal has been taken or is available. Each of the Borrower and the other
Credit Parties irrevocably agrees that all service of process in any such
proceedings in any such court may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of mail),
postage prepaid, to it at its address set forth in Section 9.2 or at such other
address of which the Administrative Agent shall have been notified pursuant
thereto, such service being hereby acknowledged by the each of the Borrower and
the other Credit Parties to be effective and binding service in every respect.
Each of the Borrower, the other Credit Parties, the Administrative Agent and the
Lenders irrevocably waives any objection, including, without limitation, any
objection to the laying of venue based on the grounds of forum non conveniens
which it may now or hereafter have to the bringing of any such action or
proceeding in any such jurisdiction. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
any party hereto to bring proceedings against another party hereto in the court
of any other jurisdiction.
Section 9.15 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will use
its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, affiliates, auditors or counsel or to another
Lender) any information with respect to the Credit Parties and their
Subsidiaries which is furnished pursuant to this Agreement, any other Credit
Document or any documents contemplated by or referred to herein or therein
(collectively, the "CONFIDENTIAL INFORMATION"), except that any Lender may
disclose any such information (a) as has become generally available to the
public other than by a breach of this Section 9.15, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the OCC or the NAIC or similar organizations (whether in the
United States or elsewhere) or their successors, (c) as may be required or
appropriate in response to any summons or subpoena or any law, order, regulation
or ruling applicable to such Lender, (d) in connection with any suit, action or
proceeding for the purpose of defending itself, reducing its liability, or
protecting or exercising any of its claims, rights, remedies or interests under
or in connection with the Credit Documents or any Secured Hedging Agreement, (e)
to any prospective Participant, assignee in connection with any
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contemplated transfer pursuant to Section 9.6; PROVIDED that such prospective
transferee shall have been made aware of this Section 9.15 and shall agree
(implicitly by its acceptance of confidential information or otherwise) to be
bound by the terms of this Section, (f) to GOLD SHEETS and other similar bank
trade publications, such information to consist of deal terms and other
information regarding the credit facilities evidenced by this Credit Agreement
customarily found in such publications or (g) to any pledgee of such Lender's
rights under this Credit Agreement pursuant to Section 9.6(h) or any national
rating agency. Notwithstanding anything herein to the contrary, Confidential
Information shall not include, and the Agents, the Documentation Agent and each
Lender may disclose without limitation of any kind, any information with respect
to the "tax treatment" and "tax structure" (in each case, with the meaning of
Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analysis) that
are provided to any of the Agents, Documentation Agent or Lenders relating to
such tax treatment and tax structure; PROVIDED that with respect to any document
or similar item that in either case contains information concerning the tax
treatment or tax structure of the transaction as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to the tax treatment or tax structure of the Loans, Letters of Credit and
transactions contemplated hereby.
Section 9.16 ACKNOWLEDGMENTS.
The Borrower and the other Credit Parties each hereby acknowledges and
agrees that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to the Borrower or any other Credit
Party arising out of or in connection with this Agreement and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower and the other Credit Parties, on the other hand, in connection
herewith is solely that of debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Borrower or the other Credit Parties and the Lenders.
Section 9.17 WAIVERS OF JURY TRIAL.
THE BORROWER, THE OTHER CREDIT PARTIES, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR
ANY COUNTERCLAIM THEREIN.
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Section 9.18 RELEASE OF COLLATERAL.
Each Lender hereby directs the Administrative Agent to release any Lien
held by it under the Security Documents under the following circumstances:
(a) upon the Termination Date, the Administrative Agent is
authorized to release all of the Liens created under the Credit Documents;
(b) upon any sale or other disposition of Collateral permitted
hereunder, the Administrative Agent is authorized to release such Liens
that relate solely to the Collateral sold or otherwise disposed; and
(c) upon consent by the Required Lenders, the Administrative
Agent is authorized to release such Liens on any part of the Collateral
which release does not require the consent of all of the Lenders as set
forth in Section 9.1;
PROVIDED, HOWEVER, that (i) the Administrative Agent shall not be required to
execute any such document on terms which, in its opinion, would expose it to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Secured Obligations or any
Liens upon (or obligations of the Credit Parties in respect of) any Collateral
retained by the Credit Parties.
Section 9.19 RELATIONSHIP OF BANC ONE MEZZANINE CORPORATION.
Each of the parties to this Agreement (a) acknowledges that Banc One
Mezzanine Corporation is a subsidiary of Bank One Corporation, as are the
Sponsor and the Borrower (by virtue of the Sponsor's equity injection in the
Borrower), (b) consents to these multiple roles, and further acknowledges that
the fact that the Sponsor and the Borrower are affiliates of Banc One Mezzanine
Corporation does not mean that any action taken or proposal made by the Sponsor
or the Borrower (i) is acceptable to Banc One Mezzanine Corporation in its
capacity as Documentation Agent or Lender hereunder, (ii) is consistent with the
terms of this Agreement or (iii) is or will be acceptable to any other Lenders,
and (c) Banc One Mezzanine Corporation shall not be deemed to have knowledge of
information known to the Borrower or the Sponsor simply because they are
affiliates.
ARTICLE X
GUARANTY
Section 10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and any Hedging
Agreement Provider to enter into any Secured Hedging Agreement and to extend
credit hereunder and thereunder and in recognition of the direct benefits to be
received by the Guarantors from the Extensions of Credit hereunder and any
Secured Hedging Agreement, each of the Guarantors hereby agrees with the
Administrative Agent and the Lenders as follows: the Guarantor hereby
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unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all Secured Obligations.
If any or all of the Secured Obligations becomes due and payable hereunder or
under any Secured Hedging Agreement, each Guarantor unconditionally promises to
pay such Secured Obligations to the Administrative Agent and the Lenders, or
order, or demand, together with any and all reasonable out-of-pocket expenses
which may be incurred by the Administrative Agent or the Lenders in collecting
any of the Secured Obligations.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
Section 10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all Secured Obligations
of the Borrower to the Lenders and any Hedging Agreement Provider whether or not
due or payable by the Borrower upon the occurrence of any of the events
specified in Section 7.1(e), and unconditionally promises to pay such Secured
Obligations to the Administrative Agent for the account of the Lenders and to
any such Hedging Agreement Provider, or order, on demand, in lawful money of the
United States. Each of the Guarantors further agrees that to the extent that the
Borrower or a Guarantor shall make a payment or a transfer of an interest in any
property to the Administrative Agent, any Lender or any Hedging Agreement
Provider, which payment or transfer or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise is avoided,
and/or required to be repaid to the Borrower or a Guarantor, the estate of the
Borrower or a Guarantor, a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then to the
extent of such avoidance or repayment, the obligation or part thereof intended
to be satisfied shall be revived and continued in full force and effect as if
said payment had not been made.
Section 10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent of
any security for or other guaranty of the Secured Obligations of the Borrower
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrower or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Secured Obligations of
the Borrower, or (c) any payment on or in reduction of any such other guaranty
or undertaking, or (d) any dissolution, termination or increase, decrease or
change in personnel by the Borrower, or (e) any payment made to the
Administrative Agent, the Lenders or any Hedging Agreement Provider on the
Secured Obligations which the Administrative Agent, such Lenders or such Hedging
Agreement
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Provider repay the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each of the Guarantors waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
Section 10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrower, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrower and whether or not
any other Guarantor or the Borrower is joined in any such action or actions.
Section 10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent, each Lender and
each Hedging Agreement Provider without notice or demand (except as shall be
required by applicable statute and cannot be waived), and without affecting or
impairing its liability hereunder, from time to time to (a) renew, compromise,
extend, increase, accelerate or otherwise change the time for payment of, or
otherwise change the terms of the Secured Obligations or any part thereof in
accordance with this Agreement and any Secured Hedging Agreement, as applicable,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any guarantor or any other party for the payment of this
Guaranty or the Secured Obligations and exchange, enforce waive and release any
such security, (c) apply such security and direct the order or manner of sale
thereof as the Administrative Agent and the Lenders in their discretion may
determine and (d) release or substitute any one or more endorsers, guarantors,
the Borrower or other obligors.
Section 10.6 RELIANCE.
It is not necessary for the Administrative Agent, the Lenders or any
Hedging Agreement Provider to inquire into the capacity or powers of the
Borrower or the officers, directors, members, partners or agents acting or
purporting to act on its behalf, and any indebtedness made or created in
reliance upon the professed exercise of such powers shall be guaranteed
hereunder.
Section 10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall be
required by applicable statute and cannot be waived) to require the
Administrative Agent, any Lender or any Hedging Agreement Provider to (i)
proceed against the Borrower, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from the Borrower, any other
guarantor or any other party, or (iii) pursue any other remedy in the
Administrative Agent's, any Lender's or any Hedging Agreement Provider's
power whatsoever. Each of the Guarantors waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any
other party other than payment in full of the Secured Obligations,
including without limitation any defense based on or
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arising out of the disability of the Borrower, any other guarantor or any
other party, or the unenforceability of the Secured Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of
the Borrower other than payment in full of the Secured Obligations. The
Administrative Agent may, at its election, foreclose on any security held
by the Administrative Agent by one or more judicial or nonjudicial sales,
whether or not every aspect of any such sale is commercially reasonable (to
the extent such sale is permitted by applicable law), or exercise any other
right or remedy the Administrative Agent or any Lender may have against the
Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Secured Obligations have been paid in full. Each of the
Guarantors waives any defense arising out of any such election by the
Administrative Agent, even though such election operates to impair or
extinguish any right of reimbursement or subrogation or other right or
remedy of the Guarantors against the Borrower or any other party or any
security.
(b) Each of the Guarantors waives all presentments, demands for
performance, protests and notices, including without limitation notices of
nonperformance, notice of protest, notices of dishonor, notices of
acceptance of this Guaranty, and notices of the existence, creation or
incurring of new or additional Secured Obligations. Each Guarantor assumes
all responsibility for being and keeping itself informed of the Borrower's
financial condition and assets, and of all other circumstances bearing upon
the risk of nonpayment of the Secured Obligations and the nature, scope and
extent of the risks which such Guarantor assumes and incurs hereunder, and
agrees that neither the Administrative Agent nor any Lender shall have any
duty to advise such Guarantor of information known to it regarding such
circumstances or risks.
(c) Each of the Guarantors hereby agrees it will not exercise
any rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the U.S.
Bankruptcy Code, or otherwise) to the claims of the Lenders or any Hedging
Agreement Provider against the Borrower or any other guarantor of the
Secured Obligations of the Borrower owing to the Lenders or such Hedging
Agreement Provider (collectively, the "OTHER PARTIES") and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity
from any Other Party which it may at any time otherwise have as a result of
this Guaranty until such time as the Secured Obligations shall have been
paid in full and the Commitments have been terminated. Each of the
Guarantors hereby further agrees not to exercise any right to enforce any
other remedy which the Administrative Agent, the Lenders or any Hedging
Agreement Provider now have or may hereafter have against any Other Party,
any endorser or any other guarantor of all or any part of the Secured
Obligations of the Borrower and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit of
the Lenders and/or the Hedging Agreement Providers to secure payment of the
Secured Obligations of the Borrower until such time as the Secured
Obligations shall have been paid in full and the Commitments have been
terminated.
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Section 10.8 LIMITATION ON ENFORCEMENT.
The Lenders and the Hedging Agreement Providers agree that this Guaranty
may be enforced only by the action of the Administrative Agent acting upon the
instructions of the Required Lenders or such Hedging Agreement Provider (only
with respect to obligations under the applicable Secured Hedging Agreement) and
that no Lender or Hedging Agreement Provider shall have any right individually
to seek to enforce or to enforce this Guaranty, it being understood and agreed
that such rights and remedies may be exercised by the Administrative Agent for
the benefit of the Lenders under the terms of this Agreement and for the benefit
of any Hedging Agreement Provider under any Secured Hedging Agreement. The
Lenders and the Hedging Agreement Providers further agree that this Guaranty may
not be enforced against any director, officer, employee or stockholder of the
Guarantors.
Section 10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent, the Lenders and any Hedging Agreement Provider
will, upon request after payment of the Secured Obligations which are the
subject of this Guaranty and termination of the Commitments relating thereto,
confirm to the Borrower, the Guarantors or any other Person that the Secured
Obligations have been paid in full and the Commitments relating thereto
terminated, subject to the provisions of Section 10.2.
Section 10.10 RELEASE OF GUARANTORS.
In the event that all of the Capital Stock of one or more Guarantors is
sold or otherwise disposed of or liquidated in compliance with the requirements
of Section 6.4 (or such sale or other disposition or liquidation has been
approved in writing by the Required Lenders (or all Lenders if required by
Section 9.1) and the proceeds of such sale, disposition or liquidation are
applied to the Obligations to the extent required by Section 2.7(b)(ii), such
Guarantor shall be released from the Guaranty and the Guaranty shall, as to each
such Guarantor or Guarantors, terminate and have no further force and effect (it
being understood and agreed that the sale of one or more Persons that own,
directly or indirectly, all of the Capital Stock of any Guarantor shall be
deemed to be a sale of such Guarantor for purposes of this Section 10.10).
Section 10.11 TERMINATION OF GUARANTY.
On the Termination Date, the Guaranty shall automatically terminate
(provided that all indemnities set forth herein and in the other Credit
Documents shall survive such termination) and the Administrative Agent, at the
request and expense of the relevant Guarantor, will execute and deliver to such
Guarantor a proper instrument or instruments acknowledging the satisfaction and
termination of the Guaranty.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWER: MEDEX, INC.,
an Ohio corporation
By: /s/ Michael I. Dobrovic
---------------------------------
Name: Michael I. Dobrovic
Title: Vice President, Treasurer & CFO
PARENT AND OTHER
GUARANTORS: MEDVEST HOLDINGS CORPORATION,
an Ohio corporation
MEDEX MEDICAL, INC.,
an Ohio corporation
MEDEX CARDIO-PULMONARY, INC.,
an Ohio corporation
By: /s/ Michael I. Dobrovic
---------------------------------
Name: Michael I. Dobrovic
Title: Vice President, Treasurer & CFO
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ADMINISTRATIVE AGENT
AND LENDERS: WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent and as a Lender
By: /s/ Chris McCoy
-------------------------
Name: Chris McCoy
Title: Associate
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LEHMAN COMMERCIAL PAPER INC.,
as Syndication Agent and as a Lender
By: /s/ Francis Chang
---------------------------------
Name: Francis Chang
Title: Authorized Signatory
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BANC ONE MEZZANINE CORPORATION,
as Documentation Agent and as a Lender
By: /s/ Jerry Kane
--------------------------------
Name: Jerry Kane
Title: Managing Director
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LASALLE BANK NATIONAL ASSOCIATION,
as Co-Documentation Agent and as a Lender
By: /s/ Robert M. Walker
---------------------------------
Name: Robert M. Walker
Title: Vice President
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THE HUNTINGTON NATIONAL BANK,
as a Leader
By: /s/ Brad C. Williams
---------------------------------
Name: Brad C. Williams
Title: Vice President