EXHIBIT 10
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of June 30, 1997
among
HBO & COMPANY,
HBO & COMPANY OF GEORGIA,
BANKBOSTON, N.A. (formerly known as The First National Bank of Boston),
NATIONSBANK OF TEXAS, N.A.
and the other lending institutions set forth on Schedule 1 hereto,
and
BANKBOSTON, N.A.,
as Agent with BancBoston Securities Inc. having acted as Arranger
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION................................. 1
1.1. Definitions.................................................... 1
1.2. Rules of Interpretation........................................ 13
2. THE REVOLVING CREDIT FACILITY........................................... 14
2.1. Commitment to Lend............................................. 14
2.2. Commitment Fee................................................. 14
2.3. Reduction of Total Commitment.................................. 15
2.4. The Revolving Credit Notes..................................... 15
2.5. Interest on Revolving Credit Loans............................. 15
2.6. Requests for Revolving Credit Loans............................ 16
2.7. Conversion Options............................................. 16
2.7.1. Conversion to Different Type
of Revolving Credit Loan.......................... 16
2.7.2. Continuation of Type of
Revolving Credit Loan............................. 17
2.7.3. LIBOR Rate Loans.................................... 17
2.8. Funds for Revolving Credit Loan................................ 17
2.8.1. Funding Procedures.................................. 17
2.8.2. Advances by Agent................................... 18
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.................................. 18
3.1. Maturity....................................................... 18
3.2. Mandatory Repayments of Revolving Credit
Loans......................................................... 19
3.3. Optional Repayments of Revolving Credit
Loans......................................................... 19
4. LETTERS OF CREDIT........................................................ 19
4.1. Letter of Credit Commitments................................... 19
4.1.1. Commitment to Issue Letters of Credit............... 19
4.1.2. Letter of Credit Applications....................... 20
4.1.3. Terms of Letters of Credit.......................... 20
4.1.4. Reimbursement Obligations of Banks.................. 20
4.1.5. Participations of Banks............................. 20
4.2. Reimbursement Obligation of the Borrower....................... 21
4.3. Letter of Credit Payments...................................... 21
4.4. Obligations Absolute........................................... 22
4.5. Reliance by Issuer............................................. 23
4.6. Letter of Credit Fee........................................... 23
5. CERTAIN GENERAL PROVISIONS............................................... 23
5.1. Fees........................................................... 23
5.2. Funds for Payments............................................. 24
5.2.1. Payments to Agent................................... 24
5.2.2. No Offset, etc. ................................... 24
5.3. Computations................................................... 25
5.4. Inability to Determine LIBOR Rate.............................. 25
5.5. Illegality..................................................... 25
5.6. Additional Costs, etc. ....................................... 26
5.7. Capital Adequacy............................................... 27
5.8. Certificate.................................................... 28
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5.9. Indemnity...................................................... 28
5.10. Interest After Default......................................... 28
5.10.1. Overdue Amounts.................................... 28
5.10.2. Amounts Not Overdue................................ 29
6. GUARANTY................................................................ 29
7. REPRESENTATIONS AND WARRANTIES.......................................... 29
7.1. Corporate Authority............................................ 29
7.1.1. Incorporation; Good Standing....................... 29
7.1.2. Authorization...................................... 29
7.1.3. Enforceability..................................... 30
7.2. Governmental Approvals........................................ 30
7.3. Title to Properties; Leases................................... 30
7.4. Financial Statements.......................................... 30
7.5. No Material Changes, etc. ................................... 31
7.6 Franchises, Patents, Copyrights, etc. ....................... 31
7.7 Litigation.................................................... 31
7.8 No Materially Adverse Contracts, etc. ........................ 31
7.9. Compliance with Other Instruments, Laws, etc. ............... 32
7.10. Tax Status.................................................... 32
7.11. No Event of Default........................................... 32
7.12. Holding Company and Investment Company Acts................... 32
7.13. Absence of Financing Statements, etc. ....................... 32
7.14. Certain Transactions.......................................... 33
7.15. Employee Benefit Plans........................................ 33
7.15.1. In General......................................... 33
7.15.2. Terminability of Welfare Plans..................... 33
7.15.3. Guaranteed Pension Plans........................... 33
7.15.4. Multiemployer Plans................................ 34
7.16. Regulations U and X........................................... 34
7.17. Environmental Compliance...................................... 34
7.18. Subsidiaries, etc. .......................................... 36
7.19. No Amendments to Certain Documents............................ 36
7.20. Disclosure.................................................... 36
8. AFFIRMATIVE COVENANTS OF THE BORROWER................................... 37
8.1. Punctual Payment.............................................. 37
8.2. Maintenance of Office......................................... 37
8.3. Records and Accounts.......................................... 37
8.4. Financial Statements, Certificates and Information............ 38
8.5. Notices....................................................... 39
8.5.1. Defaults............................................ 39
8.5.2. Environmental Events................................ 39
8.5.3. Notice of Litigation and Judgments.................. 39
8.6. Corporate Existence; Maintenance of Properties................ 40
8.7. Insurance..................................................... 40
8.8. Taxes......................................................... 41
8.9. Inspection of Properties and Books, etc....................... 41
8.9.1. General............................................. 41
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8.9.2. Communications with Accountants...................... 41
8.10. Compliance with Laws, Contracts, Licenses, and Permits....... 41
8.11. Employee Benefit Plans....................................... 42
8.12. Use of Proceeds.............................................. 42
8.13. Further Assurances........................................... 42
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.............................. 42
9.1. Restrictions on Indebtedness................................. 43
9.2. Restrictions on Liens........................................ 43
9.3. Restrictions on Investments.................................. 44
9.4. Distributions................................................ 45
9.5. Merger, Consolidation and Disposition of Assets.............. 45
9.5.1. Mergers and Acquisitions............................. 45
9.5.2. Disposition of Assets................................ 46
9.6. Compliance with Environmental Laws........................... 46
9.7. Employee Benefit Plans....................................... 46
10. FINANCIAL COVENANTS OF THE BORROWER..................................... 47
10.1. Operating Cash Flow to Total Debt Service.................... 47
10.2. Leverage Ratio............................................... 47
10.3. Minimum Tangible Net Worth................................... 47
11. CLOSING CONDITIONS..................................................... 47
11.1. Loan Documents............................................... 48
11.2. Certified Copies of Charter Documents........................ 48
11.3. Corporate Action............................................. 48
11.4. Incumbency Certificate....................................... 48
11.5. Certificates of Insurance.................................... 48
11.6. Solvency Certificate......................................... 48
11.7. Opinion of Counsel........................................... 49
11.8. Payment of Fees.............................................. 49
11.9. Disbursement Instructions.................................... 49
12. CONDITIONS TO ALL BORROWINGS............................................ 49
12.1. Representations True; No Event of Default.................... 49
12.2. No Legal Impediment.......................................... 50
12.3. Governmental Regulation...................................... 50
12.4. Proceedings and Documents.................................... 50
13. EVENTS OF DEFAULT; ACCELERATION; ETC. ................................. 50
13.1. Events of Default and Acceleration........................... 50
13.2. Termination of Commitments................................... 54
13.3. Remedies..................................................... 54
13.4. Distribution of Proceeds..................................... 54
14. SETOFF.................................................................. 55
15. THE AGENT.............................................................. 56
15.1. Authorization................................................ 56
15.2. Employees and Agents......................................... 57
15.3. No Liability................................................. 57
15.4. No Representations........................................... 57
15.5. Payments..................................................... 58
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15.5.1. Payments to Agent.................................. 58
15.5.2. Distribution by Agent.............................. 58
15.5.3. Delinquent Banks................................... 58
15.6. Holders of Revolving Credit Notes............................ 59
15.7. Indemnity.................................................... 59
15.8. Agent as Bank................................................ 59
15.9. Resignation.................................................. 59
15.10. Notification of Defaults and Events of Default............... 60
16. EXPENSES................................................................ 60
17. INDEMNIFICATION......................................................... 61
18. SURVIVAL OF COVENANTS, ETC. ........................................... 61
19. ASSIGNMENT AND PARTICIPATION............................................ 62
19.1. Conditions to Assignment by Banks............................ 62
19.2. Certain Representations and Warranties;
Limitations; Covenants.................................... 62
19.3. Register..................................................... 64
19.4. New Revolving Credit Notes................................... 64
19.5. Participations............................................... 64
19.6. Disclosure................................................... 65
19.7. Assignee or Participant Affiliated with the Borrower......... 65
19.8. Miscellaneous Assignment Provisions.......................... 65
19.9. Assignment by Borrower....................................... 66
20. NOTICES, ETC. ......................................................... 66
21. GOVERNING LAW........................................................... 67
22. HEADINGS................................................................ 67
23. COUNTERPARTS............................................................ 67
24. ENTIRE AGREEMENT, ETC. ................................................ 68
25. WAIVER OF JURY TRIAL.................................................... 68
26. CONSENTS, AMENDMENTS, WAIVERS, ETC. .................................. 68
27. SEVERABILITY............................................................ 69
28. TRANSITIONAL ARRANGEMENTS............................................... 69
28.1. Original Credit Agreement Superseded.......................... 69
28.2. Return and Cancellation of Revolving Credit Notes............. 69
28.3. Interest and Fees Under Superseded Agreement.................. 69
29. CONFIDENTIALITY......................................................... 69
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This SECOND AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as
of June 30, 1997, by and among HBO & COMPANY, a Delaware corporation
("HBOC"), HBO & COMPANY OF GEORGIA, a Delaware corporation having its
principal place of business at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx
00000 (the "Borrower"), BANKBOSTON, N.A. (formerly known as The First
National Bank of Boston), a national banking association, NATIONSBANK OF
TEXAS, N.A., a national banking association and the other lending
institutions listed on Schedule 1 hereto and BANKBOSTON, N.A. as agent for
itself and such other lending institutions.
WHEREAS, pursuant to an Amended and Restated Revolving Credit and Term
Loan Agreement dated as of May 27, 1994 (as amended from time to time, the
"Original Credit Agreement"), by and among HBOC, the Borrower, certain of the
Banks (as hereinafter defined) and the Agent (as hereinafter defined), the
Banks party thereto made a term loan to the Borrower for the purpose of
financing an acquisition and made available revolving credit loans for
general corporate and working capital purposes; and
WHEREAS, HBOC and the Borrower have requested, among other things, to
amend and restate the Original Credit Agreement and to provide additional
financing, to refinance certain Indebtedness (as hereinafter defined) and for
working capital and general corporate purposes, and the Banks are willing to
amend and restate the Original Credit Agreement and to provide such
additional financing on the terms and conditions set forth herein;
NOW, THEREFORE, HBOC, the Borrower, the Banks and the Agent agree that
on the Closing Date (as hereinafter defined) the Original Credit Agreement is
hereby amended and restated in its entirety and shall remain in full force
and effect only as set forth herein.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1 Definitions. The following terms shall have the meanings set
forth in this Section 1 or elsewhere in the provisions of this Credit
Agreement referred to below:
Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower
were issuing securities.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent
may designate in writing from time to time.
Agent. BankBoston, N.A. (formerly known as The First National Bank of
Boston) acting as agent for the Banks.
Agent's Special Counsel. Xxxxxxx, Xxxx & Xxxxx LLP or such other
counsel as may be approved by the Agent.
Assignment and Acceptance. See Section 19.1.
Balance Sheet Date. March 31, 1997.
Banks. BKB, NationsBank of Texas, N.A. and the other lending
institutions listed on Schedule 1 hereto and any other Person who becomes an
assignee of any rights and obligations of a Bank pursuant to Section 19.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds
Effective Rate. For the purposes of this definition, "Federal Funds
Effective Rate" shall mean for any day, the rate per annum equal to the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, 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 Agent from
three funds brokers of recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BKB. BankBoston, N.A. (formerly known as The First National Bank of
Boston), a national banking association, in its individual capacity.
Borrower. As defined in the preamble hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the
case of LIBOR Rate Loans, also a day which is a LIBOR Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents,
copyrights, trademarks, franchises and good will); provided that Capital
Assets shall not include any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or less in accordance
with generally accepted accounting principles.
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Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or the lease of any
assets by the Borrower or any of its Subsidiaries as lessee, under any
Synthetic Lease to the extent that such assets would have been Capital Assets
had the Synthetic Lease been treated for accounting purposes as a Capitalized
Lease.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet
of the lessee or obligor in accordance with generally accepted accounting
principles.
Cash Investment Policy. The Cash Investment Policy of HBOC and its
Subsidiaries, dated as of a date on or prior to the Closing Date and in form
and substance satisfactory to the Agent.
CERCLA. See Section 7.18.
Closing Date. The first date on which the conditions set forth in
Section 11 have been satisfied and any Revolving Credit Loans are to be made
or any Letter of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Commitment. With respect to each Bank, the amount set forth on Schedule
1 hereto as the amount of such Bank's commitment to make Revolving Credit
Loans to the Borrower, as the same may be reduced from time to time; or if
such commitment is terminated pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks, and with respect to the Letters of Credit,
the percentage amount of each Bank as set forth on Schedule 1 hereto.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of HBOC, the Borrower
and their Subsidiaries, consolidated in accordance with generally accepted
accounting principles.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of HBOC, the Borrower and their Subsidiaries, after deduction of all
expenses, taxes, and other proper charges, determined in accordance with
generally accepted accounting principles.
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Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, less, to the extent otherwise includable in
the computations of Consolidated Net Worth, any subscriptions receivable.
Consolidated Operating Cash Flow. For any quarter, an amount equal to
(a) EBITDA for such period, less (b) the sum of (i) cash payments for all
taxes paid during such period, plus (ii) Capital Expenditures made during the
immediately preceding twelve month period, divided by four, plus (iii) the
portion of the costs of software development required to be capitalized
pursuant to Financial Accounting Standards Board Statement No. 86.
Consolidated Tangible Net Worth. The excess of Consolidated Total
Assets over Consolidated Total Liabilities, and less the sum of:
(a) the total book value of all assets of HBOC, the Borrower and
their Subsidiaries properly classified as intangible assets under
generally accepted accounting principles, including such items as good
will, the purchase price of acquired assets in excess of the fair market
value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(b) all amounts representing any write-up in the book value of any
assets of HBOC, the Borrower or their Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date (except as
result of the use of the purchase accounting method to record the
Acquisition), excluding adjustments to translate foreign assets and
liabilities for changes in foreign exchange rates made in accordance
with Financial Accounting Standards Board Statement No. 52; plus
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable.
Consolidated Total Assets. The sum of (a) all assets of HBOC, the
Borrower and their Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles (the "consolidated
balance sheet assets") plus (b) without duplication, all assets leased by
HBOC, the Borrower or any of their Subsidiaries as lessee under any Synthetic
Lease to the extent that such assets would have been consolidated balance
sheet assets had the synthetic lease been treated for accounting purposes as
a Capitalized Lease, plus (c) without duplication, all sold receivables
referred to in clause (g) of the definition of the term "Indebtedness" to the
extent that such receivables would have been consolidated balance sheet
assets had they not been sold.
Consolidated Total Debt Service. For any period, the sum of (a)
Consolidated Total Interest Expense for such period plus (b) an amount equal
to the sum of all principal payments on Indebtedness that become due and
payable or that are to become due and payable during such period pursuant to
any agreement or
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instrument to which HBOC, the Borrower or any of their Subsidiaries is a
party relating to the borrowing of money or the obtaining of credit or in
respect of Capitalized Leases or any Synthetic Leases. Demand obligations
shall be deemed to be due and payable during any period during which such
obligations are outstanding.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by HBOC and its
Subsidiaries during such period on all Indebtedness of HBOC and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Leases or any Synthetic Lease, and including commitment fees,
agency fees, facility fees, balance deficiency fees and similar fees or
expenses in connection with the borrowing of money.
Consolidated Total Liabilities. All liabilities of HBOC, the Borrower
and their Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles and all Indebtedness of HBOC, the
Borrower and their Subsidiaries, whether or not so classified.
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in
accordance with Section 2.7.
Credit Agreement. This Second Amended and Restated Revolving Credit
Agreement, including the Schedules and Exhibits hereto.
Default. See Section 13.1.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of HBOC or the Borrower,
other than dividends payable solely in shares of common stock of HBOC or the
Borrower; the purchase, redemption, or other retirement of any shares of any
class of capital stock of HBOC or the Borrower, directly or indirectly
through a Subsidiary of HBOC or the Borrower or otherwise; the return of
capital by HBOC or the Borrower to its respective shareholders as such; or
any other distribution on or in respect of any shares of any class of capital
stock of the Borrower or HBOC.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
Drawdown Date. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted
or continued in accordance with Section 2.7.
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EBITDA. With respect to any fiscal period, an amount equal to the sum
of (a) Consolidated Net Income for such period, plus (b) in each case to the
extent deducted in the calculation of Consolidated Net Income and without
duplication, (i) depreciation and amortization for such period, plus (ii)
other noncash charges made in calculating Consolidated Net Income for such
period, plus (iii) income tax expense for such period, plus (iv) Consolidated
Total Interest Expense paid or accrued in such period.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000;
(b) a savings and loan association or savings bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having a net worth of at least $100,000,000, calculated in accordance with
generally accepted accounting principles; (c) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (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 is acting through a branch or agency located in the
country in which it is organized or another country which is also a member of
the OECD; (d) the central bank of any country which is a member of the OECD;
and (e) if, but only if, any Event of Default has occurred and is continuing,
any other bank, insurance company, commercial finance company or other
financial institution or other Person approved by the Agent, such approval
not to be unreasonably withheld.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by HBOC, the Borrower or
any ERISA Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 7.17(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a LIBOR Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the
Board of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding.
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The Eurocurrency Reserve Rate shall be adjusted automatically on and as of
the effective date of any change in the Eurocurrency Reserve Rate.
Event of Default. See Section 13.1.
Funded Debt. At any time of determination, the aggregate amount of the
outstanding Revolving Credit Loans and Maximum Drawing Amount on all issued
and outstanding Letters of Credit on such date and other Indebtedness of the
Borrower evidencing any Indebtedness of the Borrower to any seller of assets
to the Borrower.
generally accepted accounting principles. (a) When used in Section 10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date,
and (ii) to the extent consistent with such principles, the accounting
practice of HBOC and the Borrower reflected in their financial statements for
the year ended on the Balance Sheet Date, and (b) when used in general, other
than as provided above, means principles that are (i) consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of HBOC and the Borrower adopting the
same principles, provided that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to
financial statements in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by HBOC, the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.
Guaranty. The Amended and Restated Guaranty, dated or to be dated on or
prior to the Closing Date, made by HBOC in favor of the Banks and the Agent
pursuant to which HBOC guaranties to the Banks and the Agent the payment and
performance of the Obligations and in form and substance satisfactory to the
Banks and the Agent.
Hazardous Substances. See Section 7.17(b).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such
Person and whether or not contingent, but without duplication:
(a) every obligation of such Person for money borrowed;
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(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses;
(c) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for
the account of such Person;
(d) every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding trade accounts payable or accrued
liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith);
(e) every obligation of such Person under any Capitalized Lease;
(f) every obligation of such Person under any lease (a "Synthetic
Lease") treated as an operating lease under generally accepted
accounting principles and as a loan or financing for United States
income tax purposes;
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively, the "Receivables"),
whether pursuant to a purchase facility or otherwise, other than sales
of Receivables to HBOC Capital or sales in connection with the
disposition of the business operations of such Person relating thereto
or a disposition of defaulted receivables for collection and not as a
financing arrangement, and together with any obligation of such Person
to pay any discount, interest, fees, indemnities, penalties, recourse,
expenses or other amounts in connection therewith;
(h) every obligation of such Person (an "Equity Related Purchase
Obligation") to purchase, redeem, retire or otherwise acquire for value
any shares of capital stock of any class issued by such Person, any
warrants, options or other rights to acquire any such shares, or any
rights measured by the value of such shares, warrants, options or other
rights;
(i) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and
similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices;
(j) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor and such terms are enforceable
under applicable law; and
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(k) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (a) through (j) other than sales of Receivables to or the
assumption of any credit risk on third party leases through HBOC Capital
(the "Primary Obligation") of another Person (the "Primary Obligor"), in
any manner, whether directly or indirectly, and including, without
limitation, any obligation of such Person (i) to purchase or pay (or
advance or supply funds for the purchase of) any security for the
payment of such Primary Obligation, (ii) to purchase property,
securities or services for the purpose of assuring the payment of such
Primary Obligation, or (iii) to maintain working capital, equity capital
or other financial statement condition or liquidity of the Primary
Obligor so as to enable the Primary Obligor to pay such Primary
Obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (v) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of
the liability in respect in respect thereof determined in accordance with
generally accepted accounting principles, (w) any Capitalized Lease shall be
the principal component of the aggregate of the rental obligations under such
Capitalized Lease payable over the term thereof that is not subject to
termination by the lessee, (x) any sale of receivables shall be the amount of
unrecovered capital or principal investment of the purchaser (other than the
Borrower or any of its wholly-owned Subsidiaries) thereof, excluding amounts
representative of yield or interest earned on such investment, (y) any
Synthetic lease shall be the stipulated loss value, termination value or
other equivalent amount and (z) any equity related purchase obligation shall
be the maximum fixed redemption or purchase price thereof inclusive of any
accrued and unpaid dividends to be comprised in such redemption or purchase
price.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
each calendar month which includes the Drawdown Date thereof; and (b) as to
any LIBOR Rate Loan in respect of which the Interest Period is (A) three (3)
months or less, the last day of such Interest Period and (B) more than three
(3) months, the date that is three (3) months from the first day of each
Interest Period and, in addition, the last day of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Loan and ending
on the last day of one of the periods set forth below, as selected by the
Borrower in a Loan Request (i) for any Base Rate Loan, the last day of the
calendar month; and (ii) for any LIBOR Rate Loan, 1, 2, 3, 6, 9 or 12 months;
and (b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Revolving Credit Loan and ending
on the last day of one of the periods set forth above, as selected by the
Borrower in a Conversion Request; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
9
(a) if any Interest Period with respect to a LIBOR Rate Loan would
otherwise end on a day that is not a LIBOR Business Day, that Interest
Period shall be extended to the next succeeding LIBOR Business Day
unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end
on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
Section 2.7, the Borrower shall be deemed to have requested a
conversion of the affected LIBOR Rate Loan to a Base Rate Loan and the
continuance of all Base Rate Loans as Base Rate Loans on the last day
of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that
begins on the last LIBOR Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR
Business Day of a calendar month; and
(e) any Interest Period relating to any LIBOR Rate Loan that would
otherwise extend beyond the Revolving Credit Loan Maturity Date and
shall end on the Revolving Credit Loan Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of,
or for loans, advances, capital contributions or transfers of property to, or
in respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of
any Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b)
there shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is
paid; (c) there shall be deducted in respect of each such Investment any
amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d)
there shall not be deducted in respect of any Investment any amounts received
as earnings on such Investment, whether as dividends, interest or otherwise,
except that accrued interest included as provided in the foregoing clause (b)
may be deducted when paid; and (e) there shall not be deducted from the
aggregate amount of Investments any decrease in the value thereof.
Letters of Credit. See Section 4.1.1.
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Letter of Credit Application. See Section 4.1.1.
Letter of Credit Participation. See Section 4.1.4.
Leverage Ratio. As at any date of determination, the ratio of (a) Total
Funded Debt of HBOC and its Subsidiaries outstanding on such date to (b)
Consolidated Operating Cash Flow for the period of the most recent four
consecutive fiscal quarters (treated as a single accounting period) ended on
such date.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or
such other eurodollar interbank market as may be selected by the Agent in its
sole discretion acting in good faith.
LIBOR Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (a) the rate determined by the Agent at which
Dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. London time on the second
LIBOR Business Day prior to the first day of such Interest Period, divided by
(b) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
LIBOR Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the LIBOR Rate.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, and the Letters of Credit.
Loan Request. See Section 2.6.
Majority Banks. As of any date, the Banks holding at least sixty-six
and two thirds percent (66 2/3%) of the outstanding principal amount of the
Revolving Credit Notes and Letters of Credit on such date prior to giving
effect to any repayment of such Revolving Credit Notes from any collection
actions or rights of setoff; and if no such principal is outstanding, the
Banks whose aggregate Commitments constitutes at least sixty-six and two
thirds percent (66 2/3%) of the Total Commitment.
Maximum Drawing Amount. The maximum aggregate amount that any
beneficiary may at any time draw under the outstanding Letters of Credit, as
such amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
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Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by HBOC, the Borrower or
any ERISA Affiliate.
Obligations. All indebtedness, obligations and liabilities of any of
HBOC, the Borrower and their Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement
or arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Revolving Credit Loans made or Reimbursement
Obligations incurred or any of the Revolving Credit Notes, Letter of Credit
Application, Letters of Credit or other instruments at any time evidencing
any thereof.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Real Estate. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Revolving Credit Note.
Reference Bank. BankBoston, N.A.
Reimbursement Obligation. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under the Letters of Credit as
provided in Section 4.2.
Revolving Credit Loan Maturity Date. June 30, 1999.
Revolving Credit Loans. Revolving credit loans made or to be
made by the Banks to the Borrower pursuant to Section 2.
Revolving Credit Notes. See Section 2.4.
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Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by
number of votes) of the outstanding Voting Stock.
Synthetic Lease. See clause (f) of the definition of Indebtedness.
Total Commitment. The sum of the Commitments, as in effect from time to
time.
Total Funded Debt. As of any date of determination, the sum of (a)
Funded Debt, plus (b) Capitalized Lease and Synthetic Lease obligations of
HBOC and its Subsidiaries, plus (c) all other liabilities of HBOC and its
Subsidiaries which bear interest (other than liabilities consisting of
operating leases), including but not limited to long-term liabilities.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a LIBOR Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto
adopted by the Agent in the ordinary course of its business as a letter of
credit issuer and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, Section 4.2.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by
reason of the happening of a contingency.
1.2 Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented
from time to time in accordance with its terms and the terms of
this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
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(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
2. THE REVOLVING CREDIT FACILITY
2.1 Commitment to Lend. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay and reborrow from time to time
between the Closing Date and the Revolving Credit Loan Maturity Date, upon
notice by the Borrower to the Agent given in accordance with Section 2.6,
such sums as may be requested by the Borrower up to a maximum aggregate
amount outstanding (after giving effect to all amounts requested) at any one
time equal to such Bank's Commitment, provided that the sum of the
outstanding amount of the Revolving Credit Loans (after giving effect to all
amounts requested) shall not at any time exceed the Total Commitment. The
Revolving Credit Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Revolving Credit Loan hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in Section 11 and Section 12, in the case of the initial
Revolving Credit Loans to be made on the Closing Date, and Section 12, in the
case of all other Revolving Credit Loans, have been satisfied on the date of
such request.
2.2 Commitment Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee calculated at the rate of one quarter of one
percent (1/4%) per annum on the average daily amount during each calendar
quarter or portion thereof from the Closing Date to the Revolving Credit Loan
Maturity Date by which the Total Commitment minus the sum of the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations exceeds the
outstanding amount of Revolving
14
Credit Loans during such calendar quarter. The commitment fee shall be
payable quarterly in arrears on the first day of each calendar quarter for
the immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Revolving Credit
Maturity Date or any earlier date on which the Commitments shall terminate.
2.3 Reduction of Total Commitment. The Borrower shall have the right at
any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $100,000 or an integral multiple thereof or
terminate entirely the Total Commitment, whereupon the Commitments of the
Banks shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this Section 2.3, the Agent will notify the Banks of
the substance thereof. Upon the effective date of any such reduction or
termination, the Borrower shall pay to the Agent for the respective accounts
of the Banks the full amount of any commitment fee then accrued on the amount
of the reduction. No reduction or termination of the Commitments may be
reinstated.
2.4 The Revolving Credit Notes. The Revolving Credit Loans shall be
evidenced by separate amended and restated promissory notes of the Borrower
in substantially the form of Exhibit A hereto (each a "Revolving Credit
Note"), dated as of the Closing Date and completed with appropriate
insertions. One Revolving Credit Note shall be payable to the order of each
Bank in a principal amount equal to such Bank's Commitment or, if less, the
outstanding amount of all Revolving Credit Loans made by such Bank, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Record reflecting the making of such Revolving Credit
Loan or (as the case may be) the receipt of such payment. The outstanding
amount of the Revolving Credit Loans set forth on such Bank's Record shall be
prima facie evidence of the principal amount thereof owing and unpaid to such
Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the
obligations of the Borrower hereunder or under any Revolving Credit Note to
make payments of principal of or interest on any Revolving Credit Note when
due.
2.5 Interest on Revolving Credit Loans. Except as otherwise provided in
Section 5.10,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the Base Rate.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate of one half of one
15
percent (1/2%) per annum above the LIBOR Rate determined for such
Interest Period.
(c) The Borrower promises to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect thereto.
2.6 Requests for Revolving Credit Loans. The Borrower shall give to the
Agent telephonic notice (or, at the Borrower's election, written notice in
the form of Exhibit B hereto) of each Revolving Credit Loan requested
hereunder (a "Loan Request") no less than (a) 2:00 p.m. (Boston time) on the
proposed Drawdown Date of any Base Rate Loan and (b) two (2) LIBOR Business
Days prior to the proposed Drawdown Date of any LIBOR Rate Loan. Each such
notice shall specify (i) the principal amount of the Revolving Credit Loan
requested, (ii) the proposed Drawdown Date of such Revolving Credit Loan,
(iii) the Interest Period for such Revolving Credit Loan and (iv) the Type of
such Revolving Credit Loan. Promptly upon receipt of any such notice, the
Agent shall notify each of the Banks thereof. Each Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request shall be in a minimum aggregate amount of
$100,000 or a whole multiple of $50,000 in excess thereof, or if the
availability of the Revolving Credit Loans is less than $100,000, such lesser
amount.
2.7 Conversion Options.
2.7.1 Conversion to Different Type of Revolving Credit Loan. The
Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type, provided
that (a) with respect to any such conversion of a Revolving Credit Loan to
a Base Rate Loan, the Borrower shall give the Agent by 11:00 a.m. (Boston
time) on the effective date thereof prior written notice of such election;
(b) with respect to any such conversion of a Revolving Credit Loan to a
LIBOR Rate Loan, the Borrower shall give the Agent at least two (2) LIBOR
Business Days prior written notice of such election; (c) with respect to
any such conversion of a LIBOR Rate Loan into a Revolving Credit Loan of
another Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto and (d) no Revolving Credit Loan may
be converted into a LIBOR Rate Loan when any Default or Event of Default
has occurred and is continuing. On the date on which such conversion is
being made each Bank shall take such action as is necessary to transfer
its Commitment Percentage of such Revolving Credit Loans to its Domestic
Lending Office or its LIBOR Lending Office, as the case may be. All or
any part of outstanding Revolving Credit Loans of any Type may be converted
into a Revolving Credit Loan of another Type as provided herein, provided
that any partial conversion shall be in an aggregate principal amount of
$100,000 or a whole multiple of $50,000 in excess thereof. Each Conversion
16
Request relating to the conversion of a Revolving Credit Loan to a LIBOR
Rate Loan shall be irrevocable by the Borrower.
2.7.2 Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of
the same Type upon the expiration of an Interest Period with respect
thereto by compliance by the Borrower with the notice provisions contained
in Section 2.7.1; provided that no LIBOR Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing,
but shall be automatically converted to a Base Rate Loan on the last day
of the first Interest Period relating thereto ending during the continuance
of any Default or Event of Default of which officers of the Agent active
upon the Borrower's account have actual knowledge. In the event that the
Borrower fails to provide any such notice with respect to the continuation
of any LIBOR Rate Loan as such, then such LIBOR Rate Loan shall be
automatically converted to a Base Rate Loan on the last day of the first
Interest Period relating thereto. The Agent shall notify the Banks
promptly when any such automatic conversion contemplated by this Section
2.7 is scheduled to occur.
2.7.3 LIBOR Rate Loans. Any conversion to or from LIBOR Rate Loans
shall be in such amounts and be made pursuant to such elections so that,
after giving effect thereto, (a) the aggregate principal amount of all
LIBOR Rate Loans having the same Interest Period shall not be less than
$100,000 or a whole multiple of $50,000 in excess thereof and (b) there
shall not be at any one time more than ten (10) LIBOR Rate Loans
outstanding with different Interest Periods.
2.8 Funds for Revolving Credit Loan.
2.8.1 Funding Procedures. Not later than 1:00 p.m. (Boston time) on
the proposed Drawdown Date of any Revolving Credit Loans, each of the
Banks will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Revolving Credit Loans. Upon
receipt from each Bank of such amount, and upon receipt of the documents
required by Sections 11 and 12 and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Agent will make available
to the Borrower the aggregate amount of such Revolving Credit Loans made
available to the Agent by the Banks. The failure or refusal of any Bank
to make available to the Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Revolving Credit Loans shall not relieve any other Bank from its several
obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans.
17
2.8.2. Advances by Agent. The Agent may, unless notified to the
contrary by any Bank prior to 1:00 p.m. on the Drawdown Date, assume that
such Bank has made available to the Agent on such Drawdown Date the
amount of such Bank's Commitment Percentage of the Revolving Credit Loans
to be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the Agent
such amount on a date after such Drawdown Date, such Bank shall pay to the
Agent on demand an amount equal to the product of (a) the average computed
for the period referred to in clause (c) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the Agent
during each day included in such period, times (b) the amount of such
Bank's Commitment Percentage of such Revolving Credit Loans, times (c) a
fraction, the numerator of which is the number of days that elapse from
and including such Drawdown Date to the date on which the amount of such
Bank's Commitment Percentage of such Revolving Credit Loans shall become
immediately available to the Agent, and the denominator of which is 365.
A statement of the Agent submitted to such Bank with respect to any amounts
owing under this paragraph shall be prima facie evidence of the amount due
and owing to the Agent by such Bank. If the amount of such Bank's
Commitment Percentage of such Revolving Credit Loans is not made available
to the Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum applicable
to the Revolving Credit Loans made on such Drawdown Date, provided, that
such payment shall be without prejudice to any right the Borrower may have
against such non-funding Bank.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. Maturity. The Borrower promises to pay on the Revolving Credit Loan
Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid
interest thereon.
3.2. Mandatory Repayments of Revolving Credit Loans. If at any time the
outstanding amount of the Revolving Credit Loans, the Maximum Drawing Amount
and all Unpaid Reimbursement Obligations exceeds the Total Commitment, then
the Borrower shall immediately pay the amount of such excess to the Agent for
the respective accounts of the Banks for application: first, to any Unpaid
Reimbursement Obligations; second, to the Revolving Credit Loans; and third,
to provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by Section 4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Bank's Revolving Credit Note, with adjustments to
18
the extent practicable to equalize any prior payments or repayments not
exactly in proportion.
3.3. Optional Repayments of Revolving Credit Loans. The Borrower
shall have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding
amount of any LIBOR Rate Loans pursuant to this Section 3.3 may be made only
on the last day of the Interest Period relating thereto or, if not made on
such date, shall be subject to the provisions of Section 5.9(c) hereof. The
Borrower shall give the Agent, no later than 10:00 a.m., Boston time, at
least one (1) Business Day prior written notice of any proposed prepayment
pursuant to this Section 3.3 of Base Rate Loans, and two (2) LIBOR Business
Days notice of any proposed prepayment pursuant to this Section 3.3 of LIBOR
Rate Loans, in each case specifying the proposed date of prepayment of
Revolving Credit Loans and the principal amount to be prepaid. Each such
partial prepayment of the Revolving Credit Loans shall be in an integral
multiple of $100,000, shall be accompanied by the payment of accrued interest
on the principal prepaid to the date of prepayment and shall be applied, in
the absence of instruction by the Borrower, first to the principal of Base
Rate Loans and then to the principal of LIBOR Rate Loans, at the Agent's
option. Each partial prepayment shall be allocated among the Banks, in
proportion, as nearly as practicable, to the respective unpaid principal
amount of each Bank's Revolving Credit Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
4. LETTERS OF CREDIT.
4.1. Letter of Credit Commitments.
4.1.1 Commitment to Issue Letters of Credit. Subject to the terms and
conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance
upon the agreement of the Banks set forth in Section 4.1.4 and upon the
representations and warranties of the Borrower contained herein, agrees,
in its individual capacity, to issue, extend and renew for the account of
the Borrower one or more standby or documentary letters of credit
(individually, a "Letter of Credit"), in such form as may be requested
from time to time by the Borrower and agreed to by the Agent; provided,
however, that, after giving effect to such request, (a) the sum of the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations shall not
exceed $25,000,000 at any one time, and (b) the sum of (i) the Maximum
Drawing Amount on all Letters of Credit, (ii) all Unpaid Reimbursement
Obligations and (iii) the amount of all Revolving Credit Loans outstanding
shall not exceed the Total Commitment.
4.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
19
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3 Terms of Letters of Credit. Each Letters of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide
for the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date which
is fourteen (14) days (or, if the Letter of Credit is confirmed by a
confirming bank or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
4.1.4 Reimbursement Obligations of Banks. Each Bank severally agrees
that it shall be absolutely liable, without regard to the occurrence of
any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage, to
reimburse the Agent on demand for the amount of each draft paid by the
Agent under each Letter of Credit to the extent that such amount is not
reimbursed by the Borrower pursuant to Section 4.2 (such agreement for a
Bank being called herein the "Letter of Credit Participation" of such
Bank).
4.1.5 Participations of Banks. Each such payment made by a Bank shall
be treated as the purchase by such Bank of a participating interest in
the Borrower's Reimbursement Obligation under Section 4.2 in an amount
equal to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to Section
5.2.
4.2. Reimbursement Obligation of the Borrower. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to the Letter of Credit issued, extended or renewed by the Agent
hereunder,
(a) except as otherwise expressly provided in Section 4.2(b) and (c),
on each date that any draft presented under such Letter of Credit is
honored by the Agent, or the Agent otherwise makes a payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other
costs and expenses whatsoever incurred by the Agent or any Bank in
connection with any payment made by the Agent or any Bank under, or with
respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total Commitment
to an amount less than the Maximum Drawing Amount, an amount equal to such
difference, which amount shall be held by the Agent for the benefit of the
20
Banks and the Agent as cash collateral for all Reimbursement Obligations;
and
(c) upon the termination of the Total Commitment, or the acceleration
of the Reimbursement Obligations with respect to the Letter of Credit in
accordance with Section 13, an amount equal to the then Maximum Drawing
Amount on the Letter of Credit, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrower under this Section 4.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Section 5.10 for overdue
principal on the Revolving Credit Loans.
4.3. Letter of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under the Letter of Credit, the Agent shall
notify the Borrower of the date and amount of the draft presented or demand
for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent
as provided in Section 4.2 on or before the date that such draft is paid or
other payment is made by the Agent, the Agent may at any time thereafter
notify the Banks of the amount of any such Unpaid Reimbursement Obligation.
No later than 3:00 p.m. (Boston time) on the Business Day next following the
receipt of such notice, each Bank shall make available to the Agent, at the
Agent's Head Office, in immediately available funds, such Bank's Commitment
Percentage of such Unpaid Reimbursement Obligation, together with an amount
equal to the product of (a) the average, computed for the period referred to
in clause (c) below, of the weighted average interest rate paid by the Agent
for federal funds acquired by the Agent during each day included in such
period, times (b) the amount equal to such Bank's Commitment Percentage of
such Unpaid Reimbursement Obligation, times (c) a fraction, the numerator of
which is the number of days that elapse from and including the date the Agent
noticed the Banks that it paid the draft presented for honor or otherwise
made payment to the date on which such Bank's Commitment Percentage of such
Unpaid Reimbursement obligation shall become immediately available to the
Agent, and the denominator of which is 365. The responsibility of the Agent
to the Borrower and the Banks shall be only to examine the documents
(including each draft) delivered under each Letter of Credit in connection
with such presentment with reasonable care and determine that they appear on
their face to be in compliance with the terms and conditions of such Letter
of Credit.
4.4. Obligations Absolute. The Borrower's obligations under this Section
4 shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event
21
of Default or any condition precedent whatsoever or any setoff, counterclaim
or defense to payment which the Borrower may have or have had against the
Agent, any Bank or any beneficiary of a Letter of Credit. The Borrower
further agrees with the Agent and the Banks that the Agent and the Banks
shall not be responsible for, and the Borrower's Reimbursement Obligations
under Section 4.2 shall not be affected by, among other things, the validity
or genuineness of documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrower, the
beneficiary of any Letter of Credit or any financing institution or other
party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of the Borrower against the beneficiary of any Letter of
Credit or any such transferee. The Agent and the Banks shall not be liable
for any error, omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted
by the Agent or any Bank under or in connection with each Letter of Credit
and the related drafts and documents, if done in good faith, shall be binding
upon the Borrower and shall not result in any liability on the part of the
Agent or any Bank to the Borrower.
4.5. Reliance by Issuer. To the extent not inconsistent with Section
4.4, the Agent shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel,
independent accountants and other experts selected by the Agent. The Agent
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or concurrence of
the Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Banks and all future holders of the Revolving Credit Notes or of a Letter of
Credit Participation.
4.6. Letter of Credit Fee. The Borrower shall, on the date of issuance,
extension or renewal of any Letter of Credit and at such other time or times
as such charges are customarily made by the Agent, pay a fee (in each case, a
"Letter of Credit Fee") (a) in respect of each standby Letter of Credit
issued pursuant to this Credit Agreement, equal to one-half of one percent
(1/2%) of the face amount of such Letter of Credit plus the Agent's customary
issuance fee (but not such issuance, amendment, negotiation or document
examination fee) to be for the accounts of the Banks in accordance with their
respective Commitment Percentages, and (b) in respect of each documentary
Letter of Credit issued pursuant to this
22
Credit Agreement, equal to one-quarter of one percent (1/4%) of the face
amount of such Letter of Credit plus the Agent's customary issuance fee (but
not such issuance, amendment, negotiation or document examination fee) to be
for the accounts of the Banks in accordance with their respective Commitment
Percentages.
5. CERTAIN GENERAL PROVISIONS.
5.1. Fees. The Borrower agrees to pay to the Agent for the Agent's own
account quarterly in advance, an annual Agent's fee in such amount as is
agreed to by and among the Borrower in an Agent's fee letter dated as of the
date hereof.
5.2. Funds for Payments.
5.2.1. Payments to Agent. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan Documents
shall be made to the Agent, for the respective accounts of the Banks and
the Agent, at the Agent's Head Office or at such other location in the
Boston, Massachusetts, area that the Agent may from time to time designate,
in each case in immediately available funds.
5.2.2. No Offset, etc. All payments by the Borrower hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof
or taxing or other authority therein (the "Taxes") unless the Borrower is
compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrower with respect to any amount payable
by it hereunder or under any of the other Loan Documents, the Borrower will
pay to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as shall
be necessary to enable the Banks or the Agent to receive the same net
amount which the Banks or the Agent would have received on such due date
had no such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments made
by the Borrower hereunder or under such other Loan Document. Each Bank
which is not a bank organized under the laws of the United States or any
state thereof agrees, as soon as practicable after a request by the
Borrower to do so, to file all appropriate forms and take other appropriate
action to obtain a certificate or other appropriate document from the
appropriate governmental authority in the jurisdiction imposing the
relevant taxes, establishing that it is entitled to receive payments of
principal and interest under this Credit Agreement and the Revolving
Credit Notes without deduction and free from withholding of any Taxes
imposed by such jurisdiction; provided, that, if it is unable, for any
23
reason, to establish such exemption, or to file such forms and, in any
event, during such period of time as such request for exemption is pending,
the Borrower shall nonetheless remain obligated under the terms of the
immediately preceding paragraph. In the event any such Bank receives a
refund of any Taxes paid by the Borrower pursuant to this Section 6.2 it
will pay to the Borrower the amount of such refund promptly upon receipt
thereof; provided, however, if at any time thereafter it is required to
return such refund, the Borrower shall promptly repay to it the amount of
such refund.
5.3. Computations. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of
the term "Interest Period" with respect to LIBOR Rate Loans, whenever a
payment hereunder or under any of the other Loan Documents becomes due on a
day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue
during such extension. The outstanding amount of the Loans as reflected on
the Records from time to time shall be considered correct and binding on the
Borrower unless within five (5) Business Days after receipt of any notice by
the Agent or any of the Banks of such outstanding amount, the Agent or such
Bank shall notify the Borrower to the contrary.
5.4. Inability to Determine LIBOR Rate. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the
Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate
Loan during any Interest Period, the Agent shall forthwith give notice of
such determination (which shall be conclusive and binding on the Borrower and
the Banks) to the Borrower and the Banks. In such event (a) any Loan Request
or Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of
the Banks to make LIBOR Rate Loans shall be suspended until the Agent or the
Majority Banks determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent or, as the case may be, the
Agent upon the instruction of the Majority Banks, shall so notify the
Borrower and the Banks.
5.5 Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain LIBOR Rate Loans, such Bank shall forthwith give notice of
such circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make LIBOR Rate Loans or convert Loans of another
Type to LIBOR Rate Loans shall forthwith be suspended and (b) such Bank's
24
Revolving Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such LIBOR Rate Loans or within such earlier period as
may be required by law. Before giving any notice to the Agent pursuant to
this Section 5.5, such Bank shall designate a different LIBOR Lending office
if such designation will avoid the need for giving such notice and will not,
in the sole and absolute judgment of such Bank, be otherwise materially
disadvantageous to such Bank, which determination by such Bank shall be
conclusive. The Borrower hereby agrees promptly to pay the Agent for the
account of such Bank, upon demand by such Bank, any additional amounts
necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this Section 5.5, including any
interest or fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its LIBOR Loans hereunder.
5.6. Additional Costs, etc. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon
or otherwise issued to any Bank or the Agent by any central bank or other
fiscal, monetary or other authority (whether or not having the force of law),
shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Credit Agreement, the other Loan Documents, any Letters of Credit, such
Bank's Commitment or the Loans (other than taxes based upon or measured by
the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the
Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held
by, or deposits in or for the account of, or loans by, or letters of credit
issued by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Loans, such Bank's Commitment, or
any class of loans, letters of credit or commitments of which any of the
Loans or such Bank's Commitment forms a part, and the result of any of the
foregoing is
25
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Loans or such Bank's
Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank or the Agent
hereunder on account of such Bank's Commitment, any Letter of Credit
or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or
to forego any interest or Reimbursement Obligation or other sum
payable hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to
the gross amount of any sum receivable or deemed received by such Bank
or the Agent from the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank
or (as the case may be) the Agent at any time and from time to time and as
often as the occasion therefor may arise, pay to such Bank or the Agent such
additional amounts as will be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or
Reimbursement Obligation or other sum, provided, that the Borrower shall have
no liability hereunder for amounts which were incurred or accrued prior to a
date which is more than 180 days before the Borrower's receipt of such demand.
(e) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which
will entitle such Bank to compensation pursuant to this Section 5.6, and
such Bank will designate a different Domestic Lending Office or LIBOR
Lending Office if such designation will avoid the need for, or
substantially reduce the amount of such compensation and will not, in the
sole and absolute judgment of such Bank, be otherwise materially
disadvantageous to such Bank, which determination by such Bank shall be
conclusive. Each Bank shall allocate such additional cost increases among
its customers in good faith and on an equitable basis.
5.7. Capital Adequacy. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force
of law) regarding capital requirements for banks or bank holding companies or
any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b) compliance by
such Bank or the Agent or any corporation controlling such Bank or the Agent
with any law, governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) of any such entity regarding capital
adequacy, has the effect of reducing the return on such Bank's or the Agent's
commitment with respect to any Loans to a level below that which such Bank or
26
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such
entity's capital) by any amount deemed by such Bank or (as the case may be)
the Agent to be material, then such Bank or the Agent may notify the Borrower
of such fact. To the extent that the amount of such reduction in the return
on capital is not reflected in the Base Rate, the Borrower agrees to pay such
Bank or (as the case may be) the Agent for the amount of such reduction in
the return on capital as and when such reduction is determined upon
presentation by such Bank or (as the case may be) the Agent of a certificate
in accordance with Section 5.8 hereof, provided, that the Borrower shall have
no liability hereunder for amounts which were incurred or accrued prior to a
date which is more than 180 days before the Borrower's receipt of such
certificate. Each Bank shall allocate such cost increases among its
customers in good faith and on an equitable basis.
5.8. Certificate. A certificate setting forth any additional amounts
payable pursuant to Sections 5.6 or 5.7 and a reasonably detailed explanation
of such amounts which are due and the allocation and attribution methods
employed in connection therewith, submitted by any Bank or the Agent to the
Borrower, shall be conclusive, absent manifest error, that such amounts are
due and owing.
5.9. Indemnity. The Borrower agrees to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment of the principal amount
of or any interest on any LIBOR Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by
such Bank to lenders of funds obtained by it in order to maintain its LIBOR
Rate Loans, (b) default by the Borrower in making a borrowing or conversion
after the Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with Section 2.6 or Section
2.7 or (c) the making of any payment of a LIBOR Rate Loan or the making of
any conversion of any such Revolving Credit Loan to a Base Rate Loan on a day
that is not the last day of the applicable Interest Period with respect
thereto, including interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain any such Loans.
5.10. Interest After Default.
5.10.1. Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other
Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to three percent (3%) above the Base
Rate until such amount shall be paid in full (after as well as before
judgment).
5.10.2. Amounts Not Overdue. During the continuance of an Event of
Default the principal of the Revolving Credit Loans not overdue shall,
until such Event of Default has been cured or remedied or such Event of
27
Default has been waived by the Majority Banks pursuant to Section 26, bear
interest at a rate per annum equal to the greater of (a) two percent (2%)
above the rate of interest otherwise applicable to such Revolving Credit
Loans pursuant to Section 2.5 and (b) the rate of interest applicable to
overdue principal pursuant to Section 5.10.1.
6. GUARANTY. The Obligations shall be guaranteed pursuant to the terms of
the Guaranty.
7. REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and HBOC represents and warrants to the Banks and the
Agent as follows:
7.1. Corporate Authority.
7.1.1 Incorporation; Good Standing. Each of HBOC, the Borrower and
their Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state of incorporation, (b) has
all requisite corporate power to own its property and conduct its business
as now conducted and as presently contemplated, and (c) is in good standing
as a foreign corporation and is duly authorized to do business in each
jurisdiction where such qualification is necessary except where a failure
to be so qualified would not have a materially adverse effect on the
business, assets or financial condition of HBOC, the Borrower and the
Subsidiaries, taken as a whole.
7.1.2. Authorization. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which HBOC, the Borrower
or any of their Subsidiaries is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the corporate
authority of such Person, (b) have been duly authorized by all necessary
corporate proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which
HBOC, the Borrower or any of their Subsidiaries is subject or any judgment,
order, writ, injunction, license or permit applicable to HBOC, the Borrower
or any of their Subsidiaries and (d) do not conflict with any provision of
the corporate charter or bylaws of, or any material agreement or other
instrument binding upon, HBOC, the Borrower and their Subsidiaries, taken
as a whole.
7.1.3. Enforceability. The execution and delivery of this Credit
Agreement and the other Loan Documents to which HBOC, the Borrower or any
of their Subsidiaries is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
28
reorganization, moratorium or other laws relating to or affecting generally
the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor
may be brought.
7.2. Governmental Approvals. The execution, delivery and performance by
HBOC, the Borrower and any of their Subsidiaries of this Credit Agreement and
the other Loan Documents to which HBOC, the Borrower or any of their
Subsidiaries is or is to become a party and the transactions contemplated
hereby and thereby do not require the approval or consent of, or filing with,
any governmental agency or authority other than those already obtained.
7.3. Title to Properties; Leases. Except as indicated on Schedule 7.3
hereto, HBOC the Borrower and their Subsidiaries own all of the assets
reflected in the consolidated balance sheet of HBOC, the Borrower and their
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
7.4. Financial Statements. There has been furnished to each of the Banks
a consolidated balance sheet of HBOC, the Borrower and their Subsidiaries as
at the Balance Sheet Date, and a consolidated statement of income of HBOC,
the Borrower and their Subsidiaries for the fiscal year then ended, certified
by Xxxxxx Xxxxxxxx LLP Such balance sheet and statement of income have been
prepared in accordance with generally accepted accounting principles and
fairly present the financial condition of HBOC, the Borrower and their
Subsidiaries as at the close of business on the date thereof and the results
of operations for the fiscal year then ended. There are no contingent
liabilities of HBOC, the Borrower or any of their Subsidiaries as of such
date involving material amounts, know to the officers of the Borrower, which
were not disclosed in such balance sheet and the notes related thereto.
7.5. No Material Changes, etc. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business
of HBOC, the Borrower and their Subsidiaries as shown on or reflected in the
consolidated balance sheet of HBOC, the Borrower and their Subsidiaries as at
the Balance Sheet Date, or the consolidated statement of income for the
fiscal year then ended, other than changes in the ordinary course of business
that have not had any materially adverse effect on the business or financial
condition of HBOC, the Borrower or any of their Subsidiaries, taken as a
whole. Since the Balance Sheet Date, neither HBOC nor the Borrower has made
any Distributions.
7.6 Franchises, Patents, Copyrights, etc. Each of the Borrower and
their Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted
without known conflict with
29
any rights of others. Neither the Borrower's nor any of their Subsidiaries'
copyrights have been federally registered with the United States Copyright
Office.
7.7. Litigation. Except as set forth in Schedule 7.7 hereto, there
are no actions, suits, proceedings or investigations of any kind pending or
threatened against HBOC, the Borrower or any of their Subsidiaries before any
court, tribunal or administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of
HBOC, the Borrower and their Subsidiaries or materially impair the right of
HBOC, the Borrower and their Subsidiaries, considered as a whole, to carry on
business substantially as now conducted by them, or result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not maintained on the consolidated balance sheet of HBOC, the Borrower
and their Subsidiaries, or which question the validity of this Credit
Agreement or any of the other Loan Documents, or any action taken or to be
taken pursuant hereto or thereto.
7.8. No Materially Adverse Contracts, etc. Neither HBOC, the Borrower
nor any of their Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of HBOC, the Borrower or any of their
Subsidiaries. Neither HBOC, the Borrower nor any of their Subsidiaries taken
as a whole is a party to any contract or agreement that has or is expected,
in the judgment of HBOC's or the Borrower's officers, to have any materially
adverse effect on the business of HBOC, the Borrower and their Subsidiaries,
taken as a whole.
7.9. Compliance with Other Instruments, Laws, etc. Neither HBOC, the
Borrower nor any of their Subsidiaries is in violation of any provision of
its charter documents, bylaws, or any agreement or instrument to which it may
be subject or by which it or any of its properties may be bound or any
decree, order, judgment, statute, license, rule or regulation, in any of the
foregoing cases in a manner that could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of HBOC, the Borrower and their
Subsidiaries taken as a whole.
7.10. Tax Status. Except as otherwise disclosed to the Agent and the
Banks prior to the Closing Date, HBOC, the Borrower and their Subsidiaries
(a) have made or filed all federal and state income and all other tax
returns, reports and declarations required by any jurisdiction to which any
of them is subject, (b) have paid all taxes and other governmental
assessments and charges shown or determined to be due on such returns,
reports and declarations, except those being contested in good faith and by
appropriate proceedings and (c) have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to
the periods to which such returns, reports or declarations apply. There are
no unpaid taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and the officers of HBOC and the Borrower know
of no basis for any such claim.
30
7.11. No Event of Default. No Default or Event of Default has occurred
and is continuing.
7.12. Holding Company and Investment Company Acts. Neither HBOC, the
Borrower nor any of their Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined
in the Investment Company Act of 1940.
7.13. Absence of Financing Statements, etc. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of HBOC, the Borrower or any of their
Subsidiaries or any rights relating thereto.
7.14. Certain Transactions. Except for arm's length transactions
pursuant to which HBOC, the Borrower or any of their Subsidiaries makes
payments in the ordinary course of business upon terms no less favorable than
HBOC, the Borrower or such Subsidiary could obtain from third parties, none
of the officers, directors, or employees of HBOC, the Borrower or any of
their Subsidiaries is presently a party to any material transaction with
HBOC, the Borrower or any of their Subsidiaries (other than for services as
employees, officers and directors), including any contract, agreement or
other arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to
the knowledge of HBOC or the Borrower, any corporation, partnership, trust or
other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
7.15. Employee Benefit Plans.
7.15.1. In General Each Employee Benefit Plan has been maintained
and operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not limited
to the provisions thereunder respecting prohibited transactions.
7.15.2. Terminability of Welfare Plans Under each Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of
Section 3(1) or Section 3(2)(B) of ERISA, no benefits are due unless the
event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA) . HBOC and the
Borrower or an ERISA Affiliate,
31
as appropriate, may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in
the discretion of HBOC, the Borrower or such ERISA Affiliate without
liability to any Person.
7.15.3. Guaranteed Pension Plans. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made.
No waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to any Guaranteed Pension Plan. No
liability to the PBGC (other than required insurance premiums, all of which
have been paid) has been incurred by the Borrower or any ERISA Affiliate
with respect to any Guaranteed Pension Plan and there has not been any
ERISA Reportable Event, or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the PBGC.
Based on the latest valuation of each Guaranteed Pension Plan (which in
each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed for
that valuation, the aggregate benefit liabilities of all such Guaranteed
Pension Plans within the meaning of Section 4001 of ERISA did not exceed
the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
7.15.4. Multiemployer Plans Neither HBOC, the Borrower nor any
ERISA Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as
a result of a sale of assets described in Section 4204 of ERISA. Neither
HBOC, the Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within the
meaning of Section 4241 or Section 4245 of ERISA or that any Multiemployer
Plan intends to terminate or has been terminated under Section 4041A of
ERISA.
7.16. Regulations U and X. The proceeds of the Revolving Credit Loans
shall be used for general corporate and working capital purposes. The
Borrower will obtain Letters of Credit solely for working capital and general
corporate purposes. No portion of any of the Revolving Credit Loans is to be
used, and no portion of any Letter of Credit is to be obtained, for the
purpose of purchasing or carrying any "margin security" or "margin stock" as
such terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
7.17. Environmental Compliance. HBOC and the Borrower have taken all
necessary steps to investigate the past and present condition and usage of
the Real
32
Estate and the operations conducted thereon and, based upon such diligent
investigation, have determined that:
(a) none of HBOC, the Borrower, their Subsidiaries or any
operator of the Real Estate or any operations thereon is in violation,
or alleged violation, of any judgment, decree, order, law, license, rule
or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and
Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state or
local statute, regulation, ordinance, order or decree relating to health,
safety or the environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the environment or the
business, assets or financial condition of HBOC, the Borrower and their
Subsidiaries taken as a whole;
(b) neither HBOC, the Borrower nor any of their Subsidiaries has
received notice from any third party including, without limitation: any
federal, state or local governmental authority, (i) that any one of them
has been identified by the United States Environmental Protection Agency
("EPA") as a potentially responsible party under CERCLA with respect to a
site listed on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X;
(ii) that any hazardous waste, as defined by 42 U.S.C. Section 6903(5), any
hazardous substances as defined by 42 U.S.C. Section 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) and any
toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances")
which any one of them has generated, transported or disposed of has been
found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that HBOC, the Borrower or any of their
Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising
out of any third party's incurrence of costs, expenses, losses or damages
of any kind whatsoever in connection with the release of Hazardous
Substances;
(c) except as set forth on Schedule 7.17 attached hereto: (i) to
the best of HBOC's and the Borrower's knowledge no portion of the Real
Estate has been used for the handling, processing, storage or disposal of
Hazardous Substances except in accordance in all material respects with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on any
portion of the Real Estate; (ii) in the course of any activities conducted
by HBOC, the Borrower, their Subsidiaries or operators of its properties,
no Hazardous Substances have been generated or are being used on the Real
Estate except
33
in accordance in all material respects with applicable Environmental Laws;
(iii) to the best of HBOC's and the Borrower's knowledge there have been
no releases (i.e. any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances on,
upon, into or from the properties of HBOC, the Borrower or their
Subsidiaries, which releases would have a material adverse effect on the
value of any of the Real Estate or adjacent properties or the environment;
(iv) to the best of HBOC's and the Borrower's knowledge there have been no
releases on, upon, from or into any real property in the vicinity of any
of the Real Estate which, through soil or groundwater contamination, may
have come to be located on, and which would have a material adverse effect
on the value of, the Real Estate; and (v) to the best of HBOC's and the
Borrower's knowledge in addition, any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only by
carriers having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of HBOC's and
the Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
(d) To the best of HBOC's and the Borrower's knowledge, none of
HBOC, the Borrower, their Subsidiaries, or any of the other Real Estate is
subject to any applicable environmental law requiring the performance of
Hazardous Substances site assessments, or the removal or remediation of
Hazardous Substances, or the giving of notice to any governmental agency or
the recording or delivery to other Persons of an environmental disclosure
document or statement by virtue of the transactions set forth herein and
contemplated hereby.
7.18. Subsidiaries, etc. The Borrower, HBO & Company Canada Ltd.
("Ltd."), HBO & Company (UK) Limited ("HBO UK") and HBO & Company (VI), Inc.
are the only Subsidiaries of HBOC. HBOC Medical Ltd. and First Data Health
Systems (Ireland), Ltd. are the only Subsidiaries of the Borrower. Data-Med
Computer Services, Ltd. and HBO & Company (ST & SW), Ltd. are the only
Subsidiaries of HBO UK. Except as set forth on Schedule 7.18 hereto, neither
the Borrower nor any Subsidiary of any of the Borrower is engaged in any
joint venture or partnership with any other Person.
7.19. No Amendments to Certain Documents.
Each of the representations and warranties made by HBOC and the Borrower
in each of the Loan Documents was true and correct in all material respects
when made and continues to be true and correct in all material respects on
the Closing Date, except to the extent that any of such representations and
warranties relate, by the express terms thereof, solely to a date falling
prior to the Closing Date, and except to the extent that any of such
representations and warranties may have been
34
affected by the consummation of the transactions contemplated and permitted
or required by the Loan Documents.
7.20. Disclosure. No representation or warranty made by HBOC or the
Borrower in this Credit Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Agent or any Bank by or on
behalf of HBOC and the Borrower in connection with any of the transactions
contemplated by any of the Loan Documents contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained therein not misleading in light of the circumstances
in which they are made. Other than the transactions reflected by the balance
sheet referred to in Section 7.4 hereof and other than as set forth in the
other Loan Documents, there is no fact known to HBOC or the Borrower as of
the Closing Date (other than general economic and political conditions
affecting business generally) which materially adversely affects, or which is
reasonably likely to in the future materially adversely affect, the financial
position, business, operations, or affairs of HBOC, the Borrower and their
respective Subsidiaries taken as a whole.
8. AFFIRMATIVE COVENANTS OF THE BORROWER.
Each of HBOC and the Borrower covenants and agrees that, so long as any
Revolving Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or
Revolving Credit Note is outstanding or any Bank has any obligation to make
any Revolving Credit Loans or the Agent has any obligation to issue, extend
or renew any Letters of Credit:
8.1. Punctual Payment. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans,
all Reimbursement Obligations, the Letter of Credit Fees, the commitment
fees, the Agent's fee and all other amounts provided for in this Credit
Agreement and the other Loan Documents to which HBOC, the Borrower or any of
their Subsidiaries are a party, all in accordance with the terms of this
Credit Agreement and such other Loan Documents.
8.2. Maintenance of Office. The Borrower will maintain its chief
executive office at 000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxx 00000 or at
such other place in the United States of America as the Borrower shall
designate upon prior written notice to the Agent, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents to which the Borrower is a party may be given or made.
8.3. Records and Accounts. HBOC and the Borrower will (a) keep, and
cause each of their Subsidiaries to keep, true and accurate records and books
of account in which full, true and correct entries will be made in accordance
with generally accepted accounting principles and (b) maintain adequate
accounts and reserves for all taxes (including income taxes), depreciation,
depletion, obsolescence
35
and amortization of their properties and the properties of their
Subsidiaries, contingencies, and other reserves.
8.4. Financial Statements, Certificates and Information. HBOC and the
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of HBOC, the Borrower and their Subsidiaries
and the consolidating balance sheet of HBOC, the Borrower and their
Subsidiaries, each as at the end of such year, and the related
consolidated statement of income and consolidated statement of cash flow
and consolidating statement of income and consolidating statement of cash
flow for such year, each setting forth in comparative form the figures for
the previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with
generally accepted accounting principles, and certified without
qualification by Xxxxxx Xxxxxxxx LLP or by other independent certified
public accountants satisfactory to the Agent, together with a written
statement from such accountants to the effect that they have read the
relevant portions of this Credit Agreement necessary to deliver such
statement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event of
Default which relate to any issue or matters which, according to generally
accepted auditing standards, such accountants would generally examine and
issue such a statement, or, if such accountants shall have obtained
knowledge of any then existing Default or Event of Default they shall
disclose in such statement any such Default or Event of Default; provided
that such accountants shall not be liable to the Banks for failure to
obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of the
Borrower, copies of the unaudited consolidated balance sheet of HBOC, the
Borrower and their Subsidiaries and the unaudited consolidating balance
sheet of HBOC, the Borrower and their Subsidiaries, each as at the end of
such quarter, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statement of income
and consolidating statement of cash flow for the portion of the Borrower's
fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, together with a
certification by the principal financial or accounting officer of HBOC and
the Borrower that the information contained in such financial statements
fairly presents the financial position of HBOC, the Borrower and their
Subsidiaries on the date thereof (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
36
principal financial or accounting officer of the Borrower in substantially
the form of Exhibit C hereto (the "Compliance Certificate") and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in Section 10 and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the
Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed with the Securities and
Exchange Commission or sent to the stockholders of HBOC; and
(e) from time to time such other financial data and information
(including accountants, management letters) as the Agent or any Bank may
reasonably request.
8.5. Notices.
8.5.1. Defaults. HBOC and the Borrower will promptly upon
becoming aware thereof, notify the Agent and each of the Banks in writing
of the occurrence of any Default or Event of Default. If any Person shall
give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Credit
Agreement or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which HBOC, the Borrower or any of
their Subsidiaries is a party or obligor, whether as principal, guarantor,
surety or otherwise, HBOC and the Borrower shall forthwith give written
notice thereof to the Agent and each of the Banks, describing the notice
or action and the nature of the claimed default.
8.5.2. Environmental Events. HBOC and the Borrower will promptly
give notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that HBOC, the Borrower or any of their Subsidiaries
reports in writing or is reportable by such Person in writing (or for
which any written report supplemental to any oral report is made) to any
federal, state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental liability,
or any federal, state or local environmental agency or board, that has the
potential to materially affect the assets, liabilities, financial
conditions or operations of HBOC, the Borrower and their Subsidiaries,
taken as a whole.
8.5.3. Notice of Litigation and Judgments. HBOC and the Borrower
will, and will cause each of their Subsidiaries to, give notice to the
Agent and each of the Banks in writing within fifteen (15) days of
becoming aware of any litigation or proceedings threatened in writing or
any pending litigation and proceedings affecting HBOC, the Borrower or any
of their Subsidiaries or to which HBOC, the Borrower or any of
37
their Subsidiaries is or becomes a party involving an uninsured claim
against HBOC, the Borrower or any of their Subsidiaries that could
reasonably be expected to have a materially adverse effect on HBOC, the
Borrower and their Subsidiaries, taken as a whole, and stating the nature
and status of such litigation or proceedings. HBOC and the Borrower will,
and will cause each of their Subsidiaries to, give notice to the Agent and
each of the Banks, in writing, in form and detail satisfactory to the
Agent, at the earlier of (10) days (a) of the Borrower receiving notice
of, or (b) after the Borrower should have known of, any judgment not
covered by insurance, final or otherwise, against HBOC, the Borrower or
any of their Subsidiaries in an amount in excess of $10,000,000.
8.6. Corporate Existence; Maintenance of Properties. Each of HBOC and
the Borrower will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, rights and franchises
and those of their Subsidiaries. Each of HBOC and the Borrower (a) will
cause all of its material properties and those of its Subsidiaries used or
useful in the conduct of its business or the business of its Subsidiaries to
be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment, (b) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of HBOC and the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (c) will, and will cause each of
its Subsidiaries to, continue to engage primarily in the businesses now
conducted by them and in related businesses; provided that nothing in this
Section 8.6 shall prevent HBOC or the Borrower from discontinuing the
operation and maintenance of any of its properties or any of those of its
Subsidiaries if such discontinuance is, in the judgment of HBOC or the
Borrower, as the case may be, desirable in the conduct of its or their
business and that do not in the aggregate materially adversely affect the
business of HBOC, the Borrower and their Subsidiaries on a consolidated basis.
8.7. Insurance. Each of HBOC and the Borrower will, and will cause
each of its Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against such
casualties and contingencies as shall be in accordance with the general
practices of businesses engaged in similar activities in similar geographic
areas and in amounts, containing such terms, in such forms and for such
periods as may be reasonable and prudent.
8.8. Taxes. HBOC and the Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by
law become a lien or charge upon any of its property; provided that any such
tax, assessment, charge, levy or claim need not be paid if the validity or
amount thereof shall currently be contested in good faith by appropriate
proceedings and if HBOC, the Borrower or such Subsidiary shall have set aside
on its books adequate reserves with respect thereto; and provided further
that HBOC, the Borrower and each Subsidiary of the Borrower will
38
pay all such taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have attached as
security therefor.
8.9. Inspection of Properties and Books, etc.
8.9.1. General. HBOC and the Borrower shall permit the Agent,
through the Agent's other designated representatives, to visit and inspect
any of the properties of HBOC, the Borrower or any of their Subsidiaries,
to examine the books of account of HBOC, the Borrower and their
Subsidiaries (and, at the expense of the Agent and the Banks if no Default
or Event of Default has occurred or is continuing, to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts
of HBOC, the Borrower and their Subsidiaries with, and to be advised as to
the same by, its and their officers, all at such reasonable times and
intervals as the Agent or any Bank may reasonably request, provided,
however, if a Default or Event of Default has occurred and is continuing,
any of the Banks shall be permitted to visit and inspect the properties of
HBOC, the Borrower or any of their Subsidiaries in accordance with the
provisions of this Section 8.9.1.
8.9.2. Communications with Accountants. Each of HBOC and the
Borrower authorizes the Agent, when accompanied by the Borrower and, if
accompanied by the Borrower and the Agent, the Banks to communicate
directly with HBOC's and the Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent and
the Banks any and all financial statements and other supporting financial
documents and schedules including copies of any management letter with
respect to the business, financial condition and other affairs of HBOC and
the Borrower or any of their Subsidiaries.
8.10. Compliance with Laws, Contracts, Licenses, and Permits. Each of
HBOC and the Borrower will, and will cause each of its Subsidiaries to,
comply with (a) the applicable laws and regulations in all material respects
wherever its business is conducted, including all Environmental Laws, (b) the
provisions of its charter documents and by-laws, (c) all material agreements
and instruments by which it or any of its properties may be bound and (d) all
applicable decrees, orders, and judgments. If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of
any government shall become necessary or required in order that HBOC, the
Borrower or any of their Subsidiaries may fulfill any of its obligations
hereunder or any of the other Loan Documents to which HBOC, the Borrower or
such Subsidiary is a party, HBOC and the Borrower will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of HBOC, the Borrower or such Subsidiary to
obtain such authorization, consent, approval, permit or license and furnish
the Agent and the Banks with evidence thereof.
39
8.11. Employee Benefit Plans. HBOC and the Borrower will (a) promptly
upon filing the same with the Department of Labor or Internal Revenue Service
and upon the request of the Agent, furnish to the Agent a copy of the most
recent actuarial statement required to be submitted under Section 103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect
of each Guaranteed Pension Plan and (b) promptly upon receipt or dispatch,
furnish to the Agent any notice, report or demand sent or received in respect
of a Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063,
4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under
Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. Use of Proceeds. The Borrower will use the proceeds of the
Revolving Credit Loans for general corporate and working capital purposes.
The Borrower will obtain Letters of Credit solely for general corporate and
working capital purposes.
8.13. Further Assurances. HBOC and the Borrower will, and will cause
each of their Subsidiaries to, cooperate with the Banks and the Agent and
execute such further instruments and documents as the Banks or the Agent
shall reasonably request to carry out to their satisfaction the transactions
contemplated by this Credit Agreement and the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
HBOC and the Borrower covenant and agree that, so long as any Revolving
Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving
Credit Note is outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligations to issue any Letters
of Credit:
9.1. Restrictions on Indebtedness. Each of HBOC and the Borrower will
not, and will not permit any of its Subsidiaries to, create, incur, assume,
guarantee or become liable, contingently or otherwise (collectively, the
"Debt Incurrence"), with respect to any Indebtedness; provided, however, so
long as no Default or Event of Default has occurred and is continuing or
would result therefrom, HBOC and its Subsidiaries shall be permitted to
create, incur, assume, guarantee or become liable, contingently or otherwise,
with respect to any Indebtedness. If such Debt Incurrence is in connection
with an acquisition, the principal amount of such Debt Incurrence is greater
than or equal to $100,000,000 and there are Revolving Credit Loans
outstanding or Letters of Credit with an aggregate face amount in excess of
$10,000,000 outstanding at the time of the proposed Debt Incurrence, the
Borrower shall prior to such Debt Incurrence demonstrate to the satisfaction
of the Agent based on a pro forma Compliance Certificate covenant compliance
with Section 10 on a pro forma basis immediately prior to and after giving
effect to such Debt Incurrence on the assumption that such Debt Incurrence
occurred at the beginning of the covenant calculations period, and any
payments on such Indebtedness shall be included in the calculation of Total
Debt Service.
40
9.2. Restrictions on Liens. Each of HBOC and the Borrower will not,
and will not permit any of its Subsidiaries to, (a) create or incur or suffer
to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any kind upon any
of its property or assets of any character whether now owned or hereafter
acquired, or upon the income or profits therefrom; (b) transfer any of such
property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any
other obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more
than thirty (30) days after the same shall have been incurred any
Indebtedness or claim or demand against it that if unpaid might by law or
upon bankruptcy or insolvency, or otherwise, be given any priority whatsoever
over its general creditors; or (e) except with respect to sales of
Receivables to HBOC Capital or the assumption of credit risk on third party
leases through HBOC Capital, sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles, chattel paper or instruments,
with or without recourse without the Banks' prior written consent; provided
that HBOC, the Borrower and any Subsidiary of the Borrower may create or
incur or suffer to be created or incurred or to exist:
(i) liens in favor of HBOC or the Borrower on all or part of the
assets of Subsidiaries of HBOC or the Borrower securing Indebtedness owing
by Subsidiaries of HBOC or the Borrower to the Borrower;
(ii) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue;
(iii) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(iv) liens on properties in respect of judgments or awards, the
Indebtedness with respect to which is permitted by Section 9.1;
(v) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties in existence less than 120 days from
the date of creation thereof in respect of obligations not overdue;
(vi) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which HBOC, the Borrower or a Subsidiary of HBOC or
the Borrower is a party, and other minor liens or encumbrances none of
which in the opinion of HBOC or the Borrower interferes materially with
the use of the property affected in the ordinary conduct of the business
of HBOC, the Borrower and
41
their Subsidiaries, which defects do not individually or in the aggregate
have a materially adverse effect on the business of HBOC or the Borrower
individually or of HBOC, the Borrower and their Subsidiaries on a
consolidated basis;
(vii) liens existing on the date hereof and listed on Schedule 9.2
hereto;
(viii) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof to
secure purchase money Indebtedness permitted by Section 9.1, incurred in
connection with the acquisition of such property, which security
interests or mortgages cover only the real or personal property so
acquired; and
(ix) liens on assets of a new Subsidiary which is not party to
any Loan Document, which liens are in existence on the date of
acquisition of the stock or assets of such new Subsidiary and not created
in contemplation of such acquisition, and, if such Subsidiary is
thereafter merged with and HBOC, the Borrower or any other Subsidiary,
liens on assets of the survivor of such merger which existed on the date
of such merger.
9.3. Restrictions on Investments. Each of HBOC and the Borrower will
not, and will not permit any of its Subsidiaries to, make or permit to exist
or to remain outstanding any Investment except, so long as no Default or
Event of Default has occurred and is continuing or would exist as a result
thereof, Investments consisting of Investments made in connection with, and
pursuant to the terms of, HBOC's and the Borrower's Cash Investment Policy.
9.4. Distributions. HBOC will not make any Distributions or any other
payments to stockholders, provided, however, if no Default or Event of
Default has occurred or is continuing or would exist after giving effect
thereto, HBOC shall be permitted to make Distributions.
9.5. Merger, Consolidation and Disposition of Assets.
9.5.1. Mergers and Acquisitions. Neither HBOC nor the Borrower
will, and will not permit any of their Subsidiaries to, become a party to
any merger or consolidation, or agree to or effect any asset acquisition
or stock acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except (a) the merger
or consolidation of one or more of the Subsidiaries of the Borrower or
HBOC with and into the Borrower or HBOC, as the case may be; (b) the
merger or consolidation of two or more Subsidiaries of the Borrower or
HBOC; and (c) other asset or stock acquisitions where (i) if such
acquisition involves the merger of the Borrower or HBOC and any other
Person, as the case may be, HBOC or the Borrower, as the case may be,
is the surviving entity of any such acquisition and merger; (ii) no
Default or Event or Event of Default has
42
occurred or is continuing or would exist after giving effect thereto;
(iii) the Borrower has provided the Agent with prior written notice of
such acquisition; (iv) the Borrower has, (1) if the consideration for
such acquisition equals or exceeds $100,000,000 in cash or $200,000,000 in
stock or (2) assumed or incurred any Indebtedness in connection with such
acquisition in an aggregate amount equal to or greater than $100,000,000,
and there are any Revolving Credit Loans outstanding or Letters of Credit
with an aggregate face amount in excess of $10,000,000 outstanding at the
time of the proposed acquisition, demonstrated to the Agent based on a pro
forma Compliance Certificate covenant compliance with Section 10 on a pro
forma basis immediately prior to and after giving effect to each such
acquisition on the assumption that such acquisition occurred at the
beginning of the covenant calculations period; (v) any payments on
acquisition-related debt instruments shall be included in the calculation
of Total Debt Service; and (vi) any acquisition-related debt instruments
would not violate the restrictions on Indebtedness set forth in Section
9.1. If a pro forma Compliance Certificate is not required under clause
(iv) solely due to the fact that there are no Revolving Credit Loans or
Letters of Credit outstanding, the Borrower shall not thereafter request
a Revolving Credit Loan or Letter of Credit until either an actual
Compliance Certificate or a pro forma Compliance Certificate has been
delivered.
9.5.2. Disposition of Assets. Each of HBOC and the Borrower will
not, and will not permit any of its Subsidiaries to, become a party to or
agree to or effect any disposition of assets, provided, however, HBOC and
the Borrower shall be permitted to dispose of assets provided (a) no
Default or Event of Default has occurred and is continuing or would exist
as a result thereof; and (ii) the Borrower has provided the Agent with
prior written notice of any such material disposition; and in the case of
all dispositions of assets the aggregate maximum amount of all assets
disposed of during the term of this Credit Agreement shall not exceed an
amount equal to twenty percent (20%) of Consolidated Total Assets prior to
such dispositions.
9.6. Compliance with Environmental Laws. The Borrower will not, and
will not permit any of its Subsidiaries to do any of the following in any
manner that would violate in any material respect any Environmental Law or
bring any of the Real Estate in material violation of any Environmental Law,
(a) use any of the Real Estate or any portion thereof for the handling,
processing, storage or disposal of Hazardous Substances, (b) cause or permit
to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate, (d) conduct any activity at
any Real Estate or use any Real Estate in any manner so as to cause a release
(i.e. releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, leaching, disposing or dumping) or
threatened release of Hazardous Substances on, upon or into the Real Estate
or (e) otherwise conduct any activity at any Real Estate or use any Real
Estate in any
43
manner that would violate in any material respect any Environmental Law or
bring such Real Estate in material violation of any Environmental Law.
9.7. Employee Benefit Plans. Neither HBOC, the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for HBOC, the Borrower or any of their Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA,
whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of HBOC,
the Borrower or any of its Subsidiaries pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of
such Plans, disregarding for this purpose the benefit liabilities and
assets of any such Plan with assets in excess of benefit liabilities, by
more than the amount set forth in Section 7.15.3.
10. FINANCIAL COVENANTS OF THE BORROWER.
Each of HBOC and the Borrower covenants and agrees that, so long as any
Revolving Credit Loan, Unpaid Reimbursement Obligation, Letter of Credit or
Revolving Credit Note is outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or renew
any Letters of Credit:
10.1. Operating Cash Flow to Total Debt Service. HBOC and the Borrower
will not permit the ratio of Consolidated Operating Cash Flow to Consolidated
Total Debt Service for any fiscal quarter to be less than 3.75:1.00.
10.2. Leverage Ratio. Neither HBOC nor the Borrower will, at any time
during any fiscal quarter, permit the Leverage Ratio to exceed 1.00:1.00.
10.3. Minimum Tangible Net Worth. Neither HBOC nor the Borrower will
permit Consolidated Tangible Net Worth at the end of any fiscal quarter to be
less than the sum of (a) ninety percent (90%) of the Consolidated Tangible
Net Worth of HBOC and its Subsidiaries as of March 31, 1997 plus, on a
cumulative basis, (b) 75% of positive Consolidated Net Income (which
calculation shall include any noncash nonrecurring writedowns taken in
connection with any acquisition accruing after the Closing Date) for each
fiscal quarter subsequent to March 31, 1997, plus (c) 50%
44
of the proceeds of any sale by HBOC or any of its Subsidiaries of equity
securities issued by such Person or warrants or subscription rights for
equity securities issued by such Person after March 31, 1997; provided,
however, to the extent HBOC or its Subsidiaries issue any securities to be
paid as consideration for all or any portion of the purchase price of any
asset or stock acquired by HBOC or such Subsidiary (the "Equity
Consideration"), the proceeds of such Equity Consideration shall be excluded
from this subparagraph (c) to the extent such proceeds were used to purchase
assets which would not be included in the calculation of Consolidated
Tangible Net Worth.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and of the Agent to issue any initial Letters of Credit shall be subject to
the satisfaction of the following conditions precedent on or prior to the
date hereof:
11.1 Loan Documents. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of
the Banks. Each Bank shall have received a fully executed copy of each such
document.
11.2 Certified Copies of Charter Documents. Each of the Banks shall
have received from HBOC and the Borrower a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation documents as in
effect on such date of certification, and (b) its by-laws as in effect on
such date.
11.3 Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by HBOC and the Borrower of this Credit
Agreement and the other Loan Documents to which it is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory
to the Banks shall have been provided to each of the Banks.
11.4 Incumbency Certificate. Each of the Banks shall have received
from HBOC and the Borrower an incumbency certificate, dated as of the Closing
Date, signed by a duly authorized officer of HBOC and the Borrower, and
giving the name and bearing a specimen signature of each individual who shall
be authorized: (a) to sign, in the name and on behalf of each of HBOC and the
Borrower, each of the Loan Documents and Security Documents to which HBOC and
the Borrower is or is to become a party; (b) in the case of the Borrower, to
make Loan Requests and Conversion Requests and to apply for Letters of
Credit; and (c) to give notices and to take other action on its behalf under
the Loan Documents.
11.5. Certificates of Insurance. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of or
prior to the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms.
45
11.6 Solvency Certificate. Each of the Banks shall have received an
officer's certificate of HBOC and the Borrower dated as of the Closing Date
as to the solvency of HBOC, the Borrower and their Subsidiaries on a
consolidated basis following the consummation of the transactions
contemplated herein and in form and substance satisfactory to the Banks.
11.7 Opinion of Counsel. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent,
dated as of the Closing Date, in form and substance satisfactory to the Banks
and the Agent, from:
(a) internal counsel to the Borrower and HBOC as to
corporate matters; and
(b) external counsel to HBOC and the Borrower.
11.8. Payment of Fees. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the fee pursuant to Section 5.1 and the letter
referenced therein.
11.9 Disbursement Instructions. The Agent shall have received
disbursement instructions from the Borrower with respect to the proceeds of
the initial Revolving Credit Loan.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan and of
the Agent to issue, extend or renew any Letter of Credit, in each case
whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
12.1. Representations True; No Event of Default. Each of the
representations and warranties of any of HBOC, the Borrower and their
Subsidiaries contained in this Credit Agreement, the other Loan Documents or
in any document or instrument delivered pursuant to or in connection with
this Credit Agreement shall be true as of the date as of which they were made
and shall also be true at and as of the time of the making of such Loan or
the issuance, extension or renewal of any Letter of Credit, with the same
effect as if made at and as of that time (except to the extent of changes
resulting from transactions contemplated or permitted by this Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing. The Agent shall have received a certificate of
each of HBOC and the Borrower signed by an authorized officer of the Borrower
to such effect.
12.2. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such
Revolving Credit Loan
46
or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for
the Agent to issue, extend or renew such Letter of Credit.
12.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall reasonably require for the purpose of compliance with any
applicable regulations of the Comptroller of the Currency or the Board of
Governors of the Federal Reserve System.
12.4. Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be reasonably
satisfactory in substance and in form to the Banks and to the Agent and the
Agent's Special Counsel, and the Banks, the Agent and such counsel shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Agent or any Bank may reasonably request.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1 Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time
or both is required, then, prior to such notice or lapse of time, "Defaults")
shall occur:
(a) the Borrower shall fail to pay any principal of the Revolving
Credit Loans or any Reimbursement Obligation when the same shall become
due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(b) the Borrower shall fail to pay any interest on the Revolving
Credit Loans, the commitment fee, any Letter of Credit Fee, the Agent's
fee, or other sums due hereunder or under any of the other Loan
Documents, within (i) three (3) Business Days as to interest and (ii)
five (5) Business Days as to fees and other sums, of the date when the
same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed
for payment;
(c) HBOC, the Borrower or any of their Subsidiaries, as applicable
shall fail to comply with any of its covenants contained in Sections 8.1
(other than those specified in 13.1(a) and (b)), 8.5.1, 8.9, 8.12, 9.1 -
9.5 or 10;
(d) HBOC, the Borrower or any of any of their Subsidiaries shall
fail to perform any term, covenant or agreement contained in Sections
8.4 and 8.5.2, 8.5.3 and 8.5.4 for a period of which is the lesser of
(i) two (2) Business Days after written notice of such failure has been
given to the Borrower by the Agent or (ii) 10 days from the date of
noncompliance with such covenant;
47
(e) HBOC, the Borrower or any of their Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
Section 13.1) for thirty (30) days after written notice of such failure
has been given to the Borrower by the Agent;
(f) any representation or warranty of HBOC, the Borrower or any of
their Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant to
or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
(g) HBOC, the Borrower or any of their Subsidiaries shall fail to
pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases or Synthetic Leases in excess of $5,000,000 in the
aggregate, or fail to observe or perform any term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing
borrowed money or credit received or in respect of any Capitalized
Leases or Synthetic Leases for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof;
(h) HBOC, the Borrower or any of their Subsidiaries party to any
Loan Document shall make an assignment for the benefit of creditors, or
admit in writing its inability to pay or generally fail to pay its debts
as they mature or become due, or shall petition or apply for the
appointment of a trustee or other custodian, liquidator or receiver of
HBOC, the Borrower or any of their Subsidiaries party to any Loan
Document or of any substantial part of the assets of the Borrower or any
of its Subsidiaries party to any Loan Document or shall commence any
case or other proceeding relating to HBOC, the Borrower or any of their
Subsidiaries party to any Loan Document under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against HBOC, the Borrower or any of their Subsidiaries party
to any Loan Document and HBOC, the Borrower or any of their Subsidiaries
party to any Loan Document shall indicate its approval thereof, consent
thereto or acquiescence therein;
(i) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating HBOC, the Borrower or
any of their Subsidiaries party to any Loan Document bankrupt or
insolvent, or approving a petition in any such case or other proceeding,
or a decree or
48
order for relief is entered in respect of HBOC, the Borrower or any
Subsidiary party to any Loan Document of HBOC or the Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(j) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against HBOC, the Borrower or any of their Subsidiaries
that, with other outstanding final judgments, undischarged, against
HBOC, the Borrower or any of their Subsidiaries exceeds in the aggregate
$5,000,000;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof
or with the express prior written agreement, consent or approval of the
Banks, or any action at law, suit or in equity or other legal proceeding
to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of HBOC, the Borrower or any of their
Subsidiaries party thereto or any of their respective stockholders, or
any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance
with the terms thereof;
(l) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably
could be expected to result in liability of HBOC, the Borrower or any of
their Subsidiaries to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $5,000,000 and such event in the
circumstances occurring reasonably could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee
to administer such Guaranteed Pension Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan;
or the PBGC shall have instituted proceedings to terminate such
Guaranteed Pension Plan;
(m) HBOC, the Borrower or any of their Subsidiaries shall be
enjoined, restrained or in any way prevented by the order of any court
or any administrative or regulatory agency from conducting any material
part of its business and such order shall continue in effect for more
than thirty (30) days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any assets, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than
fifteen (15) consecutive days, the cessation or substantial curtailment
of revenue
49
producing activities at any facility of the Borrower or any of its
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and could reasonably be expected to have a
material adverse effect on the business or financial condition of HBOC,
the Borrower and their Subsidiaries, taken as a whole;
(o) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired
by HBOC, the Borrower or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew could reasonably be expected
to have a material adverse effect on the business or financial condition
of HBOC, the Borrower and their Subsidiaries, taken as a whole;
(p) HBOC, the Borrower or any of their Subsidiaries shall be
indicted for a state or federal crime, or any civil or criminal action
shall otherwise have been brought or threatened against HBOC, the
Borrower or any of their Subsidiaries, a punishment for which in any
such case could include the forfeiture of any assets of the Borrower or
such Subsidiary having a fair market value in excess of $5,000,000; or
(q) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired after the Closing Date beneficial ownership (within the meaning
of Rule 13d-3 promulgated by the Securities and Exchange Commission
under said Act) of fifty-one percent (51%) or more of the outstanding
shares of common stock of HBOC or the Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
shall upon the request of the Majority Banks by notice in writing to the
Borrower declare all amounts owing with respect to this Credit Agreement, the
Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; provided that in
the event of any Event of Default specified in Sections 13.1(h) or 13.1(i),
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Agent or any Bank.
13.2 Termination of Commitments. If any one or more of the
Events of Default specified in Section 13.1(h) or Section 13.1(i) shall
occur, any unused portion of the credit hereunder shall forthwith terminate
and each of the Banks shall be relieved of all further obligations to make
Loans to the Borrower and the Agent shall be relieved of all further
obligations to issue, extend or renew Letters of Credit. If any other Event
of Default shall have occurred and be continuing, or if on any Drawdown Date
or other date for issuing, extending or renewing any Letter of Credit the
conditions precedent to the making of the Revolving Credit Loans to be made
on such Drawdown Date or (as the case may be) to issuing, extending or
renewing such
50
Letter of Credit on such other date are not satisfied, the Agent shall upon
the request of the Majority Banks by notice to the Borrower, terminate the
unused portion of the credit hereunder, and upon such notice being given such
unused portion of the credit hereunder shall terminate immediately and each
of the Banks shall be relieved of all further obligations to make Revolving
Credit Loans and the Agent shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. No termination of the credit
hereunder shall relieve HBOC, the Borrower or any of their Subsidiaries of
any of the Obligations.
13.3. Remedies. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section
13.1, each Bank, if owed any amount with respect to the Revolving Credit
Loans or the Reimbursement Obligations, may, with the consent of the Majority
Banks but not otherwise, proceed to protect and enforce its rights by suit in
equity, action at law or other appropriate proceeding, whether for the
specific performance of any covenant or agreement contained in this Credit
Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations to such Bank are evidenced, including as permitted by
applicable law the obtaining of the ex parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of such
Bank. No remedy herein conferred upon any Bank or the Agent or the holder of
any Revolving Credit Note or purchaser of any Letter of Credit Participation
is intended to be exclusive of any other remedy and each and every remedy
shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
any other provision of law.
13.4. Distribution of Proceeds. In the event that, following
the occurrence or during the continuance of any Default or Event of Default,
the Agent or any Bank, as the case may be, receives any monies in connection
with the enforcement of any of its rights under any of the Loan Documents,
such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs,
expenses, disbursements and losses which shall have been incurred or
sustained by the Agent in connection with the collection of such monies
by the Agent, for the exercise, protection or enforcement by the Agent
of all or any of the rights, remedies, powers and privileges of the
Agent under this Credit Agreement or any of the other Loan Documents or
in respect of the Collateral or in support of any provision of adequate
indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Banks may determine; provided, however, that
distributions in
51
respect of such obligations shall be made (i) pari passu among
Obligations with respect to the Agent's fee payable pursuant to Section
5.2 and all other Obligations and (ii) Obligations owing to the Banks
with respect to each type of Obligation such as interest, principal,
fees and expenses, shall be made among the Banks pro rata; and provided,
further, that the Agent may in its discretion make proper allowance to
take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent
of all of the Obligations, to the payment of any obligations required to
be paid pursuant to Section 9-504(1)(c) of the Uniform Commercial Code
of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrower
or to such other Persons as are entitled thereto.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any
of the Banks to the Borrower and any securities or other property of the
Borrower in the possession of such Bank may be applied to or set off by such
Bank against the payment of Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, of the Borrower to such Bank. Each of the
Banks agrees with each other Bank that (a) if an amount to be set off is to
be applied to Indebtedness of the Borrower to such Bank, other than
Indebtedness evidenced by the Revolving Credit Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, such amount shall
be applied ratably to such other Indebtedness and to the Indebtedness
evidenced by all such Revolving Credit Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such
Bank shall receive from the Borrower, whether by voluntary payment, exercise
of the right of setoff, counterclaim, cross action, enforcement of the claim
evidenced by the Revolving Credit Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the
Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or
otherwise, and shall retain and apply to the payment of the Revolving Credit
Note or Revolving Credit Notes held by, or Reimbursement Obligations owed to,
such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Revolving Credit Notes held
by, and Reimbursement Obligations owed to, all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to
such excess, either by way of distribution, pro tanto assignment of claims,
subrogation or otherwise as shall result in each Bank receiving in respect of
the Revolving Credit Notes held by it or Reimbursement Obligations owed it,
its proportionate payment as contemplated by this Credit Agreement; provided
that if all or any part of such excess payment is
52
thereafter recovered from such Bank, such disposition and arrangements shall
be rescinded and the amount restored to the extent of such recovery, but
without interest.
15. THE AGENT.
15.1 Authorization.
(a) The Agent is authorized to take such action on behalf of each
of the Banks and to exercise all such powers as are hereunder and under
any of the other Loan Documents and any related documents delegated to
the Agent, together with such powers as are reasonably incident thereto,
provided that no duties or responsibilities not expressly assumed herein
or therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the
Banks. Nothing contained in this Credit Agreement nor the other Loan
Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1 of
the Uniform Commercial Code, for purposes of actions for the benefit of
the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any
of the Obligations, all for the benefit of the Banks and the Agent.
15.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through affiliates, employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Agent may utilize the services of such Persons as the
Agent in its sole discretion may reasonably determine, and all reasonable
fees and expenses of any such Persons shall be paid by the Borrower.
15.3 No Liability. Neither the Agent nor any of its affiliates,
shareholders, directors, officers or employees nor any other Person assisting
them in their duties
53
nor any agent or employee thereof, shall be liable for any waiver, consent or
approval given or any action taken, or omitted to be taken, in good faith by
it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of
any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, the Letters of Credit, any of the other Loan
Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Revolving Credit Notes, or for the
value of any such collateral security or for the validity, enforceability or
collectability of any such amounts owing with respect to the Revolving Credit
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or
instrument hereafter furnished to it by or on behalf of HBOC, the Borrower or
any of their Subsidiaries, or be bound to ascertain or inquire as to the
performance or observance of any of the terms, conditions, covenants or
agreements herein or in any instrument at any time constituting, or intended
to constitute, collateral security for the Revolving Credit Notes or to
inspect any of the properties, books or records of HBOC, the Borrower or any
of their Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or any
holder of any of the Revolving Credit Notes shall have been duly authorized
or is true, accurate and complete. The Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the credit worthiness or
financial conditions of HBOC, the Borrower or any of their Subsidiaries.
Each Bank acknowledges that it has, independently and without reliance upon
the Agent or any other Bank, and based upon such information and documents as
it has deemed appropriate, made its own credit analysis and decision to enter
into this Credit Agreement.
15.5. Payments.
15.5.1. Payments to Agent. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
15.5.2. Distribution by Agent. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent
54
jurisdiction. If a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Agent is to be repaid, each
Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over the same in such manner and to such Persons
as shall be determined by such court.
15.5.3. Delinquent Banks. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
pro rata share of any Revolving Credit Loan or to purchase any Letter of
Credit Participation or (b) to comply with the provisions of Section 14
with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by
setoff or otherwise, is in excess of its pro rata share of such payments
due and payable to all of the Banks, in each case as, when and to the
full extent required by the provisions of this Credit Agreement, shall
be deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Revolving
Credit Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding
Revolving Credit Loans and Unpaid Reimbursement Obligations. The
Delinquent Bank hereby authorizes the Agent to distribute such payments
to the nondelinquent Banks in proportion to their respective pro rata
shares of all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application
of the assigned payments to all outstanding Revolving Credit Loans and
Unpaid Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective pro rata shares of all outstanding Revolving Credit Loans and
Unpaid Reimbursement Obligations have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
15.6. Holders of Revolving Credit Notes. The Agent may deem and treat
the payee of any Revolving Credit Note or the purchaser of any Letter of
Credit Participation as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a
different name by such payee or by a subsequent holder, assignee or
transferee.
15.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent has not been reimbursed
by the Borrower as required by Section 16), and liabilities of every nature
and character arising
55
out of or related to this Credit Agreement, the Revolving Credit Notes, or
any of the other Loan Documents or the transactions contemplated or evidenced
hereby or thereby, or the Agent's actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly caused by the
Agent's willful misconduct or gross negligence.
15.8. Agent as Bank. In its individual capacity, BKB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Revolving Credit Loans made by it, and as the holder of
any of the Revolving Credit Notes and as the purchaser of any Letter of
Credit Participations, as it would have were it not also the Agent.
15.9 Resignation. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon
any such resignation, the Majority Banks shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty (30) days after
the retiring Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Banks, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Credit Agreement and the other Loan
Documents shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
15.10. Notification of Defaults and Events of Default. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 16.10, or upon learning of
the existence of a Default or an Event of Default, it shall promptly notify
the other Banks of the existence of such Default or Event of Default.
16 EXPENSES.
The Borrower agrees to pay (a) the reasonable costs incurred by the
Agent of producing and reproducing this Credit Agreement, the other Loan
Documents and the other agreements and instruments mentioned herein, (b) any
taxes (including any interest and penalties in respect thereto) payable by
the Agent or any of the Banks (other than taxes based upon the Agent's or any
Bank's net income) on or with respect to the transactions contemplated by
this Credit Agreement (the Borrower hereby agreeing to indemnify the Agent
and each Bank with respect thereto), (c) the reasonable fees, expenses and
disbursements of the Agent's Special
56
Counsel or any local counsel to the Agent incurred in connection with the
preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein, each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
reasonable fees, expenses and disbursements of the Agent incurred by the
Agent in connection with the preparation, administration or interpretation of
the Loan Documents and other instruments mentioned herein; (e) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys'
fees and costs, which attorneys may be employees of any Bank or the Agent,
and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against HBOC, the Borrower or any of their Subsidiaries or
the administration thereof after the occurrence of a Default or Event of
Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Bank's or the Agent's
relationship with HBOC, the Borrower or any of their Subsidiaries and (f) all
reasonable fees, expenses and disbursements of the Agent incurred in
connection with UCC searches made prior to the Closing Date. The covenants
of this Section 16. shall survive payment or satisfaction of all other
Obligations.
17. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent, its
affiliates and the Banks from and against any and all claims, actions and
suits whether groundless or otherwise, and from and against any and all
liabilities, losses, damages and expenses of every nature and character
arising out of this Credit Agreement or any of the other Loan Documents or
the transactions contemplated hereby including, without limitation, (a) any
actual or proposed use by the Borrower or any of their Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit, (b) HBOC,
the Borrower or any of their Subsidiaries entering into or performing this
Credit Agreement or any of the other Loan Documents or (c) with respect to
HBOC, the Borrower and their Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the presence, disposal,
escape, seepage, leakage, spillage, discharge, emission, release or
threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to, claims with respect to
wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of
counsel and allocated costs of internal counsel incurred in connection with
any such investigation, litigation or other proceeding. The Borrower shall
not be required to indemnify the Agent or any Bank for any loss or damage
arising from the gross negligence or willful misconduct of such party seeking
indemnification. In litigation, or the preparation therefor, the Banks and
the Agent shall be entitled to select their own counsel and, in addition to
the foregoing indemnity, the Borrower agrees to pay promptly the reasonable
fees and expenses of such counsel. If, and to the extent that the
obligations of the Borrower under this Section 18 are unenforceable for any
reason, the Borrower agrees to make the
57
maximum contribution to the payment in satisfaction of such obligations which
is permissible under applicable law. The covenants contained in this Section
18 shall survive payment or satisfaction in full of all other Obligations.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of HBOC, the Borrower or
any of their Subsidiaries pursuant hereto shall be deemed to have been relied
upon by the Banks and the Agent, notwithstanding any investigation heretofore
or hereafter made by any of them, and shall survive the making by the Banks
of any of the Revolving Credit Loans and the issuance, extension or renewal
of any Letters of Credit, as herein contemplated, and shall continue in full
force and effect so long as any Letter of Credit or any amount due under this
Credit Agreement or the Revolving Credit Notes or any of the other Loan
Documents remains outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in
any certificate or other paper delivered to any Bank or the Agent at any time
by or on behalf HBOC, of the Borrower or any of their Subsidiaries pursuant
hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by HBOC, the Borrower or such
Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of
its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Revolving Credit Loans at the time owing to it, the Revolving
Credit Notes held by it and its participating interest in the risk relating
to any Letters of Credit); provided that (i) each of the Agent and the
Borrower (unless a Default or an Event of Default has occurred and is
continuing) shall have given its prior written consent to such assignment,
which consent will not be unreasonably withheld, provided, however, if such
Bank assigns to its affiliate, no consent is required, (ii) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (iii)
each assignment shall be in an amount equal to $5,000,000 or a whole multiple
of $1,000,000 in excess thereof and (iv) the parties to such assignment shall
execute and deliver to the Agent, for recording in the Register (as
hereinafter defined), an Assignment and Acceptance, substantially in the form
of Exhibit D hereto (an "Assignment and Acceptance"), together with any
Revolving Credit Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall
58
be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder, and (ii) the
assigning Bank shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in Section 19.3, be
released from its obligations under this Credit Agreement.
19.2. Certain Representations and Warranties; Limitations; Covenants.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
HBOC, the Borrower and their Subsidiaries or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the
performance or observance by HBOC, the Borrower and their Subsidiaries
or any other Person primarily or secondarily liable in respect of any of
the Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in Section 7.4 and Section 8.4 and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and
Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
59
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this
Credit Agreement and the other Loan Documents as are delegated to the
Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro
rata share of Letter of Credit Fees in respect of outstanding Letters of
Credit.
19.3. Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the
Commitment Percentage of, and principal amount of the Revolving Credit Loans
owing to and Letter of Credit Participations purchased by, the Banks from
time to time. The entries in the Register shall be conclusive, in the absence
of manifest error, and the Borrower, the Agent and the Banks may treat each
Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and the Banks at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the
assigning Bank agrees to pay to the Agent a registration fee in the sum of
$3,000, provided, however, if such Bank assigns to its affiliate, no
registration fee is required.
19.4 New Revolving Credit Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record
the information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order
of such Eligible Assignee in an amount equal to the amount assumed by such
Eligible Assignee pursuant to such Assignment and Acceptance and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Bank in an amount equal
to the amount retained by it hereunder. Such new Revolving Credit Notes
shall provide that they are replacements for the surrendered Revolving Credit
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Revolving Credit Notes, shall be dated
the effective date of such in Assignment and Acceptance and shall otherwise
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be substantially the form of the assigned Revolving Credit Notes. Within
five (5) days of issuance of any new Revolving Credit Notes pursuant to this
Section 19.4, the Borrower shall deliver an opinion of counsel, addressed to
the Banks and the Agent, relating to the due authorization, execution and
delivery of such new Revolving Credit Notes and the legality, validity and
binding effect thereof, in form and substance satisfactory to the Banks. The
surrendered Revolving Credit Notes shall be cancelled and returned to the
Borrower.
19.5. Participations. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents;
provided that (a) each such participation shall be in an amount of not less
than $5,000,000, (b) any such sale or participation shall not affect the
rights and duties of the selling Bank hereunder to the Borrower and (c) the
only rights granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Loan
Documents shall be the rights to approve waivers, amendments or modifications
that would reduce the principal of or the interest rate on any Revolving
Credit Loans, extend the term or increase the amount of the Commitment of
such Bank as it relates to such participant, reduce the amount of any
commitment fees or Letter of Credit Fees to which such participant is
entitled or extend any regularly scheduled payment date for principal or
interest.
19.6. Disclosure. HBOC and the Borrower agrees any Bank or its
affiliate may disclose information obtained by such Bank pursuant to this
Credit Agreement to assignees or participants and potential assignees or
participants hereunder in accordance with and subject to the provisions of
Section 29.
19.7. Assignee or Participant Affiliated with the Borrower. If any
assignee Bank is an Affiliate of HBOC or the Borrower, then any such assignee
Bank shall have no right to vote as a Bank hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Agent pursuant to Section
13.1 or Section 13.2, and the determination of the Majority Banks shall for
all purposes of this Agreement and the other Loan Documents be made without
regard to such assignee Bank's interest in any of the Revolving Credit Loans.
If any Bank sells a participating interest in any of the Revolving Credit
Loans or Reimbursement Obligations to a participant, and such participant is
HBOC, the Borrower or an Affiliate of HBOC or the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or
modifications to any of the Loan Documents or for purposes of making requests
to the Agent pursuant to Section 13.1 or Section 13.2 to the extent that such
participation is beneficially owned by HBOC or the Borrower or any Affiliate
of HBOC or the Borrower, and the determination of the Majority Banks shall
for all purposes of this Agreement and
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the other Loan Documents be made without regard to the interest of such
transferor Bank in the Revolving Credit Loans to the extent of such
participation.
19.8 Miscellaneous Assignment Provisions. Any assigning Bank shall
retain its rights to be indemnified pursuant to Section 16 with respect to
any claims or actions arising prior to the date of such assignment. If any
assignee Bank is not incorporated under the laws of the United States of
America or any state thereof, it shall, prior to the date on which any
interest or fees are payable hereunder or under any of the other Loan
Documents for its account, deliver to the Borrower and the Agent
certification as to its exemption from deduction or withholding of any United
States federal income taxes. If any Reference Bank transfers all of its
interest, rights and obligations under this Credit Agreement, the Agent
shall, in consultation with the Borrower and with the consent of the Borrower
and the Majority Banks, appoint another Bank to act as a Reference Bank
hereunder. Anything contained in this Section 19 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion
of its Revolving Credit Notes) to any of the twelve Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section 341.
No such pledge or the enforcement thereof shall release the pledgor Bank from
its obligations hereunder or under any of the other Loan Documents.
19.9. Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to
this Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent
by overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to HBOC or the Borrower, at 000 Xxxxxxxxx Xxxxxx Xxxxx,
Xxxxxxx, XX 00000, Attention: Xxx Xxxxxxxxxx, Chief Financial Officer,
or at such other address for notice as the Borrower shall last have
furnished in writing to the Person giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, 00-00-00, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Xxx X. Massimo, Vice President, or
such other address for notice as the Agent shall last have furnished in
writing to the Person giving the notice; and
62
(c) if to any Bank, at such Bank's address set forth on Schedule 1
hereto, or such other address for notice as such Bank shall have last
furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand, overnight courier
or facsimile to a responsible officer of the party to which it is directed,
at the time of the receipt thereof by such officer or the sending of such
facsimile and (b) if sent by registered or certified first-class mail,
postage prepaid, on the third Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
HBOC AND THE BORROWER AGREE THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF
THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENT TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON HBOC AND THE BORROWER BY MAIL AT THE ADDRESS
SPECIFIED IN Section 20. HBOC AND THE BORROWER HEREBY WAIVE ANY OBJECTION
THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH
COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of
which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement
it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
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24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit
Agreement nor any term hereof may be changed, waived, discharged or
terminated, except as provided in Section 26.
25. WAIVER OF JURY TRIAL.
The Agent, the Banks, HBOC and the Borrower hereby waive their right to
a jury trial with respect to any action or claim arising out of any dispute
in connection with this Credit Agreement, the Revolving Credit Notes or any
of the other Loan Documents, any rights or obligations hereunder or
thereunder or the performance of which rights and obligations. Except as
prohibited by law, each of the Agent, the Banks, HBOC and the Borrower hereby
waives any right it may have to claim or recover in any litigation referred
to in the preceding sentence any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. Each of the Agent, the Banks, HBOC and the Borrower (a) certifies
that no representative, agent or attorney of any other party hereto has
represented, expressly or otherwise, that any other party hereto would not,
in the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the other parties have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by all of the Banks may be given, and any term of this Credit
Agreement, the other Loan Documents or any other instrument related hereto or
mentioned herein may be amended, and the performance or observance by HBOC,
the Borrower or any of their Subsidiaries of any terms of this Credit
Agreement, the other Loan Documents or such other instrument or the
continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrower and
the written consent of the Majority Banks. Notwithstanding the foregoing, the
rate of interest on the Revolving Credit Notes (other than interest accruing
pursuant to Section 5.11.2 following the effective date of any waiver by the
Majority Banks of the Default or Event of Default relating thereto), the term
of the Revolving Credit Notes, the amount of the Commitments of the Banks,
and the amount of commitment fee or Letter of Credit Fees hereunder may not
be changed without the written consent of the Borrower and the written
consent of each Bank affected thereby; the definition of Majority Banks may
not be amended without the written consent of all of the Banks; and the
amount of the Agent's Fee or any Letter
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of Credit Fees payable for the Agent's account and Section 15 may not be
amended without the written consent of the Agent. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent
or any Bank in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon HBOC or the
Borrower shall entitle HBOC or the Borrower to other or further notice or
demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or
in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction,
and shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Credit Agreement in
any jurisdiction.
28. TRANSITIONAL ARRANGEMENTS.
28.1. Original Credit Agreement Superseded. This Credit Agreement
shall on the Closing Date supersede the Original Credit Agreement in its
entirety, except as provided in this Section 28. On the Closing Date, the
rights and obligations of the parties evidenced by the Original Credit
Agreement shall be evidenced by the Credit Agreement and other Loan
Documents, the "Revolving Credit Loans" as defined in the Original Credit
Agreement shall be Revolving Credit Loans as defined herein.
28.2. Return and Cancellation of Revolving Credit Notes. As soon as
reasonably practicable after its receipt of its Revolving Credit Note
hereunder on the Closing Date, each of the Banks will promptly return to the
Borrower, marked "Substituted" or "Cancelled", as the case may be, any notes
of the Borrower held by the Banks pursuant to the Original Credit Agreement.
28.3 Interest and Fees Under Superseded Agreement. All interest and
fees and expenses, if any, owing or accruing under or in respect of the
Original Credit Agreement through the Closing Date shall be calculated as of
the Closing Date (prorated in the case of any fractional periods), and shall
be paid in accordance with the method, and on the dates, specified in the
Original Credit Agreement, as if the Original Credit Agreement were still in
effect. Commencing on the Closing Date, the commitment fees shall be payable
by the Borrower to the Agent for the account of the Banks in accordance with
Section 2.2.
29. CONFIDENTIALITY. Each Bank agrees to exercise reasonable efforts to
keep any information delivered or made available by HBOC or the Borrower to
it confidential from anyone other than persons employed or retained by such
Bank, including legal counsel, who are or are expected to become engaged in
evaluating, approving, structuring or administering the Revolving Credit
Loans; provided,
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however that nothing herein shall prevent any Bank from disclosing such
information (a) to its affiliates or any other Bank, (b) upon the order of
any court or administrative agency, (c) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (d) which
has been publicly disclosed by or on behalf of HBOC or the Borrower, (e) to
the extent reasonably required in connection with any litigation to which the
Agent, any bank or their respective affiliates may be a party, (f) to the
extent reasonably required in connection with any audits or accountings and
(g) to any actual or proposed participant, assignee or other transferee of
all or part of its rights hereunder which has agreed in writing to be bound
by the provisions of this Section 29; provided, that, should disclosure of
any such confidential information be required by virtue of either clause (b)
or (c) of the immediately preceding sentence, any relevant Bank shall
promptly notify HBOC and the Borrower as to allow HBOC and the Borrower to
seek a protective order or to take any other appropriate action; provided,
further, that, no Bank shall be required to delay compliance with any
directive to disclose any such information so as to allow HBOC and the
Borrower to effect any such action.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Revolving Credit Agreement as a sealed instrument as of the date first
set forth above.
HBO & COMPANY OF GEORGIA
By: ------------------------------------
Name:
Title:
HBO & COMPANY
By: ------------------------------------
Name:
Title:
BANKBOSTON, N.A., individually and
as Agent
By: ------------------------------------
Name:
Title:
NATIONSBANK OF TEXAS, N.A.
By: ------------------------------------
Name:
Title:
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