LOAN AND SECURITY AGREEMENT
Dated as of February 5, 1999
Among
BANKAMERICA BUSINESS CREDIT, INC.,
AS THE LENDER,
OPTION CARE, INC.,
a Delaware corporation,
INDIVIDUALLY AND AS THE BORROWERS' AGENT,
and
OPTION CARE, INC.,
a Delaware corporation,
AND EACH OF THE SUBSIDIARIES OF
OPTION CARE, INC. FROM
TIME TO TIME PARTY HERETO,
AS THE BORROWERS
TABLE OF CONTENTS
1. DEFINITIONS.........................................................1
1.1 Defined Terms..................................................1
1.2 Accounting Terms..............................................23
1.3 Interpretive Provisions........................................24
2. LOANS..............................................................25
2.1 Total Facility................................................25
2.2 Revolving Loans...............................................25
2.3 Automated Clearing House Transfers............................26
2.4 The Borrowers' Agent..........................................26
3. INTEREST AND OTHER CHARGES.........................................28
3.1 Interest......................................................28
3.2 Conversion and Continuation Elections.........................29
3.3 Maximum Interest Rate.........................................30
3.4 Facility Fee..................................................30
4. PAYMENTS AND PREPAYMENTS...........................................30
4.1 Revolving Loans...............................................30
4.2 Place and Form of Payments; Extension of Time.................31
4.3 Application and Reversal of Payments..........................31
4.4 INDEMNITY FOR RETURNED PAYMENTS...............................31
5. LENDER'S BOOKS AND RECORDS; MONTHLY STATEMENTS..........................32
6. TAXES, YIELD PROTECTION AND ILLEGALITY..................................32
6.1 Taxes.........................................................32
6.2 Illegality....................................................33
6.3 Increased Costs and Reduction of Return.......................33
6.4 Funding Losses................................................34
6.5 Inability to Determine Rates..................................34
6.6 Survival......................................................35
7. COLLATERAL.............................................................35
7.1 Grant of Security Interest....................................35
7.2 Perfection and Protection of Security Interest................36
7.3 Location of Collateral........................................37
7.4 Title to, Liens on, and Sale and Use of Collateral............37
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7.5 Additional Collateral.........................................37
7.6 Access and Examination........................................39
7.7 Insurance.....................................................39
7.8 Collateral Reporting..........................................40
7.9 Accounts......................................................41
7.10 Collection of Accounts; Payments.............................43
7.11 [Reserved]...................................................44
7.12 Equipment....................................................44
7.13 Material Contracts...........................................45
7.14 Documents, Instruments, and Chattel Paper....................46
7.15 Right to Cure................................................46
7.16 Power of Attorney............................................46
7.17 Lender's Rights, Duties, and Liabilities.....................47
7.18 [Reserved]...................................................47
7.19 License for use of Software and Other Intellectual Property..47
8. BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES..................47
8.1 Books and Records.............................................47
8.2 Financial and Other Information...............................48
8.3 Notices to Lender.............................................50
9. GENERAL WARRANTIES AND REPRESENTATIONS.............................52
9.1 Authorization, Validity, and Enforceability of
this Agreement and the Loan Documents.....................52
9.2 Validity and Priority of Security Interest....................52
9.3 Organization and Qualification................................53
9.4 Corporate Name; Prior Transactions............................53
9.5 Subsidiaries and Affiliates...................................53
9.6 Financial Statements and Plan.................................54
9.7 [Reserved]....................................................54
9.8 Solvency......................................................54
9.9 Debt..........................................................54
9.10 Distributions................................................54
9.11 Title to Property............................................54
9.12 Adequate Assets..............................................55
9.13 Real Property; Leases........................................55
9.14 Proprietary Rights...........................................55
9.15 Trade Names and Terms of Sale................................55
9.16 Litigation...................................................55
9.17 Restrictive Agreements.......................................55
9.18 Labor Disputes...............................................56
9.19 Environmental Laws...........................................56
9.20 Health Care Laws.............................................57
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9.21 No Violation of Law..........................................58
9.22 No Default...................................................58
9.23 ERISA Compliance.............................................58
9.24 Taxes........................................................59
9.25 Use of Proceeds..............................................59
9.26 Private Offerings............................................59
9.27 Broker's Fees................................................60
9.28 Government Regulation........................................60
9.29 No Material Adverse Change...................................60
9.30 Disclosure...................................................60
9.31 Fixed Charge Coverage........................................60
10. AFFIRMATIVE AND NEGATIVE COVENANTS.....................................60
10.1 Taxes and Other Obligations..................................61
10.2 Corporate Existence and Good Standing........................61
10.3 Compliance with Law and Agreements...........................61
10.4 Maintenance of Property and Insurance........................61
10.5 Environmental Laws...........................................61
10.6 Health Care Laws.............................................62
10.7 ERISA........................................................62
10.8 Mergers, Consolidations or Sales.............................62
10.9 Distributions................................................62
10.10 Transactions Having a Material Adverse Effect...............62
10.11 Guaranties..................................................62
10.12 Debt........................................................63
10.13 Prepayment..................................................63
10.14 Transactions with Affiliates................................63
10.15 Business Conducted..........................................63
10.16 Liens.......................................................64
10.17 Sale and Leaseback Transactions.............................64
10.18 New Subsidiaries............................................64
10.19 Restricted Investments......................................64
10.20 Capital Expenditures........................................64
10.21 Fixed Charge Coverage.......................................64
10.22 Debt Ratio..................................................65
10.23 Loan Documents..............................................65
10.24 Further Assurances..........................................65
10.25 Delivery of Good Standing Certificates......................65
10.26 Northern Letter of Credit...................................65
10.27 Stock Certificates...........................................65
10.28 UCC Financing Statements.....................................65
10.29 Trademark Security Agreement.................................66
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11. CONDITIONS PRECEDENT...................................................66
11.1 Conditions Precedent to Making of Initial Loan...............66
11.2 Conditions Precedent to Each Loan............................69
12. DEFAULT................................................................69
12.1 Events of Default............................................69
13. REMEDIES...............................................................72
14. TERM AND TERMINATION...................................................73
15. MISCELLANEOUS..........................................................74
15.1 Cumulative Remedies; No Prior Recourse to Collateral.........74
15.2 No Implied Waivers...........................................74
15.3 Severability.................................................75
15.4 Governing Law................................................75
15.5 Consent to Jurisdiction and Venue; Service of Process........75
15.6 Waiver of Jury Trial.........................................75
15.7 Survival of Representations and Warranties...................75
15.8 Other Security and Guaranties................................76
15.9 Fees and Expenses............................................76
15.10 Notices.....................................................77
15.11 Indemnification.............................................78
15.12 Waiver of Notices...........................................79
15.13 Binding Effect; Assignment..................................79
15.14 Modification................................................79
15.15 Counterparts................................................80
15.16 Captions....................................................80
15.17 Right of Set-Off............................................80
15.18 Participating Lender's Security Interests...................80
15.19 Additional Borrowers........................................80
15.20 Joint and Several Liability.................................81
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SCHEDULES
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Schedule 7.3 Location of Collateral
Schedule 9.4 Corporate Name; Prior Transactions
Schedule 9.5 Subsidiaries and Affiliates
Schedule 9.9 Debt
Schedule 9.13 Real Property; Leases
Schedule 9.14 Proprietary Rights
Schedule 9.15 Trade Names
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EXHIBITS
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Exhibit A Form of Account Debtor Notice
Exhibit B Additional Borrower Agreement
Exhibit C Additional Borrower Consent Notice
v
LOAN AND SECURITY AGREEMENT, dated as of February 5, 1999 (this
"AGREEMENT"), by and among BANKAMERICA BUSINESS CREDIT, INC., a Delaware
corporation, with offices at 000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxx,
Xxxxxxxx 00000 (the "LENDER"), OPTION CARE, INC., a Delaware corporation, with
offices at 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxx 00000,
individually ("OPTION CARE") and as the Borrowers' Agent, and Option Care and
each of Option Care's Subsidiaries from time to time party hereto (Option Care
and such Subsidiaries party hereto being referred to herein individually as a
"BORROWER" and collectively as the "BORROWERS").
W I T N E S S E T H
WHEREAS, the Borrowers have requested the Lender to make available to
the Borrowers a revolving line of credit for loans in an amount not to exceed
twenty-five million dollars ($25,000,000), which extensions of credit the
Borrowers shall use for working capital needs, certain permitted acquisitions
and general business purposes; and
WHEREAS, the initial Loan under this Agreement shall be used to repay
amounts owing by Option Care Persons to the Existing Bank Group;
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. DEFINITIONS.
1.1 DEFINED TERMS. As used herein:
"ACCOUNT" means, with respect to any Option Care Person, such Option
Care Person's right to payment for a sale or lease and delivery of goods or
rendition of services, including without limitation health care goods and
services.
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account.
"ACCOUNT DEBTOR NOTICE" means a notice to an Account Debtor
substantially in the form of EXHIBIT A, it being understood that Account Debtor
Notices shall be sent only to Account Debtors described in clause (p) of the
definition of "Eligible Account".
"ACH TRANSACTIONS" means all debts, liabilities, and obligations now
or hereafter owing from a Borrower to the Bank arising from or related to cash
management services including the automatic clearing house transfer of funds by
the Bank for the account of a Borrower pursuant to agreement or overdrafts.
"ADDITIONAL AUTHORIZED INDIVIDUAL" has the meaning set forth in
SECTION 2.4(c).
"ADDITIONAL BORROWER AGREEMENT" is defined in SECTION 15.19.
"ADDITIONAL BORROWER CONSENT NOTICE" is defined in SECTION 15.19.
"ADDITIONAL COLLATERAL" means (i) a domestic, Dollar denominated
letter of credit in favor of the Lender from a bank which is satisfactory to the
Lender or (ii) Dollar denominated cash or cash equivalents acceptable to the
Lender, and in the case of each of clause (i) and (ii), in form and substance
and in amounts (and pursuant to pledge agreements and other documentation)
satisfactory to the Lender. Unless the Lender notifies the Borrowers' Agent in
writing that Northern is not satisfactory as the bank referred to in clause (i)
of the preceding sentence, Northern shall be satisfactory as the bank referred
to in clause (i) of the preceding sentence. If the Lender notifies the
Borrowers' Agent in writing that Northern is not satisfactory as the bank
referred to in clause (i) of the first sentence of this definition of
"Additional Collateral", then (i) the Borrowers' Agent shall have the right to
terminate this Agreement in accordance with and subject to the terms of SECTION
14(b), and (ii) regardless of whether the Borrowers' Agent exercises such right,
the Northern Letter of Credit shall no longer be included in the calculation of
Availability.
"ADDITIONAL COLLATERAL AMOUNT" means, at any time, the then
outstanding amount of Additional Collateral as determined by the Lender in its
reasonable commercial discretion.
"ADJUSTED CASH FLOW" means, with respect to any fiscal period of
Option Care, the net income of Option Care after provision for income taxes for
such fiscal period, as determined on a consolidated basis in accordance with
GAAP and reported on the Financial Statements for such period LESS, without
duplication, (a) all Distributions permitted hereunder and made by Option Care
during such fiscal period, (b) all regularly scheduled principal installments of
Debt for borrowed money which were actually paid by the Option Care Persons
during such fiscal period, and (c) Capital Expenditures permitted hereunder and
which were actually made by the Option Care Persons during such fiscal period
determined in accordance with GAAP and reported on the Financial Statements for
such period; PLUS (i) the depreciation and amortization expense deducted in
determining such net income for such fiscal period and (ii) other non-cash
expenses deducted in computing such net income.
"ADJUSTED NET EARNINGS FROM OPERATIONS" means, with respect to any
fiscal period of Option Care, the net income of Option Care after provision for
income taxes for such fiscal period, as determined on a consolidated basis in
accordance with GAAP and reported on the Financial Statements for such period,
excluding, without duplication, any and all of the following included in such
net income: (a) gain or loss arising from the sale of capital assets (other than
durable medical equipment sold in the ordinary course of business or consistent
with the practice of the Option Care Persons as such practice existed prior to
the Closing Date); (b) gain arising from any write-up in the book value of any
asset; (c) earnings
of any corporation, substantially all the assets of which have been acquired by
an Option Care Person in any manner, to the extent realized by such other
corporation prior to the date of acquisition; (d) earnings of any Person that is
not consolidated with Option Care in accordance with GAAP, unless (and only to
the extent) such earnings shall actually have been received by Option Care or a
consolidated Subsidiary in the form of distributions of cash or cash
equivalents; (e) earnings of any Person to which assets of an Option Care Person
shall have been sold, transferred or disposed of, or into which an Option Care
Person shall have been merged, or which has been a party with an Option Care
Person to any consolidation or other form of reorganization, prior to the date
of such transaction; (f) gain arising from the acquisition of debt or equity
securities of an Option Care Person or from cancellation or forgiveness of Debt;
(g) amortization of goodwill and related intangibles; and (h) gain or loss
arising from extraordinary items, as determined in accordance with GAAP, or from
any other non-recurring transaction.
"ADJUSTED TANGIBLE ASSETS" means all of the assets of Option Care or
its consolidated Subsidiaries except: (a) deferred assets, other than prepaid
insurance and prepaid taxes; (b) patents, copyrights, trademarks, trade names,
franchises, goodwill, and other similar intangibles; (c) Restricted Investments;
(d) unamortized debt discount and expense; (e) assets of any such Person
constituting Intercompany Accounts; and (f) fixed assets to the extent of any
write-up in the book value thereof resulting from a revaluation effective after
the Closing Date.
"ADJUSTED TANGIBLE NET WORTH" means, at any date: (a) the book value
(after deducting related depreciation, obsolescence, amortization, valuation,
and other proper reserves as determined in accordance with GAAP) at which the
Adjusted Tangible Assets would be shown on a balance sheet of Option Care at
such date prepared on a consolidated basis in accordance with GAAP; LESS (b) the
amount at which the liabilities of Option Care would be shown on such balance
sheet at such date prepared on a consolidated basis in accordance with GAAP,
including as liabilities all reserves for contingencies and other potential
liabilities which would be required to be shown on such balance sheet as
determined in accordance with GAAP.
"AFFILIATE" means: (a) a Person which, directly or indirectly,
controls, is controlled by or is under common control with, an Option Care
Person; (b) a Person which beneficially owns or holds, directly or indirectly,
ten percent or more of any class of voting stock of an Option Care Person; (c) a
Person in which ten percent of any class of the voting stock is beneficially
owned or held, directly or indirectly, by an Option Care Person; or (d) a joint
venture in which an Option Care Person is a participant or in which an Option
Care Person has made an investment. The term control (including the terms
"controlled by" and "under common control with"), means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of the Person in question.
"ANNIVERSARY DATE" means each anniversary of the Closing Date.
"AVAILABILITY" means at any time the lesser of:
(a) The amount of twenty-five million dollars ($25,000,000) (the
"MAXIMUM REVOLVING CREDIT LINE"), OR
(b) The sum of (i) eighty-five percent (85%) of the Expected Net
Receivables (excluding Unbilled Accounts), plus (ii) seventy-five percent (75%)
of the Expected Net Receivables which are Unbilled Accounts, plus (iii) the
lesser of (x) two million five hundred thousand dollars ($2,500,000) and (y)
fifty percent (50%) of the Additional Collateral Amount, plus (iv) seventy-five
percent (75%) of the excess, if any, of (x) the Additional Collateral Amount
over (y) five million dollars ($5,000,000); PROVIDED, HOWEVER, that at all times
Availability shall be reduced by the sum of:
(A) the unpaid balance of Revolving Loans at that time;
(B) the amount of all unapplied cash (i.e., Collections not yet
applied to Accounts);
(C) the Offset Reserve;
(D) any reserve which the Lender in its reasonable discretion,
based upon the Lender's customary credit and collateral
standards as modified from time to time, deems necessary or
desirable to maintain (i) in respect of any Lien for
delinquent taxes applicable to any Borrower, or (ii) in
respect of accrued interest on the Revolving Loans; and
(E) all other reserves which the Lender in its reasonable
discretion, based upon the Lender's customary credit and
collateral standards as modified from time to time, deems
necessary or desirable to maintain with respect to any
Borrower's account, including, without limitation, (i) any
amounts which the Lender may be obligated to pay in the
future for the account of any Borrower, (ii) in respect of
any Borrower's ability to xxxx and collect Accounts or (iii)
any Borrower's ability to prepare and provide timely and
accurate reporting to the Lender. If the Lender sends a
notice to the Borrowers' Agent to the effect that the Lender
shall maintain a reserve contemplated by this clause (E),
then the Borrowers' Agent shall have the right to terminate
this Agreement in accordance with and subject to the terms
of SECTION 14(b).
"BANK" means Bank of America National Trust and Savings Association in
San Francisco, California.
"BLOCKED ACCOUNT" means a bank account subject to a Blocked Account
Agreement.
"BLOCKED ACCOUNT AGREEMENT" means an agreement among one or more
Option Care Persons, the Lender and a Blocked Account Bank, as the same may be
amended, amended and restated or otherwise modified from time to time in
accordance with its terms.
"BLOCKED ACCOUNT BANK" means a bank that is acceptable to the Lender.
As of the Closing Date, Northern is acceptable to the Lender; PROVIDED that if
the Lender determines that Northern is no longer able to perform the functions
(including, without limitation, the ability to follow the Lender's instructions)
of a Blocked Account Bank in a manner which is reasonably satisfactory to the
Lender, then the Lender may so notify the Borrowers' Agent and, upon such
notice, the parties hereto shall cooperate in good faith to appoint a new
Blocked Account Bank and to take all other actions which, in the reasonable
judgment of the Lender, are necessary in connection therewith to fulfill the
terms of this Agreement (including SECTION 7.10).
"BORROWER" is defined in the preamble.
"BORROWERS' AGENT" is defined in SECTION 2.4(a).
"BORROWING" means a borrowing hereunder consisting of Revolving Loans
by the Lender to one or more Borrowers.
"BORROWING BASE CERTIFICATE" means a certificate, in form and
substance reasonably satisfactory to the Lender, signed by the Chief Executive
Officer, the Chief Financial Officer or the Secretary of the Borrowers' Agent
(or by an Additional Authorized Individual). A Borrowing Base Certificate shall
be a Mid-Month Borrowing Base Certificate or a Final Borrowing Base Certificate.
"BUSINESS DAY" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in San Francisco, California or Chicago, Illinois, are
required or permitted to be closed, and (b) with respect to all notices,
determinations, fundings and payments in connection with the LIBOR Rate or LIBOR
Rate Loans, any day that is a Business Day pursuant to clause (a) above and that
is also a day on which trading is carried on by and between banks in the London
interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline, request or
directive of any central bank or other Public Authority, or any other law, rule
or regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling any bank.
"CAPITAL EXPENDITURES" means, for any period, all payments due during
such
period (whether or not paid) in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those arising
in connection with the direct or indirect acquisition of such assets by way of
increased product or service charges or offset items or in connection with
Capital Leases.
"CAPITAL LEASE" means, with respect to any Option Care Person, any
lease of Property by such Option Care Person that, in accordance with GAAP,
should be reflected as a capital lease on the balance sheet of such Option Care
Person.
"CHAMPUS" means the Civilian Health and Medical Program of the
Uniformed Services.
"CHAMPVA" means the Civilian Health and Medical Program of Veterans
Affairs.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning given to such term in SECTION 7.1.
"COLLECTIONS" means all cash, funds, checks, notes, instruments,
warrants and any other form of remittance tendered by an Account Debtor in
payment (in whole or part) of an Account.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or other substance or material, the handling, release, or possession
of which is regulated to protect health, safety or the environment, or any
constituent of any such substance, material or waste.
"CONTRACTUAL RIGHTS" means, collectively, all of the rights and
remedies of any Option Care Person under, and all moneys and claims for money
due or to become due to any Option Care Person under, any contracts or
agreements and any and all amendments, supplements, extensions, and renewals
thereof including, without limitation, all rights and claims of any Option Care
Person now or hereafter existing: (a) under any insurance, indemnities,
warranties, and guarantees provided for or arising out of or in connection with
the foregoing contracts or agreements; (b) for any damages arising out of or for
breach or default under or in connection with the foregoing contracts or
agreements; (c) to all other amounts from time to time paid or payable under or
in connection with the foregoing contracts or agreements; or (d) to exercise or
enforce any and all covenants, remedies, powers and privileges thereunder.
"DATE OF SERVICE" means, with respect to an Account, a date on which
services or goods giving rise to such Account or any portion thereof were
rendered or provided.
"DEBT" means, with respect to any Option Care Person at any time: (a)
all indebtedness, obligations or other liabilities of such Person (i) for
borrowed money or evidenced by debt securities, debentures, acceptances, notes
or other similar instruments, and any accrued interest, fees and charges
relating thereto; (ii) under profit payment agreements or similar agreements;
(iii) with respect to letters of credit issued for such Person's account; (iv)
to pay the deferred purchase price of Property or services, including, without
limitation, "earnout arrangements", except unsecured accounts payable and
accrued expenses arising in the ordinary course of business which in each case
are less than 60 days past due; or (v) Capital Lease obligations; (b) all
indebtedness, obligations or other liabilities of such Person or others secured
by a Lien on any Property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all as of such time; (c)
all indebtedness, obligations or other liabilities of such Person in respect of
any foreign exchange contract or interest hedge agreement, net of liabilities
owed to such Person thereunder by the counterparties thereon; (d) all capital
stock of such Person subject (upon the occurrence of any contingency or
otherwise) to mandatory redemption; (e) all obligations and liabilities under
Guaranties; and (f) all other Obligations.
"DILUTION PERCENTAGE" has the meaning set forth in SECTION 7.8.
"DISTRIBUTION" means, in respect of any corporation: (a) the payment
or making of any dividend or other distribution of Property in respect of
capital stock (including in respect of any options or warrants for such stock)
of such corporation, other than distributions in capital stock of the same
class; or (b) the redemption or other acquisition by such corporation of any
capital stock (or options or warrants for such stock) of such corporation.
"DOL" means the United States Department of Labor or any successor
department or agency.
"DOLLARS" and "$" means dollars constituting lawful currency of the
United States.
"EBITDA" means, with respect to any fiscal period, the Adjusted Net
Earnings from Operations for such fiscal period plus all Interest Expense,
federal and state income taxes, depreciation, and amortization deducted from
revenue in determining such Adjusted Net Earnings from Operations.
"ELIGIBLE ACCOUNTS" means those Accounts which are not ineligible as
the basis for Revolving Loans, based on the following criteria and on such other
criteria of eligibility ("OTHER CRITERIA") as the Lender may from time to time
establish in its reasonable commercial discretion upon at least three days'
prior written notice to the Borrowers' Agent provided that
if the Lender establishes Other Criteria then the Borrowers' Agent shall have
the right to terminate this Agreement in accordance with and subject to the
terms of SECTION 14(b). Without intending to limit the Lender's discretion to
establish Other Criteria, Eligible Accounts shall NOT include any Account:
(a) with respect to which more than 150 days have elapsed since
the Invoice Date; or
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in this Agreement are not or have ceased to
be complete and correct or have been breached; or
(c) with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument for the payment of
money has been received, presented for payment and returned uncollected for any
reason; or
(d) as to which any one or more of the following events has
occurred with respect to the Account Debtor on such Account: the filing by or
against the Account Debtor of a request or petition for liquidation,
reorganization, arrangement, adjustment of debts, adjudication as a bankrupt,
winding-up, or other relief under the bankruptcy, insolvency, or similar laws of
the United States, any state or territory thereof, or any foreign jurisdiction,
now or hereafter in effect; the making of any general assignment by the Account
Debtor for the benefit of creditors; the appointment of a receiver or trustee
for the Account Debtor or for any of the assets of the Account Debtor,
including, without limitation, the appointment of or taking possession by a
"custodian," as defined in the Federal Bankruptcy Code; the institution by or
against the Account Debtor of any other type of insolvency proceeding (under
bankruptcy laws or insurance laws or otherwise) or of any formal or informal
proceeding for the dissolution or liquidation of, settlement of claims against,
or winding up of affairs of, the Account Debtor; the sale, assignment, or
transfer of all or any material part of the assets of the Account Debtor; the
nonpayment generally by the Account Debtor of its debts as they become due; or
the cessation of the business of the Account Debtor as a going concern; or
(e) owed by an Account Debtor which does not maintain its chief
executive office in the United States or is not organized under the laws of the
United States or any state or commonwealth thereof; or
(f) owed by an Account Debtor which is an Affiliate of any
Borrower; or
(g) as to which either (x) the perfection, enforceability, or
validity of the Security Interest in such Account, or (y) the Lender's right or
ability to obtain direct payment to the Lender of the Proceeds of such Account
(other than, in the case of this clause
(y), an Account payable by a Government Account Debtor), is governed by any
federal, state, or local statutory requirements other than those of the UCC; or
(h) which is evidenced by a promissory note, warrant or other
instrument or by chattel paper; or
(i) if fifty percent (50%) or more of the aggregate dollar amount
of outstanding Accounts owed at such time by the Account Debtor to any Borrower
is classified by any Borrower as "not in good standing"; or
(j) which arises out of a sale made, or service performed,
outside of the ordinary course of the business of the Borrower which originated
such Receivable; or
(k) with respect to which the goods giving rise to such Account
have not been delivered to and accepted by the applicable patient or the
services giving rise to such Account have not been performed by a Borrower, and,
if applicable, accepted by the applicable patient, or the applicable patient
revokes its acceptance of such durable medical equipment which is unrelated to
infusion therapy services; or
(l) which is not subject to a first priority and perfected
security interest in favor of the Lender; or
(m) which arises under a healthcare capitation contract or
similar arrangement under which a Borrower receives payments (i) in advance of
providing the applicable goods and services or (ii) without regard to whether a
Borrower provides any goods or services; PROVIDED that if a capitation contract
or similar arrangement includes provisions for a Borrower to be paid on a "fee
for service" basis, then the related Accounts, to the extent they represent the
right to payment on such "fee for service" basis, shall not be excluded as
Eligible Accounts solely because of this clause (m); or
(n) to the extent such Account is a Self-Pay Account; or
(o) as to which at least than 60 days have elapsed since any Date
of Service and such Account was an Unbilled Account on such 60th day; or
(p) owed by an Account Debtor which is an insurance company or
health maintenance organization or other Person which is paid premiums in a
manner which is the same as or similar to an insurance company or health
maintenance organization if such Account Debtor has not received an Account
Debtor Notice; provided that this clause (p) shall apply commencing thirty (30)
days after the Closing Date; or
(q) which represents a right of payment under a servicing
contract; or
(r) unless such Account is denominated in Dollars; or
(s) (i) if the goods (other than durable medical equipment) or
services giving rise to such Account were not authorized by a physician's
prescription, or (ii) the Account Debtor (other than a Self-Pay Account Debtor)
informs any Option Care Person (whether by EOB or otherwise) that such goods or
services were not medically necessary (and the applicable contract or applicable
law provides that payment for such goods or services may or shall be denied on
the grounds that such goods or services were not medically necessary); or
(t) to the extent that the fees charged for the services or goods
constituting the basis for such Account exceed limitations imposed by applicable
law, regulation or contract; or
(u) which is not owned free and clear of all Liens (other than
Permitted Liens) by the Borrower which originated such Account; or
(v) which represents a royalty or other right to receive a
franchise payment from any franchisee of any Option Care Person; or
(w) which represents amounts due in respect of a "settlement"
with respect to Medicare or Medicaid relating to the filing of a "cost report";
or
(x) which represents a right to payment for a sale or lease and
delivery of computer software or hardware or rendition of services pertaining to
computer software or hardware.
If any Account at any time ceases to be an Eligible Account by reason of
any of the foregoing exclusions or any failure to meet any Other Criteria, then
such Account shall promptly be excluded from the calculation of Eligible
Accounts.
"ENVIRONMENTAL LAWS" means all present and future federal, state and
local laws, rules, regulations, ordinances, programs, permits, guidance, orders
and consent decrees relating to health, safety, hazardous substances, and
environmental matters applicable to any Option Care Person's business and
facilities (whether or not owned by it). Such laws and regulations include but
are not limited to the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901 et seq., as amended; the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. ss. 9601 et seq., as amended; the Toxic Substances
Control Act, 15 U.S.C. ss. 2601 et seq., as amended; the Clean Water Act, 33
U.S.C. ss. 466 et seq., as amended; the Clean Air Act, 42 U.S.C. ss. 7401 et
seq., as amended; state and federal lien and environmental cleanup programs; and
U.S. Department of Transportation regulations.
"ENVIRONMENTAL LIEN" means a Lien in favor of any Public Authority for
(a) any liability under any Environmental Laws, or (b) damages arising from, or
costs incurred by such Public Authority in response to, a Release or threatened
Release of a Contaminant into the environment.
"EOB" means the explanation of benefits, remittance advice or other
record that is provided by an Account Debtor explaining how it determined the
amount it shall or shall not pay with respect to an Account of which it is the
Account Debtor.
"EQUIPMENT" means machinery, equipment, furniture, furnishings,
fixtures, and other tangible personal property (except Inventory), including,
without limitation, data processing hardware and software, motor vehicles,
aircraft, dies, tools, jigs, and office equipment, whether owned or leased, and
all rights and interests with respect thereto under such leases (including,
without limitation, options to purchase); together with all present and future
additions and accessions thereto, replacements therefor, component and auxiliary
parts and supplies used or to be used in connection therewith, and all
substitutes for any of the foregoing, and all manuals, drawings, instructions,
warranties and rights with respect thereto; wherever any of the foregoing is
located.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is a member of a controlled group or under common control
with any Option Care Person within the meaning of Section 414(b) or (c) of the
Code (and Sections 414(m) and (o) of the Code for purposes of provisions
relating to Section 412 of the Code).
"ERISA EVENT" means, with respect to any Option Care Person, any ERISA
Affiliate or any Pension Plan, the occurrence of any of the following: (a) a
Reportable Event; (b) a withdrawal by a substantial employer (as defined in
Section 4001(a)(12) of ERISA) subject to Section 4063 of ERISA; (c) a cessation
of operations which is treated as a withdrawal under Section 4062(e) of ERISA;
(d) a complete or partial withdrawal under Section 4203 or 4205 of ERISA from a
Multiemployer Plan; (e) a notification that a Multiemployer Plan is in
reorganization under Section 4242 of ERISA; (f) the filing of a notice of intent
to terminate a Pension Plan under 4041 of ERISA; (g) the treatment of an
amendment of a Pension Plan as a termination under 4041 of ERISA; (h) the
termination of a Multiemployer Plan under Section 4041A of ERISA; (i) the
commencement of proceedings by the PBGC to terminate a Pension Plan under 4042
of ERISA; (j) an event or condition which would reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, a Pension Plan; or (k) the imposition of
any material liability under Title IV of ERISA, other than PBGC premiums due but
not delinquent under Section 4007 of ERISA.
"EVENT" means any event or condition which, with notice, the passage
of time, the happening of any other condition or event, or any combination
thereof, would constitute an Event of Default.
"EVENT OF DEFAULT" has the meaning specified in SECTION 12.1.
"EXISTING BANK GROUP" means the banks and the agent parties to that
certain credit agreement among Option Care, the other parties thereto and PNC
Bank, National Association, as agent.
"EXPECTED NET RECEIVABLES" means the amount of the Net Amount of
Eligible Accounts reasonably expected by the Lender to be collected within 180
days from Invoice Date.
"FACILITY FEE" has the meaning specified in SECTION 3.4.
"FEDERAL BANKRUPTCY CODE" or "BANKRUPTCY CODE" means the bankruptcy
code of the United States of America codified in Title 11 of the United States
Code.
"FINAL BORROWING BASE CERTIFICATE" means a Borrowing Base Certificate
reflecting actual information as of the end of the month preceding the month in
which such Final Borrowing Base Certificate is to be delivered pursuant to
SECTION 7.8.
"FINANCIAL STATEMENTS" means, according to the context in which it is
used, the financial statements contained in Option Care's Form 10-Q for the
quarterly period ended September 30, 1998, any financial statements required to
be given to the Lender pursuant to SECTIONS 8.2(a), (b) or (c), or any
combination thereof.
"FISCAL YEAR" means each Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of each Borrower shall end on
December 31, 1999.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means at any particular time generally accepted accounting
principles as in effect at such time in the United States.
"GOVERNMENT ACCOUNT DEBTOR" means the United States of America, any
state, any political subdivision of a state and any agency or instrumentality of
the United States of America or any state, political subdivision or fiscal
intermediary thereof (including any insurance company or other Person acting
solely in its capacity as a Medicare or Medicaid intermediary) that is obligated
to make any payments under (i) Medicare or Medicaid or (ii) with respect to
Accounts representing amounts owing under any other program established by
federal or state law that provides for payments for health care goods or
services to be made to providers thereof (including CHAMPUS and CHAMPVA).
"GOVERNMENT OFFSET" means any amount determined by a Government
Account Debtor, or any agent or governmental agency acting on behalf of a
Government Account Debtor or governmental agency, to constitute an overpayment
made to any Option Care Person with respect to an Account and that is to be paid
to such Government Account Debtor by any Option Care Person or is to be offset
against amounts then due to any Option Care Person from such Government Account
Debtor, including any amounts determined by HCFA or any agent acting on behalf
thereof.
"GUARANTY" by any Person means all obligations of such Person which in
any manner directly or indirectly guarantee or assure, or in effect guarantee or
assure, the payment or performance of any indebtedness, dividend or other
obligation of any other Person (the "guaranteed obligations"), or assure or in
effect assure the holder of the guaranteed obligations against loss in respect
thereof, including, without limitation, any such obligations incurred through an
agreement, contingent or otherwise: (a) to purchase the guaranteed obligations
or any Property constituting security therefor; (b) to advance or supply funds
for the purchase or payment of the guaranteed obligations or to maintain a
working capital or other balance sheet condition; or (c) to lease Property or to
purchase any debt or equity securities or other Property or services.
"HCFA" means the Health Care Financing Administration or any successor
thereto.
"HEALTH CARE LAWS" means any and all federal, state and local laws and
regulations governing the licensure, certification, good standing, accreditation
and approval of the provision of health care goods and services provided by any
Option Care Person or any of its Subsidiaries, including but not limited to laws
and regulations relating to licensure of operation, certificates of need,
certificates of operations, insurance, fraud and abuse, kickbacks, false claims,
physician self-referral arrangements, Medicaid, Medicare, CHAMPUS, CHAMPVA, the
federal Food, Drug & Cosmetic Act (FDCA) and the Food and Drug Administration.
"INTERCOMPANY ACCOUNTS" means all assets and liabilities, however
arising, which are due to any Option Care Person from, which are due from any
Option Care Person to, or which otherwise arise from any transaction by any
Option Care Person with, any Affiliate of such Option Care Person.
"INTEREST EXPENSE" means, with respect to any period, the consolidated
gross interest expense of Option Care and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP.
"INTEREST PERIOD" means, as to any LIBOR Rate Loan, the period
commencing
on the Funding Date of such Loan or on the Conversion/Continuation Date on which
the Loan is converted into or continued as a LIBOR Rate Loan, and ending on the
date one, two, three or six months thereafter as selected by the Borrowers'
Agent in its Notice of Borrowing or Notice of Conversion/Continuation; PROVIDED,
HOWEVER, that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to
the following 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
preceding Business Day;
(ii) 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 calendar month at the end of such
Interest Period; and
(iii) no Interest Period shall extend beyond the Stated
Termination Date.
"INVENTORY" means inventory, goods and merchandise, wherever located,
to be furnished under any contract of service or held for sale or lease, all raw
materials, work-in-process, finished goods, returned goods, and materials and
supplies of any kind, nature or description, and all documents of title or other
documents representing them.
"INVOICE DATE" means, with respect to an Account, the date on which
any Option Care Person first submitted a claim to an Account Debtor (other than
a Self-Pay Account Debtor) with regard to such Account. For avoidance of doubt,
if an Option Care Person submits a claim in respect of an Account to an Account
Debtor and such claim is not paid in full (the "INITIAL CLAIM"), and the Option
Care Person then submits a claim in respect of such Account to another Account
Debtor, the Initial Claim shall be treated as the "claim" for purposes of the
first sentence of this definition of Invoice Date.
"IRS" means the Internal Revenue Service or any successor agency.
"LATEST PLAN" means: (a) on the Closing Date and thereafter until the
Lender receives new projections pursuant to SECTION 8.2(f), Option Care's
business plan for Fiscal Year 1999, a true, complete and correct copy of which
was provided by Option Care to the Lender prior to the Closing Date; and (b)
thereafter, the business plan most recently received by the Lender pursuant to
SECTION 8.2(f).
"LENDER" is defined in the preamble.
"LIBOR INTEREST PAYMENT DATE" means, with respect to a LIBOR Rate
Loan, the
last day of each Interest Period applicable to such Loan.
"LIBOR INTEREST RATE DETERMINATION DATE" means each date of
calculating the LIBOR Rate for purposes of determining the interest rate with
respect to an Interest Period. The LIBOR Interest Rate Determination Date for
any LIBOR Rate Loan shall be the second Business Day prior to the first day of
the related Interest Period for such LIBOR Rate Loan.
"LIBOR RATE" means, for any Interest Period, with respect to LIBOR
Rate Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/1000th of 1.0%) determined as follows:
LIBOR Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1.0%) in effect on such
day (whether or not applicable to the Lender) under regulations issued
from time to time by the Board of Governors of the Federal Reserve for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"LIBOR" means the rate of interest per annum (rounded upward to
the next 1/16 of 1%) notified to the Lender by Bank as the rate of
interest at which United States Dollar deposits in the approximate
amount of the Loan to be made or continued as, or converted into, a
LIBOR Rate Loan and having a maturity comparable to such Interest
Period would be offered by Bank's applicable lending office to major
banks in the London interbank market at their request at approximately
11:00 a.m. (London time) two Business Days prior to the commencement
of such Interest Period.
"LIBOR RATE LOANS" means a Revolving Loan during any period in which
it bears interest based on the LIBOR Rate.
"LIEN" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any lease or title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give or file, any financing statement perfecting a security
interest under the UCC or comparable law of any jurisdiction), regardless of
whether any of the foregoing is consensual or arises by operation of law or
otherwise is non-consensual.
"LOANS" means, collectively, all loans and advances provided for in
SECTION 2.
"LOAN DOCUMENTS" means this Agreement, each Blocked Account Agreement,
each Additional Borrower Agreement, the Account Debtor Notices, the Borrowing
Base Certificates, the Northern Letter of Credit, the Pledge Agreements, the
Trust Reimbursement and Security Agreement, the Trust Subordination Agreement,
the Trademark Security Agreement, and all other agreements, letters of credit,
notices, instruments, and documents heretofore, now or hereafter evidencing,
securing, guaranteeing or otherwise relating to the Obligations, the Collateral,
the Security Interest, or any other aspect of the transactions contemplated by
this Agreement.
"LOCKBOX" means a lockbox or post office box which is subject to a
Blocked Account Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on any of
the following: (a) the Collateral, (b) the complete and timely repayment of the
Obligations, (c) the Lender's rights under any Loan Document, (d) the Property,
business, performance, operations, prospects, or condition (financial or
otherwise) of all Option Care Persons, taken as a whole, or (e) without limiting
the foregoing, the ability of all Option Care Persons, taken as a whole, to
perform their obligations under the Loan Documents in a manner which is
reasonably satisfactory to the Lender.
"MAXIMUM RATE" has the meaning specified in SECTION 3.3.
"MAXIMUM REVOLVING CREDIT LINE" has the meaning specified in clause
(a) of the definition of Availability.
"MEDICAID" means the medical assistance program established by Title
XIX of the Social Security Act.
"MEDICAID ACCOUNT" means an Account representing a claim payable under
Medicaid.
"MEDICARE" means the health insurance program established by Title
XVIII of the Social Security Act.
"MID-MONTH BORROWING BASE CERTIFICATE" means a Borrowing Base
Certificate reflecting estimated information (based on good faith, reasonable
estimates by the Borrowers' Agent) as of the fifteenth day of the month in which
such Mid-Month Borrowing Base Certificate is to be delivered pursuant to SECTION
7.8.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any Option Care Person or any ERISA Affiliate
makes, is making, made, or was at any time during the current year or the
immediately preceding six (6) years obligated to make contributions.
"NET AMOUNT OF ELIGIBLE ACCOUNTS" means, with respect to any Eligible
Accounts, the gross amount of such Eligible Accounts less sales, excise or
similar taxes, and less discounts, claims and credits at any time issued, owing,
granted, outstanding, available or claimed in respect of such Eligible Accounts
(including without limitation discounts, claims and allowances based on any fee
schedule, discount formula, cost-based reimbursement or other adjustment or
limitation required by the related Account Debtors) and disregarding interest,
if any, payable by the related Account Debtors.
"NORTHERN" means The Northern Trust Company.
"NORTHERN LETTER OF CREDIT" means a domestic, Dollar denominated
letter of credit in favor of the Lender from Northern, in form and substance
satisfactory to the Lender.
"NOTICE OF BORROWING" has the meaning specified in SECTION 2.2(b).
"NOTICE OF CONVERSION/CONTINUATION" has the meaning specified in
SECTION 3.2(B).
"OBLIGATIONS" means all present and future loans, advances,
liabilities, obligations (monetary or otherwise), covenants, duties, and Debt
owing by any Option Care Person to the Lender, whether or not arising under this
Agreement, whether or not evidenced by any note or other instrument or document,
whether arising from an extension of credit, opening of a letter of credit,
acceptance, loan, guaranty, indemnification or otherwise, whether direct or
indirect (including, without limitation, those acquired by assignment from
others, and any participation by the Lender in any Option Care Person's debts
owing to others), absolute or contingent, due or to become due, primary or
secondary, as principal or guarantor, and including, without limitation, all
interest, charges, expenses, fees, attorneys' fees, filing fees and any other
sums chargeable to any Option Care Person hereunder, under another Loan
Document, or under any other agreement or instrument with the Lender.
"OBLIGATIONS" includes, without limitation, all debts, liabilities and
obligations now or hereafter owing from any Option Care Person to the Lender
arising from or related to (i) ACH Transactions pursuant to the indemnity
provided in SECTION 2.3 hereof, or (ii) any payment made by the Lender to a
Blocked Account Bank pursuant to a Blocked Account Agreement.
"OFFSET RESERVE" means, with respect to all Accounts and Account
Debtors (other than Self-Pay Account Debtors), the result (but not less than
zero) of (a) the sum of the amounts which such Account Debtors have requested or
directed any Option Care Person to pay, or as to which any such Account Debtors
have notified any Option Care Person that such
Account Debtors shall withhold, setoff or recoup from any Option Care Person, in
respect of actual or alleged overpayments by any such Account Debtor in respect
of any Account, plus (b) the aggregate amount which any Option Care Person is
indebted to such Account Debtors arising from the fact that an Account Debtor,
in addition to being an Account Debtor, has an additional relationship with any
Option Care Person (e.g., an Option Care Person is a tenant or customer of a
Person that is an Account Debtor), minus (c) the amount paid by any Option Care
Person to Account Debtors described in clause (a) as a refund of the
overpayments contemplated by clause (a); PROVIDED that no amount relating to a
Government Account Debtor shall be included in clause (a) of this definition
unless (i) such Government Account Debtor has requested payment from an Option
Care Person with respect to any actual or alleged overpayment by such Government
Account Debtor or (ii) such Government Account Debtor, without sending prior
request for payment to an Option Care Person, is or has been withholding,
setting-off or recouping from an Option Care Person in respect of any actual or
alleged overpayment by such Government Account Debtor to an Option Care Person.
"OPTION CARE" is defined in the preamble.
"OPTION CARE PERSON" means any of (a) Option Care (both individually
and in its capacity as the Borrowers' Agent), (b) Option Care as a Borrower, and
(c) any other Borrower, and "Option Care Persons" means, collectively, all of
such Persons.
"OTHER CRITERIA" has the meaning set forth in the definition of
Eligible Accounts.
"OTHER TAXES" means any present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Loan Documents.
"PARTICIPATING LENDER" means any Person that shall have been granted
the right by the Lender to participate in the Loans and that shall have entered
into a participation agreement in form and substance satisfactory to the Lender.
"PAYMENT ACCOUNT" means a bank account maintained in the name of the
Lender on terms and with a bank acceptable to the Lender.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"PENSION PLAN" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which any Option Care Person or an ERISA
Affiliate sponsors, maintains, or to which it makes, is making, or is obligated
to make contributions or, in the case of a Multiemployer Plan, has made
contributions at any time during the current year or the immediately preceding
six (6) plan years.
"PERMITTED LIENS" means:
(a) Liens for taxes not yet delinquent or Liens for taxes in an
amount not to exceed two hundred fifty thousand dollars ($250,000) being
contested in good faith by appropriate proceedings diligently pursued,
provided that a reserve or other appropriate provision, if any, as shall be
required by GAAP shall have been made therefor on the applicable Financial
Statements and that a stay of enforcement of any such Lien is in effect;
(b) Liens in favor of the Lender;
(c) Liens arising by operation of law in favor of warehousemen,
landlords, carriers, mechanics, materialmen, laborers, employees or
suppliers, incurred in the ordinary course of business of any Option Care
Person and not in connection with the borrowing of money, for sums not yet
delinquent or which are being contested in good faith and by proper
proceedings diligently pursued, provided that a reserve or other
appropriate provision, if any, required by GAAP shall have been made
therefor on the applicable Financial Statements and a stay of enforcement
of any such Lien is in effect;
(d) Liens in favor of any Person if such Liens are subordinated
to the Security Interest in a manner acceptable to the Lender pursuant to
an agreement, in form and substance satisfactory to the Lender, among the
Lender, such Person and, if the Lender so requires, one or more Option Care
Persons;
(e) Liens arising from cash deposits in connection with workers'
compensation or other unemployment insurance incurred in the ordinary
course of business of an Option Care Person;
(f) Liens created by deposits of cash to secure performance of
bids, tenders, leases (to the extent permitted under this Agreement), or
trade contracts, incurred in the ordinary course of business of an Option
Care Person and not in connection with the borrowing of money;
(g) Liens of or resulting from any judgment or award, the time
for the appeal or petition for rehearing of which has not yet expired, or
in respect of which an Option Care Person is in good faith prosecuting an
appeal or proceeding for a review, and in respect of which a stay of
execution pending such appeal or proceeding for review has been secured;
and
(h) purchase money security interests in equipment and liens of
lessors under Capital Leases to the extent that the acquisition or lease of
the underlying
asset was permitted under SECTION 10.11, the security interest or lien only
encumbers the asset purchased or leased, and so long as the security
interest or lien only secures the purchase price of the asset.
"PERSON" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, limited liability company,
association, corporation, Public Authority, or any other entity.
"PLAN" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which any Option Care Person or an ERISA Affiliate sponsors or maintains
or to which any Option Care Person or an ERISA Affiliate makes, is making, or is
obligated to make contributions and includes any Pension Plan.
"PLEDGE AGREEMENTS" is defined in SECTION 11.1.
"PREMISES" means the land identified by addresses on SCHEDULE 9.13
together with all buildings, improvements, and fixtures thereon and all
tenements, hereditaments, and appurtenances belonging or in any way appertaining
thereto, and which constitutes all of the real property in which any Option Care
Person has any interests on the Closing Date.
"PROCEEDS" means all products and proceeds of any Collateral, and all
proceeds of such proceeds and products, including, without limitation, all
Collections, cash and credit balances, all payments under any indemnity,
warranty, or guaranty payable with respect to any Collateral, all awards for
taking by eminent domain, all proceeds of fire or other insurance, and all money
and other Property obtained as a result of any claims against third parties or
any legal action or proceeding with respect to Collateral.
"PROPERTY" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"PROPRIETARY RIGHTS" means all licenses, franchises, permits, patents,
patent rights, copyrights, works which are the subject matter of copyrights,
trademarks, trade names, trade styles, patent and trademark applications and
licenses and rights thereunder, including without limitation those patents,
trademarks and copyrights referred to on SCHEDULE 9.14, and all other rights
under any of the foregoing, all extensions, renewals, reissues, divisions,
continuations, and continuations-in-part of any of the foregoing, and all rights
to xxx for past, present, and future infringement of any of the foregoing;
inventions, trade secrets, formulae, processes, compounds, drawings, designs,
blueprints, surveys, reports, manuals, and operating standards; goodwill;
customer and other lists in whatever form maintained; and trade secret rights,
copyright rights, rights in works of authorship, and contract rights relating to
computer software programs, in whatever form created or maintained.
"PUBLIC AUTHORITY" means the government of any country or sovereign
state, or
of any state, province, municipality, or other political subdivision thereof, or
any department, agency, public corporation or other instrumentality of any of
the foregoing and, without limiting the foregoing, any official, attorney,
employee, agent or "ombudsman", whether elected, appointed or otherwise employed
or retained, by any of the foregoing.
"RECEIVABLES" means all Accounts (whether or not earned by
performance), including without limitation Accounts owed to any Option Care
Person by any of its Subsidiaries or Affiliates, together with all interest,
late charges, penalties, collection fees, and other sums which shall be due and
payable in connection with any Account; proceeds of any letters of credit naming
any Option Care Person as beneficiary; contract rights; chattel paper;
instruments; documents; investment property; royalty fees and other payments
from franchisees; general intangibles; tort claims; contract claims; choses in
action; causes of action; tax refunds; tax refund claims; Reversions and other
amounts payable to any Option Care Person from or with respect to any Plan;
interests in or claims under any policy of insurance; and all forms of
obligations owing to any Option Care Person (including, without limitation, in
respect of loans, advances, and extensions of credit by any Option Care Person
to its Subsidiaries and Affiliates); guarantees and other security for any of
the foregoing; goods represented by or the sale, lease or delivery of which gave
rise to any of the foregoing; merchandise returned to or repossessed by any
Option Care Person and rights of stoppage in transit, replevin, and reclamation;
and other rights or remedies of an unpaid vendor, lienor, or secured party.
"RECORDS" means books, documents, EOBs, instruments, files and other
records (including without limitation computer programs, tapes and disks) that
evidence an Account or are otherwise necessary or desirable to collect an
Account.
"REFERENCE RATE" means the rate of interest publicly announced from
time to time by the Bank as its reference rate. It is a rate set by the Bank
based upon various factors including the Bank's costs and desired return,
general economic conditions, and other factors, and is used as a reference point
for pricing some loans. However, the Bank may price loans at, above, or below
such announced rate. Any changes in the Reference Rate shall take effect on the
day specified in the public announcement of such change.
"REFERENCE RATE LOANS" means a Revolving Loan during any period in
which it bears interest based on the Reference Rate.
"RELEASE" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any real
estate or other property, including the movement of Con taminants through or in
the air, soil, surface water, groundwater or real estate or other property.
"REPORTABLE EVENT" means any of the events set forth in Section
4043(b) of
ERISA or the regulations thereunder, other than any such event for which the
30-day notice requirement under ERISA has been waived in regulations issued by
the PBGC.
"REQUIREMENT OF LAW" means any law (statutory or common), treaty, rule
or regulation or determination of an arbitrator or of a Public Authority.
"RESTRICTED INVESTMENT" means any acquisition of Property by any
Option Care Person or any of its Subsidiaries in exchange for cash or other
Property, whether in the form of an acquisition of stock, debt security, or
other indebtedness or obligation, or the purchase or acquisition of any other
Property, or a loan, advance, capital contribution, or subscription, except
acquisitions of the following: (a) fixed assets to be used in the business of
any Option Care Person or any of its Subsidiaries, so long as the acquisition
costs thereof constitute Capital Expenditures permitted hereunder; (b) goods
held for sale or lease or to be used in the rendition of services by any Option
Care Person and its Subsidiaries, in each case in the ordinary course of
business; (c) direct obligations of the United States of America, or any agency
thereof, or obligations guaranteed by the United States of America, provided
that such obligations mature within one year from the date of acquisition
thereof; (d) certificates of deposit maturing within one year from the date of
acquisition, bankers acceptances, Eurodollar bank deposits, or overnight bank
deposits, in each case issued by, created by, or with a bank or trust company
organized under the laws of the United States or any state thereof having
capital and surplus aggregating at least $100,000,000; and (e) commercial paper
given the highest rating by S&P or Xxxxx'x and maturing not more than 270 days
from the date of creation thereof.
"REVERSIONS" means any funds which may become due to any Option Care
Person in connection with the termination of any Plan or other employee benefit
plan.
"REVOLVING LOANS" has the meaning specified in SECTION 2.2.
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx- Xxxx Companies, Inc.
"SECURITY INTEREST" means collectively the Liens granted to the Lender
in the Collateral pursuant to this Agreement, the other Loan Documents, or any
other agreement or instrument.
"SELF-PAY ACCOUNT" means (i) the "co-pay" or "deductible" portion of
an Account payable by a Self-Pay Account Debtor, or (ii) the entire Account when
the entire amount is payable by a Self-Pay Account Debtor.
"SELF-PAY ACCOUNT DEBTOR" means an individual "natural" person.
"SOLVENT" means when used with respect to any Person that at the time
of
determination:
(i) the assets of such Person, at a fair valuation, are in excess
of the total amount of its debts (including, without limitation,
contingent liabilities); and
(ii) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(iii) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other
commitments) as they mature; and
(iv) it has capital sufficient to carry on its business as
conducted and as proposed to be conducted.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"SPECIFIED BAD DEBT EXPENSE AMOUNT" means for any period of four
consecutive fiscal quarters, the excess, if any, of (i) the amount of "bad debt
expense" of Option Care and its Subsidiaries on a consolidated basis for such
period over (ii) three percent (3%) of the "net revenues" of Option Care and its
Subsidiaries on a consolidated basis for such period; provided that for any
period of four consecutive fiscal quarters ending with the last fiscal quarter
of any Fiscal Year (commencing with the Fiscal Year ending December 31, 1999),
the Specified Bad Debt Expense Amount shall be zero if the "actual writeoffs" of
Option Care and its Subsidiaries on a consolidated basis for such period do not
exceed three percent (3%) of the "net revenues" of Option Care and its
Subsidiaries on a consolidated basis for such period.
"STATED TERMINATION DATE" has the meaning specified in SECTION 14.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other business entity
of which more than fifty percent (50%) of the voting stock or other equity
interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of an Option Care Person.
"TAXES" means any and all present or future taxes, assessments,
levies, imposts,
impositions, deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of the Lender, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by the Lender's
net income by the jurisdiction (or any political subdivision thereof) under the
laws of which the Lender is organized or maintains a lending office.
"TERMINATION FEE" means (x) two hundred fifty thousand dollars
($250,000) if this Agreement is terminated on or prior to the first Anniversary
Date, (y) one hundred twenty-five thousand dollars ($125,000) if this Agreement
is terminated after the first Anniversary Date but on or prior to the second
Anniversary Date, and (z) sixty-two thousand five hundred dollars ($62,500) if
this Agreement is terminated after the Second Anniversary Date but prior to the
Stated Termination Date.
"TOTAL FACILITY" has the meaning specified in SECTION 2.1.
"TRADEMARK SECURITY AGREEMENT" has the meaning specified in SECTION
10.29.
"TRUST" means the Xxxx X. Xxxxxx Trust dated 9/20/89.
"TRUST REIMBURSEMENT AND SECURITY AGREEMENT" has the meaning specified
in SECTION 11.1.
"TRUST SUBORDINATION AGREEMENT" has the meaning specified in SECTION
11.1.
"UCC" means the Uniform Commercial Code (or any successor statute) of
the State of Illinois or of any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of perfection
of security interests.
"UNBILLED ACCOUNT" means an Account as to which an Option Care Person,
to the best of its knowledge, has not submitted to the related Account Debtor
(other than a Self-Pay Account Debtor) those necessary claim forms, other
documentation and information required in order for such Account Debtor to make
payment of such Account.
"UNUSED LINE FEE" has the meaning specified in SECTION 3.1(c).
1.2 ACCOUNTING TERMS. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as consistently applied and using the same method for inventory valuation as
used in the preparation of the Financial Statements.
1.3 INTERPRETIVE PROVISIONS. (a) All other undefined terms contained
in this
Agreement shall, unless the context indicates otherwise, have the meanings
provided for by the UCC to the extent the same are used or defined therein.
(b) Wherever appropriate in the context, terms used herein in the
singular also include the plural, and VICE VERSA, and each masculine, feminine,
or neuter pronoun shall also include the other genders.
(c) The words "hereof," "herein," "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(d) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including,"
the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(e) Unless specified herein, references herein to times of day are to
Chicago time.
(f) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments, amendments and restatements and
other modifications thereto, but only to the extent such amendments, amendments
and restatements and other modifications are not prohibited by the terms of any
Loan Document, and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions consolidating,
amending, replacing, supplementing or interpreting the statute or regulation.
(g) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with its terms.
(h) This Agreement and the other Loan Documents are the result of
negotiations among, and have been reviewed by counsel to, each of the parties
hereto and thereto and are the products of all parties. Accordingly, neither
this Agreement nor any other Loan Document shall be construed against the Lender
merely because of the Lender's involvement in the preparation of this Agreement
and the other Loan Documents.
2. LOANS.
2.1 TOTAL FACILITY. Subject to all of the terms and conditions of this
Agreement, the Lender shall make available a total credit facility of up to
twenty-five million dollars ($25,000,000) (the "TOTAL FACILITY") for the
Borrowers' use from time to time during the term of this Agreement. The Total
Facility shall be comprised of a revolving line of credit up to the limits of
the Availability, consisting of Revolving Loans as described in SECTION 2.2.
2.2 REVOLVING LOANS.
(a) The Lender shall, upon request of the Borrowers' Agent from
time to time, make revolving loans (the "REVOLVING LOANS") to the Borrowers up
to the limits of the Availability calculated on a consolidated basis with
respect to all Option Care Persons. The Lender, in its discretion, may elect,
with the consent of the Borrowers' Agent, to make Revolving Loans in excess of
the Availability on one or more occasions, but if it does so, the Lender shall
not be deemed thereby to have changed the limits of the Availability or to be
obligated to exceed the limits of the Availability on any other occasion. If the
unpaid balance of the Revolving Loans exceeds the Availability (with
Availability determined for this purpose without subtracting the unpaid balance
of the Revolving Loans) then the Lender may refuse to make or otherwise restrict
Revolving Loans on such terms as the Lender determines until such excess has
been eliminated. The Lender shall charge all Revolving Loans and other
Obligations of an Option Care Person to a loan account of Option Care maintained
with the Lender (and all references in this Agreement to the "loan account" of
Option Care shall be references to such account). All Revolving Loans shall be
requested by and advanced to the Borrowers' Agent; provided that the Borrowers'
Agent hereby directs that the funds constituting the initial Loan under this
Agreement be paid directly to the agent for the Existing Bank Group. All fees,
commissions, costs, expenses, and other charges under or pursuant to the Loan
Documents, and all payments made and out-of-pocket expenses incurred by the
Lender pursuant to the Loan Documents, shall be charged as Revolving Loans to
the loan account of Option Care as of the date due or the date paid or incurred
by the Lender, as the case may be.
(b) PROCEDURE FOR BORROWING.
(i) Each Borrowing shall be made upon the irrevocable
written notice ("NOTICE OF BORROWING") from the Borrowers' Agent to the Lender,
which notice must be received by the Lender not later than (1) 12:00 noon,
Chicago time, three Business Days prior to the requested Funding Date in the
case of LIBOR Rate Loans and (2) 12:00 noon, Chicago time, on the requested
Funding Date in the case of Reference Rate Loans, specifying:
(A) the amount of the Borrowing which, in the case of
LIBOR Rate Loans, shall be in an amount not less than two million five hundred
thousand
dollars ($2,500,000) and in an integral multiple of five hundred thousand
dollars ($500,000) in excess thereof;
(B) the requested Funding Date, which shall be a
Business Day;
(C) whether the Revolving Loans requested are to be
Reference Rate Loans or LIBOR Rate Loans; and
(D) the duration of the Interest Period if the
requested Revolving Loans are to be LIBOR Rate Loans. If the Notice of Borrowing
fails to specify the duration of the Interest Period for any Borrowing comprised
of LIBOR Rate Loans, such Interest Period shall be one month; provided, however,
that with respect to the Borrowings to be made on the Closing Date, such
Borrowings shall consist of Reference Rate Loans only.
(ii) After giving effect to any Borrowing, there may not be
more than five different Interest Periods in effect.
2.3 AUTOMATED CLEARING HOUSE TRANSFERS. Each Borrower may request
and the Lender may, in its sole and absolute discretion, arrange for such
Borrower to obtain from the Bank ACH Transactions. Each Borrower agrees to
indemnify and hold the Lender harmless from any and all obligations now or
hereafter owing by the Lender to the Bank arising from or related to such ACH
Transactions pursuant to the indemnity referred to in clause (c) below. Each
Borrower agrees to pay the Bank all amounts owing to the Bank pursuant to ACH
Transactions. In the event any Borrower shall not have paid to the Bank such
amounts, the Lender shall pay such amounts to the Bank and such amounts when
paid by the Lender shall constitute a Revolving Loan which shall be deemed to
have been requested by the Borrowers' Agent. Each Borrower acknowledges and
agrees that the obtaining of ACH Transactions from the Bank (a) is in the sole
and absolute discretion of the Bank, (b) is subject to all rules and regulations
of the Bank, and (c) is due to the Bank relying on the indemnity of the Lender
to the Bank with respect to obligations of such Borrower to the Bank in
connection with the ACH Transactions.
2.4 THE BORROWERS' AGENT.
(a) Each Borrower hereby irrevocably appoints, designates and
authorizes Option Care as the agent and attorney-in-fact of such Borrower
(Option Care, in such capacity for all of the Borrowers, being referred to as
the "BORROWERS' AGENT") to give and receive notices, statements, requests and
instructions on such Borrower's behalf under this Agreement and any other Loan
Document and otherwise communicate on such Borrower's behalf with the Lender,
and, without limiting the foregoing, to take such action on such Borrower's
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are delegated to the
Borrowers' Agent by the terms of this
Agreement or any other Loan Document, together with such powers as are
incidental thereto. Option Care hereby accepts such appointment, designation and
authorization.
(b) Without limiting the foregoing, the Lender may give notices,
statements, requests and instructions to any Borrower through the Borrowers'
Agent and may accept and act upon any notices, statements, requests and
instructions given by the Borrowers' Agent, and each such notice, statement,
request and instruction shall be binding upon the Borrowers. Notwithstanding
such appointment, designation, and authorization, the Lender may also deal
directly with, and give and receive notices, statements, requests and
instructions to and from, any Borrower, provided that the Lender shall promptly
give notice of any such communications with any Borrower to the Borrowers'
Agent. Any communications transmitted by the Lender to a Borrower shall be sent
to such Borrower in care of Option Care at the address of Option Care determined
in accordance with SECTION 15.10. If conflicting instructions are received from
an Option Care Person and from the Borrowers' Agent, the notice, statement,
request or instruction of the Borrowers' Agent shall prevail.
(c) The Borrowers' Agent may execute any of its duties under this
Agreement or any other Loan Document by or through any of, but none other than,
its Chief Executive Officer, Chief Financial Officer or Secretary.
Notwithstanding the foregoing, but subject to the conditions specified in the
proviso to this sentence, the Borrowers' Agent may authorize other agents,
officers or employees of the Borrowers' Agent (such other agents, officers or
employees being referred to collectively as the "ADDITIONAL AUTHORIZED
INDIVIDUALS" and individually as an "ADDITIONAL AUTHORIZED INDIVIDUAL") to sign
and submit a Notice of Borrowing or sign and submit a Notice of
Conversion/Continuation; provided that no Person shall be considered to be an
Additional Authorized Individual unless the Lender shall have received (i) a
written list of such Additional Authorized Individuals and their respective
signatures, and the Lender shall have acknowledged receipt of such list in
writing, and (ii) a resolution of the board of directors of the Borrowers' Agent
specifically identifying such Additional Authorized Individuals or authorizing
one or more officers of the Borrowers' Agent to designate Additional Authorized
Individuals, it being understood and agreed that the list and resolutions
described in clauses (i) and (ii) shall be in form and substance reasonably
satisfactory to the Lender and shall be certified by the Secretary of the
Borrowers' Agent pursuant to a certificate which is in form and substance
reasonably satisfactory to the Lender.
(d) The Borrowers' Agent shall promptly forward to the Lender or
the Borrowers, as appropriate, all notices, documents, certificates, financial
statements and reports received by it in the performance of its duties
hereunder.
(e) The Borrowers' Agent shall perform its duties hereunder and
under the other Loan Documents on behalf of the Borrowers. All actions of the
Borrowers' Agent shall in each case bind all the Borrowers, whether or not any
such action has been duly authorized by such Borrowers.
3. INTEREST AND OTHER CHARGES.
3.1 INTEREST.
(a) All Obligations shall bear interest on the unpaid principal
amount thereof from the date made until paid in full in cash at a rate
determined by reference to the Reference Rate or the LIBOR Rate and SECTIONS
3.1(a)(i) or (ii), as applicable, but not to exceed the Maximum Rate. Subject to
the provisions of SECTION 3.2, any of the Loans may be converted into, or
continued as, Reference Rate Loans or LIBOR Rate Loans in the manner provided in
SECTION 3.2. If at any time Loans are outstanding with respect to which notice
has not been delivered to Lender in accordance with the terms of this Agreement
specifying the basis for determining the interest rate applicable thereto, then
those Loans shall be Reference Rate Loans and shall bear interest at a rate
determined by reference to the Reference Rate until notice to the contrary has
been given to the Lender and such notice has become effective. Except as
otherwise provided herein, the Obligations shall bear interest as follows:
(i) For all Obligations, other than LIBOR Rate Loans, then
at a fluctuating per annum rate equal to the Reference Rate; and
(ii) If the Loans are LIBOR Rate Loans, then at a per annum
rate equal to two and one-eighth percent (2.125%) (the "LIBOR MARGIN") plus the
LIBOR Rate determined for the applicable Interest Period.
Each change in the Reference Rate shall be reflected in the interest rate
described in clause (i) above as of the effective date of such change. All
interest charges in respect of the Obligations shall be computed on the basis of
a year of three hundred sixty (360) days and actual days elapsed. All interest
on the Obligations shall be payable to the Lender on the first day of each month
hereafter, and, with respect to a LIBOR Rate Loan, on the last day of each
Interest Period relating thereto.
(b) If any Event of Default occurs, then, from the date such
Event of Default occurs until it is cured or waived, or if not cured or waived
until all Obligations are paid and performed in full, then the Borrowers shall
pay interest on the unpaid principal balances of the Revolving Loans at a per
annum rate two percent (2%) greater than the rate of interest otherwise
specified herein.
(c) UNUSED LINE FEE. For every month during the term of this
Agreement, the Borrowers shall pay the Lender a fee (the "UNUSED LINE FEE") in
an amount equal to one-quarter of one percent (0.25%) per annum, MULTIPLIED BY
the average daily amount by which the Maximum Revolving Credit Line exceeds the
average daily outstanding amount of Revolving Loans during such month, with the
outstanding amount of Revolving Loans calculated for this purpose by applying
payments immediately upon receipt. Such a fee, if any, shall be calculated on
the basis of a year of three hundred sixty (360) days and actual days elapsed,
and shall be payable to the Lender on the first day of each month and on the
termination of this Agreement, in each case, with respect to the prior month or
portion thereof.
3.2 CONVERSION AND CONTINUATION ELECTIONS.
(a) The Borrowers' Agent may, upon irrevocable written notice to
the Lender in accordance with SUBSECTION 3.2(b):
(i) elect, as of any Business Day, in the case of Reference
Rate Loans to convert any such Loans (or any part thereof in an amount not less
than two million five hundred thousand dollars ($2,500,000), or that is in an
integral multiple of five hundred thousand dollars ($500,000) in excess thereof)
into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Rate Loans having Interest Periods expiring on
such day (or any part thereof in an amount not less than two million five
hundred thousand dollars ($2,500,000), or that is in an integral multiple of
five hundred thousand dollars ($500,000) in excess thereof);
PROVIDED, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than two million five hundred thousand dollars
($2,500,000), such LIBOR Rate Loans shall automatically convert into Reference
Rate Loans, and on and after such date the right of the Borrowers' Agent to
continue such Loans as, and convert such Loans into, LIBOR Rate Loans, as the
case may be, shall terminate.
(b) The Borrowers' Agent shall deliver a written notice of
conversion or continuation ("NOTICE OF CONVERSION/CONTINUATION") to be received
by the Lender not later than 12:00 noon, Chicago time, at least three Business
Days in advance of the date of conversion or continuation, if the Loans are to
be converted into or continued as LIBOR Rate Loans and specifying:
(A) the proposed Conversion/Continuation Date;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the type of Loans resulting from the proposed conversion
or continuation; and
(D) the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
LIBOR
Rate Loans, the Borrowers' Agent has failed to select timely a new Interest
Period to be applicable to LIBOR Rate Loans or if any Event or Event of Default
then exists, the Borrowers' Agent shall be deemed to have elected to convert
such LIBOR Rate Loans into Reference Rate Loans effective as of the expiration
date of such Interest Period.
(d) During the existence of an Event, the Lender shall have the
right to decline to permit a Loan to be converted into or continued as a LIBOR
Rate Loan. During the existence of an Event of Default, the Borrowers' Agent
shall not elect to have a Loan converted into or continued as a LIBOR Rate Loan.
(e) After giving effect to any conversion or continuation of
Loans, there may not be more than five different Interest Periods in effect.
3.3 MAXIMUM INTEREST RATE. In no event shall any interest rate
provided for hereunder exceed the maximum rate permissible for corporate
borrowers under applicable law for loans of the type provided for hereunder (the
"MAXIMUM RATE"). If, in any month, any interest rate, absent such limitation,
would have exceeded the Maximum Rate, then the interest rate for that month
shall be the Maximum Rate, and, if in future months, that interest rate would
otherwise be less than the Maximum Rate, then that interest rate shall remain at
the Maximum Rate until such time as the amount of interest paid hereunder equals
the amount of interest which would have been paid if the same had not been
limited by the Maximum Rate. In the event that, upon payment in full of the
Obligations, the total amount of interest paid or accrued under the terms of
this Agreement is less than the total amount of interest which would, but for
this SECTION 3.3, have been paid or accrued if the interest rates otherwise set
forth in this Agreement had at all times been in effect, then the Borrowers
shall, to the extent permitted by applicable law, pay the Lender, an amount
equal to the excess of (a) the lesser of (i) the amount of interest which would
have been charged if the Maximum Rate had, at all times, been in effect or (ii)
the amount of interest which would have accrued had the interest rates otherwise
set forth in this Agreement, at all times, been in effect over (b) the amount of
interest actually paid or accrued under this Agreement. In the event that a
court determines that the Lender has received interest and other charges
hereunder in excess of the Maximum Rate, such excess shall be deemed received on
account of, and shall automatically be applied to reduce, the Obligations other
than interest, in the inverse order of maturity, and if there are no Obligations
outstanding, the Lender shall refund to the applicable Borrowers such excess.
3.4 FACILITY FEE. The Borrowers shall pay the Lender on the Closing
Date a facility fee in the amount of one hundred eighty-seven thousand five
hundred dollars ($187,500) (the "FACILITY FEE"), less twenty-five thousand
dollars ($25,000) previously paid as a commitment fee by Option Care in respect
thereof pursuant to the letter agreement dated January 13, 1999 between Option
Care and the Lender.
4. PAYMENTS AND PREPAYMENTS.
4.1 REVOLVING LOANS. The Borrowers shall repay the outstanding
principal balance of the Revolving Loans, plus all accrued but unpaid interest
thereon, upon the termination of this Agreement for any reason. In addition, and
without limiting the generality of the foregoing, the Borrowers shall pay to the
Lender, on demand, the amount by which the unpaid principal balance of the
Revolving Loans at any time exceeds the Availability at such time (determined
for this purpose as if the amount of the Revolving Loans were zero) regardless
of whether the Lender elected to make Revolving Loans in excess of the
Availability; provided that if the unpaid principal balance of the Revolving
Loans so exceeds the Availability solely because the Lender established Other
Criteria, then the Borrowers shall pay to the Lender, within two days after
demand by the Lender, the amount of such excess.
4.2 PLACE AND FORM OF PAYMENTS; EXTENSION OF TIME. All payments of
principal, interest, and other sums due to the Lender shall be made at the
Lender's address determined in accordance with SECTION 15.10. Except for
Proceeds received directly by the Lender, all such payments shall be made in
immediately available funds. If any payment of principal, interest, or other sum
to be made hereunder becomes due and payable on a day other than a Business Day,
the due date of such payment shall be extended to the next succeeding Business
Day and interest thereon shall be payable at the applicable interest rate during
such extension.
4.3 APPLICATION AND REVERSAL OF PAYMENTS. The Lender shall determine
in its sole discretion the order and manner in which Proceeds of Collateral
(including amounts in respect of Additional Collateral) and other payments that
the Lender receives are applied to the Revolving Loans, interest thereon, and
the other Obligations, and each Option Care Person hereby irrevocably waives the
right to direct the application of any such Proceeds or payments. The Lender
shall have the continuing and exclusive right to apply and reverse and reapply
any and all such Proceeds and payments to any portion of the Obligations.
4.4 INDEMNITY FOR RETURNED PAYMENTS. IF AFTER RECEIPT OF ANY PAYMENT
WHICH IS APPLIED TO THE PAYMENT OF ALL OR ANY PART OF THE OBLIGATIONS, THE
LENDER IS FOR ANY REASON COMPELLED TO SURRENDER SUCH PAYMENT TO ANY PERSON
BECAUSE SUCH PAYMENT IS INVALIDATED, DECLARED FRAUDULENT, SET ASIDE, DETERMINED
TO BE VOID OR VOIDABLE AS A PREFERENCE, IMPERMISSIBLE SETOFF, OR A DIVERSION OF
TRUST FUNDS, OR FOR ANY OTHER REASON, THEN: THE OBLIGATIONS OR PART THEREOF
INTENDED TO BE SATISFIED SHALL BE REVIVED AND CONTINUE AND THIS AGREEMENT SHALL
CONTINUE IN FULL FORCE AS IF SUCH PAYMENT HAD NOT BEEN RECEIVED BY THE LENDER
AND EACH OPTION CARE PERSON SHALL BE LIABLE TO PAY TO THE LENDER AND HEREBY DOES
INDEMNIFY THE LENDER AND HOLD THE LENDER HARMLESS FOR THE AMOUNT OF SUCH PAYMENT
SURRENDERED. The provisions of this SECTION 4.4 shall be and remain effective
notwithstanding any contrary action which may have been taken by the Lender in
reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the Lender's rights under
this Agreement and shall be deemed to have been conditioned upon such payment
having become final and irrevocable. The provisions of this SECTION 4.4 shall
survive the termination of this Agreement.
5. LENDER'S BOOKS AND RECORDS; MONTHLY STATEMENTS. Each Option Care
Person agrees that the Lender's books and records showing the Obligations and
the transactions pursuant to this Agreement and the other Loan Documents shall
be admissible in any action or proceeding arising therefrom, and shall
constitute evidence thereof (absent manifest error), irrespective of whether any
Obligation is also evidenced by a promissory note or other instrument. The
Lender shall provide to the Borrowers' Agent a monthly statement of Loans,
payments, and other transactions pursuant to this Agreement. Such statement
shall be deemed correct, accurate, and binding on the Option Care Persons and as
an account stated (except for reversals and reapplications of payments made as
provided in SECTION 4.3 and corrections of errors discovered by the Lender),
unless the Borrowers' Agent notifies the Lender in writing to the contrary
within sixty (60) days after such statement is given to the Borrowers' Agent. In
the event a timely written notice of objections is given by the Borrowers'
Agent, only the items to which exception is expressly made shall be considered
to be disputed by the Option Care Persons.
6. TAXES, YIELD PROTECTION AND ILLEGALITY
6.1 TAXES.
(a) Any and all payments by any Option Care Person to the Lender
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for any Taxes. In addition, the Option
Care Persons shall pay all Other Taxes.
(b) Each Option Care Person agrees to indemnify and hold harmless
the Lender for the full amount of Taxes or Other Taxes (including any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section)
paid by the Lender and any liability (including penalties, interest, additions
to tax and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. The Lender shall
make payments of Other Taxes only in the event that either (i) an Event of
Default has occurred; or (ii) in the event that such Other Taxes remain
delinquent for more than thirty (30) days after the Lender has provided notice
thereof to the Borrowers' Agent. Payment under this indemnification shall be
made within thirty (30) days after the date the Lender makes written demand
therefor.
(c) If any Option Care Person shall be required by law to deduct
or withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to the Lender, then:
(i) the sum payable shall be increased as necessary so that
after making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section) the
Lender receives an amount equal to the sum it would have received had no such
deductions or withholdings been made;
(ii) such Option Care Person shall make such deductions and
withholdings;
(iii) such Option Care Person shall pay the full amount
deducted or withheld to the relevant taxing authority or other authority in
accordance with applicable law; and
(iv) such Option Care Person shall also pay to the Lender at
the time interest is paid, all additional amounts which the Lender specifies as
necessary to preserve the after tax yield the Lender would have received if such
Taxes or Other Taxes had not been imposed.
(d) Within 60 days after the date of any payment by any Option
Care Person of Taxes or Other Taxes referred to in clause (c) above, such Option
Care Person shall furnish the Lender the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment reasonably
satisfactory to the Lender, which such satisfactory evidence shall include,
without limitation, cancelled checks.
6.2 ILLEGALITY.
(a) If the Lender determines that the introduction of any
Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Public Authority has asserted that
it is unlawful, for the Lender or its applicable lending office to make LIBOR
Rate Loans, then, on notice thereof by the Lender to the Borrowers' Agent, any
obligation of the Lender to make LIBOR Rate Loans shall be suspended until the
Lender notifies the Borrowers' Agent that the circumstances giving rise to such
determination no longer exist.
(b) If the Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, then, upon demand by the Lender, each Borrower shall prepay in
full all of the LIBOR Rate Loans relating to such Borrower and then outstanding,
together with interest accrued thereon and amounts required under SECTION 6.4,
either on the last day of the Interest Period thereof, if the Lender may
lawfully continue to maintain such LIBOR Rate Loans to such day, or immediately,
if the Lender may not lawfully continue to maintain such LIBOR Rate Loan. If any
Borrower is required to so prepay any LIBOR Rate Loan, then concurrently with
such prepayment, such Borrower shall borrow from the Lender, in the amount of
such
repayment, a Reference Rate Loan.
6.3 INCREASED COSTS AND REDUCTION OF RETURN.
(a) If the Lender determines that, due to either (i) the
introduction of or any change in the interpretation of any law or regulation or
(ii) the compliance by the Lender with any guideline or request from any central
bank or other Public Authority (whether or not having the force of law), there
shall be any increase in the cost to the Lender of agreeing to make or making,
funding or maintaining any LIBOR Rate Loans, then the Borrowers shall be liable
for, and, upon demand by the Lender from time to time, shall pay to the Lender
additional amounts as are sufficient to compensate the Lender for such increased
costs.
(b) If the Lender shall have determined that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any Capital Adequacy
Regulation, (iii) any change in the interpretation or administration of any
Capital Adequacy Regulation by any central bank or other Public Authority
charged with the interpretation or administration thereof, or (iv) compliance by
the Lender or any corporation controlling the Lender with any Capital Adequacy
Regulation, affects or would affect the amount of capital, reserves, or special
deposits required or expected to be maintained by the Lender or any corporation
controlling the Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital, reserves,
or special deposits is increased as a consequence of its loans, credits or
obligations under this Agreement, then each Borrower shall be liable for, and,
upon demand of the Lender from time to time, shall pay to the Lender additional
amounts sufficient to compensate the Lender for such increase. Notwithstanding
the foregoing, all such amounts shall be subject to the provisions of SECTION
3.3.
6.4 FUNDING LOSSES. The Borrowers shall reimburse the Lender and hold
the Lender harmless from any loss or expense which the Lender may sustain or
incur as a consequence of:
(a) the failure of any Borrower to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(b) the failure of any Borrower to borrow, continue or convert a
Loan after the Borrowers' Agent has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/Continuation;
(c) the prepayment or other payment (including after acceleration
thereof) of an LIBOR Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds
obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
6.5 INABILITY TO DETERMINE RATES. If the Lender determines that for
any reason adequate and reasonable means do not exist for determining the LIBOR
Rate for any requested Interest Period with respect to a proposed LIBOR Rate
Loan, or that the LIBOR Rate for any requested Interest Period with respect to a
proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to the
Lender of funding such Loan, the Lender shall so notify the Borrowers' Agent.
Thereafter, the obligation of the Lender to make or maintain LIBOR Rate Loans
hereunder shall be suspended until the Lender revokes such notice in writing.
Upon receipt of such notice, the Borrowers' Agent may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Borrowers' Agent does not revoke such Notice, the Lender shall make, convert or
continue the Loans, as proposed by the Borrowers' Agent, in the amount specified
in the applicable notice submitted by the Borrowers' Agent, but such Loans shall
be made, converted or continued as Reference Rate Loans instead of LIBOR Rate
Loans.
6.6 SURVIVAL. The agreements and obligations of the Option Care
Persons in this SECTION 6 shall survive the payment of all other Obligations.
7. COLLATERAL.
7.1 GRANT OF SECURITY INTEREST.
(a) As security for the payment and performance of all of the
Obligations, each Option Care Person hereby grants to the Lender a continuing
security interest in, lien on, and assignment of all of such Option Care
Person's right, title and interest in, to and under (but none of such Option
Care Person's obligations under) all of the following, in each case wherever
located and whether now owned or existing or hereafter arising or acquired: (i)
all Receivables, Inventory, Equipment, Contractual Rights, Proprietary Rights,
Lockboxes, Blocked Accounts, Payment Accounts, and Proceeds; (ii) all moneys,
securities and other property and the Proceeds thereof, now or hereafter held or
received by, or in transit to, the Lender from or for any Option Care Person,
whether for safekeeping, pledge, custody, transmission, collection or otherwise,
including, without limitation, all of the deposit accounts, credits, and
balances of any Option Care Person with the Lender and all claims of any Option
Care Person against the Lender at any time existing; (iii) all deposit accounts
with any financial institutions (including without limitation Northern) with
which any Option Care Person maintains deposits; (iv) the Loan Documents; (v)
all fixtures; (vi) all capital stock or other equity interests issued by any
Subsidiary of any Option Care Person; (vii) the Additional Collateral; (viii)
any other Property (including without limitation all checks, monies and other
items on deposit from time to time in any Lockbox or Blocked Account); and (ix)
all books, Records and other Property relating to or referring to any of the
foregoing, including, without limitation, all books, records, ledger cards, data
processing records, computer software and other property and general intangibles
at any time evidencing or relating to the Receivables, Inventory, Equipment,
Contractual Rights, Proprietary Rights, Proceeds, or other items referred to
above (all of the foregoing, and all other property in which the Lender may at
any time be granted a Lien, being herein collectively referred to as the
"COLLATERAL"). The Lender shall have all of the rights of a secured party with
respect to the Collateral under the UCC and other applicable laws (except to the
extent, if any, prohibited by applicable law).
(b) All Obligations shall constitute a single loan secured by the
Collateral. The Lender may, in its sole discretion, (i) exchange, waive, or
release any of the Collateral, (ii) after the occurrence of an Event of Default,
apply Collateral and direct the order or manner of sale thereof as the Lender
may determine, and (iii) after the occurrence of an Event of Default, settle,
compromise, collect, or otherwise liquidate any Collateral in any manner, all
without affecting the Obligations or the Lender's right to take any other action
with respect to any other Collateral. To the extent that SECTION 7.5 is
applicable thereto, the preceding sentence is subject to SECTION 7.5.
7.2 PERFECTION AND PROTECTION OF SECURITY INTEREST. Each Option Care
Person shall, at its expense, perform all steps requested by the Lender at any
time and from time to time to perfect, maintain, protect, and enforce the
Security Interest including, without limitation: (a) executing and filing UCC
financing or continuation statements, and amendments thereof, in form and
substance satisfactory to the Lender; (b) delivering to the Lender the original
certificates of title for motor vehicles with the Security Interest properly
endorsed thereon; (c) delivering to the Lender the originals of all instruments,
documents, and chattel paper, and all other Collateral of which the Lender
determines it should have physical possession in order to perfect and protect
the Security Interest therein, duly endorsed or assigned to the Lender without
restriction; (d) delivering to the Lender warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse receipts
are issued; (e) executing and delivering to the Lender a security agreement
relating to the Reversions in form and substance satisfactory to the Lender; (f)
delivering to the Lender all letters of credit on which such Option Care Person
is named beneficiary; and (g) taking such other steps as are deemed necessary or
appropriate by the Lender to maintain the Security Interest. To the extent
permitted by applicable law, the Lender may file, without any Option Care
Person's signature, one or more financing statements disclosing the Security
Interest. Each Option Care Person agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement. If any Collateral is at any time in the
possession or control of any warehouseman, bailee or any of the agents or
processors of any Option Care Person, then such Option Care Person shall notify
the Lender thereof and shall notify such Person of the Security Interest in such
Collateral and, upon the Lender's request, instruct such Person to hold all such
Collateral for the Lender's account subject to the Lender's instructions. If at
any time any Collateral is located on any Premises that are not owned by an
Option Care Person, other than equipment located at a patient's premises, then,
at the request of the Lender, each Option Care Person
shall use reasonable efforts to obtain written waivers, in form and substance
satisfactory to the Lender, of all present and future Liens to which the owner
or lessor or any mortgagee of such Premises may be entitled to assert against
the Collateral. From time to time, each Option Care Person shall, upon Lender's
request, execute and deliver confirmatory written instruments pledging to the
Lender the Collateral, but an Option Care Person's failure to do so shall not
affect or limit the Security Interest or the Lender's other rights in and to the
Collateral. So long as this Agreement is in effect and until all Obligations
have been fully satisfied, the Security Interest shall continue in full force
and effect in all Collateral (whether or not deemed eligible for the purpose of
calculating the Availability or as the basis for any advance, loan, extension of
credit, or other financial accommodation).
Without limiting the generality of the foregoing: (i) each Borrower which
is not a party to a Pledge Agreement acknowledges the terms of such Pledge
Agreement and agrees to comply with such terms as if it were a party to such
Pledge Agreement; and (ii) each Borrower which is an "Issuer", as defined in the
applicable Pledge Agreement, shall register the pledge effected by such Pledge
Agreement on the books of such Borrower.
7.3 LOCATION OF COLLATERAL. Each Option Care Person represents and
warrants to the Lender that as of the Closing Date: (a) the chief executive
office of such Option Care Person is located (and at all times during the twelve
months prior to the Closing Date, the chief executive office of such Option Care
Person has been located) at 000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx,
Xxxxxxxx 00000; (b) SCHEDULE 7.3 hereto is a correct and complete list of the
location of the books and records of such Option Care Person, the locations of
the Collateral (other than equipment located at a patient's premises), and the
locations of all of its other places of business; and (c) SCHEDULE 7.3 correctly
identifies any of such facilities and locations that are not owned by the Option
Care Persons and sets forth the names of the owners and lessors or sub-lessors
of such facilities and locations. Each Option Care Person covenants and agrees
that it shall not maintain any Collateral at any location other than those
listed on SCHEDULE 7.3, and, with the exception of equipment located at a
patient's premises, it shall not otherwise change or add to any of such
locations, unless it gives the Lender written notice thereof within thirty (30)
days after such change in or addition of location, and executes any and all UCC
financing statements and other documents that the Lender requests in connection
therewith.
7.4 TITLE TO, LIENS ON, AND SALE AND USE OF COLLATERAL. Each Option
Care Person represents and warrants to, and each Option Care Person covenants
with, the Lender that: (a) all Collateral is and shall continue to be owned by
the Option Care Persons free and clear of all Liens whatsoever, except for the
Security Interest and other Permitted Liens; (b) the Security Interest is not
and shall not be subject to any prior Lien; (c) each Option Care Person shall
use, store, and maintain the Collateral with all reasonable care and shall use
the Collateral for lawful purposes only; and (d) no Option Care Person shall,
without the Lender's prior written approval, sell, lease, or dispose of or
permit the sale or disposition of the Collateral or any portion thereof, except
for sales of Inventory in the ordinary course of
business and as permitted by SECTION 7.12. The inclusion of Proceeds in the
Collateral shall not be deemed the Lender's consent to any sale or other
disposition of the Collateral except as expressly permitted herein.
7.5 ADDITIONAL COLLATERAL.
(a) Pursuant to SECTION 10.26, the Option Care Persons have
agreed to cause the Northern Letter of Credit to remain in effect. If an Event
of Default has occurred and either the Lender has declared any or all
Obligations to be immediately due and payable or all Obligations shall have
automatically become immediately due and payable as contemplated by SECTION
13(a), then
(i) during the one hundred eighty (180) days from and after
the Obligations being declared or automatically becoming due and payable, the
Lender shall have the right from time to time to draw on the Northern Letter of
Credit (and to draw on or liquidate other Additional Collateral) in an amount
equal to the amount of Availability attributable to clause (b)(iii) of the
definition of Availability; and
(ii) after the end of such one hundred eighty (180) day
period, the Lender shall have the right from time to time to draw on the
Northern Letter of Credit (and to draw on or liquidate other Additional
Collateral) in such amount as may be determined by the Lender from time to time.
Notwithstanding the foregoing, on any day which is not more than thirty
(30) days prior to the then current expiry date of the Northern Letter of
Credit, the Lender shall have the right to draw on the Northern Letter of Credit
in such amount as may be determined by the Lender from time to time.
(b) The Borrowers' Agent may cause the Northern Letter of Credit
to be terminated:
(i) if, as of December 31, 1999, (x) the Availability is at
least five million dollars ($5,000,000) without giving effect to clauses
(b)(iii) and (b)(iv) of the definition of Availability, and (y) the fixed charge
coverage ratio calculated pursuant to SECTION 10.21 for the four fiscal quarters
of Option Care ending December 31, 1999 (i.e., the twelve month period ending
December 31, 1999) is not less than 1.75 to 1; or
(ii) if, as of the end of any fiscal quarter of Option Care
(commencing with the fiscal quarter ending June 30, 2000), (x) the Availability
is at least twenty percent (20%) greater than the unpaid balance of Revolving
Loans at that time without giving effect to clauses (b)(iii) and (b)(iv) of the
definition of Availability, and (y) the fixed charge coverage ratio calculated
pursuant to SECTION 10.21 for the four fiscal quarters of Option Care ending
with the end of such fiscal quarter is not less than 2.0 to 1.
(c) If the Lender consents in writing in its sole discretion that
Northern Letter of Credit shall be terminated or that the amount of the Northern
Letter of Credit shall be reduced, then the Borrowers' Agent may cause the
Northern Letter of Credit to be so terminated or reduced in accordance with the
terms of such consent; provided that (i) any such reduction shall be evidenced
by documentation which is in form and substance reasonably satisfactory to the
Lender and (ii) immediately after giving effect to such reduction the
Availability shall exceed zero (without giving effect to clauses (b)(iii) and
(b)(iv) of the definition of Availability).
(d) If the amount of the Northern Letter of Credit exceeds five
million dollars ($5,000,000), then the Borrowers' Agent may cause the amount of
the Northern Letter of Credit to be reduced; provided that (i) immediately after
giving effect to such reduction the amount of the Northern Letter of Credit
shall be not less than five million dollars ($5,000,000), (ii) such reduction
shall be evidenced by documentation which is in form and substance reasonably
satisfactory to the Lender, and (iii) immediately after giving effect to such
reduction the Availability shall exceed zero (without giving effect to clause
(b)(iv) of the definition of Availability).
(e) Any amendment to this Section 7.5 pertaining to the Northern
Letter of Credit shall not take effect unless the corresponding provision of the
Trust Subordination Agreement, if applicable, is also amended.
7.6 ACCESS AND EXAMINATION. The Lender may at all reasonable times and
from time to time (not to exceed four times each year, absent a continuing Event
of Default) have access to, examine, audit, make extracts from and inspect the
records, files, and books of account of the Option Care Persons and the
Collateral and may discuss the affairs of the Option Care Persons with the
officers and management of the Option Care Persons. Each Option Care Person
shall deliver to the Lender any instrument necessary for the Lender to obtain
records from any service bureau maintaining records for any Option Care Person.
The Lender may, at the reasonable expense of the Option Care Persons, make
copies of all of the books and records of the Option Care Persons, or require
the Option Care Persons to deliver such copies to the Lender. The Lender may,
without expense to the Lender, use such of the personnel, supplies, and Premises
of the Option Care Persons as may be reasonably necessary and appropriate for
maintaining or enforcing the Security Interest. The Lender shall have the right,
at any time, in Lender's name or in the name of a nominee of the Lender, to
verify the validity, amount or any other matter relating to the Accounts, by
mail, telephone, or otherwise.
7.7 INSURANCE. The Option Care Persons shall insure the Collateral
against loss or damage by fire with extended coverage, theft, burglary,
pilferage, loss in transit, and such other hazards as the Lender shall specify,
in amounts, under policies and by insurers acceptable to the Lender. The Option
Care Persons shall cause the Lender to be named in each such policy as
secured party and loss payee or additional insured, in a manner acceptable to
the Lender. Each policy of insurance shall contain a clause or endorsement
requiring the insurer to give not less than thirty (30) days' prior written
notice to the Lender in the event of cancellation of the policy for any reason
other than for failure to pay premiums when due, and requiring the insurer to
give not less than ten (10) days' prior written notice to the Lender in the
event of cancellation of the policy for failure to pay premiums when due. Each
Option Care Person shall also pay all premiums for such insurance when due, and
shall deliver to the Lender certificates of insurance and, if requested,
photocopies of the policies.
If the Option Care Persons fail to pay such fees or to procure such
insurance or the premiums therefor when due, the Lender may (but shall not be
required to) do so and charge the costs thereof to the loan account of Option
Care as a Revolving Loan. The insurance referred to in the preceding sentence
may, but need not, protect the interests of the Option Care Persons. The
coverage purchased by the Lender hereunder may not pay any claim made by any
Option Care Person or any claim that is made against any Option Care Person in
connection with the Collateral. The Option Care Persons may later cancel any
insurance purchased by the Lender hereunder, but only after providing the Lender
with evidence that the Option Care Persons have obtained insurance as required
by this Agreement. If the Lender purchases insurance for the Collateral, each
Option Care Person shall be responsible for the costs of such insurance,
including interest and any other charges that the Lender may impose in
connection with the placement of such insurance, until the effective date of the
cancellation or expiration of such insurance. The costs of the insurance may be
added to the total outstanding Obligations. The costs of the insurance obtained
by the Lender hereunder may be more than the cost of insurance that the Option
Care Persons may be able to obtain on their own.
Each Option Care Person shall promptly notify the Lender of each instance
of any loss, damage, or destruction to the Collateral in excess of one hundred
thousand dollars ($100,000) or arising from its use, whether or not covered by
insurance. The Option Care Persons shall apply all insurance proceeds
contemplated by this SECTION 7.7 to the reduction of the Obligations; provided
that, prior to the occurrence of an Event of Default, an Option Care Person may
use such proceeds, or any part thereof, to replace, repair, restore or rebuild
the Collateral in a diligent and expeditious manner with materials and
workmanship of substantially the same quality as existed before the loss, damage
or destruction. Following the occurrence and during the continuance of an Event
of Default, the Lender shall have the right but not the obligation to collect
all insurance proceeds directly (other than proceeds of insurance which the
Lender procured pursuant to this SECTION 7.7, which may be collected directly by
the Lender regardless of whether an Event of Default exists); provided that any
insurance proceeds that the Lender collects pursuant to this SECTION 7.7 shall
be applied in accordance with SECTION 4.3.
7.8 COLLATERAL REPORTING. The Borrowers' Agent shall provide the
Lender with the following documents and information at the following times in
form satisfactory to the Lender: (a) on a weekly basis, a schedule of cash
received; (b) upon request by the Lender,
copies of invoices, EOBs (and any similar correspondence from any Account Debtor
which is or which at any time has been an Account Debtor of an Eligible
Account), credit memos, shipping and delivery documents no later than ten
Business Days following such written request (except to the extent that delivery
of the foregoing violates applicable law); (c) monthly agings and
reconciliations of accounts receivable to be delivered no later than the
fifteenth day of each month respecting the immediately preceding month
(including detail as to applications of collections thereon); (d) monthly
reports as to "dilutions", including as to the Dilution Percentage for each
month and each calendar quarter, not later than the fifteenth day of each month
respecting the immediately preceding month and calendar quarter; (e) during the
third week of each month, a forecast as to revenue of the Option Care Persons
for such month; (f) monthly reports pertaining to the cash collections in
respect of Accounts as to which more than 120 days have elapsed since Invoice
Date, not later than the fifteenth day of each month respecting the immediately
preceding month; (g)(x) during the third week of each month, a Mid-Month
Borrowing Base Certificate for such month, and (y) on the fifteenth day of each
month (or, if such day is not a Business Day, on the next Business Day), a Final
Borrowing Base Certificate with respect to the immediately preceding month; (h)
such other reports as to the Collateral (including without limitation reports as
to adjusting entries) as the Lender shall request from time to time; and (i)
certificates of an officer of the Borrowers' Agent certifying as to the
foregoing; provided that reports delivered pursuant to clause (c) or clause (f),
and the Final Borrowing Base Certificate delivered pursuant to clause (g),
during January of each year may be delivered up to five Business Days later than
the applicable day specified in such clauses.
If (x) an Event of Default has occurred, or (y) as of the end of any two
consecutive calendar quarters the Dilution Percentage (defined below) for the
twelve month period ending as of the end of each such calendar quarter exceeds
seven and one-half percent (7.5%), then, upon request from the Lender, the
Lender shall have the right to retain the services of a collateral monitoring
company (at the expense of the Option Care Persons) to review, monitor and
report on Accounts and collections in such manner as may be required by the
Lender from time to time. If any of the records or reports of the Option Care
Persons with respect to the Collateral are prepared by an accounting service or
other agent, each Option Care Person hereby authorizes such service or agent to
deliver such records, reports, and related documents to the Lender.
As used herein, "DILUTION PERCENTAGE" means, on any date of determination,
the percentage identified as such in the most recent monthly report as to
"dilutions" referred to in clause (d) of the first paragraph of this SECTION 7.8
provided by the Borrowers' Agent to the Lender on or prior to such date of
determination. The Dilution Percentage for any period shall be calculated as a
fraction, the numerator of which is the aggregate amount of non-cash credits
(i.e., reductions) to the accounts receivable of the Option Care Persons during
such period and the denominator of which is the gross revenues of the Option
Care Persons during such period. The Borrowers' Agent shall not change the
method by which it calculates the Dilution Percentage (or by which it calculates
any component thereof) without the prior written consent of the Lender.
7.9 ACCOUNTS.
(a) Each Option Care Person hereby represents and warrants to the
Lender and covenants with the Lender that: (i) each existing Account represents,
and each future Account shall represent, a BONA FIDE sale or lease and delivery
of goods by an Option Care Person, or rendition of services by an Option Care
Person, in the ordinary course of business of an Option Care Person; (ii) each
existing Account is, and each future Account shall be, at the time any such
Account arose and at the time any such Account is billed, for a liquidated
amount payable by the Account Debtor thereon on the terms set forth in the
invoice therefor or in the schedule thereof delivered to the Lender, without
offset, deduction, defense, or counterclaim, other than discounts required by
law or contract, and corrections of billing errors, in the ordinary course of
business of an Option Care Person; (iii) no payment shall be received with
respect to any Account, and no credit, discount, extension, or agreement
therefor shall be granted on any Account, except as reported to the Lender in
accordance with this Agreement; (iv) each copy of an invoice or claim form
delivered to the Lender by an Option Care Person shall be a genuine copy of the
original invoice or claim form sent to the Account Debtor named therein; (v) all
goods described in any invoice or claim form representing a sale of goods shall
have been delivered to the applicable patient and all services of any Option
Care Person described in any invoice or claim form shall have been performed;
(vi) each of the Accounts and the related contracts is in full force and effect
and represents and constitutes a legal, valid and binding obligation of the
related Account Debtor, enforceable against such Account Debtor in accordance
with its terms; (vii) promptly following notice from an Account Debtor as to an
earlier overpayment by such Account Debtor to any Option Care Person, such
Option Care Person has made all payments to such Account Debtor which are
necessary to prevent such Account Debtor from offsetting such overpayment
against any amount which such Account Debtor owes on the Accounts (however,
Lender acknowledges that notwithstanding said payments, offsets may and do
nonetheless occur); (viii) no direction of any Option Care Person or any other
Person is in effect directing Account Debtors (A) to remit payments in respect
of the Accounts other than to a Lockbox or a Blocked Account or (B) to remit
EOBs in respect of the Accounts to any Person or address other than to an Option
Care Person at its chief executive office; and (ix) during the one year prior to
the Closing Date, no Option Care Person has been subject to any Government
Offset involving in excess of fifty thousand dollars ($50,000). As of the date
of each Borrowing, each Option Care Person is unaware of any potential
Government Offset involving in excess of fifty thousand dollars ($50,000) for
any single Governmental Offset and in excess of two hundred thousand dollars
($200,000) for all such Government Offsets that has not been disclosed by such
Option Care Person to the Lender in writing prior to that date. All of the
Medicaid and Medicare reports required to be filed by any Option Care Person for
all reporting periods have been filed with the applicable Government Account
Debtor, or HCFA designated agents or agents of such Government Account Debtor.
At all times on and after the thirtieth day following the Closing Date, each
Option Care Person hereby represents and warrants to the Lender that Account
Debtor Notices, signed by the Borrowers, have been delivered to all of the
Account Debtors of the type referred to in clause (p) of the definition of
Eligible Account.
(b) No Option Care Person shall re-date any invoice, claim form
or sale or make sales on extended dating or extend or modify any Account (other
than to correct billing errors in the ordinary course of business). The Lender
acknowledges that if an Account Debtor which is the "primary" payor does not pay
a claim in full or denies such claim, an Option Care Person may send a separate
invoice to an Account Debtor which is a "secondary" payor. If any Option Care
Person becomes aware of any matter that is reasonably likely to materially
adversely affect any Account Debtor (other than a Self-Pay Account Debtor),
including information regarding the Account Debtor's creditworthiness, such
Option Care Person shall promptly so advise the Lender.
(c) No Option Care Person shall accept any note, warrant or other
instrument (except a check or other instrument for the immediate payment of
money, subject to compliance with SECTION 7.10) with respect to any Account
(other than a Self-Pay Account) without the Lender's written consent. If the
Lender consents to the acceptance of any such note, warrant or other instrument,
it shall be considered as evidence of the Account and not payment thereof, and
the Option Care Persons shall promptly deliver such note, warrant or instrument
to the Lender appropriately endorsed. Regardless of the form of presentment,
demand, notice of dishonor, protest, and notice of protest with respect thereto,
the Option Care Persons shall remain liable thereon until such note, warrant or
instrument is paid in full. Notwithstanding the foregoing, any Option Care
Person may accept a note (i) from a franchisee or (ii) as payment solely for the
provision of computer software, provided that such Option Care Person shall (i)
promptly notify the Lender that it has accepted any such note, and (ii) upon
request by the Lender, promptly deliver such note to the Lender appropriately
endorsed.
(d) Each Option Care Person shall notify the Lender promptly of
(i) all disputes and claims (other than as to discounts required by law or
contract, and corrections of billing errors, in the ordinary course of business)
with Persons which are Account Debtors, involving in excess of fifty thousand
dollars ($50,000) for any single dispute or claim and in excess of two hundred
thousand dollars ($200,000) for all such disputes and claims, whether any such
Person is acting in its capacity as an Account Debtor or in its individual
capacity (e.g., as a landlord or supplier of an Option Care Person); and (ii)
all alleged or asserted Government Offsets involving in excess of fifty thousand
dollars ($50,000) for any single Government Offset and in excess of two hundred
thousand dollars ($200,000) for all such Government Offsets. No discount, credit
or allowance shall be granted with respect to any Eligible Account to any
Account Debtor (other than in respect of Self-Pay Accounts) without the Lender's
consent, which consent shall not be unreasonably withheld, except for: (i)
discounts required by law or contract, and corrections of billing errors, in the
ordinary course of business; and (ii) any other discount which does not exceed
fifty thousand dollars ($50,000), provided that the aggregate amount of
discounts permitted pursuant to this clause (ii) during any calendar year shall
not exceed five hundred thousand dollars ($500,000). The Lender may at all times
following the occurrence and during the continuance of an Event of Default
hereunder settle or adjust disputes and claims directly with Account Debtors for
amounts and upon terms which the Lender considers
reasonable and, in all cases, the Lender shall credit the loan account of Option
Care with only the net amounts received by the Lender in payment of any
Accounts.
7.10 COLLECTION OF ACCOUNTS; PAYMENTS.
(a) Each Option Care Person shall (and all invoices and claim
forms with respect to the Accounts shall) instruct all Account Debtors to make
all payments only to a Lockbox or a Blocked Account (the Lender acknowledges
that payments by patients made at the time that a patient is receiving goods and
services at a facility of an Option Care Person would not be invoiced to such
patient). If, notwithstanding such instructions, any Option Care Person receives
any Proceeds of Accounts, it shall receive such payments as the Lender's
trustee, and shall immediately deliver such payments to the Lender in their
original form duly endorsed in blank or deposit them into a Lockbox, Blocked
Account or a Payment Account, as the Lender may direct; provided, however, that
each Option Care Person may maintain a separate account with a local financial
institution (each a "Local Account") for the deposit of walk-in payments from
patients and walk-in payments for durable medical equipment from customers;
provided, further, that (i) each Option Care Person shall deposit such walk-in
payments in a Local Account not later than the first Business Day after
receiving such walk-in payments, (ii) each Option Care Person shall cause all
available amounts in such Local Accounts to be transferred by wire transfer or
automated clearinghouse transfer to a Blocked Account during the last week of
each month, and (iii) no Option Care Person shall withdraw any funds on deposit
in any Local Account or permit funds on deposit in any Local Account to be
transferred other than in accordance with this sentence (provided that this
clause (iii) shall not prevent the Option Care Persons from writing checks on a
Local Account for the sole purpose of refunding some or all of such walk-in
payments to the Person or Persons who made such walk-in payments). Except as
otherwise provided under applicable law with respect to Accounts owed by
Government Account Debtors, all collections received in any such Lockbox,
Blocked Account or Payment Account or directly by any Option Care Person or the
Lender, and all funds in any Lockbox, Blocked Account or Payment Account or
other account to which such collections are deposited, shall be the sole
property of the Lender and subject to the Lender's sole control and shall be
applied by the Lender subject to and in accordance with the terms of SECTION
4.3. The Lender or the Lender's designee may, at any time after the occurrence
of an Event of Default, notify Account Debtors that the Accounts have been
assigned to the Lender and of the Security Interest therein, and may collect
them directly (except to the extent prohibited under applicable law with respect
to Accounts owed by Government Account Debtors) and charge the collection costs
and expenses to the loan accounts of the Borrowers as a Revolving Loan. At the
Lender's request, each Option Care Person shall execute and deliver to the
Lender such documents as the Lender shall require to grant the Lender access to
any post office box, lockbox or bank account in which collections of Accounts
are received or deposited.
(b) In accordance with the Blocked Account Agreement, the Blocked
Account Bank shall remit, by automatic standing wire transfer, on a daily basis,
all available
amounts in the Blocked Accounts to or at the direction of the Lender. Such
amounts shall be applied in accordance with SECTION 4.3.
(c) All payments received by the Lender on account of Accounts or
other Collateral (including Proceeds) shall be the Lender's sole property and
subject to the Lender's sole control and shall be applied by the Lender subject
to and in accordance with the terms of SECTION 4.3. If such payments are
received by the Lender at or prior to 1:00 p.m., Chicago time, on any Business
Day, such payments shall be credited to the loan accounts of the Borrowers
(conditional upon final collection) on such Business Day. If such payments are
received by the Lender after 1:00 p.m., Chicago time, on any Business Day, such
payments shall be credited to the loan account of Option Care (conditional upon
final collection) on the next Business Day.
(d) In the event the Borrowers repay all of the Obligations upon
the termination of this Agreement, other than through the Lender's receipt of
payments on account of Accounts or Proceeds of other Collateral, such payment
shall be credited (conditional upon final collection) to the loan account of
Option Care in accordance with SECTION 7.10(c).
7.11 [Reserved]
7.12 EQUIPMENT. Each Option Care Person represents and warrants to the
Lender that all of the Equipment used or held for use in the business of an
Option Care Person is adequate for its current use, except that portion of
Equipment that is currently under repair. Each Option Care Person shall keep and
maintain such Equipment (or cause such Equipment to be kept and maintained) in
good operating condition and repair (ordinary wear and tear excepted) and shall
make all necessary replacements thereof.
7.13 MATERIAL CONTRACTS. Each Option Care Person shall fully perform
all of its obligations under each of the contracts and agreements to which it is
a party and shall enforce all of its rights and remedies thereunder, in each
case, as it deems appropriate in its business judgment; PROVIDED, HOWEVER, no
Option Care Person shall take any action or fail to take any action with respect
to any such contract or agreement that would cause the termination of any
Material Contract except in the ordinary course of business of such Option Care
Person. As used in this SECTION 7.13, "MATERIAL CONTRACT" means any contract or
agreement to which an Option Care Person is a party if such contract or
agreement involves amounts paid or payable to or by an Option Care Person in
excess of ten thousand dollars ($10,000) during any calendar year. No Option
Care Person shall, without the Lender's prior written consent, modify, amend,
supplement, compromise, satisfy, waive, release, terminate or discharge any
Material Contract, the Contractual Rights relating to any Material Contract, or
any collateral securing the same, except in the ordinary course of business of
such Option Care Person. Each Option Care Person shall notify the Lender in
writing, promptly after it becomes aware thereof, of any event or fact which
could reasonably be expected to give rise to a claim by it for indemnification
under any Material Contract and shall diligently pursue such right and report to
the Lender on all further
developments with respect thereto, provided that the notification and
reporting requirements set forth in this sentence shall not apply except to
the extent that such a claim for indemnification is made outside of the
ordinary course of business of such Options Care Person. Each Option Care
Person shall remit directly to the Lender, for application to the Obligations
in such order as the Lender determines, all amounts received by such Option
Care Person as indemnification or otherwise pursuant to any contract or
agreement relating to Contractual Rights. If an Event of Default exists, then
the Lender may directly enforce such right in its own name or in the name of
an Option Care Person and may enter into such settlements or other agreements
with respect thereto as the Lender determines. All amounts thereby recovered
by the Lender, after deducting the Lender's costs and expenses in connection
therewith, shall be applied to the Obligations in such order as the Lender
determines. In any suit, proceeding or action brought by the Lender under any
contract or agreement relating to a Contractual Right for any sum owing
thereunder or to enforce any provision thereof, each Option Care Person shall
indemnify and hold the Lender harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff, counterclaim, recoupment,
or reduction of liability whatsoever of the obligor thereunder arising out of
a breach by any Option Care Person of any obligation thereunder or arising
out of any other agreement, indebtedness or liability at any time owing from
any Option Care Person to or in favor of such obligor or its successors. All
such obligations of any Option Care Person shall be and remain enforceable
only against such Option Care Person and shall not be enforceable against the
Lender. Notwithstanding any provision hereof to the contrary, each Option
Care Person shall at all times remain liable to observe and perform all of
its duties and obligations under each contract or agreement relating to
Contractual Rights and the Lender's exercise of any of its rights with
respect to the Collateral shall not release any Option Care Person from any
of such duties and obligations. The Lender shall not be obligated to perform
or fulfill any of duties or obligations under any contract or agreement
relating to Contractual Rights or to make any payment thereunder or to make
any inquiry as to the nature or sufficiency of any payment or Property
received by it thereunder or the sufficiency of performance by any party
thereunder, or to present or file any claim, or to take any action to collect
or enforce any performance or payment of any amounts due.
7.14 DOCUMENTS, INSTRUMENTS, AND CHATTEL PAPER. Each Option Care
Person represents and warrants to the Lender, and covenants with the Lender,
that: (a) all documents, instruments, and chattel paper describing, evidencing,
or constituting Collateral, and all signatures and endorsements thereon, are and
shall be complete, valid, and genuine; and (b) all goods evidenced by such
documents, instruments, and chattel paper are and shall be owned by the Option
Care Person free and clear of all Liens other than Permitted Liens.
7.15 RIGHT TO CURE. The Lender may, in its sole discretion and at any
time, pay any amount or do any act required of any Option Care Person hereunder
to preserve, protect, maintain or enforce the Security Interest, which any
Option Care Person fails to pay or do, including, without limitation, payment of
any judgment against any Option Care Person, any insurance premium, any
warehouse charge, any landlord's claim, and any other obligation giving
rise to any Lien upon or with respect to the Collateral. All payments that the
Lender makes under this SECTION 7.15 and all out-of-pocket costs and expenses
that the Lender pays or incurs in connection with any action taken by it
hereunder shall be charged to the loan accounts of the Borrowers as a Revolving
Loan. Any payment made or other action taken by the Lender under this SECTION
7.15 shall be without prejudice to any right to assert an Event of Default
hereunder.
7.16 POWER OF ATTORNEY. Each Option Care Person hereby appoints the
Lender and the Lender's designees as such Option Care Person's attorney, subject
to the provisions of applicable law, with power: (a) to endorse such Option Care
Person's name on any checks, notes, acceptances, money orders, or other forms of
payment or security that come into the Lender's possession; (b) to sign such
Option Care Person's name on any invoice, xxxx of lading, or other document of
title relating to any Collateral, on drafts against customers, on assignments of
Accounts, on notices of assignment, UCC financing statements and other public
records, on verifications of Accounts and on notices to Account Debtors and to
file any such financing statements by electronic means with or without a
signature as authorized or required by applicable law or filing procedure; (c)
to notify the post office authorities, when an Event of Default exists, to
change the address for delivery of such Option Care Person's mail to an address
designated by the Lender and to receive, open and review (but not to dispose of,
and in each instance promptly forward to Option Care) all mail addressed to such
Option Care Person; (d) when an Event of Default exists, to send requests for
verification of Accounts to Account Debtors; and (e) to do all things necessary
to carry out this Agreement; provided that to the extent that applicable law
prohibits the Lender from collecting any payment directly from a Government
Account Debtor, the Lender shall not collect such payment directly from such
Government Account Debtor. Each Option Care Person ratifies and approves all
acts of such attorney. Neither the Lender nor the attorney, as the case may be,
shall be liable for any acts or omissions or for any error of judgment or
mistake of fact or law absent gross negligence or wilful misconduct on the part
of the Lender or such attorney, as the case may be. This power, being coupled
with an interest, is irrevocable until this Agreement has been terminated and
the Obligations have been fully satisfied.
7.17 LENDER'S RIGHTS, DUTIES, AND LIABILITIES. Each Option Care Person
assumes all responsibility and liability arising from or relating to the use,
sale, or other disposition of the Collateral. The Obligations shall not be
affected by any failure of the Lender to take any steps to perfect the Security
Interest or to collect or realize upon the Collateral, nor shall loss of or
damage to the Collateral release any Option Care Person from any of the
Obligations. Following the occurrence of an Event of Default, the Lender may
(but shall not be required to), without notice to or consent from any Option
Care Person, xxx upon or otherwise collect, extend the time for payment of,
modify or amend the terms of, compromise or settle for cash, credit, or
otherwise upon any terms, grant other indulgences, extensions, renewals,
compositions, or releases, and take or omit to take any other action with
respect to the Collateral, any security therefor, any agreement relating
thereto, any insurance applicable thereto, or any Person liable directly or
indirectly in connection with any of the foregoing, without discharging or
otherwise affecting the liability of any Option Care Person for the Obligations
or under this Agreement or any other
agreement now or hereafter existing between the Lender and any Option Care
Person; provided that to the extent that applicable law prohibits the Lender
from collecting any payment directly from a Government Account Debtor, the
Lender shall not collect such payment directly from such Government Account
Debtor.
7.18 [Reserved]
7.19 LICENSE FOR USE OF SOFTWARE AND OTHER INTELLECTUAL PROPERTY.
Except to the extent prohibited by applicable law, each Option Care Person
hereby grants the Lender a non-exclusive, royalty-free license (with the right
to sublicense) to use, without payment or royalty of any kind, all books,
documents, EOBs, instruments, files, records, computer software programs, tapes,
disks, data bases, processes and materials used by such Option Care Person to
operate its business (including the collection or other liquidation of Accounts
and other items covered by the definition of Collateral), which license shall be
irrevocable so long as any of the Obligations remain outstanding or this
Agreement is in effect; PROVIDED that the Lender shall not use such license
unless an Event of Default exists; and PROVIDED, FURTHER, that should the
consent of any licensor of any Option Care Person to such grant of the license
described herein be required, each Option Care Person (upon the request of the
Lender) shall use its best efforts to obtain the consent of such third-party
licensor and, in the absence of obtaining such consent, shall, upon request of
the Lender, download all information required to operate its business (including
information required to collect or otherwise liquidate Collateral) contained in
such licensed computer software programs, tapes, disks, data bases, processes
and materials in a format which is accessible by the Lender or otherwise print
out such information.
8. BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES.
8.1 BOOKS AND RECORDS. Each Option Care Person shall maintain, at all
times, correct and complete books, records and accounts in which complete,
correct and timely entries are made of its transactions in accordance with GAAP
consistent with those applied in the preparation of the Financial Statements.
Each Option Care Person shall, by means of appropriate entries, reflect in such
accounts and in all Financial Statements proper liabilities and reserves for all
taxes and proper provision for depreciation and amortization of Property and bad
debts, all in accordance with GAAP. Each Option Care Person shall maintain at
all times books and records pertaining to the Collateral in such detail, form,
and scope as the Lender shall reasonably require, including without limitation,
records of: (a) all payments received and all credits and extensions granted
with respect to the Accounts; (b) the return, rejection, repossession, stoppage
in transit, loss, damage, or destruction of any Inventory; and (c) all other
dealings affecting the Collateral which would reasonably be expected to have a
Material Adverse Effect.
8.2 FINANCIAL AND OTHER INFORMATION. Each Option Care Person shall
promptly furnish to the Lender or its agents all such information as the Lender
shall from time to time reasonably request through the Borrowers' Agent, and
notify its auditors and accountants that the
Lender is authorized by each Option Care Person to obtain such information
directly from them. Without limiting the foregoing, each Option Care Person
shall furnish to the Lender through the Borrowers' Agent, in such detail as the
Lender shall request, the following:
(a) As soon as available, but in any event not later than 105
days after the close of each Fiscal Year, a copy of Option Care's annual report
on Form 10-K filed with the Securities and Exchange Commission or, if Option
Care is no longer required to file an annual report on Form 10-K with the
Securities and Exchange Commission, consolidated and consolidating audited
balance sheets, and statements of operation, and stockholders equity and cash
flows for Option Care and its consolidated Subsidiaries for such Fiscal Year,
and the accompanying notes thereto, setting forth in each case in comparative
form figures for the previous Fiscal Year, all in reasonable detail, fairly
presenting the financial position and the results of operations of Option Care
and its consolidated Subsidiaries as at the date thereof and for the Fiscal Year
then ended, and prepared in accordance with GAAP. Such statements shall be
examined in accordance with generally accepted auditing standards and
accompanied by a report thereon unqualified as to scope by independent certified
public accountants selected by Option Care and reasonably satisfactory to the
Lender.
(b) As soon as available, but in any event not later than 50 days
after the close of each fiscal quarter other than the fourth quarter of a Fiscal
Year, a copy of Option Care's quarterly report on Form 10-Q filed with the
Securities and Exchange Commission or, if Option Care is no longer required to
file quarterly reports on Form 10-Q with the Securities and Exchange Commission,
consolidated and consolidating unaudited balance sheets of Option Care and its
consolidated Subsidiaries as at the end of such quarter, and consolidated and
consolidating unaudited statements of income and cash flows for Option Care and
its consolidated Subsidiaries for such quarter and for the period from the
beginning of the Fiscal Year to the end of such quarter, together with the
accompanying notes, if any, thereto, all in reasonable detail, fairly presenting
the financial position and results of operation of Option Care and its
consolidated Subsidiaries as at the date thereof and for such periods, prepared
in accordance with GAAP consistent with the audited Financial Statements
required pursuant to SECTION 8.2(a). Such statements shall be certified to be
fairly stated in all material respects by the chief financial or accounting
officer of Option Care, subject to normal year-end adjustments.
(c) As soon as available, but in any event not later than 30 days
after the end of each month, consolidated and consolidating unaudited balance
sheets of Option Care and its consolidated Subsidiaries as at the end of such
month, and consolidated and consolidating unaudited statements of income and
expenses for Option Care and its consolidated Subsidiaries for such month and
for the period from the beginning of the Fiscal Year to the end of such month,
all in reasonable detail, fairly presenting the financial position and results
of operation of Option Care and its consolidated Subsidiaries as at the date
thereof and for such periods, and prepared in accordance with GAAP consistent
with the audited Financial Statements required pursuant to SECTION 8.2(a). Such
statements shall be certified to be correct by the chief financial
or accounting officer of Option Care, subject to normal year-end adjustments, if
any.
(d) With each of the audited Financial Statements delivered
pursuant to SECTION 8.2(a), a certificate of the independent certified public
accountants that examined such statements to the effect that they have reviewed
and are familiar with the Loan Documents and that, in examining such Financial
Statements, they did not become aware of any fact or condition which then
constituted an Event or Event of Default under SECTION 10.20, 10.21 or 10.22,
except for those, if any, described in reasonable detail in such certificate.
(e) With each of the annual audited and quarterly unaudited
Financial Statements delivered pursuant to SECTIONS 8.2(a) and 8.2(b), a
certificate of the chief executive or chief financial officer of Option Care (i)
setting forth in reasonable detail the calculations required to establish that
each Option Care Person was in compliance with its covenants set forth in
SECTIONS 10.20, 10.21 and 10.22 during the period covered in such Financial
Statements, and (ii) stating that, except as explained in reasonable detail in
such certificate, (A) all of the representations and warranties of each Option
Care Person contained in this Agreement and the other Loan Documents are correct
and complete as at the date of such certificate as if made at such time, (B) no
Event or Event of Default then exists or existed during the period covered by
such Financial Statements. If such certificate discloses that a representation
or warranty is not correct or complete, or that a covenant has not been complied
with, or that an Event or Event of Default existed or exists, such certificate
shall set forth what action the applicable Option Care Person has taken or
proposes to take with respect thereto.
(f) No sooner than 90 days prior to the beginning of, and not
later than January 30 of, each Fiscal Year (beginning with Fiscal Year
commencing January 1, 2000), consolidated and consolidating projected balance
sheets, statements of income and expense, and statements of cash flow for Option
Care and its Subsidiaries on a consolidated basis as at the end of and for each
month of such Fiscal Year.
(g) Within 50 days after the end of each fiscal quarter, a report
of the Capital Expenditures of Option Care and its Subsidiaries for such quarter
and, if Option Care is no longer required to file quarterly reports on Form 10-Q
with the Securities and Exchange Commission, a statement of cash flow for Option
Care and its Subsidiaries for the period from the beginning of the then current
Fiscal Year to the end of such quarter, prepared in accordance with GAAP
consistent with the audited Financial Statements required pursuant to SECTION
8.2(a).
(h) Promptly after their preparation, copies of any and all proxy
statements, financial statements, and reports which Option Care makes available
to its stockholders.
(i) Promptly after the filing of any regular, periodic or special
reports (other than those delivered pursuant to a different clause of this
SECTION 8.2), registration statement, prospectus or any amendment to any of the
foregoing by Option Care or any of its Subsidiaries with the Securities and
Exchange Commission, copies of each such report,
registration statement, prospectus or amendment.
(j) Promptly after filing with the PBGC, DOC, or IRS, a copy of
each annual report or other filing or notice filed with respect to each Plan of
any Option Care Person or any ERISA Affiliate with the PBGC, DOL, or IRS.
(k) Such additional information as the Lender may from time to
time reasonably request regarding the financial and business affairs of any
Option Care Person or any Subsidiary, including, without limitation: (i)
projections of future operations on both a consolidated and consolidating basis;
and (ii) the status and prospects of all outstanding litigation and proceedings
affecting any Option Care Person or any officer of any Option Care Person and
the terms and conditions of any settlements involving any Option Care Person or
any officer of any Option Care Person. The obligations of the Option Care
Persons pursuant to this clause (k) shall be limited to the extent that
complying with such obligations (x) is prohibited by (i) applicable law, (ii) a
governmental agency or (iii) a contractual restriction (except that this clause
(iii) shall not apply to litigation, proceedings or settlements) or (y) would
result in a complete waiver of the attorney-client privilege with respect to the
matters disclosed.
8.3 NOTICES TO LENDER. Each Option Care Person shall notify the Lender
in writing through the Borrowers' Agent, of the following matters at the
following times:
(a) Immediately after becoming aware of the existence of any
Event or Event of Default.
(b) Immediately after becoming aware that the holder of any
capital stock having a value of not less than one hundred thousand dollars
($100,000) issued by any Option Care Person has taken any legal action, or that
the holder of any Debt of any Option Care Person in excess of two hundred
thousand dollars ($200,000) has given notice or taken any action, with respect
to a claimed default.
(c) Immediately after becoming aware of any material adverse
change in the Property, business, performance, operations, prospects, or
condition (financial or otherwise) of any Option Care Person.
(d) Immediately after becoming aware of any pending or threatened
action, suit, proceeding, or counterclaim by any Person, or any pending or
threatened investigation by a Public Authority, or any actual or potential
Government Offset, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
(e) Immediately after becoming aware of any pending or threatened
strike, work stoppage, material unfair labor practice claim, or other material
labor dispute affecting any Option Care Person or any of its Subsidiaries.
(f) Immediately after becoming aware of any violation of any law,
statute, regulation, or ordinance of a Public Authority applicable to any Option
Care Person, any Subsidiary, or their respective Properties which could
reasonably be expected to have a Material Adverse Effect.
(g) Immediately after becoming aware of any violation by any
Option Care Person of Environmental Law (which violation could reasonably be
expected to have a Material Adverse Effect) or immediately upon receipt of any
notice that a Public Authority has asserted that any Option Care Person is not
in compliance with Environmental Laws or that its compliance is being
investigated.
(h) Thirty (30) days prior to any Option Care Person (x) changing
its name or the address of its chief executive office, (y) entering into any
merger or consolidation or (z) taking any other action which could result in the
Security Interest ceasing to be a first priority perfected security interest in
favor of the Lender.
(i) Immediately after becoming aware of any ERISA Event,
accompanied by any materials required to be filed with the PBGC with respect
thereto; immediately after any Option Care Person's receipt of any notice
concerning the imposition of any withdrawal liability under Section 4042 of
ERISA with respect to a Plan; immediately upon the establishment of any Pension
Plan not existing at the Closing Date or the commencement of contributions by
any Option Care Person to any Pension Plan to which any Option Care Person was
not contributing at the Closing Date; and immediately upon becoming aware of any
other event or condition regarding a Plan or regarding compliance by any Option
Care Person or an ERISA Affiliate with ERISA, which could have a Material
Adverse Effect.
(j) Immediately upon becoming aware of any delinquent taxes of
any Option Care Person which, individually or in the aggregate, exceed two
hundred fifty thousand dollars ($250,000).
Each notice given under this SECTION 8.3 shall describe the subject
matter thereof in reasonable detail and shall set forth the action that the
Option Care Persons have taken or propose to take with respect thereto.
The foregoing shall not limit the obligations of the Option Care
Persons to give other notices under this Agreement, including without limitation
to notify the Lender in accordance with SECTION 7.9(d) as to disputes and claims
and alleged or asserted Government Offsets.
9. GENERAL WARRANTIES AND REPRESENTATIONS.
Each Option Care Person continuously warrants and represents to the
Lender, at all times during the term of this Agreement and until all Obligations
have been satisfied, that, except as hereafter disclosed to and accepted by the
Lender in writing:
9.1 AUTHORIZATION, VALIDITY, AND ENFORCEABILITY OF THIS AGREEMENT AND
THE LOAN DOCUMENTS. Each Option Care Person has the corporate power and
authority to execute, deliver and perform this Agreement and the other Loan
Documents, to incur the Obligations, and to grant the Security Interest. Each
Option Care Person has taken all necessary corporate action (including, without
limitation, obtaining approval of its stockholders, if necessary) to authorize
its execution, delivery, and performance of this Agreement and the other Loan
Documents to which it is a party. No consent, approval, or authorization of, or
declaration or filing with, any Public Authority, and no consent of any other
Person, is required in connection with the execution, delivery, and performance
of this Agreement and the other Loan Documents by any Option Care Person, except
for those already duly obtained. This Agreement and the other Loan Documents to
which it is a party have been duly executed and delivered by each Option Care
Person and constitute the legal, valid and binding obligations of each Option
Care Person, enforceable against it in accordance with their respective terms
without defense, setoff, or counterclaim. The execution, delivery, and
performance of this Agreement and the other Loan Documents by each Option Care
Person do not and shall not conflict with, or constitute a violation or breach
of, or constitute a default under, or result in the creation or imposition of
any Lien upon the Property of any Option Care Person or any of its Subsidiaries
(except as contemplated by this Agreement and the other Loan Documents) by
reason of the terms of (a) any mortgage, lease, agreement, or instrument to
which any Option Care Person or any of its Subsidiaries is a party or which is
binding upon it, (b) any judgment, law, statute, rule or governmental regulation
applicable to any Option Care Person or any of its Subsidiaries, or (c) the
certificate or articles of incorporation or bylaws of any Option Care Person or
any of its Subsidiaries.
9.2 VALIDITY AND PRIORITY OF SECURITY INTEREST. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in the Lender's favor, and when all proper filings, recordings, and
other actions necessary to perfect such Liens have been made or taken, such
Liens shall constitute perfected and continuing Liens on all the Collateral,
having priority over all other Liens on the Collateral and enforceable against
each Option Care Person and all other Persons.
9.3 ORGANIZATION AND QUALIFICATION. Each Option Care Person: (a) is
duly incorporated and organized and validly existing in good standing under the
laws of the state of its incorporation; (b) is qualified to do business as a
foreign corporation and is in good standing in all jurisdictions in which the
failure to be so qualified and in good standing could reasonably be expected to
result in a Material Adverse Effect; and (c) has all requisite power and
authority to conduct its business and to own its Property.
9.4 CORPORATE NAME; PRIOR TRANSACTIONS. The corporate name of each
Option Care Person is set forth on its signature page to this Agreement (or, in
the case of a Person which becomes a Borrower pursuant to an Additional Borrower
Agreement, set forth on its signature page to such Additional Borrower
Agreement), and, except as set forth on SCHEDULE 9.4, such Option Care Person
has not used any other corporate name during the past five years. Since January
1, 1998, no Option Care Person has: been known by or used any doing business as
or fictitious name, or been a party to any merger or consolidation, or acquired
all or substantially all of the assets of any Person, or acquired any of its
Property out of the ordinary course of business, or been subject to any event,
occurrence or proceeding of the type contemplated by any of CLAUSE (f), CLAUSE
(g), CLAUSE (h), or CLAUSE (i) of SECTION 12.1, except as set forth on SCHEDULE
9.4.
9.5 SUBSIDIARIES AND AFFILIATES. SCHEDULE 9.5 is a correct and
complete list as of the Closing Date of the name and relationship to each Option
Care Person of each and all of its Subsidiaries and other Affiliates. Since the
Closing Date, each Option Care Person has notified the Lender as to the name and
relationship to such Option Care Person of any other Person which became a
Subsidiary or other Affiliate of such Option Care Person after the Closing Date.
The Option Care Persons and/or the applicable Subsidiary of Option Care Persons
are the only record and beneficial owner of all of the shares of capital stock,
partnership interests or other ownership interests of each of the Subsidiaries,
except as specified in SCHEDULE 9.5 or as specified in such notification. There
are no proxies, irrevocable or otherwise, with respect to such shares,
partnership interests or ownership interests, and no equity securities of any of
such Subsidiaries are or may become required to be issued by reason of any
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any capital stock of, partnership interests or
ownership interests in any such Subsidiary, and there are no contracts,
commitments, understandings or arrangements by which any such Subsidiary is or
may become bound to issue additional shares of its capital stock, securities
convertible into or exchangeable for such shares, partnership interests or any
other ownership interests. All of such shares, partnership interests or
ownership interests so owned by each Option Care Person are owned by such Option
Care Person free and clear of any Liens other than Permitted Liens. Each
Subsidiary is (a) duly incorporated or formed, and duly organized and validly
existing in good standing under the laws of its state of incorporation set forth
on SCHEDULE 9.5, and (b) qualified to do business as a foreign corporation or
partnership and in good standing in each jurisdiction in which the failure to be
so qualified could result in a Material Adverse Effect.
9.6 FINANCIAL STATEMENTS AND PLAN.
(a) Option Care has delivered to the Lender the audited
consolidated balance sheet and related consolidated statements of operations,
cash flows, and changes in stockholders equity for Option Care and its
Subsidiaries as of December 31, 1997 and for the Fiscal Year then ended,
accompanied by the report thereon of Option Care's independent certified public
accountants, KPMG Peat Marwick LLP. Option Care has also delivered to the
Lender the Borrower's Form 10-Q for the quarterly period ended September 30,
1998. All such financial statements have been prepared in accordance with GAAP
and present accurately and fairly Option Care's financial position as at the
dates thereof and its results of operations for the periods then ended.
(b) The Latest Plan represents Option Care's best estimate of the
future financial performance of Option Care and its Subsidiaries for the periods
set forth therein. The Latest Plan has been prepared on the basis of the
assumptions set forth therein, which Option Care believes are fair and
reasonable in light of current and reasonably foreseeable business conditions.
(c) During the past three (3) years, Option Care has not
discharged or replaced its independent certified public accountants, and such
accountants have not resigned as such, except as disclosed by Option Care to the
Lender.
9.7 [Reserved]
9.8 SOLVENCY. Each Option Care Person is Solvent prior to and after
giving effect to the making of each Revolving Loan.
9.9 DEBT. Except as disclosed in SCHEDULE 9.9, no Option Care Person
has any Debt, except as permitted by SECTION 10.12.
9.10 DISTRIBUTIONS. Except as disclosed in writing to the Lender,
since September 30, 1998, no Distribution has been declared, paid, or made upon
or in respect of any capital stock or other securities of Option Care.
9.11 TITLE TO PROPERTY. Except for Property which an Option Care
Person leases, each Option Care Person has good, indefeasible, and merchantable
title to all of its Property including, without limitation, the assets reflected
on the most recent Financial Statements delivered to the Lender, except as
disposed of since the date thereof in the ordinary course of business.
9.12 ADEQUATE ASSETS. Each Option Care Person possesses adequate
assets for the conduct of its business.
9.13 REAL PROPERTY; LEASES. SCHEDULE 9.13 contains a correct and
complete list, as of the Closing Date, of all real property owned by any Option
Care Person, all leases and subleases of real or personal property by any Option
Care Person as lessee or sublessee, and all leases and subleases of real or
personal property by any Option Care Person as lessor or sublessor. Since the
Closing Date, each Option Care Person has notified the Lender as to all other
real property acquired by such Option Care Person, and all leases and subleases
of real property (and all leases or subleases of personal property involving
payments by any Option Care
Person during any Fiscal Year in excess of two hundred fifty thousand dollars
($250,000), entered into by any Option Care Person after the Closing Date. Each
of such leases and subleases is valid and enforceable in accordance with its
terms and is in full force and effect and no default by any party to any such
lease or sublease exists.
9.14 PROPRIETARY RIGHTS. SCHEDULE 9.14 contains a correct and complete
list, as of the Closing Date, of all the Proprietary Rights of each Option Care
Person. Since the Closing Date, each Option Care Person has notified the Lender
as to all other Proprietary Rights of which such Option Care Person became the
owner after the Closing Date. None of the Proprietary Rights are subject to any
licensing agreement or similar arrangement except as set forth on SCHEDULE 9.14
or in such notification. To the best knowledge of each Option Care Person, none
of such Proprietary Rights infringe on or conflict with any other Person's
Property and no other Person's Property infringes on or conflicts with the
Proprietary Rights. The Proprietary Rights described on SCHEDULE 9.14 or in such
notification constitute all of the Property of such type necessary to the
current conduct of the business of each Option Care Person.
9.15 TRADE NAMES AND TERMS OF SALE. All trade names or styles under
which any Borrower shall sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, are listed on SCHEDULE
9.15. Each Borrower bills each Account Debtor having outstanding Accounts at
least once each calendar month. No Borrower redates any invoice or claim form
after such invoice or claim form has been sent to an Account Debtor. The Lender
acknowledges that if an Account Debtor which is the "primary" payor does not pay
a claim in full or denies such claim, an Option Care Person may send a separate
invoice to an Account Debtor which is a "secondary" payor.
9.16 LITIGATION. There is no pending or, to the best knowledge of any
Option Care Person, threatened action, suit, proceeding, or counterclaim by any
Person, or investigation by any Public Authority, or any basis for any of the
foregoing, which would reasonably be expected to result in a Material Adverse
Effect.
9.17 RESTRICTIVE AGREEMENTS. No Option Care Person is a party to any
contract or agreement, or is subject to any charter or other corporate
restriction, which affects its ability to execute, deliver, and perform the Loan
Documents, or which could otherwise reasonably be expected to result in a
Material Adverse Effect.
9.18 LABOR DISPUTES. As of the Closing Date: (a) there is no
collective bargaining agreement or other labor contract covering employees of
any Option Care Person or any of its Subsidiaries; (b) no such collective
bargaining agreement or other labor contract is scheduled to expire during the
term of this Agreement; (c) no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees of
any Option Care Person or any of its Subsidiaries or for any similar purpose;
and (d) there is no pending or, to the best knowledge of any Option Care Person,
threatened strike, work stoppage,
material unfair labor practice claim, or other material labor dispute against or
affecting any Option Care Person, or any of its Subsidiaries or their respective
employees. Since the Closing Date, each Option Care Person has notified the
Lender as to any matters covered by clause (a), (b), (c) or (d) of the previous
sentence which first arose or existed after the Closing Date.
9.19 ENVIRONMENTAL LAWS.
(a) Each Option Care Person and its Subsidiaries have complied in
all material respects with all Environmental Laws applicable to its Premises and
business, and no Option Care Person or any of its Subsidiaries or any of its
present Premises or operations, or any of its past property or operations, is
subject to any enforcement order from or liability agreement with any Public
Authority or private Person respecting (i) compliance with or violation of any
Environmental Law or (ii) any potential liabilities and costs or remedial action
arising from the Release or threatened Release of a Contaminant. For purposes of
this SECTION 9.19, "Premises" means an area or areas leased by an Option Care
Person or a Subsidiary of an Option Care Person.
(b) Each Option Care Person and its Subsidiaries have obtained
all permits necessary for their current operations under Environmental Laws, and
all such permits are valid and each Option Care Person and its Subsidiaries are
in compliance with all terms and conditions of such permits.
(c) No Option Care Person or any of its Subsidiaries, or, to the
best knowledge of any Option Care Person, any of its predecessors in interest,
has in violation of applicable law stored, treated or disposed of any
Contaminant on any Premises, as defined pursuant to 40 CFR Part 261 or any
equivalent Environmental Law.
(d) No Option Care Person or any of its Subsidiaries has received
any summons, complaint, order or similar written notice that it is not currently
in compliance with, or that any Public Authority is investigating its compliance
with, any Environmental Laws or that it is or may be liable to any other Person
as a result of a Release or threatened Release of a Contaminant.
(e) To the best knowledge of each Option Care Person, none of the
present or past operations of any Option Care Person or any of its Subsidiaries
is the subject of any investigation by any Public Authority evaluating whether
any remedial action is needed to respond to a Release or threatened Release of a
Contaminant.
(f) To the best knowledge of each Option Care Person there is not
now, nor has there ever been on or in the Premises:
(i) any underground storage tanks or surface impoundments,
(ii) any asbestos-containing material, or
(iii) any polychlorinated biphenyls (PCBs) used in hydraulic
oils, electrical transformers or other equipment.
(g) No Option Care Person or any of its Subsidiaries has filed
any notice under any applicable requirement of Environmental Law reporting a
spill or accidental and unpermitted release or discharge of a Contaminant into
the environment.
(h) No Option Care Person or any of its Subsidiaries has entered
into any negotiations or settlement agreements with any Person (including,
without limitation, the prior owner of its property) imposing material
obligations or liabilities on any Option Care Person or any of its Subsidiaries
with respect to any remedial action in response to the Release of a Contaminant
or environmentally related claim.
(i) None of the products manufactured, distributed or sold by any
Option Care Person or any of its Subsidiaries contains asbestos-containing
material.
(j) No Environmental Lien has attached to any Premises of any
Option Care Person or any of its Subsidiaries.
9.20 HEALTH CARE LAWS.
(a) Each Option Care Person and its Subsidiaries have complied in
all material respects with all Health Care Laws applicable to its business, and
no Option Care Person or any of its Subsidiaries or any of its present
operations, nor its past operations, is subject to any action, order from or
agreement respecting (i) to the best knowledge of each Option Care Person,
compliance with any Health Care Law or (ii) to the best knowledge of each Option
Care Person, any potential liabilities under Health Care Laws.
(b) Each Option Care Person and its Subsidiaries have obtained
all licenses, permits, accreditations, certifications and approvals necessary
for their current operations under Health Care Laws, and all such licenses,
permits, accreditations, certifications and approvals are in good standing, and
each Option Care Person and its Subsidiaries are in compliance with all material
terms and conditions thereof.
(c) No Option Care Person or any of its Subsidiaries has received
any summons, complaint, subpoena, order or other notice that it is not currently
in compliance with any Health Care Laws or that it is or may be liable to any
other Person under or in connection with any Health Care Laws (unless, with
respect to any such order (which is not a judicial order) or any such other
notice such Option Care Person is in the process of remediating such
noncompliance in accordance with any applicable cure or remediation plan or
period set forth in
such order or notice).
(d) To the best knowledge of each Option Care Person, none of the
present or past operations of any Option Care Person or any of its Subsidiaries
is the subject of any investigation by any Public Authority concerning alleged
or potential violations of Health Care Laws.
(e) No Option Care Person or any of its Subsidiaries has entered
into any negotiations or settlement agreements with any Person which impose or
could impose material obligations or liabilities on any Option Care Person or
any of its Subsidiaries with respect to any Health Care Law.
9.21 NO VIOLATION OF LAW. No Option Care Person is in violation of any
law, statute, regulation, ordinance, judgment, order, or decree applicable to it
which violation could reasonably be expected to result in a Material Adverse
Effect.
9.22 NO DEFAULT. No Option Care Person is in default with respect to
any note, indenture, loan agreement, mortgage, lease, deed, or other agreement
to which any Option Care Person is a party or bound, which default could
reasonably be expected to result in a Material Adverse Effect.
9.23 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all respects with the
applicable provisions of ERISA, the Code and other federal or state law, except
where any failure to comply would not reasonably be expected to have a Material
Adverse Effect. Each Plan which is intended to qualify under Section 401(a) of
the Code has received a favorable determination letter from the IRS or is
maintained in the form of a standardized prototype plan which has received a
favorable opinion letter or a favorable notification letter from the IRS, and to
the best knowledge of each Option Care Person, nothing has occurred which would
materially affect its reliance on such determination letter, opinion letter or
notification letter, except where any failure to rely would not reasonably be
expected to have a Material Adverse Effect. Each Option Care Person and each
ERISA Affiliate have made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an extension
of any amortization period pursuant to Section 412 of the Code, except where any
failure to contribute would not reasonably be expected to have a Material
Adverse Effect, has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Borrower,
threatened claims, actions or lawsuits, or action by any Public Authority, with
respect to any Plan which has resulted or could reasonably be expected to have a
Material Adverse Effect. There has been no prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan which has
resulted in or could reasonably be expected to have a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any material unfunded liability; (iii) no Option
Care Person or any ERISA Affiliate has incurred, or reasonably expects to incur,
any material liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
no Option Care Person or any ERISA Affiliate has incurred, or reasonably expects
to incur, any material liability (and no event has occurred which, with the
giving of notice under Section 4219 of ERISA, would result in such liability)
under Section 4201 or 4243 of ERISA with respect to a Multiemployer Plan; and
(v) no Option Care Person or any ERISA Affiliate has engaged in a transaction
that could subject any Person to Section 4069 or 4212(c) of ERISA.
9.24 TAXES. Each Option Care Person and its Subsidiaries have filed
all tax returns and other reports required to be filed and have paid all Taxes,
assessments, fees and other governmental charges levied or imposed upon them or
their properties, income or assets that are otherwise due and payable, except
for those Taxes, assessments, fees and other governmental charges which are
being contested in good faith by appropriate proceedings diligently pursued.
9.25 USE OF PROCEEDS. The initial Loan made under this Agreement shall
be used to repay the obligations of Option Care Persons to the Existing Bank
Group. None of the transactions contemplated in this Agreement or any other Loan
Document (including the use of proceeds from the Loans) shall violate or result
in the violation of any law, rule or regulation, including Section 7 of the
Securities Exchange Act of 1934, as amended, or any regulations issued pursuant
thereto, including the regulations of the Board of Governors of the Federal
Reserve System ("Federal Reserve Board"), 12 CFR, Chapter II. No Option Care
Person owns or intends to carry or purchase any "margin stock" within the
meaning of the regulations of the Federal Reserve Board. Except as permitted by
SECTION 10.19, no Option Care Person has used proceeds of the Loans to invest in
any Restricted Investments.
9.26 PRIVATE OFFERINGS. No Option Care Person has, directly or
indirectly, offered the Loans for sale to, or solicited offers to buy part
thereof from, or otherwise approached or negotiated with respect thereto with
any prospective purchaser other than Lender. No Option Care Person or any Person
acting on its behalf has offered or shall offer the Loans or any part thereof or
any similar securities for issue or sale to or solicit any offer to acquire any
of the same from anyone so as to bring the issuance thereof within the
provisions of Section 5 of the Securities Act of 1933, as amended.
9.27 BROKER'S FEES. No Person is entitled to any brokerage or finder's
fee with respect to the transactions described in this Agreement.
9.28 GOVERNMENT REGULATION. No Option Care Person or any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal
Power Act, the Investment Company Act of 1940, or any other Requirement of Law
that limits its ability to incur indebtedness or its ability to enter into or
consummate the transactions contemplated in this Agreement and the other Loan
Documents.
9.29 NO MATERIAL ADVERSE CHANGE. No material adverse change has
occurred in the Property, business, performance, operations, prospects or
condition (financial or otherwise) of any Option Care Person since September 30,
1998. On the basis of a comprehensive review and assessment undertaken by Option
Care of the computer applications of Option Care and its Subsidiaries and
inquiry made of the material suppliers and vendors of Option Care and its
Subsidiaries, Option Care reasonably believes that the "Year 2000 problem" (that
is, the risk that computer applications used by any Person may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999) shall not result in a Material
Adverse Effect.
9.30 DISCLOSURE. Neither this Agreement nor any Borrowing Base
Certificate, report, notice, document or statement furnished to the Lender by or
on behalf of any Option Care Person under this Agreement or any other Loan
Document contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements contained herein or
therein not misleading.
9.31 FIXED CHARGE COVERAGE. As of December 31, 1998, the ratio of (a)
the sum of (i) EBITDA for the four consecutive fiscal quarters ending on
December 31, 1998, plus (ii) the Specified Bad Debt Expense Amount for such four
fiscal quarters TO (b) the sum of (i) Interest Expense for such four fiscal
quarters, (ii) Capital Expenditures of Option Care and its Subsidiaries during
such four fiscal quarters, (iii) payments by any Option Care Person during such
four fiscal quarters in respect of earnout obligations related to the buyback of
franchises by any Option Care Person, (iv) actual payments of taxes during such
four fiscal quarters, and (v) principal payments which any Option Care Person
was required to make on Debt for borrowed money during such four fiscal
quarters, which Debt had an original term of at least one year, was not less
than 1.1 to 1.
10. AFFIRMATIVE AND NEGATIVE COVENANTS. Each Option Care Person covenants
that, so long as any of the Obligations remain outstanding or this Agreement is
in effect:
10.1 TAXES AND OTHER OBLIGATIONS. Each Option Care Person and each of
its Subsidiaries shall: (a) file when due all tax returns and other reports
which it is required to file, pay, or provide for the payment, when due, of all
Taxes, fees, assessments and other governmental charges against it or upon its
Property, income, and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
shall provide to the Lender, upon request, satisfactory evidence of its timely
compliance with the foregoing; and (b) pay when due all Debt owed by it and
perform and
discharge in a timely manner all other obligations undertaken by it; PROVIDED,
HOWEVER, that each Option Care Person and its Subsidiaries need not pay any tax,
fee, assessment, governmental charge, or Debt, or perform or discharge any other
obligation, that it is contesting in good faith by appropriate proceedings
diligently pursued.
10.2 CORPORATE EXISTENCE AND GOOD STANDING. Each Option Care Person
shall maintain its corporate existence and its qualification and good standing
in all states necessary to conduct its business and own its Property, except
where the failure to remain qualified and in good standing could not reasonably
be expected to result in a Material Adverse Effect, and shall obtain and
maintain all material licenses, permits, franchises and governmental
authorizations necessary to conduct its business and own its Property.
10.3 COMPLIANCE WITH LAW AND AGREEMENTS. Each Option Care Person and
each of its Subsidiaries shall comply in all material respects with the terms
and provisions of each judgment, law, statute, rule, and governmental regulation
applicable to it and each contract, mortgage, lien, lease, indenture, order,
instrument, agreement, or document to which it is a party or by which it is
bound.
10.4 MAINTENANCE OF PROPERTY AND INSURANCE. Each Option Care Person
and each of its Subsidiaries shall: (a) maintain all of its Property necessary
and useful in its business in good operating condition and repair, ordinary wear
and tear excepted; and (b) in addition to the insurance required by SECTION 7.7,
maintain with financially sound and reputable insurers such other insurance with
respect to its Property and business against casualties and contingencies of
such types and in such amounts as is customary for Persons of established
reputation engaged in the same or a similar business and similarly situated,
naming the Lender, at its request, as additional insured under each such policy.
10.5 ENVIRONMENTAL LAWS. Each Option Care Person shall conduct its
business in full compliance with all Environmental Laws applicable to it,
including, without limitation, those relating to the generation, handling, use,
storage, and disposal of Contaminants. Each Option Care Person shall take (and
shall cause each of its Subsidiaries to take) prompt and appropriate action to
respond to and remediate any non-compliance with Environmental Laws, and shall
regularly report to the Lender on such response and remediation. Without
limiting the generality of the foregoing, whenever any Option Care Person gives
notice to the Lender pursuant to SECTION 8.3(g) the Option Care Persons shall,
at the Lender's request and the expense of the Option Care Persons: (a) cause an
independent environmental engineer acceptable to the Lender and the Borrowers'
Agent to conduct such tests of the site where the noncompliance or alleged
non-compliance with Environmental Laws has occurred and prepare and deliver to
the Lender a report setting forth the results of such tests, a proposed plan for
responding to any environmental problems described therein, and an estimate of
the costs thereof; and (b) provide to the Lender a supplemental report of such
engineer whenever the scope of the environmental problems, or the Option Care
Person's response thereto or the estimated costs thereof, shall change.
10.6 HEALTH CARE LAWS. Each Option Care Person and each of its
Subsidiaries shall conduct its business in all material respects in compliance
with all Health Care Laws applicable to it. Each Option Care Person and its
Subsidiaries shall take prompt and appropriate action to respond to and
remediate any non-compliance with any Health Care Law. Each Option Care Person
and each of its Subsidiaries shall promptly report to the Lender on any such
non-compliance and any such response and remediation in each case if such
non-compliance or such response and remediation is reasonably likely to have a
Material Adverse Effect.
10.7 ERISA. Each Option Care Person shall cause each Plan, which has
been designated to be so, to be qualified within the meaning of Section 401(a)
of the Code and to be administered in all respects in compliance with Section
401(a) of the Code, except where any such failure to comply would not reasonably
be expected to have a Material Adverse Effect. Each Option Care Person shall
cause each Plan to be administered in all respects in compliance with ERISA,
except where any such failure to comply would not reasonably be expected to have
a Material Adverse Effect.
10.8 MERGERS, CONSOLIDATIONS OR SALES. Without the prior written
consent of the Lender, no Option Care Person or any of its Subsidiaries shall
enter into any transaction of merger, reorganization, or consolidation, or
transfer, sell, assign, lease, or otherwise dispose of all or any part of its
Property, or wind up, liquidate or dissolve, or acquire or purchase any Person
or substantially all of the assets of any Person or agree to do any of the
foregoing, except: (i) sales of Inventory in the ordinary course of its
business; (ii) sales of Equipment permitted under SECTION 7.12; and (iii) the
grant or termination of a franchise, which does not include an Option Care
Person's buyback of the franchise from the franchisee.
10.9 DISTRIBUTIONS. Except as permitted by SECTION 10.14, no Option
Care Person or any of its Subsidiaries shall directly or indirectly declare or
make, or incur any liability to make, any Distribution, except Distributions to
a Borrower by a Subsidiary wholly owned by such Borrower.
10.10 TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT. No Option Care
Person or any of its Subsidiaries shall enter into any transaction after the
Closing Date which is reasonably likely to have a Material Adverse Effect.
10.11 GUARANTIES. No Option Care Person or any of its Subsidiaries
shall make, issue or become liable on any Guaranty, except Guaranties in favor
of the Lender and endorsements of instruments for deposit, and except for
Guaranties of Debt otherwise expressly permitted hereunder.
10.12 DEBT. No Option Care Person or any of its Subsidiaries shall
incur or maintain any Debt, other than: (a) the Obligations; (b) trade payables
and contractual obligations
to suppliers and customers incurred in the ordinary course of business; (c)
other Debt existing on the Closing Date and reflected (x) in the financial
statements contained in Option Care's Form 10-Q for the quarterly period ending
September 30, 1998, or (y) in SCHEDULE 9.9; (d) obligations to the Trust
pursuant to the Trust Reimbursement and Security Agreement, subject to the terms
of the Trust Subordination Agreement; (e) accruals required in connection with
any Plan; (f) any "earnout arrangements" pertaining to the purchase of a
business by any Option Care Person; and (g) other unsecured Debt in an aggregate
amount not to exceed two hundred fifty thousand dollars ($250,000) at any one
time outstanding.
10.13 PREPAYMENT. No Option Care Person or any of its Subsidiaries
shall voluntarily prepay any Debt, except: (a) prepayments of the Obligations in
accordance with their terms; (b) prepayments not exceeding two hundred fifty
thousand dollars ($250,000) in the aggregate from and after the Closing Date;
(c) repayment of the obligations of Option Care Persons to the Existing Bank
Group with the proceeds of the initial Loan under this Agreement; or (d)
otherwise with the prior written consent of the Lender.
10.14 TRANSACTIONS WITH AFFILIATES. Except as set forth below, no
Option Care Person or any of its Subsidiaries shall: (a) sell, transfer,
distribute, or pay any money or Property to any Affiliate other than pursuant to
the Trust Reimbursement and Security Agreement (but subject in the case of the
Trust Reimbursement and Security Agreement to the terms of the Trust
Subordination Agreement), (b) lend or advance money or Property to any
Affiliate, (c) invest in (by capital contribution or otherwise) or purchase or
repurchase any stock or indebtedness or any Property of any Affiliate, or (d)
become liable on any Guaranty of the indebtedness, dividends, or other
obligations of any Affiliate. Notwithstanding the foregoing, if no Event of
Default has occurred and is continuing, each Option Care Person and its
Subsidiaries may engage in transactions with Affiliates (including the payment
by Option Care of (i) an annual consulting fee of $100,000 to EJ Financial
Enterprises, Inc. pursuant to the consulting agreement between Option Care and
EJ Financial Enterprises, Inc. and (ii) a salary of $100,000 to Xx. Xxxx X.
Xxxxxx in his capacity as Chairman of Option Care) in the ordinary course of
business in amounts and upon terms fully disclosed to the Lender and no less
favorable to each Option Care Person and its Subsidiaries than would obtain in a
comparable arm's length transaction with a third party who is not an Affiliate
(but subject in the case of the Trust Reimbursement and Security Agreement to
the terms of the Trust Subordination Agreement).
10.15 BUSINESS CONDUCTED. No Option Care Person or any of its
Subsidiaries shall engage, directly or indirectly, in any line of business other
than the businesses in which such Option Care Person and its Subsidiaries are
engaged on the Closing Date.
10.16 LIENS. No Option Care Person or any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any Property now owned or
hereafter acquired by any of them, except Permitted Liens.
10.17 SALE AND LEASEBACK TRANSACTIONS. Except with the prior written
consent of the Lender, no Option Care Person or any of its Subsidiaries shall,
directly or indirectly, enter into any arrangement with any Person providing for
such Option Care Person or any such Subsidiary to lease or rent Property that
such Option Care Person or Subsidiary has or shall sell or otherwise transfer to
such Person.
10.18 NEW SUBSIDIARIES. Except with the prior written consent of the
Lender, no Option Care Person shall, directly or indirectly, organize or acquire
any Subsidiary other than those listed on SCHEDULE 9.5.
10.19 RESTRICTED INVESTMENTS. Except with the prior written consent of
the Lender, no Option Care Person or any of its Subsidiaries shall make any
Restricted Investment.
10.20 CAPITAL EXPENDITURES. Except with the prior written consent of
the Lender, the aggregate amount of all Capital Expenditures by Option Care and
its Subsidiaries during any calendar year (beginning with January 1, 1999) shall
not exceed one million dollars ($1,000,000).
10.21 FIXED CHARGE COVERAGE. As of the last day of each fiscal quarter
of Option Care, Option Care shall maintain a ratio of (a) the sum of (i) EBITDA
for the four consecutive fiscal quarters ending on such last day specified below
plus (ii) the Specified Bad Debt Expense Amount for such four fiscal quarters TO
(b) the sum of (i) Interest Expense for such four fiscal quarters, (ii) Capital
Expenditures of Option Care and its Subsidiaries during such four fiscal
quarters, (iii) payments by any Option Care Person during such four fiscal
quarters in respect of earnout obligations related to the buyback of franchises
by any Option Care Person, (iv) actual payments of taxes during such four fiscal
quarters, and (v) principal payments which any Option Care Person was required
to make on Debt for borrowed money during such four fiscal quarters, which Debt
had an original term of at least one year, of not less than the following ratios
during the following periods:
FOUR QUARTER
PERIOD ENDED MINIMUM RATIO
3/31/99 ......................... 1.1 to 1
6/30/99 ......................... 1.1 to 1
9/30/99 ......................... 1.1 to 1
12/31/99 ......................... 1.5 to 1
and thereafter
10.22 DEBT RATIO. Option Care shall not permit the ratio of debt of
Option Care on a consolidated basis (determined in accordance with GAAP) to
Adjusted Tangible Net Worth to exceed the following amounts during the following
periods:
Period Ratio
------ -----
1/1/99 - 12/30/99 ..................... 8.5 to 1
12/31/99 and thereafter ............... 5 to 1
10.23 LOAN DOCUMENTS. No Option Care Person shall enter into or permit
to exist any amendment, modification, termination, supplement, compromise,
satisfaction, release, discharge or waiver of any Loan Document without the
prior written consent of the Lender. Except as otherwise provided in this
Agreement, no Option Care Person shall sell, assign, pledge or otherwise
transfer any of its rights or obligations under any Loan Document without the
prior written consent of the Lender.
10.24 FURTHER ASSURANCES. Each Option Care Person shall execute and
deliver, or cause to be executed and delivered, to the Lender such documents,
financing statements, instruments and agreements, and shall take or cause to be
taken such actions, as the Lender may, from time to time, request to carry out
the terms and conditions of this Agreement and the other Loan Documents.
10.25 DELIVERY OF GOOD STANDING CERTIFICATES. Within twenty (20) days
after the Closing Date, the Borrowers' Agent shall deliver to the Lender good
standing certificates of each Option Care Person issued during 1999 by the
Secretary of State of the state of incorporation or formation of such Option
Care Person and the state(s) in which such Option Care Person does business,
PROVIDED, HOWEVER, that with respect to Option Care, Inc., a California
corporation, such certificates need be provided only from the State of
California and the State of Illinois.
10.26 NORTHERN LETTER OF CREDIT. The Option Care Persons shall cause
the Northern Letter of Credit to remain in effect until the Stated Termination
Date, subject to SECTION 7.5(b).
10.27 STOCK CERTIFICATES. Not later than the third day after the
Closing Date, the Borrowers' Agent shall deliver (or cause to be delivered) to
the Lender all of the stock certificates pledged under the Pledge Agreements,
together with undated, signed stock powers, in form and substance reasonably
satisfactory to the Lender, relating thereto.
10.28 UCC FINANCING STATEMENTS. Not later than ten (10) Business Days
after the Closing Date, the Lender shall have received evidence that UCC
financing statements, in form and substance reasonably satisfactory to the
Lender, have been filed in the applicable jurisdictions: (i) amending filings
against Techni-Med, Inc. and Galesburg Institutional Pharmacy Management Inc. to
remove any reference to "Option Care"; and (ii) limiting the scope of filings
made by VGM Leasing. Inc. to leased equipment (and limiting the description of
proceeds therein).
10.29 TRADEMARK SECURITY AGREEMENT. The Borrowers' Agent shall deliver
to the Lender, not later than ten (10) Business Days after the Closing Date, a
security agreement in form and substance reasonably satisfactory to the Lender
(as amended, amended and restated or otherwise modified from time to time, the
"TRADEMARK SECURITY AGREEMENT"), covering the trademarks listed in part A of
SCHEDULE 9.14 and signed by the owner of such trademarks.
11. CONDITIONS PRECEDENT. The Lender shall not be obligated to make the
initial Loans, unless the following conditions precedent have been satisfied in
a manner satisfactory to Lender:
11.1 CONDITIONS PRECEDENT TO MAKING OF INITIAL LOAN.
(a) REPRESENTATIONS OF EACH OPTION CARE PERSON AND WARRANTIES;
COVENANTS. The representations and warranties contained in this Agreement and
the other Loan Documents shall be true, correct and complete; each Option Care
Person shall have performed and complied with all covenants, agreements, and
conditions contained herein and in the other Loan Documents which are required
to have been performed or complied with.
(b) SECRETARY'S CERTIFICATE. The Lender shall have received a
certificate of the Secretary or Assistant Secretary of each Option Care Person
certifying (i) the certificate of incorporation referred to in SECTION 11.1(c),
(ii) the by-laws of such Option Care Person, (iii) a copy of the resolutions of
the board of directors of such Option Care Person approving this Agreement and
the other Loan Documents and the transactions contemplated hereby and thereby
and (iv) the names and true signatures of the officers of such Option Care
Person authorized to sign the Loan Documents (on which certificate the Lender
conclusively may rely until such time as the Lender receives a revised
certificate meeting the requirements hereof).
(c) CERTIFICATE OF INCORPORATION. The Lender shall have received
the certificate of incorporation of each Option Care Person certified by the
Secretary of State of the state of incorporation of such Person.
(d) LEGAL OPINIONS. The Lender shall have received legal opinions
from Heroux, Clingen, Callow, Wolfe and XxXxxxx, counsel to Option Care Persons,
and Xxxxx, Xxxxxx, MacKay & Xxxxxxxxxx, P.C., counsel for Xx. Xxxx X. Xxxxxx and
the Trust, in each case in form and substance satisfactory to the Lender and its
counsel.
(e) UCC MATTERS. The Lender shall have received:
(x) Acknowledgment copies of UCC financing statements filed
on or before the date hereof, or other similar instruments or documents, as may
be necessary or, in the opinion of the Lender, desirable under the UCC or any
comparable law of all appropriate jurisdictions to perfect the Lender's
interests in the Collateral.
(y) A search report provided in writing by a Person
acceptable to the Lender listing all effective UCC financing statements that
name any Option Care Person as debtor and that are filed in the jurisdictions in
which filings were made pursuant to CLAUSE (x) and in such other jurisdictions
as the Lender reasonably may request, together with copies of such financing
statements and reflecting searches of applicable records showing any liens
affecting the Collateral or any Option Care Person.
(z) Subject to SECTION 10.28, one or more UCC financing
statements signed by the Option Care Persons and each secured party (including
those in the Existing Bank Group) that has a Lien on the Collateral (or on any
Property of a Subsidiary) that are necessary or, in the opinion of the Lender,
desirable under the UCC or any comparable law of all appropriate jurisdictions
to terminate or subordinate such Lien (including subordinating the Lien of the
Trust against Option Care), together with, if applicable, signed payoff letters
from each such secured party.
(f) NORTHERN LETTER OF CREDIT. The Lender shall have received the
Northern Letter of Credit, in form and substance satisfactory to the Lender,
executed by Northern, in an amount of not less than five million dollars
($5,000,000).
(g) REIMBURSEMENT AND SECURITY AGREEMENT; SUBORDINATION
AGREEMENT. The Lender shall have received a reimbursement and security
agreement, in form and substance satisfactory to the Lender, signed by the Trust
and Option Care (as amended, amended and restated or otherwise modified from
time to time in accordance with the terms hereof, the "TRUST REIMBURSEMENT AND
SECURITY AGREEMENT"), and a subordination agreement, in form and substance
satisfactory to the Lender, signed by the Trust and by Option Care (as amended,
amended and restated or otherwise modified from time to time in accordance with
the terms hereof, the "TRUST SUBORDINATION AGREEMENT").
(h) FINANCIAL STATEMENTS AND BUSINESS PLAN. The Lender shall have
received Option Care's audited financial statements for Fiscal Year 1997, and
Option Care's business plan for Fiscal Year 1999, in each case in form and
substance satisfactory to the Lender.
(i) PLEDGE AGREEMENTS. The Lender shall have received pledge
agreements from Option Care, Rehab Options, Inc. and Option Care Enterprises,
Inc., each in form and substance satisfactory to the Lender (such pledge
agreements, as amended, amended and restated or otherwise modified from time to
time in accordance with the terms hereof, being referred to individually as a
"PLEDGE AGREEMENT" and collectively as the "PLEDGE AGREEMENTS"), signed by the
parties thereto, whereby such pledgors pledge to the Lender all of the capital
stock or membership interests, as the case may be, issued by the Borrowers
(other than Option Care). Subject to SECTION 10.27, the Lender shall have
received all certificates representing the shares of stock pledged under the
Pledge Agreements.
(j) LITIGATION. There shall exist no action, suit, investigation,
litigation, or proceeding pending or to the knowledge of any Option Care Person
threatened in any court or before any arbitrator or governmental instrumentality
that in the Lender's reasonable judgment (x) would reasonably be expected to
have a material adverse effect on the business, condition (financial or
otherwise), operations, performance, or properties of any Option Care Person or
which could impair the ability of any Option Care Person to perform
satisfactorily under this Agreement or (y) would reasonably be expected to
materially and adversely affect the transactions contemplated hereby. The Lender
shall be satisfied with the prospects of all outstanding litigation and
proceedings affecting any Option Care Person and the terms and conditions of any
settlements involving any Option Care Person.
(k) CORPORATE STRUCTURE. The Lender shall be satisfied with each
Option Care Person's corporate structure and ownership of Accounts and other
assets.
(l) BLOCKED ACCOUNT AGREEMENT. The Lender shall have received the
initial Blocked Account Agreement, signed by the parties thereto, which shall be
the Lockbox /Blocked Account Agreement among Northern, the Lender and the Option
Care Persons.
(m) FACILITY FEE. The Lender shall have received payment of the
Facility Fee.
(n) PAYMENT OF FEES AND EXPENSES. Option Care shall have paid, to
the extent invoiced, the fees and expenses of the Lender's outside counsel,
Xxxxx, Xxxxx & Xxxxx, and all other fees and expenses of the Lender incurred in
connection with any of the Loan Documents and the transactions contemplated
thereby (including the allocated costs of in-house counsel for non- duplicative
work).
(o) REQUIRED APPROVALS. The Lender shall have received certified
copies of all consents or approvals of any Public Authority or other Person
which the Lender determines is required in connection with the transactions
contemplated by this Agreement.
(p) NO MATERIAL ADVERSE CHANGE. No material adverse change shall
have occurred, as determined by the Lender in its sole discretion, in the
business, operations, profits, prospects, or financial condition of any Option
Care Person or in the Collateral since October 31, 1998, and Option Care shall
have met, as of the Closing Date, the Latest Plan, and the Lender shall have
received a certificate from Option Care to such effect.
(q) YEAR 2000 ISSUES. Each Option Care Person shall have
satisfied the Lender that (a) such Option Care Person is taking all necessary
and appropriate steps to ascertain the extent of, quantify and successfully
address the business and financial risks facing such Option Care Person as a
result of what is commonly referred to as the "Year 2000 problem" (i.e., the
inability of certain computer applications to recognize correctly and perform
properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), including risks resulting from the failure of key customers
and suppliers of such Option Care Person to address successfully the Year 2000
problem, and (b) the material computer applications of such Option Care Person
will on a timely basis adequately address the Year 2000 problem in all material
respects.
(r) PROCEEDINGS. All proceedings to be taken in connection with
the transactions contemplated by this Agreement, all exhibits and schedules to
this Agreement, and all documents contemplated in connection with this
Agreement, shall be satisfactory in form and substance to the Lender and its
counsel.
(s) DELIVERY OF DOCUMENTS. The Option Care Persons shall have
delivered, or caused to be delivered, to the Lender such other certifications,
documents (including, without limitation, evidence of the federal taxpayer
identification number of each Option Care Person), instruments and agreements as
the Lender may request in connection herewith, duly executed by all parties
thereto other than the Lender, and in form and substance satisfactory to the
Lender and its counsel.
11.2 CONDITIONS PRECEDENT TO EACH LOAN. The obligation of the Lender
to make each Loan shall be subject to the conditions precedent that:
(a) on the date of any such Loan the following statements shall
be true, and the acceptance by any Borrower of any extension of credit shall be
deemed to be a statement, representation and warranty to the effect that (i) the
representations and warranties contained in this Agreement and the other Loan
Documents are correct in all material respects on and as of the date of such
Loan as though made on and as of such date, except to the extent the Lender has
been notified by such Borrower that any representation or warranty is not
correct and the Lender has explicitly waived in writing compliance with such
representation or warranty and (ii) no Event or Event of Default has occurred
and is continuing, or would result from such Loan; and
(b) the Lender shall have received the most recent Borrowing Base
Certificate delivered pursuant to SECTION 7.8 by 9:00 a.m., Chicago time, on the
date on which such Loan is made.
12. DEFAULT.
12.1 EVENTS OF DEFAULT. It shall constitute an event of default
("EVENT OF DEFAULT") if any one or more of the following shall occur for any
reason:
(a) any Option Care Person shall (i) fail to make payment of
principal on any Loan when due, or (ii) fail to make payment of interest, fees
or any other Obligation when due (and, in the case of this clause (ii), such
failure shall continue for a period of two (2) days
after the date on which the Lender notifies any Option Care Person of any such
failure);
(b) any representation or warranty made (or deemed made pursuant
to SECTION 11.2) by any Option Care Person in this Agreement, any of the other
Loan Documents, any Financial Statement, or any certificate furnished by any
Option Care Person or any Subsidiary at any time to the Lender shall prove to be
untrue in any material respect as of the date when made, deemed made, or
furnished;
(c) any Option Care Person shall (i) fail to comply with any of
the covenants set forth in any of SECTIONS 7.1 through 7.19, 8.1, 8.2, 8.3,
10.6, 10.8 through 10.23 or 10.25 through 10.29, or (ii) fail to comply with any
of the covenants set forth in any of SECTIONS 10.1, 10.2, 10.3, 10.4(b), 10.5,
10.7, or 10.24 (if such failure specified this clause (ii) shall have existed
for more than five (5) days after the earlier to occur of (x) the date that any
Option Care Person discovers, or reasonably should have discovered, any such
failure and (y) the date on which the Lender notifies any Option Care Person of
any such failure); PROVIDED, HOWEVER, that to the extent that any covenant in
SECTION 8.2 or 8.3 specifies the number of days within which any Option Care
Person must comply with any reporting requirement therein, such failure shall
have existed for the number of days specified in such covenant, plus three (3)
days;
(d) any Option Care Person shall fail to comply with any of the
other terms, covenants or agreements contained in this Agreement, the other Loan
Documents, or any other agreement entered into at any time to which any Option
Care Person and the Lender are party and such failure shall continue for a
period of ten (10) days after the earlier to occur of (i) the date on which the
Lender notifies any Option Care Person of any such failure and (ii) the date on
which any Option Care Person discovers, or reasonably should have discovered,
any such failure, or if any such Loan Document or agreement shall terminate
(other than in accordance with its terms or with the written consent of the
Lender) or become void or unenforceable without the written consent of the
Lender; or any Person shall contest in any manner the validity or enforceability
of this Agreement or any of the other Loan Documents or shall deny that any
Option Care Person has any further liability or obligation thereunder;
(e) any Option Care Person shall fail to make any payment when
due in respect of any Debt (other than the Obligations) in an aggregate amount
in excess of two hundred fifty thousand dollars ($250,000) beyond any period of
grace or cure provided with respect thereto;
(f) any Option Care Person or any Subsidiary of any Option Care
Person shall: (i) file a voluntary petition in bankruptcy or file a voluntary
petition or an answer or otherwise commence any action or proceeding seeking
reorganization, arrangement or readjustment of its debts or for any other relief
under the Federal Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing, or consent
to, approve of, or acquiesce in, any such petition, action or proceeding; (ii)
apply for or acquiesce in the appointment of a receiver, assignee, liquidator,
sequestrator,
custodian, trustee or similar officer for it or for all or any part of its
Property; (iii) make an assignment for the benefit of creditors; or (iv) admit
its inability, or be unable generally, to pay its debts as they become due;
(g) an involuntary petition shall be filed or an action or
proceeding otherwise commenced seeking reorganization, arrangement or
readjustment of the debts of any Option Care Person or any Subsidiary of any
Option Care Person or for any other relief under the Federal Bankruptcy Code, as
amended, or under any other bankruptcy or insolvency act or law, state or
federal, now or hereafter existing, and thirty (30) days shall pass from the
date of such filing or commencement;
(h) a receiver, assignee, liquidator, sequestrator, custodian,
trustee or similar officer for any Option Care Person or any Subsidiary of any
Option Care Person or for all or any part of their Property shall be appointed
involuntarily; or a warrant of attachment, execution or similar process shall be
issued against any part of the Property of any Option Care Person or any
Subsidiary of any Option Care Person;
(i) any Option Care Person shall file a certificate of
dissolution under applicable state law or shall be liquidated, dissolved or
wound-up or shall commence or have commenced against it any action or proceeding
for dissolution, winding-up or liquidation, or shall take any corporate action
in furtherance thereof;
(j) all or any material part of the Property of any Option Care
Person shall be nationalized, expropriated or condemned, seized or otherwise
appropriated, or custody or control of such Property or of any Option Care
Person shall be assumed by any Public Authority or any court of competent
jurisdiction at the instance of any Public Authority and, in either case, the
result thereof would have a Material Adverse Effect, except where contested in
good faith by proper proceedings diligently pursued where a stay of enforcement
is in effect;
(k) the Trust fails in any material respect to perform or observe
any term, covenant or agreement in the Trust Subordination Agreement; or the
Trust Subordination Agreement is for any reason revoked or invalidated, or
otherwise ceases to be in full force and effect; or the Trust or any other
Person by, through or on behalf of the Trust, contests in any manner the
validity or enforceability of the Trust Subordination Agreement or denies that
the Trust has any further liability or obligation thereunder;
(l) one or more final judgments for the payment of money
aggregating in excess of two hundred fifty thousand dollars ($250,000) shall be
rendered against any Option Care Person or any Subsidiary of any Option Care
Person and such Option Care Person or such Subsidiary shall fail to discharge
the same within thirty (60) days from the date of notice of entry thereof or to
appeal therefrom;
(m) any loss, theft, damage or destruction of any item or items
of
Collateral occurs which: (i) materially and adversely affects the operation of
any Option Care Person's business or (ii) is material in amount and is not
adequately covered by insurance;
(n) any event or condition shall occur or exist with respect to a
Plan that could, in the Lender's reasonable judgment, subject any Option Care
Person or any Subsidiary of any Option Care Person to any tax, penalty or
liability under ERISA, the Code or otherwise which in the aggregate is material
in relation to the business, performance, operations, Property, prospects or
condition (financial or otherwise) of any Option Care Person;
(o) there occurs any material adverse change in the business,
performance, operations, Property, prospects or condition (financial or
otherwise) of any Option Care Person, which change would reasonably be expected
to have a Material Adverse Effect; or
(p) any Option Care Person shall: (i) withdraw or attempt to
withdraw any funds or other items on deposit in any Lockbox or any Blocked
Account; (ii) direct or attempt to direct a Blocked Account Bank not to make, or
to cease making, transfers of any funds or other items (x) from a Lockbox to a
Blocked Account, or (y) from a Blocked Account to the Lender or at the direction
of the Lender; or (iii) without limiting the foregoing, give a "Revocation
Order" (as defined in the applicable Blocked Account Agreement) to a Blocked
Account Bank.
13. REMEDIES.
(a) If an Event of Default has occurred and is continuing, the Lender
may, without notice to or demand on any Option Care Person, do one or more of
the following at any time or times and in any order: (i) reduce the Availability
or one or more of the elements thereof; (ii) restrict the amount of or refuse to
make Revolving Loans; (iii) terminate this Agreement; (iv) declare any or all
Obligations to be immediately due and payable (PROVIDED, HOWEVER, that upon the
occurrence of any Event of Default described in SECTIONS 12.1(f), 12.1(g),
12.1(h) or 12.1(i), all Obligations shall automatically become immediately due
and payable); and (v) pursue its other rights and remedies under the Loan
Documents and applicable law.
(b) If an Event of Default has occurred and is continuing: (i) the
Lender shall have, in addition to all other rights, the rights and remedies of a
secured party under the UCC; (ii) the Lender may, at any time, take possession
of the Collateral and keep it on the Premises of any Option Care Person, at no
cost to the Lender, or remove any part of it to such other place or places as
the Lender may desire, and each Option Care Person shall, upon the Lender's
demand, at the expense of the Option Care Persons, assemble the Collateral and
make it available to the Lender at a place reasonably convenient to the Lender;
and (iii) the Lender may sell and deliver any Collateral at public or private
sales, for cash, upon credit or otherwise, at such prices and upon such terms as
the Lender deems advisable, in its sole discretion, and may, if the Lender deems
it reasonable, postpone or adjourn any sale of the Collateral by an announcement
at the
time and place of sale or of such postponed or adjourned sale without giving a
new notice of sale. Without in any way requiring notice to be given in the
following manner, each Option Care Person agrees that any notice by the Lender
of sale, disposition or other intended action hereunder or in connection
herewith, whether required by the UCC or otherwise, shall constitute reasonable
notice to such Option Care Person if such notice is mailed by registered or
certified mail, return receipt requested, postage prepaid, or is delivered
personally against receipt, at least five (5) days prior to such action to the
Borrowers' Agent at the address for notices to the Borrowers' Agent determined
in accordance with SECTION 15.10. If any Collateral is sold on terms other than
payment in full at the time of sale, no credit shall be given against the
Obligations until the Lender receives payment, and if the buyer defaults in
payment, the Lender may resell the Collateral without further notice to any
Option Care Person. In the event the Lender seeks to take possession of all or
any portion of the Collateral by judicial process, each Option Care Person
irrevocably waives: (a) the posting of any bond, surety or security with respect
thereto which might otherwise be required; (b) any demand for possession prior
to the commencement of any suit or action to recover the Collateral; and (c) any
requirement that the Lender retain possession and not dispose of any Collateral
until after trial or final judgment. Each Option Care Person agrees that the
Lender has no obligation to preserve rights to the Collateral or marshal any
Collateral for the benefit of any Person. The Lender is hereby granted a license
or other right to use, without charge, each Option Care Person's labels,
patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and each Option Care Person's rights
under all licenses and all franchise agreements shall inure to the Lender's
benefit. The proceeds of sale shall be applied first to all expenses of sale,
including attorney's fees, and second, in whatever order the Lender elects, to
all Obligations. The Lender shall return any excess to the Option Care Persons
or such other Person as shall be legally entitled thereto and the Option Care
Persons shall remain liable for any deficiency.
(c) Each Option Care Person hereby waives (i) all rights to notice and
hearing prior to the exercise by the Lender of the Lender's rights to repossess
the Collateral without judicial process following the occurrence of an Event of
Default or to replevy, attach or levy upon the Collateral without notice or
hearing following the occurrence of an Event of Default, and (ii) all rights of
set-off and counterclaim against the Lender.
14. TERM AND TERMINATION.
(a) This Agreement shall terminate, without premium or penalty, on the
third anniversary of the Closing Date (the "STATED TERMINATION DATE") unless
earlier terminated as provided in this Section.
(b) The Borrowers' Agent may also terminate this Agreement at any time
prior to the Stated Termination Date or during any renewal term if all of the
following conditions have been satisfied: (i) it gives the Lender at least
fifteen (15) days' prior written notice of
termination; (ii) it pays and performs (or causes to be paid and performed) all
Obligations on or prior to the effective date of termination; and (iii) it pays
the Termination Fee (or causes the Termination Fee to be paid) to the Lender, on
or prior to the effective date of termination, which payment shall be in
addition to the fees required by SECTION 6.4; PROVIDED, HOWEVER, that the
Borrowers' Agent shall not be obligated to pay the Termination Fee if the reason
for termination of this Agreement is that (I) the Bank (or any Affiliate
thereof) has provided a revolving loan facility to the Borrowers which
completely refinances the credit facility provided for in this Agreement; (II)
the Lender has notified the Borrowers' Agent that Northern is not satisfactory
as the bank referred to in clause (i) of the first sentence of the definition of
Additional Collateral; (III) the Lender sends a notice to the Borrowers' Agent
establishing Other Criteria; or (IV) the Lender sends a notice to the Borrowers'
Agent to the effect that the Lender shall maintain a reserve pursuant to clause
(E) of the definition of Availability; PROVIDED, FURTHER, HOWEVER, that
notwithstanding clauses (II), (III) and (IV) of the preceding proviso, the
Borrowers' Agent shall be required to pay the Termination Fee (or to cause the
Termination Fee to be paid) if either: (x) the Borrowers' Agent fails to provide
written notice to the Lender of its intent to terminate this Agreement within
fifteen (15) days after (i) the Agent shall have notified the Borrowers' Agent
that Northern is not satisfactory as the bank referred to in clause (i) of the
first sentence of the definition of Additional Collateral, (ii) the Lender sends
a notice to the Borrowers' Agent establishing Other Criteria or (iii) the Lender
sends a notice to the Borrowers' Agent to the effect that the Lender shall
maintain a reserve pursuant to clause (E) of the definition of Availability; or
(y) the Borrowers' Agent fails to pay and perform (or fails to cause to be paid
and performed) all Obligations on or prior to the ninetieth (90th) day following
the end of the fifteen (15) day period referred to in clause (x) of this
proviso.
(c) The Lender may also terminate this Agreement without notice while
an Event of Default exists; provided that no Termination Fee shall be payable
solely as a result of a termination pursuant to this sentence.
(d) Upon the effective date of termination of this Agreement for any
reason whatsoever, all Obligations shall become immediately due and payable.
(e) Notwithstanding the termination of this Agreement, until all
Obligations are paid and performed in full, the Lender shall retain all its
rights and remedies hereunder (including, without limitation, in all then
existing and after-arising Collateral).
15. MISCELLANEOUS.
15.1 CUMULATIVE REMEDIES; NO PRIOR RECOURSE TO COLLATERAL. The
enumeration in this Agreement or any other Loan Document of the Lender's rights
and remedies is not intended to be exclusive, and such rights and remedies are
in addition to and not by way of limitation of any other rights or remedies that
the Lender may have under the UCC or other applicable law. The Lender shall have
the right, in its sole discretion, to determine which rights and remedies are
to be exercised and in which order. The exercise of one right or remedy under or
in connection with this Agreement or any other Loan Document shall not preclude
the exercise of any others, all of which shall be cumulative. The Lender may,
without limitation, proceed directly against any Option Care Person to collect
the Obligations without any prior recourse to the Collateral.
15.2 NO IMPLIED WAIVERS. No act, failure or delay by the Lender under
or in connection with this Agreement or any other Loan Document shall constitute
a waiver of any of its rights and remedies. No single or partial waiver by the
Lender of any provision of this Agreement or any other Loan Document, or of
breach or default hereunder or thereunder, or of any right or remedy which the
Lender may have, shall operate as a waiver of any other provision, breach,
default, right or remedy or of the same provision, breach, default, right or
remedy on a future occasion. No waiver by the Lender shall affect its rights to
require strict performance of this Agreement or any other Loan Document.
15.3 SEVERABILITY. Whenever possible, each provision of this Agreement
and each other Loan Document shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
or any other Loan Document shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement or such other Loan Document.
15.4 GOVERNING LAW. This Agreement and each other Loan Document shall
be deemed to have been made in the State of Illinois and shall be governed by
and interpreted in accordance with the laws of such state, except that no
doctrine of choice of law shall be used to apply the laws of any other state or
jurisdiction.
15.5 CONSENT TO JURISDICTION AND VENUE; SERVICE OF PROCESS. Each
Option Care Person agrees that, in addition to any other courts that may have
jurisdiction under applicable laws, any action or proceeding to enforce or
arising out of this Agreement or any of the other Loan Documents may be
commenced in the courts of the State of Illinois, or in the United States
District Court for the Northern District of Illinois, and each Option Care
Person consents and submits in advance to such jurisdiction and agrees that
venue shall be proper in such courts on any such matter. The choice of forum set
forth in this section shall not be deemed to preclude the enforcement of any
judgment obtained in such forum, or the taking of any action under this
Agreement to enforce the same, in any appropriate jurisdiction. Each Option Care
Person hereby waives personal service of process and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction if served by registered or
certified mail to the Borrowers' Agent, at the address for notices to the
Borrowers' Agent determined in accordance with SECTION 15.10. Should any Option
Care Person fail to appear or answer any summons, complaint, process or papers
so served within thirty (30) days after the mailing or other service thereof, it
shall be deemed in default and an order or judgment may be entered against it as
demanded or prayed for in such
summons, complaint, process or papers.
15.6 WAIVER OF JURY TRIAL. EACH OPTION CARE PERSON HEREBY WAIVES TRIAL
BY JURY, RIGHTS OF SETOFF, AND THE RIGHT TO IMPOSE COUNTERCLAIMS IN ANY
LITIGATION IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF
THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL, OR
ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT HERETO OR THERETO, OR ANY OTHER
CLAIM OR DISPUTE HOWSOEVER ARISING, BETWEEN OR AMONG THE OPTION CARE PERSONS AND
THE LENDER. EACH OPTION CARE PERSON CONFIRMS THAT THE FOREGOING WAIVERS ARE
INFORMED AND FREELY MADE.
15.7 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of the Option Care Persons contained in this
Agreement shall survive the execution, delivery, and acceptance thereof by the
parties, notwithstanding any investigation by the Lender or its agents, until
the later of (a) the termination of this Agreement and (b) payment and
performance in full of all of the Obligations.
15.8 OTHER SECURITY AND GUARANTIES. The Lender may, without notice or
demand and without affecting the Obligations, from time to time: (a) take from
any Person and hold collateral (other than the Collateral) for the payment of
all or any part of the Obligations and exchange, enforce or release such
collateral or any part thereof; and (b) accept and hold any endorsement or
guaranty of payment of all or any part of the Obligations and release or
substitute any such endorser or guarantor, or any Person who has given any Lien
in any other collateral as security for the payment of all or any part of the
Obligations, or any other Person in any way obligated to pay all or any part of
the Obligations.
15.9 FEES AND EXPENSES. The Option Care Persons agree to pay to the
Lender on demand (whether or not any transaction contemplated by this Agreement
is consummated) all costs and expenses that the Lender pays or incurs in
connection with the negotiation, preparation, consummation, administration,
enforcement, and termination of this Agreement and the other Loan Documents,
including, without limitation: (a) attorneys' and paralegals' fees and
disbursements of counsel to the Lender (including, without limitation, a
reasonable estimate of the allocable cost of in-house counsel and staff for
non-duplicative work); (b) costs and expenses including attorneys' and
paralegals' fees and disbursements (including, without limitation, a reasonable
estimate of the allocable cost of in-house counsel and staff for non-duplicative
work) for any amendment, supplement, waiver, consent, or subsequent closing in
connection with any Loan Document and the transactions contemplated thereby; (c)
costs and expenses of lien and title searches and title insurance; (d) Taxes,
fees and other charges for filing UCC financing statements and amendments and
continuations thereof, and other actions to perfect, protect, and continue the
Security Interest; (e) sums paid or incurred to pay any amount or take any
action required of any Option Care Person under the Loan Documents that such
Option Care Person
fails to pay or take; (f) costs of review, due diligence, appraisals, audits,
inspections, and verifications of the Collateral and the operations of any
Option Care Person, including, without limitation, travel, lodging, meals, and
other expenses, together with an allocated "charge" per day for each auditor
employed or utilized by the Lender for any such purpose (such "charge" per day
to be specified from time to time by the Lender but, absent an Event of Default,
the aggregate "charges" per day during any calendar quarter shall not exceed
$5,000 per calendar quarter, it being understood that said $5,000 cap does not
cover or limit the other costs and expenses referred to in this clause (f)); (g)
costs and expenses of forwarding loan proceeds, collecting checks and other
items of payment, and establishing and maintaining Payment Accounts and lock
boxes; (h) costs and expenses of preserving and protecting the Collateral
(including without limitation costs and expenses relating to SECTIONS 7.16 and
7.17); and (i) costs and expenses including attorneys' and paralegals' fees and
disbursements (including, without limitation, a reasonable estimate of the
allocable cost of in-house counsel and staff) paid or incurred to obtain payment
of the Obligations, enforce the Security Interest, sell or otherwise realize
upon the Collateral, and otherwise enforce the provisions of any Loan Document
(including without limitation costs and expenses relating to SECTIONS 7.16 and
7.17), or to defend any claims made or threatened against the Lender arising out
of the transactions contemplated by this Agreement or any other Loan Document
(including without limitation, preparations for and consultations concerning any
such matters). The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be paid by any
Option Care Person. All of the foregoing costs and expenses shall be charged to
the loan account of Option Care as Revolving Loans. Notwithstanding the
foregoing, the Lender acknowledges receipt of the Borrowers' advance payment of
$25,000 toward the fees and expenses described herein.
15.10 NOTICES. Except as otherwise expressly provided herein or in an
Exhibit hereto, all notices, demands, and requests that any party hereto is
required or elects to give to any other party hereto shall be in writing, shall
be delivered personally against receipt, or sent by recognized overnight courier
services, or sent by facsimile transmission, or mailed by registered or
certified mail, return receipt requested, postage prepaid, and shall be
addressed to the party to be notified as follows:
If to the Lender: BankAmerica Business Credit, Inc.
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Facsimile: 312/974-8833
with a copy to: Bank of America National Trust
and Savings Association
00000 Xxx Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Legal Department
Facsimile: 619/549-7518
If to Option Care: Option Care, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Facsimile: 847/615-5
with a copy to: Option Care, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Facsimile: 847/615-9345
and
Heroux, Clingen, Callow, Wolfe & XxXxxx
0000 Xxxxxxxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: 630/871-9869
or to such other address as each party may designate for itself by like notice.
Any such notice, demand, or request shall be deemed given when received if
personally delivered or sent by overnight courier or facsimile transmission, or
when deposited in the United States mails, postage paid, if sent by registered
or certified mail.
15.11 INDEMNIFICATION.
(A) EACH OPTION CARE PERSON HEREBY INDEMNIFIES, DEFENDS AND HOLDS THE
LENDER, AND ITS DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND COUNSEL, HARMLESS
FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES, DEFICIENCIES,
JUDGMENTS, PENALTIES OR EXPENSES IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY
OF THEM, WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL ARISING OUT OF OR BY REASON
OF ANY LITIGATION, INVESTIGATIONS, CLAIMS, OR PROCEEDINGS (WHETHER BASED ON ANY
FEDERAL, STATE OR LOCAL LAWS OR OTHER STATUTES OR REGULATIONS, INCLUDING,
WITHOUT LIMITATION, SECURITIES, ENVIRONMENTAL, OR COMMERCIAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR AT EQUITY, OR ON CONTRACT OR OTHERWISE)
COMMENCED OR THREATENED, WHICH ARISE
OUT OF OR ARE IN ANY WAY BASED UPON THE NEGOTIATION, PREPARATION, EXECUTION,
DELIVERY, ENFORCEMENT, PERFORMANCE OR ADMINISTRATION OF THIS AGREEMENT, ANY
OTHER LOAN DOCUMENT, OR ANY UNDERTAKING OR PROCEEDING RELATED TO ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR ANY ACT, OMISSION TO ACT, EVENT OR
TRANSACTION RELATED OR ATTENDANT THERETO, INCLUDING, WITHOUT LIMITATION, AMOUNTS
PAID IN SETTLEMENT, COURT COSTS, AND THE FEES AND EXPENSES OF COUNSEL INCURRED
IN CONNECTION WITH ANY SUCH LITIGATION, INVESTIGATION, CLAIM OR PROCEEDING AND
FURTHER INCLUDING, WITHOUT LIMITATION, ALL LOSSES, DAMAGES (INCLUDING
CONSEQUENTIAL DAMAGES), EXPENSES OR LIABILITIES SUSTAINED BY THE LENDER IN
CONNECTION WITH ANY ENVIRONMENTAL INSPECTION, MONITORING, SAMPLING, OR CLEANUP
OF THE ENCUMBERED REAL ESTATE REQUIRED OR MANDATED BY ANY ENVIRONMENTAL LAW;
PROVIDED, HOWEVER, THAT THE OPTION CARE PERSONS SHALL NOT INDEMNIFY THE LENDER,
ITS DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND COUNSEL FROM SUCH DAMAGES
RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE LENDER, ITS
DIRECTORS, OFFICERS, AGENTS, EMPLOYEES AND COUNSEL.
(b) Each Option Care Person hereby indemnifies, defends and holds
harmless the Lender from any loss or liability directly or indirectly arising
out of the use, generation, manufacture, production, storage, release,
threatened release, discharge, disposal or presence of a Hazardous Substance.
This indemnity shall apply whether the Hazardous Substance is on, under or about
any Option Care Person's property or operations or property leased to any Option
Care Person. The indemnity includes but is not limited to attorneys' fees
(including the reasonable estimate of the allocated cost of in-house counsel and
staff). The indemnity extends to the Lender, its parent, subsidiaries and all of
their directors, officers, employees, agents, successors, attorneys and assigns.
"Hazardous Substances" means any substance, material or waste that is or becomes
designated or regulated as "toxic," "hazardous," "pollutant," or "contaminant"
or a similar designation or regulation under any federal, state or local law
(whether under common law, statute, regulation or otherwise) or judicial or
administrative interpretation of such, including without limitation petroleum or
natural gas.
(c) Without limiting the foregoing, if, by reason of any suit or
proceeding of any kind, nature, or description against any Option Care Person or
by any Option Care Person or any other Person against the Lender, which in the
Lender's sole discretion makes it advisable for the Lender to seek counsel for
protection and preservation of its liens and security assets, or to defend its
own interest, such expenses and counsel fees shall be allowed to the Lender. To
the extent that the undertaking to indemnify, pay and hold harmless set forth in
this SECTION 15.11 may be unenforceable because it is violative of any law or
public policy, each Option Care Person shall contribute the maximum portion
which it is permitted to pay and satisfy under applicable law, to the payment
and satisfaction of all indemnified matters incurred by the Lender.
The indemnity contained in this SECTION 15.11 shall survive the payment of the
Obligations and the termination of this Agreement. All of the foregoing costs
and expenses shall be part of the Obligations and secured by the Collateral.
(d) Without limiting the foregoing, the Option Care Persons shall
reimburse the Lender on demand for any amount paid by the Lender to a Blocked
Account Bank pursuant to a Blocked Account Agreement.
15.12 WAIVER OF NOTICES. Unless otherwise expressly provided herein,
each Option Care Person waives presentment, protest and notice of demand or
dishonor and protest as to any instrument, as well as any and all other notices
to which it might otherwise be entitled. No notice to or demand on any Option
Care Person which the Lender may elect to give shall entitle any Option Care
Person to any or further notice or demand in the same, similar or other
circumstances.
15.13 BINDING EFFECT; ASSIGNMENT. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective
representatives, successors and assigns of the parties hereto; PROVIDED,
HOWEVER, that no interest in this Agreement may be assigned by any Option Care
Person without the prior written consent of the Lender. The rights and benefits
of the Lender under this Agreement and the other Loan Documents shall, if the
Lender so agrees, inure to any assignee of the Obligations or any part thereof.
15.14 MODIFICATION. This Agreement is intended by the parties hereto
to be the final, complete, and exclusive expression of the agreement between
them. This Agreement supersedes any and all prior oral or written agreements
relating to the subject matter hereof and may not be contradicted by evidence of
prior, contemporaneous or subsequent oral agreements of the parties. There are
no oral agreements between the parties. No modification, rescission, waiver,
release, or amendment of any provision of this Agreement (including the
Schedules and Exhibits hereto) shall be made, except by a written agreement
signed by the parties hereto.
15.15 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement.
15.16 CAPTIONS. The captions contained in this Agreement or any other
Loan Document (including without limitation the table of contents and the
exhibits and schedules hereto or thereto) are for convenience only, are without
substantive meaning and should not be construed to modify, enlarge, or restrict
any provision.
15.17 RIGHT OF SET-OFF. Whenever an Event of Default exists, the
Lender is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lender or any Affiliate of the
Lender to or for the credit or the account of any Option Care Person against any
and all of the Obligations, whether or not then due and payable.
15.18 PARTICIPATING LENDER'S SECURITY INTERESTS. The Lender may,
without notice to or consent by any Option Care Person, grant one or more
participations in the Loans to Participating Lenders. If a Participating Lender
shall at any time with the knowledge of an Option Care Person participate with
the Lender in the Loans, such Option Care Person hereby grants to such
Participating Lender, and the Lender and such Participating Lender shall have
and are hereby given, a continuing lien on and security interest in any money,
securities and other property of such Option Care Person in the custody or
possession of the Participating Lender, including the right of setoff, to the
extent of the Participating Lender's participation in the Obligations, and such
Participating Lender shall be deemed to have the same right of setoff to the
extent of Participating Lender's participation in the Obligations under this
Agreement as it would have if it were a direct lender.
15.19 ADDITIONAL BORROWERS. Any Subsidiary wholly owned by Option Care
(or wholly owned by any Subsidiary of Option Care) that is not a Borrower party
hereto on the Closing Date may become a Borrower party to this Agreement upon
the satisfaction of the following conditions: (a) such Subsidiary and Option
Care shall have signed and delivered to the Lender an agreement substantially in
the form of Exhibit B hereto (an "ADDITIONAL BORROWER AGREEMENT"); (b) the
Lender shall have received such other documents, agreements, instruments and
opinions as it may reasonably request in connection with such Subsidiary
becoming a Borrower, which shall be in form and substance reasonably
satisfactory to the Lender, including without limitation items of the type
delivered pursuant to SECTION 11.1; (c) the Lender shall have had a reasonable
period of time to conduct (and to cause one or more of its agents or
representatives to conduct) due diligence with respect to such Subsidiary, such
Subsidiary and the Option Care Persons shall have fully cooperated with the
Lender and such agents and representatives in connection with such due
diligence, and the results of such due diligence are satisfactory to the Lender;
(d) such Subsidiary shall be in the same line of business that one or more of
the Borrowers were engaged in on the Closing Date; and (e) the Lender shall have
sent the Borrowers' Agent a notice substantially in the form of Exhibit C hereto
(an "ADDITIONAL BORROWER CONSENT NOTICE").
15.20 JOINT AND SEVERAL LIABILITY. (a) The Borrowers shall be jointly
and severally liable for all Loans and other amounts due to the Lender under
this Agreement, regardless of which Borrower actually receives Loans or other
extensions of credit hereunder or the amount of such Loans received or the
manner in which the Lender accounts for such Loans or other extensions of credit
on its books and records. Each Borrower's Obligations with respect to Loans made
to it, and each Borrower's Obligations arising as a result of the joint and
several liability of the Borrowers hereunder with respect to Loans made to the
other Borrowers hereunder, shall be separate and distinct obligations, but all
such Obligations shall be primary obligations of such Borrower.
(b) Each Borrower's Obligations arising as a result of the joint and
several liability of such Borrower hereunder with respect to Loans or other
extensions of credit made to the other Borrowers hereunder shall, to the fullest
extent permitted by law, be absolute and unconditional irrespective of (i) the
validity, legality, enforceability, avoidance or subordination of the
Obligations of any other Borrower or of any promissory note or other document
evidencing all or any part of the Obligations of any other Borrower, (ii) the
absence of any attempt to collect the Obligations from any other Borrower, any
other guarantor, or any other security therefor, or the absence of any other
action to enforce the same, (iii) the waiver, consent, extension, forbearance or
granting of any indulgence by the Lender with respect to any Obligations or any
provision of any instrument evidencing the Obligations of any other Borrower, or
any part thereof, or any other agreement now or hereafter executed by any other
Borrower and delivered to the Lender, (iv) the failure by the Lender to take any
steps to perfect and maintain its security interest in, or to preserve its
rights to, any security or collateral for the Obligations of any other Borrower,
(v) the Lender's election, in any proceeding instituted under the Federal
Bankruptcy Code, of the application of Section 1111(b)(2) of the Federal
Bankruptcy Code, (vi) any borrowing or grant of a security interest by any other
Borrower, as debtor-in-possession, under Section 364 of the Federal Bankruptcy
Code, (vii) the disallowance of all or any portion of the Lender's claim(s) for
the repayment of the Obligations of any other Borrower under Section 502 of the
Federal Bankruptcy Code, or (viii) any other events, conditions or circumstances
which might constitute a legal or equitable discharge or defense of a guarantor
or of a surety or of any Borrower. With respect to any Borrower's Obligations
arising as a result of the joint and several liability of the Borrowers
hereunder with respect to Loans or other extensions or credit made to any other
Borrower hereunder, each Borrower waives, until all of the Obligations shall
have been paid in full and this Agreement shall have been terminated, any right
to enforce any right of subrogation or any remedy which the Lender now has or
may hereafter have against any Borrower, any endorser or any guarantor of all or
any part of the Obligations, and any benefit of, and any right to participate
in, any security or collateral given to the Lender to secure payment of the
Obligations or any other liability of any Borrower to the Lender.
(c) Upon any Event of Default, the Lender may proceed directly and at
once, without notice, against any Borrower to collect and recover the full
amount, or any portion of, the Obligations, without first proceeding against any
other Borrower or any other Person, or against any security or collateral for
the Obligations. Each Borrower consents and agrees that the Lender shall be
under no obligation to marshal any assets in favor of any Borrower or against or
in payment of any or all of the Obligations.
(d) Notwithstanding the other provisions of this Agreement, each
Option Care Person shall be liable under this Agreement only for the maximum
amount of such liability that can hereby be incurred without rendering its
obligations under this Agreement voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any greater
amount.
[SIGNATURES FOLLOW]
IN WITNESS WHEREOF, the parties have entered into this Agreement on
the date first above written.
BANKAMERICA BUSINESS
CREDIT, INC., as the Lender
By:
----------------------------------
Vice President
OPTION CARE, INC., individually
and as the Borrowers' Agent
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
BORROWERS:
OPTION CARE, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
OPTION CARE ENTERPRISES, INC., OPTION CARE ENTERPRISES, INC.,
a Delaware corporation a Delaware corporation
By: By:
----------------------------- -----------------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxxxx Xxxx
Title: President Title: Chief Financial Officer
OPTION CARE ENTERPRISES, INC.
a Pennsylvania corporation
By:
-----------------------------------
Name:
Title:
OPTION CARE, INC.,
a California corporation
By:
-----------------------------------
Name:
Title:
MANAGEMENT BY INFORMATION, INC.
By:
-----------------------------------
Name:
Title:
OPTION CARE HOME HEALTH
OF CALIFORNIA, INC.
By:
-----------------------------------
Name:
Title:
OPTION CARE HOSPICE, INC.
By:
-----------------------------------
Name:
Title:
NORTH COUNTY HOME I.V., INC.
By:
-----------------------------------
Name:
Title:
OPTION HOME HEALTH, INC.
By:
-----------------------------------
Name:
Title:
HOME CARE OF COLUMBIA, INC.
By:
-----------------------------------
Name:
Title:
OPTION CARE OF DENVER, INC.
By:
-----------------------------------
Name:
Title:
OPTION CARE HOME HEALTH, L.L.C. OPTION CARE HOME HEALTH, L.L.C.
By: By:
------------------------------ -----------------------------------
Name: Xxxxxxx Xxxxxx Name: Xxxxxxx Xxxx
Title: President Title: Chief Financial Officer
REHAB OPTIONS, INC.
By:
-----------------------------------
Name:
Title:
CORDESYS HEALTHCARE
MANAGEMENT, INC.
By:
-----------------------------------
Name:
Title:
EXHIBIT A
to Loan and Security Agreement
FORM OF ACCOUNT DEBTOR NOTICE
[Letterhead of Borrower]
_____________, 19__
CERTIFIED MAIL;
RETURN RECEIPT REQUESTED
[Name and address of Account Debtor]
To Whom It May Concern:
We are pleased to announce that we have entered into a revolving loan
agreement with BankAmerica Business Credit, Inc. ("BankAmerica"). In connection
with that agreement, we have granted a continuing security interest to
BankAmerica in our existing and future receivables and other amounts which you
may owe us from time to time.
Such security interest will continue in effect until such time as
BankAmerica otherwise notifies you in writing. We hereby revoke any notice we
may have given you previously with regard to any security interest granted (or
transfer made) by us to any person or entity other than BankAmerica.
If you have any questions about this notice or anything else, please
contact the undersigned.
Very truly yours,
[NAME OF BORROWER]
By:
--------------------------
Name:
Title:
EXHIBIT B
to Loan and Security Agreement
FORM OF ADDITIONAL BORROWER AGREEMENT
BankAmerica Business Credit, Inc.
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Re: Loan and Security Agreement dated as of February 5, 1999 (as amended,
amended and restated or otherwise modified from time to time, the
"LOAN AND SECURITY AGREEMENT") among BankAmerica Business Credit,
Inc., as the Lender, Option Care, Inc., individually and as the
Borrowers' Agent, and Option Care, Inc. and the Subsidiaries of Option
Care, Inc. from time to time party thereto, as the Borrowers
Ladies and Gentlemen:
This Additional Borrower Agreement is dated as of [ ] and
is made and delivered pursuant to Section 15.19 of the Loan and Security
Agreement, and reference is made thereto for full particulars of the matters
described herein. All capitalized terms defined in the Loan and Security
Agreement and used in this Additional Borrower Agreement without definition
shall have the meanings assigned to them in the Loan and Security Agreement.
Each of [ ](the "ADDITIONAL BORROWER") and the
Borrowers' Agent hereby confirms, represents and warrants to the Lender
that the Additional Borrower is a wholly-owned Subsidiary of Option Care
or a wholly-owned Subsidiary of one of the Subsidiaries of Option Care.
The parties hereto hereby agree that from and after the effective date
specified in the Additional Borrower Consent Notice relating to the Additional
Borrower, the Additional Borrower shall be a "Borrower" party to the Loan and
Security Agreement and, without limiting the foregoing, shall have all of the
rights, obligations, duties and liabilities of a Borrower thereunder. The
Additional Borrower confirms its acceptance of, and consents to, all
representations and warranties, covenants, and other terms and provisions of the
Loan and Security Agreement; provided, however, that the Schedules to the Loan
and Security Agreement are hereby supplemented with the information set forth in
Annex A attached hereto. [Annex A should be attached to the executed Additional
Borrower Agreement] Without limiting the generality of the foregoing, and
without limiting SECTION 7.1 of the Loan and Security Agreement: as security for
the payment and performance of all of the Obligations, the Additional Borrower
hereby grants to the Lender a continuing security interest in, lien on, and
assignment of
all of the Additional Borrower's right, title and interest in, to and under (but
none of the Additional Borrower's obligations under) the Collateral, in each
case wherever located and whether now existing or hereafter arising or acquired.
This Additional Borrower Agreement may be executed in any number of
counterparts, and by the parties hereto in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Additional Borrower
Agreement to be duly executed and delivered by their duly authorized officers as
of the day and year first above written.
[NAME OF ADDITIONAL BORROWER]
By:
--------------------------
Name:
Title:
OPTION CARE, INC.,
as the Borrowers' Agent
By:
--------------------------
Name:
Title:
By:
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Name:
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EXHIBIT C
to Loan and Security Agreement
ADDITIONAL BORROWER CONSENT NOTICE
[Date]
Option Care, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer
Re: Additional Borrower Agreement dated [ ] (the "ADDITIONAL BORROWER
AGREEMENT") between [name of Additional Borrower] (the "ADDITIONAL
BORROWER") and Option Care, Inc., as the Borrowers' Agent
Ladies and Gentlemen:
We have received the Additional Borrower Agreement and the other related
items contemplated by SECTION 15.19 of the Loan and Security Agreement referred
to therein. Please be advised that we consent to the Additional Borrower
becoming a Borrower party to, and agree that the Additional Borrower shall
become a Borrower party to, such Loan and Security Agreement, effective as of
[ ].
Very truly yours,
BANKAMERICA BUSINESS CREDIT, INC.
By:__________________________
Name:
Title:
