1
================================================================================
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
among
MATRIA HEALTHCARE, INC.
and certain subsidiaries,
as Borrowers,
THE LENDERS NAMED HEREIN,
FIRST UNION NATIONAL BANK,
as Administrative Agent,
and
UBS WARBURG LLC,
as Syndication Agent,
$30,000,000 Senior Revolving Credit Facility
Arranged by
FIRST UNION SECURITIES, INC.
Dated as of January 19, 1999
Amended and restated as of July 9, 2001
================================================================================
2
TABLE OF CONTENTS
Page
RECITALS ........................................................................................................ 1
ARTICLE I
DEFINITIONS
1.1 Defined Terms............................................................................................2
1.2 Accounting Terms........................................................................................26
1.3 Other Terms; Construction...............................................................................26
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments.............................................................................................26
2.2 Borrowings..............................................................................................28
2.3 Disbursements; Funding Reliance; Domicile of Loans......................................................31
2.4 Notes...................................................................................................32
2.5 Termination and Reduction of Revolving Credit Commitments and Swingline Commitment......................33
2.6 Mandatory Payments and Prepayments......................................................................33
2.7 Voluntary Prepayments...................................................................................35
2.8 Interest................................................................................................36
2.9 Fees....................................................................................................38
2.10 Interest Periods........................................................................................38
2.11 Conversions and Continuations...........................................................................39
2.12 Method of Payments; Computations........................................................................40
2.13 Recovery of Payments....................................................................................42
2.14 Use of Proceeds.........................................................................................42
2.15 Pro Rata Treatment......................................................................................42
2.16 Increased Costs; Change in Circumstances; Illegality; etc...............................................43
2.17 Taxes...................................................................................................46
2.18 Compensation............................................................................................48
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance................................................................................................48
3.2 Notices.................................................................................................49
3.3 Participations..........................................................................................50
3.4 Reimbursement...........................................................................................50
3.5 Payment by Revolving Loans..............................................................................51
3.6 Payment to Lenders......................................................................................51
i
3
3.7 Obligations Absolute....................................................................................51
3.8 Cash Collateral Account.................................................................................53
3.9 Effectiveness...........................................................................................54
3.10 Existing Letters of Credit..............................................................................54
ARTICLE IV
CONDITIONS OF EFFECTIVENESS, BORROWING
4.1 Conditions of Effectiveness, Initial Borrowing..........................................................54
4.2 Conditions of All Borrowings............................................................................59
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Organization and Power..................................................................................60
5.2 Authorization; Enforceability...........................................................................60
5.3 No Violation............................................................................................60
5.4 Governmental and Third-Party Authorization; Permits.....................................................61
5.5 Litigation..............................................................................................61
5.6 Taxes...................................................................................................61
5.7 Subsidiaries............................................................................................62
5.8 Full Disclosure.........................................................................................62
5.9 Margin Regulations......................................................................................62
5.10 No Material Adverse Change..............................................................................62
5.11 Financial Matters.......................................................................................63
5.12 Ownership of Properties.................................................................................63
5.13 ERISA...................................................................................................64
5.14 Environmental Matters...................................................................................64
5.15 Compliance With Laws....................................................................................65
5.16 Regulated Industries....................................................................................65
5.17 Insurance...............................................................................................65
5.18 Material Contracts......................................................................................66
5.19 Security Documents......................................................................................66
5.20 Labor Relations.........................................................................................66
5.21 Reimbursement...........................................................................................67
5.22 Fraud and Abuse.........................................................................................67
ARTICLE VI
AFFIRMATIVE COVENANTS
6.1 Financial Statements....................................................................................68
6.2 Other Business and Financial Information................................................................69
6.3 Corporate Existence; Franchises; Maintenance of Properties..............................................71
6.4 Compliance with Laws....................................................................................71
6.5 Payment of Obligations..................................................................................71
ii
4
6.6 Insurance...............................................................................................71
6.7 Maintenance of Books and Records; Inspection............................................................71
6.8 [Reserved]..............................................................................................72
6.9 Permitted Acquisitions..................................................................................72
6.10 Creation or Acquisition of Subsidiaries.................................................................74
6.11 Additional Security; Further Assurances.................................................................75
ARTICLE VII
FINANCIAL COVENANTS
7.1 Leverage Ratio..........................................................................................75
7.2 [Reserved]..............................................................................................76
7.3 Fixed Charge Coverage Ratio.............................................................................76
7.4 Consolidated Net Worth..................................................................................76
7.5 Capital Expenditures....................................................................................76
ARTICLE VIII
NEGATIVE COVENANTS
8.1 Merger; Consolidation...................................................................................77
8.2 Indebtedness............................................................................................78
8.3 Liens...................................................................................................79
8.4 Disposition of Assets...................................................................................80
8.5 Investments.............................................................................................81
8.6 Restricted Payments.....................................................................................82
8.7 Transactions with Affiliates............................................................................83
8.8 Lines of Business.......................................................................................84
8.9 Certain Amendments......................................................................................84
8.10 Limitation on Certain Restrictions......................................................................84
8.11 No Other Negative Pledges...............................................................................84
8.12 Fiscal Year.............................................................................................85
8.13 Accounting Changes......................................................................................85
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default.......................................................................................85
9.2 Remedies: Termination of Commitments, Acceleration, etc.................................................87
9.3 Remedies: Set-Off.......................................................................................88
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment.............................................................................................89
iii
5
10.2 Nature of Duties........................................................................................89
10.3 Exculpatory Provisions..................................................................................89
10.4 Reliance by Administrative Agent........................................................................89
10.5 Non-Reliance on Administrative Agent and Other Lenders..................................................90
10.6 Notice of Default.......................................................................................91
10.7 Indemnification.........................................................................................91
10.8 The Administrative Agent in its Individual Capacity.....................................................91
10.9 Successor Administrative Agent..........................................................................92
10.10 Collateral Matters......................................................................................92
10.11 Issuing Lender and Swingline Lender.....................................................................93
10.12 Syndication Agent, Co-Agents............................................................................93
ARTICLE XI
GUARANTY
11.1 Guaranty................................................................................................93
11.2 Right of Set-Off........................................................................................94
11.3 No Subrogation..........................................................................................94
11.4 Amendments, etc. with respect to the Obligations; Waiver of Rights......................................94
11.5 Guaranty Absolute and Unconditional.....................................................................95
11.6 Reinstatement...........................................................................................96
11.7 Payments................................................................................................96
ARTICLE XII
MISCELLANEOUS
12.1 Fees and Expenses.......................................................................................96
12.2 Indemnification.........................................................................................97
12.3 Governing Law; Consent to Jurisdiction..................................................................97
12.4 Arbitration; Preservation and Limitation of Remedies....................................................98
12.5 Notices................................................................................................100
12.6 Amendments, Waivers, etc...............................................................................101
12.7 Assignments, Participations............................................................................102
12.8 No Waiver..............................................................................................104
12.9 Successors and Assigns.................................................................................104
12.10 Survival 105
12.11 Severability...........................................................................................105
12.12 Construction...........................................................................................105
12.13 Confidentiality........................................................................................105
12.14 Counterparts; Effectiveness............................................................................105
12.15 Disclosure of Information..............................................................................106
12.16 Judgment Currency......................................................................................106
12.17 European Monetary Union................................................................................106
12.18 Addition of Borrowers..................................................................................109
12.19 Entire Agreement.......................................................................................110
12.20 Effect of Amendment and Restatement....................................................................110
iv
6
EXHIBITS
Exhibit A-1 Form of Dollar Revolving Credit Note
Exhibit A-2 Form of Foreign Currency Revolving Credit Note
Exhibit A-3 Form of Swingline Note
Exhibit B-1 Form of Notice of Borrowing
Exhibit B-2 Form of Notice of Swingline Borrowing
Exhibit B-3 Form of Notice of Conversion/Continuation
Exhibit B-4 Form of Letter of Credit Notice
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment and Acceptance
Exhibit E Form of Security Agreement
Exhibit F Form of Matria Pledge Agreement
Exhibit G Form of Subsidiary Guaranty
Exhibit H Form of Joinder Agreement
Exhibit I Form of Intercompany Note
Exhibit J Form of Financial Condition Certificate
SCHEDULES
Schedule 1.1(a) Revolving Credit Commitments
Schedule 1.1(b) Lender Addresses
Schedule 5.4 Consents and Approvals
Schedule 5.7 Subsidiaries
Schedule 5.12 Real Property
Schedule 5.17 Insurance
Schedule 5.18 Material Contracts
Schedule 8.2 Indebtedness
Schedule 8.3 Liens
Schedule 8.6 Restricted Payments
v
7
FIRST AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 19th
day of January, 1999 and amended and restated as of the 9th day of July, 2001
(this "Agreement"), is made among MATRIA HEALTHCARE, INC., a Delaware
corporation with its principal offices in Marietta, Georgia ("Matria"), certain
Foreign Subsidiaries (as hereinafter defined) of Matria that become parties
hereto after the date hereof pursuant to SECTION 12.18 (collectively, together
with Matria, the "Borrowers"), the banks and financial institutions listed on
the signature pages hereto or that become parties hereto after the date hereof
(collectively, the "Lenders"), FIRST UNION NATIONAL BANK ("First Union"), as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"), and UBS WARBURG LLC, as Syndication Agent. Capitalized terms used
herein without definition shall have the meanings given to them in SECTION 1.1.
RECITALS
A. Matria, certain banks and other financial institutions, First
Union, as Administrative Agent, and Xxxxxx Trust and Savings Bank, as Co-Agent,
are parties to a Credit Agreement, dated as of January 19, 1999 (as amended to,
but not including, the Restatement Effective Date, the "Existing Credit
Agreement"), providing for a term loan facility in the aggregate principal
amount of $80,000,000 and a revolving credit facility in the aggregate principal
amount of $45,000,000 on the terms and subject to the conditions set forth
therein. The proceeds of borrowings made under the Existing Credit Agreement on
the Closing Date (as defined therein) were used, among other things, to pay a
portion of the purchase price of the Borrower's acquisition, from Xxxxxx Medical
Management, LLC, a Georgia limited liability company ("Xxxxxx"), of the assets
relating to Xxxxxx'x domestic and international diabetes disease management and
microsampling businesses (the "Xxxxxx Acquisition").
B. Pursuant to the Sixth Amendment to Credit Agreement, dated as
of June 29, 2001, among Matria, the Lenders party thereto, and the
Administrative Agent (the "Sixth Amendment"), certain Lenders made new term
loans to Matria in the aggregate principal amount of $11,000,000, on the terms
and subject to the conditions set forth in the Sixth Amendment, the proceeds of
which Matria used to repurchase a portion of its Series A Preferred Stock and
Series B Preferred Stock issued to Xxxxxx in connection with the Xxxxxx
Acquisition.
C. Matria intends to issue its 11% Senior Notes due 2008 in the
aggregate principal amount of $125,000,000 (including any registered notes
issued by Matria and exchanged for the original notes pursuant to the terms of
the Senior Note Indenture (as hereinafter defined), and as the same may be
amended, modified or supplemented from time to time in accordance with the terms
thereof and of this Agreement, the "Senior Notes"). The proceeds of the issuance
of the Senior Notes will be used, in part, to repurchase the remaining Series A
Preferred Stock and Series B Preferred Stock of Matria owned by Xxxxxx and
certain warrants for the purchase of Matria's common stock that are owned by
Xxxxxx, to repay certain subordinated indebtedness owed to Xxxxxx, and to repay
in full the indebtedness outstanding under the Existing Credit Agreement.
1
8
D. Matria has requested that the Lenders amend and restate the
Existing Credit Agreement to reflect the transactions described above and to
make certain other amendments to the terms thereof, and the Lenders have agreed
to make such amendments by amending and restating the Existing Credit Agreement
in its entirety on the terms and subject to the conditions hereinafter set
forth.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual provisions, covenants
and agreements herein contained, the parties hereto hereby agree that, on and as
of the Restatement Effective Date, the Existing Credit Agreement shall be
amended and restated in its entirety as follows:
ARTICLE I
DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement, in addition to
the terms defined elsewhere herein, the following terms shall have the meanings
set forth below (such meanings to be equally applicable to the singular and
plural forms thereof):
"Account Designation Letter" shall mean a letter from one or more
Borrowers to the Administrative Agent, duly completed and signed by an
Authorized Officer of each such Borrower and in form and substance satisfactory
to the Administrative Agent, listing any one or more accounts to which any such
Borrower may from time to time request the Administrative Agent to forward the
proceeds of any Loans made hereunder.
"Acquisition" shall mean any transaction or series of related
transactions, consummated on or after the date hereof, by which Matria directly,
or indirectly through one or more Subsidiaries, (i) acquires any going business,
or all or substantially all of the assets, of any Person, whether through
purchase of assets, merger or otherwise, or (ii) acquires securities or other
ownership interests of any Person having at least a majority of combined voting
power of the then outstanding securities or other ownership interests of such
Person.
"Acquisition Amount" shall mean, with respect to any Acquisition, the
sum (without duplication) of (i) the amount of cash paid by Matria and its
Subsidiaries in connection with such Acquisition, (ii) the Fair Market Value of
all Capital Stock of Matria issued or given in connection with such Acquisition,
(iii) the amount (determined by using the face amount or the amount payable at
maturity, whichever is greater) of all Indebtedness incurred, assumed or
acquired by Matria and its Subsidiaries in connection with such Acquisition,
(iv) all additional purchase price amounts in connection with such Acquisition
in the form of earnouts and other contingent obligations that should be recorded
as a liability on the balance sheet of Matria and its Subsidiaries or expensed,
in either event in accordance with GAAP, Regulation S-X under the Securities Act
of 1933, as amended, or any other rule or regulation of the Securities and
Exchange Commission, (v) all amounts paid in respect of covenants not to compete
and consulting agreements in connection with such Acquisition, (vi) the amount
of all transaction
2
9
fees and expenses (including, without limitation, legal, accounting and finders'
fees and expenses) incurred by Matria and its Subsidiaries in connection with
such Acquisition and (vii) the aggregate fair market value of all other
consideration given by Matria and its Subsidiaries in connection with such
Acquisition. For purposes of this Agreement, all amounts included in calculating
the Acquisition Amount with respect to any Acquisition for which the Acquisition
Amount is payable or determinable in a currency other than Dollars shall be
valued at the Dollar Equivalent thereof as of the relevant date of
determination.
"Adjusted Base Rate" shall mean, at any time with respect to any Base
Rate Loan, a rate per annum equal to the Base Rate as in effect at such time
plus the Applicable Margin Percentage for Base Rate Loans as in effect at such
time.
"Adjusted IBOR Rate" shall mean, at any time with respect to any
Foreign Currency Revolving Loan, a rate per annum equal to the IBOR Rate as in
effect at such time plus the Applicable Margin Percentage for Foreign Currency
Revolving Loans as in effect at such time.
"Adjusted LIBOR Rate" shall mean, at any time with respect to any LIBOR
Loan, a rate per annum equal to the LIBOR Rate as in effect at such time plus
the Applicable Margin Percentage for LIBOR Loans as in effect at such time.
"Administrative Agent" shall mean First Union, in its capacity as
Administrative Agent appointed under ARTICLE X, and its successors and permitted
assigns in such capacity.
"Affiliate" shall mean, as to any Person, each other Person that
directly, or indirectly through one or more intermediaries, owns or controls, is
controlled by or under common control with, such Person or is a director or
officer of such Person. For purposes of this definition, with respect to any
Person "control" shall mean (i) the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise, or
(ii) the beneficial ownership of securities or other ownership interests of such
Person having 10% or more of the combined voting power of the then outstanding
securities or other ownership interests of such Person ordinarily (and apart
from rights accruing under special circumstances) having the right to vote in
the election of directors or other governing body of such Person.
"Agreement" shall mean this First Amended and Restated Credit
Agreement, as amended, modified or supplemented from time to time.
"Applicable Currency" shall mean (i) in the case of Dollar Revolving
Loans, Dollars, and (ii) in the case of any Foreign Currency Revolving Loans,
the Foreign Currency in which such Loans are to be made or maintained, as
selected pursuant to the relevant Notice of Borrowing or Notice of
Conversion/Continuation.
"Applicable Margin Percentage" shall mean, at any time, the applicable
percentage (i) to be added to the Base Rate pursuant to SECTION 2.8 for purposes
of determining the Adjusted Base Rate, (ii) to be added to the IBOR Rate
pursuant to SECTION 2.8 for purposes of determining the Adjusted IBOR Rate, and
(iii) to be added to the LIBOR Rate pursuant to SECTION 2.8 for purposes of
determining the Adjusted LIBOR Rate, in each case as determined under the
following matrix with reference to the Leverage Ratio:
3
10
Applicable Margin
Percentage for Foreign
Applicable Margin Currency Revolving
Percentage for Loans and
Leverage Ratio Base Rate Loans LIBOR Loans
-------------- --------------- -----------------------
Greater than or equal to 3.0 to 1.0 2.500% 3.500%
Greater than or equal to 2.5 to 1.0 but 2.250% 3.250%
less than 3.0 to 1.0
Greater than or equal to 2.0 to 1.0 but 2.000% 3.000%
less than 2.5 to 1.0
Greater than or equal to 1.5 to 1.0 but 1.750% 2.750%
less than 2.0 to 1.0
Less than 1.5 to 1.0 1.500% 2.500%
On each Adjustment Date (as hereinafter defined), the Applicable Margin
Percentage for all Loans shall be adjusted effective as of such date (based upon
the calculation of the Leverage Ratio as of the last day of the fiscal period to
which such Adjustment Date relates) in accordance with the above matrix;
provided, however, that, notwithstanding the foregoing or anything else herein
to the contrary, if at any time Matria shall have failed to deliver the
financial statements and a Compliance Certificate as required by SECTION 6.1(A)
or SECTION 6.1(B), as the case may be, and SECTION 6.2(A), then at the election
of the Required Lenders, at all times from and including the date on which such
statements and Compliance Certificate are required to have been delivered to the
date on which the same shall have been delivered, each Applicable Margin
Percentage shall be determined in accordance with the above matrix as if the
Leverage Ratio were greater than or equal to 3.0 : 1.0 (notwithstanding the
actual Leverage Ratio). For purposes of this definition, "Adjustment Date" shall
mean, with respect to any fiscal period of Matria, the tenth (10th) day (or, if
such day is not a Business Day, on the next succeeding Business Day) after
delivery by Matria in accordance with SECTION 6.1(A) or SECTION 6.1(B), as the
case may be, of (i) financial statements as of the end of and for such fiscal
period and (ii) a duly completed Compliance Certificate with respect to such
fiscal period. Until the first Adjustment Date occurring after the Restatement
Effective Date, each Applicable Margin Percentage shall be determined in
accordance with the above matrix based upon the Leverage Ratio as set forth in
the Covenant Compliance Worksheet delivered with respect to the fiscal quarter
ended March 31, 2001.
"Applicable Number of Business Days" shall mean (i) with respect to all
notices and determinations in connection with Foreign Currency Revolving Loans,
four (4) Business Days, (ii) with respect to all notices and determinations in
connection with LIBOR Loans, three (3) Business Days, and (iii) with respect to
all notices and determinations in connection with Base Rate Loans other than
Swingline Loans, one (1) Business Day.
"Arranger" shall mean First Union Securities, Inc.
4
11
"Asset Disposition" shall mean any sale, assignment, transfer or other
disposition by Matria or any of its Subsidiaries to any other Person (other than
to Matria or to a Wholly Owned Subsidiary), whether in one transaction or in a
series of related transactions, of any of its assets, business units or other
properties (including any interests in property, whether tangible or intangible,
and including Capital Stock of Subsidiaries), excluding (i) sales of inventory
in the ordinary course of business, (ii) the sale or exchange of used or
obsolete equipment to the extent (y) the proceeds of such sale are applied
towards, or such equipment is exchanged for, similar replacement equipment or
(z) such equipment is no longer necessary for the operations of Matria or its
applicable Subsidiary in the ordinary course of business, and (iii) sales or
other dispositions of assets to the extent the aggregate amount of consideration
received by Matria and its Subsidiaries in connection therewith does not exceed
$250,000 for all such sales and dispositions during any fiscal year.
"Assignee" shall have the meaning given to such term in SECTION
12.7(A).
"Assignment and Acceptance" shall mean an Assignment and Acceptance
entered into between a Lender and an Assignee and accepted by the Administrative
Agent and Matria, in substantially the form of EXHIBIT D.
"Authorized Officer" shall mean, with respect to any action of any
Borrower specified herein, any officer of such Borrower duly authorized by
resolution of its board of directors to take such action on its behalf, and
whose signature and incumbency shall have been certified to the Administrative
Agent by the secretary or an assistant secretary of such Borrower.
"Bankruptcy Code" shall mean 11 X.X.X.xx.xx. 101 et seq., as amended
from time to time, and any successor statute.
"Base Rate" shall mean the higher of (i) the per annum interest rate
publicly announced from time to time by First Union in Charlotte, North
Carolina, to be its prime rate (which may not necessarily be its best lending
rate), as adjusted to conform to changes as of the opening of business on the
date of any such change in such prime rate, and (ii) the Federal Funds Rate plus
0.5% per annum, as adjusted to conform to changes as of the opening of business
on the date of any such change in the Federal Funds Rate.
"Base Rate Loan" shall mean, at any time, any Loan that bears interest
at such time at the Adjusted Base Rate.
"Borrowing" shall mean the incurrence by any Borrower (including as a
result of conversions and continuations of outstanding Loans pursuant to SECTION
2.11) on a single date of a group of Loans of a single Type (or a Swingline Loan
made by the Swingline Lender) and, in the case of Fixed Rate Loans, as to which
a single Interest Period is in effect.
"Borrowing Date" shall mean, with respect to any Borrowing, the date
upon which such Borrowing is made.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) or (iii) below, any day other than a Saturday or Sunday, a legal
holiday or a day on which commercial banks in Charlotte, North Carolina are
authorized or required by law to be closed, (ii) with
5
12
respect to all notices and determinations in connection with, and payments in
respect of, LIBOR Loans, any day described in clause (i) above that is also a
day on which tradings are conducted in the London interbank Eurodollar market,
and (iii) with respect to all notices and determinations in connection with, and
payments in respect of, any Foreign Currency Revolving Loans, any day described
in clauses (i) and (ii) that is also (y) not a legal holiday or a day on which
banking institutions are authorized or required by law to close in the city of
the country of issuance of the Applicable Currency where the relevant
disbursement or payment office of the Administrative Agent or its applicable
Correspondent is located and (z) a day on which tradings are conducted in the
interbank market for the Applicable Currency.
"Capital Expenditures" shall mean, for any period, the aggregate amount
(whether paid in cash or accrued as a liability) that would, in accordance with
GAAP, be included on a Consolidated statement of cash flows for such period as
additions to equipment, fixed assets, real property or improvements or other
capital assets (including, without limitation, capital lease obligations);
provided, however, that Capital Expenditures shall not include any such
expenditures (i) for replacements and substitutions for capital assets, to the
extent made with the proceeds of insurance, (ii) made in connection with
Permitted Acquisitions or (iii) made by Q Liquidation.
"Capital Stock" shall mean (i) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(whether voting or nonvoting, and whether common or preferred) of such
corporation, and (ii) with respect to any Person that is not a corporation, any
and all partnership, membership, limited liability company or other equity
interests of such Person; and in each case, any and all warrants, rights or
options to purchase any of the foregoing.
"Cash Collateral Account" shall have the meaning given to such term in
SECTION 3.8.
"Cash Equivalents" shall mean (i) securities issued or unconditionally
guaranteed by the United States of America or any agency or instrumentality
thereof, backed by the full faith and credit of the United States of America and
maturing within 90 days from the date of acquisition, (ii) commercial paper
issued by any Person organized under the laws of the United States of America,
maturing within 90 days from the date of acquisition and, at the time of
acquisition, having a rating of at least A-1 or the equivalent thereof by
Standard & Poor's Ratings Services or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., (iii) time deposits and certificates of deposit
maturing within 90 days from the date of issuance and issued by a bank or trust
company organized under the laws of the United States of America or any state
thereof that has combined capital and surplus of at least $500,000,000 and that
has (or is a subsidiary of a bank holding company that has) a long-term
unsecured debt rating of at least A or the equivalent thereof by Standard &
Poor's Ratings Services or at least A2 or the equivalent thereof by Xxxxx'x
Investors Service, Inc., (iv) repurchase obligations with a term not exceeding
seven (7) days with respect to underlying securities of the types described in
clause (i) above entered into with any bank or trust company meeting the
qualifications specified in clause (iii) above, and (v) money market funds at
least 95% of the assets of which are continuously invested in securities of the
type described in clause (i) above.
6
13
"Casualty Event" shall mean, with respect to any property (including
any interest in property) of Matria or any of its Subsidiaries, any loss of,
damage to, or condemnation or other taking of, such property for which Matria or
such Subsidiary receives insurance proceeds, proceeds of a condemnation award or
other compensation.
"Certificate of Designations" shall mean, with respect to the Series A
Preferred Stock or the Series B Preferred Stock, the Certificate of
Designations, Preferences and Relative, Participating, Optional and other
Special Rights therefor authorized and adopted by Matria's board of directors
and contained in Matria's certificate of incorporation as filed with the
Delaware Secretary of State, in each case as amended, modified or restated from
time to time in accordance with the terms of this Agreement.
"Class," with respect to any Loan, shall mean and refer to whether such
Loan is a Revolving Loan or a Swingline Loan, each of which constitutes a Class.
"Collateral" shall mean all the assets, property and interests in
property that shall from time to time be pledged or be purported to be pledged
as direct or indirect security for the Obligations pursuant to any one or more
of the Security Documents.
"Commitment Fee Percentage" shall mean, at any time, the applicable
percentage to be used in calculating the commitment fee payable pursuant to
SECTION 2.9(B), as determined under the following matrix with reference to the
Leverage Ratio:
Commitment Fee
Leverage Ratio Percentage
-------------- ---------------
Greater than or equal to 3.0 to 1.0 1.50%
Greater than or equal to 2.5 to 1.0 but 1.35%
less than 3.0 to 1.0
Greater than or equal to 2.0 to 1.0 but 1.25%
less than 2.5 to 1.0
Greater than or equal to 1.5 to 1.0 but 1.00%
less than 2.0 to 1.0
Less than 1.5 to 1.0 1.00%
On each Adjustment Date (as hereinafter defined), the Commitment Fee
Percentage shall be adjusted effective as of such date (based upon the
calculation of the Leverage Ratio as of the last day of the fiscal period to
which such Adjustment Date relates) in accordance with the above matrix;
provided, however, that, notwithstanding the foregoing or anything else herein
to the contrary, if at any time Matria shall have failed to deliver the
financial statements and a Compliance Certificate as required by SECTION 6.1(A)
or SECTION 6.1(B), as the case may be, and SECTION 6.2(A), then at the election
of the Required Lenders, at all times from and including the date on which such
statements and Compliance Certificate are required to have been delivered to the
date on which the same shall have been delivered, the Commitment Fee Percentage
shall be determined in accordance with the above matrix as if the Leverage Ratio
were greater than or equal to 3.0 : 1.0 (notwithstanding the actual Leverage
Ratio). For purposes of this definition,
7
14
"Adjustment Date" shall mean, with respect to any fiscal period of Matria, the
tenth (10th) day (or, if such day is not a Business Day, on the next succeeding
Business Day) after delivery by Matria in accordance with SECTION 6.1(A) or
SECTION 6.1(B), as the case may be, of (i) financial statements as of the end of
and for such fiscal period and (ii) a duly completed Compliance Certificate with
respect to such fiscal period. Until the first Adjustment Date occurring after
the Restatement Effective Date, the Commitment Fee Percentage shall be
determined in accordance with the above matrix based upon the Leverage Ratio as
set forth in the Covenant Compliance Worksheet delivered with respect to the
fiscal quarter ended March 31, 2001.
"Compliance Certificate" shall mean a fully completed and duly executed
certificate in the form of EXHIBIT C, together with a Covenant Compliance
Worksheet.
"Consolidated" shall mean, with respect to any financial statements or
financial statement items, such statements or items of Matria and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any period, the aggregate of (i)
Consolidated Net Income for such period, plus (ii) the sum of Consolidated
Interest Expense, federal, state, local and other income taxes, depreciation,
amortization of intangible assets, and extraordinary or nonrecurring losses
(including in connection with the sale or write-down of assets) and other
noncash expenses or charges reducing income for such period, all to the extent
taken into account in the calculation of Consolidated Net Income for such
period, minus (iii) the sum of extraordinary or nonrecurring gains (including in
connection with the sale or write-up of assets) and other noncash credits
increasing income for such period, all to the extent taken into account in the
calculation of Consolidated Net Income for such period; provided, however, that
the net income of Q Liquidation shall be excluded in such calculation.
"Consolidated Fixed Charges" shall mean, for any period, the aggregate
(without duplication) of the following, all determined on a Consolidated basis
for such period: (a) Consolidated Interest Expense for such period, (b)
aggregate expense for federal, state, local and other income taxes for such
period; provided that, in calculating Consolidated Fixed Charges for any period
of four consecutive fiscal quarters ending on or after March 31, 2001, only cash
payments actually made during such period in respect of federal, state, local
and other income taxes shall be taken into account, (c) Capital Expenditures for
such period, (d) the aggregate (without duplication) of all scheduled payments
of principal on Funded Debt required to have been made during such period
(whether or not such payments are actually made), and (e) the aggregate of all
amounts paid during such period in respect of Contingent Purchase Price
Obligations.
"Consolidated Indebtedness" shall mean, as of the last day of any
fiscal quarter, the aggregate (without duplication) of all Indebtedness of
Matria and its Subsidiaries as of such date (provided that (a) any Guaranty
Obligation shall be included only in the event that the corresponding "primary
obligation" (as such term is defined in the definition of Guaranty Obligation
herein) constitutes Indebtedness, (b) any Contingent Purchase Price Obligation
shall be included only to the extent such obligation should be recorded as a
liability on the balance sheet of Matria and its Subsidiaries in accordance with
GAAP, and (c) no Indebtedness of Matria under or relating to Hedge Agreements
shall be included), determined on a Consolidated basis.
8
15
For purposes of calculating Consolidated Indebtedness at any date, (i) each
Guaranty Obligation of Matria or any of its Subsidiaries required to be included
in such determination as set forth hereinabove shall be valued at the aggregate
stated or determinable principal amount (whether or not then drawn or
outstanding) of the Indebtedness that is the corresponding "primary obligation"
as of such date or, if such amount is not stated or determinable, the maximum
reasonably anticipated liability in respect thereof as of such date (assuming
the primary obligor is required to perform thereunder), and (ii) each Contingent
Purchase Price Obligation of Matria or any of its Subsidiaries required to be
included in such determination as set forth hereinabove shall be valued at the
aggregate stated principal amount thereof.
"Consolidated Interest Expense" shall mean, for any period, the sum
(without duplication) of (i) total interest expense for such period in respect
of Funded Debt (including, without limitation, all such interest expense accrued
or capitalized during such period, whether or not actually paid during such
period), (ii) all net amounts payable under or in respect of Hedge Agreements,
to the extent paid or accrued during such period, and (iii) all commitment fees
and other ongoing fees in respect of Funded Debt (including the commitment fee
provided for under SECTION 2.9(B) and the fees provided for under the Fee
Letter) paid, accrued or capitalized during such period, all determined on a
Consolidated basis for such period; provided, however, that solely for purposes
of calculating Consolidated Fixed Charges, all noncash interest expenses, fees
and other amounts of the types described in clauses (i) through (iii) above
(including, without limitation, the amortization or write-off of deferred
financing fees, debt discount and debt issuance costs and commissions, premiums
paid in respect of Hedge Agreements, and other noncash fees and charges
associated with Indebtedness) shall be excluded in the determination of
Consolidated Interest Expense.
"Consolidated Net Income" shall mean, for any period, net income (or
loss) of Matria and its Subsidiaries for such period, determined on a
Consolidated basis.
"Consolidated Net Revenues" shall mean, for any period, net revenues of
Matria and its Subsidiaries for such period, determined on a Consolidated basis.
"Consolidated Net Worth" shall mean, as of any date of determination,
the net worth of Matria and its Subsidiaries as of such date, determined on a
Consolidated basis and including the Series A Preferred Stock and Series B
Preferred Stock (to the extent outstanding on such date), but excluding any
Disqualified Capital Stock.
"Contingent Purchase Price Obligations" shall mean any "earnout"
obligations or similar deferred or contingent purchase price obligations of
Matria or any of its Subsidiaries incurred or created in connection with a
Permitted Acquisition.
"Convertible Subordinated Debentures" shall mean the 8% Convertible
Subordinated Debentures of Matria due December 31, 2001.
"Correspondent" shall mean First Union National Bank, London branch, or
any other financial institution designated by the Administrative Agent to act as
its correspondent hereunder in respect of the disbursement and payment of
Foreign Currency Revolving Loans.
9
16
"Covenant Compliance Worksheet" shall mean a fully completed worksheet
in the form of Attachment A to EXHIBIT C.
"Credit Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Fee Letter, the Security Agreement, the Pledge Agreements, the
Subsidiary Guaranty, the Mortgages, any other Security Documents, the
Intercompany Notes, and all other agreements, instruments, documents and
certificates now or hereafter executed and delivered to the Administrative Agent
or any Lender by or on behalf of Matria or any of its Subsidiaries with respect
to this Agreement and the transactions contemplated hereby, in each case as
amended, modified, supplemented or restated from time to time, but specifically
excluding any Hedge Agreement to which Matria and any Lender or Affiliate of any
Lender are parties.
"Default" shall mean any event or condition that, with the passage of
time or giving of notice, or both, would constitute an Event of Default.
"Disqualified Capital Stock" shall mean, with respect to any Person,
any Capital Stock of such Person that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event or otherwise, (i) matures or is mandatorily
redeemable or subject to any mandatory repurchase requirement, pursuant to a
sinking fund obligation or otherwise, (ii) is redeemable or subject to any
mandatory repurchase requirement at the sole option of the holder thereof, or
(iii) is convertible into or exchangeable for (whether at the option of the
issuer or the holder thereof) (a) debt securities or (b) any Capital Stock
referred to in (i) or (ii) above, in each case under (i), (ii) or (iii) above at
any time on or prior to the Revolving Credit Maturity Date; provided, however,
that (y) only the portion of Capital Stock that so matures or is mandatorily
redeemable, is so redeemable at the option of the holder thereof, or is so
convertible or exchangeable on or prior to such date shall be deemed to be
Disqualified Capital Stock, and (z) the Series A Preferred Stock and Series B
Preferred Stock shall not (so long as such stock has, in each case, the terms,
preferences and rights given to it in the applicable Certificate of Designations
as in effect on the Original Closing Date) be deemed Disqualified Capital Stock
hereunder for purposes of any determination of Disqualified Capital Stock as of
a date prior to the Restatement Effective Date.
"Dollar Amount" shall mean (i) with respect to Dollars or an amount
denominated in Dollars, such amount, and (ii) with respect to an amount
denominated in a Foreign Currency, the Dollar Equivalent of such amount on the
date contemplated by the applicable section of this Agreement.
"Dollar Equivalent" shall mean (i) with respect to each Loan made or
continued in a Foreign Currency, except as specifically provided otherwise
herein, the amount of Dollars into which the Administrative Agent could, in
accordance with its customary commercial practice from time to time in the
applicable interbank foreign exchange market, convert such amount of Foreign
Currency at the most favorable spot rate of exchange determined by the
Administrative Agent to be available to it (inclusive of all reasonable and
related costs of conversion, if any are actually incurred) at or about 11:00
a.m., Charlotte time, two (2) Business Days prior to the date such Loan is made
or continued (or is to be made or continued), for purchase on such date, and
(ii) with respect to any other amount denominated in a Foreign Currency (and,
for purposes of SECTIONS 2.6(B) and 2.6(C), with respect to each Loan made or
continued in a Foreign Currency),
10
17
the amount of Dollars into which the Administrative Agent could convert such
amount of Foreign Currency at the most favorable spot rate of exchange
determined by the Administrative Agent to be available to it (inclusive of all
reasonable and related costs of conversion, if any are actually incurred) as of
the date of determination.
"Dollar Revolving Credit Notes" shall mean the promissory notes of
Matria in substantially the form of EXHIBIT A-1, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Dollar Revolving Loans" shall have the meaning given to such term in
SECTION 2.1(A).
"Dollars" or "$" shall mean dollars of the United States of America.
"Domestic Subsidiary" shall mean any Subsidiary of Matria that is
organized under the laws of the United States of America or any state thereof or
the District of Columbia.
"EMU" shall have the meaning given to such term in SECTION 12.17.
"EMU legislation" shall have the meaning given to such term in SECTION
12.17.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"ERISA Affiliate" shall mean any Person (including any trade or
business, whether or not incorporated) that would be deemed to be under "common
control" with, or a member of the same "controlled group" as, Matria or any of
its Subsidiaries, within the meaning of Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code or Section 4001 of ERISA.
"ERISA Event" shall mean any of the following with respect to a Plan or
Multiemployer Plan, as applicable: (i) a Reportable Event with respect to a Plan
or a Multiemployer Plan, (ii) a complete or partial withdrawal by Matria or any
ERISA Affiliate from a Multiemployer Plan that results in liability under
Section 4201 or 4204 of ERISA, or the receipt by Matria or any ERISA Affiliate
of notice from a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has
terminated under Section 4041A of ERISA, (iii) the distribution by Matria or any
ERISA Affiliate under Section 4041 or 4041A of ERISA of a notice of intent to
terminate any Plan or the taking of any action to terminate any Plan, (iv) the
commencement of proceedings by the PBGC under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan, or the
receipt by Matria or any ERISA Affiliate of a notice from any Multiemployer Plan
that such action has been taken by the PBGC with respect to such Multiemployer
Plan, (v) the institution of a proceeding by any fiduciary of any Multiemployer
Plan against Matria or any ERISA Affiliate to enforce Section 515 of ERISA,
which is not dismissed within thirty (30) days, (vi) the imposition upon Matria
or any ERISA Affiliate of any liability under Title IV of ERISA, other than for
PBGC premiums due but not delinquent under Section 4007 of ERISA, or the
imposition or threatened imposition of any Lien upon any assets of Matria or any
ERISA Affiliate as a result of any alleged failure to comply with the Internal
Revenue Code or ERISA in respect of any Plan, (vii) the engaging in or otherwise
becoming liable for a nonexempt
11
18
Prohibited Transaction by Matria or any ERISA Affiliate, (viii) a violation of
the applicable requirements of Section 404 or 405 of ERISA or the exclusive
benefit rule under Section 401(a) of the Internal Revenue Code by any fiduciary
of any Plan for which Matria or any of its ERISA Affiliates may be directly or
indirectly liable or (ix) the adoption of an amendment to any Plan that,
pursuant to Section 401(a)(29) of the Internal Revenue Code or Section 307 of
ERISA, would result in the loss of tax-exempt status of the trust of which such
Plan is a part if Matria or an ERISA Affiliate fails to timely provide security
to such Plan in accordance with the provisions of such sections.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States or any state thereof and having total assets in
excess of $1,000,000,000, (ii) a commercial bank organized under the laws of any
other country that is a member of the Organization for Economic Cooperation and
Development or any successor thereto (the "OECD") or a political subdivision of
any such country and having total assets in excess of $1,000,000,000, provided
that such bank or other financial institution is acting through a branch or
agency located in the United States, in the country under the laws of which it
is organized or in another country that is also a member of the OECD, (iii) the
central bank of any country that is a member of the OECD, (iv) a finance
company, insurance company or other financial institution or fund that is
engaged in making, purchasing or otherwise investing in loans in the ordinary
course of its business and having total assets in excess of $500,000,000, (v)
any Affiliate of an existing Lender or (vi) any other Person approved by the
Required Lenders, which approval shall not be unreasonably withheld.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
accusations, allegations, notices of noncompliance or violation, investigations
(other than internal reports prepared by any Person in the ordinary course of
its business and not in response to any third party action or request of any
kind) or proceedings relating in any way to any actual or alleged violation of
or liability under any Environmental Law by Matria or any of its Subsidiaries or
relating to any permit issued, or any approval given, under any such
Environmental Law to Matria or any of its Subsidiaries (collectively, "Claims"),
including, without limitation, (i) any and all Claims by Governmental
Authorities for enforcement, cleanup, removal, response, remedial or other
actions or damages pursuant to any applicable Environmental Law and (ii) any and
all Claims by any third party seeking damages, contribution, indemnification,
cost recovery, compensation or injunctive relief resulting from Hazardous
Substances or arising from alleged injury or threat of injury to human health or
the environment.
"Environmental Laws" shall mean any and all applicable federal, state
and local laws, statutes, ordinances, rules, regulations, permits, licenses,
approvals, rules of common law and orders of courts or Governmental Authorities,
relating to the protection of human health or the environment, now or hereafter
in effect and in each case as amended from time to time, including, without
limitation, requirements pertaining to the manufacture, processing,
distribution, use, treatment, storage, disposal, transportation, handling,
reporting, licensing, permitting, investigation or remediation of Hazardous
Substances.
"Euro" shall have the meaning given to such term in SECTION 12.17.
12
19
"Euro unit" shall have the meaning given to such term in SECTION 12.17.
"Event of Default" shall have the meaning given to such term in SECTION
9.1.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Existing Credit Agreement" shall have the meaning given to such term
in the recitals hereto.
"Existing Credit Agreement Indebtedness" shall have the meaning given
to such term in SECTION 4.1(I).
"Existing Letters of Credit" shall mean all Letters of Credit (as
defined in the Existing Credit Agreement) issued under the Existing Credit
Agreement and outstanding and undrawn (in whole or in part) on the Restatement
Effective Date.
"Fair Market Value" shall mean, with respect to any Capital Stock of
Matria given in connection with an Acquisition, the value given to such Capital
Stock for purposes of such Acquisition by the parties thereto, as determined in
good faith pursuant to the relevant acquisition agreement or otherwise in
connection with such Acquisition.
"Federal Funds Rate" shall mean, for any period, a fluctuating per
annum interest rate (rounded upwards, if necessary, to the nearest 1/100 of one
percentage point) equal for each day during such period to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by the Administrative Agent.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System or any successor thereto.
"Fee Letter" shall mean the letter from First Union to Matria, dated
December 21, 1998, as supplemented by the letter from First Union to Matria
dated June 18, 2001 and as further amended, modified or supplemented from time
to time, relating to certain fees payable by Matria in respect of the
transactions contemplated by this Agreement.
"Financial Condition Certificate" shall mean a fully completed and duly
executed certificate, substantially in the form of EXHIBIT J, together with the
attachments thereto.
"Financial Officer" shall mean, with respect to Matria, the chief
financial officer, vice president - finance, principal accounting officer or
treasurer of Matria.
13
20
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter, the ratio of (i) Consolidated EBITDA for the period of four
consecutive fiscal quarters then ending to (ii) Consolidated Fixed Charges for
such period.
"Fixed Rate" shall mean the IBOR Rate or the LIBOR Rate, or both, as
the context may require.
"Fixed Rate Loans" shall mean any or all of the Foreign Currency
Revolving Loans and the LIBOR Loans, as the context may require.
"Foreign Currency" shall mean each of (i) British pounds sterling,
Canadian dollars, French francs, German deutsche marks, Euros (if and when
introduced pursuant to the Treaty on European Union), and Japanese yen and (ii)
at the option of the Lenders, any other currency that is readily available and
freely tradeable and convertible into Dollars; provided that no such other
currency under this clause (ii) shall be included as a Foreign Currency
hereunder or referenced as an Applicable Currency in a Notice of Borrowing
unless the applicable Borrower has first submitted a request to the
Administrative Agent and the Lenders that such currency be so included and the
Administrative Agent and the Lenders have agreed to such request in their sole
discretion.
"Foreign Currency Revolving Credit Notes" shall mean the promissory
notes of the applicable Borrowers in substantially the form of EXHIBIT A-2,
together with any amendments, modifications and supplements thereto,
substitutions therefor and restatements thereof.
"Foreign Currency Revolving Loan" shall have the meaning given to such
term in SECTION 2.1(B).
"Foreign Currency Sublimit" shall mean $12,500,000 or, if less, the
aggregate Revolving Credit Commitments at the time of determination, as such
amount may be reduced at or prior to such time pursuant to the terms hereof.
"Foreign Subsidiary" shall mean any Subsidiary of Matria that is
organized under the laws of any nation, state or jurisdiction other than the
United States of America or any state thereof or the District of Columbia.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness
for borrowed money of such Person that by its terms or by the terms of any
instrument or agreement relating thereto matures more than one year from, or is
renewable or extendable at the option of the debtor to a date more than one year
from, the date of creation thereof (including an option of the debtor under a
revolving credit or similar arrangement obligating the lender or lenders to
extend credit over a period of one year or more), including any current
maturities of such Indebtedness.
"GAAP" shall mean generally accepted accounting principles, as set
forth in the statements, opinions and pronouncements of the Accounting
Principles Board, the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board, consistently applied and maintained, as in
effect from time to time (subject to the provisions of SECTION 1.2).
14
21
"Xxxxxx" shall have the meaning given to such term in the recitals
hereto.
"Xxxxxx Acquisition" shall have the meaning given to such term in the
recitals hereto.
"Xxxxxx Purchase and Sale Agreement" shall mean the Purchase and Sale
Agreement dated as of December 21, 1998, between Xxxxxx and Matria, pursuant to
which the parties effected the Xxxxxx Acquisition.
"Xxxxxx Securities Purchase Agreement" shall mean the Securities
Purchase Agreement, dated as of May 10, 2001, by and among Matria, Xxxxxx, Xxxx
X. Xxxxxx and SZ Investments, L.L.C., as amended, modified or supplemented from
time to time in accordance with the terms of this Agreement.
"Xxxxxx Seller Subordinated Note" shall mean, collectively, the
Non-Negotiable Subordinated Promissory Notes in the principal amounts of
$13,553,148 and $410,311 and dated June 9, 2000 and August 22, 2000,
respectively, issued by Matria in favor of Xxxxxx pursuant to Section 1.5 of the
Xxxxxx Purchase and Sale Agreement, in each case as amended, modified or
supplemented from time to time in accordance with the terms of this Agreement.
"Xxxxxx Transaction" shall mean, collectively, (i) the purchase by
Matria of 7,500 shares of the Series A Preferred Stock and 15,000 shares of the
Series B Preferred Stock held by Xxxxxx as set forth in Section 2.1 of the
Xxxxxx Securities Purchase Agreement, (ii) the purchase by Matria of the
remaining Series A Preferred Stock and Series B Preferred Stock held by Xxxxxx,
(iii) the prepayment in full of the Xxxxxx Seller Subordinated Note, (iv) the
cancellation in full of the Xxxxxx Warrant, and (v) the related transactions
described in the Xxxxxx Securities Purchase Agreement, all pursuant to the terms
of the Xxxxxx Securities Purchase Agreement.
"Xxxxxx Warrant" shall mean, collectively, the warrants to purchase
1,000,000 shares of Matria's common stock at $12.00 per share (subject to
adjustment as provide therein) issued to Xxxxxx on January 19, 1999 pursuant to
the Xxxxxx Purchase and Sale Agreement.
"German Pledge Agreement" shall mean the Notarial Deed Share Pledge
Agreement, dated December 29, 1999, made by Diabetes Acquisition, Inc. (through
its attorney Xx. Xxxxxx Xxxx-Xxxxxxxxxx) in favor of the Administrative Agent
and the Lenders.
"Governmental Authority" shall mean any domestic or foreign nation or
government, any state or other political subdivision thereof and any central
bank thereof, any municipal, local, city or county government, and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
"Guaranty Obligation" shall mean, with respect to any Person, any
direct or indirect liability of such Person with respect to any Indebtedness
(the "primary obligation") of another Person (the "primary obligor"), whether or
not contingent, (a) to purchase, repurchase or otherwise acquire such primary
obligation or any property constituting direct or indirect security therefor,
(b) to advance or provide funds (i) for the payment or discharge of any such
primary obligation or (ii) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial
15
22
condition of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor in respect thereof to make
payment of such primary obligation or (d) otherwise to assure or hold harmless
the owner of any such primary obligation against loss or failure or inability to
perform in respect thereof; provided, however, that, with respect to Matria and
its Subsidiaries, the term Guaranty Obligation shall not include endorsements
for collection or deposit in the ordinary course of business.
"Hazardous Substances" shall mean any substances or materials (i) that
are or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (ii) that are
defined by any Environmental Law as toxic, explosive, corrosive, ignitable,
infectious, radioactive, mutagenic or otherwise hazardous, (iii) the presence of
which require investigation or response under any Environmental Law, (iv) that
constitute a nuisance, trespass or health hazard to Persons or neighboring
properties, (v) that consist of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance, or (vi) that
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or wastes, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedge Agreement" shall mean any interest or foreign currency rate
swap, cap, collar, option, hedge, forward rate or other similar agreement or
arrangement designed to protect against fluctuations in interest rates or
currency exchange rates, including any swap agreements (as defined in 11 U.S.C.
ss. 101).
"IBOR Rate" shall mean, with respect to each Foreign Currency Revolving
Loan comprising part of the same Borrowing for any Interest Period, an interest
rate per annum obtained by dividing (i) (y) the rate of interest (rounded
upward, if necessary, to the nearest 1/16 of one percentage point) appearing on
Telerate Page 3750 (or any successor page) or (z) if no such rate is available,
the rate of interest determined by the Administrative Agent to be the rate or
the arithmetic mean of rates (rounded upward, if necessary, to the nearest 1/16
of one percentage point) at which deposits in the applicable Foreign Currency in
immediately available funds are offered by First Union to first-tier banks in
the interbank market for such Foreign Currency, in each case under (y) and (z)
above at approximately 11:00 a.m., London time, two (2) Business Days prior to
the first day of such Interest Period for a period substantially equal to such
Interest Period and in an amount substantially equal to the amount of First
Union's Foreign Currency Revolving Loan comprising part of such Borrowing, by
(ii) the amount equal to 1.00 minus the applicable Reserve Requirement
(expressed as a decimal) for such Interest Period.
"Inactive Subsidiary" shall mean any Subsidiary of Matria (i) the
Capital Stock of which has been previously acquired by Matria or another
Subsidiary, (ii) that owns no assets or properties (other than Medicare and
Medicaid provider numbers and immaterial accounts receivable) and (iii) that
does not conduct any active trade or business; provided, however, that in no
event shall a Subsidiary that is a guarantor of the Senior Notes be an Inactive
Subsidiary. Notwithstanding the foregoing, the general partnerships listed in
SCHEDULE 5.7 and Matria Healthcare Puerto Rico, Inc. shall be deemed Inactive
Subsidiaries for all purposes of this Agreement and the other Credit Documents.
16
23
"Indebtedness" shall mean, with respect to any Person (without
duplication), (i) all indebtedness and obligations of such Person for borrowed
money or in respect of loans or advances of any kind, (ii) all obligations of
such Person evidenced by notes, bonds, debentures or similar instruments, (iii)
all reimbursement obligations of such Person with respect to surety bonds,
letters of credit and bankers' acceptances (in each case, whether or not drawn
or matured and in the stated amount thereof), (iv) all obligations of such
Person to pay the deferred purchase price of property or services, including
Contingent Purchase Price Obligations, (v) all indebtedness created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person, (vi) all obligations of such Person as lessee
under leases that are or are required to be, in accordance with GAAP, recorded
as capital leases, to the extent such obligations are required to be so
recorded, (vii) all Disqualified Capital Stock issued by such Person, with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any (for
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the board of directors or other governing body of the issuer of such
Disqualified Capital Stock), (viii) the net termination obligations of such
Person under any Hedge Agreements, calculated as of any date as if such
agreement or arrangement were terminated as of such date, (ix) all Guaranty
Obligations of such Person and (x) all indebtedness referred to in clauses (i)
through (ix) above secured by any Lien on any property or asset owned or held by
such Person regardless of whether the indebtedness secured thereby shall have
been assumed by such Person or is nonrecourse to the credit of such Person. For
purposes of compliance with the financial covenants set forth in SECTIONS 7.1
through 7.5, the "amount" or "principal amount" of Indebtedness, at any time of
determination, represented by the Senior Notes shall be the amount of the
liability in respect thereof determined in accordance with GAAP.
"Intercompany Notes" shall mean, collectively, (i) the intercompany
notes made by Subsidiaries dated the Original Closing Date and delivered to the
Administrative Agent pursuant to the Existing Credit Agreement, in substantially
the form of Exhibit I thereto, as amended as of the Restatement Effective Date
and as further amended, modified or supplemented from time to time, and (ii) the
intercompany notes made by Subsidiaries dated the Restatement Effective Date and
delivered to the Administrative Agent pursuant to SECTION 4.1(A)(II), in
substantially the form of EXHIBIT I, as amended, modified or supplemented from
time to time.
"Interest Period" shall have the meaning given to such term in SECTION
2.10.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time, and any successor statute, and all rules and
regulations from time to time promulgated thereunder.
"Issuing Lender" shall mean First Union in its capacity as issuer of
the Letters of Credit, and its successors in such capacity.
17
24
"Joinder Agreement" shall mean a joinder agreement made by a Foreign
Subsidiary and Matria in favor of the Administrative Agent and the Lenders, in
substantially the form of EXHIBIT H, as amended, modified or supplemented from
time to time.
"LIBOR Loan" shall mean, at any time, any Loan that bears interest at
such time at the Adjusted LIBOR Rate.
"LIBOR Rate" shall mean, with respect to each LIBOR Loan comprising
part of the same Borrowing for any Interest Period, an interest rate per annum
obtained by dividing (i) (y) the rate of interest (rounded upward, if necessary,
to the nearest 1/16 of one percentage point) appearing on Telerate Page 3750 (or
any successor page) or (z) if no such rate is available, the rate of interest
determined by the Administrative Agent to be the rate or the arithmetic mean of
rates (rounded upward, if necessary, to the nearest 1/16 of one percentage
point) at which Dollar deposits in immediately available funds are offered by
First Union to first-tier banks in the London interbank Eurodollar market, in
each case under (y) and (z) above at approximately 11:00 a.m., London time, two
(2) Business Days prior to the first day of such Interest Period for a period
substantially equal to such Interest Period and in an amount substantially equal
to the amount of First Union's LIBOR Loan comprising part of such Borrowing, by
(ii) the amount equal to 1.00 minus the applicable Reserve Requirement
(expressed as a decimal) for such Interest Period.
"Lender" shall mean each financial institution signatory hereto and
each other financial institution that becomes a "Lender" hereunder pursuant to
SECTION 12.7, and their respective successors and assigns.
"Lending Office" shall mean, with respect to any Lender, the office of
such Lender designated as its "Lending Office" on SCHEDULE 1.1(B) or in an
Assignment and Acceptance, or such other office as may be otherwise designated
in writing from time to time by such Lender to Matria and the Administrative
Agent. A Lender may designate separate Lending Offices as provided in the
foregoing sentence for the purposes of making or maintaining different Types of
Loans, and, with respect to Fixed Rate Loans, such office may be a domestic or
foreign branch or Affiliate of such Lender.
"Letter of Credit Exposure" shall mean, with respect to any Lender at
any time, such Lender's ratable share (based on the proportion that its
Revolving Credit Commitment bears to the aggregate Revolving Credit Commitments
at such time) of the sum of (i) the aggregate Stated Amount of all Letters of
Credit outstanding at such time and (ii) the aggregate amount of all
Reimbursement Obligations outstanding at such time.
"Letter of Credit Notice" shall have the meaning given to such term in
SECTION 3.2.
"Letters of Credit" shall have the meaning given to such term in
SECTION 3.1.
"Leverage Ratio" shall mean, as of the last day of any fiscal quarter,
the ratio of (i) Consolidated Indebtedness as of such date to (ii) Consolidated
EBITDA for the period of four consecutive fiscal quarters then ending.
18
25
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
security interest, lien (statutory or otherwise), preference, priority, charge
or other encumbrance of any nature, whether voluntary or involuntary, including,
without limitation, the interest of any vendor or lessor under any conditional
sale agreement, title retention agreement, capital lease or any other lease or
arrangement having substantially the same effect as any of the foregoing.
"Licenses" shall mean any and all licenses (including provisional
licenses), certificates of need, accreditations, permits, franchises, rights to
conduct business, approvals (by a Governmental Authority or otherwise),
consents, qualifications, operating authority and any other authorizations.
"Limitation" shall mean a revocation, suspension, termination,
impairment, probation, limitation, non-renewal, forfeiture, declaration of
ineligibility, loss of status as a participating provider in a Third Party Payor
Arrangement, and the loss of any other rights.
"Loans" shall mean any or all of the Revolving Loans and the Swingline
Loans, as the context may require.
"Local Time" shall mean the local time in effect at the office of the
applicable Correspondent in connection with any disbursements or payments of
Loans by or through such Correspondent.
"Margin Stock" shall have the meaning given to such term in Regulation
U.
"Material Adverse Change" shall mean a material adverse change in the
condition (financial or otherwise), operations, prospects, business, properties
or assets of Matria and its Subsidiaries, taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect upon (i)
the condition (financial or otherwise), operations, prospects, business,
properties or assets of Matria and its Subsidiaries, taken as a whole, (ii) the
ability of any Borrower or any of its Subsidiaries to perform its obligations
under this Agreement or any of the other Credit Documents to which it is a party
or (iii) the legality, validity or enforceability of this Agreement or any of
the other Credit Documents or the rights and remedies of the Administrative
Agent and the Lenders hereunder and thereunder.
"Material Contract" shall have the meaning given to such term in
SECTION 5.18.
"Matria Pledge Agreement" shall mean a pledge agreement made by Matria
and the Subsidiaries party thereto in favor of the Administrative Agent, in
substantially the form of EXHIBIT F, as amended, modified or supplemented from
time to time.
"Mortgage" shall mean any mortgage, deed of trust, deed to secure debt
or similar agreement or instrument pursuant to which Matria or any of its
Subsidiaries grants in favor of the Administrative Agent, for its benefit and
the benefit of the Lenders, a security interest in and Lien upon any fee or
leasehold interest in real property owned by it, as amended, modified or
supplemented from time to time.
19
26
"Mortgaged Premises" shall mean, with respect to any Mortgage, the
"Mortgaged Premises" (as such term is defined therein) covered by such Mortgage.
"Multiemployer Plan" shall mean any "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA to which Matria or any ERISA Affiliate
makes, is making or is obligated to make contributions or has made or been
obligated to make contributions.
"national currency unit" shall have the meaning given to such term in
SECTION 12.17.
"Net Cash Proceeds" shall mean, in the case of any Casualty Event, the
aggregate cash proceeds of insurance, condemnation awards and other compensation
received by Matria and its Subsidiaries in respect of such Casualty Event less
(y) reasonable fees and expenses incurred by Matria and its Subsidiaries in
connection therewith and (z) contractually required repayments of Indebtedness
to the extent secured by Liens on the property subject to such Casualty Event
and any income or transfer taxes paid or reasonably estimated by Matria to be
payable by Matria and its Subsidiaries as a result of such Casualty Event.
"Notes" shall mean any or all of the Revolving Credit Notes and the
Swingline Note, as the context may require.
"Notice of Borrowing" shall have the meaning given to such term in
SECTION 2.2(B).
"Notice of Conversion/Continuation" shall have the meaning given to
such term in SECTION 2.11(B).
"Notice of Swingline Borrowing" shall have the meaning given to such
term in SECTION 2.2(D).
"Obligations" shall mean all principal of and interest (including, to
the greatest extent permitted by law, post-petition interest) on the Loans, all
Reimbursement Obligations and all fees, expenses, indemnities and other
obligations owing, due or payable at any time by any Borrower to the
Administrative Agent, any Lender, the Issuing Lender or any other Person
entitled thereto, under this Agreement or any of the other Credit Documents, and
all payment and other obligations owing or payable at any time by Matria to any
Lender or any Affiliate of any Lender under or in connection with any Hedge
Agreement required or permitted by this Agreement.
"Original Closing Date" shall mean the Closing Date as defined in the
Original Credit Agreement, which was January 19, 1999.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
successor thereto.
"Participant" shall have the meaning given to such term in SECTION
12.7(D).
"participating member state" shall have the meaning given to such term
in SECTION 12.17.
"Permitted Acquisition" shall mean (a) any Acquisition with respect to
which all of the following conditions are satisfied: (i) each business acquired
shall be within the permitted lines
20
27
of business described in SECTION 8.8, (ii) any Capital Stock given as
consideration in connection therewith shall be Capital Stock of Matria, (iii) in
the case of an Acquisition involving the acquisition of control of Capital Stock
of any Person, immediately after giving effect to such Acquisition such Person
(or the surviving Person, if the Acquisition is effected through a merger or
consolidation) shall be Matria or a Wholly Owned Subsidiary, (iv) the board of
directors or equivalent governing body of the Person whose Capital Stock or
business is acquired shall have approved such Acquisition, if required by
applicable law (but provided in any event that such acquisition shall not be
"hostile"), and (v) all of the conditions and requirements of SECTIONS 6.9 and
6.10 applicable to such Acquisition are satisfied; or (b) any other Acquisition
to which the Required Lenders (or the Administrative Agent on their behalf)
shall have given their prior written consent (which consent may be in their sole
but reasonable discretion and may be given subject to such additional terms and
conditions as the Required Lenders shall establish) and with respect to which
all of the conditions and requirements set forth in this definition and in
SECTION 6.9, and in or pursuant to any such consent, have been satisfied or
waived in writing by the Required Lenders (or the Administrative Agent on their
behalf).
"Permitted Liens" shall have the meaning given to such term in SECTION
8.3.
"Person" shall mean any corporation, association, joint venture,
partnership, limited liability company, organization, business, individual,
trust, government or agency or political subdivision thereof or any other legal
entity.
"Plan" shall mean any "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA that is subject to the provisions of Title IV
of ERISA (other than a Multiemployer Plan) and to which Matria or any ERISA
Affiliate may have any liability.
"Pledge Agreement" shall mean (i) the Matria Pledge Agreement, (ii) the
German Pledge Agreement and (iii) each other pledge agreement made by Matria or
any Subsidiary with respect to the pledge of Capital Stock of any other
Subsidiary, in substantially the form of EXHIBIT F (with such modifications as
may be necessary or appropriate for each applicable foreign jurisdiction), as
amended, modified or supplemented from time to time.
"Prohibited Transaction" shall mean any transaction described in (i)
Section 406 of ERISA that is not exempt by reason of Section 408 of ERISA or by
reason of a Department of Labor prohibited transaction individual or class
exemption or (ii) Section 4975(c) of the Internal Revenue Code that is not
exempt by reason of Section 4975(c)(2) or 4975(d) of the Internal Revenue Code.
"Projections" shall have the meaning given to such term in SECTION
5.11(B).
"Q Liquidation" shall mean Q Liquidation Corp., a Delaware corporation
formerly known as Quality Diagnostic Services, Inc.
"Refunded Swingline Loans" shall have the meaning given to such term in
SECTION 2.2(E).
"Register" shall have the meaning given to such term in SECTION
12.7(B).
21
28
"Regulations D, T, U and X" shall mean Regulations D, T, U and X,
respectively, of the Federal Reserve Board, and any successor regulations.
"Reimbursement Approvals" shall mean, with respect to all Third Party
Payor Arrangements, any and all certifications, provider numbers, provider
agreements, participation agreements, accreditations and any other similar
agreements with or approvals by Governmental Authorities or other Persons.
"Reimbursement Obligation" shall have the meaning given to such term in
SECTION 3.4.
"Relevant Type" shall have the meaning given to such term in SECTION
2.16(C).
"Reportable Event" shall mean (i) any "reportable event" within the
meaning of Section 4043(c) of ERISA for which the 30-day notice under Section
4043(a) of ERISA has not been waived by the PBGC (including any failure to meet
the minimum funding standard of, or timely make any required installment under,
Section 412 of the Internal Revenue Code or Section 302 of ERISA, regardless of
the issuance of any waivers in accordance with Section 412(d) of the Internal
Revenue Code), (ii) any such "reportable event" subject to advance notice to the
PBGC under Section 4043(b)(3) of ERISA, (iii) any application for a funding
waiver or an extension of any amortization period pursuant to Section 412 of the
Internal Revenue Code, and (iv) a cessation of operations described in Section
4062(e) of ERISA.
"Required Lenders" shall mean the Lenders holding outstanding Revolving
Loans, Letter of Credit Exposure, participations in outstanding Swingline Loans
and Unutilized Revolving Credit Commitments (or, after the termination of the
Revolving Credit Commitments, outstanding Revolving Loans, Letter of Credit
Exposure and participations in outstanding Swingline Loans) representing greater
than sixty-six and two-thirds percent (66-2/3%) of the aggregate at such time of
all outstanding Revolving Loans, Letter of Credit Exposure, participations in
outstanding Swingline Loans and Unutilized Revolving Credit Commitments (or,
after the termination of the Revolving Credit Commitments, the aggregate at such
time of all outstanding Revolving Loans, Letter of Credit Exposure and
participations in outstanding Swingline Loans). For purposes of any
determination of the "Required Lenders," the aggregate outstanding Swingline
Loans held by the Swingline Lender shall be calculated net of participations
therein purchased by the other Lenders pursuant to the terms hereof.
"Requirement of Law" shall mean, with respect to any Person, the
charter, articles or certificate of organization or incorporation and bylaws or
other organizational or governing documents of such Person, and any statute,
law, treaty, rule, regulation, order, decree, writ, injunction or determination
of any arbitrator or court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject or otherwise pertaining to any or
all of the transactions contemplated by this Agreement and the other Credit
Documents.
"Reserve Requirement" shall mean, with respect to any Interest Period,
(i) in respect of any LIBOR Loan, the reserve percentage (expressed as a
decimal) in effect from time to time during such Interest Period, as provided by
the Federal Reserve Board, applied for determining the maximum reserve
requirements (including, without limitation, basic, supplemental, marginal
22
29
and emergency reserves) applicable to First Union under Regulation D with
respect to "Eurocurrency liabilities" within the meaning of Regulation D, or
under any similar or successor regulation with respect to Eurocurrency
liabilities or Eurocurrency funding, and (ii) in respect of any Foreign Currency
Revolving Loan, the reserve percentage (expressed as a decimal) in effect from
time to time during such Interest Period applied for determining the maximum
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves), applicable to First Union under any applicable
Requirement of Law established by any Governmental Authority having jurisdiction
in respect of such Foreign Currency Revolving Loan or any category of
liabilities that includes deposits by reference to which the interest rate on
such Foreign Currency Revolving Loan is determined.
"Responsible Officer" shall mean, with respect to any Borrower or any
of its Subsidiaries, the president, the chief executive officer, the chief
financial officer, any executive officer, or any other Financial Officer of such
Borrower or Subsidiary, and any other officer or similar official thereof
responsible for the administration of the obligations of the Borrower or such
Subsidiary in respect of this Agreement and the other Credit Documents.
"Restatement Effective Date" shall mean the date upon which the
conditions to the effectiveness of this Agreement set forth in SECTION 4.1 are
satisfied or waived in accordance with their terms.
"Revolving Credit Commitment" shall mean, with respect to any Lender at
any time, the amount set forth opposite such Lender's name on Schedule 1.1(a)
under the caption "Revolving Credit Commitment" or, if such Lender has entered
into one or more Assignment and Acceptances, the amount set forth for such
Lender at such time in the Register maintained by the Administrative Agent
pursuant to SECTION 12.7(B) as such Lender's "Revolving Credit Commitment," as
such amount may be reduced at or prior to such time pursuant to the terms
hereof.
"Revolving Credit Maturity Date" shall mean the third anniversary of
the Restatement Effective Date.
"Revolving Credit Notes" shall mean any or all of the Dollar Revolving
Credit Notes and the Foreign Currency Revolving Credit Notes, as the context may
require.
"Revolving Loans" shall mean any or all of the Dollar Revolving Loans
and the Foreign Currency Revolving Loans, as the context may require.
"Security Agreement" shall mean a security agreement made by Matria and
the Subsidiaries party thereto in favor of the Administrative Agent, in
substantially the form of EXHIBIT E, as amended, modified or supplemented from
time to time.
"Security Documents" shall mean the Security Agreement, the Pledge
Agreements, the Mortgages and all other pledge or security agreements,
mortgages, deeds of trust, assignments or other similar agreements or
instruments executed and delivered by Matria or any of its Subsidiaries pursuant
to SECTION 6.10 or SECTION 6.11 or otherwise in connection with the transactions
contemplated hereby, in each case as amended, modified or supplemented from time
to time.
23
30
"Seller Subordinated Indebtedness" shall have the meaning given to such
term in SECTION 8.2.
"Senior Note Indenture" shall mean the Indenture, dated as of July 9,
2001, between Matria, certain of its Subsidiaries, as guarantors, and Xxxxx
Fargo Bank Minnesota, N.A., as trustee, providing for the issuance of the Senior
Notes, as amended, modified or supplemented from time to time in accordance with
the terms of this Agreement.
"Senior Notes" shall have the meaning given to such term in the
recitals hereto.
"Series A Preferred Stock" shall mean the Borrower's 4% Series A
Convertible Preferred Stock designated as such, and having the terms, rights and
preferences set forth, in the Certificate of Designations therefor and issued
pursuant to the Xxxxxx Purchase and Sale Agreement.
"Series B Preferred Stock" shall mean the Borrower's 8% Series B
Redeemable Preferred Stock designated as such, and having the terms, rights and
preferences set forth, in the Certificate of Designations therefor and issued
pursuant to the Xxxxxx Purchase and Sale Agreement.
"Stated Amount" shall mean, with respect to any Letter of Credit at any
time, the aggregate amount available to be drawn thereunder at such time
(regardless of whether any conditions for drawing could then be met).
"Subordinated Indebtedness" shall mean, collectively, (i) any Seller
Subordinated Indebtedness issued pursuant to clause (v) of SECTION 8.2, (ii) the
Convertible Subordinated Debentures, and (iii) any other Indebtedness of Matria
or any Subsidiary that is subordinated in right of payment to the Obligations
(other than the Senior Notes).
"Subsidiary" shall mean, with respect to any Person, any corporation or
other Person of which more than fifty percent (50%) of the outstanding Capital
Stock having ordinary voting power to elect a majority of the board of
directors, board of managers or other governing body of such Person, is at the
time, directly or indirectly, owned or controlled by such Person and one or more
of its other Subsidiaries or a combination thereof (irrespective of whether, at
the time, securities of any other class or classes of any such corporation or
other Person shall or might have voting power by reason of the happening of any
contingency). When used without reference to a parent entity, the term
"Subsidiary" shall be deemed to refer to a Subsidiary of Matria.
"Subsidiary Guarantor" shall mean any Domestic Subsidiary of Matria
that is a guarantor under the Subsidiary Guaranty and has granted to the
Administrative Agent a first priority Lien upon and security interest in its
personal property assets pursuant to the Security Agreement, subject only to
Permitted Liens.
"Subsidiary Guaranty" shall mean a guaranty agreement made by the
Subsidiary Guarantors in favor of the Administrative Agent and the Lenders, in
substantially the form of EXHIBIT G, as amended, modified or supplemented from
time to time.
24
31
"Swingline Commitment" shall mean $5,000,000 or, if less, the aggregate
Revolving Credit Commitments at the time of determination, as such amount may be
reduced at or prior to such time pursuant to the terms hereof.
"Swingline Lender" shall mean First Union in its capacity as maker of
Swingline Loans, and its successors in such capacity.
"Swingline Loans" shall have the meaning given to such term in SECTION
2.1(C).
"Swingline Maturity Date" shall mean the date that is five (5) Business
Days prior to the Revolving Credit Maturity Date.
"Swingline Note" shall mean the promissory note of Matria in
substantially the form of EXHIBIT A-3, together with any amendments,
modifications and supplements thereto, substitutions therefor and restatements
thereof.
"Termination Date" shall mean the Revolving Credit Maturity Date or
such earlier date of termination of the Revolving Credit Commitments pursuant to
SECTION 2.5 or SECTION 9.2.
"Third Party Payor Arrangements" shall mean any and all arrangements
with Medicare, Medicaid, CHAMPUS and any other Governmental Authority or
quasi-public agency, Blue Cross, Blue Shield, any managed care plans and
organizations including, without limitation, health maintenance organizations
and preferred provider organizations, private commercial insurance companies and
any similar third party arrangements, plans or programs for payment or
reimbursement in connection with health care services, products or supplies.
"Treaty on European Union" shall have the meaning given to such term in
SECTION 12.17.
"Type" shall mean the type of Loan determined with regard to both the
currency and interest rate option applicable thereto. Foreign Currency Revolving
Loans denominated in different currencies shall be different Types of Loans.
"Unfunded Pension Liability" shall mean, with respect to any Plan or
Multiemployer Plan, the excess of its benefit liabilities under Section
4001(a)(16) of ERISA over the current value of its assets, determined in
accordance with the applicable assumptions used for funding under Section 412 of
the Code for the applicable plan year.
"Unutilized Revolving Credit Commitment" shall mean, with respect to
any Lender at any time, such Lender's Revolving Credit Commitment at such time
less the sum of (i) the aggregate principal Dollar Amount of all Revolving Loans
made by such Lender that are outstanding at such time and (ii) such Lender's
Letter of Credit Exposure at such time.
"Unutilized Swingline Commitment" shall mean, with respect to the
Swingline Lender at any time, the Swingline Commitment at such time less the
aggregate principal amount of all Swingline Loans that are outstanding at such
time.
"Wholly Owned" shall mean, with respect to any Subsidiary of any
Person, that 100% of the outstanding Capital Stock of such Subsidiary is owned,
directly or indirectly, by such Person.
25
32
1.2 Accounting Terms.
(a) Except as specifically provided otherwise in this Agreement,
all accounting terms used herein that are not specifically defined shall have
the meanings customarily given them in accordance with GAAP. Notwithstanding
anything to the contrary in this Agreement, for purposes of calculation of the
financial covenants set forth in ARTICLE VII, all accounting determinations and
computations hereunder shall be made in accordance with GAAP as in effect as of
the date of this Agreement applied on a basis consistent with the application
used in preparing the most recent financial statements of Matria referred to in
SECTION 5.11(A). In the event that any changes in GAAP after such date are
required to be applied to Matria and would affect the computation of the
financial covenants contained in ARTICLE VII, such changes shall be followed
only from and after the date this Agreement shall have been amended to take into
account any such changes.
(b) Notwithstanding the other provisions of this Section or any
other provision of this Agreement, the assets, liabilities, revenues, income,
losses and other financial statement items of any Foreign Subsidiary of Matria
that is not either (i) a Subsidiary Guarantor or (b) a Foreign Subsidiary that
has joined this Agreement as a Borrower hereunder in accordance with, and has
satisfied the requirements of, SECTION 12.18 shall not be taken into account in
the calculation of the financial covenants set forth in ARTICLE VII.
1.3 Other Terms; Construction. Unless otherwise specified or
unless the context otherwise requires, all references herein to sections,
annexes, schedules and exhibits are references to sections, annexes, schedules
and exhibits in and to this Agreement, and all terms defined in this Agreement
shall have the defined meanings when used in any other Credit Document or any
certificate or other document made or delivered pursuant hereto. All references
herein to the Lenders or any of them shall be deemed to include the Issuing
Lender unless specifically provided otherwise or unless the context otherwise
requires.
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
2.1 Commitments.
(a) Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make revolving credit loans in Dollars (each, a
"Dollar Revolving Loan," and collectively, the "Dollar Revolving Loans") to
Matria, from time to time on any Business Day during the period from and
including the Restatement Effective Date to but not including the Termination
Date, provided that no Borrowing of Dollar Revolving Loans shall be made if,
immediately after giving effect thereto:
(i) the sum of (y) the aggregate principal Dollar Amount
of Revolving Loans of such Lender outstanding at such time and (z) such
Lender's Letter of Credit Exposure at such time would exceed its
Revolving Credit Commitment at such time; or
26
33
(ii) the sum of (x) the aggregate principal Dollar Amount
of Revolving Loans outstanding at such time, (y) the aggregate
principal amount of Swingline Loans outstanding at such time (excluding
the aggregate amount of any Swingline Loans to be repaid with proceeds
of Dollar Revolving Loans made pursuant to such Borrowing) and (z) the
aggregate Letter of Credit Exposure of all Lenders at such time would
exceed the aggregate Revolving Credit Commitments at such time.
Subject to and on the terms and conditions of this Agreement, Matria
may borrow, repay and reborrow Dollar Revolving Loans.
(b) Each Lender severally agrees, subject to and on the terms and
conditions of this Agreement, to make revolving credit loans in any Foreign
Currency (each, a "Foreign Currency Revolving Loan," and collectively, the
"Foreign Currency Revolving Loans") to any Borrower, from time to time on any
Business Day during the period from and including the Restatement Effective Date
to but not including the Termination Date, provided that no Borrowing of Foreign
Currency Revolving Loans shall be made if, immediately after giving effect
thereto:
(i) the sum of (y) the aggregate principal Dollar Amount
of Revolving Loans of such Lender outstanding at such time and (z) such
Lender's Letter of Credit Exposure at such time would exceed its
Revolving Credit Commitment at such time;
(ii) the sum of (x) the aggregate principal Dollar Amount
of Revolving Loans outstanding at such time, (y) the aggregate
principal amount of Swingline Loans outstanding at such time and (z)
the aggregate Letter of Credit Exposure of all Lenders at such time
would exceed the aggregate Revolving Credit Commitments at such time;
or
(iii) the aggregate principal Dollar Amount of Foreign
Currency Revolving Loans outstanding at such time would exceed the
Foreign Currency Sublimit.
Subject to and on the terms and conditions of this Agreement, each
Borrower may borrow, repay and reborrow Foreign Currency Revolving Loans.
(c) The Swingline Lender agrees, subject to and on the terms and
conditions of this Agreement, to make loans (each, a "Swingline Loan," and
collectively, the "Swingline Loans") to Matria, from time to time on any
Business Day during the period from the Restatement Effective Date to but not
including the Swingline Maturity Date (or, if earlier, the Termination Date), in
an aggregate principal amount at any time outstanding not exceeding the
Swingline Commitment, notwithstanding that the aggregate principal amount of
Swingline Loans outstanding at any time, when added to the aggregate principal
Dollar Amount of the Revolving Loans made by the Swingline Lender in its
capacity as a Lender outstanding at such time and its Letter of Credit Exposure
at such time, may exceed its Revolving Credit Commitment at such time, but
provided that no Borrowing of Swingline Loans shall be made if, immediately
after giving effect thereto, the sum of (x) the aggregate principal Dollar
Amount of Revolving Loans outstanding at such time, (y) the aggregate Letter of
Credit Exposure of all Lenders at such time and (z) the aggregate principal
amount of Swingline Loans outstanding at such time would exceed the aggregate
Revolving Credit Commitments at such time. Subject to and on the terms and
conditions of this Agreement, Matria may borrow, repay (including by means of a
27
34
Borrowing of Dollar Revolving Loans pursuant to SECTION 2.2(E)) and reborrow
Swingline Loans.
2.2 Borrowings.
(a) Subject to the terms and conditions of this Agreement, the
Dollar Revolving Loans shall at the option of Matria be either Base Rate Loans
or LIBOR Loans, provided that (i) all Loans comprising the same Borrowing shall,
unless otherwise specifically provided herein, be of the same Type (with regard
to both currency and interest rate option, in the case of Foreign Currency
Revolving Loans), (ii) the Loans made on the Restatement Effective Date shall be
made initially as Base Rate Loans, and (iii) no Borrowing of LIBOR Loans may be
made at any time prior to the third (3rd) Business Day after the Restatement
Effective Date, and no Borrowing of Foreign Currency Revolving Loans may be made
at any time prior to the fourth (4th) Business Day after the Restatement
Effective Date. The Swingline Loans shall be made and maintained as Base Rate
Loans at all times, and the Foreign Currency Revolving Loans shall at all times
bear interest at the Adjusted IBOR Rate.
(b) In order to make a Borrowing (other than (x) Borrowings of
Swingline Loans, which shall be made pursuant to SECTION 2.2(D), (y) Borrowings
for the purpose of repaying Refunded Swingline Loans, which shall be made
pursuant to SECTION 2.2(E), and (z) Borrowings involving continuations or
conversions of outstanding Loans, which shall be made pursuant to SECTION 2.11),
the applicable Borrower will give the Administrative Agent written notice not
later than 11:00 a.m., Charlotte time, the Applicable Number of Business Days
prior to each Borrowing; provided, however, that requests for any Revolving
Loans to be made on the Restatement Effective Date may, at the discretion of the
Administrative Agent, be given later than the times specified hereinabove. Each
such notice (each, a "Notice of Borrowing") shall be irrevocable, shall be given
in the form of EXHIBIT B-1 and shall specify (1) the aggregate principal amount,
Class and initial Type of the Loans to be made pursuant to such Borrowing, (2)
in the case of a Borrowing of Fixed Rate Loans, the initial Interest Period to
be applicable thereto, (3) in the case of a Borrowing of Foreign Currency
Revolving Loans, the applicable Foreign Currency, and (4) the requested date of
such Borrowing (the "Borrowing Date"), which shall be a Business Day. Upon its
receipt of a Notice of Borrowing, the Administrative Agent will promptly notify
each Lender of the proposed Borrowing. Notwithstanding anything to the contrary
contained herein:
(i) the aggregate principal amount of each Borrowing
comprised of Base Rate Loans shall not be less than $1,000,000 or, if
greater, an integral multiple of $500,000 in excess thereof (or, in the
case of a Borrowing of Revolving Loans, if less, in the amount of the
aggregate Unutilized Revolving Credit Commitments), and the aggregate
principal amount of each Borrowing comprised of Fixed Rate Loans shall
not be less than a Dollar Amount of $3,000,000 or, if greater, an
integral multiple of a Dollar Amount of $1,000,000 in excess thereof;
and
(ii) if the applicable Borrower shall have failed to
select the duration of the Interest Period to be applicable to any
Borrowing of Fixed Rate Loans, then such Borrower shall be deemed to
have selected an Interest Period with a duration of one month.
28
35
(c) In the case of each Borrowing of Dollar Revolving Loans, not
later than 1:00 p.m., Charlotte time, on the requested Borrowing Date, each
Lender will make available to the Administrative Agent at its office referred to
in SECTION 12.5 (or at such other location as the Administrative Agent may
designate) an amount, in Dollars and in immediately available funds, equal to
the amount of the Dollar Revolving Loan to be made by such Lender. To the extent
the Lenders have made such amounts available to the Administrative Agent as
provided hereinabove, the Administrative Agent will make the aggregate of such
amounts available to Matria in accordance with SECTION 2.3(A) and in like funds
as received by the Administrative Agent. In the case of each Borrowing of
Foreign Currency Revolving Loans, not later than 10:00 a.m., Local Time, on the
requested Borrowing Date, each Lender will make available to the Administrative
Agent at the office of its applicable Correspondent (or at such other location
as the Administrative Agent may designate) an amount, in the applicable Foreign
Currency and in immediately available funds, equal to the amount of the Foreign
Currency Revolving Loan to be made by such Lender. To the extent the Lenders
have made such amounts available to the Administrative Agent as provided
hereinabove, the Administrative Agent will make the aggregate of such amounts
available to the applicable Borrower in accordance with SECTION 2.3(A) and in
like funds as received by the Administrative Agent.
(d) In order to make a Borrowing of a Swingline Loan, Matria will
give the Administrative Agent and the Swingline Lender written notice not later
than 11:00 a.m., Charlotte time, on the date of such Borrowing. Each such notice
(each, a "Notice of Swingline Borrowing") shall be irrevocable, shall be given
in the form of EXHIBIT B-2 and shall specify (i) the principal amount of the
Swingline Loan to be made pursuant to such Borrowing (which shall not be less
than $50,000 and, if greater, shall be in an integral multiple of $50,000 in
excess thereof (or, if less, in the amount of the Unutilized Swingline
Commitment)) and (ii) the requested Borrowing Date, which shall be a Business
Day. Not later than 1:00 p.m., Charlotte time, on the requested Borrowing Date,
the Swingline Lender will make available to the Administrative Agent at its
office referred to in SECTION 12.5 (or at such other location as the
Administrative Agent may designate) an amount, in Dollars and in immediately
available funds, equal to the amount of the requested Swingline Loan. To the
extent the Swingline Lender has made such amount available to the Administrative
Agent as provided hereinabove, the Administrative Agent will make such amount
available to Matria in accordance with SECTION 2.3(A) and in like funds as
received by the Administrative Agent.
(e) With respect to any outstanding Swingline Loans, the Swingline
Lender may at any time (whether or not an Event of Default has occurred and is
continuing) in its sole and absolute discretion, and is hereby authorized and
empowered by Matria to, cause a Borrowing of Revolving Loans to be made for the
purpose of repaying such Swingline Loans by delivering to the Administrative
Agent (if the Administrative Agent is different from the Swingline Lender) and
each other Lender (on behalf of, and with a copy to, Matria), not later than
11:00 a.m., Charlotte time, one (1) Business Day prior to the proposed Borrowing
Date therefor, a notice (which shall be deemed to be a Notice of Borrowing given
by Matria) requesting the Lenders to make Dollar Revolving Loans (which shall be
made initially as Base Rate Loans) on such Borrowing Date in an aggregate amount
equal to the amount of such Swingline Loans (the "Refunded Swingline Loans")
outstanding on the date such notice is given that the Swingline Lender requests
to be repaid. Not later than 1:00 p.m., Charlotte time, on the requested
Borrowing Date, each Lender (other than the Swingline Lender) will make
available to the
29
36
Administrative Agent at its office referred to in SECTION 12.5 (or at such other
location as the Administrative Agent may designate) an amount, in Dollars and in
immediately available funds, equal to the amount of the Dollar Revolving Loan to
be made by such Lender. To the extent the Lenders have made such amounts
available to the Administrative Agent as provided hereinabove, the
Administrative Agent will make the aggregate of such amounts available to the
Swingline Lender in like funds as received by the Administrative Agent, which
shall apply such amounts in repayment of the Refunded Swingline Loans.
Notwithstanding any provision of this Agreement to the contrary, on the relevant
Borrowing Date, the Refunded Swingline Loans (including the Swingline Lender's
ratable share thereof, in its capacity as a Lender) shall be deemed to be repaid
with the proceeds of the Dollar Revolving Loans made as provided above
(including a Dollar Revolving Loan deemed to have been made by the Swingline
Lender), and such Refunded Swingline Loans deemed to be so repaid shall no
longer be outstanding as Swingline Loans but shall be outstanding as Dollar
Revolving Loans. If any portion of any such amount repaid (or deemed to be
repaid) to the Swingline Lender shall be recovered by or on behalf of Matria
from the Swingline Lender in any bankruptcy, insolvency or similar proceeding or
otherwise, the loss of the amount so recovered shall be shared ratably among all
the Lenders in the manner contemplated by SECTION 2.15(B).
(f) If, as a result of any bankruptcy, insolvency or similar
proceeding with respect to Matria, Dollar Revolving Loans are not made pursuant
to subsection (e) above in an amount sufficient to repay any amounts owed to the
Swingline Lender in respect of any outstanding Swingline Loans, or if the
Swingline Lender is otherwise precluded for any reason from giving a notice on
behalf of Matria as provided for hereinabove, the Swingline Lender shall be
deemed to have sold without recourse, representation or warranty, and each
Lender shall be deemed to have purchased and hereby agrees to purchase, a
participation in such outstanding Swingline Loans in an amount equal to its
ratable share (based on the proportion that its Revolving Credit Commitment
bears to the aggregate Revolving Credit Commitments at such time) of the unpaid
amount thereof together with accrued interest thereon. Upon one (1) Business
Day's prior notice from the Swingline Lender, each Lender (other than the
Swingline Lender) will make available to the Administrative Agent at its office
referred to in SECTION 12.5 (or at such other location as the Administrative
Agent may designate) an amount, in Dollars and in immediately available funds,
equal to its respective participation. To the extent the Lenders have made such
amounts available to the Administrative Agent as provided hereinabove, the
Administrative Agent will make the aggregate of such amounts available to the
Swingline Lender in like funds as received by the Administrative Agent. In the
event any such Lender fails to make available to the Administrative Agent the
amount of such Lender's participation as provided in this subsection (f), the
Swingline Lender shall be entitled to recover such amount on demand from such
Lender, together with interest thereon for each day from the date such amount is
required to be made available for the account of the Swingline Lender until the
date such amount is made available to the Swingline Lender at the Federal Funds
Rate for the first three (3) Business Days and thereafter at the Adjusted Base
Rate. Promptly following its receipt of any payment by or on behalf of Matria in
respect of a Swingline Loan, the Swingline Lender will pay to each Lender that
has acquired a participation therein such Lender's ratable share of such
payment.
(g) Notwithstanding any provision of this Agreement to the
contrary, the obligation of each Lender (other than the Swingline Lender) to
make Dollar Revolving Loans for the purpose of repaying any Refunded Swingline
Loans pursuant to subsection (e) above and each
30
37
such Lender's obligation to purchase a participation in any unpaid Swingline
Loans pursuant to subsection (f) above shall be absolute and unconditional and
shall not be affected by any circumstance or event whatsoever, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or other
right that such Lender may have against the Swingline Lender, the Administrative
Agent, Matria or any other Person for any reason whatsoever, (ii) the occurrence
or continuance of any Default or Event of Default, (iii) any adverse change in
the business, operations, properties, assets, condition (financial or otherwise)
or prospects of Matria or any of its Subsidiaries, or (iv) any breach of this
Agreement by any party hereto.
2.3 Disbursements; Funding Reliance; Domicile of Loans.
(a) Each Borrower hereby authorizes the Administrative Agent and
each Correspondent to disburse the proceeds of each Borrowing in accordance with
the terms of any written instructions from any of its Authorized Officers,
provided that neither the Administrative Agent nor any Correspondent shall be
obligated under any circumstances to forward amounts to any account not listed
in an Account Designation Letter. Each Borrower may at any time deliver to the
Administrative Agent an Account Designation Letter listing any additional
accounts or deleting any accounts listed in a previous Account Designation
Letter.
(b) Unless the Administrative Agent has received, prior to the
applicable funding deadline as set forth in SECTION 2.2(C) or SECTION 2.2(E), on
the relevant Borrowing Date, written notice from a Lender that such Lender will
not make available to the Administrative Agent such Lender's ratable portion (if
any) of the relevant Borrowing, the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent in
immediately available funds on such Borrowing Date in accordance with the
applicable provisions of SECTION 2.2(C) or SECTION 2.2(E), as the case may be,
and the Administrative Agent may, in reliance upon such assumption, but shall
not be obligated to, make a corresponding amount available to the applicable
Borrower on such Borrowing Date. If and to the extent that such Lender shall not
have made such portion available to the Administrative Agent, and the
Administrative Agent shall have made such corresponding amount available to the
applicable Borrower, such Lender, on the one hand, and the applicable Borrower,
on the other, severally agree to pay to the Administrative Agent forthwith on
demand such corresponding amount, together with interest thereon for each day
from the date such amount is made available to the applicable Borrower until the
date such amount is repaid to the Administrative Agent, (i) in the case of such
Lender, (y) with respect to any Borrowing of Dollar Revolving Loans, at the
Federal Funds Rate, and (z) with respect to any Borrowing of Foreign Currency
Revolving Loans, at the Administrative Agent's average daily cost of carrying
such amount, and (ii) in the case of such Borrower, at the rate of interest
applicable at such time to the Type of Loans comprising such Borrowing, as
determined under the provisions of SECTION 2.8. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement. The
failure of any Lender to make any Loan required to be made by it as part of any
Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan as part of such Borrowing, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender as part of any Borrowing.
31
38
(c) Each Lender may, at its option, make and maintain any Loan at,
to or for the account of any of its Lending Offices, provided that any exercise
of such option shall not affect the obligation of the applicable Borrower to
repay such Loan to or for the account of such Lender in accordance with the
terms of this Agreement.
2.4 Notes.
(a) The Loans made by each Lender shall be evidenced (i) in the
case of Dollar Revolving Loans, by a Dollar Revolving Credit Note appropriately
completed in substantially the form of EXHIBIT A-1, (ii) in the case of Foreign
Currency Revolving Loans, by a Foreign Currency Revolving Credit Note
appropriately completed in substantially the form of EXHIBIT A-2, and (iii) in
the case of Swingline Loans, by a Swingline Note appropriately completed in
substantially the form of EXHIBIT A-3.
(b) Each Dollar Revolving Credit Note issued to a Lender shall (i)
be executed by Matria, (ii) be payable to the order of such Lender, (iii) be
dated as of the Restatement Effective Date (or, in the case of a Dollar
Revolving Credit Note issued after the Restatement Effective Date, dated the
effective date of the applicable Assignment and Acceptance), (iv) be in a stated
principal amount equal to such Lender's Revolving Credit Commitment, (v) bear
interest in accordance with the provisions of SECTION 2.8, as the same may be
applicable from time to time to the Dollar Revolving Loans made by such Lender,
and (vi) be entitled to all of the benefits of this Agreement and the other
Credit Documents and subject to the provisions hereof and thereof.
(c) Each Foreign Currency Revolving Credit Note issued to a Lender
shall (i) be executed by the applicable Borrower, (ii) be payable to the order
of such Lender, (iii) be dated as of the Restatement Effective Date (or, in the
case of a Foreign Currency Revolving Credit Note issued after the Restatement
Effective Date, dated the effective date of the applicable Assignment and
Acceptance), (iv) be in a stated principal amount equal to such Lender's ratable
share of the Foreign Currency Sublimit, (v) bear interest in accordance with the
provisions of SECTION 2.8, as the same may be applicable from time to time to
the Foreign Currency Revolving Loans made by such Lender to such Borrower, and
(vi) be entitled to all of the benefits of this Agreement and the other Credit
Documents and subject to the provisions hereof and thereof.
(d) The Swingline Note shall (i) be executed by Matria, (ii) be
payable to the order of the Swingline Lender, (iii) be dated as of the
Restatement Effective Date, (iv) be in a stated principal amount equal to the
Swingline Commitment, (v) bear interest in accordance with the provisions of
SECTION 2.8, as the same may be applicable from time to time to the Swingline
Loans, and (vi) be entitled to all of the benefits of this Agreement and the
other Credit Documents and subject to the provisions hereof and thereof.
(e) Each Lender will record on its internal records the amount and
Type of each Loan made by it and each payment received by it in respect thereof
and will, in the event of any transfer of any of its Notes, either endorse on
the reverse side thereof or on a schedule attached thereto (or any continuation
thereof) the outstanding principal amount and Type of the Loans evidenced
thereby as of the date of transfer or provide such information on a schedule to
the Assignment and Acceptance relating to such transfer; provided, however, that
the failure of any
32
39
Lender to make any such recordation or provide any such information, or any
error therein, shall not affect any Borrower's obligations under this Agreement
or the Notes.
2.5 Termination and Reduction of Revolving Credit Commitments and
Swingline Commitment.
(a) The Revolving Credit Commitments shall be automatically and
permanently terminated on the Termination Date (or, if earlier, on July 15,
2001, if the Restatement Effective Date shall not have occurred on or prior to
such date). The Swingline Commitment shall be automatically and permanently
terminated on the Swingline Maturity Date, unless sooner terminated pursuant to
any other provision of this Section or SECTION 9.2.
(b) At any time and from time to time after the date hereof, upon
not less than five (5) Business Days' prior written notice to the Administrative
Agent (and, in the case of a termination or reduction of the Unutilized
Swingline Commitment, the Swingline Lender), Matria may terminate in whole or
reduce in part the aggregate Unutilized Revolving Credit Commitments, the
Unutilized Swingline Commitment and/or the Foreign Currency Sublimit, provided
that any such partial reduction shall be in an aggregate principal Dollar Amount
of not less than $1,000,000 or, if greater, an integral multiple thereof. The
amount of any termination or reduction made under this subsection (b) may not
thereafter be reinstated.
(c) Each reduction of the Revolving Credit Commitments or the
Foreign Currency Sublimit pursuant to this Section shall be applied ratably
among the Lenders according to their respective Revolving Credit Commitments or
ratable share (based on their respective Revolving Credit Commitments) of the
Foreign Currency Sublimit, as the case may be. Notwithstanding any provision of
this Agreement to the contrary, to the extent that the aggregate Revolving
Credit Commitments are reduced pursuant to this Section to an amount lower than
the Swingline Commitment or the Foreign Currency Sublimit, there shall be a
corresponding permanent reduction of the Swingline Commitment or the Foreign
Currency Sublimit, as the case may be, to the amount of the aggregate Revolving
Credit Commitments as so reduced.
2.6 Mandatory Payments and Prepayments.
(a) Except to the extent due or paid sooner pursuant to the
provisions of this Agreement, (i) the aggregate outstanding principal of the
Swingline Loans shall be due and payable in full on the Swingline Maturity Date,
(ii) the aggregate outstanding principal amount of each Borrowing of Foreign
Currency Revolving Loans shall be due and payable in full on the last day of the
Interest Period applicable thereto; provided, however, that the applicable
Borrower may, subject to the provisions of SECTION 2.11, continue all or a
portion of such outstanding principal amount of such Foreign Currency Revolving
Loans for an additional Interest Period in the same Foreign Currency, and to the
extent that any such Foreign Currency Revolving Loans are not continued for an
additional Interest Period as provided in such Section, such Borrower will repay
the principal amount thereof not so continued (together with interest thereon)
on the last day of the Interest Period applicable thereto, and (iii) the
aggregate outstanding principal amount of all the Revolving Loans shall be due
and payable in full on the Revolving Credit Maturity Date. Each payment of a
Foreign Currency Revolving Loan made pursuant to the provisions of this
subsection (a) shall be made in the Foreign Currency in which
33
40
such Foreign Currency Revolving Loan was made, as set forth more particularly in
SECTION 2.12(A), and shall be made in an amount (denominated in the applicable
Foreign Currency) equal to the outstanding amount (denominated in such Foreign
Currency) of such Foreign Currency Revolving Loan, i.e. without adjustment to
the Dollar Equivalent of such outstanding amount.
(b) In the event that, at any time, the sum of (x) the aggregate
principal Dollar Amount of Revolving Loans outstanding at such time, (y) the
aggregate Letter of Credit Exposure of all Lenders at such time and (z) the
aggregate principal amount of Swingline Loans outstanding at such time
(excluding the aggregate amount of any Swingline Loans to be repaid with
proceeds of Dollar Revolving Loans made on the date of determination) shall
exceed the aggregate Revolving Credit Commitments at such time (after giving
effect to any concurrent termination or reduction thereof), the Borrowers will
immediately prepay the outstanding principal amount of the Swingline Loans and,
to the extent of any excess remaining after prepayment in full of outstanding
Swingline Loans, the Borrowers will immediately prepay the outstanding principal
amount of the Revolving Loans in the Dollar Amount of such excess; provided
that, to the extent such excess amount is greater than the aggregate principal
amount of Swingline Loans and Revolving Loans outstanding immediately prior to
the application of such prepayment, the amount so prepaid shall be retained by
the Administrative Agent and held in the Cash Collateral Account as cover for
Letter of Credit Exposure, as more particularly described in SECTION 3.8, and
thereupon such cash shall be deemed to reduce the aggregate Letter of Credit
Exposure by an equivalent amount.
(c) In the event that, at any time, the aggregate principal Dollar
Amount of Foreign Currency Revolving Loans outstanding at such time shall exceed
the Foreign Currency Sublimit at such time (after giving effect to any
concurrent termination or reduction thereof), the Borrowers will immediately
prepay the outstanding principal amount of the Foreign Currency Revolving Loans
in the Dollar Amount of such excess.
(d) Not later than sixty (60) days after receipt by Matria or any
Subsidiary of any proceeds of insurance, condemnation award or other
compensation in respect of any Casualty Event (and in any event upon its
determination not to repair or replace any property subject to such Casualty
Event), the Borrowers will prepay the outstanding principal amount of the Loans
in an amount equal to 100% of the Net Cash Proceeds from such Casualty Event
(less any amounts theretofore applied to the repair or replacement of property
subject to such Casualty Event) and in connection therewith Matria will deliver
to the Administrative Agent, concurrently with such prepayment, a certificate
signed by a Financial Officer of Matria in form and substance satisfactory to
the Administrative Agent and setting forth the calculation of such Net Cash
Proceeds; provided, however, that, notwithstanding the foregoing, (i) nothing in
this subsection shall be deemed to limit or otherwise affect any right of the
Administrative Agent herein or in any of the other Credit Documents to receive
and hold such proceeds as loss payee and to disburse the same to Matria upon the
terms hereof or thereof, or any obligation of Matria and each of its
Subsidiaries herein or in any of the other Credit Documents to remit any such
proceeds to the Administrative Agent upon its receipt thereof, and (ii) any and
all such proceeds received or held by the Administrative Agent or Matria or any
of its Subsidiaries during the continuance of an Event of Default (regardless of
any proposed or actual use thereof for repair or replacement) shall be applied
to prepay the outstanding principal amount of the Loans.
34
41
(e) Each prepayment of the Loans made pursuant to subsection (d)
above shall be applied (i) first, to reduce the outstanding principal amount of
the Swingline Loans, with a corresponding permanent reduction to the Revolving
Credit Commitments, (ii) second, to the extent of any excess remaining after
application as provided in clause (i), to reduce the outstanding principal
amount of the Revolving Loans, with a corresponding permanent reduction to the
Revolving Credit Commitments, and (iii) third, to the extent of any excess
remaining after application as provided in clauses (i) and (ii) above, to pay
any outstanding Reimbursement Obligations, and thereafter to cash collateralize
Letter of Credit Exposure pursuant to SECTION 3.8. Each payment or prepayment
pursuant to the provisions of this Section shall be applied ratably among the
Lenders holding the Loans being prepaid, in proportion to the principal amount
held by each, and in the case of prepayments pursuant to subsection (b) or (d)
above shall be applied, as among the Loans being prepaid, (x) first, to prepay
all Base Rate Loans, (y) second, to the extent of any excess remaining after
application as provided in clause (x) above, to prepay all LIBOR Loans (and as
among LIBOR Loans, first to prepay those LIBOR Loans, if any, having Interest
Periods ending on the date of such prepayment), and (z) third, in the case of
Revolving Loans only, to the extent of any excess remaining after application as
provided in clauses (x) and (y) above, to prepay all Foreign Currency Revolving
Loans in an amount equal to the Dollar Amount of such excess (and as among
Foreign Currency Revolving Loans, first to prepay those Foreign Currency
Revolving Loans, if any, having Interest Periods ending on the date of such
prepayment).
(f) Each payment or prepayment of a Fixed Rate Loan made pursuant
to the provisions of this Section on a day other than the last day of the
Interest Period applicable thereto shall be made together with all amounts
required under SECTION 2.18 to be paid as a consequence thereof.
(g) For purposes of subsections (b) and (c) above, and
notwithstanding any other provision of this Agreement, the Administrative Agent
shall calculate the Dollar Equivalent of each Foreign Currency Revolving Loan
(i) in connection with the making or continuation of such Foreign Currency
Revolving Loan, as of the date such Foreign Currency Revolving Loan is so made
or continued, and (ii) on the Termination Date. Notwithstanding the foregoing,
the Administrative Agent may in its sole discretion, but unless requested in
writing to do so by the Required Lenders shall not be required to, calculate the
Dollar Equivalent of any Foreign Currency Revolving Loan or other amount at any
other time for purposes of determining compliance with the provisions of
subsections (b) and (c) above.
2.7 Voluntary Prepayments. At any time and from time to time, each
Borrower shall have the right to prepay the Loans, in whole or in part, without
premium or penalty (except as provided in clause (iii) below), upon written
notice given to the Administrative Agent not later than 11:00 a.m., Charlotte
time, the Applicable Number of Business Days prior to each intended prepayment,
provided that (i) each partial prepayment of Base Rate Loans shall be in an
aggregate principal amount of not less than $1,000,000 or, if greater, an
integral multiple of $500,000 in excess thereof ($50,000 and $50,000,
respectively, in the case of Swingline Loans), and each partial prepayment of
Fixed Rate Loans shall be in an aggregate principal Dollar Amount of not less
than $3,000,000 or, if greater, an integral multiple of a Dollar Amount of
$1,000,000 in excess thereof, (ii) no partial prepayment of Fixed Rate Loans
made pursuant to any single Borrowing shall reduce the aggregate outstanding
principal amount of the remaining
35
42
Fixed Rate Loans under such Borrowing to less than a Dollar Amount of $3,000,000
or to any greater amount not an integral multiple Dollar Amount of $1,000,000 in
excess thereof, and (iii) unless made together with all amounts required under
SECTION 2.18 to be paid as a consequence of such prepayment, a prepayment of a
Fixed Rate Loan may be made only on the last day of the Interest Period
applicable thereto. Each such notice shall specify the proposed date of such
prepayment and the aggregate principal amount, Class and Type of the Loans to be
prepaid (and, in the case of Fixed Rate Loans, the Borrowing pursuant to which
made and the Interest Period applicable thereto), and shall be irrevocable and
shall bind such Borrower to make such prepayment on the terms specified therein.
Revolving Loans and Swingline Loans prepaid pursuant to this Section may be
reborrowed, subject to the terms and conditions of this Agreement. Each
prepayment of the Loans made pursuant to this Section shall be applied ratably
among the Lenders holding the Loans being prepaid, in proportion to the
principal amount held by each.
2.8 Interest.
(a) Each Borrower will pay interest in respect of the unpaid
principal amount of each Loan made to it, from the date of Borrowing thereof
until such principal amount shall be paid in full, (i) at the Adjusted Base
Rate, as in effect from time to time during such periods as such Loan is a Base
Rate Loan, (ii) at the Adjusted LIBOR Rate, as in effect from time to time
during such periods as such Loan is a LIBOR Loan, and (iii) at the Adjusted IBOR
Rate, as in effect from time to time during such periods as such Loan is a
Foreign Currency Revolving Loan.
(b) Upon the occurrence and during the continuance of any default
by any Borrower in the payment of any principal of or interest on any Loan, any
fees or other amount hereunder when due (whether at maturity, pursuant to
acceleration or otherwise), and (at the election of the Required Lenders) upon
the occurrence and during the continuance of any Event of Default, in order to
compensate the Lenders for increased credit risk and not as a penalty, all
outstanding principal amounts of the Loans and, to the greatest extent permitted
by law, all interest accrued on the Loans and all other accrued and outstanding
fees and other amounts hereunder, shall bear interest at a rate per annum equal
to the interest rate applicable from time to time thereafter to such Loans
(whether the Adjusted Base Rate, the Adjusted LIBOR Rate or the Adjusted IBOR
Rate) plus 2% (or, in the case of fees and other amounts, at the Adjusted Base
Rate plus 2%), and, in each case, such default interest shall be payable on
demand. To the greatest extent permitted by law, interest shall continue to
accrue after the filing by or against any applicable Borrower of any petition
seeking any relief in bankruptcy or under any law pertaining to insolvency or
debtor relief.
(c) Accrued (and theretofore unpaid) interest shall be payable as
follows:
(i) in respect of each Base Rate Loan (including any Base
Rate Loan or portion thereof paid or prepaid pursuant to the provisions
of SECTION 2.6, except as provided hereinbelow), in arrears on the last
Business Day of each calendar quarter, beginning with the first such
day to occur after the Original Closing Date; provided, that in the
event the Loans are repaid or prepaid in full and the Revolving Credit
Commitments have been terminated, then accrued interest in respect of
all Base Rate Loans shall be payable together with such repayment or
prepayment on the date thereof;
36
43
(ii) in respect of each Fixed Rate Loan (including any
Fixed Rate Loan or portion thereof paid or prepaid pursuant to the
provisions of SECTION 2.6, except as provided hereinbelow), in arrears
(y) on the last Business Day of the Interest Period applicable thereto
(subject to the provisions of clause (iv) in SECTION 2.10) and (z) in
addition, in the case of a Fixed Rate Loan with an Interest Period
having a duration of six months, on the date three months after the
first day of such Interest Period; provided, that in the event all
Fixed Rate Loans made pursuant to a single Borrowing are repaid or
prepaid in full, then accrued interest in respect of such Fixed Rate
Loans shall be payable together with such repayment or prepayment on
the date thereof; and
(iii) in respect of any Loan, at maturity (whether pursuant
to acceleration or otherwise) and, after maturity, on demand.
(d) Nothing contained in this Agreement or in any other Credit
Document shall be deemed to establish or require the payment of interest to any
Lender at a rate in excess of the maximum rate permitted by applicable law. If
the amount of interest payable for the account of any Lender on any interest
payment date would exceed the maximum amount permitted by applicable law to be
charged by such Lender, the amount of interest payable for its account on such
interest payment date shall be automatically reduced to such maximum permissible
amount. In the event of any such reduction affecting any Lender, if from time to
time thereafter the amount of interest payable for the account of such Lender on
any interest payment date would be less than the maximum amount permitted by
applicable law to be charged by such Lender, then the amount of interest payable
for its account on such subsequent interest payment date shall be automatically
increased to such maximum permissible amount, provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this sentence exceed the aggregate amount by which
interest paid for its account has theretofore been reduced pursuant to the
previous sentence.
(e) The Administrative Agent shall promptly notify Matria and the
Lenders upon determining the interest rate for each Borrowing of Fixed Rate
Loans after its receipt of the relevant Notice of Borrowing or Notice of
Conversion/Continuation, and upon each change in the Base Rate; provided,
however, that the failure of the Administrative Agent to provide the applicable
Borrower or the Lenders with any such notice shall neither affect any
obligations of such Borrower or the Lenders hereunder nor result in any
liability on the part of the Administrative Agent to such Borrower or any
Lender. Each such determination (including each determination of the applicable
Reserve Requirement) shall, absent manifest error, be conclusive and binding on
all parties hereto.
2.9 Fees. Matria agrees to pay:
(a) To the Arranger and First Union, on the Restatement Effective
Date, the fees described in the Fee Letter, in the amounts set forth therein as
due and payable to the Arranger and First Union, respectively, on the
Restatement Effective Date (including fees for the account of the Lenders) and
to the extent not theretofore paid to the Arranger and First Union;
(b) To the Administrative Agent, for the account of each Lender, a
commitment fee for each calendar quarter (or portion thereof) for the period
from the date of this Agreement to
37
44
the Termination Date, at a per annum rate equal to the Commitment Fee Percentage
in effect from time to time during such quarter, on such Lender's ratable share
(based on the proportion that its Revolving Credit Commitment bears to the
aggregate Revolving Credit Commitments) of the average daily aggregate
Unutilized Revolving Credit Commitments, payable in arrears (i) on the last
Business Day of each calendar quarter and (ii) on the Termination Date;
(c) To the Administrative Agent, for the account of each Lender, a
letter of credit fee for each calendar quarter (or portion thereof) in respect
of all Letters of Credit outstanding during such quarter, at a per annum rate
equal to the Applicable Margin Percentage in effect from time to time during
such quarter for Revolving Loans that are maintained as LIBOR Loans, on such
Lender's ratable share (based on the proportion that its Revolving Credit
Commitment bears to the aggregate Revolving Credit Commitments) of the daily
average aggregate Stated Amount of such Letters of Credit, payable in arrears
(i) on the last Business Day of each calendar quarter and (ii) on the later of
the Termination Date and the date of termination of the last outstanding Letter
of Credit;
(d) To the Issuing Lender, for its own account, a facing fee for
each calendar quarter (or portion thereof) in respect of all Letters of Credit
outstanding during such quarter, at a per annum rate of 0.125% on the daily
average aggregate Stated Amount of such Letters of Credit, payable in arrears
(i) on the last Business Day of each calendar quarter and (ii) on the later of
the Termination Date and the date of termination of the last outstanding Letter
of Credit; and
(e) To the Administrative Agent, for its own account, the annual
administrative fee described in paragraph (2) of the Fee Letter, on the terms,
in the amount and at the times set forth therein.
2.10 Interest Periods. Concurrently with the giving of a Notice of
Borrowing or Notice of Conversion/Continuation in respect of (a) any Borrowing
of Dollar Revolving Loans comprised of Base Rate Loans to be converted into, or
LIBOR Loans to be continued as, LIBOR Loans, or (b) any Borrowing of Foreign
Currency Revolving Loans in any Foreign Currency to be continued as Foreign
Currency Revolving Loans in the same Foreign Currency, the applicable Borrower
shall have the right to elect, pursuant to such notice, the interest period
(each, an "Interest Period") to be applicable to such LIBOR Loans or Foreign
Currency Revolving Loans, as the case may be, which Interest Period shall, at
the option of such Borrower, be a one, two, three or six-month period; provided,
however, that:
(i) all Fixed Rate Loans comprising a single Borrowing
shall at all times have the same Interest Period;
(ii) the initial Interest Period for any Fixed Rate Loan
shall commence on the date of the Borrowing of such Fixed Rate Loan
(including the date of any continuation of, or conversion into, such
Fixed Rate Loan), and each successive Interest Period applicable to
such Fixed Rate Loan shall commence on the day on which the next
preceding Interest Period applicable thereto expires;
38
45
(iii) Fixed Rate Loans may not be outstanding under more
than five (5) separate Interest Periods at any one time (for which
purpose Interest Periods shall be deemed to be separate even if they
are coterminous);
(iv) if any Interest Period otherwise would expire on a
day that is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day unless such next succeeding Business
Day falls in another calendar month, in which case such Interest Period
shall expire on the next preceding Business Day;
(v) the Borrower may not select any Interest Period that
(y) with respect to any Revolving Loans made on the Restatement
Effective Date, begins prior to the third (3rd) Business Day after the
Restatement Effective Date (with respect to LIBOR Loans) or the fourth
(4th) Business Day after the Restatement Effective Date (with respect
to Foreign Currency Loans) or (z) that expires after the Revolving
Credit Maturity Date; and
(vi) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month during
which such Interest Period would otherwise expire, such Interest Period
shall expire on the last Business Day of such calendar month.
2.11 Conversions and Continuations.
(a) The Borrowers shall have the right, on any Business Day
occurring on or after the Restatement Effective Date, to elect (i) to convert
all or a portion of the outstanding principal amount of any Base Rate Loans into
LIBOR Loans, or to convert any LIBOR Loans the Interest Periods for which end on
the same day into Base Rate Loans, or (ii) upon the expiration of any Interest
Period, (A) to continue all or a portion of the outstanding principal amount of
any LIBOR Loans, the Interest Periods for which end on the same day, for an
additional Interest Period, or (B) to continue all or a portion of the
outstanding principal amount of any Foreign Currency Revolving Loans in any
Foreign Currency, the Interest Periods for which end on the same day, for an
additional Interest Period as Foreign Currency Revolving Loans in the same
Foreign Currency, provided that (w) any such conversion of LIBOR Loans into Base
Rate Loans shall involve an aggregate principal amount of not less than
$1,000,000 or, if greater, an integral multiple of $500,000 in excess thereof;
any such conversion of Base Rate Loans into, or continuation of, LIBOR Loans, or
continuation of Foreign Currency Revolving Loans, shall involve an aggregate
principal Dollar Amount of not less than $3,000,000 or, if greater, an integral
multiple of a Dollar Amount of $1,000,000 in excess thereof; and no partial
conversion of LIBOR Loans made pursuant to a single Borrowing shall reduce the
outstanding principal amount of such LIBOR Loans to less than $3,000,000 or to
any greater amount not an integral multiple of $1,000,000 in excess thereof, (x)
except as otherwise provided in SECTION 2.16(D), LIBOR Loans may be converted
into Base Rate Loans only on the last day of the Interest Period applicable
thereto (and, in any event, if a LIBOR Loan is converted into a Base Rate Loan
on any day other than the last day of the Interest Period applicable thereto,
the applicable Borrower will pay, upon such conversion, all amounts required
under SECTION 2.18 to be paid as a consequence thereof), (y) no such conversion
or continuation shall be permitted with regard to any Base Rate Loans that are
Swingline Loans, and (z) no conversion of Base Rate Loans into
39
46
LIBOR Loans or continuation of Fixed Rate Loans shall be permitted during the
continuance of a Default or Event of Default.
(b) The applicable Borrower shall make each such election by
giving the Administrative Agent written notice not later than 11:00 a.m.,
Charlotte time, the Applicable Number of Business Days prior to the intended
effective date of any such conversion or continuation. Each such notice (each, a
"Notice of Conversion/Continuation") shall be irrevocable, shall be given in the
form of EXHIBIT B-3 and shall specify (w) the date of such conversion or
continuation (which shall be a Business Day), (x) in the case of a conversion
into, or a continuation of, Fixed Rate Loans, the Interest Period to be
applicable thereto, (y) in the case of a continuation of Foreign Currency
Revolving Loans, the applicable Foreign Currency, and (z) the aggregate amount
and Type of the Loans being converted or continued. Upon the receipt of a Notice
of Conversion/Continuation, the Administrative Agent will promptly notify each
Lender of the proposed conversion or continuation. In the event that the
applicable Borrower shall fail to deliver a Notice of Conversion/Continuation as
provided herein with respect to any outstanding Fixed Rate Loans, such Fixed
Rate Loans shall automatically be converted to Base Rate Loans upon the
expiration of the then current Interest Period applicable thereto (unless repaid
pursuant to the terms hereof), and if such Fixed Rate Loans were Foreign
Currency Revolving Loans, any such Base Rate Loans shall be in an aggregate
principal amount equal to the aggregate principal Dollar Amount of such Fixed
Rate Loans. In the event the applicable Borrower shall have failed to select in
a Notice of Conversion/Continuation the duration of the Interest Period to be
applicable to any conversion into, or continuation of, Fixed Rate Loans, then
such Borrower shall be deemed to have selected an Interest Period with a
duration of one month.
2.12 Method of Payments; Computations.
(a) All payments by the Borrowers hereunder shall be made without
setoff, counterclaim or other defense and in immediately available funds to the
Administrative Agent, for the account of the Lenders entitled to such payment or
the Swingline Lender, as the case may be (except as otherwise expressly provided
herein as to payments required to be made directly to the Issuing Lender and the
Lenders), (i) in the case of payments of principal and interest with respect to
any Dollar Revolving Loan and all payments of fees, expenses and any other
amounts due hereunder or under any other Credit Document (except as set forth in
clause (ii) below with respect to Foreign Currency Revolving Loans), in Dollars,
to the Administrative Agent at its office referred to in SECTION 12.5, prior to
12:00 noon, Charlotte time, on the date payment is due, and (ii) in the case of
payments of principal and interest with respect to any Foreign Currency
Revolving Loan, in the Foreign Currency in which such Foreign Currency Revolving
Loan was made, to the Administrative Agent at the office of the applicable
Correspondent, prior to 12:00 noon, Local Time, on the date payment is due. Any
payment made as required hereinabove, but after 12:00 noon, Charlotte time (or
Local Time, as the case may be) shall be deemed to have been made on the next
succeeding Business Day. If any payment falls due on a day that is not a
Business Day, then such due date shall be extended to the next succeeding
Business Day (except that in the case of Fixed Rate Loans to which the
provisions of clause (iv) in SECTION 2.10 are applicable, such due date shall be
the next preceding Business Day), and such extension of time shall then be
included in the computation of payment of interest, fees or other applicable
amounts.
40
47
(b) The Administrative Agent will distribute to the Lenders like
amounts relating to payments made to the Administrative Agent for the account of
the Lenders as follows: (i) if the payment is received by 12:00 noon, Charlotte
time (in the case of payments denominated in Dollars) or Local Time (in the case
of payments denominated in a Foreign Currency), in immediately available funds,
the Administrative Agent will make available to each relevant Lender on the same
date, by wire transfer of immediately available funds, such Lender's ratable
share of such payment (based on the percentage that the amount of the relevant
payment owing to such Lender bears to the total amount of such payment owing to
all of the relevant Lenders), and (ii) if such payment is received after 12:00
noon, Charlotte time (in the case of payments denominated in Dollars) or Local
Time (in the case of payments denominated in a Foreign Currency), or in other
than immediately available funds, the Administrative Agent will make available
to each such Lender its ratable share of such payment by wire transfer of
immediately available funds on the next succeeding Business Day (or in the case
of uncollected funds, as soon as practicable after collected). The
Administrative Agent will distribute to the Issuing Lender like amounts relating
to payments made to the Administrative Agent for the account of the Issuing
Lender in the same manner, and subject to the same terms and conditions, as set
forth hereinabove with respect to distributions of amounts to the Lenders.
(c) Unless the Administrative Agent shall have received written
notice from the applicable Borrower prior to the date on which any payment is
due to any Lender hereunder that such payment will not be made in full, the
Administrative Agent may assume that such Borrower has made such payment in full
to the Administrative Agent on such date, and the Administrative Agent may, in
reliance on such assumption, but shall not be obligated to, cause to be
distributed to such Lender on such due date an amount equal to the amount then
due to such Lender. If and to the extent such Borrower shall not have so made
such payment in full to the Administrative Agent, and without limiting the
obligation of such Borrower to make such payment in accordance with the terms
hereof, such Lender shall repay to the Administrative Agent forthwith on demand
such amount so distributed to such Lender, together with interest thereon for
each day from the date such amount is so distributed to such Lender until the
date repaid to the Administrative Agent, (y) with respect to any amount
denominated in Dollars, at the Federal Funds Rate, and (z) with respect to any
amount denominated in a Foreign Currency, at the Administrative Agent's average
daily cost of carrying such amount.
(d) All computations of interest and fees hereunder (including
computations of the applicable Reserve Requirement) shall be made on the basis
of a year consisting of (i) in the case of interest on Base Rate Loans and
Foreign Currency Revolving Loans denominated in British pounds sterling, 365 or
366 days, as the case may be, and (ii) in all other instances, 360 days, and in
each case, the actual number of days (including the first day, but excluding the
last day) elapsed.
2.13 Recovery of Payments.
(a) Each Borrower agrees that to the extent such Borrower makes a
payment or payments to or for the account of the Administrative Agent, any
Lender or the Issuing Lender, which payment or payments or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or similar state or federal law, common law or equitable
41
48
cause, then, to the extent of such payment or repayment, the Obligation intended
to be satisfied shall be revived and continued in full force and effect as if
such payment had not been received.
(b) If any amounts distributed by the Administrative Agent to any
Lender are subsequently returned or repaid by the Administrative Agent to any
Borrower or its representative or successor in interest, whether by court order
or by settlement approved by the Lender in question, such Lender will, promptly
upon receipt of notice thereof from the Administrative Agent, pay the
Administrative Agent such amount. If any such amounts are recovered by the
Administrative Agent from any Borrower or its representative or successor in
interest, the Administrative Agent will redistribute such amounts to the Lenders
on the same basis as such amounts were originally distributed.
2.14 Use of Proceeds. The proceeds of the Revolving Loans shall be
used for working capital and general corporate purposes of the Borrowers and
their Subsidiaries and in such other manner as is expressly provided under, and
in accordance with, the terms and provisions of this Agreement (including to
finance Permitted Acquisitions in accordance with the terms and provisions of
this Agreement, including without limitation the provisions set forth in SECTION
6.9, and to repay the Senior Notes to the extent repayment is permitted by this
Agreement).
2.15 Pro Rata Treatment.
(a) All fundings, continuations and conversions of Revolving Loans
shall be made by the Lenders pro rata on the basis of their respective Revolving
Credit Commitments (in the case of the initial funding of Loans pursuant to
SECTION 2.2) or on the basis of their respective outstanding Revolving Loans (in
the case of continuations and conversions of Revolving Loans pursuant to SECTION
2.11, and additionally in all cases in the event the Revolving Credit
Commitments have expired or have been terminated), as the case may be from time
to time. All payments on account of principal of or interest on any Loans, fees
or any other Obligations owing to or for the account of any one or more Lenders
shall be apportioned ratably among such Lenders in proportion to the amounts of
such principal, interest, fees or other Obligations owed to them respectively.
(b) Each Lender agrees that if it shall receive any amount
hereunder (whether by voluntary payment, realization upon security, exercise of
the right of setoff or banker's lien, counterclaim or cross action, or
otherwise, other than pursuant to SECTION 12.7) applicable to the payment of any
of the Obligations that exceeds its ratable share (according to the proportion
of (i) the amount of such Obligations due and payable to such Lender at such
time to (ii) the aggregate amount of such Obligations due and payable to all
Lenders at such time) of payments on account of such Obligations then or
therewith obtained by all the Lenders to which such payments are required to
have been made, such Lender shall forthwith purchase from the other Lenders such
participations in such Obligations as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably with
each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each such other Lender shall be rescinded and each such other Lender shall repay
to the purchasing Lender the purchase price to the extent of such recovery,
together with an amount equal to such other Lender's ratable share (according to
the proportion of (i) the amount of such other Lender's required repayment to
(ii) the total amount so
42
49
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
Each Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to the provisions of this subsection may, to the fullest extent
permitted by law, exercise any and all rights of payment (including, without
limitation, setoff, banker's lien or counterclaim) with respect to such
participation as fully as if such participant were a direct creditor of such
Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or similar law, any Lender receives a secured claim in
lieu of a setoff to which this subsection applies, such Lender shall, to the
extent practicable, exercise its rights in respect of such secured claim in a
manner consistent with the rights of the Lenders entitled under this subsection
to share in the benefits of any recovery on such secured claim.
2.16 Increased Costs; Change in Circumstances; Illegality; etc.
(a) If, at any time after the date hereof and from time to time,
the introduction of or any change in any applicable law, rule or regulation or
in the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline or request from any such Governmental Authority
(whether or not having the force of law), shall (i) subject such Lender to any
tax or other charge, or change the basis of taxation of payments to such Lender,
in respect of any of its Fixed Rate Loans or any other amounts payable hereunder
or its obligation to make, fund or maintain any Fixed Rate Loans (other than any
change in the rate or basis of tax on the overall net income of such Lender or
its applicable Lending Office), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement (other than any reserves to the
extent actually included within the applicable Reserve Requirement in the
calculation of any Fixed Rate) against assets of, deposits with or for the
account of, or credit extended by, such Lender or its applicable Lending Office,
or (iii) impose on such Lender or its applicable Lending Office any other
condition, and the result of any of the foregoing shall be to increase in any
material respect the cost to such Lender of making or maintaining any Fixed Rate
Loans or issuing or participating in Letters of Credit or to reduce in any
material respect the amount of any sum received or receivable by such Lender
hereunder (including in respect of Letters of Credit), each applicable Borrower
will, promptly upon demand therefor by such Lender, pay to such Lender such
additional amounts as shall compensate such Lender for such increase in costs or
reduction in return.
(b) If, at any time after the date hereof and from time to time,
any Lender shall have reasonably determined that the introduction of or any
change in any applicable law, rule or regulation regarding capital adequacy or
in the interpretation or administration thereof by any Governmental Authority
charged with the interpretation or administration thereof, or compliance by such
Lender with any guideline or request from any such Governmental Authority
(whether or not having the force of law), has or would have the effect, as a
consequence of such Lender's Revolving Credit Commitment, Loans or issuance of
or participations in Letters of Credit hereunder, of reducing the rate of return
on the capital of such Lender or any Person controlling such Lender to a level
below that which such Lender or controlling Person could have achieved but for
such introduction, change or compliance (taking into account such Lender's or
controlling Person's policies with respect to capital adequacy), each applicable
Borrower will,
43
50
promptly upon demand therefor by such Lender therefor, pay to such Lender such
additional amounts as will compensate such Lender or controlling Person for such
reduction in return.
(c) If, on or prior to the first day of any Interest Period, (x)
the Administrative Agent or the Required Lenders shall have determined that by
reason of circumstances affecting the foreign exchange and interbank markets
generally, deposits in Eurodollars or any Foreign Currency in the applicable
amounts are not being quoted or offered to the Administrative Agent or the
Lenders for such Interest Period, or that a fundamental change has occurred in
the foreign exchange or interbank markets with respect to any Foreign Currency
(including, without limitation, changes in national or international financial,
political or economic conditions or currency exchange rates or exchange
controls), (y) the Administrative Agent shall have determined that adequate and
reasonable means do not exist for ascertaining the applicable Fixed Rate for
such Interest Period, or (z) the Administrative Agent shall have received
written notice from the Required Lenders of their determination that the rate of
interest referred to in the definition of "LIBOR Rate" or "IBOR Rate" upon the
basis of which the applicable Fixed Rate for such Interest Period is to be
determined will not adequately and fairly reflect the cost to such Lenders of
making or maintaining the relevant Type of Fixed Rate Loans during such Interest
Period, the Administrative Agent will forthwith so notify the Borrowers and the
Lenders. Upon such notice, (i) all then outstanding Fixed Rate Loans of each
affected currency and/or Interest Period type specified in such notice (each, a
"Relevant Type") shall automatically, on the expiration date of the respective
Interest Periods applicable thereto, be converted into Base Rate Loans or
prepaid in full (provided that if any such Fixed Rate Loan is a Foreign Currency
Revolving Loan, such Loan shall be prepaid in full on the expiration date of the
applicable Interest Period), and (ii) the obligation of the Lenders to make, to
convert Loans into, or to continue, Fixed Rate Loans of each Relevant Type shall
be suspended (including pursuant to the Borrowing to which such Interest Period
applies), in each case until the Administrative Agent or the Required Lenders,
as the case may be, shall have determined that the circumstances giving rise to
such suspension no longer exist, and upon such determination the Required
Lenders (if making such determination) shall so notify the Administrative Agent,
and the Administrative Agent shall so notify the Borrowers and the Lenders.
(d) Notwithstanding any other provision in this Agreement, if, at
any time after the date of the Existing Credit Agreement and from time to time,
any Lender shall have determined in good faith that the introduction of or any
change in any applicable law, rule or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance with any guideline or
request from any such Governmental Authority (whether or not having the force of
law), has or would have the effect of making it unlawful for such Lender to make
or to continue to make or maintain Fixed Rate Loans of any currency or Interest
Period type, such Lender will forthwith so notify the Administrative Agent and
the Borrowers. Upon such notice, (i) each of such Lender's then outstanding
Fixed Rate Loans of each Relevant Type shall automatically, on the expiration
date of the respective Interest Period applicable thereto (or, to the extent any
such Fixed Rate Loan may not lawfully be maintained as a Fixed Rate Loan of such
Type until such expiration date, upon such notice), be converted into a Base
Rate Loan (provided that if any such Fixed Rate Loan is a Foreign Currency
Revolving Loan, such Loan shall be prepaid in full on the expiration date of the
applicable Interest Period), and (ii) the obligation of such Lender to make, to
convert Loans into, or to continue, Fixed Rate Loans of each Relevant Type shall
be suspended
44
51
(including pursuant to any Borrowing for which the Administrative Agent has
received a Notice of Borrowing but for which the Borrowing Date has not
arrived), in each case until such Lender shall have reasonably determined that
the circumstances giving rise to such suspension no longer exist, and upon such
determination such Lender shall so notify the Administrative Agent, and the
Administrative Agent shall so notify the Borrowers.
(e) In the event, as a result of increases in the value of any
Foreign Currency against the Dollar, the obligation of any Lender to make,
maintain or continue Revolving Loans or issue or participate in Letters of
Credit (taking into account the Dollar Amount of the Obligations and all other
indebtedness required to be aggregated under 12 U.S.C.A. ss.84, as amended, the
regulations promulgated thereunder and any other applicable Requirement of Law)
is determined by such Lender to exceed its then applicable legal lending limit
under 12 U.S.C.A. ss.84, as amended, the regulations promulgated thereunder, or
any other applicable Requirement of Law, the amount of additional extensions of
credit (including participations in Letters of Credit) such Lender shall be
obligated to make or issue or participate in hereunder shall, immediately
thereupon, be reduced to the maximum amount that such Lender may legally advance
or maintain (as reasonably determined by such Lender), and, to the extent
necessary under such applicable Requirements of Law (as determined by each
Lender with respect to itself), the Borrowers shall reduce, or cause to be
reduced, complying to the extent practicable with the remaining provisions
hereof, the Obligations outstanding hereunder by an amount sufficient to comply
with such maximum amount.
(f) Determinations by the Administrative Agent or any Lender for
purposes of this Section of any increased costs, reduction in return, market
contingencies, illegality or any other matter shall, absent manifest error, be
conclusive, provided that such determinations are made in good faith. No failure
by the Administrative Agent or any Lender at any time to demand payment of any
amounts payable under this Section shall constitute a waiver of its right to
demand payment of any additional amounts arising at any subsequent time;
provided, however, that no Borrower shall be required to compensate a Lender
pursuant to this Section for any increased costs or reduction in return incurred
or suffered more than 180 days prior to the date that such Lender notifies the
applicable Borrower of the event or circumstance giving rise to such increased
costs or reduction and of such Lender's intent to claim compensation therefor;
and provided further that if the event or circumstance giving rise to such
increased costs or reduction is retroactive, then the 180-day period referred to
above shall be extended to include the period of retroactive effect thereof.
Nothing in this Section shall require or be construed to require any Borrower to
pay any interest, fees, costs or other amounts in excess of that permitted by
applicable law.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section or exercising its rights under subsection (d) or (f) above shall
use reasonable efforts (consistent with legal and regulatory restrictions) to
file any certificate or document reasonably requested by the applicable Borrower
or to change the jurisdiction of its applicable Lending Office if the making of
such filing or change would avoid the need for or reduce the amount of any such
additional amounts that may thereafter accrue or avoid the circumstances giving
rise to such exercise and would not, in the reasonable determination of such
Lender, result in any additional costs, expenses or risks or be otherwise
disadvantageous to it. Each Lender agrees to use reasonable efforts to notify
the applicable Borrower as promptly as practicable upon its becoming aware that
45
52
circumstances exist that would cause such Borrower to become obligated to pay
additional amounts to such Lender pursuant to this Section or that would entitle
such Lender to exercise its rights under subsection (d) or (f) above.
2.17 Taxes.
(a) Any and all payments by the Borrowers hereunder or under any
Note shall be made, in accordance with the terms hereof and thereof, free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, other than net income and franchise taxes imposed on the Administrative
Agent or any Lender by the United States or by the jurisdiction under the laws
of which the Administrative Agent or such Lender, as the case may be, is
organized or in which its principal office or (in the case of a Lender) its
applicable Lending Office is located, or any political subdivision or taxing
authority thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If any Borrower shall be required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Note to the Administrative Agent or
any Lender, (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section), the Administrative Agent or such
Lender, as the case may be, receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Borrower will make such
deductions, (iii) such Borrower will pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable law
and (iv) such Borrower will deliver to the Administrative Agent or such Lender,
as the case may be, evidence of such payment.
(b) The Borrowers will indemnify the Administrative Agent and each
Lender for the full amount of Taxes (including, without limitation, any Taxes
imposed by any jurisdiction on amounts payable under this Section) paid by the
Administrative Agent or such Lender, as the case may be, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Administrative
Agent or such Lender, as the case may be, makes written demand therefor.
(c) Each of the Administrative Agent and the Lenders agrees that
if it subsequently recovers, or receives a permanent net tax benefit with
respect to, any amount of Taxes (i) previously paid by it and as to which it has
been indemnified by or on behalf of the Borrowers or (ii) previously deducted by
the Borrowers (including, without limitation, any Taxes deducted from any
additional sums payable under clause (i) of subsection (a) above), the
Administrative Agent or such Lender, as the case may be, shall reimburse the
Borrowers to the extent of the amount of any such recovery or permanent net tax
benefit (but only to the extent of indemnity payments made, or additional
amounts paid, by or on behalf of the Borrowers under this Section with respect
to the Taxes giving rise to such recovery or tax benefit); provided, however,
that the Borrowers, upon the request of the Administrative Agent or such Lender,
agree to repay to the Administrative Agent or such Lender, as the case may be,
the amount paid over to the Borrowers (together with any penalties, interest or
other charges), in the event the Administrative Agent or such Lender is required
to repay such amount to the relevant taxing authority or other Governmental
Authority. The determination by the Administrative Agent or any Lender of the
46
53
amount of any such recovery or permanent net tax benefit shall, in the absence
of manifest error, be conclusive and binding, provided that such determination
is made in good faith.
(d) If any Lender is incorporated or organized under the laws of a
jurisdiction other than the United States of America or any state thereof (a
"Non-U.S. Lender") and claims exemption from United States withholding tax
pursuant to the Internal Revenue Code, such Non-U.S. Lender will (if it has not
previously done so) deliver to each of the Administrative Agent and Matria, on
or prior to the Restatement Effective Date (or, in the case of a Non-U.S. Lender
that becomes a party to this Agreement as a result of an assignment after the
Restatement Effective Date, on the effective date of such assignment), (i) in
the case of a Non-U.S. Lender that is a "bank" for purposes of Section
881(c)(3)(A) of the Internal Revenue Code, a properly completed Internal Revenue
Service Form 4224 or 1001, X-0XXX, X-0XXX or W-8EXP, as applicable (or successor
forms), certifying that such Non-U.S. Lender is entitled to an exemption from or
a reduction of withholding or deduction for or on account of United States
federal income taxes in connection with payments under this Agreement or any of
the Notes, together with a properly completed Internal Revenue Service Form W-8
or W-9, as applicable (or successor forms), and (ii) in the case of a Non-U.S.
Lender that is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal
Revenue Code, a certificate in form and substance reasonably satisfactory to the
Administrative Agent and Matria and to the effect that (x) such Non-U.S. Lender
is not a "bank" for purposes of Section 881(c)(3)(A) of the Internal Revenue
Code, is not subject to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any governmental authority,
any application made to a rating agency or qualification for any exemption from
any tax, securities law or other legal requirements, (y) is not a 10-percent
shareholder for purposes of Section 881(c)(3)(B) of the Internal Revenue Code
and (z) is not a controlled foreign corporation receiving interest from a
related person for purposes of Section 881(c)(3)(C) of the Internal Revenue
Code, together with a properly completed Internal Revenue Service Form W-8 or
W-9, as applicable (or successor forms). Each such Non-U.S. Lender further
agrees to deliver to each of the Administrative Agent and Matria an additional
copy of each such relevant form on or before the date that such form expires or
becomes obsolete or after the occurrence of any event (including a change in its
applicable Lending Office) requiring a change in the most recent forms so
delivered by it, in each case certifying that such Non-U.S. Lender is entitled
to an exemption from or a reduction of withholding or deduction for or on
account of United States federal income taxes in connection with payments under
this Agreement or any of the Notes, unless an event (including, without
limitation, any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required, which event renders
all such forms inapplicable or the exemption to which such forms relate
unavailable and such Non-U.S. Lender notifies the Administrative Agent and
Matria that it is not entitled to receive payments without deduction or
withholding of United States federal income taxes. Each such Non-U.S. Lender
will promptly notify the Administrative Agent and Matria of any changes in
circumstances that would modify or render invalid any claimed exemption or
reduction.
(e) If any Lender is entitled to a reduction in (and not a
complete exemption from) the applicable withholding tax, the Borrowers and the
Administrative Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If any of the forms or other documentation required under
47
54
subsection (d) above are not delivered to the Administrative Agent as therein
required, then the Borrowers and the Administrative Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
2.18 Compensation. Each Borrower will compensate each Lender upon
demand for all losses, expenses and liabilities (including, without limitation,
any loss, expense or liability incurred by reason of the liquidation or
reemployment of deposits or other funds required by such Lender to fund or
maintain Fixed Rate Loans or by reason of the liquidation or closing out of any
foreign currency contract undertaken by such Lender to fund or maintain Fixed
Rate Loans) that such Lender may incur or sustain (i) if for any reason (other
than a default by such Lender) a Borrowing or continuation of, or conversion
into, a Fixed Rate Loan by or to such Borrower does not occur on a date
specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation, (ii) if any repayment, prepayment or conversion of any
Fixed Rate Loan by such Borrower occurs on a date other than the last day of an
Interest Period applicable thereto (including as a consequence of acceleration
of the maturity of the Loans pursuant to SECTION 9.2), (iii) if any prepayment
of any Fixed Rate Loan by such Borrower is not made on any date specified in a
notice of prepayment given by such Borrower, (iv) as a consequence of any other
failure by such Borrower to make any payments with respect to any Fixed Rate
Loan when due hereunder, or (v) as a consequence of any failure by such Borrower
to pay a Foreign Currency Revolving Loan in the applicable Foreign Currency.
Calculation of all amounts payable to a Lender under this Section shall be made
as though such Lender had actually funded its relevant Fixed Rate Loan through
the purchase in the applicable interbank market of a Eurodollar (or other
applicable Foreign Currency) deposit bearing interest at the relevant Fixed Rate
in an amount equal to the amount of such Fixed Rate Loan, having a maturity
comparable to the relevant Interest Period; provided, however, that each Lender
may fund its Fixed Rate Loans in any manner it sees fit and the foregoing
assumption shall be utilized only for the calculation of amounts payable under
this Section. Determinations by any Lender for purposes of this Section of any
such losses, expenses or liabilities shall, absent manifest error, be
conclusive, provided that such determinations are made in good faith.
ARTICLE III
LETTERS OF CREDIT
3.1 Issuance. Subject to and upon the terms and conditions herein
set forth, so long as no Default or Event of Default has occurred and is
continuing, the Issuing Lender will, at any time and from time to time on and
after the Restatement Effective Date and prior to the earlier of (i) the seventh
day prior to the Revolving Credit Maturity Date and (ii) the Termination Date,
and upon request by Matria in accordance with the provisions of SECTION 3.2,
issue for the account of Matria one or more irrevocable standby letters of
credit denominated in Dollars and in a form customarily used or otherwise
approved by the Issuing Lender, and on the Restatement Effective Date the
Issuing Lender shall be deemed to have issued the Existing Letters of Credit
pursuant to this Agreement, as more completely set forth in SECTION 3.10
(collectively, together with all amendments, modifications and supplements
thereto, substitutions therefor and renewals and restatements thereof,
collectively, the "Letters of Credit"). The Stated Amount of each
48
55
Letter of Credit shall not be less than such amount as may be acceptable to the
Issuing Lender. Notwithstanding the foregoing:
(a) No Letter of Credit shall be issued the Stated Amount upon
issuance of which (i) would be less than $100,000, (ii) when added to the
aggregate Letter of Credit Exposure of the Lenders at such time, would exceed
$5,000,000, or (iii) when added to the sum of (x) the aggregate Letter of Credit
Exposure of all Lenders at such time, (y) the aggregate principal Dollar Amount
of all Revolving Loans then outstanding and (z) the aggregate principal amount
of all Swingline Loans then outstanding, would exceed the aggregate Revolving
Credit Commitments at such time;
(b) No more than five (5) Letters of Credit shall be outstanding
at any time;
(c) No Letter of Credit shall be issued that by its terms expires
later than the seventh day prior to the Revolving Credit Maturity Date or, in
any event, more than one (1) year after its date of issuance; provided, however,
that a Letter of Credit may, if requested by Matria, provide by its terms, and
on terms acceptable to the Issuing Lender, for renewal for successive periods of
one year or less (but not beyond the seventh day prior to the Revolving Credit
Maturity Date), unless and until the Issuing Lender shall have delivered a
notice of nonrenewal to the beneficiary of such Letter of Credit; and
(d) The Issuing Lender shall be under no obligation to issue any
Letter of Credit if, at the time of such proposed issuance, (i) any order,
judgment or decree of any Governmental Authority or arbitrator shall purport by
its terms to enjoin or restrain the Issuing Lender from issuing such Letter of
Credit, or any Requirement of Law applicable to the Issuing Lender or any
request or directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the Issuing Lender shall prohibit,
or request that the Issuing Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose upon the
Issuing Lender with respect to such Letter of Credit any restriction or reserve
or capital requirement (for which the Issuing Lender is not otherwise
compensated) not in effect on the Original Closing Date, or any unreimbursed
loss, cost or expense that was not applicable, in effect or known to the Issuing
Lender as of the Original Closing Date and that the Issuing Lender in good xxxxx
xxxxx material to it, or (ii) the Issuing Lender shall have actual knowledge, or
shall have received notice from any Lender, prior to the issuance of such Letter
of Credit that one or more of the conditions specified in SECTIONS 4.1 (if
applicable) or 4.2 are not then satisfied (or have not been waived in writing as
required herein) or that the issuance of such Letter of Credit would violate the
provisions of subsection (a) above.
3.2 Notices. Whenever Matria desires the issuance of a Letter of
Credit (other than the Existing Letters of Credit), Matria will give the Issuing
Lender written notice with a copy to the Administrative Agent not later than
11:00 a.m., Charlotte time, three (3) Business Days (or such shorter period as
is acceptable to the Issuing Lender in any given case) prior to the requested
date of issuance thereof. Each such notice (each, a "Letter of Credit Notice")
shall be irrevocable, shall be given in the form of EXHIBIT B-4 and shall
specify (i) the requested date of issuance, which shall be a Business Day, (ii)
the requested Stated Amount and expiry date of the Letter of Credit, and (iii)
the name and address of the requested beneficiary or beneficiaries of the Letter
of Credit. Matria will also complete any application procedures and documents
49
56
required by the Issuing Lender in connection with the issuance of any Letter of
Credit. Upon its issuance of any Letter of Credit, the Issuing Lender will
promptly notify the Administrative Agent of such issuance, and the
Administrative Agent will give prompt notice thereof to each Lender.
3.3 Participations. Immediately upon the issuance of any Letter of
Credit, the Issuing Lender shall be deemed to have sold and transferred to each
Lender, and each Lender shall be deemed irrevocably and unconditionally to have
purchased and received from the Issuing Lender, without recourse or warranty, an
undivided interest and participation, pro rata (based on the percentage of the
aggregate Revolving Credit Commitments represented by such Lender's Revolving
Credit Commitment), in such Letter of Credit, each drawing made thereunder and
the obligations of Matria under this Agreement with respect thereto and any
Collateral or other security therefor or guaranty pertaining thereto; provided,
however, that the fee relating to Letters of Credit described in SECTION 2.9(D)
shall be payable directly to the Issuing Lender as provided therein, and the
Lenders shall have no right to receive any portion thereof. Upon any change in
the Revolving Credit Commitments of any of the Lenders pursuant to SECTION
12.7(A), with respect to all outstanding Letters of Credit and Reimbursement
Obligations there shall be an automatic adjustment to the participations
pursuant to this Section to reflect the new pro rata shares of the assigning
Lender and the Assignee.
3.4 Reimbursement. Matria hereby agrees to reimburse the Issuing
Lender by making payment to the Administrative Agent, for the account of the
Issuing Lender, in immediately available funds, for any payment made by the
Issuing Lender under any Letter of Credit (each such amount so paid until
reimbursed, together with interest thereon payable as provided hereinbelow, a
"Reimbursement Obligation") immediately after, and in any event within one (1)
Business Day after its receipt of notice of, such payment (provided that any
such Reimbursement Obligation shall be deemed timely satisfied (but nevertheless
subject to the payment of interest thereon as provided hereinbelow) if satisfied
pursuant to a Borrowing of Revolving Loans (which shall be Dollar Revolving
Loans) made on or prior to the next Business Day following the date of Matria's
receipt of notice of such payment), together with interest on the amount so paid
by the Issuing Lender, to the extent not reimbursed prior to 12:00 noon,
Charlotte time, on the date of such payment or disbursement, for the period from
the date of the respective payment to the date the Reimbursement Obligation
created thereby is satisfied, at the Adjusted Base Rate as in effect from time
to time during such period, such interest also to be payable on demand. The
Issuing Lender will provide the Administrative Agent and Matria with prompt
notice of any payment or disbursement made under any Letter of Credit, although
the failure to give, or any delay in giving, any such notice shall not release,
diminish or otherwise affect Matria's obligations under this Section or any
other provision of this Agreement. The Administrative Agent will promptly pay to
the Issuing Lender any such amounts received by it under this Section.
3.5 Payment by Revolving Loans. In the event that the Issuing
Lender makes any payment under any Letter of Credit and Matria shall not have
timely satisfied in full its Reimbursement Obligation to the Issuing Lender
pursuant to SECTION 3.4, and to the extent that any amounts then held in the
Cash Collateral Account established pursuant to SECTION 3.8 shall be
insufficient to satisfy such Reimbursement Obligation in full, the Issuing
Lender will promptly notify the Administrative Agent, and the Administrative
Agent will promptly notify
50
57
each Lender, of such failure. If the Administrative Agent gives such notice
prior to 11:00 a.m., Charlotte time, on any Business Day, each Lender will make
available to the Administrative Agent, for the account of the Issuing Lender,
its pro rata share (based on the percentage of the aggregate Revolving Credit
Commitments represented by such Lender's Revolving Credit Commitment) of the
amount of such payment on such Business Day in immediately available funds. If
the Administrative Agent gives such notice after 11:00 a.m., Charlotte time, on
any Business Day, each such Lender shall make its pro rata share of such amount
available to the Administrative Agent on the next succeeding Business Day. If
and to the extent any Lender shall not have so made its pro rata share of the
amount of such payment available to the Administrative Agent, such Lender agrees
to pay to the Administrative Agent, for the account of the Issuing Lender,
forthwith on demand such amount, together with interest thereon at the Federal
Funds Rate for each day from such date until the date such amount is paid to the
Administrative Agent. The failure of any Lender to make available to the
Administrative Agent its pro rata share of any payment under any Letter of
Credit shall not relieve any other Lender of its obligation hereunder to make
available to the Administrative Agent its pro rata share of any payment under
any Letter of Credit on the date required, as specified above, but no Lender
shall be responsible for the failure of any other Lender to make available to
the Administrative Agent such other Lender's pro rata share of any such payment.
Each such payment by a Lender under this Section of its pro rata share of an
amount paid by the Issuing Lender shall constitute a Revolving Loan by such
Lender (Matria being deemed to have given a timely Notice of Borrowing therefor)
and shall be treated as such for all purposes of this Agreement; provided that
for purposes of determining the aggregate Unutilized Revolving Credit
Commitments immediately prior to giving effect to the application of the
proceeds of such Revolving Loans, the Reimbursement Obligation being satisfied
thereby shall be deemed not to be outstanding at such time. Each Revolving Loan
made pursuant to this Section shall be a Dollar Revolving Loan and shall be made
initially as a Base Rate Loan.
3.6 Payment to Lenders. Whenever the Issuing Lender receives a
payment in respect of a Reimbursement Obligation as to which the Administrative
Agent has received, for the account of the Issuing Lender, any payments from the
Lenders pursuant to SECTION 3.5, the Issuing Lender will promptly pay to the
Administrative Agent, and the Administrative Agent will promptly pay to each
Lender that has paid its pro rata share thereof, in immediately available funds,
an amount equal to such Lender's ratable share (based on the proportionate
amount funded by such Lender to the aggregate amount funded by all Lenders) of
such Reimbursement Obligation.
3.7 Obligations Absolute. The Reimbursement Obligations of Matria,
and the obligations of the Lenders under SECTION 3.5 to make payments to the
Administrative Agent, for the account of the Issuing Lender, with respect to
Letters of Credit, shall be irrevocable, shall remain in effect until the
Issuing Lender shall have no further obligations to make any payments or
disbursements under any circumstances with respect to any Letter of Credit, and,
except to the extent resulting from any gross negligence or willful misconduct
on the part of the Issuing Lender, shall be absolute and unconditional, shall
not be subject to counterclaim, setoff or other defense or any other
qualification or exception whatsoever and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
51
58
(a) Any lack of validity or enforceability of this Agreement, any
of the other Credit Documents or any documents or instruments relating to any
Letter of Credit;
(b) Any change in the time, manner or place of payment of, or in
any other term of, all or any of the Obligations in respect of any Letter of
Credit, in each case whether or not Matria has notice or knowledge thereof;
(c) The existence of any claim, setoff, defense or other right
that Matria may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, the Issuing Lender, any
Lender or other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated hereby or any unrelated transactions
(including any underlying transaction between Matria and the beneficiary named
in any such Letter of Credit);
(d) Any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect (provided that such draft, certificate or other document appears on its
face to comply with the terms of such Letter of Credit), any errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
telecopier or otherwise, or any errors in translation or in interpretation of
technical terms;
(e) Any defense based upon the failure of any drawing under a
Letter of Credit to conform to the terms of the Letter of Credit (provided that
any draft, certificate or other document presented pursuant to such Letter of
Credit appears on its face to comply with the terms thereof), any nonapplication
or misapplication by the beneficiary or any transferee of the proceeds of such
drawing or any other act or omission of such beneficiary or transferee in
connection with such Letter of Credit;
(f) The exchange, release, surrender or impairment of any
Collateral or other security for the Obligations;
(g) The occurrence of any Default or Event of Default; or
(h) Any other circumstance that might otherwise constitute a
defense available to, or a discharge of, Matria or a guarantor.
Any action taken or omitted to be taken by the Issuing Lender under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall be binding upon Matria and each
Lender and shall not create or result in any liability of the Issuing Lender to
Matria or any Lender. It is expressly understood and agreed that, for purposes
of determining whether a wrongful payment under a Letter of Credit resulted from
the Issuing Lender's gross negligence or willful misconduct, (i) the Issuing
Lender's good faith acceptance of documents that appear on their face to comply
with the terms of such Letter of Credit, without responsibility for further
investigation, regardless of any notice or information to the contrary, (ii) the
Issuing Lender's exclusive reliance on the documents presented to it under such
Letter of Credit as to any and all matters set forth therein, including the
amount of any draft presented under such Letter of Credit, whether or not the
amount due to the beneficiary thereunder equals
52
59
the amount of such draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any respect (so long as such
document appears on its face to comply with the terms of such Letter of Credit),
and whether or not any other statement or any other document presented pursuant
to such Letter of Credit proves to be forged or invalid or any statement therein
proves to be inaccurate or untrue in any respect whatsoever, and (iii) any
noncompliance in any immaterial respect of the documents presented under such
Letter of Credit with the terms thereof shall, in each case, be deemed not to
constitute gross negligence or willful misconduct of the Issuing Lender.
3.8 Cash Collateral Account. At any time and from time to time (i)
after the occurrence and during the continuance of an Event of Default, the
Administrative Agent, at the direction or with the consent of the Required
Lenders, may require Matria to deliver to the Administrative Agent such
additional amount of cash as is equal to the aggregate Stated Amount of all
Letters of Credit at any time outstanding (whether or not any beneficiary under
any Letter of Credit shall have drawn or be entitled at such time to draw
thereunder) and (ii) in the event of a prepayment under SECTION 2.6(B), or to
the extent any amount of a required prepayment under SECTION 2.6(D) remains
after prepayment of all outstanding Loans and Reimbursement Obligations and
termination of the Revolving Credit Commitments, as contemplated by SECTION
2.6(E), the Administrative Agent will retain such amount as may then be required
to be retained, such amounts in each case under clauses (i) and (ii) above to be
held by the Administrative Agent in a cash collateral account (the "Cash
Collateral Account"). Matria hereby grants to the Administrative Agent, for the
benefit of the Issuing Lender and the Lenders, a Lien upon and security interest
in the Cash Collateral Account and all amounts held therein from time to time as
security for Letter of Credit Exposure, and for application to Matria's
Reimbursement Obligations as and when the same shall arise. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest on the investment of
such amounts in Cash Equivalents, which investments shall be made at the
direction of Matria (unless a Default or Event of Default shall have occurred
and be continuing, in which case the determination as to investments shall be
made at the option and in the discretion of the Administrative Agent), amounts
in the Cash Collateral Account shall not bear interest. Interest and profits, if
any, on such investments shall accumulate in such account. In the event of a
drawing, and subsequent payment by the Issuing Lender, under any Letter of
Credit at any time during which any amounts are held in the Cash Collateral
Account, the Administrative Agent will deliver to the Issuing Lender an amount
equal to the Reimbursement Obligation created as a result of such payment (or,
if the amounts so held are less than such Reimbursement Obligation, all of such
amounts) to reimburse the Issuing Lender therefor. Any amounts remaining in the
Cash Collateral Account after the expiration of all Letters of Credit and
reimbursement in full of the Issuing Lender for all of its obligations
thereunder shall be held by the Administrative Agent, for the benefit of Matria,
to be applied against the Obligations in such order and manner as the
Administrative Agent may direct. If Matria is required to provide cash
collateral pursuant to SECTION 2.6(B), such amount (to the extent not applied as
aforesaid) shall be returned to Matria on demand, provided that after giving
effect to such return (i) the sum of (x) the aggregate principal Dollar Amount
of all Revolving Loans outstanding at such time, (y) the aggregate principal
amount of all Swingline Loans outstanding at such time and (z) the aggregate
Letter of Credit Exposure of all Lenders at such time would not exceed the
aggregate Revolving Credit Commitments at such time and (ii) no Default or Event
of Default shall have occurred and be continuing at such time. If Matria is
53
60
required to provide cash collateral as a result of an Event of Default, such
amount (to the extent not applied as aforesaid) shall be returned to Matria
within three (3) Business Days after all Events of Default have been cured or
waived.
3.9 Effectiveness. Notwithstanding any termination of the
Revolving Credit Commitments or repayment of the Loans, or both, the obligations
of Matria under this Article shall remain in full force and effect until the
Issuing Lender and the Lenders shall have no further obligations to make any
payments or disbursements under any circumstances with respect to any Letter of
Credit.
3.10 Existing Letters of Credit. The parties hereto agree that each
Existing Letter of Credit will be treated as if it had been originally issued
under this Agreement, and as of the Restatement Effective Date each Existing
Letter of Credit shall be deemed to be a Letter of Credit for all purposes
hereunder and under the other Credit Documents. Specifically, and without
limitation of the foregoing or the other provisions of this Article, (i) the
Stated Amount of each Existing Letter of Credit, for so long as the same shall
be outstanding, shall be included in calculating (y) the limit set forth in
clause (ii) of SECTION 3.1(A) and (z) the aggregate Letter of Credit Exposure,
(ii) each Lender hereby absolutely and unconditionally agrees to pay to the
Issuing Lender, in accordance with SECTION 3.5, such Lender's pro rata share of
each payment made by the Issuing Lender under each Existing Letter of Credit,
together with interest in accordance with SECTION 3.5, and (iii) with respect to
each Existing Letter of Credit, the Issuing Lender shall have the benefit of all
agreements, covenants and indemnities of the Issuing Lender set forth in this
Agreement and shall comply with all agreements and obligations set forth herein
that bind the Issuing Lender, insofar as the same apply to Letters of Credit
generally.
ARTICLE IV
CONDITIONS OF EFFECTIVENESS, BORROWING
4.1 Conditions of Effectiveness, Initial Borrowing. The
effectiveness of this Agreement and the amendment and restatement of the
Existing Credit Agreement effected hereby and the obligation of the Issuing
Lender to issue Letters of Credit hereunder on the Restatement Effective Date,
is subject to the satisfaction of the following conditions precedent:
(a) The Administrative Agent shall have received the following,
each dated as of the Restatement Effective Date (unless otherwise specified)
and, except for the Notes and any certificates or instruments required to be
delivered under the Matria Pledge Agreement, in sufficient copies for each
Lender:
(i) A Dollar Revolving Credit Note for each Lender that
is a party hereto as of the Restatement Effective Date, in the amount
of such Lender's Revolving Credit Commitment; a Foreign Currency
Revolving Credit Note for each Lender that is a party hereto as of the
Restatement Effective Date, in the amount of such Lender's ratable
share of the Foreign Currency Sublimit; and a Swingline Note for the
Swingline Lender, in the amount of the Swingline Commitment, in each
case duly completed in accordance with the relevant provisions of
SECTION 2.4 and executed by Matria;
54
61
(ii) the Subsidiary Guaranty, duly completed and executed
by each Subsidiary of Matria (other than Foreign Subsidiaries and
Inactive Subsidiaries); a global amendment to the existing Intercompany
Notes, duly completed and executed by each Subsidiary of Matria (other
than Foreign Subsidiaries and Inactive Subsidiaries) that delivered an
Intercompany Note to the Administrative Agent on the Original Closing
Date; and an Intercompany Note, duly completed and executed by each
Subsidiary of Matria (other than Foreign Subsidiaries and Inactive
Subsidiaries) that did not deliver an Intercompany Note to the
Administrative Agent on the Original Closing Date;
(iii) the Security Agreement, duly completed and executed
by Matria and each Subsidiary of Matria (other than Foreign
Subsidiaries and Inactive Subsidiaries), and the Matria Pledge
Agreement, duly completed and executed by Matria and each Subsidiary of
Matria (other than Foreign Subsidiaries and Inactive Subsidiaries) that
owns Capital Stock of another Subsidiary other than an Inactive
Subsidiary (provided that the Capital Stock of Inactive Subsidiaries
shall not be required to be pledged), together (in each case, to the
extent not previously delivered to the Administrative Agent) with any
certificates evidencing the Capital Stock being pledged thereunder as
of the Restatement Effective Date and undated assignments separate from
certificate for any such certificate, duly executed in blank, and any
promissory notes being pledged thereunder, duly endorsed in blank; and
(iv) the favorable opinions of (A) Xxxxxxxx Xxxxxxx LLP,
special counsel to Matria, and (B) Xxxxxxx X. XxXxx, general counsel of
Matria, in each case addressed to the Administrative Agent and the
Lenders, addressing such matters as the Administrative Agent or any
Lender may reasonably request and in form and substance satisfactory to
the Administrative Agent and each Lender.
(b) The Administrative Agent shall have received a certificate,
signed by the president, the chief executive officer or the chief financial
officer of Matria, in form and substance satisfactory to the Administrative
Agent, certifying that (i) all representations and warranties of Matria
contained in this Agreement and the other Credit Documents are true and correct
as of the Restatement Effective Date, both immediately before and after giving
effect to the consummation of the transactions contemplated hereby, the making
of Loans hereunder (if any) on the Restatement Effective Date and the
application of the proceeds thereof, (ii) no Default or Event of Default has
occurred and is continuing, both immediately before and after giving effect to
the consummation of the transactions contemplated hereby, the making of Loans
hereunder (if any) on the Restatement Effective Date and the application of the
proceeds thereof, (iii) both immediately before and after giving effect to the
consummation of the transactions contemplated hereby, the making of Loans
hereunder (if any) on the Restatement Effective Date and the application of the
proceeds thereof, no Material Adverse Change has occurred since December 31,
2000, and there exists no event, condition or state of facts that could
reasonably be expected to result in a Material Adverse Change, and (iv) all
conditions to the effectiveness of this Agreement, and to the extensions of
credit hereunder on the Restatement Effective Date, set forth in this Section
and in SECTION 4.2 have been satisfied or waived as required hereunder.
(c) The Administrative Agent shall have received a certificate of
the secretary or an assistant secretary of each of Matria and its Subsidiaries
(other than Foreign Subsidiaries and
55
62
Inactive Subsidiaries), in form and substance satisfactory to the Administrative
Agent, certifying as follows:
(i) in the case of Matria, (x) that attached thereto is a
true and complete copy of its certificate of incorporation and all
amendments thereto, certified as of a recent date by the Secretary of
State of Delaware, and that the same has not been amended since the
date of such certification, (y) that attached thereto is a true and
complete copy of its bylaws as then in effect and as in effect at all
times from the date on which the resolutions referred to in clause (z)
below were adopted to and including the date of such certificate, and
(z) that attached thereto is a true and complete copy of resolutions
adopted by its board of directors authorizing the execution, delivery
and performance of this Agreement and the other Credit Documents to
which it is a party, and as to the incumbency and genuineness of the
signature of each officer of Matria executing this Agreement or any of
such other Credit Documents, and attaching all such copies of the
documents described above; and
(ii) in the case of each such Subsidiary of Matria, (x)
that since the Original Closing Date, there has been no amendment to or
restatement of its articles or certificate of incorporation or
organization as certified and delivered to the Administrative Agent on
the Original Closing Date, except as attached thereto (or, as
applicable, if the same shall not have been certified and delivered to
the Administrative Agent on the Original Closing Date, that attached
thereto is a true and complete copy thereof, certified as of a recent
date by the Secretary of State (or comparable Governmental Authority)
of its jurisdiction of organization, and that the same has not been
amended since the date of such certification); (y) that since the
Original Closing Date, there has been no amendment to its bylaws or
operating agreement as certified and delivered to the Administrative
Agent on the Original Closing Date, except as attached thereto (or, as
applicable, if the same shall not have been certified and delivered to
the Administrative Agent on the Original Closing Date, that attached
thereto is a true and complete copy thereof, as then in effect and as
in effect at all times from the date on which the resolutions referred
to in clause (z) below were adopted to and including the date of such
certificate); and (z) that attached thereto is a true and complete copy
of resolutions adopted by its board of directors (or the board of
directors of its managing member), as the case may be, authorizing the
execution, delivery and performance of the Credit Documents to which it
is a party, and as to the incumbency and genuineness of the signature
of each officer of such Subsidiary (or its managing member), as the
case may be, executing any of such Credit Documents, and attaching a
copy of such resolutions.
(d) The Administrative Agent shall have received (i) a certificate
as of a recent date of the good standing of each of Matria and its Subsidiaries
(other than Foreign Subsidiaries and Inactive Subsidiaries) under the laws of
its jurisdiction of organization, from the Secretary of State (or comparable
Governmental Authority) of such jurisdiction, and (ii) a certificate as of a
recent date of the qualification of Matria to conduct business as a foreign
corporation in the State of Georgia, from the Secretary of State of Georgia.
(e) All aspects of the structure and documentation of the Xxxxxx
Transaction and the issuance of the Senior Notes (including the Xxxxxx
Securities Purchase Agreement and the
56
63
Senior Note Indenture), all legal matters and documentation relating to the
credit facilities provided for hereby, and all corporate or other proceedings
incident to the transactions contemplated hereby, shall be satisfactory in form
and substance to the Administrative Agent.
(f) All approvals, permits and consents of any Governmental
Authorities or other Persons required in connection with the execution and
delivery of this Agreement and the other Credit Documents and the consummation
of the transactions contemplated hereby shall have been obtained, without the
imposition of conditions that are not acceptable to the Administrative Agent,
and all related filings, if any, shall have been made, and all such approvals,
permits, consents and filings shall be in full force and effect and the
Administrative Agent shall have received such copies thereof as it shall have
requested; all applicable waiting periods shall have expired without any adverse
action being taken by any Governmental Authority having jurisdiction; and no
action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before, and no order, injunction or decree
shall have been entered by, any court or other Governmental Authority, in each
case to enjoin, restrain or prohibit, to obtain substantial damages in respect
of, or that is otherwise related to or arises out of, this Agreement, any of the
other Credit Documents or the consummation of the transactions contemplated
hereby, or that, in the opinion of the Administrative Agent, could reasonably be
expected to have a Material Adverse Effect.
(g) Since the date thereof, the Xxxxxx Securities Purchase
Agreement shall not have been amended, modified or supplemented, nor any
condition or provision thereof waived, other than as approved by the
Administrative Agent and shall be in full force and effect; Matria shall have
duly complied with and performed all of its agreements and conditions set forth
in the Xxxxxx Securities Purchase Agreement required to be complied with or
performed by it on or prior to the closing date thereunder in order to
consummate the Xxxxxx Transaction; and the Administrative Agent shall have
received evidence satisfactory to it that the Xxxxxx Transaction shall be
consummated on the Restatement Effective Date in accordance with the terms of
the Xxxxxx Securities Purchase Agreement and in compliance with all applicable
Requirements of Law.
(h) The Administrative Agent shall be satisfied that Matria shall
have received net cash proceeds of not less than $110,000,000 from the issuance
of the Senior Notes on terms and conditions and pursuant to documentation
(including the Senior Note Indenture, the Senior Notes and all other
documentation relating thereto) satisfactory to the Administrative Agent and the
Lenders, and a portion of such net cash proceeds shall have been applied to
repay the Existing Credit Agreement Indebtedness in full, to consummate the
Xxxxxx Transaction, and to pay transaction fees and expenses in connection
therewith.
(i) Concurrently with the issuance of the Senior Notes, all
principal, interest, accrued but unpaid fees and other amounts outstanding under
the Existing Credit Agreement (collectively, the "Existing Credit Agreement
Indebtedness") shall be repaid and satisfied in full and all commitments to
extend credit thereunder shall be terminated (but without any release or
termination of the Liens securing the Existing Credit Agreement Indebtedness,
which shall remain in effect under this Agreement and the other Credit Documents
as security for the Obligations) and the Administrative Agent shall have
received evidence of the foregoing satisfactory to it.
57
64
(j) The Administrative Agent shall have received certified reports
from an independent search service satisfactory to it listing any Uniform
Commercial Code financing statement that (i) names Matria as debtor in any of
the jurisdictions listed beneath its name on Annex A to the Security Agreement
or (ii) names any Subsidiary Guarantor as debtor in any of the jurisdictions
listed beneath its name on Annex A to the Security Agreement, and the results
thereof shall be satisfactory to the Administrative Agent.
(k) The Administrative Agent shall have received evidence in form
and substance satisfactory to it that all filings, recordings, registrations and
other actions (including, without limitation, the filing of duly completed and
executed UCC-1 financing statements in each jurisdiction listed on Annex A to
the Security Agreement) necessary or, in the reasonable opinion of the
Administrative Agent, desirable to perfect the Liens created by the Security
Documents (including in compliance with Revised Article 9 of the Uniform
Commercial Code, whether or not then effective in all applicable jurisdictions)
shall have been completed, or arrangements satisfactory to the Administrative
Agent for the completion thereof shall have been made.
(l) Since December 31, 2000, both immediately before and after
giving effect to the consummation of the transactions contemplated by this
Agreement, there shall not have occurred any Material Adverse Change or any
event, condition or state of facts that could reasonably be expected to result
in a Material Adverse Change.
(m) Matria shall have paid all fees and expenses of the
Administrative Agent, the Arranger and the Lenders required hereunder, under the
Fee Letter or under any other Credit Document to be paid on or prior to the
Restatement Effective Date (including fees and expenses of counsel) in
connection with this Agreement and the transactions contemplated hereby.
(n) The Administrative Agent shall have received a Financial
Condition Certificate, together with the Projections as described in SECTION
5.11(B), all of which shall be in form and substance satisfactory to the
Administrative Agent.
(o) The Administrative Agent shall have received a Covenant
Compliance Worksheet, duly completed and certified by the chief financial
officer of Matria and in form and substance satisfactory to the Administrative
Agent, demonstrating Matria's compliance with the financial covenants set forth
in SECTIONS 7.1 through 7.5, determined on a pro forma basis as of March 31,
2001 after giving effect to the issuance of the Senior Notes, the Xxxxxx
Transaction and the consummation of the transactions contemplated hereby.
(p) The Administrative Agent shall have received evidence in form
and substance reasonably satisfactory to it that all of the requirements of
Section 6.6 and those provisions of the Security Agreement relating to the
maintenance of insurance have been satisfied, including receipt of certificates
of insurance evidencing the insurance coverages described on SCHEDULE 5.17 and
all other or additional coverages required under the Security Agreement and
naming the Administrative Agent as loss payee or additional insured, as its
interests may appear.
(q) There shall not have occurred any material disruption or
material adverse change in, or other condition with respect to, the United
States financial and capital markets that could
58
65
reasonably be expected to have a material adverse effect on the syndication of
the credit facilities provided for hereunder, and there shall be no competing
issues of debt securities (other than the Senior Notes) or commercial bank or
other credit facilities of Matria or any Subsidiary being offered, placed or
arranged.
(r) The Administrative Agent shall have received written
instructions from an Authorized Officer, including wire transfer information,
directing the payment of the proceeds of any Loans to be made hereunder on the
Restatement Effective Date.
(s) The Administrative Agent and each Lender shall have received
such other documents, certificates, opinions and instruments in connection with
the transactions contemplated hereby as it shall have reasonably requested.
4.2 Conditions of All Borrowings. The obligation of each Lender to
make any Loans hereunder, including the Loans to be made on the Restatement
Effective Date (but excluding Revolving Loans made for the purpose of repaying
Refunded Swingline Loans pursuant to SECTION 2.2(E)), and the obligation of the
Issuing Lender to issue any Letters of Credit hereunder, is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date or date of issuance:
(a) The Administrative Agent shall have received a Notice of
Borrowing in accordance with SECTION 2.2(B), or (together with the Swingline
Lender) a Notice of Swingline Borrowing in accordance with SECTION 2.2(D), or
(together with the Issuing Lender) a Letter of Credit Notice in accordance with
SECTION 3.2, as applicable;
(b) Each of the representations and warranties contained in
ARTICLE V and in the other Credit Documents shall be true and correct on and as
of such Borrowing Date (including the Restatement Effective Date, in the case of
the initial Loans made hereunder) or date of issuance with the same effect as if
made on and as of such date, both immediately before and after giving effect to
the Loans to be made or Letter of Credit to be issued on such date (except to
the extent any such representation or warranty is expressly stated to have been
made as of a specific date, in which case such representation or warranty shall
be true and correct in all material respects as of such date); and
(c) No Default or Event of Default shall have occurred and be
continuing on such date, both immediately before and after giving effect to the
Loans to be made or Letter of Credit to be issued on such date.
Each giving of a Notice of Borrowing, a Notice of Swingline Borrowing
or a Letter of Credit Notice, and the consummation of each Borrowing or issuance
of a Letter of Credit, shall be deemed to constitute a representation by Matria
(and each other applicable Borrower) that the statements contained in
subsections (b) and (c) above are true, both as of the date of such notice or
request and as of the relevant Borrowing Date or date of issuance.
66
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to extend the credit contemplated hereby,
each of the Borrowers represents and warrants to the Administrative Agent and
the Lenders as follows:
5.1 Organization and Power. Each of Matria and its Subsidiaries
(i) is a corporation or limited liability company duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (ii) has the full corporate or limited liability company power and
authority to execute, deliver and perform the Credit Documents to which it is or
will be a party, to own and hold its property and to engage in its business as
presently conducted, and (iii) is duly qualified to do business as a foreign
corporation or limited liability company and is in good standing in each
jurisdiction where the nature of its business or the ownership of its properties
requires it to be so qualified, except where the failure to be so qualified
would not, individually or in the aggregate, be reasonably likely to have a
Material Adverse Effect.
5.2 Authorization; Enforceability. Each of Matria and its
Subsidiaries has taken, or on the Restatement Effective Date will have taken,
all necessary corporate or limited liability company action to execute, deliver
and perform each of the Credit Documents to which it is or will be a party, and
has, or on the Restatement Effective Date (or any later date of execution and
delivery) will have, validly executed and delivered each of the Credit Documents
to which it is or will be a party. This Agreement constitutes, and each of the
other Credit Documents upon execution and delivery will constitute, the legal,
valid and binding obligation of each of Matria and its Subsidiaries that is a
party hereto or thereto, enforceable against it in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally, by general equitable principles or by principles of good faith and
fair dealing.
5.3 No Violation. The execution, delivery and performance by each
of Matria and its Subsidiaries of this Agreement and each of the other Credit
Documents to which it is or will be a party, and compliance by it with the terms
hereof and thereof, do not and will not (i) violate any provision of its
articles or certificate of incorporation or organization, bylaws or operating
agreement or contravene any other Requirement of Law applicable to it, (ii)
conflict with, result in a breach of or constitute (with notice, lapse of time
or both) a default under any indenture, agreement or other instrument to which
it is a party, by which it or any of its properties is bound or to which it is
subject, (iii) result in a Limitation on any Licenses applicable to the
business, operations or properties of Matria or any of its Subsidiaries or
adversely affect the ability of Matria or any of its Subsidiaries to participate
in any Third Party Payor Arrangement, or (iv) except for the Liens granted in
favor of the Administrative Agent pursuant to the Security Documents, result in
or require the creation or imposition of any Lien upon any of its properties or
assets. No Subsidiary is a party to any agreement or instrument or otherwise
subject to any restriction or encumbrance that restricts or limits its ability
to make dividend payments or other distributions in respect of its Capital
Stock, to repay Indebtedness owed to Matria or any other Subsidiary, to make
loans or advances to Matria or any other Subsidiary, or to transfer any of its
assets or properties to Matria or any other Subsidiary, in each case other than
such restrictions or
60
67
encumbrances existing under or by reason of the Credit Documents or applicable
Requirements of Law.
5.4 Governmental and Third-Party Authorization; Permits.
(a) No consent, approval, authorization or other action by, notice
to, or registration or filing with, any Governmental Authority or other Person
is or will be required as a condition to or otherwise in connection with the due
execution, delivery and performance by each of Matria and its Subsidiaries of
this Agreement or any of the other Credit Documents to which it is or will be a
party or the legality, validity or enforceability hereof or thereof, other than
(i) filings of Uniform Commercial Code financing statements and other
instruments and actions necessary to perfect the Liens created by the Security
Documents, (ii) consents, authorizations and filings that have been (or on or
prior to the Restatement Effective Date will have been) made or obtained and
that are (or on the Restatement Effective Date will be) in full force and
effect, which consents, authorizations and filings are listed on SCHEDULE 5.4,
and (iii) consents and filings the failure to obtain or make which would not,
individually or in the aggregate, have a Material Adverse Effect.
(b) Each of Matria and its Subsidiaries (i) has, and is in good
standing with respect to, all governmental approvals, permits and other Licenses
and (to the extent applicable) all Reimbursement Approvals necessary to conduct
its business as presently conducted and to own or lease and operate its
properties, (ii) has obtained and maintains accreditation from all generally
recognized accrediting agencies to the extent prudent and customary in the
industry in which it is engaged or to the extent required under applicable
Requirements of Law, and (iii) if and to the extent required, has obtained and
maintains Medicaid and Medicare certifications and has entered into and
maintains in good standing its Medicare and Medicaid provider agreements, except
in each instance under clauses (i) through (iii), for those the failure to
obtain which would not be reasonably likely, individually or in the aggregate,
to have a Material Adverse Effect. There is no pending or, to the knowledge of
Matria, threatened Limitation of any such approval, permit or other License or
Reimbursement Approval of Matria or any Subsidiary, except for such Limitations
as would not be reasonably likely, individually or in the aggregate, to have a
Material Adverse Effect.
5.5 Litigation. There are no actions, investigations, suits or
proceedings pending or, to the knowledge of Matria, threatened, at law, in
equity or in arbitration, before any court, other Governmental Authority or
other Person, (i) against or affecting Matria, any of its Subsidiaries or any of
their respective properties that would, if adversely determined, be reasonably
likely to have a Material Adverse Effect, or (ii) with respect to this Agreement
or any of the other Credit Documents.
5.6 Taxes. Each of Matria and its Subsidiaries has timely filed
all federal, state and local tax returns and reports required to be filed by it
and has paid all taxes, assessments, fees and other charges levied upon it or
upon its properties that are shown thereon as due and payable, other than those
that are being contested in good faith and by proper proceedings and for which
adequate reserves have been established in accordance with GAAP. Such returns
accurately reflect in all material respects all liability for taxes of Matria
and its Subsidiaries for the periods covered thereby. There is no ongoing audit
or examination or, to the knowledge of Matria, other
61
68
investigation by any Governmental Authority of the tax liability of Matria or
any of its Subsidiaries, and there is no unresolved claim by any Governmental
Authority concerning the tax liability of Matria or any of its Subsidiaries for
any period for which tax returns have been or were required to have been filed,
other than claims for which adequate reserves have been established in
accordance with GAAP. Neither Matria nor any of its Subsidiaries has waived or
extended or has been requested to waive or extend the statute of limitations
relating to the payment of any taxes.
5.7 Subsidiaries. SCHEDULE 5.7 sets forth a list, as of the
Restatement Effective Date, of all of the Subsidiaries of Matria and, as to each
such Subsidiary, the percentage ownership (direct and indirect) of Matria in
each class of its capital stock and each direct owner thereof, and separately
identifies each such Subsidiary that is an Inactive Subsidiary. Except for the
shares of capital stock expressly indicated on SCHEDULE 5.7, there are no shares
of capital stock, warrants, rights, options or other equity securities, or other
Capital Stock of any Subsidiary of Matria outstanding or reserved for any
purpose. All outstanding shares of capital stock of each Subsidiary of Matria
are duly and validly issued, fully paid and nonassessable. Except as set forth
on SCHEDULE 5.7, as of the Restatement Effective Date, neither Matria nor any
Subsidiary is engaged in any joint venture, partnership or similar arrangement
with any other Person. As of the Restatement Effective Date, the aggregate face
amount of all accounts receivable owned by Inactive Subsidiaries does not exceed
$500,000.
5.8 Full Disclosure. All factual information heretofore or
contemporaneously furnished to the Administrative Agent or any Lender in writing
by or on behalf of Matria or any of its Subsidiaries for purposes of or in
connection with this Agreement and the transactions contemplated hereby is, and
all other such factual information hereafter furnished to the Administrative
Agent or any Lender in writing by or on behalf of Matria or any of its
Subsidiaries will be, true and accurate in all material respects on the date as
of which such information is dated or certified (or, if such information has
been amended or supplemented, on the date as of which any such amendment or
supplement is dated or certified) and not made incomplete by omitting to state a
material fact necessary to make the statements contained therein, in light of
the circumstances under which such information was provided, not misleading.
5.9 Margin Regulations. Neither Matria nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying Margin Stock. No
proceeds of the Loans will be used, directly or indirectly, to purchase or carry
any Margin Stock, to extend credit for such purpose or for any other purpose
that would violate or be inconsistent with Regulations T, U or X or any
provision of the Exchange Act.
5.10 No Material Adverse Change. There has been no Material Adverse
Change since December 31, 2000, and there exists no event, condition or state of
facts that could reasonably be expected to result in a Material Adverse Change.
62
69
5.11 Financial Matters.
(a) Matria has heretofore furnished to the Administrative Agent
copies of (i) the audited consolidated balance sheets of Matria and its
Subsidiaries as of December 31, 2000 and 1999, and the related statements of
income, cash flows and stockholders' equity for the fiscal years then ended,
together with the opinion of KPMG Peat Marwick LLP thereon, and (ii) the
unaudited consolidated balance sheet of Matria and its Subsidiaries as of March
31, 2001, and the related statements of income, cash flows and stockholders'
equity for the three-month period then ended. Such financial statements have
been prepared in accordance with GAAP (subject, with respect to the unaudited
financial statements, to the absence of notes required by GAAP and to normal
year-end adjustments) and present fairly the financial condition of Matria and
its Subsidiaries on a consolidated basis as of the respective dates thereof and
the consolidated results of operations of Matria and its Subsidiaries for the
respective periods then ended. Except as fully reflected in the most recent
financial statements referred to above and the notes thereto, there are no
material liabilities or obligations with respect to Matria or any of its
Subsidiaries of any nature whatsoever (whether absolute, contingent or otherwise
and whether or not due).
(b) Matria has prepared, and has heretofore furnished to the
Administrative Agent a copy of, annual projected balance sheets and statements
of income and cash flows of Matria for the period ending December 31, 2004,
giving effect to the issuance of the Senior Notes, the consummation of the
Xxxxxx Transaction and the transactions contemplated by this Agreement and the
payment of transaction fees and expenses related to the foregoing (the
"Projections"). In the opinion of management of Matria, the assumptions used in
the preparation of the Projections were fair, complete and reasonable when made
and continue to be fair, complete and reasonable as of the date hereof. The
Projections have been prepared in good faith by the executive and financial
personnel of Matria, are complete and represent a reasonable estimate of the
future performance and financial condition of Matria, subject to the
uncertainties and approximations inherent in any projections.
(c) Each of Matria and its Subsidiaries, after giving effect to
the issuance of the Senior Notes and the consummation of the Xxxxxx Transaction
and the other transactions contemplated by this Agreement, (i) has capital
sufficient to carry on its businesses as conducted and as proposed to be
conducted, (ii) has assets with a fair saleable value, determined on a going
concern basis, (y) not less than the amount required to pay the probable
liability on its existing debts as they become absolute and matured and (z)
greater than the total amount of its liabilities (including identified
contingent liabilities, valued at the amount that can reasonably be expected to
become absolute and matured), and (iii) does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay such debts
and liabilities as they mature.
5.12 Ownership of Properties. Each of Matria and its Subsidiaries
(i) has good and marketable title to all real property owned by it, if any, (ii)
holds interests as lessee under valid leases in full force and effect with
respect to all material leased real and personal property used in connection
with its business, (iii) possesses or has rights to use licenses, patents,
copyrights, trademarks, service marks, trade names and other assets sufficient
to enable it to continue to conduct its business substantially as heretofore
conducted and without any material conflict with the rights of others, and (iv)
has good title to all of its other properties and assets reflected in the most
recent financial statements referred to in SECTION 5.11(A) (except as sold or
otherwise
63
70
disposed of since the date thereof in the ordinary course of business), in each
case under (i), (ii), (iii) and (iv) above free and clear of all Liens other
than Permitted Liens. SCHEDULE 5.12 lists, as of the Restatement Effective Date,
all real property interests of Matria and its Subsidiaries, indicating in each
case the identity of the owner, the address of the property, the nature of use
of the premises, and whether such interest is a leasehold or fee ownership
interest (and, if a leasehold interest, whether Matria or such Subsidiary, as
the case may be, is a lessee, sublessee or assignee thereunder).
5.13 ERISA.
(a) Each of Matria and its ERISA Affiliates is in compliance in
all material respects with the applicable provisions of ERISA, and each Plan is
and has been administered in compliance in all material respects with all
applicable Requirements of Law, including, without limitation, the applicable
provisions of ERISA and the Internal Revenue Code. No ERISA Event (i) has
occurred within the five-year period prior to the Restatement Effective Date,
(ii) has occurred and is continuing, or (iii) to the knowledge of Matria, is
reasonably expected to occur with respect to any Plan. No Plan has any Unfunded
Pension Liability as of the most recent annual valuation date applicable
thereto, and neither Matria nor any ERISA Affiliate has engaged in a transaction
that could be subject to Section 4069 or 4212(c) of ERISA.
(b) Neither Matria nor any ERISA Affiliate has had a complete or
partial withdrawal from any Multiemployer Plan, and neither Matria nor any ERISA
Affiliate would become subject to any liability under ERISA if Matria or any
ERISA Affiliate were to withdraw completely from all Multiemployer Plans as of
the most recent valuation date. No Multiemployer Plan is in "reorganization" or
is "insolvent" within the meaning of such terms under ERISA.
5.14 Environmental Matters.
(a) No Hazardous Substances are or have been generated, used,
located, released, treated, disposed of or stored by Matria or any of its
Subsidiaries or, to the knowledge of Matria, by any other Person (including any
predecessor in interest) or otherwise, in, on or under any portion of any real
property, leased or owned, of Matria or any of its Subsidiaries, except for
immaterial amounts used in the ordinary course of business and except in
material compliance with all applicable Environmental Laws; to the knowledge of
Matria, no portion of any such real property or any other real property at any
time leased, owned or operated by Matria or any of its Subsidiaries has been
contaminated by any Hazardous Substance; and to the knowledge of Matria, no
portion of any real property, leased or owned, of Matria or any of its
Subsidiaries has been or is presently the subject of any remedial action under
any Environmental Law.
(b) To the knowledge of Matria, (i) no portion of any real
property, leased or owned, of Matria or any of its Subsidiaries has been used by
Matria or any of its Subsidiaries or by any other Person as or for a mine, a
landfill, a dump or other unpermitted disposal facility, a gasoline service
station, or (other than for petroleum substances stored in the ordinary course
of business) a petroleum products storage facility; no portion of such real
property or any other real property at any time leased, owned or operated by
Matria or any of its Subsidiaries has, pursuant to any Environmental Law, been
placed on the "National Priorities List" or "CERCLIS List" (or any
64
71
similar federal, state or local list) of sites subject to possible response
action; and there are not and have never been any underground storage tanks
situated on any real property, leased or owned, of Matria or any of its
Subsidiaries.
(c) All activities and operations of Matria and its Subsidiaries
are in compliance with the requirements of all applicable Environmental Laws,
except to the extent the failure so to comply, individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect. Each of Matria
and its Subsidiaries has obtained all licenses and permits under Environmental
Laws necessary to its respective operations; all such licenses and permits are
being maintained in good standing; and each of Matria and its Subsidiaries is in
compliance with all terms and conditions of such licenses and permits, except
for such licenses and permits the failure to obtain, maintain or comply with
which would not be reasonably likely, individually or in the aggregate, to have
a Material Adverse Effect. Neither Matria nor any of its Subsidiaries is
involved in any suit, action or proceeding, or has received any notice,
complaint or other request for information from any Governmental Authority or
other Person, with respect to any actual or alleged Environmental Claims that,
if adversely determined, would be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect; and, to the knowledge of Matria,
there are no threatened actions, suits, proceedings or investigations with
respect to any such Environmental Claims, nor any reasonable basis therefor.
5.15 Compliance With Laws. Each of Matria and its Subsidiaries has
timely filed all material reports, documents and other materials required to be
filed by it under all applicable Requirements of Law with any Governmental
Authority, has retained all material records and documents required to be
retained by it under all applicable Requirements of Law, and is otherwise in
compliance with all applicable Requirements of Law in respect of the conduct of
its business and the ownership and operation of its properties (including,
without limitation, all applicable Medicare and Medicaid statutes, rules and
regulations and all related administrative, reimbursement and other guidelines
having the force of law), except for such Requirements of Law the failure to
comply with which, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect.
5.16 Regulated Industries. Neither Matria nor any of its
Subsidiaries is (i) an "investment company," a company "controlled" by an
"investment company," or an "investment advisor," within the meaning of the
Investment Company Act of 1940, as amended, or (ii) a "holding company," a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company," within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
5.17 Insurance. SCHEDULE 5.17 sets forth a true and complete
summary of all insurance policies or arrangements carried or maintained by
Matria and its Subsidiaries as of the Restatement Effective Date, indicating in
each case the insurer, policy number, expiration, amount and type of coverage
and deductibles. The assets, properties and business of Matria and its
Subsidiaries are insured against such hazards and liabilities, under such
coverages and in such amounts, as are customarily maintained by prudent
companies similarly situated and under policies issued by insurers of recognized
responsibility.
65
72
5.18 Material Contracts. SCHEDULE 5.18 lists, as of the Restatement
Effective Date, each "material contract" (within the meaning of Item 601(b)(10)
of Regulation S-K under the Exchange Act) to which Matria or any of its
Subsidiaries is a party, by which any of them or their respective properties is
bound or to which any of them is subject (collectively, "Material Contracts"),
and also indicates the parties and dates thereof. As of the Restatement
Effective Date, (i) each Material Contract is in full force and effect and is
enforceable by Matria or the Subsidiary that is a party thereto in accordance
with its terms, and (ii) neither Matria nor any of its Subsidiaries (nor, to the
knowledge of Matria, any other party thereto) is in breach of or default under
any Material Contract in any material respect or has given notice of termination
or cancellation of any Material Contract. SCHEDULE 5.18 also indicates, as of
the Restatement Effective Date, each Material Contract under which the consent
of any party thereto is required in order for all of the rights and interests of
Matria or any Subsidiary thereunder to be included among the Collateral pledged
to the Administrative Agent, for its benefit and the benefit of the Lenders,
pursuant to the Security Agreement without violation of the terms of such
Material Contract.
5.19 Security Documents.
(a) The provisions of each of the Security Documents other than
the Mortgages (whether executed and delivered prior to or on the Restatement
Effective Date or thereafter) are and will be effective to create in favor of
the Administrative Agent, for its benefit and the benefit of the Lenders, a
valid and enforceable security interest in and Lien upon all right, title and
interest of each of Matria and its Subsidiaries that is a party thereto in and
to the Collateral purported to be pledged by it thereunder and described
therein, and upon (i) the initial extension of credit hereunder, (ii) the filing
of appropriately completed Uniform Commercial Code financing statements and
continuations thereof in the jurisdictions specified therein, (iii) the filing
of appropriately completed short-form assignments in the U.S. Patent and
Trademark Office and the U.S. Copyright Office, and (iv) the possession by the
Administrative Agent of any certificates evidencing the securities pledged
thereby, such security interest and Lien shall constitute a fully perfected and
first priority security interest in and Lien upon such right, title and interest
of Matria or such Subsidiary, as applicable, in and to such Collateral, to the
extent that such security interest and Lien can be perfected by such filings,
actions and possession, subject only to Permitted Liens.
(b) The provisions of each Mortgage (whether executed and
delivered prior to or on the Restatement Effective Date or thereafter) are and
will be effective to create in favor of the Administrative Agent, for its
benefit and the benefit of the Lenders, a valid and enforceable security
interest in and Lien upon all right, title and interest of each of Matria and
its Subsidiaries that is a party thereto in and to the Mortgaged Premises
described therein, and upon (i) the initial extension of credit hereunder and
(ii) the filing of such Mortgage in the applicable real property recording
office, such security interest and Lien shall constitute a fully perfected and
first priority security interest in and Lien upon such right, title and interest
of Matria or such Subsidiary, as applicable, in and to such Mortgaged Premises,
in each case prior and superior to the rights of any other Person and subject
only to Permitted Liens.
5.20 Labor Relations. Neither Matria nor any of its Subsidiaries is
engaged in any unfair labor practice within the meaning of the National Labor
Relations Act of 1947, as
66
73
amended. There is (i) no unfair labor practice complaint before the National
Labor Relations Board, or grievance or arbitration proceeding arising out of or
under any collective bargaining agreement, pending or, to the knowledge of
Matria, threatened, against Matria or any of its Subsidiaries, (ii) no strike,
lock-out, slowdown, stoppage, walkout or other labor dispute pending or, to the
knowledge of Matria, threatened, against Matria or any of its Subsidiaries, and
(iii) to the knowledge of Matria, no petition for certification or union
election or union organizing activities taking place with respect to Matria or
any of its Subsidiaries.
5.21 Reimbursement. The accounts receivable of Matria and each
Subsidiary have been properly adjusted in all material respects to reflect the
reimbursement policies under all applicable Requirements of Law (including,
without limitation, all applicable Medicare and Medicaid statutes, rules and
regulations and all related administrative, reimbursement and other guidelines)
and other Third Party Payor Arrangements to which Matria or such Subsidiary is
subject, and do not exceed in any material respect amounts Matria or such
Subsidiary is entitled to receive under any capitation arrangement, fee
schedule, discount formula, cost-based reimbursement or other adjustment or
limitation to usual charges. All xxxxxxxx by Matria and each Subsidiary pursuant
to Third Party Payor Arrangements have been made in compliance with all
applicable Requirements of Law, except where the failure to comply would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect; and there has been no intentional or material overbilling or
overcollection pursuant to any Third Party Payor Arrangements, other than as
created by routine adjustments and disallowances made in the ordinary course of
business by the payors with respect to such xxxxxxxx.
5.22 Fraud and Abuse. Neither Matria nor any Subsidiary, nor any
physician shareholder or employee thereof or of any physician practice managed
by Matria or any of its Subsidiaries, has engaged in any activities that are
prohibited under 42 U.S.C. xx.xx. 1320a-7b, or the regulations promulgated
thereunder, or related Requirements of Law, or that are prohibited by rules of
professional conduct, including, without limitation, the following: (i)
knowingly and willfully making or causing to be made a false statement or
misrepresentation of a material fact in any application for any benefit or
payment; (ii) knowingly and willfully making or causing to be made any false
statement or misrepresentation of a material fact for use in determining rights
to any benefit or payment; (iii) failure to disclose knowledge by a claimant of
the occurrence of any event affecting the initial or continued right to any
benefit or payment on its own behalf or on behalf of another, with intent to
secure such benefit or payment fraudulently; and (iv) knowingly and willfully
soliciting or receiving any remuneration (including any kickback, bribe or
rebate), directly or indirectly, overtly or covertly, in cash or in kind, or
offering to pay or receive such remuneration (y) in return for referring an
individual to a Person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by Medicare,
Medicaid or any other government or private third party payor, or (z) in return
for purchasing, leasing, or ordering or arranging for or recommending
purchasing, leasing or ordering any good, facility, service, or item for which
payment may be made in whole or in part by Medicare, Medicaid or any other
government or private third party payor.
67
74
ARTICLE VI
AFFIRMATIVE COVENANTS
Matria covenants and agrees that, until the termination of the
Revolving Credit Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans and all Reimbursement Obligations together with all other amounts then due
and owing hereunder:
6.1 Financial Statements. Matria will deliver to each Lender:
(a) As soon as available and in any event within fifty (50) days
after the end of each of the first three fiscal quarters of each fiscal year,
beginning with the fiscal quarter ending June 30, 2001, unaudited consolidated
and consolidating balance sheets of Matria and its Subsidiaries as of the end of
such fiscal quarter and unaudited consolidated and consolidating statements of
income and cash flows (reported by business segment) and stockholders' equity
for Matria and its Subsidiaries for the fiscal quarter then ended and for that
portion of the fiscal year then ended, in each case setting forth comparative
consolidated (or consolidating) figures as of the end of and for the
corresponding period in the preceding fiscal year, all in reasonable detail and
prepared in accordance with GAAP (subject to the absence of notes required by
GAAP and subject to normal year-end adjustments) applied on a basis consistent
with that of the preceding quarter or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such quarter; and
(b) As soon as available and in any event within 105 days after
the end of each fiscal year, beginning with the fiscal year ending December 31,
2001, (i) an audited consolidated balance sheet of Matria and its Subsidiaries
as of the end of such fiscal year and audited consolidated statements of income,
cash flows and stockholders' equity for Matria and its Subsidiaries for the
fiscal year then ended, including the notes thereto, in each case setting forth
comparative figures as of the end of and for the preceding fiscal year, all in
reasonable detail and certified by the independent certified public accounting
firm regularly retained by Matria or another independent certified public
accounting firm of recognized national standing reasonably acceptable to the
Required Lenders, together with (y) a report thereon by such accountants that is
not qualified as to going concern or scope of audit and to the effect that such
financial statements present fairly the consolidated financial condition and
results of operations of Matria and its Subsidiaries as of the dates and for the
periods indicated in accordance with GAAP applied on a basis consistent with
that of the preceding year or containing disclosure of the effect on the
financial condition or results of operations of any change in the application of
accounting principles and practices during such year, and (z) a report by such
accountants to the effect that, based on and in connection with their
examination of the financial statements of Matria and its Subsidiaries, they
obtained no knowledge of the occurrence or existence of any Default or Event of
Default relating to accounting or financial reporting matters, or a statement
specifying the nature and period of existence of any such Default or Event of
Default disclosed by their audit; provided, however, that such accountants shall
not be liable by reason of the failure to obtain knowledge of any Default or
Event of Default that would not be disclosed or revealed in the course of their
audit examination, and (ii) an unaudited consolidating balance sheet of Matria
and its Subsidiaries as of the end of such fiscal year and unaudited
consolidating statements of
68
75
income and cash flows (reported by business segment) and stockholders' equity
for Matria and its Subsidiaries for the fiscal year then ended, all in
reasonable detail.
6.2 Other Business and Financial Information. Matria will deliver
to each Lender:
(a) Concurrently with each delivery of the financial statements
described in SECTION 6.1, a Compliance Certificate with respect to the period
covered by the financial statements then being delivered, executed by a
Financial Officer of Matria, together with a Covenant Compliance Worksheet
reflecting the computation of the financial covenants set forth in SECTIONS 7.1
through 7.5 as of the last day of the period covered by such financial
statements;
(b) As soon as available and in any event prior to January 31 of
each fiscal year, a consolidated operating budget for Matria and its
Subsidiaries for such fiscal year (prepared on a quarterly basis), consisting of
a consolidated balance sheet, consolidated statements of income and cash flows,
and consolidating statements of income and cash flows reported by business
segment, and containing analysis of projected compliance with the financial
covenants set forth in ARTICLE VII, together with a certificate of a Financial
Officer of Matria to the effect that such budgets have been prepared in good
faith and are reasonable estimates of the financial position and results of
operations of Matria and its Subsidiaries for the period covered thereby; and as
soon as available from time to time thereafter, any modifications or revisions
to or restatements of such budget;
(c) Promptly upon receipt thereof, copies of any "management
letter" submitted to Matria or any of its Subsidiaries by its certified public
accountants in connection with each annual, interim or special audit, and
promptly upon completion thereof, any response reports from Matria or any such
Subsidiary in respect thereof;
(d) Promptly upon the sending, filing or receipt thereof, copies
of (i) all financial statements, reports, notices and proxy statements that
Matria or any of its Subsidiaries shall send or make available generally to its
shareholders, (ii) all regular, periodic and special reports, registration
statements and prospectuses (other than on Form S-8) that Matria or any of its
Subsidiaries shall render to or file with the Securities and Exchange
Commission, the National Association of Securities Dealers, Inc. or any national
securities exchange, and (iii) all press releases and other statements made
available generally by Matria or any of its Subsidiaries to the public
concerning material developments in the business of Matria or any of its
Subsidiaries;
(e) Promptly upon (and in any event within five (5) Business Days
after) any Responsible Officer of Matria or any of its Subsidiaries obtaining
knowledge thereof, written notice of any of the following:
(i) the occurrence of any Default or Event of Default,
together with a written statement of a Responsible Officer of Matria or
such Subsidiary specifying the nature of such Default or Event of
Default, the period of existence thereof and the action that Matria has
taken and proposes to take with respect thereto;
(ii) the institution or threatened institution of any
action, suit, investigation or proceeding against or affecting Matria
or any of its Subsidiaries, including any such investigation or
proceeding by any Governmental Authority (other than routine periodic
69
76
inquiries, investigations or reviews), that would, if adversely
determined, be reasonably likely, individually or in the aggregate, to
have a Material Adverse Effect, and any material development in any
litigation or other proceeding previously reported pursuant to SECTION
5.5 or this subsection;
(iii) the receipt by Matria or any of its Subsidiaries from
any Governmental Authority or other Person of (y) any notice asserting
any failure by Matria or any of its Subsidiaries to be in compliance
with applicable Requirements of Law or that threatens the taking of any
action against such Person or sets forth circumstances that, if taken
or adversely determined, would be reasonably likely to have a Material
Adverse Effect, or (z) any notice of any actual or threatened
Limitation with respect to any License or Reimbursement Approval of
Matria or any of its Subsidiaries, where such action would be
reasonably likely to have a Material Adverse Effect;
(iv) the occurrence of any ERISA Event, together with (x)
a written statement of a Responsible Officer of Matria or such
Subsidiary specifying the details of such ERISA Event and the action
that Matria or such Subsidiary has taken and proposes to take with
respect thereto, (y) a copy of any notice with respect to such ERISA
Event that may be required to be filed with the PBGC and (z) a copy of
any notice delivered by the PBGC to Matria or such ERISA Affiliate with
respect to such ERISA Event;
(v) the occurrence of any material default under, or any
proposed or threatened termination or cancellation of, any Material
Contract or other material contract or agreement to which Matria or any
of its Subsidiaries is a party, the termination or cancellation of
which would be reasonably likely to have a Material Adverse Effect;
(vi) the occurrence of any of the following: (x) the
assertion of any Environmental Claim against or affecting Matria, any
of its Subsidiaries or any of their respective real property, leased or
owned; (y) the receipt by Matria or any of its Subsidiaries of notice
of any alleged violation of or noncompliance with any Environmental
Laws; or (z) the taking of any remedial action by Matria, any of its
Subsidiaries or any other Person in response to the actual or alleged
generation, storage, release, disposal or discharge of any Hazardous
Substances on, to, upon or from any real property leased or owned by
Matria or any of its Subsidiaries; but in each case under clauses (x),
(y) and (z) above, only to the extent the same would be reasonably
likely to have a Material Adverse Effect; and
(vii) any other matter or event that has, or would be
reasonably likely to have, a Material Adverse Effect, together with a
written statement of a Responsible Officer of Matria or such Subsidiary
setting forth the nature and period of existence thereof and the action
that Matria or such Subsidiary has taken and proposes to take with
respect thereto;
(f) Promptly upon the acquisition thereof, written notice of the
acquisition by Matria or such Subsidiary, as the case may be, of any fee or
leasehold interest in any real property; and
(g) As promptly as reasonably possible, such other information
about the business, condition (financial or otherwise), operations or properties
of Matria or any of its Subsidiaries
70
77
(including any Plan and any information required to be filed under ERISA) as the
Administrative Agent or any Lender may from time to time reasonably request.
6.3 Corporate Existence; Franchises; Maintenance of Properties.
Matria will, and will cause each of its Subsidiaries to, (i) maintain and
preserve in full force and effect its corporate existence, except as expressly
permitted otherwise by SECTION 8.1, (ii) obtain, maintain and preserve in full
force and effect all other rights, franchises, licenses, permits,
certifications, approvals, authorizations and other Licenses, and all
Reimbursement Approvals, required by Governmental Authorities and necessary to
the ownership, occupation or use of its properties or the conduct of its
business, except to the extent the failure to do so would not be reasonably
likely to have a Material Adverse Effect, and (iii) keep all material properties
in good working order and condition (normal wear and tear excepted) and from
time to time make all necessary repairs to and renewals and replacements of such
properties, except to the extent that any of such properties are obsolete or are
being replaced.
6.4 Compliance with Laws. Matria will, and will cause each of its
Subsidiaries to, comply in all respects with all Requirements of Law applicable
in respect of the conduct of its business and the ownership and operation of its
properties (including, without limitation, all applicable Medicare and Medicaid
statutes, rules and regulations and all related administrative, reimbursement
and other guidelines having the force of law), except to the extent the failure
so to comply would not be reasonably likely to have a Material Adverse Effect.
6.5 Payment of Obligations. Matria will, and will cause each of
its Subsidiaries to, (i) pay all liabilities and obligations as and when due
(subject to any applicable subordination provisions), except to the extent
failure to do so would not be reasonably likely to have a Material Adverse
Effect, and (ii) pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it, upon its income or profits or upon any of its
properties, prior to the date on which penalties would attach thereto, and all
lawful claims that, if unpaid, might become a Lien upon any of the properties of
Matria or any of its Subsidiaries; provided, however, that neither Matria nor
any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim that is being contested in good faith and by proper
proceedings and as to which Matria or such Subsidiary is maintaining adequate
reserves with respect thereto in accordance with GAAP.
6.6 Insurance. Matria will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance with respect to its assets, properties and business, against
such hazards and liabilities, of such types and in such amounts, as is
customarily maintained by companies in the same or similar businesses similarly
situated, and maintain such other or additional insurance on such terms and
subject to such conditions as may be required under any Security Document.
6.7 Maintenance of Books and Records; Inspection. Matria will, and
will cause each of its Subsidiaries to, (i) maintain adequate books, accounts
and records, in which full, true and correct entries shall be made of all
financial transactions in relation to its business and properties, and prepare
all financial statements required under this Agreement, in each case in
accordance with GAAP and in compliance with the requirements of any Governmental
Authority having jurisdiction over it, and (ii) permit employees or agents of
the Administrative Agent or any
71
78
Lender to inspect its properties and examine or audit its books, records,
working papers and accounts and make copies and memoranda of them, and to
discuss its affairs, finances and accounts with its officers and employees and,
upon notice to Matria, the independent public accountants of Matria and its
Subsidiaries (and by this provision Matria authorizes such accountants to
discuss the finances and affairs of Matria and its Subsidiaries), all at such
times and from time to time, upon reasonable notice and during business hours,
as may be reasonably requested.
6.8 [Reserved].
6.9 Permitted Acquisitions.
(a) Subject to the provisions of subsection (b) below and the
requirements contained in the definition of Permitted Acquisition, and subject
to the other terms and conditions of this Agreement, Matria may from time to
time on or after the Restatement Effective Date effect Permitted Acquisitions,
provided that, with respect to each Permitted Acquisition:
(i) no Default or Event of Default shall have occurred
and be continuing at the time of the consummation of such Permitted
Acquisition or would exist immediately after giving effect thereto; and
(ii) to the extent paid or payable in cash, the
Acquisition Amount with respect thereto (y) shall be less than
$10,000,000, and (z) together with the aggregate of the Acquisition
Amounts (to the extent paid or payable in cash) for all other Permitted
Acquisitions consummated during the same fiscal year, shall not exceed
$20,000,000; and
(iii) regardless of the form of consideration, the
Acquisition Amount with respect thereto (y) shall be less than
$15,000,000, and (z) together with the aggregate of the Acquisition
Amounts (regardless of the form of consideration) for all other
Permitted Acquisitions consummated during the same fiscal year, shall
not exceed $30,000,000.
(b) Within forty-five (45) days after the end of each fiscal
quarter, Matria will deliver to the Administrative Agent and each Lender, with
respect to each Permitted Acquisition during such fiscal quarter the Acquisition
Amount in respect of which is less than $2,000,000, the items described in
clauses (i) and (ii) of subsection (c) below.
(c) Not less than ten (10) Business Days prior to the consummation
of any proposed Acquisition with respect to which the Acquisition Amount equals
or exceeds $2,000,000, Matria shall have delivered to the Administrative Agent
and each Lender a request that such Acquisition be approved as a Permitted
Acquisition and, in support of such request (at a minimum, and without
limitation of any other materials or information that may be reasonably
requested by the Administrative Agent or any Lender), the following:
(i) a reasonably detailed description of the material
terms of such Acquisition (including, without limitation, the purchase
price and method and structure of payment) and of each Person or
business that is the subject of such Acquisition (each, a "Target"),
72
79
including any materials presented to Matria's board of directors or any
committee thereof;
(ii) historical financial statements of the Target (or, if
there are two or more Targets that are the subject of such Acquisition
and that are part of the same consolidated group, consolidated
historical financial statements for all such Targets) for the two (2)
most recent fiscal years available and, if available, for any interim
periods since the most recent fiscal year-end;
(iii) consolidated projected income statements of Matria
and its Subsidiaries (giving effect to such Acquisition and the
consolidation with Matria of each relevant Target) for the five-year
period following the consummation of such Acquisition, in reasonable
detail, together with any appropriate statement of assumptions and pro
forma adjustments; and
(iv) a certificate, in form and substance reasonably
satisfactory to the Administrative Agent, executed by a Financial
Officer of Matria setting forth the Acquisition Amount and further to
the effect that, to the best of such individual's knowledge, (x) the
consummation of such Acquisition will not result in a violation of any
provision of this Section, and after giving effect to such Acquisition
and any Borrowings made in connection therewith, Matria will be in
compliance with the financial covenants contained in SECTIONS 7.1
through 7.5, such compliance determined with regard to calculations
made on a pro forma basis in accordance with GAAP as if each Target had
been consolidated with Matria for those periods applicable to such
covenants (such calculations to be attached to the certificate), (y)
Matria believes in good faith that it will continue to comply with such
financial covenants for a period of one year following the date of the
consummation of such Acquisition, and (z) after giving effect to such
Acquisition and any Borrowings in connection therewith, Matria believes
in good faith that it will have sufficient availability under the
Revolving Credit Commitments to meet its ongoing working capital
requirements.
(d) As soon as reasonably practicable after the consummation of
any Permitted Acquisition, Matria will deliver to the Administrative Agent and
each Lender a copy of the fully executed acquisition agreement (including
schedules and exhibits thereto) and other material documents and closing papers
delivered in connection therewith.
(e) The consummation of each Permitted Acquisition shall be deemed
to be a representation and warranty by Matria that (except as shall have been
approved in writing by the Required Lenders) all conditions thereto set forth in
this Section and in the description furnished under clause (i) of subsection (c)
above (if applicable) have been satisfied, that the same is permitted in
accordance with the terms of this Agreement, and that the matters certified to
by the Financial Officer of Matria in the certificate referred to in clause (iv)
of subsection (c) above (if applicable) are, to the best of such individual's
knowledge, true and correct in all material respects as of the date such
certificate is given, which representation and warranty shall be deemed to be a
representation and warranty as of the date thereof for all purposes hereunder,
including, without limitation, for purposes of SECTIONS 4.2 and 9.1.
73
80
6.10 Creation or Acquisition of Subsidiaries. Subject to the
provisions of SECTION 8.5, Matria may from time to time create or acquire new
Wholly Owned Subsidiaries in connection with Permitted Acquisitions or otherwise
as permitted under SECTION 8.5, and the Wholly Owned Subsidiaries of Matria may
create or acquire new Wholly Owned Subsidiaries, provided that:
(a) Concurrently with (and in any event within ten (10) Business
Days thereafter) the creation or direct or indirect acquisition by Matria of any
new Domestic Subsidiary, (i) Matria will cause such Domestic Subsidiary to
execute and deliver to the Administrative Agent (y) a joinder to the Subsidiary
Guaranty, pursuant to which such new Domestic Subsidiary shall become a party
thereto and shall guarantee the payment in full of the Obligations of Matria
under this Agreement and the other Credit Documents, and (z) a joinder to the
Security Agreement, pursuant to which such new Domestic Subsidiary shall become
a party thereto and shall grant to the Administrative Agent a first priority
Lien upon and security interest in its accounts receivable, inventory,
equipment, general intangibles and other personal property as Collateral for its
obligations under the Subsidiary Guaranty, subject only to Permitted Liens, and
(iii) Matria and/or any applicable Subsidiary will execute and deliver to the
Administrative Agent a Pledge Agreement or an amendment or supplement to the
Matria Pledge Agreement pursuant to which all of the Capital Stock of such new
Domestic Subsidiary shall be pledged to the Administrative Agent, together with
the certificates evidencing such Capital Stock and undated stock powers duly
executed in blank;
(b) Concurrently with (and in any event within ten (10) Business
Days thereafter) the creation or direct or indirect acquisition by Matria of any
new Foreign Subsidiary, (i) Matria will cause such Foreign Subsidiary to execute
and deliver to the Administrative Agent a joinder to the Subsidiary Guaranty or
a separate guaranty agreement in form and substance satisfactory to the
Administrative Agent, pursuant to which such new Foreign Subsidiary shall
guarantee the payment in full of the Obligations of Matria under this Agreement
and the other Credit Documents, (ii) Matria will cause such Foreign Subsidiary
to execute and deliver to the Administrative Agent a joinder to the Security
Agreement or a separate security agreement in form and substance satisfactory to
the Administrative Agent, pursuant to which such new Foreign Subsidiary shall
grant to the Administrative Agent a first priority Lien upon and security
interest in its accounts receivable, inventory, equipment, general intangibles
and other personal property as Collateral for its obligations under the
Subsidiary Guaranty or such other guaranty agreement, subject only to Permitted
Liens, and (iii) Matria and/or any applicable Subsidiary will execute and
deliver to the Administrative Agent a Pledge Agreement or an amendment or
supplement to the Matria Pledge Agreement pursuant to which all of the Capital
Stock of such new Foreign Subsidiary shall be pledged to the Administrative
Agent, together with the certificates evidencing such Capital Stock and undated
stock powers duly executed in blank (or such other documents, instruments and
other evidence as the Administrative Agent shall require in order to perfect its
security interest (or the equivalent thereof under applicable law of the
relevant foreign jurisdiction) in such Capital Stock); provided that such
Foreign Subsidiary shall not be required to guarantee the Obligations or xxxxx x
Xxxx upon and security interest in its assets, and no more than 65% of the
Capital Stock of such Foreign Subsidiary shall be required to be pledged to the
Administrative Agent, if such guarantee or Lien, or the pledge of more than 65%
of such Capital Stock, would, in the good faith judgment of Matria, result in
materially adverse tax consequences to Matria or would be unlawful for such
Foreign Subsidiary; and
74
81
(c) As promptly as reasonably possible, Matria and its
Subsidiaries will deliver any such other documents, certificates and opinions
(including opinions of local counsel in the jurisdiction of organization of each
such new Subsidiary, including any new Foreign Subsidiary), in form and
substance reasonably satisfactory to the Administrative Agent, as the
Administrative Agent may reasonably request in connection therewith and will
take such other action as the Administrative Agent may reasonably request to
create in favor of the Administrative Agent a perfected security interest in the
Collateral being pledged pursuant to the documents described above. Nothing
contained in this Section, however, shall be deemed to permit the creation or
acquisition by Matria, directly or indirectly, of any Subsidiary not expressly
permitted under SECTION 8.5.
6.11 Additional Security; Further Assurances.
(a) Matria will, and will cause each of its Subsidiaries to, grant
to the Administrative Agent from time to time security interests and Liens in
and upon such of its interests in real property as may be requested from time to
time by the Administrative Agent or the Required Lenders, pursuant to Mortgages
in form and substance satisfactory to the Administrative Agent and in a manner
so that such security interests and Liens shall constitute valid and perfected
security interests and Liens, subject to no Liens other than Permitted Liens.
Without limitation of the foregoing, in connection with the grant of any
Mortgage with respect to any fee or leasehold interest in real property, Matria
will, and will cause each applicable Subsidiary to, at Matria's expense,
prepare, obtain and deliver to the Administrative Agent any environmental
assessments, appraisals, surveys, certifications, title insurance and other
matters or documents as the Administrative Agent may request or as may be
required under applicable banking laws and regulations, all in form and
substance satisfactory to the Administrative Agent.
(b) Matria will, and will cause each of its Subsidiaries to, make,
execute, endorse, acknowledge and deliver any amendments, modifications or
supplements hereto and restatements hereof and any other agreements, instruments
or documents, and take any and all such other actions, as may from time to time
be reasonably requested by the Administrative Agent or the Required Lenders to
perfect and maintain the validity and priority of the Liens granted pursuant to
the Security Documents and to effect, confirm or further assure or protect and
preserve the interests, rights and remedies of the Administrative Agent and the
Lenders under this Agreement and the other Credit Documents.
ARTICLE VII
FINANCIAL COVENANTS
Matria covenants and agrees that, until the termination of the
Revolving Credit Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans and all Reimbursement Obligations together with all other amounts then due
and owing hereunder:
7.1 Leverage Ratio. Matria will not permit the Leverage Ratio as
of the last day of any fiscal quarter during the periods set forth below to be
greater than the ratio set forth below opposite such period:
75
82
Maximum Leverage
Date Ratio
---- ----------------
July 1, 2001 through
March 31, 2002 3.75 : 1.0
April 1, 2002 through 3.50 : 1.0
December 31, 2002
Thereafter 3.25 : 1.0
7.2 [Reserved].
7.3 Fixed Charge Coverage Ratio. Matria will not permit the Fixed
Charge Coverage Ratio as of the last day of any fiscal quarter during the
periods set forth below, beginning with the fiscal quarter ending June 30, 2001,
to be less than the ratio set forth below opposite such period:
Minimum Fixed Charge
Date Coverage Ratio
---- --------------------
July 1, 2001 through
December 31, 2001 1.25 : 1.0
Thereafter 1.35 : 1.0
7.4 Consolidated Net Worth. Matria will not permit Consolidated
Net Worth as of the last day of any fiscal quarter, beginning with the fiscal
quarter ending March 31, 1999, to be less than the sum of (i) $85,000,000, plus
(ii) 75% of the aggregate of Consolidated Net Income for each fiscal quarter
ending after March 31, 1999 (provided that Consolidated Net Income for any such
fiscal quarter shall be taken into account for purposes of this calculation only
if positive), plus (iii) 100% of the aggregate amount of all increases in the
stated capital and additional paid-in capital accounts of Matria and its
Subsidiaries, as determined on a consolidated basis in accordance with GAAP,
resulting from the issuance of equity securities (including pursuant to the
exercise of options, rights or warrants or pursuant to the conversion of
convertible securities) or other Capital Stock after March 31, 1999, minus (iv)
the aggregate of all cash dividends paid on the Series A Preferred Stock and the
Series B Preferred Stock from and after the Original Closing Date, minus (v) the
aggregate of all other dividends, purchases, redemptions, repurchases,
acquisitions and other distributions of or with respect to the Capital Stock of
Matria and its Subsidiaries made after March 31, 1999, including without
limitation pursuant to the Xxxxxx Transaction.
7.5 Capital Expenditures. Matria will not permit Capital
Expenditures during any period of four consecutive fiscal quarters (a "Reference
Period") ending on the last day of any fiscal quarter during the periods set
forth below, beginning with the period ending June 30, 2001, to be greater than
the sum of (i) $12,500,000 plus (ii) fifty percent (50%) of the excess, if any,
of $12,500,000 over the actual amount of Capital Expenditures for such
immediately preceding Reference Period.
76
83
ARTICLE VIII
NEGATIVE COVENANTS
Matria covenants and agrees that, until the termination of the
Revolving Credit Commitments, the termination or expiration of all Letters of
Credit and the payment in full of all principal and interest with respect to the
Loans and all Reimbursement Obligations together with all other amounts then due
and owing hereunder:
8.1 Merger; Consolidation. Matria will not, and will not permit or
cause any of its Subsidiaries to, liquidate, wind up or dissolve, or enter into
any consolidation, merger or other combination, or agree to do any of the
foregoing; provided, however, that:
(i) Matria may merge or consolidate with another Person,
provided that (x) Matria is the surviving entity, (y) unless such other
Person is a Wholly Owned Subsidiary immediately prior to giving effect
thereto, such merger or consolidation shall constitute a Permitted
Acquisition and the applicable conditions and requirements of SECTIONS
6.9 and 6.10 shall be satisfied, and (z) no Default or Event of Default
shall have occurred and be continuing or would result therefrom;
(ii) any Wholly Owned Subsidiary may merge or consolidate
with Matria (provided that Matria is the surviving entity) or with any
Subsidiary Guarantor (provided that a Subsidiary Guarantor is the
surviving entity), and in each case provided further that no Default or
Event of Default shall have occurred and be continuing or would result
therefrom;
(iii) any Wholly Owned Subsidiary that is a Domestic
Subsidiary may merge or consolidate with another Person not a
Subsidiary immediately prior to giving effect thereto, provided that
(x) the surviving entity shall be a Wholly Owned Subsidiary that is a
Domestic Subsidiary and a Subsidiary Guarantor, (y) such merger or
consolidation shall constitute a Permitted Acquisition and the
applicable conditions and requirements of SECTIONS 6.9 and 6.10 shall
be satisfied, and (z) no Default or Event of Default shall have
occurred and be continuing or would result therefrom;
(iv) any Wholly Owned Subsidiary that is a Foreign
Subsidiary may merge or consolidate with any other Wholly Owned
Subsidiary that is a Foreign Subsidiary, provided that if either
constituent corporation is a Borrower or a Subsidiary Guarantor, the
surviving entity shall be a Borrower or a Subsidiary Guarantor, as the
case may be, and provided further that no Default or Event of Default
shall have occurred and be continuing or would result therefrom;
(v) Matria may merge with a direct Wholly Owned
Subsidiary of a newly created holding company, which holding company
("Holdings") is a direct Wholly Owned Subsidiary of Matria, in a
transaction permitted by Section 251(g) of the Delaware General
Corporation Law, provided that (u) Matria shall have given the
Administrative Agent not less than sixty (60) days' prior written
notice of such merger, (v) Matria shall be the surviving entity, (w)
such transaction shall comply in all respects with the requirements of
Section 251(g) of the Delaware General Corporation Law, (x) no Default
77
84
or Event of Default shall have occurred and be continuing or would
result therefrom, (y) Holdings shall have executed and delivered to the
Administrative Agent (1) a guaranty agreement, pursuant to which
Holdings shall guarantee the payment in full of the Obligations of
Matria and the other Borrowers under this Agreement and the other
Credit Documents, (2) a security agreement (or a joinder to the
Security Agreement), pursuant to which Holdings shall grant to the
Administrative Agent a first priority Lien upon and security interest
in its personal property as Collateral for its obligations under such
guaranty, subject only to Permitted Liens, and (3) a pledge agreement,
pursuant to which Holdings shall pledge to the Administrative Agent all
of the Capital Stock of Matria owned by it, together with the
certificates evidencing such Capital Stock and undated stock powers
duly executed in blank, and Holdings and Matria shall have delivered
any such other documents, certificates and opinions (including opinions
of counsel) as the Administrative Agent shall have reasonably requested
in connection therewith, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent, and (z) this
Agreement shall have been amended or amended and restated to the extent
deemed necessary or appropriate, in the reasonable opinion of the
Administrative Agent and the Required Lenders, to reflect the creation
of Holdings and to add Holdings as a party hereto (which amendments
shall include, without limitation, the inclusion of Holdings under the
representations, covenants, events of default and other provisions of
ARTICLES V through IX); and
(vi) any Inactive Subsidiary may merge or consolidate with
any other Inactive Subsidiary or dissolve and thereafter liquidate and
wind up its affairs, in each case so long as no Default or Event of
Default would result therefrom and, in the case of dissolution, so long
as its assets, if any, are distributed only to Matria or a Subsidiary
Guarantor.
8.2 Indebtedness. Matria will not, and will not permit or cause
any of its Subsidiaries to, create, incur, assume or suffer to exist any
Indebtedness other than:
(i) Indebtedness incurred under this Agreement, the Notes
and the Subsidiary Guaranty;
(ii) Indebtedness existing on the Restatement Effective
Date and described in SCHEDULE 8.2, provided that the principal amount
thereof as shown on such schedule shall not be increased;
(iii) accrued expenses (including salaries, accrued
vacation and other compensation), current trade or other accounts
payable and other current liabilities arising in the ordinary course of
business and not incurred through the borrowing of money, provided that
the same shall be paid when due except to the extent being contested in
good faith and by appropriate proceedings;
(iv) loans and advances by any Borrower or Subsidiary
Guarantor to any other Borrower or Subsidiary Guarantor, provided that
(y) any such loan or advance is subordinated in right and time of
payment to the Obligations and is evidenced by an Intercompany Note, or
other promissory note in form and substance satisfactory to the
78
85
Administrative Agent, pledged to the Administrative Agent pursuant to a
Pledge Agreement, and (z) no such loan or advance shall be made to any
Borrower or Subsidiary that is the subject of a proceeding of the type
described in SECTION 9.1(F) or 9.1(G);
(v) unsecured Indebtedness issued after the Original
Closing Date by Matria or any of its Subsidiaries to sellers in
connection with Permitted Acquisitions, including Indebtedness
consisting of Contingent Purchase Price Obligations, in an aggregate
principal amount not exceeding $10,000,000 outstanding at any time,
provided that such Indebtedness (A) shall not mature or require any
scheduled payment of principal at any time prior to the first
anniversary of the Revolving Credit Maturity Date, (B) is fully
subordinated in right and time of payment to the Obligations on terms
and conditions acceptable to the Administrative Agent, and (C) is
otherwise on terms and conditions acceptable to, and in a form approved
in writing by, the Administrative Agent (the Indebtedness described in
this clause (v), "Seller Subordinated Indebtedness");
(vi) Indebtedness of Matria in respect of the Senior
Notes, in an aggregate principal amount not exceeding $125,000,000
outstanding at any time, and the guarantees thereof by Matria's
Domestic Subsidiaries as required under the Senior Note Indenture;
(vii) Indebtedness consisting of obligations of Matria in
respect of Hedge Agreements entered into on terms reasonably
satisfactory to the Administrative Agent in order to manage existing or
anticipated interest rate risk and not for speculative purposes; and
(viii) purchase money Indebtedness of Matria and its
Subsidiaries incurred solely to finance the payment of all or part of
the purchase price of any equipment, real property or other fixed
assets acquired in the ordinary course of business, including
Indebtedness in respect of capital lease obligations, and any renewals,
refinancings or replacements thereof (subject to the limitations on the
principal amount thereof set forth in this clause (vii)), and other
Indebtedness of Matria and its Subsidiaries that is unsecured,
including Guaranty Obligations (other than Indebtedness specified in
clauses (i) through (vi) above), which purchase money indebtedness and
other unsecured indebtedness shall not exceed $5,000,000 in aggregate
principal amount outstanding at any time.
8.3 Liens. Matria will not, and will not permit or cause any of
its Subsidiaries to, directly or indirectly, make, create, incur, assume or
suffer to exist, any Lien upon or with respect to any part of its property or
assets, whether now owned or hereafter acquired, or file or permit the filing
of, or permit to remain in effect, any financing statement or other similar
notice of any Lien with respect to any such property, asset, income or profits
under the Uniform Commercial Code of any state or under any similar recording or
notice statute, or agree to do any of the foregoing, other than the following
(collectively, "Permitted Liens"):
(i) Liens created under the Security Documents;
(ii) Liens in existence on the Restatement Effective Date
and set forth on SCHEDULE 8.3;
79
86
(iii) Liens imposed by law, such as Liens of carriers,
warehousemen, mechanics, materialmen and landlords, and other similar
Liens incurred in the ordinary course of business for sums not
constituting borrowed money that are not overdue for a period of more
than sixty (60) days or that are being contested in good faith by
appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(iv) Liens (other than any Lien imposed by ERISA, the
creation or incurrence of which would result in an Event of Default
under SECTION 9.1(J)) incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure the
performance of letters of credit, bids, tenders, statutory obligations,
surety and appeal bonds, leases, government contracts and other similar
obligations (other than obligations for borrowed money) entered into in
the ordinary course of business;
(v) Liens for taxes, assessments or other governmental
charges or statutory obligations that are not delinquent or remain
payable without any penalty or that are being contested in good faith
by appropriate proceedings and for which adequate reserves have been
established in accordance with GAAP (if so required);
(vi) Liens securing the purchase money Indebtedness
permitted under clause (vii) of SECTION 8.2, provided that any such
Lien (a) shall attach to such property concurrently with or within ten
(10) days after the acquisition thereof by Matria or such Subsidiary,
(b) shall not exceed the lesser of (y) the fair market value of such
property or (z) the cost thereof to Matria or such Subsidiary and (c)
shall not encumber any other property of Matria or any of its
Subsidiaries;
(vii) any attachment or judgment Lien not constituting an
Event of Default under SECTION 9.1(H) that is being contested in good
faith by appropriate proceedings and for which adequate reserves have
been established in accordance with GAAP (if so required);
(viii) Liens arising from the filing, for notice purposes
only, of financing statements in respect of true leases; and
(ix) with respect to any real property occupied by Matria
or any of its Subsidiaries, all easements, rights of way, licenses and
similar encumbrances on title that do not materially impair the use of
such property for its intended purposes.
8.4 Disposition of Assets. Matria will not, and will not permit or
cause any of its Subsidiaries to, sell, assign, lease, convey, transfer or
otherwise dispose of (whether in one or a series of transactions) all or any
portion of its assets, business or properties (including, without limitation,
any Capital Stock of any Subsidiary), or enter into any arrangement with any
Person providing for the lease by Matria or any Subsidiary as lessee of any
asset that has been sold or transferred by Matria or such Subsidiary to such
Person, or agree to do any of the foregoing, except for:
(i) sales of inventory in the ordinary course of
business;
80
87
(ii) the sale or exchange of used or obsolete equipment to
the extent (y) the proceeds of such sale are applied towards, or such
equipment is exchanged for, replacement equipment or (z) such equipment
is no longer necessary for the operations of Matria or its applicable
Subsidiary in the ordinary course of business;
(iii) the sale, lease or other disposition of assets by any
Subsidiary to Matria or to a Subsidiary Guarantor so long as no Default
or Event of Default shall have occurred and be continuing or would
result therefrom; and
(iv) sales or other dispositions of assets to the extent
the aggregate amount of consideration received by Matria and its
Subsidiaries in connection therewith does not exceed $250,000 for all
such sales and dispositions during any fiscal year.
8.5 Investments. Matria will not, and will not permit or cause any
of its Subsidiaries to, directly or indirectly, purchase, own, invest in or
otherwise acquire any Capital Stock, evidence of indebtedness or other
obligation or security or any interest whatsoever in any other Person, or make
or permit to exist any loans, advances or extensions of credit to, or any
investment in cash or by delivery of property in, any other Person, or purchase
or otherwise acquire (whether in one or a series of related transactions) any
portion of the assets, business or properties of another Person (including
pursuant to an Acquisition), or create or acquire any Subsidiary, or become a
partner or joint venturer in any partnership or joint venture (collectively,
"Investments"), or make a commitment or otherwise agree to do any of the
foregoing, other than:
(i) Investments in Cash Equivalents;
(ii) Investments consisting of purchases and acquisitions
of inventory, supplies, materials and equipment in the ordinary course
of business;
(iii) Investments consisting of loans and advances to
employees for reasonable travel, relocation and business expenses in
the ordinary course of business, extensions of trade credit in the
ordinary course of business, and prepaid expenses incurred in the
ordinary course of business;
(iv) without duplication, Investments consisting of
intercompany Indebtedness permitted under clause (iv) of SECTION 8.2;
(v) Investments in (x) Domestic Subsidiaries existing as
of the date hereof, which Domestic Subsidiaries are Subsidiary
Guarantors, (y) Foreign Subsidiaries existing as of the date hereof,
and (z) partnerships and joint ventures existing as of the date hereof
and described in SCHEDULE 5.7, provided that nothing in clauses (y) or
(z) above shall permit any Investments after the date hereof in such
Foreign Subsidiaries, partnerships or joint ventures;
(vi) Investments consisting of the making of capital
contributions or the purchase of Capital Stock (a) by Matria or any
Subsidiary in any other Wholly Owned Subsidiary that is (or immediately
after giving effect to such Investment will be) a Domestic Subsidiary
and a Subsidiary Guarantor, provided that Matria complies with the
provisions of SECTION 6.10, and (b) by any Subsidiary in Matria;
81
88
(vii) Permitted Acquisitions; provided that the Acquisition
Amounts with respect to Permitted Acquisitions of businesses having
assets or operations located outside of the United States of America
shall not exceed (a) $3,000,000 for any individual foreign Acquisition
or $6,000,000 for all foreign Acquisitions from and after the Original
Closing Date or (b) together with all Investments in Foreign
Subsidiaries made pursuant to clause (x) below (but without duplication
thereof), $5,000,000 in the aggregate for all such foreign Acquisitions
and Investments made during any single fiscal year and $10,000,000 in
the aggregate for all such foreign Acquisitions and Investments made
from and after the Original Closing Date;
(viii) Investments in Foreign Subsidiaries made after the
date hereof in an aggregate amount, together with the aggregate amount
of foreign Permitted Acquisitions made pursuant to clause (vii) above,
not exceeding the amounts set forth in part (b) of clause (vii) above
for all such Investments and Acquisitions from and after the Original
Closing Date;
(ix) Investments consisting of the exchange, pursuant to
the terms of the Senior Note Indenture, of initial Senior Notes for
registered Senior Notes of like principal amount issued by Matria;
(x) Indebtedness consisting of obligations of Matria in
respect of Hedge Agreements entered into on terms reasonably
satisfactory to the Administrative Agent in order to manage existing or
anticipated interest rate risk and not for speculative purposes; and
(xi) other Investments in an aggregate amount not
exceeding $3,000,000 at any time outstanding. 8.6 Restricted Payments.
(a) Matria will not, and will not permit or cause any of its
Subsidiaries to, directly or indirectly, declare or make any dividend payment,
or make any other distribution of cash, property or assets, in respect of any of
its Capital Stock or any warrants, rights or options to acquire its Capital
Stock, or purchase, redeem, retire or otherwise acquire for value any shares of
its Capital Stock or any warrants, rights or options to acquire its Capital
Stock, or set aside funds for any of the foregoing, except that:
(i) Matria may declare and make dividend payments or
other distributions payable solely in its common stock;
(ii) each Wholly Owned Subsidiary of Matria may declare
and make dividend payments or other distributions to Matria or to
another Wholly Owned Subsidiary that is a Subsidiary Guarantor, or (if
such declaring Subsidiary is a Foreign Subsidiary) to another Foreign
Subsidiary, in each case to the extent not prohibited under applicable
Requirements of Law;
(iii) Matria may consummate the Xxxxxx Transaction;
82
89
(iv) Matria may purchase, redeem, retire or otherwise
acquire for value shares of its common stock in an aggregate amount not
exceeding $6,000,000 for all such purchases, redemptions, retirements
and acquisitions from and after the Original Closing Date; and
(v) Matria may make the repurchase of its common stock
described in SCHEDULE 8.6.
(b) Matria will not, and will not permit or cause any of its
Subsidiaries to, make (or give any notice in respect of) any payment or
prepayment (whether scheduled, at maturity, voluntary or otherwise) of principal
on any Subordinated Indebtedness, or directly or indirectly make any redemption
(including pursuant to any change of control provision), retirement, defeasance
or other acquisition for value of any Subordinated Indebtedness, or make any
deposit or otherwise set aside funds for any of the foregoing purposes;
provided, however, that (i) Matria may make required principal payments on the
Convertible Subordinated Debentures at maturity thereof and in accordance with
the terms thereof (including the subordination provisions thereof), and may make
additional payments or prepayments on the Convertible Subordinated Debentures so
long as no Default or Event of Default has occurred and is continuing or would
result therefrom; (ii) Matria may prepay the Xxxxxx Seller Subordinated Note as
part of the Xxxxxx Transaction; and (iii) Matria and its Subsidiaries may make
required principal payments on any Seller Subordinated Indebtedness (other than
the Xxxxxx Seller Subordinated Note) incurred or issued pursuant to (and in
accordance with the terms of) SECTION 8.2(V), in accordance with the terms of
such Seller Subordinated Indebtedness (including the subordination provisions
thereof).
(c) If any Default or Event of Default has occurred and is
continuing or would result therefrom, Matria will not, and will not permit or
cause any of its Subsidiaries to, make (or give any notice in respect of) any
payment or prepayment (whether scheduled, at maturity, voluntary or otherwise)
of principal on the Senior Notes, or directly or indirectly make any redemption
(including pursuant to any change of control provision), retirement, defeasance
or other acquisition for value of any Senior Notes, or make any deposit or
otherwise set aside funds for any of the foregoing purposes.
8.7 Transactions with Affiliates. Matria will not, and will not
permit or cause any of its Subsidiaries to, enter into any transaction
(including, without limitation, any purchase, sale, lease or exchange of
property or the rendering of any service) with any officer, director,
stockholder or other Affiliate of Matria or any Subsidiary, except in the
ordinary course of its business and upon fair and reasonable terms that are no
less favorable to it than would obtain in a comparable arm's length transaction
with a Person other than an Affiliate of Matria or such Subsidiary; provided,
however, that nothing contained in this Section shall prohibit:
(i) transactions between or among Matria and its Wholly
Owned Subsidiaries; and
(ii) the payment by Matria of reasonable and customary
fees to members of its board of directors.
83
90
8.8 Lines of Business. Matria will not, and will not permit or
cause any of its Subsidiaries to, engage in any business other than the
businesses engaged in by it on the date hereof and businesses and activities
reasonably related thereto.
8.9 Certain Amendments. Matria will not, and will not permit or
cause any of its Subsidiaries to, (i) amend, modify or waive, or permit the
amendment, modification or waiver of, any provision of any agreement or
instrument evidencing or governing any Subordinated Indebtedness, the effect of
which would be to (a) increase the principal amount due thereunder, (b) shorten
or accelerate the time of payment of any amount due thereunder, (c) increase the
applicable interest rate or amount of any fees or costs due thereunder, (d)
amend any of the subordination provisions thereunder (including any of the
definitions relating thereto), (e) make any covenant therein more restrictive or
add any new covenant, or (f) otherwise materially and adversely affect the
Lenders, or breach or otherwise violate any of the subordination provisions
applicable thereto, including, without limitation, restrictions against payment
of principal and interest thereon, (ii) if any Default or Event of Default has
occurred and is continuing or would result therefrom, amend, modify or waive, or
permit the amendment, modification or waiver of, any provision of the Senior
Notes or the Senior Note Indenture, the effect of which would be to (a) increase
the principal amount due thereunder, (b) shorten or accelerate the time of
payment of any amount due thereunder, (c) increase the applicable interest rate
or amount of any fees or costs due thereunder, (d) make any covenant therein
more restrictive or add any new covenant, or (e) otherwise materially and
adversely affect the Lenders, or (iii) amend, modify, restate or change any
provision of its articles or certificate of incorporation or bylaws, the terms
of any class or series of its Capital Stock or the Xxxxxx Securities Purchase
Agreement, other than in a manner that could not reasonably be expected to
adversely affect the Lenders.
8.10 Limitation on Certain Restrictions. Matria will not, and will
not permit or cause any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any restriction or
encumbrance on (i) the ability of Matria and its Subsidiaries to perform and
comply with their respective obligations under the Credit Documents or (ii) the
ability of any Subsidiary of any Borrower to make any dividend payments or other
distributions in respect of its Capital Stock, to repay Indebtedness owed to
such Borrower or any other Subsidiary, to make loans or advances to such
Borrower or any other Subsidiary, or to transfer any of its assets or properties
to such Borrower or any other Subsidiary, in each case other than such
restrictions or encumbrances existing under or by reason of the Credit
Documents, the Senior Note Indenture or applicable Requirements of Law.
8.11 No Other Negative Pledges. Matria will not, and will not
permit or cause any of its Subsidiaries to, directly or indirectly, enter into
or suffer to exist any agreement or restriction that prohibits or conditions the
creation, incurrence or assumption of any Lien upon or with respect to any part
of its property or assets, whether now owned or hereafter acquired, or agree to
do any of the foregoing, other than as set forth in (i) this Agreement and the
Security Documents, (ii) any agreement or instrument creating a Permitted Lien
(but only to the extent such agreement or restriction applies to the assets
subject to such Permitted Lien), (iii) operating leases of real or personal
property entered into by Matria or any of its Subsidiaries as lessee in the
ordinary course of business, and (iv) the Senior Note Indenture.
84
91
8.12 Fiscal Year. Matria will not, and will not permit or cause any
of its Subsidiaries to, change the ending date of its fiscal year to a date
other than December 31.
8.13 Accounting Changes. Matria will not, and will not permit or
cause any of its Subsidiaries to, make or permit any material change in its
accounting policies or reporting practices, except as may be required by GAAP.
ARTICLE IX
EVENTS OF DEFAULT
9.1 Events of Default. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) Any Borrower shall fail to pay (i) any principal of any Loan
when due, or (ii) any interest on any Loan, any Reimbursement Obligation, any
fee or any other Obligation (other than any Obligation under a Hedge Agreement)
when due, and in the case of clause (ii) only, such failure shall continue
unremedied for a period of three (3) Business Days;
(b) Any Borrower shall fail to observe, perform or comply with any
condition, covenant or agreement contained in any of SECTIONS 2.14, 6.1, 6.2,
6.3(I), 6.9, 6.10 or in ARTICLE VII or ARTICLE VIII;
(c) Any Borrower or any of its Subsidiaries shall fail to observe,
perform or comply with any condition, covenant or agreement contained in this
Agreement or any of the other Credit Documents other than those enumerated in
subsections (a) and (b) above, and such failure shall continue unremedied for
any grace period specifically applicable thereto or, if no such grace period is
applicable, for a period of thirty (30) days after the earlier of (i) the date
on which a Responsible Officer of the Borrower or such Subsidiary acquires
knowledge thereof and (ii) the date on which written notice thereof is delivered
by the Administrative Agent or any Lender to the Borrower; or any default or
event of default shall occur under any Hedge Agreement to which Matria and any
Lender or Affiliate of any Lender are parties;
(d) Any representation or warranty made or deemed made by or on
behalf of any Borrower or any of its Subsidiaries in this Agreement, any of the
other Credit Documents or in any certificate, instrument, report or other
document furnished in connection herewith or therewith or in connection with the
transactions contemplated hereby or thereby shall prove to have been false or
misleading in any material respect as of the time made, deemed made or
furnished;
(e) Matria or any of its Subsidiaries shall (i) fail to pay when
due (whether by scheduled maturity, acceleration or otherwise and after giving
effect to any applicable grace period) (y) any principal of or interest on any
Indebtedness (other than the Indebtedness incurred pursuant to this Agreement)
having an aggregate principal Dollar Amount of at least $250,000 or (z) any
termination or other payment under any Hedge Agreement covering a notional
amount of Indebtedness of at least $250,000 or (ii) fail to observe, perform or
comply with any condition, covenant or agreement contained in any agreement or
instrument evidencing or relating to any
85
92
such Indebtedness, or any other event shall occur or condition exist in respect
thereof, and the effect of such failure, event or condition is to cause, or
permit the holder or holders of such Indebtedness (or a trustee or agent on its
or their behalf) to cause (with the giving of notice, lapse of time, or both),
such Indebtedness to become due, or to be prepaid, redeemed, purchased or
defeased, prior to its stated maturity;
(f) Matria or any of its Subsidiaries shall (i) file a voluntary
petition or commence a voluntary case seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts or any other
relief under the Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, (ii) consent to the
institution of, or fail to controvert in a timely and appropriate manner, any
petition or case of the type described in subsection (g) below, (iii) apply for
or consent to the appointment of or taking possession by a custodian, trustee,
receiver or similar official for or of itself or all or a substantial part of
its properties or assets, (iv) fail generally, or admit in writing its
inability, to pay its debts generally as they become due, (v) make a general
assignment for the benefit of creditors or (vi) take any corporate action to
authorize or approve any of the foregoing;
(g) Any involuntary petition or case shall be filed or commenced
against Matria or any of its Subsidiaries seeking liquidation, winding-up,
reorganization, dissolution, arrangement, readjustment of debts, the appointment
of a custodian, trustee, receiver or similar official for it or all or a
substantial part of its properties or any other relief under the Bankruptcy Code
or under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, and such petition or case shall continue undismissed and
unstayed for a period of sixty (60) days; or an order, judgment or decree
approving or ordering any of the foregoing shall be entered in any such
proceeding;
(h) Any one or more money judgments, writs or warrants of
attachment, executions or similar processes involving an aggregate amount
(exclusive of amounts fully bonded or covered by insurance as to which the
surety or insurer, as the case may be, has acknowledged its liability in
writing) in excess of $250,000 shall be entered or filed against Matria or any
of its Subsidiaries or any of their respective properties and the same shall not
be dismissed, stayed or discharged for a period of thirty (30) days or in any
event later than five days prior to the date of any proposed sale thereunder;
(i) Any Security Document to which Matria or any of its
Subsidiaries is now or hereafter a party shall for any reason cease to be in
full force and effect or cease to be effective to give the Administrative Agent
a valid and perfected security interest in and Lien upon the Collateral
purported to be covered thereby, subject to no Liens other than Permitted Liens,
in each case unless any such cessation occurs in accordance with the terms
thereof or is due to any act or failure to act on the part of the Administrative
Agent or any Lender; or Matria or any such Subsidiary shall assert any of the
foregoing; or Matria or any Person acting on its behalf shall deny or disaffirm
its obligations under the guaranty contained in ARTICLE XI; or any Subsidiary of
Matria or any Person acting on behalf of any such Subsidiary shall terminate,
deny or disaffirm such Subsidiary's obligations under the Subsidiary Guaranty or
any other guaranty of the Obligations;
86
93
(j) Any ERISA Event or any other event or condition shall occur or
exist with respect to any Plan or Multiemployer Plan and, as a result thereof,
together with all other ERISA Events and other events or conditions then
existing, Matria and its ERISA Affiliates have incurred or would be reasonably
likely to incur liability to any one or more Plans or Multiemployer Plans or to
the PBGC (or to any combination thereof) in excess of $250,000;
(k) There shall occur a Limitation with respect to any one or more
Licenses or Reimbursement Approvals of Matria or any of its Subsidiaries, or any
other action shall be taken by any Governmental Authority or other Person in
response to any alleged failure by Matria or any such Subsidiary to be in
compliance with applicable Requirements of Law, and such Limitation or other
action, individually or in the aggregate, has or would be reasonably likely to
have a Material Adverse Effect; or there shall occur any introduction of or
change in any Requirement of Law (or in the interpretation or administration
thereof by any Governmental Authority) governing or affecting Matria or any of
its Subsidiaries, and such introduction or change, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse Effect;
(l) Any one or more agreements or contracts to which Matria or any
of its Subsidiaries is a party shall be terminated or shall, for any other
reason, fail to be in full force and effect and enforceable in accordance with
its terms, and such event or condition, together with all other such events or
conditions, if any, has or would be reasonably likely to have a Material Adverse
Effect; or
(m) Any of the following shall occur: (i) any Person or group of
Persons acting in concert as a partnership or other group shall, as a result of
a tender or exchange offer, open market purchases, privately negotiated
purchases or otherwise, have become, after the date hereof, the "beneficial
owner" (within the meaning of such term under Rule 13d-3 under the Exchange Act)
of securities of Matria representing 20% or more of the combined voting power of
the then outstanding securities of Matria ordinarily (and apart from rights
accruing under special circumstances) having the right to vote in the election
of directors; (ii) the Board of Directors of Matria shall cease to consist of a
majority of the individuals who constituted the Board of Directors as of the
date hereof or who shall have become a member thereof subsequent to the date
hereof after having been nominated, or otherwise approved in writing, by at
least a majority of individuals who constituted the Board of Directors of Matria
as of the date hereof (or their replacements approved as herein required); or
(iii) a "change of control" or similar event within the meaning of the Senior
Note Indenture or any agreement or instrument governing or evidencing
Subordinated Indebtedness shall occur thereunder.
9.2 Remedies: Termination of Commitments, Acceleration, etc. Upon
and at any time after the occurrence and during the continuance of any Event of
Default, the Administrative Agent shall at the direction, or may with the
consent, of the Required Lenders, take any or all of the following actions at
the same or different times:
(a) Declare the Revolving Credit Commitments, the Swingline
Commitment and the Issuing Lender's obligation to issue Letters of Credit, to be
terminated, whereupon the same shall terminate (provided that, upon the
occurrence of an Event of Default pursuant to SECTION 9.1(F)
87
94
or SECTION 9.1(G), the Revolving Credit Commitments, the Swingline Commitment
and the Issuing Lender's obligation to issue Letters of Credit shall
automatically be terminated);
(b) Declare all or any part of the outstanding principal amount of
the Loans to be immediately due and payable, whereupon the principal amount so
declared to be immediately due and payable, together with all interest accrued
thereon and all other amounts payable under this Agreement, the Notes and the
other Credit Documents (but excluding any amounts owing under any Hedge
Agreement), shall become immediately due and payable without presentment,
demand, protest, notice of intent to accelerate or other notice or legal process
of any kind, all of which are hereby knowingly and expressly waived by the
Borrowers (provided that, upon the occurrence of an Event of Default pursuant to
SECTION 9.1(F) or SECTION 9.1(G), all of the outstanding principal amount of the
Loans and all other amounts described in this subsection (b) shall automatically
become immediately due and payable without presentment, demand, protest, notice
of intent to accelerate or other notice or legal process of any kind, all of
which are hereby knowingly and expressly waived by the Borrowers);
(c) Direct Matria to deposit (and Matria hereby agrees, forthwith
upon receipt of notice of such direction from the Administrative Agent, to
deposit) with the Administrative Agent from time to time such additional amount
of cash as is equal to the aggregate Stated Amount of all Letters of Credit then
outstanding (whether or not any beneficiary under any Letter of Credit shall
have drawn or be entitled at such time to draw thereunder), such amount to be
held by the Administrative Agent in the Cash Collateral Account as security for
the Letter of Credit Exposure as described in SECTION 3.8; and
(d) Exercise all rights and remedies available to it under this
Agreement, the other Credit Documents and applicable law.
9.3 Remedies: Set-Off. In addition to all other rights and
remedies available under the Credit Documents or applicable law or otherwise,
upon and at any time after the occurrence and during the continuance of any
Event of Default, each Lender may, and each is hereby authorized by each
Borrower, at any such time and from time to time, to the fullest extent
permitted by applicable law, without presentment, demand, protest or other
notice of any kind, all of which are hereby knowingly and expressly waived by
each Borrower, to set off and to apply any and all deposits (general or special,
time or demand, provisional or final) and any other property at any time held
(including at any branches or agencies, wherever located), and any other
indebtedness at any time owing, by such Lender to or for the credit or the
account of such Borrower against any or all of the Obligations to such Lender
now or hereafter existing, whether or not such Obligations may be contingent or
unmatured, each Borrower hereby granting to each Lender a continuing security
interest in and Lien upon all such deposits and other property as security for
such Obligations. Each Lender agrees promptly to notify the applicable Borrower
and the Administrative Agent after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application.
88
95
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably appoints and
authorizes First Union to act as Administrative Agent hereunder and under the
other Credit Documents and to take such actions as agent on its behalf hereunder
and under the other Credit Documents, and to exercise such powers and to perform
such duties, as are specifically delegated to the Administrative Agent by the
terms hereof or thereof, together with such other powers and duties as are
reasonably incidental thereto.
10.2 Nature of Duties. The Administrative Agent shall have no
duties or responsibilities other than those expressly set forth in this
Agreement and the other Credit Documents. The Administrative Agent shall not
have, by reason of this Agreement or any other Credit Document, a fiduciary
relationship in respect of any Lender; and nothing in this Agreement or any
other Credit Document, express or implied, is intended to or shall be so
construed as to impose upon the Administrative Agent any obligations or
liabilities in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein. The Administrative Agent may execute any
of its duties under this Agreement or any other Credit Document by or through
agents or attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact that it selects with reasonable
care. The Administrative Agent shall be entitled to consult with legal counsel,
independent public accountants and other experts selected by it with respect to
all matters pertaining to this Agreement and the other Credit Documents and its
duties hereunder and thereunder and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts. The Lenders hereby acknowledge that the
Administrative Agent shall not be under any duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Credit Document unless it shall be requested in writing to do so by
the Required Lenders (or, where a higher percentage of the Lenders is expressly
required hereunder, such Lenders).
10.3 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action taken or omitted to be taken by it
or such Person under or in connection with the Credit Documents, except for its
or such Person's own gross negligence or willful misconduct, (ii) responsible in
any manner to any Lender for any recitals, statements, information,
representations or warranties herein or in any other Credit Document or in any
document, instrument, certificate, report or other writing delivered in
connection herewith or therewith, for the execution, effectiveness, genuineness,
validity, enforceability or sufficiency of this Agreement or any other Credit
Document, or for the financial condition of any Borrower, its Subsidiaries or
any other Person, or (iii) required to ascertain or make any inquiry concerning
the performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document or the existence or possible
existence of any Default or Event of Default, or to inspect the properties,
books or records of any Borrower or any of its Subsidiaries.
10.4 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
notice, statement, consent or other
89
96
communication (including, without limitation, any thereof by telephone,
telecopy, telex, telegram or cable) believed by it in good faith to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons. The Administrative Agent may deem and treat each Lender as the owner of
its interest hereunder for all purposes hereof unless and until a written notice
of the assignment, negotiation or transfer thereof shall have been given to the
Administrative Agent in accordance with the provisions of this Agreement. The
Administrative Agent shall be entitled to refrain from taking or omitting to
take any action in connection with this Agreement or any other Credit Document
(i) if such action or omission would, in the reasonable opinion of the
Administrative Agent, violate any applicable law or any provision of this
Agreement or any other Credit Document or (ii) unless and until it shall have
received such advice or concurrence of the Required Lenders (or, where a higher
percentage of the Lenders is expressly required hereunder, such Lenders) as it
deems appropriate or it shall first have been indemnified to its satisfaction by
the Lenders against any and all liability and expense (other than liability and
expense arising from its own gross negligence or willful misconduct) that may be
incurred by it by reason of taking, continuing to take or omitting to take any
such action. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Administrative Agent as a result of the
Administrative Agent's acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders (or, where a higher percentage of the Lenders is expressly required
hereunder, such Lenders), and such instructions and any action taken or failure
to act pursuant thereto shall be binding upon all of the Lenders (including all
subsequent Lenders).
10.5 Non-Reliance on Administrative Agent and Other Lenders. Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representation or warranty to it and that no act by the Administrative
Agent or any such Person hereinafter taken, including any review of the affairs
of Matria and its Subsidiaries, shall be deemed to constitute any representation
or warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that (i) it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, properties, financial
and other condition and creditworthiness of Matria and its Subsidiaries and made
its own decision to enter into this Agreement and extend credit to the Borrowers
hereunder, and (ii) it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action
hereunder and under the other Credit Documents and to make such investigation as
it deems necessary to inform itself as to the business, prospects, operations,
properties, financial and other condition and creditworthiness of Matria and its
Subsidiaries. Except as expressly provided in this Agreement and the other
Credit Documents, the Administrative Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any credit
or other information concerning the business, prospects, operations, properties,
financial or other condition or creditworthiness of any Borrower, its
Subsidiaries or any other Person that may at any time come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.
90
97
10.6 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent shall have received written notice from
a Borrower or a Lender referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives such a notice, the Administrative
Agent will give notice thereof to the Lenders as soon as reasonably practicable;
provided, however, that if any such notice has also been furnished to the
Lenders, the Administrative Agent shall have no obligation to notify the Lenders
with respect thereto. The Administrative Agent shall (subject to SECTIONS 10.4
and 12.6) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders; provided that, unless and
until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders except
to the extent that this Agreement expressly requires that such action be taken,
or not be taken, only with the consent or upon the authorization of the Required
Lenders or all of the Lenders.
10.7 Indemnification. To the extent the Administrative Agent is not
reimbursed by or on behalf of the Borrowers, and without limiting the obligation
of the Borrowers to do so, the Lenders agree (i) to indemnify the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact and
Affiliates, ratably in proportion to their respective percentages as used in
determining the Required Lenders as of the date of determination, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses (including, without limitation,
attorneys' fees and expenses) or disbursements of any kind or nature whatsoever
that may at any time (including, without limitation, at any time following the
repayment in full of the Loans and the termination of the Revolving Credit
Commitments) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement or any other
Credit Document or any documents contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted by
the Administrative Agent under or in connection with any of the foregoing, and
(ii) to reimburse the Administrative Agent upon demand, ratably in proportion to
their respective percentages as used in determining the Required Lenders as of
the date of determination, for any expenses incurred by the Administrative Agent
in connection with the preparation, negotiation, execution, delivery,
administration, amendment, modification, waiver or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement or any of the other Credit
Documents (including, without limitation, reasonable attorneys' fees and
expenses and compensation of agents and employees paid for services rendered on
behalf of the Lenders); provided, however, that no Lender shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the gross negligence or willful misconduct of the party to be
indemnified.
10.8 The Administrative Agent in its Individual Capacity. With
respect to its Revolving Credit Commitment, the Loans made by it, the Letters of
Credit issued or participated in by it and the Note or Notes issued to it, the
Administrative Agent in its individual capacity and not as Administrative Agent
shall have the same rights and powers under the Credit Documents as any other
Lender and may exercise the same as though it were not performing the agency
91
98
duties specified herein; and the terms "Lenders," "Required Lenders," "holders
of Notes" and any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent and its Affiliates may accept deposits from, lend money to,
make investments in, and generally engage in any kind of banking, trust,
financial advisory or other business with any Borrower, any of its Subsidiaries
or any of their respective Affiliates as if the Administrative Agent were not
performing the agency duties specified herein, and may accept fees and other
consideration from any of them for services in connection with this Agreement
and otherwise without having to account for the same to the Lenders.
10.9 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving ten (10) days' prior written notice to Matria and
the Lenders. Upon any such notice of resignation, the Required Lenders will,
with the prior written consent of Matria (which consent shall not be
unreasonably withheld), appoint from among the Lenders a successor to the
Administrative Agent (provided that Matria's consent shall not be required in
the event a Default or Event of Default shall have occurred and be continuing).
If no successor to the Administrative Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within such ten-day
period, then the retiring Administrative Agent may, on behalf of the Lenders and
after consulting with the Lenders and Matria, appoint a successor Administrative
Agent from among the Lenders. Upon the acceptance of any appointment as
Administrative Agent by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents. After any retiring
Administrative Agent's resignation as Administrative Agent, the provisions of
this Article shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent. If no successor to the
Administrative Agent has accepted appointment as Administrative Agent by the
thirtieth (30th) day following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective, and the Lenders shall thereafter perform all of the
duties of the Administrative Agent hereunder and under the other Credit
Documents until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided for hereinabove.
10.10 Collateral Matters.
(a) The Administrative Agent is hereby authorized on behalf of the
Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time (but without any obligation) to take any action with
respect to the Collateral and the Security Documents that may be necessary to
perfect and maintain perfected the Liens upon the Collateral granted pursuant to
the Security Documents.
(b) The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Administrative Agent upon any Collateral (i) upon termination of the Revolving
Credit Commitments, termination or expiration of all outstanding Letters of
Credit and payment in full of all of the Obligations, (ii) constituting property
sold or to be sold or disposed of as part of or in connection with any
disposition
92
99
expressly permitted hereunder or under any other Credit Document or to which the
Required Lenders have consented or (iii) otherwise pursuant to and in accordance
with the provisions of any applicable Credit Document. Upon request by the
Administrative Agent at any time, the Lenders will confirm in writing the
Administrative Agent's authority to release Collateral pursuant to this
subsection (b).
10.11 Issuing Lender and Swingline Lender. The provisions of this
Article (other than SECTION 10.9) shall apply to the Issuing Lender and the
Swingline Lender mutatis mutandis to the same extent as such provisions apply to
the Administrative Agent.
10.12 Syndication Agent, Co-Agents. Notwithstanding any other
provision of this Agreement or any of the other Credit Documents, any Lenders or
other parties designated on the cover page of this Agreement or elsewhere herein
as "Syndication Agent," "Co-Agent" or any similar designation are named as such
for recognition purposes only, and in their capacities as such shall have no
powers, rights, duties, responsibilities or liabilities with respect to this
Agreement and the other Credit Documents and the transactions contemplated
hereby and thereby.
ARTICLE XI
GUARANTY
11.1 Guaranty.
(a) Matria hereby unconditionally and irrevocably guarantees to
the Administrative Agent, for the ratable benefit of the Administrative Agent
and the Lenders and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrowers when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations.
(b) Matria further agrees to pay any and all expenses (including,
without limitation, all reasonable fees and expenses of counsel actually
incurred) that may be paid or incurred by the Administrative Agent or any Lender
in enforcing, or obtaining advice of counsel in respect of, any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, Matria under this Section. This
Section shall remain in full force and effect until the Obligations are paid in
full, all Letters of Credit have expired or terminated and the Revolving Credit
Commitments have been terminated, notwithstanding that from time to time prior
thereto the Borrowers may be free from any Obligations.
(c) No payment or payments made by any Borrower or any other
Person or received or collected by the Administrative Agent or any Lender from
any Borrower or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application, at any time or from time to time, in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of Matria hereunder, and Matria shall,
notwithstanding any such payment or payments, remain liable hereunder for the
Obligations until the Obligations are paid in full, all Letters of Credit have
expired or terminated and the Revolving Credit Commitments have been terminated.
93
100
(d) Matria agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any Lender on
account of its liability under this Section, it will notify the Administrative
Agent and such Lender in writing that such payment is made under this Section
for such purpose.
11.2 Right of Set-Off. The Administrative Agent and each Lender is
hereby irrevocably authorized at any time and from time to time without notice
to Matria, any such notice being expressly waived by Matria, to set off and
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Administrative Agent or such Lender to or for the credit or the account of
Matria, or any part thereof in such amounts as the Administrative Agent or such
Lender may elect, against or on account of the obligations and liabilities of
Matria to the Administrative Agent or such Lender hereunder which are then due
and payable and claims of every nature and description of the Administrative
Agent or such Lender against Matria, in any currency, whether arising hereunder,
under any other Credit Document or otherwise in connection therewith, as the
Administrative Agent or such Lender may elect, whether or not the Administrative
Agent or such Lender has made any demand for payment. The Administrative Agent
and each Lender shall notify Matria promptly of any such set-off and the
application made by the Administrative Agent or such Lender, as the case may be,
of the proceeds thereof; provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of the
Administrative Agent and each Lender under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
that the Administrative Agent or such Lender may have.
11.3 No Subrogation. Notwithstanding any payment or payments made
by Matria hereunder, or any set-off or application of funds of Matria by the
Administrative Agent or any Lender, Matria shall not be entitled to be
subrogated to any of the rights of the Administrative Agent or any Lender
against the Borrowers or against any Collateral or other security or guarantee
or right of offset held by the Administrative Agent or any Lender for the
payment of the Obligations, nor shall Matria seek or be entitled to seek any
contribution or reimbursement from any of the Borrowers in respect of payments
made by Matria hereunder, until all amounts owing to the Administrative Agent
and the Lenders by the Borrowers on account of the Obligations are paid in full,
all Letters of Credit have expired or terminated and the Revolving Credit
Commitments have been terminated. If any amount shall be paid to Matria on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by Matria in trust for the
Administrative Agent and the Lenders, segregated from other funds of Matria, and
shall, forthwith upon receipt by Matria, be turned over to the Administrative
Agent in the exact form received by Matria (duly endorsed by Matria to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as Administrative Agent may
determine. The provisions of this Section shall survive the termination of this
Agreement and the payment in full of the Obligations, the termination or
expiration of all Letters of Credit and the termination of the Revolving Credit
Commitments.
11.4 Amendments, etc. with respect to the Obligations; Waiver of
Rights. Matria shall remain obligated hereunder notwithstanding that, without
any reservation of rights against
94
101
Matria, and without notice to or further assent by Matria, any demand for
payment of any of the Obligations made by the Administrative Agent or any Lender
may be rescinded by the Administrative Agent or such Lender, and any of the
Obligations continued, and the Obligations, or the liability of any other party
upon or for any part thereof, or any Collateral or other security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by the Administrative Agent or any
Lender, and any Credit Documents and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in
whole or in part, in accordance with the provisions thereof as the
Administrative Agent (or the requisite Lenders, as the case may be) may deem
advisable from time to time, and any Collateral or other security, guarantee or
right of offset at any time held by the Administrative Agent or any Lender for
the payment of the Obligations may be sold, exchanged, waived, surrendered or
released. None of the Administrative Agent or any Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Obligations or for this Agreement or any property subject
thereto. When making any demand hereunder against Matria, the Administrative
Agent or any Lender may, but shall be under no obligation to, make a similar
demand on any Borrower or any other guarantor, and any failure by the
Administrative Agent or any Lender to make any such demand or to collect any
payments from any Borrower or any such other guarantor or any release of any
Borrower or such other guarantor shall not relieve Matria of its obligations or
liabilities hereunder, and shall not impair or affect the rights and remedies,
express or implied, or as a matter of law, of the Administrative Agent or any
Lender against Matria. For the purposes hereof "demand" shall include the
commencement and continuance of any legal proceedings.
11.5 Guaranty Absolute and Unconditional. Matria waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Administrative Agent or any Lender
upon this Agreement or acceptance of this Agreement; the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon this Agreement; and
all dealings between Matria and the other Borrowers, on the one hand, and the
Administrative Agent and the Lenders, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Agreement. Matria waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon Matria and the other Borrowers with
respect to the Obligations, and without limitation of the foregoing,
specifically waives the benefits of O.C.G.A. Section 10-7-24. This ARTICLE XI
shall be construed as a continuing, absolute and unconditional guaranty of
payment without regard to (a) the validity, regularity or enforceability of this
Agreement, any other Credit Document, any of the Obligations or any other
Collateral or other security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any Lender, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) that may at any time be available to or be
asserted by any of the Borrowers against the Administrative Agent or any Lender,
or (c) any other circumstance whatsoever (with or without notice to or knowledge
of Matria or any other Borrower) that constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrowers for the
Obligations, or of Matria under this ARTICLE XI, in bankruptcy or in any other
instance. When pursuing its rights and remedies hereunder against Matria, the
Administrative Agent and any Lender may, but shall be under no obligation to,
pursue such rights and remedies as it may have against the Borrowers or
95
102
any other Person or against any Collateral or other security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Administrative Agent or any Lender to pursue such other rights or remedies
or to collect any payments from the Borrowers or any such other Person or to
realize upon any such Collateral or other security or guarantee or to exercise
any such right of offset, or any release of any of the Borrowers or any such
other Person or of any such Collateral or other security, guarantee or right of
offset, shall not relieve Matria of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent or any Lender against Matria.
This ARTICLE XI shall remain in full force and effect and be binding in
accordance with and to the extent of its terms upon Matria and its successors
and assigns, and shall inure to the benefit of the Administrative Agent and the
Lenders, and their respective successors, indorsees, transferees and assigns,
until all the Obligations and the obligations of Matria under this Agreement
shall have been satisfied by payment in full, all Letters of Credit shall have
expired or terminated, and the Revolving Credit Commitments shall have been
terminated, notwithstanding that from time to time during the term of this
Agreement the Borrowers may be free from any Obligations.
11.6 Reinstatement. This ARTICLE XI shall continue to be effective,
or be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Lender upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of any Borrower or upon
or as a result of the appointment of a receiver, intervenor or conservator of,
or trustee or similar officer for, any Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.
11.7 Payments. Matria hereby agrees that all payments required to
be made by it hereunder will be made to the Administrative Agent without set-off
or counterclaim in accordance with the terms of the Obligations, including,
without limitation, in the currency in which payment is due.
ARTICLE XII
MISCELLANEOUS
12.1 Fees and Expenses. The Borrowers agree (i) whether or not the
transactions contemplated by this Agreement shall be consummated, to pay upon
demand all reasonable out-of-pocket costs and expenses of the Administrative
Agent (including, without limitation, the reasonable fees and expenses of
counsel to the Administrative Agent actually incurred) in connection with (y)
the Administrative Agent's due diligence investigation in connection with, and
the preparation, negotiation, execution, delivery and syndication of, this
Agreement and the other Credit Documents, and any amendment, modification or
waiver hereof or thereof or consent with respect hereto or thereto, and (z) the
creation, perfection and maintenance of the perfection of the Administrative
Agent's Liens upon the Collateral, including, without limitation, Lien search,
filing and recording fees, (ii) to pay upon demand all reasonable out-of-pocket
costs and expenses of the Administrative Agent and each Lender (including,
without limitation, reasonable attorneys' fees and expenses actually incurred)
in connection with (y) any refinancing
96
103
or restructuring of the credit arrangement provided under this Agreement,
whether in the nature of a "work-out," in any insolvency or bankruptcy
proceeding or otherwise and whether or not consummated, and (z) the enforcement,
attempted enforcement or preservation of any rights or remedies under this
Agreement or any of the other Credit Documents, whether in any action, suit or
proceeding (including any bankruptcy or insolvency proceeding) or otherwise, and
(iii) to pay and hold the Administrative Agent and each Lender harmless from and
against all liability for any intangibles, documentary, stamp or other similar
taxes, fees and excises, if any, including any interest and penalties, and any
finder's or brokerage fees, commissions and expenses (other than any fees,
commissions or expenses of finders or brokers engaged by the Administrative
Agent or any Lender), that may be payable in connection with the transactions
contemplated by this Agreement and the other Credit Documents.
12.2 Indemnification. The Borrowers agree, whether or not the
transactions contemplated by this Agreement shall be consummated, to indemnify
and hold the Administrative Agent and each Lender and each of their respective
directors, officers, employees, agents and Affiliates (each, an "Indemnified
Person") harmless from and against any and all claims, losses, damages,
obligations, liabilities, penalties, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses actually incurred) of any
kind or nature whatsoever, whether direct, indirect or consequential
(collectively, "Indemnified Costs"), that may at any time be imposed on,
incurred by or asserted against any such Indemnified Person as a result of,
arising from or in any way relating to the preparation, execution, performance
or enforcement of this Agreement or any of the other Credit Documents, any of
the transactions contemplated herein or therein or any transaction financed or
to be financed in whole or in part, directly or indirectly, with the proceeds of
any Loans or Letters of Credit (including, without limitation, in connection
with the actual or alleged generation, presence, discharge or release of any
Hazardous Substances on, into or from, or the transportation of Hazardous
Substances to or from, any real property at any time owned or leased by any
Borrower or any of its Subsidiaries, any other Environmental Claims or any
violation of or liability under any Environmental Law), or any action, suit or
proceeding (including any inquiry or investigation) by any Person, whether
threatened or initiated, related to any of the foregoing, and in any case
whether or not such Indemnified Person is a party to any such action, proceeding
or suit or a subject of any such inquiry or investigation; provided, however,
that no Indemnified Person shall have the right to be indemnified hereunder for
any Indemnified Costs to the extent resulting from the gross negligence or
willful misconduct of such Indemnified Person. All of the foregoing Indemnified
Costs of any Indemnified Person shall be paid or reimbursed by the Borrowers, as
and when incurred and upon demand.
12.3 Governing Law; Consent to Jurisdiction. THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA (WITHOUT REGARD TO THE
CONFLICTS OF LAW PROVISIONS THEREOF); PROVIDED THAT EACH LETTER OF CREDIT SHALL
BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OR RULES
DESIGNATED IN SUCH LETTER OF CREDIT OR, IF NO SUCH LAWS OR RULES ARE DESIGNATED,
THE UNIFORM CUSTOMS AND PRACTICES FOR DOCUMENTARY CREDITS, INTERNATIONAL CHAMBER
OF COMMERCE, AS IN EFFECT FROM TIME TO TIME (THE "UNIFORM CUSTOMS"), AND, AS TO
97
104
MATTERS NOT GOVERNED BY THE UNIFORM CUSTOMS, THE LAWS OF THE STATE OF GEORGIA
(WITHOUT REGARD TO THE CONFLICTS OF LAW PROVISIONS THEREOF). EACH BORROWER
HEREBY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY STATE COURT WITHIN XXXX
COUNTY, GEORGIA OR XXXXXX COUNTY, GEORGIA OR ANY FEDERAL COURT LOCATED WITHIN
THE NORTHERN DISTRICT OF THE STATE OF GEORGIA FOR ANY PROCEEDING INSTITUTED
HEREUNDER OR UNDER ANY OF THE OTHER CREDIT DOCUMENTS, OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER CREDIT DOCUMENTS, OR ANY
PROCEEDING TO WHICH THE AGENT OR ANY LENDER OR SUCH BORROWER IS A PARTY,
INCLUDING ANY ACTIONS BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENT (WHETHER ORAL OR WRITTEN) OR
ACTIONS OF THE AGENT OR ANY LENDER OR SUCH BORROWER. EACH BORROWER IRREVOCABLY
AGREES TO BE BOUND (SUBJECT TO ANY AVAILABLE RIGHT OF APPEAL) BY ANY JUDGMENT
RENDERED OR RELIEF GRANTED THEREBY AND FURTHER WAIVES ANY OBJECTION THAT IT MAY
HAVE BASED ON LACK OF JURISDICTION OR IMPROPER VENUE OR FORUM NON CONVENIENS TO
THE CONDUCT OF ANY SUCH PROCEEDING. EACH BORROWER CONSENTS THAT ALL SERVICE OF
PROCESS BE MADE BY REGISTERED OR CERTIFIED MAIL DIRECTED TO MATRIA AT ITS
ADDRESS SET FORTH HEREINBELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID AND PROPERLY
ADDRESSED. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT TO SERVE LEGAL PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE AGENT OR ANY
LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST ANY BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION.
12.4 Arbitration; Preservation and Limitation of Remedies.
(a) UPON DEMAND OF ANY PARTY HERETO, WHETHER MADE BEFORE OR AFTER
INSTITUTION OF ANY JUDICIAL PROCEEDING, ANY DISPUTE, CLAIM OR CONTROVERSY
ARISING OUT OF, CONNECTED WITH OR RELATING TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT ("DISPUTES") BETWEEN OR AMONG THE BORROWERS, ITS SUBSIDIARIES, THE
ADMINISTRATIVE AGENT AND THE LENDERS, OR ANY OF THEM, SHALL BE RESOLVED BY
BINDING ARBITRATION AS PROVIDED HEREIN. INSTITUTION OF A JUDICIAL PROCEEDING BY
A PARTY DOES NOT WAIVE THE RIGHT OF THAT PARTY TO DEMAND ARBITRATION HEREUNDER.
DISPUTES MAY INCLUDE, WITHOUT LIMITATION, TORT CLAIMS, COUNTERCLAIMS, CLAIMS
BROUGHT AS CLASS ACTIONS, CLAIMS ARISING FROM DOCUMENTS EXECUTED IN THE FUTURE,
DISPUTES AS TO WHETHER A MATTER IS SUBJECT TO ARBITRATION, OR CLAIMS ARISING OUT
OF OR CONNECTED WITH THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS. ARBITRATION SHALL
98
105
BE CONDUCTED UNDER AND GOVERNED BY THE COMMERCIAL FINANCIAL DISPUTES ARBITRATION
RULES (THE "ARBITRATION RULES") OF THE AMERICAN ARBITRATION ASSOCIATION (THE
"AAA"), AS IN EFFECT FROM TIME TO TIME, AND THE FEDERAL ARBITRATION ACT, TITLE 9
OF THE U.S. CODE, AS AMENDED. ALL ARBITRATION HEARINGS SHALL BE CONDUCTED IN THE
CITY IN WHICH THE PRINCIPAL OFFICE OF THE ADMINISTRATIVE AGENT IS LOCATED. A
HEARING SHALL BEGIN WITHIN NINETY (90) DAYS OF DEMAND FOR ARBITRATION AND ALL
HEARINGS SHALL BE CONCLUDED WITHIN 120 DAYS OF DEMAND FOR ARBITRATION. THESE
TIME LIMITATIONS MAY NOT BE EXTENDED UNLESS A PARTY SHOWS CAUSE FOR EXTENSION
AND THEN FOR NO MORE THAN A TOTAL OF SIXTY (60) DAYS. THE EXPEDITED PROCEDURES
SET FORTH IN RULE 51 ET SEQ. OF THE ARBITRATION RULES SHALL BE APPLICABLE TO
CLAIMS OF LESS THAN $1,000,000. ALL APPLICABLE STATUTES OF LIMITATION SHALL
APPLY TO ANY DISPUTE. A JUDGMENT UPON THE AWARD MAY BE ENTERED IN ANY COURT
HAVING JURISDICTION. THE PANEL FROM WHICH ALL ARBITRATORS ARE SELECTED SHALL BE
COMPRISED OF LICENSED ATTORNEYS SELECTED FROM THE COMMERCIAL FINANCIAL DISPUTE
ARBITRATION PANEL OF THE AAA. THE SINGLE ARBITRATOR SELECTED FOR EXPEDITED
PROCEDURE SHALL BE A RETIRED JUDGE FROM THE HIGHEST COURT OF GENERAL
JURISDICTION, STATE OR FEDERAL, OF THE STATE WHERE THE HEARING WILL BE
CONDUCTED. NOTWITHSTANDING THE FOREGOING, THIS ARBITRATION PROVISION DOES NOT
APPLY TO DISPUTES UNDER OR RELATED TO ANY HEDGE AGREEMENT THAT IS A CREDIT
DOCUMENT. THE PARTIES DO NOT WAIVE APPLICABLE FEDERAL OR STATE SUBSTANTIVE LAW
EXCEPT AS PROVIDED HEREIN.
(b) NOTWITHSTANDING THE PRECEDING BINDING ARBITRATION PROVISIONS,
THE PARTIES HERETO AGREE TO PRESERVE, WITHOUT DIMINUTION, CERTAIN REMEDIES THAT
ANY PARTY HERETO MAY EMPLOY OR EXERCISE FREELY, EITHER ALONE, IN CONJUNCTION
WITH OR DURING A DISPUTE. ANY PARTY HERETO SHALL HAVE THE RIGHT TO PROCEED IN
ANY COURT OF PROPER JURISDICTION OR BY SELF-HELP TO EXERCISE OR PROSECUTE THE
FOLLOWING REMEDIES, AS APPLICABLE: (I) ALL RIGHTS TO FORECLOSE AGAINST ANY
COLLATERAL BY EXERCISING A POWER OF SALE GRANTED PURSUANT TO ANY OF THE CREDIT
DOCUMENTS OR UNDER APPLICABLE LAW OR BY JUDICIAL FORECLOSURE AND SALE, INCLUDING
A PROCEEDING TO CONFIRM THE SALE; (II) ALL RIGHTS OF SELF-HELP, INCLUDING
PEACEFUL OCCUPATION OF REAL PROPERTY AND COLLECTION OF RENTS, SET-OFF, AND
PEACEFUL POSSESSION OF PERSONAL PROPERTY; (III) OBTAINING PROVISIONAL OR
ANCILLARY REMEDIES, INCLUDING INJUNCTIVE RELIEF, SEQUESTRATION, GARNISHMENT,
ATTACHMENT, APPOINTMENT OF A RECEIVER AND FILING AN INVOLUNTARY BANKRUPTCY
PROCEEDING; AND (IV) WHEN APPLICABLE, A JUDGMENT BY CONFESSION OF JUDGMENT. ANY
CLAIM OR CONTROVERSY WITH REGARD TO ANY PARTY'S ENTITLEMENT TO SUCH REMEDIES IS
A DISPUTE. PRESERVATION OF THESE REMEDIES DOES NOT LIMIT THE POWER OF AN
ARBITRATOR TO GRANT
99
106
SIMILAR REMEDIES THAT MAY BE REQUESTED BY A PARTY IN A DISPUTE. THE PARTIES
HERETO AGREE THAT NO PARTY SHALL HAVE A REMEDY OF PUNITIVE OR EXEMPLARY DAMAGES
AGAINST ANY OTHER PARTY IN ANY DISPUTE, AND EACH PARTY HEREBY WAIVES ANY RIGHT
OR CLAIM TO PUNITIVE OR EXEMPLARY DAMAGES THAT IT HAS NOW OR THAT MAY ARISE IN
THE FUTURE IN CONNECTION WITH ANY DISPUTE, WHETHER SUCH DISPUTE IS RESOLVED BY
ARBITRATION OR JUDICIALLY. THE PARTIES ACKNOWLEDGE THAT BY AGREEING TO BINDING
ARBITRATION THEY HAVE IRREVOCABLY WAIVED ANY RIGHT THEY MAY HAVE TO A JURY TRIAL
WITH REGARD TO A DISPUTE.
12.5 Notices.
(a) All notices and other communications provided for hereunder
shall be in writing (including facsimile transmission) and mailed (by registered
or certified mail), telecopied, or delivered (by hand or overnight delivery
service) to the party to be notified at the following addresses:
(a) if to Matria or any other Borrower, to Matria
Healthcare, Inc., 0000 Xxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxx
00000, Attention: President, Telecopy No. (000) 000-0000, with copies
(except in the case of routine administrative notices) to Matria
Healthcare, Inc., 0000 Xxxxxxx Xxxxx, 00xx Xxxxx, Xxxxxxxx, Xxxxxxx
00000, Attention: General Counsel, Telecopy No. (000) 000-0000, and to
Xxxxxxxx Xxxxxxx LLP, 000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 0000, Xxxxxxx,
Xxxxxxx 00000-0000, Attention: Xxxxx X. Xxxxx, III, Telecopy No. (404)
962-6687;
(b) if to the Administrative Agent, to First Union
Xxxxxxxx Xxxx, Xxxxxxxxx Xxxxx Xxxxxxxx XX-00, 000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, Attention: Syndication
Agency Services, Telecopy No. (000) 000-0000; and
(c) if to any Lender, to it at the address set forth on
SCHEDULE 1.1(B) (or if to any Lender not a party hereto as of the date
hereof, at the address set forth in its Assignment and Acceptance);
or in each case, to such other address as any party may designate for itself by
like notice to all other parties hereto. All such notices and communications
shall be deemed to have been given on the date of receipt.
(b) Each Borrower (other than Matria) hereby irrevocably
designates and appoints Matria as its designee, appointee and agent to receive
on its behalf all service of process in any action or proceeding and any other
notice or communication hereunder, consents that all service of process upon it
may be made by registered or certified mail directed to Matria at its address
set forth hereinabove (and service so made shall be deemed to be completed upon
the earlier of actual receipt thereof or three (3) Business Days after deposit
in the United States mails, proper postage prepaid and properly addressed), and
agrees that service so made shall be effective and binding upon such Borrower in
every respect and that any other notice or communication given to Matria at the
address and in the manner specified herein shall be effective notice to such
100
107
Borrower. Further, each Borrower does hereby irrevocably make, constitute and
appoint Matria as its true and lawful attorney-in-fact, with full authority in
its place and stead and in its name, Matria's name or otherwise, and with full
power of substitution in the premises, from time to time in Matria's discretion
to agree on behalf of, and sign the name of, such Borrower to any Notice of
Borrowing or Notice of Conversion/Continuation, or any amendment, modification
or supplement to, restatement of, or waiver or consent in connection with, this
Agreement, any other Credit Document or any document or instrument pursuant
hereto or thereto, and to take any other action and do all other things on
behalf of such Borrower that Matria may deem necessary or advisable to carry out
and accomplish the purposes of this Agreement and the other Credit Documents.
Matria will not be liable for any act or omission nor for any error of judgment
or mistake of fact unless the same shall occur as a result of its gross
negligence or willful misconduct. This power, being coupled with an interest, is
irrevocable by any Borrower for so long as such Borrower shall be a party
hereto. By its signature hereto, Matria consents to its appointment as provided
for herein and agrees promptly to distribute all process, notices and other
communications to each other Borrower.
12.6 Amendments, Waivers, etc. No amendment, modification, waiver
or discharge or termination of, or consent to any departure by any Borrower
from, any provision of this Agreement or any other Credit Document, shall be
effective unless in a writing signed by the Required Lenders (or by the
Administrative Agent at the direction or with the consent of the Required
Lenders), and then the same shall be effective only in the specific instance and
for the specific purpose for which given; provided, however, that no such
amendment, modification, waiver, discharge, termination or consent shall:
(a) unless agreed to by each Lender directly affected thereby, (i)
reduce or forgive the principal amount of any Loan, reduce the rate of or
forgive any interest thereon, or reduce or forgive any fees or other Obligations
(other than fees payable to the Administrative Agent for its own account), or
(ii) extend the Revolving Credit Maturity Date or any other scheduled date for
the payment of any principal of or interest on any Loan (other than additional
interest payable under SECTION 2.8(B) at the election of the Required Lenders,
as provided therein), any fees (other than fees payable to the Administrative
Agent for its own account) or any other Obligations;
(b) unless agreed to by all of the Lenders, (i) increase or extend
the Revolving Credit Commitment of any Lender (it being understood that a waiver
of any Event of Default, if agreed to by the requisite Lenders hereunder, shall
not constitute such an increase), (ii) change the percentage of the aggregate
Revolving Credit Commitments or of the aggregate unpaid principal amount of the
Loans, or the number or percentage of Lenders, that shall be required for the
Lenders or any of them to take or approve, or direct the Administrative Agent to
take, any action hereunder (including as set forth in the definition of
"Required Lenders"), (iii) except as may be otherwise specifically provided in
this Agreement or in any other Credit Document, release all or substantially all
of the Collateral, release Matria from its obligations under its guaranty
contained in ARTICLE XI, or release any Subsidiary Guarantor from its
obligations under the Subsidiary Guaranty, (iv) change any provision of SECTION
2.15 or this Section, or (v) extend the expiry date of any Letter of Credit
beyond the seventh day prior to the Revolving Credit Maturity Date; and
101
108
(c) unless agreed to by the Issuing Lender, the Swingline Lender
or the Administrative Agent in addition to the Lenders required as provided
hereinabove to take such action, affect the respective rights or obligations of
the Issuing Lender, the Swingline Lender or the Administrative Agent, as
applicable, hereunder or under any of the other Credit Documents;
and provided further that the Fee Letter may be amended or modified, and any
rights thereunder waived, in a writing signed by the parties thereto.
12.7 Assignments, Participations.
(a) Each Lender may assign to one or more other Eligible Assignees
(each, an "Assignee") all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitment, the outstanding Loans made by it, the Note or Notes held by
it and its participations in Letters of Credit); provided, however, that (i) any
such assignment (other than an assignment to a Lender or an Affiliate of a
Lender) shall not be made without the prior written consent of the
Administrative Agent and Matria (to be evidenced by its counterexecution of the
relevant Assignment and Acceptance), which consent shall not be unreasonably
withheld (provided that Matria's consent shall not be required in the event a
Default or Event of Default shall have occurred and be continuing), (ii) each
such assignment by a Lender shall be made in such manner so that the same
portion of its Revolving Credit Commitment, Revolving Loans, Revolving Credit
Note and other interests is assigned to the relevant Assignee, (iii) except in
the case of an assignment to a Lender or an Affiliate of a Lender, no such
assignment shall be in an aggregate principal amount (determined as of the date
of the Assignment and Acceptance with respect to such assignment) less than (y)
in the case of assignments of Revolving Credit Commitments, $5,000,000 (or, if
less, the entire Revolving Credit Commitment of the assigning Lender), or (z) in
the case of assignments of Swingline Loans, the entire Swingline Commitment and
the full amount of the outstanding Swingline Loans, and (iv) the parties to each
such assignment will execute and deliver to the Administrative Agent, for its
acceptance and recording in the Register, an Assignment and Acceptance, together
with any Note or Notes subject to such assignment, and will pay a nonrefundable
processing fee of $3,000 to the Administrative Agent for its own account. Upon
such execution, delivery, acceptance and recording of the Assignment and
Acceptance, from and after the effective date specified therein, which effective
date shall be at least five Business Days after the execution thereof (unless
the Administrative Agent shall otherwise agree), (A) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations hereunder
have been assigned to it pursuant to such Assignment and Acceptance, shall have
the rights and obligations of the assigning Lender hereunder with respect
thereto and (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than rights under the provisions of
this Agreement and the other Credit Documents relating to indemnification or
payment of fees, costs and expenses, to the extent such rights relate to the
time prior to the effective date of such Assignment and Acceptance) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto). The terms and provisions of each Assignment
and Acceptance shall, upon the effectiveness thereof, be incorporated into and
made a part of this Agreement, and the covenants, agreements and obligations of
each Lender set forth therein shall be deemed made
102
109
to and for the benefit of the Administrative Agent and the other parties hereto
as if set forth at length herein.
(b) The Administrative Agent will maintain at its address for
notices referred to herein a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Revolving Credit Commitments of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrowers, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrowers and each Lender at any reasonable time and from time
to time upon reasonable prior notice.
(c) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an Assignee and, if required,
counterexecuted by Matria, together with the Note or Notes subject to such
assignment and the processing fee referred to in subsection (a) above, the
Administrative Agent will (i) accept such Assignment and Acceptance, (ii) on the
effective date thereof, record the information contained therein in the Register
and (iii) give notice thereof to Matria and the Lenders. Within five (5)
Business Days after its receipt of such notice, each applicable Borrower, at its
own expense, will execute and deliver to the Administrative Agent, in exchange
for the surrendered Note or Notes, a new Note or Notes to the order of the
Assignee (and, if the assigning Lender has retained any portion of its rights
and obligations hereunder, to the order of the assigning Lender), prepared in
accordance with the applicable provisions of SECTION 2.4 as necessary to
reflect, after giving effect to the assignment, the Revolving Credit Commitments
of the Assignee and (to the extent of any retained interests) the assigning
Lender, dated the date of the replaced Note or Notes and otherwise in
substantially the form of EXHIBITS X-0, X-0 xxx X-0, as applicable. The
Administrative Agent will return canceled Notes to the Borrowers.
(d) Each Lender may, without the consent of any Borrower, the
Administrative Agent or any other Lender, sell to one or more other Persons
(each, a "Participant") participations in any portion comprising less than all
of its rights and obligations under this Agreement (including, without
limitation, a portion of its Revolving Credit Commitment, the outstanding Loans
made by it, the Note or Notes held by it and its participations in Letters of
Credit); provided, however, that (i) such Lender's obligations under this
Agreement shall remain unchanged and such Lender shall remain solely responsible
for the performance of such obligations, (ii) no Lender shall sell any
participation that, when taken together with all other participations, if any,
sold by such Lender, covers all of such Lender's rights and obligations under
this Agreement, (iii) the Borrowers, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
no Lender shall permit any Participant to have any voting rights or any right to
control the vote of such Lender with respect to any amendment, modification,
waiver, consent or other action hereunder or under any other Credit Document
(except as to actions that would (x) reduce or forgive the principal amount of
any Loan, reduce the rate of or forgive any interest thereon, or reduce or
forgive any fees or other Obligations, (y) extend the Revolving Credit Maturity
Date or any other date fixed for the payment of any principal of or interest on
any Loan, any fees or any other Obligations, or (z) increase or extend
103
110
the Revolving Credit Commitment of any Lender), and (iv) no Participant shall
have any rights under this Agreement or any of the other Credit Documents, each
Participant's rights against the granting Lender in respect of any participation
to be those set forth in the participation agreement, and all amounts payable by
the Borrowers hereunder shall be determined as if such Lender had not granted
such participation. Notwithstanding the foregoing, each Participant shall have
the rights of a Lender for purposes of SECTIONS 2.16(A), 2.16(B), 2.17, 2.18 and
9.3, and shall be entitled to the benefits thereto, to the extent that the
Lender granting such participation would be entitled to such benefits if the
participation had not been made, provided that no Participant shall be entitled
to receive any greater amount pursuant to any of such Sections than the Lender
granting such participation would have been entitled to receive in respect of
the amount of the participation made by such Lender to such Participant had such
participation not been made.
(e) Nothing in this Agreement shall be construed to prohibit any
Lender from pledging or assigning all or any portion of its rights and interest
hereunder or under any Note to any Federal Reserve Bank as security for
borrowings therefrom; provided, however, that no such pledge or assignment shall
release a Lender from any of its obligations hereunder.
(f) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section, disclose to the Assignee or Participant or proposed Assignee or
Participant any information relating to Matria and its Subsidiaries furnished to
it by or on behalf of any other party hereto, provided that such Assignee or
Participant or proposed Assignee or Participant agrees in writing to keep such
information confidential to the same extent required of the Lenders under
SECTION 12.13.
12.8 No Waiver. The rights and remedies of the Administrative Agent
and the Lenders expressly set forth in this Agreement and the other Credit
Documents are cumulative and in addition to, and not exclusive of, all other
rights and remedies available at law, in equity or otherwise. No failure or
delay on the part of the Administrative Agent or any Lender in exercising any
right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude other
or further exercise thereof or the exercise of any other right, power or
privilege or be construed to be a waiver of any Default or Event of Default. No
course of dealing between any of the Borrowers and the Administrative Agent or
the Lenders or their agents or employees shall be effective to amend, modify or
discharge any provision of this Agreement or any other Credit Document or to
constitute a waiver of any Default or Event of Default. No notice to or demand
upon any Borrower in any case shall entitle such Borrower or any other Borrower
to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the right of the Administrative Agent or any Lender to
exercise any right or remedy or take any other or further action in any
circumstances without notice or demand.
12.9 Successors and Assigns. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto, and all references herein to any party shall be
deemed to include its successors and assigns; provided, however, that (i) no
Borrower may sell, assign or transfer any of its rights, interests, duties or
obligations under this Agreement without the prior written consent of all of the
Lenders and (ii) any Assignees and Participants shall have such rights and
obligations with respect to this
104
111
Agreement and the other Credit Documents as are provided for under and pursuant
to the provisions of SECTION 12.7.
12.10 Survival. All representations, warranties and agreements made
by or on behalf of any Borrower or any of its Subsidiaries in this Agreement and
in the other Credit Documents shall survive the execution and delivery hereof or
thereof, the making and repayment of the Loans and the issuance and repayment of
the Letters of Credit. In addition, notwithstanding anything herein or under
applicable law to the contrary, the provisions of this Agreement and the other
Credit Documents relating to indemnification or payment of fees, costs and
expenses, including, without limitation, the provisions of SECTIONS 2.16(A),
2.16(B), 2.17, 2.18, 10.7, 12.1 and 12.2, shall survive the payment in full of
all Loans and Letters of Credit, the termination of the Revolving Credit
Commitments and all Letters of Credit, and any termination of this Agreement or
any of the other Credit Documents.
12.11 Severability. To the extent any provision of this Agreement is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in such jurisdiction, without prohibiting or invalidating
such provision in any other jurisdiction or the remaining provisions of this
Agreement in any jurisdiction.
12.12 Construction. The headings of the various articles, sections
and subsections of this Agreement have been inserted for convenience only and
shall not in any way affect the meaning or construction of any of the provisions
hereof. Except as otherwise expressly provided herein and in the other Credit
Documents, in the event of any inconsistency or conflict between any provision
of this Agreement and any provision of any of the other Credit Documents, the
provision of this Agreement shall control.
12.13 Confidentiality. Each Lender agrees to keep confidential,
pursuant to its customary procedures for handling confidential information of a
similar nature and in accordance with safe and sound banking practices, all
nonpublic information provided to it by or on behalf of Matria or any of its
Subsidiaries in connection with this Agreement or any other Credit Document;
provided, however, that any Lender may disclose such information (i) to its
directors, employees and agents and to its auditors, counsel and other
professional advisors, (ii) at the demand or request of any bank regulatory
authority, court or other Governmental Authority having or asserting
jurisdiction over such Lender, as may be required pursuant to subpoena or other
legal process, or otherwise in order to comply with any applicable Requirement
of Law, (iii) in connection with any proceeding to enforce its rights hereunder
or under any other Credit Document or under any Hedge Agreement or with respect
to any other litigation or proceeding related hereto or to any Hedge Agreement
or to which it is a party, (iv) to the Administrative Agent or any other Lender,
(v) to the extent the same has become publicly available other than as a result
of a breach of this Agreement and (vi) pursuant to and in accordance with the
provisions of SECTION 12.7(F).
12.14 Counterparts; Effectiveness. This Agreement may be executed in
any number of counterparts and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. This
Agreement shall become effective upon the execution of a counterpart
105
112
hereof by each of the parties hereto and receipt by the Administrative Agent and
Matria of written or telephonic notification of such execution and authorization
of delivery thereof.
12.15 Disclosure of Information. Matria agrees and consents to the
Administrative Agent's disclosure of information relating to this transaction to
Gold Sheets and other similar bank trade publications. Such information will
consist of deal terms and other information customarily found in such
publications.
12.16 Judgment Currency. The obligations of the Borrowers and each
Guarantor hereunder and under the other Credit Documents to make payment of
principal of and interest on the Loans, and any other amounts payable hereunder
and thereunder, in the Applicable Currency (the "Obligation Currency") shall not
be discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than the Obligation Currency,
except to the extent that such tender or recovery shall result in the effective
receipt by the Administrative Agent or any applicable Lender of the full amount
of the Obligation Currency expressed to be payable under this Agreement or any
other Credit Document, as applicable. If, for the purpose of obtaining or
enforcing judgment against any Borrower or any Guarantor in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the "Judgment Currency") an amount due in the Obligation Currency, the
conversion shall be made at the rate of exchange (as quoted by the
Administrative Agent or if the Administrative Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Administrative Agent) or the Dollar Equivalent thereof, as the case may be,
determined, in each case, as of the Business Day immediately preceding the day
on which the judgment is given (such Business Day being hereinafter referred to
as the "Judgment Currency Conversion Date"). If there shall occur any change in
the rate of exchange prevailing between the Judgment Currency Conversion Date
and the date of actual payment of the amount due, each applicable Borrower
agrees to pay, or cause to be paid, such additional amounts, if any (but in any
event not a lesser amount), as may be necessary to ensure that the amount paid
in the Judgment Currency, when converted at the rate of exchange prevailing on
the date of payment, will produce the amount of the Obligation Currency that
could have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the Judgment
Currency Conversion Date. In determining the Dollar Equivalent or any other rate
of exchange for purposes of this Section, such amounts shall include any premium
or other costs payable in connection with the purchase of the Obligation
Currency.
12.17 European Monetary Union.
(a) For purposes of this Section and the remaining provisions of
this Agreement and the other Credit Documents, the following terms have the
meanings set forth below:
"EMU" means economic and monetary union as contemplated in the Treaty
on European Union.
"EMU legislation" means legislative measures of the European Council
for the introduction of change over to or operation of a single or unified
European currency (whether known as the Euro or otherwise), being in part the
implementation of the third stage of EMU;
106
113
"Euro" means the single currency to which participating member states
of the European Union are converting;
"Euro unit" means the currency unit of the Euro;
"national currency unit" means the unit of currency (other than a Euro
unit) of a participating member state;
"participating member state" means each state so described in any EMU
legislation; and
"Treaty on European Union" means the treaty of Rome of March 25, 1957,
as amended by the Single Xxxxxxxx Xxx 0000 and the Maastricht Treaty (signed
February 7, 1992) as amended from time to time.
(b) The provisions of subsections (c) through (l) below
(inclusive) shall be effective at and from the date of this Agreement; provided,
that if and to the extent that any such provision relates to any state (or the
currency of such state) that is not a participating member state on the date
hereof, such provision shall become effective in relation to such state (and the
currency of such state) at and from the date on which such state becomes a
participating member state.
(c) The Administrative Agent, the Lenders and the Borrowers agree
that the occurrence or non-occurrence of EMU, any event or events associated
with the EMU and/or the introduction of the Euro in all or any part of the
European Union will not result in the discharge, cancellation, rescission or
termination in whole or in part of any agreement between or among the
Administrative Agent, the Lenders and any Borrower or give the Administrative
Agent, any Lender or any Borrower the right to cancel, rescind, terminate or
vary any agreement, other than as specifically provided in this Agreement.
(d) Each obligation of any party under this Agreement that has
been denominated in the national currency unit of a participating member state
shall be redenominated into the Euro unit at the exchange rate set in accordance
with EMU legislation; provided, that if and to the extent that any EMU
legislation provides that following the beginning of the third stage of EMU an
amount denominated either in the Euro or in the national currency unit of a
member state and payable within the member state by crediting an account of a
creditor can be paid by a debtor either in the Euro unit or in that national
currency unit, each party to this Agreement shall be entitled to pay or repay
any such amount either in the Euro unit or in such national currency unit;
provided, however, any amount paid in a national currency unit shall be paid at
the fixed exchange rate in order to yield the required amount in Euros.
(e) Any Loan in the currency of a participating member state shall
be made in the Euro unit; provided that any Loan may, if so requested by any
Borrower, be made in the national currency unit (based upon the fixed exchange
rate) of any participating member state so long as such national currency unit
continues to be available as legal tender, is freely convertible and is not
subject to exchange controls.
(f) Those Sections of this Agreement providing for payment or
repayment in a national currency unit shall be construed so that, in relation to
the payment of any amount of Euro units or national currency units, such amount
shall be made available to the Administrative
107
114
Agent in immediately available, freely transferable, cleared funds to such
account with each bank (in such principal financial center) as the
Administrative Agent may from time to time nominate for this purpose.
(g) Any amount payable by the Administrative Agent to the Lenders
under this Agreement in the currency of a participating member state shall be
paid in the currency received by it from the applicable Borrower.
(h) With respect to the payment of any amount denominated in the
Euro or in a national currency unit, the Administrative Agent shall not be
liable to the Borrowers or any of the Lenders in any way whatsoever for any
delay, or the consequences of any delay, in the crediting to any account of any
amount required by this Agreement to be paid by the Administrative Agent if the
Administrative Agent has made reasonable effort to effect all relevant steps to
achieve, on the date required by the Agreement, the payment of such amount in
immediately available, freely transferable, cleared funds (in the Euro unit or,
as the case may be, in a national currency unit) to the account with the bank in
the principal financial center in the participating member state which the
applicable Borrower or, as the case may be, any Lender shall have specified for
such purpose. In this paragraph, "all relevant steps" means all such steps as
may be prescribed from time to time by the regulations or operating procedures
of such clearing or settlement system as the Administrative Agent may from time
to time determine for the purpose of clearing or settling payment of the Euro.
(i) If the basis of accrual of interest or fees expressed in this
Agreement with respect to the currency of any state that becomes a participating
state shall, in the Administrative Agent's judgment, be inconsistent with any
convention or practice in the London interbank market for the basis of accrual
of interest or fees in respect of the Euro, or interest rate quotes for a
national currency unit are no longer provided, such convention or practice shall
replace such expressed basis effective as of and from the date on which such
state becomes a participating member state; provided, that if any Loan in the
currency of such state is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Loan, at the end of the then
current Interest Period.
(j) Without prejudice and in addition to any method of conversion
or rounding prescribed by any EMU legislation and without prejudice to the
respective liabilities for indebtedness of the Borrowers to the Administrative
Agent and to the Lenders and the Administrative Agent and the Lenders to the
Borrowers under or pursuant to this Agreement:
(i) each reference in this Agreement to a minimum amount
(or an integral multiple thereof) in a national currency unit to be
paid to or by the Administrative Agent shall be replaced by a reference
to such reasonably comparable and convenient amount (or an integral
multiple thereof) in the Euro unit as the Administrative Agent may from
time to time specify; and
(ii) except as expressly provided in this Agreement, each
provision of this Agreement, including, without limitation, the right
to combine currencies to effect a setoff, shall be subject to such
reasonable changes of interpretation as the Administrative Agent may
from time to time specify to be necessary or appropriate to reflect the
108
115
implementation of the EMU to place the parties hereto in substantially
the position they would have occupied had the EMU not been implemented.
(k) Each applicable Borrower shall, upon demand from the
Administrative Agent or any Lender, pay to the Administrative Agent or such
Lender, as the case may be, the amount of any loss or cost or increased cost
incurred by, or of any reduction in any amount payable to or in the effective
return on its capital to, or of interest or other return, including principal,
foregone by the Administrative Agent or such Lender (as the case may be) or its
holding company as a result of the introduction of, change over to or operation
of the Euro in any participating member state, or such Borrower's election to
borrower in a national currency and repay in the Euro or to borrow in the Euro
and repay in a national currency.
(l) Each Borrower agrees, at the request of the Administrative
Agent, at the time of or at any time following the implementation of the EMU, to
enter into an agreement amending this Agreement in such manner as the
Administrative Agent reasonably shall request in order to reflect the
implementation of the EMU to place the parties hereto in the position they would
have been in had the EMU not been implemented.
12.18 Addition of Borrowers. Any Foreign Subsidiary of Matria may
join this Agreement as a Borrower hereunder upon (i) execution and delivery by
Matria, such Foreign Subsidiary and the Administrative Agent of a Joinder
Agreement providing for such Foreign Subsidiary to become a Borrower hereunder,
(ii) execution and delivery by such Foreign Subsidiary to the Administrative
Agent of (x) a Foreign Currency Note, appropriately completed as set forth in
SECTION 2.4, (y) a guaranty of the obligations to the Administrative Agent and
the Lenders of any other Foreign Subsidiaries that are Borrowers and that are
organized under the laws of the same jurisdiction as such Foreign Subsidiary,
and (z) a joinder to the Security Agreement or a separate security agreement in
form and substance satisfactory to the Administrative Agent, pursuant to which
such Foreign Subsidiary shall grant to the Administrative Agent a first priority
Lien upon and security interest in its accounts receivable, inventory,
equipment, general intangibles and other personal property as Collateral for
Loans made to such Foreign Subsidiary under the Credit Agreement, all accrued
interest thereon and such Foreign Subsidiary's ratable share of all fees,
expenses and other amounts due or payable at any time under the Credit Agreement
and the other Credit Documents, subject only to Permitted Liens, (iii) execution
and delivery by Matria and any applicable Subsidiaries to the Administrative
Agent of a Pledge Agreement or an amendment or supplement to the Matria Pledge
Agreement, together with the certificates evidencing the Capital Stock of such
Foreign Subsidiary being pledged thereby and undated stock powers duly executed
in blank, all as required by, and as described more completely in, SECTION 6.10,
and (iii) to the extent not previously delivered pursuant to SECTION 6.10,
delivery to the Administrative Agent of documents and certificates with respect
to such Foreign Subsidiary of the type described in SECTIONS 4.1(C) and 4.1(D)
and such other documents, certificates and opinions (including opinions of local
counsel in the jurisdiction of organization of such Foreign Subsidiary) as the
Administrative Agent may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent. Any such Foreign Subsidiary
may be removed and released as a Borrower upon (a) written notice from Matria to
the Administrative Agent to such effect and (b) repayment in full of all
outstanding Loans of such Borrower, together with all accrued and
109
116
unpaid interest thereon and all other fees, expenses and other Obligations owing
by such Borrower in connection therewith.
12.19 Entire Agreement. THIS AGREEMENT AND THE OTHER DOCUMENTS AND
INSTRUMENTS EXECUTED AND DELIVERED IN CONNECTION HEREWITH (A) EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND THERETO RELATING TO
THE SUBJECT MATTER HEREOF AND THEREOF, (B) SUPERSEDE ANY AND ALL PRIOR
AGREEMENTS AND UNDERSTANDINGS OF SUCH PERSONS, ORAL OR WRITTEN, RELATING TO THE
SUBJECT MATTER HEREOF AND THEREOF, INCLUDING, WITHOUT LIMITATION, THE COMMITMENT
LETTERS FROM FIRST UNION TO MATRIA DATED DECEMBER 21, 1998 AND JUNE 18, 2001 (IN
EACH CASE, EXCEPT AS SPECIFICALLY OTHERWISE PROVIDED THEREIN), BUT SPECIFICALLY
EXCLUDING THE FEE LETTER, AND (C) MAY NOT BE AMENDED, SUPPLEMENTED, CONTRADICTED
OR OTHERWISE MODIFIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
12.20 Effect of Amendment and Restatement. On and as of the
Restatement Effective Date in accordance with SECTION 4.1, the Existing Credit
Agreement shall be amended and restated in its entirety by this Agreement, and
all Credit Documents, instruments, certificates, financial statements and other
documents executed or delivered by or on behalf of Matria or any of its
Subsidiaries pursuant to the Existing Credit Agreement at any time prior to the
effectiveness of this Agreement (other than the Notes evidencing the Existing
Credit Agreement Indebtedness, which shall be deemed canceled and terminated
upon repayment in full of the Existing Credit Agreement Indebtedness) shall be
deemed to have been executed or delivered pursuant to this Agreement. The
parties to this Agreement agree that the credit facility provided for hereunder
evidences a continuation of, and not a novation, termination or or replacement
of, the revolving credit facility provided for under the Existing Credit
Agreement, that the repayment of the Existing Credit Agreement Indebtedness has
been agreed to as a matter of administrative convenience in lieu of requiring
assignments of the Revolving Credit Commitments from lenders under the Existing
Credit Agreement to Lenders hereunder, and that the pledges, Liens and security
interests in Collateral granted under the Credit Documents (as defined in the
Existing Credit Agreement) prior to the Restatement Effective Date shall remain
in full force and effect and shall secure the payment and performance of all
Obligations arising under this Agreement and the other Credit Documents, without
interruption in the attachment or perfection of any such pledges, Liens and
security interests.
110
117
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
MATRIA HEALTHCARE, INC.
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------------
Title: Vice President
-----------------------------------------
FIRST UNION NATIONAL BANK, as Administrative
Agent and as a Lender
By: /s/ Xxxxx X. Law
-----------------------------------------
Title: Director
-----------------------------------------
UBS AG, STAMFORD BRANCH, as a Lender
By: /s/ Xxxxxx X. Xxxx III
-----------------------------------------
Title: Executive Director
-----------------------------------------
By: /s/ Xxxxxxx X. Saint
-----------------------------------------
Title: Associate Director
-----------------------------------------
UBS WARBURG LLC, as Syndication Agent
By: /s/ Xxxxxx X. Xxxx III
-----------------------------------------
Title: Executive Director
-----------------------------------------
By: /s/ Rate Jenal
-----------------------------------------
Title: Executive Director
-----------------------------------------
Signature Page
To First Amended and
Restated Credit Agreement
118
Schedule 1.1(a)
Revolving Credit Commitments
----------------------------------------------------------------------------
Lender Revolving Credit Commitment
----------------------------------------------------------------------------
First Union National Bank $25,000,000
----------------------------------------------------------------------------
UBS AG, Stamford Branch $5,000,000
----------------------------------------------------------------------------
TOTAL $30,000,000
----------------------------------------------------------------------------
119
Schedule 1.1(b)
Lender Addresses
----------------------------------------------------------------------------------------------------------------------
Lender Address for notices Lending Office
----------------------------------------------------------------------------------------------------------------------
First Union National Bank One First Union Center, 5th Floor One First Union Center, 5th Floor
000 Xxxxx Xxxxxxx Xxxxxx XX0000 000 Xxxxx Xxxxxxx Xxxxxx XX0000
Charlotte, North Carolina 28288-0760 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxx Xxx Attention: Xxxxx Xxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Instructions for wire transfers to the
Administrative Agent:
First Union National Bank
ABA Routing Xx. 000000000
Xxxxxxxxx, Xxxxx Xxxxxxxx
Account Name: Matria Healthcare, Inc.
Attention: Syndication Agency Services
----------------------------------------------------------------------------------------------------------------------
UBS AG, Stamford Branch 000 Xxxxxxxxxx Xxxxxxxxx 000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
----------------------------------------------------------------------------------------------------------------------
