EXHIBIT 2.1
CREDIT AGREEMENT
Dated as of May 14, 2004
among
ODYSSEY HEALTHCARE OPERATING A, LP,
ODYSSEY HEALTHCARE OPERATING B, LP, and
HOSPICE OF THE PALM COAST, INC.
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
GECC CAPITAL MARKETS GROUP, INC.,
as Lead Arranger
TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT.......................................................................... 2
1.1. Credit Facilities.......................................................................... 2
1.2. Letters of Credit.......................................................................... 4
1.3. Prepayments................................................................................ 4
1.4. Use of Proceeds............................................................................ 6
1.5. Interest and Applicable Margins............................................................ 6
1.6. [Intentionally Omitted].................................................................... 8
1.7. [Intentionally Omitted].................................................................... 8
1.8. Cash Management Systems.................................................................... 8
1.9. Fees....................................................................................... 8
1.10. Receipt of Payments........................................................................ 8
1.11. Application and Allocation of Payments..................................................... 9
1.12. Loan Account and Accounting................................................................ 9
1.13. Indemnity.................................................................................. 10
1.14. Access..................................................................................... 11
1.15. Taxes...................................................................................... 12
1.16. Capital Adequacy; Increased Costs; Illegality.............................................. 13
1.17. Single Loan; Joint and Several Obligations................................................. 14
2. CONDITIONS PRECEDENT................................................................................ 14
2.1. Conditions to the Initial Loans............................................................ 14
2.2. Further Conditions to Each Loan............................................................ 15
3. REPRESENTATIONS AND WARRANTIES...................................................................... 16
3.1. Existence; Compliance with Law............................................................. 16
3.2. Executive Offices, Collateral Locations, FEIN.............................................. 17
3.3. Power, Authorization, Enforceable Obligations.............................................. 17
3.4. Financial Statements and Projections....................................................... 17
3.5. Material Adverse Effect.................................................................... 18
3.6. Ownership of Property; Liens............................................................... 18
3.7. Labor Matters.............................................................................. 19
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness.................. 20
3.9. Government Regulation...................................................................... 20
3.10. Margin Regulations......................................................................... 20
3.11. Taxes...................................................................................... 21
3.12. ERISA...................................................................................... 21
3.13. No Litigation.............................................................................. 22
3.14. Brokers.................................................................................... 22
3.15. Intellectual Property...................................................................... 22
3.16. Full Disclosure............................................................................ 23
3.17. Environmental Matters...................................................................... 23
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3.18. Insurance.................................................................................. 24
3.19. Deposit and Disbursement Accounts.......................................................... 24
3.20. [Intentionally Omitted].................................................................... 24
3.21. [Intentionally Omitted].................................................................... 24
3.22. Agreements and Other Documents............................................................. 24
3.23. Solvency................................................................................... 25
3.24. Compliance With Health Care Laws........................................................... 25
3.25. HIPAA Compliance........................................................................... 26
4. FINANCIAL STATEMENTS AND INFORMATION................................................................ 27
4.1. Reports and Notices........................................................................ 27
4.2. Communication with Accountants............................................................. 27
5. AFFIRMATIVE COVENANTS............................................................................... 27
5.1. Maintenance of Existence and Conduct of Business........................................... 27
5.2. Payment of Charges......................................................................... 27
5.3. Books and Records.......................................................................... 28
5.4. Insurance; Damage to or Destruction of Collateral.......................................... 28
5.5. Compliance with Laws....................................................................... 30
5.6. Supplemental Disclosure.................................................................... 30
5.7. Intellectual Property...................................................................... 30
5.8. Environmental Matters...................................................................... 30
5.9. Lease Performance and Real Estate Purchases................................................ 31
5.10. Right of First Refusal to Refinance........................................................ 31
5.11. Further Assurances......................................................................... 32
6. NEGATIVE COVENANTS.................................................................................. 32
6.1. Mergers, Subsidiaries, Etc................................................................. 32
6.2. Investments; Loans and Advances............................................................ 35
6.3. Indebtedness............................................................................... 35
6.4. Employee Loans and Affiliate Transactions.................................................. 36
6.5. Capital Structure and Business............................................................. 36
6.6. Guaranteed Indebtedness.................................................................... 36
6.7. Liens...................................................................................... 37
6.8. Sale of Stock and Assets................................................................... 37
6.9. ERISA...................................................................................... 37
6.10. Financial Covenants........................................................................ 38
6.11. Hazardous Materials........................................................................ 38
6.12. Sale-Leasebacks............................................................................ 38
6.13. Cancellation of Indebtedness............................................................... 38
6.14. Restricted Payments........................................................................ 38
6.15. Change of Corporate Name or Location; Change of Fiscal Year................................ 38
6.16. No Impairment of Intercompany Transfers.................................................... 39
6.17. No Speculative Transactions................................................................ 39
6.18. Leases; Real Estate Purchases.............................................................. 39
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7. TERM................................................................................................ 39
7.1.. Termination................................................................................ 39
7.2.. Survival of Obligations Upon Termination of Financing Arrangements......................... 39
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.............................................................. 40
8.1.. Events of Default.......................................................................... 40
8.2.. Remedies................................................................................... 42
8.3.. Waivers by Credit Parties.................................................................. 42
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT................................................. 43
9.1.. Assignment and Participations.............................................................. 43
9.2.. Appointment of Agent....................................................................... 45
9.3.. Agent's Reliance, Etc...................................................................... 46
9.4.. GE Capital and Affiliates.................................................................. 47
9.5.. Lender Credit Decision..................................................................... 47
9.6.. Indemnification............................................................................ 47
9.7.. Successor Agent............................................................................ 48
9.8.. Setoff and Sharing of Payments............................................................. 48
9.9.. Advances; Payments; Non-Funding Lenders; Information; Actions in Concert................... 49
10. SUCCESSORS AND ASSIGNS.............................................................................. 51
10.1. Successors and Assigns..................................................................... 51
11. MISCELLANEOUS....................................................................................... 52
11.1. Complete Agreement; Modification of Agreement.............................................. 52
11.2. Amendments and Waivers..................................................................... 52
11.3. Fees and Expenses.......................................................................... 54
11.4. No Waiver.................................................................................. 55
11.5. Remedies................................................................................... 55
11.6. Severability............................................................................... 56
11.7. Conflict of Terms.......................................................................... 56
11.8. Confidentiality............................................................................ 56
11.9. GOVERNING LAW.............................................................................. 57
11.10. Notices.................................................................................... 58
11.11. Section Titles............................................................................. 58
11.12. Counterparts............................................................................... 58
11.13. WAIVER OF JURY TRIAL....................................................................... 58
11.14. Press Releases and Related Matters......................................................... 59
11.15. Reinstatement.............................................................................. 59
11.16. Advice of Counsel.......................................................................... 59
11.17. No Strict Construction..................................................................... 60
12. CROSS-GUARANTY...................................................................................... 60
12.1. Cross-Guaranty............................................................................. 60
12.2. Waivers by Borrowers....................................................................... 60
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12.3. Benefit of Guaranty........................................................................ 61
12.4. Subordination of Subrogation, Etc.......................................................... 61
12.5. Election of Remedies....................................................................... 61
12.6. Limitation................................................................................. 62
12.7. Contribution with Respect to Guaranty Obligations.......................................... 62
12.8. Liability Cumulative....................................................................... 63
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Closing Checklist
Annex E (Section 4.1(a)) - Financial Statements and Projections -Reporting
Annex F (Section 6.10) - Financial Covenants
Annex G (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex H (Section 11.10) - Notice Addresses
Annex I (from Annex A-
Commitments definition) - Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices; Collateral Locations; FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of May 14, 2004 among ODYSSEY
HEALTHCARE OPERATING A, LP, a Delaware limited partnership ("OpCoA"), ODYSSEY
HEALTHCARE OPERATING B, LP, a Delaware limited partnership ("OpCoB"), HOSPICE OF
THE PALM COAST,INC., a Florida not for profit corporation ("Palm Coast"; OpCoA,
OpCoB and Palm Coast being referred to together as the "Borrowers" and each
individually as a "Borrower"), the other Credit Parties signatory hereto;
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders; and
the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Borrowers have requested that Lenders extend a revolving
credit facility to Borrowers of up to Forty Million Dollars ($40,000,000) in the
aggregate, subject to increase on the terms set forth herein, to provide (a)
working capital financing for Borrowers, (b) funds for Permitted Acquisitions
and other general corporate purposes of Borrowers and (c) funds for other
purposes permitted hereunder; and for these purposes, Lenders are willing to
make certain loans and other extensions of credit to Borrowers of up to such
amount upon the terms and conditions set forth herein; and
WHEREAS, Borrowers have agreed to secure all of their obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon substantially all of their
existing property (other than existing leasehold interests) and after-acquired
property; and
WHEREAS, each Credit Party, other than Borrowers, is willing to
guarantee all of the obligations of Borrowers to Agent and Lenders under the
Loan Documents and to grant to Agent, for the benefit of Agent and Lenders, a
security interest in and lien upon substantially all of its existing property
(other than existing leasehold interests) and after-acquired property,
including, without limitation, the Stock of each Subsidiary owned by such Credit
Party to secure such guaranty; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each Lender
agrees to make available to Borrowers from time to time until the Commitment
Termination Date its Pro Rata Share of advances (each, a "Revolving Credit
Advance"). The Pro Rata Share of the Revolving Loan of any Lender shall not at
any time exceed its separate Revolving Loan Commitment and the Revolving Loans
of all Lenders shall not at any time exceed the Maximum Amount. The obligations
of each Lender hereunder shall be several and not joint. Until the Commitment
Termination Date, Borrowers may from time to time borrow, repay and reborrow
under this Section 1.1(a). Each Revolving Credit Advance shall be made on notice
by Borrowers to one of the representatives of Agent identified in Schedule 1.1
at the address specified therein. Any such notice must be given no later than
(1) noon (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) noon (New York time) on the
date which is 3 Business Days prior to the proposed Revolving Credit Advance, in
the case of a LIBOR Loan. Each such notice (a "Notice of Revolving Credit
Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other information as may be
reasonably required by Agent. If Borrowers desire to have the Revolving Credit
Advances bear interest by reference to a LIBOR Rate, Borrowers must comply with
Section 1.5(e).
(ii) Except as provided in Section 1.12, each Borrower shall
execute and deliver to each Lender a note to evidence the Revolving Loan
Commitment of that Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment of the applicable Lender, dated the Closing Date and
substantially in the form of Exhibit 1.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall represent the
joint and several obligation of each Borrower to pay the full principal amount
of the applicable Lender's Revolving Loan Commitment or, if less, such Lender's
Pro Rata Share of the aggregate unpaid principal amount of all Revolving Credit
Advances together with interest thereon as prescribed in Section 1.5. The entire
unpaid balance of the aggregate Revolving Loan and all other non-contingent
Obligations shall be due and payable in full in immediately available funds on
the Commitment Termination Date.
(iii) The Borrowers may at any time request in writing that
the then effective Revolving Loan Commitments be increased in up to two (2)
separate $10,000,000 increments, and, subject to satisfaction of each of the
following conditions within ten (10) Business Days after the making of such
request, the Revolving Loan Commitments shall, in each case, be increased by
$10,000,000 (and each Lender's individual Revolving Loan Commitment shall be
automatically increased by its Pro Rata Share of such increase, determined
immediately prior to giving effect to such increase): (A) no Event of Default
shall
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have occurred and be continuing or shall occur as a result of such increase in
Revolving Loan Commitments, in each case as of the time of the making of such
request by Borrowers for such increase through and including the date, if any,
that the Revolving Loan Commitment has been so increased, (B) no Material
Adverse Effect shall have occurred as of the time of the making of such request
by Borrowers for such increase through and including the date, if any, that the
Revolving Loan Commitment has been so increased, (C) each Credit Party shall,
and shall cause its Subsidiaries to, execute and deliver such documents and
instruments (including, without limitation, executing and issuing new Revolving
Notes) as may be reasonably requested by the Agent in connection with such
increase, (D) GE Capital, for its own account, shall have received payment in
full from Borrowers of the applicable "Additional Commitment Fee" specified in
the GE Capital Fee Letter and (E) Borrowers shall have delivered a certificate,
in form and substance reasonably satisfactory to Agent, indicating that each of
the conditions to such increase set forth in this clause (iii) have been
satisfied. No more than two increases in the Revolving Loan Commitments, each in
the amount of $10,000,000, shall be made pursuant to the provisions of this
clause (iii).
(iv) In the event that the Revolving Loan Commitments shall
have been increased by two (2) separate $10,000,000 increments pursuant to the
proceeding clause (iii), the Borrowers may request, in writing, that the then
effective Revolving Loan Commitments be increased in a third increment of
$10,000,000, which increase shall be effective upon (i) the receipt by Agent of
written commitments by one or more Lenders (which may include new Lenders to
this Agreement by means of a joinder in form and substance reasonably
satisfactory to Agent) to provide the entirety of such increased amount and (ii)
satisfaction of each of the following conditions: (A) no Event of Default shall
have occurred and be continuing or shall occur as a result of such increase in
Revolving Loan Commitments, in each case as of the time of the making of such
request by Borrowers for such increase through and including the date, if any,
that the Revolving Loan Commitment has been so increased, (B) no Material
Adverse Effect shall have occurred as of the time of the making of such request
by Borrowers for such increase through and including the date, if any, that the
Revolving Loan Commitment has been so increased, (C) each Credit Party shall,
and shall cause its Subsidiaries to, execute and deliver such documents and
instruments and take such other actions (including, without limitation,
executing and issuing new Revolving Notes) as may be reasonably requested by the
Agent in connection with such increase, (D) GE Capital, for its own account,
shall have received payment in full from Borrowers of the applicable "Arranger
Fee" specified in the GE Capital Fee Letter, (E) the Lender or Lenders providing
such incremental increase in the Revolving Loan Commitments shall have received
payment in full from Borrowers of any closing fee required by such Lenders in
connection with such commitment increase and (F) Borrowers shall have delivered
a certificate, in form and substance reasonably satisfactory to Agent,
indicating that all of the conditions to such increase set forth in this clause
(iv) have been satisfied. No Lender shall have any obligation, without such
Lender's written consent, to increase its individual Revolving Loan Commitment
pursuant to this clause (iv). Within two (2) Business Days of the consummation
of any increase to the Revolving Loan Commitments contemplated by this clause
(iv), the Lenders shall effect such inter-Lender transfers and settlements
necessary to
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give effect to changes in the Pro Rata Shares as a result of such increase. Any
Lender that shall fail to receive full settlement within such two (2) Business
Day period shall be entitled to receive interest thereon at the Index Rate from
the Lender or Lenders that shall have failed to make full settlement. Agent
hereby agrees to use its best efforts to solicit Lender commitments to
Borrowers' request for any such increased amount pursuant to this clause (iv).
(b) [Intentionally Omitted].
(c) [Intentionally Omitted]
(d) Reliance on Notices. Agent shall be entitled to rely upon, and
shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
in good faith to be genuine. Agent may assume that each Person executing and
delivering any notice in accordance herewith was duly authorized, unless the
responsible individual acting thereon for Agent has actual knowledge to the
contrary. Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from either Borrower as a notice or communication
from all Borrowers, and may give any notice or communication required or
permitted to be given to any Borrower or Borrowers hereunder to another Borrower
or Borrowers.
1.2. Letters of Credit.
Subject to and in accordance with the terms and conditions contained
herein and in Annex B, Borrowers shall have the right to request, and Lenders
agree to incur, or purchase participations in, Letter of Credit Obligations in
respect of each Borrower.
1.3. Prepayments.
(a) Reductions in Revolving Loan Commitments. Borrowers may at any
time on at least 5 days' prior written notice by Borrowers to Agent permanently
reduce (but not terminate) the Revolving Loan Commitment; provided, that (A) any
such prepayments or reductions shall be in a minimum amount of $500,000 and
integral multiples of $100,000 in excess of such amount, (B) the Revolving Loan
Commitment shall not be reduced to an amount less than the lesser of (i)
$20,000,000 and (ii) the amount of the Revolving Loan then outstanding, and (C)
after giving effect to such reductions, Borrowers shall comply with Section
1.3(b)(i). In addition, Borrowers may at any time on at least 10 days' prior
written notice by Borrowers to Agent terminate the Revolving Loan Commitment;
provided, that upon such termination, all Loans and other Obligations shall be
due and payable in full and all Letter of Credit Obligations shall be cash
collateralized or otherwise satisfied in accordance with Annex B hereto. Any
voluntary prepayment and any reduction or termination of the Revolving Loan
Commitment must be accompanied by payment of any LIBOR funding breakage costs in
accordance with Section 1.13(b). Upon any such reduction or termination of the
Revolving Loan Commitment, each Borrower's right to request Revolving Credit
Advances, or request that Letter of Credit Obligations be incurred on its
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behalf, shall simultaneously be permanently reduced or terminated, as the case
may be; provided, that a permanent reduction of the Revolving Loan Commitment
shall require a corresponding pro rata reduction in the L/C Sublimit.
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balances of the
Revolving Loan exceed the Maximum Amount (an "Overadvance"), Borrowers shall,
within one Business Day of the earlier of Borrower's knowledge of the existence
of such Overadvance or notice from Agent of the existence of such Overadvance,
repay the aggregate outstanding Revolving Credit Advances to the extent required
to eliminate such excess. If any such excess remains after repayment in full of
the aggregate outstanding Revolving Credit Advances, Borrowers shall provide
cash collateral for the Letter of Credit Obligations in the manner set forth in
Annex B to the extent required to eliminate such excess.
(ii) Within three Business Days of receipt by any Credit
Party of proceeds of any asset disposition (excluding proceeds of asset
dispositions permitted by Section 6.8(a)), or any sale of Stock of any
Subsidiary of any Credit Party, Borrowers shall prepay the Loans in an amount
equal to all such proceeds, net of (A) reasonable and customary commissions and
other reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Borrowers in connection
therewith (in each case, paid to non-Affiliates), (B) transfer taxes, (C)
amounts payable to holders of senior Liens (to the extent such Liens constitute
Permitted Encumbrances hereunder), if any, and (D) an appropriate reserve for
income taxes in accordance with GAAP in connection therewith. Any such
prepayment shall be applied in accordance with Section 1.3(c).
(iii) If any Credit Party issues Stock (other than Stock of
Holdings issued in connection with the exercise of stock options and Stock of
Holdings issued to employees of the Credit Parties under employee incentive
plans or employee stock purchase plans) or incurs Indebtedness (other than
Indebtedness permitted by Section 6.3), no later than three Business Days
following the date of receipt of the proceeds thereof, Borrowers shall prepay
the Loans in an amount equal to all such proceeds, net of underwriting discounts
and commissions and other reasonable costs paid to non-Affiliates in connection
therewith. Any such prepayment shall be applied in accordance with Section
1.3(c).
(c) Application of Certain Mandatory Prepayments. Any prepayments
made by any Borrower pursuant to Sections 1.3(b)(ii) or (b)(iii) above or
Section 5.4(c) shall be applied as follows: first, to Fees and reimbursable
expenses of Agent then due and payable pursuant to any of the Loan Documents;
second, to interest then due and payable on Revolving Credit Advances; third, to
the principal balance of Revolving Credit Advances outstanding until the same
has been paid in full; and last, to any Letter of Credit Obligations to provide
cash collateral therefor in the manner set forth in Annex B, until all such
Letter of Credit Obligations have been fully cash collateralized in the manner
set forth in Annex B.
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The Revolving Loan Commitments shall not be permanently reduced by the amount of
any such prepayments.
(d) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4. Use of Proceeds.
Borrowers shall utilize the proceeds of the Revolving Loan solely
for the financing of Borrowers' ordinary working capital and Capital
Expenditures, to finance Permitted Acquisitions and for general corporate needs.
1.5. Interest and Applicable Margins.
(a) Borrowers shall pay interest to Agent, for the ratable benefit
of Lenders in accordance with the various Loans being made by each Lender, in
arrears on each applicable Interest Payment Date, at the Index Rate plus the
Applicable Revolver Index Margin per annum or, at the election of Borrowers, the
applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum, based
on the aggregate Revolving Credit Advances outstanding from time to time.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 0.50%
Applicable Revolver LIBOR Margin 2.50%
(b) If any payment on any Loan becomes due and payable on a day
other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year, in each case for
the actual number of days occurring in the period for which such interest and
Fees are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agent of an interest rate and Fees hereunder shall be
final, binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(h) or (i) or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to
Borrowers, the interest rates applicable to the Loans and the Letter of Credit
Fees shall be increased by two percentage points (2%) per annum above the rates
of interest or the rate of such Fees otherwise applicable hereunder ("Default
Rate"), and all outstanding Obligations shall bear interest at the Default Rate
applicable to such
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Obligations. Interest and Letter of Credit Fees at the Default Rate shall (x)
with respect to any Event of Default under Section 8.1(h) or (i), accrue from
the initial date of such Event of Default or (y) with respect to any other Event
of Default, accrue from the date of receipt of written notice from Agent of such
Event of Default and shall continue until that Event of Default is cured or
waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in Section 2.2,
Borrowers shall have the option to (i) request that any Revolving Credit Advance
be made as a LIBOR Loan, (ii) convert at any time all or any part of outstanding
Loans from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an
Index Rate Loan, subject to payment of LIBOR breakage costs in accordance with
Section 1.13(b) if such conversion is made prior to the expiration of the LIBOR
Period applicable thereto, or (iv) continue all or any portion of any Loan as a
LIBOR Loan upon the expiration of the applicable LIBOR Period and the succeeding
LIBOR Period of that continued Loan shall commence on the first day after the
last day of the LIBOR Period of the Loan to be continued. Any Loan or group of
Loans having the same proposed LIBOR Period to be made or continued as, or
converted into, a LIBOR Loan must be in a minimum amount of $500,000 and
integral multiples of $100,000 in excess of such amount. Any such election must
be made by noon (New York time) on the 3rd Business Day prior to (1) the date of
any proposed Advance which is to bear interest at the LIBOR Rate, (2) the end of
each LIBOR Period with respect to any LIBOR Loans to be continued as such, or
(3) the date on which Borrowers wish to convert any Index Rate Loan to a LIBOR
Loan for a LIBOR Period designated by Borrowers in such election. If no election
is received with respect to a LIBOR Loan by noon (New York time) on the 3rd
Business Day prior to the end of the LIBOR Period with respect thereto (or if an
Event of Default has occurred and is continuing or if the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR
Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.
Borrowers must make such election by notice to Agent in writing, by telecopy or
overnight courier. In the case of any conversion or continuation, such election
must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof
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exceed the amount that such Lender could lawfully have received had the interest
due hereunder been calculated for the full term hereof at the Maximum Lawful
Rate. If the Maximum Lawful Rate is calculated pursuant to this paragraph, such
interest shall be calculated at a daily rate equal to the Maximum Lawful Rate
divided by the number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and thereafter shall refund any excess to Borrowers or as a
court of competent jurisdiction may otherwise order.
1.6. [Intentionally Omitted]
1.7. [Intentionally Omitted].
1.8. Cash Management Systems.
On or prior to the date of the making of the initial Revolving
Credit Advance or the incurrence of the initial Letter of Credit Obligations,
Borrowers will establish and will maintain until the Termination Date, the cash
management systems described in Annex C (the "Cash Management Systems").
1.9. Fees.
(a) Borrowers shall pay to GE Capital, individually, the
Fees specified in that certain fee letter of even date herewith among Borrowers
and GE Capital (the "GE Capital Fee Letter"), at the times specified for payment
therein.
(b) As additional compensation for the Lenders, Borrowers
shall pay to Agent, for the ratable benefit of Lenders, in arrears, on or before
the fifth Business Day of each month prior to the Commitment Termination Date
and on the Commitment Termination Date, a Fee for Borrowers' non-use of the
Revolving Loan Commitments in an amount equal to three-eighths of one percent
(0.375%) per annum (calculated on the basis of a 360 day year for actual days
elapsed) multiplied by the difference between (x) the Maximum Amount (as it may
be adjusted from time to time) and (y) the average for the period of the daily
closing balances of the aggregate Revolving Loan outstanding during the period
for which such Fee is due.
(c) Borrowers shall pay to Agent, for the ratable benefit of
Lenders, the Letter of Credit Fee as provided in Annex B.
1.10. Receipt of Payments.
Borrowers shall make each payment under this Agreement not
later than 2:00 p.m. (New York time) on the day when due in immediately
available funds in Dollars to the Collection Account. For purposes of computing
interest and Fees as of any date, all
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payments shall be deemed received on the Business Day on which immediately
available funds therefor are received in the Collection Account prior to 2:00
p.m. New York time. Payments received after 2:00 p.m. New York time on any
Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day.
1.11. Application and Allocation of Payments.
(a) So long as no Event of Default has occurred and is
continuing, (i) voluntary prepayments shall be applied as determined by
Borrowers, subject to the provisions of Section 1.3(a); and (ii) mandatory
prepayments shall be applied as set forth in Section 1.3(c). All payments and
prepayments applied to a particular Loan shall be applied ratably to the portion
thereof held by each Lender as determined by its Pro Rata Share. As to any other
payment, and as to all payments made when an Event of Default has occurred and
is continuing or following the Commitment Termination Date, each Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of such Borrower, and each Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to apply
any and all such payments against the Obligations of Borrowers as Agent may deem
advisable notwithstanding any previous entry by Agent in the Loan Account or any
other books and records. In the absence of a specific determination by Agent
with respect thereto, payments shall be applied to amounts then due and payable
in the following order: (1) to Fees and Agent's expenses reimbursable hereunder;
(2) to interest on the other Loans, ratably in proportion to the interest
accrued as to each Loan; (3) to principal payments on the other Loans and to
provide cash collateral for Letter of Credit Obligations in the manner described
in Annex B, ratably to the aggregate, combined principal balance of the other
Loans and outstanding Letter of Credit Obligations; and (4) to all other
Obligations, including expenses of Lenders to the extent reimbursable under
Section 11.3.
(b) At any time an Event of Default under Section 8.1(a) has
occurred and is continuing, Agent is authorized to, and at its sole election
may, charge to the Revolving Loan balance on behalf of each Borrower and cause
to be paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than principal
of the Revolving Loan, owing by Borrowers under this Agreement or any of the
other Loan Documents if and to the extent Borrowers fail to pay promptly any
such amounts as and when due, it being understood that in the event Agent
charges the Revolving Loan balance for any unpaid amount, the Event of Default
then in existence under Section 8.1(a) solely as a result of Borrowers' failure
to pay such amount shall be cured by such charge to Borrowers' Revolving Loan
balance. At Agent's option and to the extent permitted by law, any charges so
made shall constitute part of the Revolving Loan hereunder.
1.12. Loan Account and Accounting.
Agent shall maintain a loan account (the "Loan Account") on
its books to record: all Advances, all payments made by Borrowers, and all other
debits and credits as
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provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in accordance with Agent's
customary accounting practices as in effect from time to time. The balance in
the Loan Account, as recorded on Agent's most recent printout or other written
statement, shall be prima facie evidence of the amounts due and owing to Agent
and Lenders by each Borrower; provided, that any failure to so record or any
error in so recording shall not limit or otherwise affect any Borrower's duty to
pay the Obligations. Agent shall render to Borrowers a monthly accounting of
transactions with respect to the Loans setting forth the balance of the Loan
Account as to Borrowers for the immediately preceding month. Unless Borrowers
notify Agent in writing of any objection to any such accounting (specifically
describing the basis for such objection), within 45 days after the date thereof,
each and every such accounting shall (absent manifest error) be deemed final,
binding and conclusive on Borrowers in all respects as to all matters reflected
therein. Only those items expressly objected to in such notice shall be deemed
to be disputed by Borrowers. Notwithstanding any provision herein contained to
the contrary, any Lender may elect (which election may be revoked) to dispense
with the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to it.
1.13. Indemnity.
(a) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and hold harmless each of Agent, Lenders and
their respective Affiliates, and each such Person's respective officers,
directors, employees, attorneys, agents and representatives (each, an
"Indemnified Person"), from and against any and all suits, actions, proceedings,
claims, damages, losses, liabilities and expenses (including reasonable
attorneys' fees and disbursements and other costs of investigation or defense,
including those incurred upon any appeal) that may be instituted or asserted
against or incurred by any such Indemnified Person as the result of credit
having been extended, suspended or terminated under this Agreement and the other
Loan Documents and the administration of such credit, and in connection with or
arising out of the transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, "Indemnified Liabilities"); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
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(b) To induce Lenders to provide the LIBOR Rate option on
the terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of, any borrowing of, conversion
into or continuation of, LIBOR Loans after Borrowers have given notice
requesting the same in accordance herewith; or (iv) any Borrower shall fail to
make any prepayment of a LIBOR Loan after Borrowers have given a notice thereof
in accordance herewith, then Borrowers shall jointly and severally indemnify and
hold harmless each Lender from and against all losses, costs and expenses
resulting from or arising from any of the foregoing. Such indemnification shall
include any loss (including loss of margin) or expense arising from the
reemployment of funds obtained by it or from fees payable to terminate deposits
from which such funds were obtained. For the purpose of calculating amounts
payable to a Lender under this subsection, each Lender shall be deemed to have
actually funded its relevant LIBOR Loan through the purchase of a deposit
bearing interest at the LIBOR Rate in an amount equal to the amount of that
LIBOR Loan and having a maturity comparable to the relevant LIBOR Period;
provided, that each Lender may fund each of its LIBOR Loans in any manner it
sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrowers with its written calculation
of all amounts payable pursuant to this Section 1.13(b), and such calculation
shall be binding (absent manifest error) on the parties hereto unless Borrowers
shall object in writing within 10 Business Days of receipt thereof, specifying
the basis for such objection in reasonable detail.
1.14. Access.
Except to the extent prohibited by applicable law and by
confidentiality agreements, each Credit Party that is a party hereto shall,
during normal business hours, from time to time upon 3 Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate, but,
unless an Event of Default has occurred and is continuing, no more than twice in
any Fiscal Year: (a) provide Agent and any of its officers, employees and agents
access to its properties, facilities, advisors and employees (including
officers) of each Credit Party and to the Collateral, (b) permit Agent, and any
of its officers, employees and agents, to inspect, audit and make extracts from
any Credit Party's books and records, and (c) permit Agent, and its officers,
employees and agents, to inspect, review, evaluate and make test verifications
and counts of the Accounts, Inventory and other Collateral of any Credit Party;
provided, that if no Event of Default has occurred and is continuing, Borrowers
shall not be responsible for the costs of any such visits, inspections or
verifications in any Fiscal Year. If a Default or Event of Default has occurred
and is continuing or if access is necessary to preserve or protect the
Collateral as determined by Agent, each such Credit Party shall provide such
access to Agent and to each Lender at all times and without advance
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notice. Each Credit Party shall, so long as any Event of Default has occurred
and is continuing, make available to Agent and its counsel, as quickly as is
possible under the circumstances, originals or copies of all books and records
that Agent may reasonably request. Each Credit Party shall deliver any document
or instrument necessary for Agent, as it may from time to time reasonably
request, to obtain records from any service bureau or other Person that
maintains records for such Credit Party, and shall maintain duplicate records or
supporting documentation on media, including computer tapes and discs owned by
such Credit Party. Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to Borrowers.
1.15. Taxes.
(a) Any and all payments by each Borrower hereunder
(including any payments made pursuant to Section 12) or under the Notes shall be
made, in accordance with this Section 1.15, free and clear of and without
deduction for any and all present or future Taxes. If any Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder (including any sum payable pursuant to Section 12) or under the Notes,
(i) the sum payable shall be increased as much as shall be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 1.15) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (ii) such Borrower shall make such deductions, and
(iii) such Borrower shall pay the full amount deducted to the relevant taxing or
other authority in accordance with applicable law. Within 45 days after the date
of any payment of Taxes, Borrowers shall furnish to Agent the original or a
certified copy of a receipt evidencing payment thereof, or other evidence of
such payment reasonably satisfactory to Agent. Agent and Lenders shall not be
obligated to return or refund any amounts received pursuant to this Section.
(b) Each Credit Party that is a signatory hereto shall
jointly and severally indemnify and, within 10 days of written demand therefor,
pay Agent and each Lender for the full amount of Taxes (including any Taxes
imposed by any jurisdiction on amounts payable under this Section 1.15) paid by
Agent or such Lender, as appropriate, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "Foreign Lender") as to which payments to be made
under this Agreement or under the Notes are exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrowers and Agent a properly completed and executed IRS Form W-8ECI or Form
W-8BEN or other applicable form, certificate or document prescribed by the IRS
or the United States certifying as to such Foreign Lender's entitlement to such
exemption (a "Certificate of Exemption"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of Exemption to
Borrowers and Agent prior to becoming a Lender hereunder. No foreign Person may
become a Lender hereunder if such Person fails to deliver a Certificate of
Exemption in advance of becoming a Lender.
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1.16. Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that any law,
treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrowers
shall from time to time within 5 Business Days of written demand by such Lender
(with a copy of such demand to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction. A certificate as to the amount of that reduction and showing the
basis of the computation thereof in reasonable detail submitted by such Lender
to Borrowers and to Agent shall, absent manifest error, be final, conclusive and
binding for all purposes.
(b) If, due to either (i) the introduction of or any change
in any law or regulation (or any change in the interpretation thereof) or (ii)
the compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, within 5 Business Days of written demand by
such Lender (with a copy of such demand to Agent), pay to Agent for the account
of such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost in
reasonable detail, submitted to Borrowers and to Agent by such Lender, shall be
conclusive and binding on Borrowers for all purposes, absent manifest error.
Each Lender agrees that, as promptly as practicable after it becomes aware of
any circumstances referred to above which would result in any such increased
cost, the affected Lender shall, to the extent not inconsistent with such
Lender's internal policies of general application, use reasonable commercial
efforts to minimize costs and expenses incurred by it and payable to it by
Borrowers pursuant to this Section 1.16(b).
(c) Notwithstanding anything to the contrary contained
herein, if, after the Closing Date, the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) shall make it
unlawful, or any central bank or other Governmental Authority shall assert that
it is unlawful, for any Lender to agree to make or to make or to continue to
fund or maintain any LIBOR Loan, then, unless that Lender is able to make or to
continue to fund or to maintain such LIBOR Loan at another branch or office of
that Lender without, in that Lender's opinion, adversely affecting it or its
Loans or the income obtained therefrom, on written notice thereof and demand
therefor by such Lender to Borrowers through Agent, (i) the obligation of such
Lender to agree to make or to make or to continue to fund or maintain LIBOR
Loans shall terminate and (ii) Borrowers shall forthwith prepay in full all
outstanding LIBOR Loans owing by Borrowers to such Lender, together with
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interest accrued thereon, unless Borrowers, within 5 Business Days after the
delivery of such notice and demand, convert all LIBOR Loans into Index Rate
Loans.
(d) Within 15 days after receipt by Borrowers of written notice
and demand from any Lender (an "Affected Lender") for payment of additional
amounts or increased costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b),
Borrowers may, at their option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Default or Event of
Default has occurred and is continuing, Borrowers, with the consent of Agent,
may obtain, at Borrowers' expense, a replacement Lender ("Replacement Lender")
for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If Borrowers obtain a Replacement Lender within 90 days
following notice of their intention to do so, the Affected Lender must sell and
assign its Loans and Commitments to such Replacement Lender for an amount equal
to the principal balance of all Loans held by the Affected Lender and all
accrued interest and Fees with respect thereto through the date of such sale;
provided, that Borrowers shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrowers shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional
amounts within 15 days following its receipt of Borrowers' notice of intention
to replace such Affected Lender. Furthermore, if Borrowers give a notice of
intention to replace and do not so replace such Affected Lender within 90 days
thereafter, Borrowers' rights under this Section 1.16(d) shall terminate with
respect to such replacement attempt and Borrowers shall promptly pay all
increased costs or additional amounts demanded by such Affected Lender pursuant
to Sections 1.15(a), 1.16(a) and 1.16(b).
1.17. Single Loan; Joint and Several Obligations.
All Loans to each Borrower and all of the other Obligations of each
Borrower arising under this Agreement and the other Loan Documents shall
constitute one general joint and several obligation of Borrowers secured, until
the Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans.
No Lender shall be obligated to make the initial Revolving Credit
Advance or incur the initial Letter of Credit Obligations, or to take, fulfill,
or perform any other action hereunder, until the following conditions have been
satisfied or provided for in a manner satisfactory to Agent, or waived in
writing by Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrowers, each other Credit Party, Agent and Lenders; and Agent shall have
received such documents, instruments, agreements and legal opinions as Agent
shall reasonably request in connection with the
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transactions contemplated by this Agreement and the other Loan Documents,
including all those listed in the Closing Checklist attached hereto as Annex D,
each in form and substance reasonably satisfactory to Agent.
(b) Approvals. Agent shall have received (i) satisfactory evidence
that the Credit Parties have obtained all required consents and approvals of all
Persons including all requisite Governmental Authorities, to the execution,
delivery and performance of this Agreement and the other Loan Documents or (ii)
an officer's certificate in form and substance reasonably satisfactory to Agent
affirming that no such consents or approvals are required.
(c) Payment of Fees. Borrowers shall have paid the Fees required
to be paid on the Closing Date in the respective amounts specified in Section
1.9 (including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses of closing incurred (to the
extent Borrowers have been notified of such costs and expenses) as of or prior
to the Closing Date.
(d) Capital Structure; Other Indebtedness. The capital structure
of each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party shall be acceptable to Agent in its sole discretion.
(e) Due Diligence. Agent shall have completed its business and
legal due diligence (including, without limitation, lien, tax lien, judgment and
litigation searches), with results reasonably satisfactory to Agent.
2.2. Further Conditions to Each Loan.
Except as otherwise expressly provided herein, no Lender shall be
obligated to fund any Advance, convert or continue any Loan as a LIBOR Loan or
incur any Letter of Credit Obligation, if, as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect as of such date, except to the extent that such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement and Agent or
Requisite Lenders have determined not to make such Advance, convert or continue
any Loan as LIBOR Loan or incur such Letter of Credit Obligation as a result of
the fact that such warranty or representation is untrue or incorrect in any
material respect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Lenders and Agent
or Requisite Lenders have determined not to make such Advance, convert or
continue any Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a
result of the fact that such event or circumstance has occurred;
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(c) any Default or Event of Default has occurred and is continuing
or would result after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligation), and Agent or Requisite Lenders shall have
determined not to make any Advance, convert or continue any Loan as a LIBOR Loan
or incur any Letter of Credit Obligation as a result of that Default or Event of
Default; or
(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the aggregate
Revolving Loans would exceed the Maximum Amount.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1. Existence; Compliance with Law.
Each Credit Party (a) is a corporation, limited liability company or
limited partnership duly organized, validly existing and in good standing under
the laws of its respective jurisdiction of incorporation or organization set
forth in Disclosure Schedule 3.1; (b) is duly qualified to conduct business and
is in good standing in each other jurisdiction where its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in exposure to losses,
damages or liabilities in excess of $500,000; (c) has the requisite power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease and to
conduct its business as now, heretofore and proposed to be conducted; (d)
subject to specific representations regarding Environmental Laws, has all
material licenses, permits, consents or approvals from or by, and has made all
material filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
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3.2. Executive Offices, Collateral Locations, FEIN.
As of the Closing Date, the current location of each Credit Party's
chief executive office and the warehouses and premises at which any Collateral
(other than warehouses and premises that (i) are not a Credit Party's chief
executive office and (ii) do not individually have Collateral with a value in
excess of $25,000 and, collectively with all other warehouses and premises not
listed on Disclosure Schedule 3.2, do not have Collateral with an aggregate
value in excess of $100,000) is located are set forth in Disclosure Schedule
3.2, and, except as set forth on Disclosure Schedule 3.2 none of such locations
has changed to another state within twelve months preceding the Closing Date. In
addition, Disclosure Schedule 3.2 lists the federal employer identification
number of each Credit Party.
3.3. Power, Authorization, Enforceable Obligations.
The execution, delivery and performance by each Credit Party of the
Loan Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Credit Party's power; (b) have been duly authorized
by all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Credit Party's charter,
bylaws or partnership or operating agreement as applicable; (d) do not violate
any law or regulation, or any order or decree of any court or Governmental
Authority; (e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such
Person or any of its property is bound; (f) do not result in the creation or
imposition of any Lien upon any of the property of such Person other than those
in favor of Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and (g) do not require the consent or approval of any Governmental
Authority or any other Person, except those that have been obtained or are
otherwise referred to in Section 2.1(b), all of which will have been duly
obtained, made or complied with prior to the Closing Date. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms, subject to applicable bankruptcy, insolvency, reorganization,
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity regardless of whether considered in a proceeding in
law or equity.
3.4. Financial Statements and Projections.
Except for the Projections, all Financial Statements concerning
Holdings and its Subsidiaries that are referred to below have been prepared in
accordance with GAAP consistently applied throughout the periods covered (except
as disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes and normal year-end audit adjustments) and present
fairly in all material respects the financial position of the Persons covered
thereby as at the dates thereof and the results of their operations and cash
flows for the periods then ended.
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(a) Financial Statements. The following Financial Statements
attached hereto as Disclosure Schedule 3.4(a) have been delivered on or prior to
the date hereof:
(i) The audited consolidated balance sheets at December 31,
2003 and the related statements of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Years then ended, certified by Ernst & Young LLP.
(ii) The unaudited balance sheet(s) at December 31, 2003 and
the related statement(s) of income of Holdings and its Subsidiaries for the four
(4) Fiscal Quarters then ended and the unaudited balance sheet(s) at March 31,
2004 and the related statement(s) of income of Holdings and its Subsidiaries for
the Fiscal Quarter then ended.
(b) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule 3.4(c) have been prepared by Borrowers in
light of the past operations of their businesses, and reflect projections for
the four year period beginning on January 1, 2004 on a quarter-by-quarter basis.
The Projections are based upon estimates and assumptions stated therein, all of
which Borrowers believe to be reasonable and fair in light of current conditions
and current facts known to Borrowers and, as of the Closing Date, reflect
Borrowers' good faith and reasonable estimates of the future financial
performance of Borrowers and of the other information projected therein for the
period set forth therein (it being understood that all such Projections will be
subject to uncertainties and contingencies and that no representation is given
that any particular projection will be realized).
3.5. Material Adverse Effect.
Between December 31, 2003 and the Closing Date: (a) no Credit Party
has incurred any obligations, contingent or noncontingent liabilities,
liabilities for Charges, long-term leases or unusual forward or long-term
commitments that, alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, (b) no contract, lease or other agreement or
instrument has been entered into by any Credit Party or has become binding upon
any Credit Party's assets and no law or regulation applicable to any Credit
Party has been adopted that has had or could reasonably be expected to have a
Material Adverse Effect, and (c) no Credit Party is in default and to the best
of Borrowers' knowledge no third party is in default under any material
contract, lease or other agreement or instrument, that alone or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Between December
31, 2003 and the Closing Date no event has occurred, that alone or together with
other events, could reasonably be expected to have a Material Adverse Effect.
3.6. Ownership of Property; Liens.
As of the Closing Date, the real estate ("Real Estate") listed n
Disclosure Schedule 3.6 constitutes all of the real property owned, leased, or
subleased by any Credit Party. Each Credit Party owns good and marketable fee
simple title to all of its owned Real Estate, and valid and marketable leasehold
interests in all of its leased Real Estate, all as described on Disclosure
Schedule 3.6, and a summary of terms of all such leases reasonably satisfactory
to Agent has been delivered to Agent. Disclosure Schedule 3.6 further describes
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any Real Estate with respect to which any Credit Party is a lessor, sublessor or
assignor as of the Closing Date. Each Credit Party also has good and marketable
title to, or valid leasehold interests in, all of its personal property and
assets material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties or assets for their intended purposes. As of the Closing
Date, none of the properties and assets of any Credit Party are subject to any
Liens other than Permitted Encumbrances, and there are no facts, circumstances
or conditions known to any Credit Party that could reasonably be expected to
result in any Liens (including Liens arising under Environmental Laws) other
than Permitted Encumbrances. Each Credit Party has received all deeds,
assignments, waivers, consents, nondisturbance and attornment or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Credit Party's right, title and interest in and to all such Real
Estate and other properties and assets. Disclosure Schedule 3.6 also describes,
as of the Closing Date, any purchase options, rights of first refusal or other
similar contractual rights pertaining to any Real Estate owned by a Credit Party
or granted by, or in favor of, any Credit Party pertaining to any other Real
Estate. As of the Closing Date, no portion of any Credit Party's Real Estate has
suffered any material damage by fire or other casualty loss that has not
heretofore been repaired and restored in all material respects to its original
condition (normal wear and tear excepted) or otherwise remedied. As of the
Closing Date, all material permits required to have been issued or appropriate
to enable the Real Estate to be lawfully occupied and used for all of the
purposes for which it is currently occupied and used have been lawfully issued
and are in full force and effect.
3.7. Labor Matters.
As of the Closing Date (a) no strikes or other material labor
disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply inall material respects with the Fair Labor Standards Act
and each other federal, state, local or foreign law applicable to such matters;
(c) all payments due from any Credit Party for employee health and welfare
insurance have been paid or accrued as a liability on the books of such Credit
Party; (d) except as set forth in Disclosure Schedule 3.7, no Credit Party is a
party to or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement
or arrangement (and true and complete copies of any agreements described on
Disclosure Schedule 3.7 have been delivered to Agent); (e) there is no
organizing activity involving any Credit Party pending or, to any Credit Party's
knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule 3.7, there are
no material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
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otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness.
Except as set forth in Disclosure Schedule 3.8, as of the Closing
Date, no Credit Party has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is an Affiliate of any other Person. All
of the issued and outstanding Stock of each Credit Party (excluding Holdings) is
owned by each of the Stockholders and in the amounts set forth in Disclosure
Schedule 3.8. Except as set forth in Disclosure Schedule 3.8, there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in Section 6.3 (including Disclosure Schedule 6.3.
3.9. Government Regulation.
No Credit Party is an "investment company" or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940. No Credit Party is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any other federal or state statute that restricts or
limits its ability to incur Indebtedness or to perform its obligations
hereunder. The making of the Loans by Lenders to Borrowers, the incurrence of
the Letter of Credit Obligations on behalf of Borrowers, the application of the
proceeds thereof and repayment thereof will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10. Margin Regulations.
No Credit Party is engaged, nor will it engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" any "margin stock" as such terms are
defined in Regulation U of the Federal Reserve Board as now and from time to
time hereafter in effect (such securities being referred to herein as "Margin
Stock"). No Credit Party owns any Margin Stock, and none of the proceeds of the
Loans or other extensions of credit under this Agreement will be used, directly
or indirectly, for the purpose of purchasing or carrying any Margin Stock, for
the purpose of reducing or retiring any Indebtedness that was originally
incurred to purchase or carry any Margin Stock or for any other purpose that
might cause any of the Loans or other extensions of credit under this Agreement
to be considered a "purpose credit" within the meaning of Regulations T, U or X
of the Federal Reserve Board. No Credit Party will take or permit to be taken
any action that might cause any Loan Document to violate any regulation of the
Federal Reserve Board.
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3.11. Taxes.
All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges have
been paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding Charges or other amounts
being contested in accordance with Section 5.2(b). Proper and accurate amounts
have been withheld by each Credit Party from its respective employees for all
periods in compliance in all material respects with all applicable federal,
state, local and foreign laws and such withholdings have been timely paid to the
respective Governmental Authorities. Disclosure Schedule 3.11 sets forth as of
the Closing Date those taxable years for which any Credit Party's tax returns
are currently being audited by the IRS or any other applicable Governmental
Authority, and any assessments or threatened assessments in connection with such
audit, or otherwise currently outstanding. Except as described in Disclosure
Schedule 3.11, no Credit Party has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Credit Parties and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b)
to each Credit Party's knowledge, as a transferee. As of the Closing Date, no
Credit Party has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
could reasonably be expected to have a Material Adverse Effect.
3.12. ERISA.
(a) Disclosure Schedule 3.12 lists (i) all ERISA Affiliates and
(ii) all Plans and separately identifies all Pension Plans, including Title IV
Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest IRS/DOL 5500-series form for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that could
reasonably be expected to result in the loss of such qualification or tax-exempt
status. Each Plan is in compliance in all material respects with the applicable
provisions of ERISA and the IRC, including the timely filing of all reports
required under the IRC or ERISA, including the statement required by 29 CFR
Section 2520.104-23. Neither any Credit Party nor ERISA Affiliate has failed to
make any contribution or pay any amount due as required by either Section 412 of
the IRC or Section 302 of ERISA or the terms of any such Plan. Neither any
Credit Party nor ERISA Affiliate has engaged in a "prohibited transaction," as
defined in Section 406 of ERISA and Section 4975 of the IRC, in connection with
any Plan, that could reasonably be expected to subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.
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(b) Except as set forth in Disclosure Schedule 3.12: (i) no Title
IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041(b)(1) of ERISA, nor
has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at
any time within the last five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); (vi) except in the case of any ESOP, Stock of all Credit Parties and
their ERISA Affiliates makes up, in the aggregate, no more than ten percent
(10%) of fair market value of the assets of any Plan measured on the basis of
fair market value as of the latest valuation date of any Plan; and (vii) no
liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or an equivalent rating by another nationally recognized
rating agency.
3.13. No Litigation.
No action, claim, lawsuit, demand, investigation or proceeding is
now pending or, to the knowledge of any Credit Party, threatened against any
Credit Party, before any Governmental Authority or before any arbitrator or
panel of arbitrators (collectively, "Litigation"), (a) that challenges any
Credit Party's right or power to enter into or perform any of its obligations
under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that
has a reasonable risk of being determined adversely to any Credit Party and
that, if so determined, could be reasonably be expected to have a Material
Adverse Effect. Except as set forth on Disclosure Schedule 3.13, as of the
Closing Date there is no Litigation pending or, to any Credit Party's knowledge,
threatened, that seeks damages in excess of $500,000 or injunctive relief
against, or alleges criminal misconduct of, any Credit Party.
3.14. Brokers.
No broker or finder brought about the obtaining, making or closing
of the Loans, and no Credit Party or Affiliate thereof has any obligation to any
Person in respect of any finder's or brokerage fees in connection therewith.
3.15. Intellectual Property.
As of the Closing Date, each Credit Party owns or has rights to use
all Intellectual Property necessary to continue to conduct its business as now
conducted by it,
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and each Patent, Trademark, Copyright and License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule 3.15.
Each Credit Party conducts its business and affairs without infringement of or
interference with any Intellectual Property of any other Person in any material
respect. Except as set forth in Disclosure Schedule 3.15, no Credit Party is
aware of any infringement claim by any other Person with respect to any
Intellectual Property.
3.16. Full Disclosure.
No information contained in this Agreement, any of the other Loan
Documents, any Projections or Financial Statements or other written reports from
time to time delivered hereunder or any written statement furnished by or on
behalf of any Credit Party to Agent or any Lender pursuant to the terms of this
Agreement contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made (it being understood that all Projections will be subject
to uncertainties and contingencies and that no representation is given that any
particular projection will be realized). Borrowers will take no action, or omit
to take any action, that would cause the Liens granted to Agent, on behalf of
itself and Lenders, pursuant to the Collateral Documents to not be at any time
fully perfected first priority Liens in and to the Collateral described therein
(to the extent the Collateral Documents and applicable law allow for such
perfection), subject, as to priority, only to Permitted Encumbrances.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule 3.17, as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the value
or marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $500,000; (ii) no Credit
Party has caused or suffered to occur any Release of Hazardous Materials on, at,
in, under, above, to, from or about any of its Real Estate; (iii) the Credit
Parties are and have been in compliance with all Environmental Laws, except for
such noncompliance that would not result in Environmental Liabilities which
could reasonably be expected to exceed $500,000; (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted, except where the failure to so obtain or comply with such
Environmental Permits would not result in Environmental Liabilities that could
reasonably be expected to exceed $500,000, and all such Environmental Permits
are valid, uncontested and in good standing; (v) no Credit Party is involved in
operations or knows of any facts, circumstances or conditions, including any
Releases of Hazardous Materials, that are likely to result in any Environmental
Liabilities of such Credit Party which could reasonably be expected to exceed
$500,000, and no Credit Party has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
Litigation arising under or related to any Environmental Laws, Environmental
Permits or Hazardous Material that seeks damages, penalties, fines, costs or
expenses in excess of
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$500,000 or injunctive relief against, or that alleges criminal misconduct by,
any Credit Party; (vii) no written notice has been received by any Credit Party
identifying it as a "potentially responsible party" or requesting information
under CERCLA or analogous state statutes, and to the knowledge of the Credit
Parties, there are no facts, circumstances or conditions that may result in any
Credit Party being identified as a "potentially responsible party" under CERCLA
or analogous state statutes; and (viii) the Credit Parties have provided to
Agent copies of all existing environmental reports, reviews and audits and all
written information pertaining to actual or potential Environmental Liabilities,
in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent
(i) is not now, and has not ever been, in control of any of the Real Estate or
any Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18. Insurance.
Disclosure Schedule 3.18 lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by each Credit
Party, as well as a summary of the terms of each such policy.
3.19. Deposit and Disbursement Accounts.
Disclosure Schedule 3.19 lists all banks and other financial
institutions at which any Credit Party maintains deposit or other accounts as of
the Closing Date, and such Schedule correctly identifies the name, address and
telephone number of each depository, the name in which the account is held, a
description of the purpose of the account, and the complete account number
therefor.
3.20. [Intentionally Omitted]
3.21. [Intentionally Omitted]
3.22. Agreements and Other Documents.
As of the Closing Date, each Credit Party has provided to Agent or
its counsel, on behalf of Lenders, accurate and complete copies (or summaries)
of all of the following agreements or documents to which it is subject and each
of which is listed in Disclosure Schedule 3.22: supply agreements and purchase
agreements not terminable by such Credit Party within 60 days following written
notice issued by such Credit Party and involving transactions in excess of
$1,000,000 per annum; leases of Equipment having a remaining term of one year or
longer and requiring aggregate rental and other payments in excess of $1,000,000
per annum; licenses and permits held by the Credit Parties, the absence of which
could be reasonably likely to have a Material Adverse Effect; instruments and
documents
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evidencing any Indebtedness or Guaranteed Indebtedness of such Credit Party in
an amount in excess of $500,000 and any Lien granted by such Credit Party with
respect thereto; and instruments and agreements evidencing the issuance of any
equity securities, warrants, rights or options to purchase equity securities of
such Credit Party.
3.23. Solvency.
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or incurred on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
incurred, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of Borrowers; and (c) the payment and accrual of all transaction
costs in connection with the foregoing, each Credit Party is and will be
Solvent.
3.24. Compliance With Health Care Laws.
Without limiting the generality of Sections 3.1 or 5.5 or any other
representation or warranty made herein, Credit Parties and each of the
facilities operated by Credit Parties and, to Credit Parties' knowledge, each of
Credit Parties' licensed employees and contractors (other than contracted
agencies) in the exercise of their respective duties on behalf of any Credit
Party or any such facilities, is in compliance with all applicable statutes,
laws, ordinances, rules and regulations of any federal, state or local
governmental authority with respect to regulatory matters primarily relating to
patient healthcare (including without limitation Section 1128B(b) of the Social
Security Act, as amended, 42 U.S.C. Section 1320a-7(b) (Criminal Penalties
Involving Medicare or State Health Care Programs), commonly referred to as the
"Federal Anti-Kickback Statute," and the Social Security Act, as amended,
Section 1877, 42 U.S.C Section 1395nn (Prohibition Against Certain Referrals),
commonly referred to as the "Xxxxx Statute" (collectively, "Healthcare Laws")),
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect. Each Credit Party has maintained in all material
respects all records required to be maintained by the Food and Drug
Administration, Drug Enforcement Agency and State Boards of Pharmacy and the
federal and state Medicare and Medicaid programs as required by the Healthcare
Laws and, to the knowledge of such Credit Party, there are no presently existing
circumstances which could reasonably be expected to result in material
violations of the Healthcare Laws. Each Credit Party and its Affiliates have
such permits, licenses, franchises, certificates and other approvals or
authorizations of governmental or regulatory authorities as are necessary under
applicable law to own their respective properties and to conduct their
respective business (including without limitation such permits as are required
under such federal, state and other health care laws, and under such HMO or
similar licensure laws and such insurance laws and regulations, as are
applicable thereto), and with respect to those facilities and other businesses
that participate in Medicare and/or Medicaid, to receive reimbursement under
Medicare and Medicaid, except where the failure to have such licenses, permits,
franchises, certificates or other government approvals or authorizations could
not reasonably be expected to have a Material Adverse Effect. To Credit Parties'
knowledge, there currently exist no restrictions, deficiencies, required plans
of correction actions or other
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such remedial measures with respect to federal and state Medicare and Medicaid
certifications or licensure.
3.25. HIPAA Compliance.
(a) To the extent that and for so long as (i) any Credit Party is
a "covered entity" as defined in 45 C.F.R. Section 160.103, (ii) any Credit
Party and/or its business and operations are subject to or covered by the HIPAA
Administrative Requirements codified at 45 C.F.R. Parts 160 and 162 (the
"Transactions Rule") and/or the HIPAA Security and Privacy Requirements codified
at 45 C.F.R. Parts 160 and 164 (the "Privacy and Security Rules"), and/or (iii)
any Credit Party sponsors any "group health plans" as defined in 45 C.F.R.
Section 160.103, such Credit Party has, except to the extent that the failure to
do any of the following could not reasonably be expected to have a Material
Adverse Effect: (x) completed, or will complete on or before any applicable
compliance date, thorough and detailed surveys, audits, inventories, reviews,
analyses and/or assessments, including risk assessments, (collectively
"Assessments") of all areas of its business and operations subject to HIPAA
and/or that could be adversely affected by the failure of such Credit Party to
be HIPAA Compliant (as defined below) to the extent these Assessments are
appropriate or required for such Credit Party to be HIPAA Compliant; (y)
developed, or will develop on or before any applicable compliance date, a
detailed plan and time line for becoming HIPAA Compliant (a "HIPAA Compliance
Plan"); and (z) implemented, or will implement on or before any applicable
compliance date, those provisions of its HIPAA Compliance Plan necessary to
ensure that such Credit Party is HIPAA Compliant. For purposes of this
Agreement, "HIPAA Compliant" shall mean that a Credit Party (1) is, or on or
before any applicable compliance date will be, in full compliance with any and
all of the applicable requirements of HIPAA, including all requirements of the
Transactions Rule and the Privacy and Security Rules and (2) is not subject to,
and could not reasonably be expected to become subject to, any civil or criminal
penalty or any investigation, claim or process that could reasonably be expected
to have a Material Adverse Effect.
(b) Each Credit Party represents that it, collectively with the
other entities identified herein as a " Credit Party" and/or certain other
affiliates of such Credit Party have elected to be treated as a single covered
entity in accordance with the Privacy and Security Rules (45 C.F.R. Section
164.504(d)) (the "Affiliated Entity"). As such, each Credit Party represents and
warrants that it has the legal right, power and authority to execute the
Business Associate Agreement on behalf of the Affiliated Entity, in accordance
with the Privacy and Security Rules, and that the provisions of the Business
Associate Agreement shall be binding upon each Credit Party and all of such
Credit Party's affiliates that are participating in the Affiliated Entity, in
accordance with the Privacy and Security Rules, as if each and every such
affiliate were a party to such Business Associate Agreement directly.
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4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices.
Each Credit Party executing this Agreement hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver to
Agent or to Agent and Lenders, as required, the Financial Statements, notices,
Projections and other information at the times, to the Persons and in the manner
set forth in Annex E.
4.2. Communication with Accountants.
Each Credit Party executing this Agreement authorizes (a) Agent and
(b) so long as an Event of Default has occurred and is continuing, each Lender,
to communicate directly with its independent certified public accountants,
including Ernst & Young LLP, and authorizes and, at Agent's request, shall
instruct those accountants and advisors to disclose and make available to Agent
and each Lender any and all Financial Statements and other supporting financial
documents, schedules and information relating to any Credit Party (including
copies of any issued management letters) with respect to the business, financial
condition and other affairs of any Credit Party; provided, however, that such
accountants' failure to disclose or make materials available to Agent and
Lenders as a result of such accountants' confidentiality policies shall not
constitute a breach of this Section 4.2.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1. Maintenance of Existence and Conduct of Business.
Except as otherwise expressly permitted in this Agreement, each
Credit Party shall: (a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and its rights and
franchises; (b) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; (c) at all times maintain, preserve and
protect all of its material assets and properties used or useful in the conduct
of its business, and keep the same in good repair, working order and condition
in all material respects (taking into consideration ordinary wear and tear) and
from time to time make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with industry
practices; and (d) unless such Credit Party shall have given thirty day prior
notice to Agent to the contrary, transact business only in such corporate and
trade names as are set forth in Disclosure Schedule 5.1.
5.2. Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges due and
payable by it, including (i) Charges imposed upon it, its income and profits, or
any of its property (real, personal or
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mixed) and all Charges with respect to tax, social security and unemployment
withholding with respect to its employees, (ii) lawful claims for labor,
materials, supplies and services or otherwise, and (iii) all storage or rental
charges payable to warehousemen or bailees, in each case, before any thereof
shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims; provided,
that (i) adequate reserves with respect to such contest are maintained on the
books of such Credit Party, in accordance with GAAP; (ii) no Lien shall be
imposed to secure payment of such Charges (other than payments to warehousemen
and/or bailees) that is superior to any of the Liens securing the Obligations
and such contest is maintained and prosecuted continuously and with diligence
and operates to suspend collection or enforcement of such Charges; (iii) none of
the Collateral becomes subject to forfeiture or loss as a result of such
contest; (iv) such Credit Party shall promptly pay or discharge such contested
Charges, Taxes or claims and all additional charges, interest, penalties and
expenses, if any, and shall deliver to Agent evidence reasonably acceptable to
Agent of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Credit Party or the conditions set forth in this
Section 5.2(b) are no longer met; and (v) Agent has not advised Borrowers in
writing that Agent reasonably believes that nonpayment or nondischarge thereof
could have or result in a Material Adverse Effect.
5.3. Books and Records.
Each Credit Party shall keep adequate books and records with respect
to its business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis consistent with
the Financial Statements attached as Disclosure Schedule 3.4(a).
5.4. Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule 3.18 as in
effect on the date hereof or otherwise in form and amounts and with insurers
reasonably acceptable to Agent. Such policies of insurance (or the loss payable
and additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice to
Agent in the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees,
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court costs and other charges related thereto, shall be payable on demand by
Borrowers to Agent and shall be additional Obligations hereunder secured by the
Collateral.
(b) Agent reserves the right at any time upon any change in any
Credit Party's risk profile (including any change in the product mix maintained
by any Credit Party or any laws affecting the potential liability of such Credit
Party) to, after prior written notice to Borrowers, require additional forms and
limits of insurance to, in Agent's reasonable opinion, adequately protect both
Agent's and Lenders' interests in all or any portion of the Collateral and to
ensure that each Credit Party is protected by insurance in amounts and with
coverage customary for its industry. If reasonably requested by Agent in
writing, each Credit Party shall deliver to Agent from time to time a report of
a reputable insurance broker, reasonably satisfactory to Agent, with respect to
its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
insurance naming Agent, on behalf of itself and Lenders, as loss payee, and (ii)
all general liability and other liability policies naming Agent, on behalf of
itself and Lenders, as additional insured. Each Credit Party irrevocably makes,
constitutes and appoints Agent (and all officers, employees or agents designated
by Agent), so long as any Event of Default has occurred and is continuing or the
anticipated insurance proceeds exceed $500,000, as such Credit Party's true and
lawful agent and attorney-in-fact for the purpose of making, settling and
adjusting claims under such "All Risk" policies of insurance, endorsing the name
of such Credit Party on any check or other item of payment for the proceeds of
such "All Risk" policies of insurance and for making all determinations and
decisions with respect to such "All Risk" policies of insurance. Agent shall
have no duty to exercise any rights or powers granted to it pursuant to the
foregoing power-of-attorney, but, while exercising any rights and powers
hereunder, agrees to act in good faith. Borrowers shall promptly notify Agent of
any loss, damage, or destruction to the Collateral in the amount of $500,000 or
more, whether or not covered by insurance. After deducting from such proceeds
the expenses, if any, incurred by Agent in the collection or handling thereof,
Agent may, at its option, apply such proceeds to the reduction of the
Obligations in accordance with Section 1.3(c), or permit or require the
applicable Credit Party to use such money, or any part thereof, to replace,
repair, restore or rebuild the Collateral in a diligent and expeditious manner
with materials and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the foregoing, if the
casualty giving rise to such insurance proceeds could not reasonably be expected
to have a Material Adverse Effect, such insurance proceeds do not exceed
$1,000,000 in the aggregate and no Event of Default has occurred and is
continuing, Agent shall make available to the applicable Credit Party such
proceeds and permit such Credit Party to replace, restore, repair or rebuild the
property; provided, that if such Credit Party shall not have completed or
entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 180 days of such casualty, such Credit Party shall
pay such proceeds to Agent and Agent may apply such insurance proceeds to the
Obligations in accordance with Section 1.3(c). To the extent not used to
replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 1.3(c).
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5.5. Compliance with Laws.
Each Credit Party shall comply with all federal, state, local and
foreign laws and regulations applicable to it, including all Healthcare Laws and
those laws and regulations relating to ERISA and labor matters and Environmental
Laws and Environmental Permits, except, in each case, to the extent that the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
5.6. Supplemental Disclosure.
From time to time as may be reasonably requested by Agent (which
request will not be made more frequently than once each year absent the
occurrence and continuance of an Event of Default), the Credit Parties shall
supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising that, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided, that (a) no such supplement to any such Disclosure Schedule or
representation shall amend, supplement or otherwise modify any Disclosure
Schedule or representation, or be or be deemed a waiver of any Default or Event
of Default resulting from the matters disclosed therein, except as consented to
by Agent and Requisite Lenders in writing, and (b) no supplement shall be
required or permitted as to representations and warranties that relate solely to
any preceding specific date.
5.7. Intellectual Property.
Each Credit Party will (i) conduct its business and affairs without
infringement of or interference with any Intellectual Property of any other
Person in any material respect and (ii) within ten (10) Business Days of the
filing thereof, provide Agent with written notice of the registration of any
Intellectual Property with any Governmental Authority.
5.8. Environmental Matters.
Each Credit Party shall and shall cause each Person within its
control to: (a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to comply with Environmental
Laws and Environmental Permits pertaining to the presence, generation,
treatment, storage, use, disposal, transportation or Release of any Hazardous
Material on, at, in, under, above, to, from or about any of its Real Estate
except where noncompliance could be reasonably likely to result in Environmental
Liabilities in excess of $250,000; (c) notify Agent promptly after such Credit
Party becomes aware of any violation of Environmental Laws or Environmental
Permits or any Release on, at, in, under, above, to,
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from or about any Real Estate that is reasonably likely to result in
Environmental Liabilities in excess of $250,000; and (d) promptly forward to
Agent a copy of any order, notice, request for information or any communication
or report received by such Credit Party in connection with any such violation or
Release or any other matter relating to any Environmental Laws or Environmental
Permits that could reasonably be expected to result in Environmental Liabilities
in excess of $250,000, in each case whether or not the Environmental Protection
Agency or any Governmental Authority has taken or threatened any action in
connection with any such violation, Release or other matter. If Agent at any
time has a reasonable basis to believe that there may be a violation of any
Environmental Laws or Environmental Permits by any Credit Party or any
Environmental Liability arising thereunder, or a Release of Hazardous Materials
on, at, in, under, above, to, from or about any of its Real Estate, that, in
each case, could reasonably be expected to have a Material Adverse Effect, then
each Credit Party shall, upon Agent's written request (i) cause the performance
of such environmental audits including subsurface sampling of soil and
groundwater, and preparation of such environmental reports, at Borrowers'
expense, as Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Agent and shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have access to all Real Estate for
the purpose of conducting such environmental audits and testing as Agent deems
appropriate, including subsurface sampling of soil and groundwater. Borrowers
shall reimburse Agent for the costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder.
5.9. Lease Performance and Real Estate Purchases.
Each Credit Party shall timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located. To the
extent otherwise permitted hereunder, if any Credit Party proposes to acquire a
fee ownership interest in Real Estate after the Closing Date, it shall first
provide to Agent a mortgage or deed of trust granting Agent a first priority
Lien on such Real Estate, together with environmental audits, mortgage title
insurance commitment, real property survey, local counsel opinion(s), and, if
required by Agent, supplemental casualty insurance and flood insurance, and such
other documents, instruments or agreements reasonably requested by Agent, in
each case, in form and substance reasonably satisfactory to Agent.
5.10. Right of First Refusal to Refinance.
If, at any time, any Credit Party receives any offer or commitment
for any secured financing that such Credit Party intends to pursue and would
result in the repayment in full of the Obligations and termination of the
Commitments prior to December 31, 2006, (a "Refinancing Offer"), the Credit
Parties shall send a copy of the material terms of such Refinancing Offer to
each Lender at its address set forth in Annex H hereto within five (5) days of
receipt thereof. Each Lender shall have a period of fifteen (15) days following
its receipt of the Refinancing Offer to provide Borrowers with an agreement to
modify the terms
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of the Loan Documents to substantially conform to the material terms and
conditions of the Refinancing Offer (a "Modification Agreement"). The Credit
Parties shall not consummate any Refinancing Offer following the timely delivery
of a Modification Agreement, but shall instead have the option, but not the
obligation, to execute and deliver such Modification Agreement. Upon the
expiration of such fifteen (15) day period, if no Lender or group of Lenders has
responded to the Refinancing Offer or if no Lender or group of Lenders is able
to provide Borrowers' with an applicable Modification Agreement, the Credit
Parties shall be free to proceed with the documentation of the Refinancing Offer
without any further obligation to any Lender under this Section 5.10.
5.11. Further Assurances.
Each Credit Party executing this Agreement agrees that it shall and
shall cause each other Credit Party to, at such Credit Party's expense and upon
request of Agent, duly execute and deliver, or cause to be duly executed and
delivered, to Agent such further instruments and do and cause to be done such
further acts as may be necessary or proper in the reasonable opinion of Agent to
carry out more effectively the provisions and purposes of this Agreement or any
other Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1. Mergers, Subsidiaries, Etc.
No Credit Party shall directly or indirectly, by operation of law or
otherwise, (a) form or acquire any Subsidiary, or (b) merge with, consolidate
with, acquire all or substantially all of the assets or Stock of, or otherwise
combine with or acquire, any Person (or business unit thereof). Notwithstanding
the foregoing, (a) any Credit Party may merge into any other Credit Party;
provided, that that a Borrower shall be the survivor of any such merger to which
a Borrower is a party, (b) any Credit Party may acquire all or substantially all
of the Stock of any other Credit Party, (c) any Credit Party that is not a
Borrower may acquire all or substantially all of the assets of any other Credit
Party that is also not a Borrower, (d) any Borrower may acquire all or
substantially all of the assets or Stock of any other Credit Party, (e) any
Credit Party may acquire all or substantially all of the assets or Stock of any
Person (the "Target") and, (f) any Borrower may form a Subsidiary in order to
acquire all or substantially all of the stock or assets of a Target (in each
case, a "Permitted Acquisition") subject to the satisfaction of each of the
following conditions, each to the reasonable satisfaction of Agent:
(i) Agent shall receive, (A) with respect to any proposed
Permitted Acquisition with total consideration and other amounts payable of less
than $5,000,000, at least ten (10) Business Days' prior written notice of such
proposed Permitted Acquisition or, (B) with respect to any proposed Permitted
Acquisition with total consideration and other amounts payable of $5,000,000 or
more, at least fifteen (15) Business Days' prior written
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notice of such proposed Permitted Acquisition, which notice shall, in each case,
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) At the time of such Permitted Acquisition and after
giving effect thereto, (A) no Default or Event of Default has occurred and is
continuing; (B) the sum of all consideration and other amounts payable
(including all transaction costs, non-competition payments or similar payments
and all Indebtedness and Guaranteed Indebtedness incurred or assumed in
connection therewith or Indebtedness, liabilities and contingent obligations
otherwise reflected in a consolidated balance sheet of the Credit Parties after
giving effect to such Permitted Acquisition) (x) in connection with all
Permitted Acquisitions shall not exceed $70,000,000 in any calendar year (it
being understood that the calendar year ending December 31, 2004 shall include
the period from January 1, 2004 through the Closing Date), (y) in connection
with all Permitted Acquisitions shall not exceed $175,000,000 during the term of
this Agreement and (z) in connection with such Permitted Acquisition shall not
exceed $15,000,000; and (C) such Permitted Acquisition shall only involve assets
located in the United States and comprising a business, or those assets of a
business, that involve the provision of hospice services such that the
consummation of such Permitted Acquisition would not subject Agent or any Lender
to regulatory or third party approvals in connection with the exercise of its
rights and remedies under this Agreement or any other Loan Documents other than
the approvals applicable to a hospice service provider;
(iii) the consideration and other amounts payable in
connection with such Permitted Acquisition shall be payable in cash on the date
of consummation of such Permitted Acquisition, other than (A) unsecured
Indebtedness in an amount not to exceed the lesser of (x) $2,000,000 and (y) 20%
of the aggregate consideration and other amount payable in connection with such
Permitted Acquisition and (B) amounts due and payable after the date of the
consummation of such Permitted Acquisition under customary non-competition
agreements in an amount not to exceed $500,000 per agreement.
(iv) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(v) no Indebtedness or Guaranteed Indebtedness shall be
incurred, assumed or otherwise be reflected on a consolidated balance sheet of
Borrowers and Target after giving effect to such Permitted Acquisition, except
(A) Loans made hereunder and (B) Indebtedness and/or Guaranteed Indebtedness
permitted under Section 6.3 or Section 6.6, as applicable;
(vi) the Target shall have Pro Forma Acquisition EBITDA of
not less than $0 for the trailing twelve month period preceding the date of the
consummation of the Permitted Acquisition, as determined based upon the Target's
financial statements for its most recently completed fiscal year and its most
recent interim financial period completed within 60 days prior to the date of
consummation of such Permitted Acquisition;
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(vii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(viii) at or prior to the closing of any Permitted
Acquisition, Agent will be granted a first priority perfected Lien (subject to
Permitted Encumbrances) in all assets acquired pursuant thereto or, as
applicable, in the assets and Stock of the Target, and Borrowers and the Target
shall have executed such documents and taken such actions as may be reasonably
required by Agent in connection therewith;
(ix) concurrently with delivery of the notice referred to in
clause (i) above, Borrowers shall have delivered to Agent, in form and substance
satisfactory to Agent in its reasonable credit judgment:
(A) a pro forma consolidated balance sheet, income
statement and cash flow statement of Holdings and its Subsidiaries
(the "Acquisition Pro Forma"), based on recent financial statements,
which shall fairly present in all material respects the assets,
liabilities, financial condition and results of operations of
Holdings and its Subsidiaries in accordance with GAAP consistently
applied, but taking into account such Permitted Acquisition and the
funding of all Loans in connection therewith, and such Acquisition
Pro Forma shall (x) reflect that, on a pro forma basis, Holdings and
its Subsidiaries would have had a Leverage Ratio not in excess of
1.0 to 1.0 for the four quarter period reflected in the Compliance
Certificate most recently delivered to Agent pursuant to Section 4.1
prior to the consummation of such Permitted Acquisition (after
giving effect to such Permitted Acquisition and all Loans funded in
connection therewith as if made on the first day of such period),
and (y) reflect that, on a pro forma basis, no Event of Default has
occurred and is continuing or would result after giving effect to
such Permitted Acquisition; and
(B) a certificate of the chief financial officer of
Holdings to the effect that: (x) the Credit Parties will be Solvent
upon the consummation of the Permitted Acquisition; (y) the
Acquisition Pro Forma fairly presents the financial condition of
Holdings and its Subsidiaries (on a consolidated basis) as of the
date thereof after giving effect to the Permitted Acquisition; and
(z) Holdings and its Subsidiaries have completed their due diligence
investigation with respect to the Target and such Permitted
Acquisition, which investigation was conducted in a commercially
reasonable manner, consistent with past practices;
(x) on or prior to the date of such Permitted Acquisition,
Agent shall have received (A) a copy of the acquisition agreement and (B) copies
of all other related agreements, instruments, opinions, certificates, lien
search results and other documents reasonably requested by Agent.
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6.2. Investments; Loans and Advances.
Except as otherwise expressly permitted by this Section 6, no Credit
Party shall make or permit to exist any investment in, or make, accrue or permit
to exist loans or advances of money to, any Person, through the direct or
indirect lending of money, holding of securities or otherwise, except that: (a)
Borrowers may hold investments comprised of notes payable, or stock or other
securities issued by Account Debtors to any Borrower pursuant to negotiated
agreements with respect to settlement of such Account Debtor's Accounts in the
ordinary course of business, so long as the aggregate amount of such Accounts so
settled by Borrowers does not exceed $250,000; (b) each Credit Party may make
and maintain investments in any other Credit Party; (c) Borrowers may make
investments, subject to Control Letters in (i) marketable direct obligations
issued or unconditionally guaranteed by the United States of America or any
agency thereof maturing within one year from the date of acquisition thereof,
(ii) commercial paper maturing no more than one year from the date of creation
thereof and currently having the highest rating obtainable from either Standard
& Poor's Ratings Group or Xxxxx'x Investors Service, Inc., (iii) certificates of
deposit maturing no more than one year from the date of creation thereof issued
by commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of "A" or better by a
nationally recognized rating agency (an "A Rated Bank"), (iv) time deposits
maturing no more than 30 days from the date of creation thereof with A Rated
Banks and (v) mutual funds that invest solely in one or more of the investments
described in clauses (i) through (iv) above, and (d) other investments not
exceeding $500,000 in the aggregate at any time outstanding.
6.3. Indebtedness.
No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by purchase
money security interests and Capital Leases permitted in Section 6.7(c), (ii)
the Loans and the other Obligations, (iii) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, (iv) existing Indebtedness
described in Disclosure Schedule 6.3 and refinancings thereof or amendments or
modifications thereto that do not have the effect of increasing the principal
amount thereof or changing the amortization thereof (other than to extend the
same) and that are otherwise on terms and conditions no less favorable to any
Credit Party than the terms of the Indebtedness being refinanced, amended or
modified, (v) Indebtedness consisting of intercompany loans and advances made by
any Credit Party to any other Credit Party, including, without limitation,
intercompany loans and advances evidenced by the promissory notes listed on
Disclosure Schedule 6.3 hereto (collectively, the "Intercompany Notes"), (vi)
Indebtedness arising upon the draw of one or more Permitted L/Cs, and (vii)
unsecured Indebtedness incurred (x) in connection with Permitted Acquisitions
not exceeding $10,000,000 in the aggregate at any time outstanding and (y) in
connection any single Permitted Acquisition not exceeding $2,000,000 in the
aggregate.
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6.4. Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any Affiliate (other than another Credit Party) thereof except
in the ordinary course of and pursuant to the reasonable requirements of such
Credit Party's business and upon fair and reasonable terms that are no less
favorable to such Credit Party than would be obtained in a comparable arm's
length transaction with a Person not an Affiliate of such Credit Party. In
addition, if any such transaction or series of related transactions involves
payments in excess of $1,000,000 in the aggregate, the terms of these
transactions must be disclosed in advance, in writing, to Agent and Lenders. All
such transactions existing as of the date hereof are described in Disclosure
Schedule 6.4(a).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes and stock option financing up to a maximum of $100,000 to any employee
and up to a maximum of $250,000 in the aggregate at any one time outstanding.
6.5. Capital Structure and Business.
No Credit Party shall (a) issue or sell any shares of preferred
Stock to the extent the terms of such preferred Stock provide for, or permit the
holders of such preferred Stock to require, a mandatory redemption or any other
cash payment prior to May 14, 2007 unless such redemption or other cash payment
is subject to the terms of this Agreement and the other Loan Documents, (b) make
any change in its capital structure as described in Disclosure Schedule 3.8,
including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; provided, that Holdings may issue or sell shares of its Stock
for cash so long as (i) the proceeds thereof are applied in prepayment of the
Obligations as required by Section 1.3(b)(iii), and (ii) no Change of Control
occurs after giving effect thereto, or (c) amend its charter or bylaws in a
manner that would adversely affect Agent or Lenders or such Credit Party's duty
or ability to repay the Obligations. No Credit Party shall engage in any
business other than the businesses currently engaged in by it or businesses
reasonably related thereto.
6.6. Guaranteed Indebtedness.
No Credit Party shall create, incur, assume or permit to exist any
Guaranteed Indebtedness except (a) by endorsement of instruments or items of
payment for deposit to the general account of any Credit Party, (b) for
Guaranteed Indebtedness incurred for the benefit of any other Credit Party if
the primary obligation is expressly permitted by this Agreement and (c)
reimbursement obligations in respect of Permitted L/Cs.
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6.7. Liens.
No Credit Party shall create, incur, assume or permit to exist any
Lien on or with respect to its Accounts or any of its other properties or assets
(whether now owned or hereafter acquired) except for (a) Permitted Encumbrances;
(b) Liens in existence on the date hereof and summarized on Disclosure Schedule
6.7 securing the Indebtedness described on Disclosure Schedule 6.3 and permitted
refinancings, extensions and renewals thereof, including extensions or renewals
of any such Liens; provided, that the principal amount of the Indebtedness so
secured is not increased and the Lien does not attach to any other property; and
(c) Liens created after the date hereof by conditional sale or other title
retention agreements (including Capital Leases) or in connection with purchase
money Indebtedness with respect to assets acquired by any Credit Party in the
ordinary course of business, involving the incurrence of an aggregate amount of
purchase money Indebtedness and Capital Lease Obligations of not more than
$3,000,000 outstanding at any one time for all such Liens (provided that such
Liens attach only to the assets subject to such purchase money debt and such
Indebtedness is or was incurred within 20 days following such purchase and does
not exceed one hundred percent (100%) of the purchase price of the subject
assets). In addition, no Credit Party shall become a party to any agreement,
note, indenture or instrument, or take any other action, that would prohibit the
creation of a Lien on any of its properties or other assets in favor of Agent,
on behalf of itself and Lenders, as additional collateral for the Obligations,
except operating leases, Capital Leases or Licenses which prohibit Liens upon
the assets that are subject thereto.
6.8. Sale of Stock and Assets.
Except as otherwise expressly permitted by Section 6.1 of this
Agreement, no Credit Party shall sell, transfer, convey, assign or otherwise
dispose of any of its properties or other assets, including the Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise) or any
of its Accounts, other than (a) the sale of Inventory in the ordinary course of
business, and (b) the sale, transfer, conveyance or other disposition by a
Credit Party of assets (other than the sale of Inventory in the ordinary course
of business) having a net book value not exceeding $250,000 in any single
transaction or $500,000 in the aggregate in any Fiscal Year. With respect to any
disposition of assets or other properties permitted pursuant to clause (b)
above, subject to Section 1.3(b), Agent agrees on reasonable prior written
notice to release its Lien on such assets or other properties in order to permit
the applicable Credit Party to effect such disposition and shall execute and
deliver to Borrowers, at Borrowers' expense, appropriate UCC-3 termination
statements and other releases as reasonably requested by Borrowers.
6.9. ERISA.
No Credit Party shall, or shall cause or permit any ERISA Affiliate
to, cause or permit to occur an event that could result in the imposition of a
Lien under Section 412 of the IRC or Section 302 or 4068 of ERISA or cause or
permit to occur an ERISA Event to the extent such ERISA Event could reasonably
be expected to have a Material Adverse Effect.
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6.10. Financial Covenants.
Borrowers shall not breach or fail to comply with any of the
Financial Covenants.
6.11. Hazardous Materials.
No Credit Party shall cause or permit a Release of any Hazardous
Material on, at, in, under, above, to, from or about any of the Real Estate
where such Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise adversely impact the value of any of the Real Estate or any of
the Collateral, other than such violations or Environmental Liabilities that
could not reasonably be expected to have a Material Adverse Effect.
6.12. Sale-Leasebacks.
No Credit Party shall engage in any sale-leaseback, synthetic lease
or similar transaction involving any of its assets.
6.13. Cancellation of Indebtedness.
No Credit Party shall cancel any claim or debt owing to it in excess
of $100,000, except for reasonable consideration negotiated on an arm's length
basis and in the ordinary course of its business consistent with past practices.
6.14. Restricted Payments.
No Credit Party shall make any Restricted Payment, except (a)
payments with respect to intercompany loans and advances between Credit Parties
to the extent permitted by Section 6.3, (b) dividends and distributions by
Subsidiaries of any Credit Party paid to such Credit Party, (c) employee loans
permitted under Section 6.4(b), (d) management fees paid by any Credit Party to
any other Credit Party, and (e) payments by Holdings to purchase or redeem its
Stock (or warrants, options or other rights to acquire such Stock) in an
aggregate amount not to exceed $10,000,000 in any Fiscal Year; provided that no
Default or Event of Default exists at the time of any such payment or would
occur as a result thereof.
6.15. Change of Corporate Name or Location; Change of Fiscal Year.
No Credit Party shall (a) change its name as it appears in official
filings in the state of its incorporation or other organization, (b) change its
chief executive office, principal place of business, or the location of its
records concerning the Collateral, or (c) change its organization identification
number, if any, issued by its state of incorporation or other organization, in
each case without at least 30 days prior written notice to Agent and, in the
case of a change in any Credit Party's chief executive office, a landlord
agreement that is reasonably satisfactory to Agent shall have been obtained with
respect to such location, and provided that any such new location shall be in
the continental United States. No Credit
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Party shall change its Fiscal Year. No Credit Party shall (a) change the type of
entity that it is, or (b) change its state of incorporation or organization, in
each case without at least 30 days prior written notice to Agent and after
Agent's written acknowledgment that any reasonable action requested by Agent in
connection therewith, including to continue the perfection of any Liens in favor
of Agent, on behalf of Lenders, in any Collateral, has been completed or taken.
6.16. No Impairment of Intercompany Transfers.
No Credit Party shall directly or indirectly enter into or become
bound by any agreement, instrument, indenture or other obligation (other than
this Agreement and the other Loan Documents) that could directly or indirectly
restrict, prohibit or require the consent of any Person with respect to the
payment of dividends or distributions or the making or repayment of intercompany
loans by a Subsidiary of any Borrower to any Borrower or between Borrowers.
6.17. No Speculative Transactions.
No Credit Party shall engage in any transaction involving commodity
options, futures contracts or similar transactions, except solely to hedge
against fluctuations in the prices of commodities owned or purchased by it and
the values of foreign currencies receivable or payable by it and interest swaps,
caps or collars.
6.18. Leases; Real Estate Purchases.
Except as permitted under Section 6.1 in connection with a Permitted
Acquisition, no Credit Party shall purchase a fee simple ownership interest in
Real Estate with an aggregate purchase price in excess of $5,000,000.
7. TERM
7.1. Termination.
The financing arrangements contemplated hereby shall be in effect
until the Commitment Termination Date, and the Loans and all other Obligations
shall be automatically due and payable in full on such date.
7.2. Survival of Obligations Upon Termination of Financing
Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the
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performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date; provided, that the provisions of Section
11, the payment obligations under Sections 1.15 and 1.16, and the indemnities
contained in the Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1. Events of Default.
The occurrence of any one or more of the following events
(regardless of the reason therefor) shall constitute an "Event of Default"
hereunder:
(a) Any Borrower (i) fails to make any payment of principal of the
Loans when due and payable, (ii) fails to make any payment of interest on, or
Fees owing in respect of, the Loans or any of the other Obligations within 3
Business Days following the date such interest, Fees or other Obligations are
due and payable, or (iii) fails to pay or reimburse Agent or Lenders for any
expense reimbursable hereunder or under any other Loan Document within 10 days
following Agent's demand for such reimbursement or payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Sections 1.4, 1.8, 5.4(a) or 6, or any of the
provisions set forth in Annexes C or F, respectively.
(c) Any Borrower fails or neglects to perform, keep or observe any
of the provisions of Section 4 or any provisions set forth in Annex E,
respectively, and the same shall remain unremedied for the earlier of 3 Business
Days after (i) any Credit Party's knowledge of such breach or (ii) receipt by
Borrowers of written notice from Agent of such breach.
(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for the earlier of 15 days
after (i) any Credit Party's knowledge of such breach or (ii) receipt by
Borrowers of written notice from Agent of such breach; provided, however, that
if such breach is not susceptible to cure within such 15-day period and
Borrowers are diligently pursuing such cure at the expiration of such 15-day
period, such 15-day period shall be extended an additional 15 days.
(e) A default or breach occurs under any other agreement, document
or instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when
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due in respect of any Indebtedness or Guaranteed Indebtedness (other than the
Obligations) of any Credit Party in excess of $500,000 in the aggregate
(including (x) undrawn committed or available amounts and (y) amounts owing to
all creditors under any combined or syndicated credit arrangements), or (ii)
causes, or permits any holder of such Indebtedness or Guaranteed Indebtedness or
a trustee to cause, Indebtedness or Guaranteed Indebtedness or a portion thereof
in excess of $500,000 in the aggregate to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment, or cash
collateral in respect thereof to be demanded, in each case, regardless of
whether such default is waived, or such right is exercised, by such holder or
trustee.
(f) Any representation or warranty herein or in any Loan Document
or in any written statement, report, financial statement or certificate made or
delivered to Agent or any Lender by any Credit Party is untrue or incorrect in
any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of
$250,000 or more are attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver, trustee,
custodian or assignee for the benefit of creditors of any Credit Party and such
condition continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party
seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for 60 days or more or a decree
or order granting the relief sought in such case or proceeding shall be entered
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing, or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in
excess of $500,000 in the aggregate at any time are outstanding against one or
more of the Credit Parties and the same are not, within 30 days after the entry
thereof, discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay.
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(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby due to any action or omission by
any Credit Party.
(l) Any Change of Control occurs.
8.2. Remedies.
(a) If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, suspend the Revolving Loan facility with respect to
additional Advances and/or the incurrence of additional Letter of Credit
Obligations, whereupon any additional Advances and additional Letter of Credit
Obligations shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Event of Default has occurred and is continuing, Agent may (and at the written
request of Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest applicable to the
outstanding principal balance of the Loans and the Letter of Credit Fees to the
Default Rate.
(b) If any Event of Default has occurred and is continuing, Agent
may (and at the written request of the Requisite Lenders shall), without notice:
(i) terminate the Revolving Loan facility with respect to further Advances or
the incurrence of further Letter of Credit Obligations; (ii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized as provided in Annex B, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrowers and each other Credit Party; (iii) conduct, at Borrowers' expense,
such appraisals of Borrowers' assets as may be desired by Agent or Lenders or
(iv) exercise any rights and remedies provided to Agent under the Loan Documents
or at law or equity, including all remedies provided under the Code; provided,
that upon the occurrence of an Event of Default specified in Sections 8.1(h) or
(i), the Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the aggregate Revolving Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
8.3. Waivers by Credit Parties.
Except as otherwise provided for in this Agreement or by applicable
law, each Credit Party waives (including for purposes of Section 12): (a)
presentment, demand and protest and notice of presentment, dishonor, notice of
intent to accelerate, notice of
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acceleration, protest, default, nonpayment, maturity, release, compromise,
settlement, extension or renewal of any or all commercial paper, accounts,
contract rights, documents, instruments, chattel paper and guaranties at any
time held by Agent on which any Credit Party may in any way be liable, and
hereby ratifies and confirms whatever Agent may do in this regard, (b) all
rights to notice and a hearing prior to Agent's taking possession or control of,
or to Agent's replevy, attachment or levy upon, the Collateral or any bond or
security that might be required by any court prior to allowing Agent to exercise
any of its remedies, and (c) the benefit of all valuation, appraisal, marshaling
and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make
an assignment to a Qualified Assignee of, or sell participations in, at any time
or times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
execution of an assignment agreement (an "Assignment Agreement") substantially
in the form attached hereto as Exhibit 9.1(a) and otherwise in form and
substance reasonably satisfactory to, and acknowledged by, Agent; (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) after giving effect to any such partial assignment, the assignee
Lender shall have Commitments in an amount at least equal to $5,000,000 and the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; (iv) include a payment to Agent of an assignment fee of $3,500; and
(v) so long as no Event of Default has occurred and is continuing, require the
consent of Borrowers, which shall not be unreasonably withheld or delayed. In
the case of an assignment by a Lender under this Section 9.1, the assignee shall
have, to the extent of such assignment, the same rights, benefits and
obligations as all other Lenders hereunder. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any permitted assignment shall give
rise to a direct obligation of Borrowers to the assignee and that the assignee
shall be considered to be a "Lender". In all instances, each Lender's liability
to make Loans hereunder shall be several and not joint and shall be limited to
such Lender's Pro Rata Share of the applicable Commitment. In the event Agent or
any Lender assigns or otherwise transfers all or any part of the Obligations in
accordance herewith, Agent or any such Lender shall so notify Borrowers and
Borrowers shall, upon the written request of Agent or such Lender, execute new
Notes in exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 9.1(a), any Lender may at any time pledge
the Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to a Federal Reserve Bank, and any Lender that is an
investment fund may assign the Obligations held by it and such Lender's rights
under this
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Agreement and the other Loan Documents to another investment fund managed by the
same investment advisor; provided, that no such pledge to a Federal Reserve Bank
shall release such Lender from such Lender's obligations hereunder or under any
other Loan Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.13,
1.15, 1.16 and 9.8, each Borrower acknowledges and agrees that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence no Borrower or Credit Party shall have any obligation or duty
to any participant. Neither Agent nor any Lender (other than the Lender selling
a participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no Lender
shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrowers shall only be certified by
Borrowers as having been prepared by Borrowers in compliance with the
representations contained in Section 3.4(c).
(e) Subject to Section 11.8, any Lender may furnish any
information concerning Credit Parties in the possession of such Lender from time
to time to assignees and participants (including prospective assignees and
participants); provided, that such Lender
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shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing,
no Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.16(a), increased
costs under Section 1.16(b), an inability to fund LIBOR Loans under Section
1.16(c), or withholding taxes in accordance with Section 1.15(a).
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrowers, the option to provide to Borrowers all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrowers pursuant
to this Agreement; provided, that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with written notice to, but without the prior
written consent of, Borrowers and Agent and without paying any processing fee
therefor assign all or a portion of its interests in any Loans to the Granting
Lender or to any financial institutions (consented to by Borrowers and Agent in
writing) providing liquidity and/or credit support to or for the account of such
SPC to support the funding or maintenance of Loans and (ii) subject to the terms
of Section 11.8, disclose on a confidential basis any non-public information
relating to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such SPC. Subject
to the terms of Section 11.2, this Section 9.1(g) may not be amended without the
prior written consent of each Granting Lender, all or any of whose Loans are
being funded by an SPC at the time of such amendment. For the avoidance of
doubt, the Granting Lender shall for all purposes, including without limitation,
the approval of any amendment or waiver of any provision of any Loan Document or
the obligation to pay any amount otherwise payable by the Granting Lender under
the Loan Documents, continue to be the Lender of record hereunder.
9.2. Appointment of Agent.
GE Capital is hereby appointed to act on behalf of all Lenders as
Agent under this Agreement and the other Loan Documents. The provisions of this
Section 9.2 are solely for the benefit of Agent and Lenders and no Credit Party
nor any other Person shall have any rights as a third party beneficiary of any
of the provisions hereof. In performing its functions and duties under this
Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
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obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person. Agent shall have no duties or responsibilities except
for those expressly set forth in this Agreement and the other Loan Documents.
The duties of Agent shall be mechanical and administrative in nature and Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct, as determined by a
final court of competent jurisdiction.
If Agent shall request instructions from Requisite Lenders or all
affected Lenders with respect to any act or action (including failure to act) in
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders or all affected Lenders,
as the case may be, and Agent shall not incur liability to any Person by reason
of so refraining. Agent shall be fully justified in failing or refusing to take
any action hereunder or under any other Loan Document (a) if such action would,
in the opinion of Agent, be contrary to law or the terms of this Agreement or
any other Loan Document, (b) if such action would, in the opinion of Agent,
expose Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders or all affected Lenders, as applicable.
9.3. Agent's Reliance, Etc.
Neither Agent nor any of its Affiliates nor any of their respective
directors, officers, agents or employees shall be liable for any action taken or
omitted to be taken by it or them under or in connection with this Agreement or
the other Loan Documents, except for damages caused by its or their own gross
negligence or willful misconduct, as determined by a final court of competent
jurisdiction. Without limiting the generality of the foregoing, Agent: (a) may
treat the payee of any Note as the holder thereof until Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
reasonably satisfactory to Agent; (b) may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts; (c) makes no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties or representations made in or in
connection with this
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Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.4. GE Capital and Affiliates.
With respect to its Commitments hereunder, GE Capital shall have the
same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include GE
Capital in its individual capacity. GE Capital and its Affiliates may lend money
to, invest in, and generally engage in any kind of business with, any Credit
Party, any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital were
not Agent and without any duty to account therefor to Lenders. GE Capital and
its Affiliates may accept fees and other consideration from any Credit Party for
services in connection with this Agreement or otherwise without having to
account for the same to Lenders.
9.5. Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender and based on the Financial Statements
referred to in Section 3.4(a) and such other documents and information as it has
deemed appropriate, made its own credit and financial analysis of the Credit
Parties and its own decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement. Each Lender acknowledges the potential
conflict of interest of each other Lender as a result of Lenders holding
disproportionate interests in the Loans, and expressly consents to, and waives
any claim based upon, such conflict of interest.
9.6. Indemnification.
Lenders agree to indemnify Agent (to the extent not reimbursed by
Credit Parties and without limiting the obligations of Borrowers hereunder),
ratably according to their respective Pro Rata Shares, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever that
may be imposed on, incurred by, or asserted against Agent in any way relating to
or arising out of this Agreement or any other Loan Document or any action taken
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or omitted to be taken by Agent in connection therewith; provided, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. Without limiting
the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees) incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent is not reimbursed for such expenses by Credit Parties.
9.7. Successor Agent.
Agent may resign at any time by giving not less than 30 days' prior
written notice thereof to Lenders and Borrowers. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment within 30 days after the resigning Agent's giving
notice of resignation, then the resigning Agent may, on behalf of Lenders,
appoint a successor Agent, which shall be a Lender, if a Lender is willing to
accept such appointment, or otherwise shall be a commercial bank or financial
institution or a subsidiary of a commercial bank or financial institution if
such commercial bank or financial institution is organized under the laws of the
United States of America or of any State thereof and has a combined capital and
surplus of at least $300,000,000. If no successor Agent has been appointed
pursuant to the foregoing, within 30 days after the date such notice of
resignation was given by the resigning Agent, such resignation shall become
effective and the Requisite Lenders shall thereafter perform all the duties of
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Agent as provided above. Any successor Agent appointed by Agent or
Requisite Lenders hereunder shall be subject to the prior approval of Borrowers,
such approval not to be unreasonably withheld or delayed; provided, that such
approval shall not be required if an Event of Default has occurred and is
continuing. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning Agent. Upon the
earlier of the acceptance of any appointment as Agent hereunder by a successor
Agent or the effective date of the resigning Agent's resignation, the resigning
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent shall continue. After any resigning Agent's
resignation hereunder, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was acting
as Agent under this Agreement and the other Loan Documents.
9.8. Setoff and Sharing of Payments.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence and
during the continuance of
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any Event of Default and subject to Section 9.9(f), each Lender is hereby
authorized at any time or from time to time, without notice to any Credit Party
or to any other Person, any such notice being hereby expressly waived, to offset
and to appropriate and to apply any and all balances held by it at any of its
offices for the account of any Borrower or Guarantor (regardless of whether such
balances are then due to such Borrower or Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of any Borrower or Guarantor against and on account of
any of the Obligations that are not paid when due. Any Lender exercising a right
of setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to Sections 1.13, 1.15 or
1.16). Each Credit Party that, during the existence and continuance of an Event
of Default, is a Borrower or Guarantor agrees, to the fullest extent permitted
by law, that (a) any Lender may exercise its right to offset with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such amounts so offset to other Lenders and holders and (b)
any Lender so purchasing a participation in the Loans made or other Obligations
held by other Lenders or holders may exercise all rights of offset, bankers'
lien, counterclaim or similar rights with respect to such participation as fully
as if such Lender or holder were a direct holder of the Loans and the other
Obligations in the amount of such participation. Notwithstanding the foregoing,
if all or any portion of the offset amount or payment otherwise received is
thereafter recovered from the Lender that has exercised the right of offset, the
purchase of participations by that Lender shall be rescinded and the purchase
price restored without interest.
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions
in Concert.
(a) Advances; Payments.
(i) Agent shall notify Lenders, promptly after receipt of a
Notice of Revolving Credit Advance and in any event prior to 1:00 p.m. (New York
time) on the date such Notice of Revolving Advance is received, by telecopy,
telephone or other similar form of transmission. Each Lender shall make the
amount of such Lender's Pro Rata Share of such Revolving Credit Advance
available to Agent in same day funds by wire transfer to Agent's account as set
forth in Annex G not later than 3:00 p.m. (New York time) on the requested
funding date, in the case of an Index Rate Loan, and not later than 11:00 a.m.
(New York time) on the requested funding date, in the case of a LIBOR Loan.
After receipt of such wire transfers (or, in the Agent's sole discretion, before
receipt of such wire transfers), subject to the terms hereof, Agent shall make
the requested Revolving Credit Advance to Borrowers. All payments by each Lender
shall be made without setoff, counterclaim or deduction of any kind.
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(ii) On the 2nd Business Day of each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrowers since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. To the extent that any Lender (a "Non-Funding Lender") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrowers. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in Annex G or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume that
each Lender will make its Pro Rata Share of each Revolving Credit Advance
available to Agent on each funding date. If such Pro Rata Share is not, in fact,
paid to Agent by such Lender when due, Agent will be entitled to recover such
amount on demand from such Lender without setoff, counterclaim or deduction of
any kind. If any Lender fails to pay the amount of its Pro Rata Share forthwith
upon Agent's demand, Agent shall promptly notify Borrowers and Borrowers shall
immediately repay such amount to Agent. Nothing in this Section 9.9(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Lender or to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights that Borrowers may have against any Lender as a result of any default by
such Lender hereunder. To the extent that Agent advances funds to any Borrower
on behalf of any Lender and is not reimbursed therefor on the same Business Day
as such Advance is made, Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement
in the belief or expectation that a related payment has been or will be received
by Agent from Borrowers and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received
by Agent under this Agreement must be returned to any Borrower or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with
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interest at such rate, if any, as Agent is required to pay to any Borrower or
such other Person, without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder on the
date specified therefor shall not relieve any other Lender (each such other
Lender, an "Other Lender") of its obligations to make such Advance or purchase
such participation on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make an Advance,
purchase a participation or make any other payment required hereunder.
Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender
shall not have any voting or consent rights under or with respect to any Loan
Document or constitute a "Lender" (or be included in the calculation of
"Requisite Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document. At Borrowers' request, Agent or a Person
reasonably acceptable to Agent shall have the right with Agent's consent and in
Agent's sole discretion (but shall have no obligation) to purchase from any
Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at Agent's
request, sell and assign to Agent or such Person, all of the Commitments of that
Non-Funding Lender for an amount equal to the principal balance of all Loans
held by such Non-Funding Lender and all accrued interest and fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment Agreement.
(e) Dissemination of Information. Agent shall use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, that
Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Agent's gross negligence or willful
misconduct, as determined by a final court of competent jurisdiction. Lenders
acknowledge that Borrowers are required to provide Financial Statements to
Lenders in accordance with Annex E hereto and agree that Agent shall have no
duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
10.1. Successors and Assigns.
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of each Credit Party, Agent, Lenders and their
respective successors and
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assigns (including, in the case of any Credit Party, a debtor-in-possession on
behalf of such Credit Party), except as otherwise provided herein or therein. No
Credit Party may assign, transfer, hypothecate or otherwise convey its rights,
benefits, obligations or duties hereunder or under any of the other Loan
Documents without the prior express written consent of Agent and Lenders. Any
such purported assignment, transfer, hypothecation or other conveyance by any
Credit Party without the prior express written consent of Agent and Lenders
shall be void. The terms and provisions of this Agreement are for the purpose of
defining the relative rights and obligations of each Credit Party, Agent and
Lenders with respect to the transactions contemplated hereby and no Person shall
be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement.
The Loan Documents constitute the complete agreement between the
parties with respect to the subject matter thereof and may not be modified,
altered or amended except as set forth in Section 11.2. Any letter of interest,
commitment letter or fee letter (other than the GE Capital Fee Letter) if any,
between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent,
no amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent, Borrowers, and by Requisite Lenders or all
affected Lenders, as applicable. Except as set forth in clause (c) below, all
such amendments, modifications, terminations or waivers requiring the consent of
any Lenders shall require the written consent of Requisite Lenders.
(b) [Intentionally Omitted.]
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed to directly affect all Lenders; (ii) reduce the principal of, rate of
interest on (other than a reduction from the Default Rate to the interest rate
that would have been applicable to such Obligations in the event the Agent or
Requisite Lenders had not elected to impose the Default Rate) or Fees payable
with respect to any Loan or Letter of Credit Obligations of any affected Lender;
(iii) extend any scheduled payment date (other than payment dates of mandatory
prepayments under Section 1.3(b)(ii)-(iii)) or final maturity date of the
principal amount of any Loan of any affected Lender; (iv) waive, forgive, defer,
extend or postpone any payment of interest or Fees as to any affected Lender;
(v) release any Guaranty or, except as otherwise permitted
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herein or in the other Loan Documents, release, or permit any Credit Party to
sell or otherwise dispose of, any Collateral with a value exceeding $5,000,000
in the aggregate (which action shall be deemed to directly affect all Lenders);
(vi) change the percentage of the Commitments or of the aggregate unpaid
principal amount of the Loans that shall be required for Lenders or any of them
to take any action hereunder; and (vii) amend or waive this Section 11.2 or the
definition of the term "Requisite Lenders", insofar as such definition affects
the substance of this Section 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent or L/C Issuer, as the case may be, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders, the
consent of Requisite Lenders is obtained, but the consent of other Lenders whose
consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clause (ii) below being referred
to as a "Non-Consenting Lender"), or
(ii) requiring the consent of Requisite Lenders, the consent
of Lenders holding fifty-one percent (51%) or more of the aggregate Commitments
is obtained, but the consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrowers' request,
Agent or a Person reasonably acceptable to Agent shall have the right with
Agent's consent and in Agent's sole discretion (but shall have no obligation) to
purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders agree
that they shall, upon Agent's request, sell and assign to Agent or such Person,
all of the Commitments of such Non-Consenting Lenders for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lenders and all
accrued but unpaid interest and Fees with respect thereto through the date of
sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than unasserted indemnification Obligations), termination of
the Commitments and a
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release of all claims against Agent and Lenders, and so long as no suits,
actions, proceedings or claims are pending or threatened against any Indemnified
Person asserting any damages, losses or liabilities that are Indemnified
Liabilities, Agent shall promptly deliver to Borrowers termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3. Fees and Expenses.
Borrowers shall reimburse Agent (and, with respect to clauses (c)
and (d) below, all Lenders) for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel, consultants, auditors or other
advisors (including environmental and management consultants and appraisers),
incurred in connection with the negotiation and preparation of the Loan
Documents, closing of the transactions contemplated hereunder and those the
perfection of Liens on Collateral and incurred in connection with:
(a) the forwarding to Borrowers or any other Person on behalf of
Borrowers by Agent of the proceeds of any Loan (including a wire transfer fee of
$25 per wire transfer);
(b) any amendment, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or advice in connection with
the syndication and administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Borrower or any other Person and
whether as a party, witness or otherwise), other than any such litigation,
contest, dispute, suit, proceeding or action instituted by Agent or any Lender
against one or more other Lenders or the Agent only, in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Borrowers or any other Person that may be obligated to Agent by virtue of the
Loan Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; provided, that
in the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders; provided,
further, that no Person shall be entitled to reimbursement under this clause (c)
in respect of any litigation, contest, dispute, suit, proceeding or action to
the extent any of the foregoing results from such Person's gross negligence or
willful misconduct, as determined by a final court of competent jurisdiction;
(d) any attempt to enforce any remedies of Agent against any or
all of the Credit Parties or any other Person that may be obligated to Agent or
any Lender by virtue of any of the Loan Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more
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Events of Default; provided, that in the case of reimbursement of counsel for
Lenders other than Agent, such reimbursement shall be limited to one counsel for
all such Lenders;
(e) any workout or restructuring of the Loans during the pendency
of one or more Events of Default; and
(f) efforts to verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrowers to Agent; provided, that
Borrowers shall not be liable for fees and expenses incurred on or prior to the
Closing Date in connection with the negotiation and preparation of the Loan
Documents and closing of the transactions contemplated hereunder in an amount in
excess of $100,000. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: reasonable fees, costs and
expenses of accountants, environmental advisors, appraisers, investment bankers,
management and other consultants and paralegals; court costs and expenses;
photocopying and duplication expenses; court reporter fees, costs and expenses;
long distance telephone charges; air express charges; telegram or telecopy
charges; secretarial overtime charges; and reasonable expenses for travel,
lodging and food paid or incurred in connection with the performance of such
legal or other advisory services.
11.4. No Waiver.
Agent's or any Lender's failure, at any time or times, to require
strict performance by the Credit Parties of any provision of this Agreement or
any other Loan Document shall not waive, affect or diminish any right of Agent
or such Lender thereafter to demand strict compliance and performance herewith
or therewith. Any suspension or waiver of an Event of Default shall not suspend,
waive or affect any other Event of Default whether the same is prior or
subsequent thereto and whether the same or of a different type. Subject to the
provisions of Section 11.2, none of the undertakings, agreements, warranties,
covenants and representations of any Credit Party contained in this Agreement or
any of the other Loan Documents and no Default or Event of Default by any Credit
Party shall be deemed to have been suspended or waived by Agent or any Lender,
unless such waiver or suspension is by an instrument in writing signed by an
officer of or other authorized employee of Agent and the applicable required
Lenders, and directed to Borrowers specifying such suspension or waiver.
11.5. Remedies.
Agent's and Lenders' rights and remedies under this Agreement shall
be cumulative and nonexclusive of any other rights and remedies that Agent or
any Lender may
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have under any other agreement, including the other Loan Documents, by operation
of law or otherwise. Recourse to the Collateral shall not be required.
11.6. Severability.
Wherever possible, each provision of this Agreement and the other
Loan Documents shall be interpreted in such a manner as to be effective and
valid under applicable law, but if any provision of this Agreement or any other
Loan Document shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement or such other Loan Document.
11.7. Conflict of Terms.
Except as otherwise provided in this Agreement or any of the other
Loan Documents by specific reference to the applicable provisions of this
Agreement, if any provision contained in this Agreement conflicts with any
provision in any of the other Loan Documents, the provision contained in this
Agreement shall govern and control.
11.8. Confidentiality.
Agent and each Lender agree to use commercially reasonable efforts
(equivalent to the efforts Agent or such Lender applies to maintaining the
confidentiality of its own confidential information) to maintain as confidential
all confidential information provided to them by the Credit Parties and
designated as confidential for a period of two years following receipt thereof,
except that Agent and any Lender may disclose such information (a) to Persons
employed or engaged by Agent or such Lender; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenants contained in this Section 9.1(e) and Section 11.8 (and any such
bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any Litigation to which Agent or such Lender is a party; or (f) that ceases to
be confidential through no fault of Agent or any Lender. Notwithstanding
anything to the contrary set forth herein or in any other agreement to which the
parties hereto are parties or by which they are bound, the obligations of
confidentiality contained herein and therein, as they relate to the transactions
contemplated by the Agreement and the other Loan Documents (the "Transaction"),
shall not apply to the federal tax structure or federal tax treatment of the
Transaction, and each party hereto (and any employee, representative, or agent
of or on behalf of any party hereto) may disclose to any and all persons,
without limitation of any kind, the federal tax structure and federal tax
treatment of the Transaction. The preceding sentence is intended to cause the
Transaction to be treated as not having been offered under
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conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any
successor provision) of the Treasury Regulations promulgated under Section 6011
of the IRC, and shall be construed in a manner consistent with such purpose. In
addition, each party hereto acknowledges that it has no proprietary or exclusive
rights to the federal tax structure of the Transaction or any federal tax matter
or federal tax idea related to the Transaction.
11.9. GOVERNING LAW.
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS,
IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND
AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX
XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY
CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED,
THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM
THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX XXXX XXXXXX;
PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH
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CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE UNITED
STATES MAILS, PROPER POSTAGE PREPAID.
11.10. Notices.
Except as otherwise provided herein, whenever it is provided herein
that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other parties, or whenever any of the parties desires to give or serve upon any
other parties any communication with respect to this Agreement, each such
notice, demand, request, consent, approval, declaration or other communication
shall be in writing and shall be deemed to have been validly served, given or
delivered: (a) upon the earlier of actual receipt and 3 Business Days after
deposit in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid; (b) upon transmission, when sent by
telecopy or other similar facsimile transmission (with such telecopy or
facsimile promptly confirmed by delivery of a copy by personal delivery or
United States Mail as otherwise provided in this Section 11.10); (c) 1 Business
Day after deposit with a reputable overnight courier with all charges prepaid or
(d) when delivered, if hand-delivered by messenger, all of which shall be
addressed to the party to be notified and sent to the address or facsimile
number indicated in Annex H or to such other address (or facsimile number) as
may be substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrowers or Agent) designated in Annex H to receive copies shall in
no way adversely affect the effectiveness of such notice, demand, request,
consent, approval, declaration or other communication.
11.11. Section Titles.
The Section titles and Table of Contents contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement between the parties hereto.
11.12. Counterparts.
This Agreement may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement.
11.13. WAIVER OF JURY TRIAL.
BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL
TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND
EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY
(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
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TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14. Press Releases and Related Matters.
Each Credit Party executing this Agreement agrees that neither it
nor its Affiliates will in the future issue any press releases or other public
disclosure using the name of GE Capital or its affiliates or referring to this
Agreement or the other Loan Documents without at least 2 Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement. Agent or such Lender shall provide a draft of
any such tombstone or similar advertising material to Borrowers for review and
comment prior to the publication thereof. Agent reserves the right to provide to
industry trade organizations information necessary and customary for inclusion
in league table measurements.
11.15. Reinstatement.
This Agreement shall remain in full force and effect and continue to
be effective should any petition be filed by or against any Borrower for
liquidation or reorganization, should any Borrower become insolvent or make an
assignment for the benefit of any creditor or creditors or should a receiver or
trustee be appointed for all or any significant part of any Borrower's assets,
and shall continue to be effective or to be reinstated, as the case may be, if
at any time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a "voidable
preference," "fraudulent conveyance," or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.
11.16. Advice of Counsel.
Each of the parties represents to each other party hereto that it
has discussed this Agreement and, specifically, the provisions of Sections 11.9
and 11.13, with its counsel.
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11.17. No Strict Construction.
The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
12. CROSS-GUARANTY
12.1. Cross-Guaranty.
Each Borrower hereby agrees that such Borrower is jointly and
severally liable for, and hereby absolutely and unconditionally guarantees to
Agent and Lenders and their respective successors and assigns, the full and
prompt payment (whether at stated maturity, by acceleration or otherwise) and
performance of, all Obligations owed or hereafter owing to Agent and Lenders by
each other Borrower. Each Borrower agrees that its guaranty obligation hereunder
is a continuing guaranty of payment and performance and not of collection, that
its obligations under this Section 12 shall not be discharged until payment and
performance, in full, of the Obligations has occurred, and that its obligations
under this Section 12 shall be absolute and unconditional, irrespective of, and
unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Section 12) or any other Loan Document or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect
its Lien against, any security for the Obligations or any action, or the absence
of any action, by Agent and Lenders in respect thereof (including the release of
any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2. Waivers by Borrowers.
Each Borrower expressly waives all rights it may have now or in the
future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Agent or
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Lenders to xxxxxxxx assets or to proceed in respect of the Obligations
guaranteed hereunder against any other Credit Party, any other party or against
any security for the payment and performance of the Obligations before
proceeding against, or as a condition to proceeding against, such Borrower. It
is agreed among each Borrower, Agent and Lenders that the foregoing waivers are
of the essence of the transaction contemplated by this Agreement and the other
Loan Documents and that, but for the provisions of this Section 12 and such
waivers, Agent and Lenders would decline to enter into this Agreement.
12.3. Benefit of Guaranty.
Each Borrower agrees that the provisions of this Section 12 are for
the benefit of Agent and Lenders and their respective successors, transferees,
endorsees and assigns, and nothing herein contained shall impair, as between any
other Borrower and Agent or Lenders, the obligations of such other Borrower
under the Loan Documents.
12.4. Subordination of Subrogation, Etc.
Notwithstanding anything to the contrary in this Agreement or in any
other Loan Document, and except as set forth in Section 12.7, each Borrower
hereby expressly and irrevocably subordinates to payment of the Obligations any
and all rights at law or in equity to subrogation, reimbursement, exoneration,
contribution, indemnification or set off and any and all defenses available to a
surety, guarantor or accommodation co-obligor until the Obligations are
indefeasibly paid in full in cash. Each Borrower acknowledges and agrees that
this subordination is intended to benefit Agent and Lenders and shall not limit
or otherwise affect such Borrower's liability hereunder or the enforceability of
this Section 12, and that Agent, Lenders and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set
forth in this Section 12.4.
12.5. Election of Remedies.
If Agent or any Lender may, under applicable law, proceed to realize
its benefits under any of the Loan Documents giving Agent or such Lender a Lien
upon any Collateral, whether owned by any Borrower or by any other Person,
either by judicial foreclosure or by non-judicial sale or enforcement, Agent or
any Lender may, at its sole option, determine which of its remedies or rights it
may pursue without affecting any of its rights and remedies under this Section
12. If, in the exercise of any of its rights and remedies, Agent or any Lender
shall forfeit any of its rights or remedies, including its right to enter a
deficiency judgment against any Borrower or any other Person, whether because of
any applicable laws pertaining to "election of remedies" or the like, each
Borrower hereby consents to such action by Agent or such Lender and waives any
claim based upon such action, even if such action by Agent or such Lender shall
result in a full or partial loss of any rights of subrogation that each Borrower
might otherwise have had but for such action by Agent or such Lender. Any
election of remedies that results in the denial or impairment of the right of
Agent or any Lender to seek a deficiency judgment against any Borrower shall not
impair any other Borrower's obligation to pay the full amount of the
Obligations. In the
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event Agent or any Lender shall bid at any foreclosure or trustee's sale or at
any private sale permitted by law or the Loan Documents, Agent or such Lender
may bid all or less than the amount of the Obligations and the amount of such
bid need not be paid by Agent or such Lender but shall be credited against the
Obligations. The amount of the successful bid at any such sale, whether Agent,
Lender or any other party is the successful bidder, shall be conclusively deemed
to be the fair market value of the Collateral and the difference between such
bid amount and the remaining balance of the Obligations shall be conclusively
deemed to be the amount of the Obligations guaranteed under this Section 12,
notwithstanding that any present or future law or court decision or ruling may
have the effect of reducing the amount of any deficiency claim to which Agent or
any Lender might otherwise be entitled but for such bidding at any such sale.
12.6. Limitation.
Notwithstanding any provision herein contained to the contrary, each
Borrower's liability under this Section 12 (which liability is in any event in
addition to amounts for which such Borrower is primarily liable under Section 1)
shall be limited to an amount not to exceed as of any date of determination the
greater of:
(a) the net amount of all Loans advanced to Borrowers under this
Agreement and then re-loaned or otherwise transferred to, or for the benefit of,
Borrowers; and
(b) the amount that could be claimed by Agent and Lenders from
such Borrower under this Section 12 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrower's right of contribution and indemnification from each
other Borrower under Section 12.7.
12.7. Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Borrower shall make a payment under
this Section 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "Guarantor Payment") that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations satisfied by such
Guarantor Payment in the same proportion that such Borrower's "Allocable Amount"
(as defined below) (as determined immediately prior to such Guarantor Payment)
bore to the aggregate Allocable Amounts of each of the Borrowers as determined
immediately prior to the making of such Guarantor Payment, then, following
indefeasible payment in full in cash of the Obligations and termination of the
Commitments, such Borrower shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Borrower for the
amount of such excess, pro rata based upon their respective Allocable Amounts in
effect immediately prior to such Guarantor Payment.
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(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Section 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Section 12.7 is intended only to define the relative rights
of Borrowers and nothing set forth in this Section 12.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 12.1. Nothing contained in this Section
12.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of Borrower to which such
contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit
Parties under this Section 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
1.2. Liability Cumulative.
The liability of Borrowers under this Section 12 is in addition to
and shall be cumulative with all liabilities of each Borrower to Agent and
Lenders under this Agreement and the other Loan Documents to which such Borrower
is a party or in respect of any Obligations or obligation of the other Borrower,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWERS:
ODYSSEY HEALTHCARE OPERATING A, LP
By: Odyssey HealthCare GP, LLC
Its: General Partner
By:___________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Chief
Financial Officer
ODYSSEY HEALTHCARE OPERATING B, LP
By: Odyssey HealthCare GP, LLC
Its: General Partner
By:___________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Chief
Financial Officer
HOSPICE OF THE PALM COAST, INC.
By:___________________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and Chief
Financial Officer
AGENT AND LENDERS:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
By:______________________________________
Duly Authorized Signatory
Odyssey Credit Agreement - Borrower and Agent Signature Page
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers.
ODYSSEY HEALTHCARE, INC.
By_________________________________________
Its: Senior Vice President and Chief
Financial Officer
ODYSSEY HEALTHCARE HOLDING COMPANY
By________________________________________
Its: Senior Vice President and Chief
Financial Officer
ODYSSEY HEALTHCARE GP, LLC
By_________________________________________
Its: Senior Vice President and Chief
Financial Officer
ODYSSEY HEALTHCARE LP, LLC
By_________________________________________
Its: Manager
ODYSSEY HEALTHCARE MANAGEMENT, LP
By: Odyssey HealthCare GP, LLC
Its: General Partner
By____________________________________
Its: Senior Vice President and Chief
Financial Officer
Odyssey Credit Agreement - Credit Party Signature Page
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex F.
"Accounts" means all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including (a) all
accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper or
Instruments), (including any such obligations that may be characterized as an
account or contract right under the Code), (b) all of each Credit Party's rights
in, to and under all purchase orders or receipts for goods or services, (c) all
of each Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security and guaranties of any kind, given by any Account Debtor or
any other Person with respect to any of the foregoing.
"Advance" means any Revolving Credit Advance.
"Affected Lender" has the meaning ascribed to it in Section 1.16(d).
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, ten percent (10%) or more of the Stock having
ordinary voting power in the election of directors of such Person, (b) each
Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Borrowers, the immediate family members, spouses
and lineal
Annex A - Page 1
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
"Agreement" means the Credit Agreement by and among Borrowers, the
other Credit Parties party thereto, GE Capital, as Agent and Lender and the
other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable Margins" means collectively the Applicable Revolver
Index Margin and the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in Section
9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. Sections 101 et seq.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrowers" and "Borrower" have the respective meanings ascribed
thereto in the preamble to the Agreement.
"Business Associate Agreement" means that certain Business Associate
Agreement duly executed by and between Holdings and Agent and dated as of or
prior to the date of this Agreement, together with all exhibits and schedules
thereto, as the same may be amended, modified, restated or supplemented from
time to time in accordance with the terms thereof.
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the States of
Illinois and/or New York
Annex A - Page 2
and in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP, excluding
in each instance, any such expenditures made pursuant to a Permitted
Acquisition.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in Section
1.8.
"Certificate of Exemption" has the meaning ascribed to it in Section
1.15(c).
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934)
shall have acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of thirty-five percent (35%) or more of the issued and
outstanding shares of capital Stock of Holdings having the right to vote for the
election of directors of Holdings under ordinary circumstances; (b) during any
period of twelve consecutive calendar months, individuals who at the beginning
of such period constituted the board of directors of Holdings (together with any
new directors whose election by the board of directors of Holdings or whose
nomination for election by the Stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office; (c)
Holdings ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its direct
Subsidiaries; (d) Parent ceases to own and control all of the economic and
voting rights associated with all of the outstanding capital Stock of any of its
direct Subsidiaries; (e) Odyssey GP ceases to own and control all of the
economic and voting rights associated with all of the outstanding capital Stock
of any of its direct Subsidiaries; or (f) Odyssey LP ceases to own and control
all of the economic and
Annex A - Page 3
voting rights associated with all of the outstanding capital Stock of any of its
direct Subsidiaries.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined
in the Code, including electronic chattel paper, now owned or hereafter acquired
by any Credit Party.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
"Closing Date" means May 14, 2004.
"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, that to
the extent that the Code is used to define any term herein or in any Loan
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement
and the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of Agent, on behalf
of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Master
Pledge Agreement, the Guaranties, the Trademark Security Agreements, and all
similar agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.
"Collection Account" means that certain account of Agent, account
number 000-000-00 in the name of Agent at Deutsche Bank in New York, New York
ABA No. 021
Annex A - Page 4
001 033, or such other account as may be specified in writing by Agent as the
"Collection Account."
"Commitment Termination Date" means the earliest of (a) May 14,
2007, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrowers of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, such Lender's Revolving
Loan Commitment as set forth on Annex I to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Revolving Loan Commitments, which aggregate commitment
shall be $20,000,000 on the Closing Date, and as to each of clauses (a) and (b),
as such Commitments may be increased, reduced, amortized or adjusted from time
to time in accordance with the Agreement.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement, in form and substance
reasonably satisfactory to Agent, between Agent and (i) the issuer of
uncertificated securities with respect to uncertificated securities in the name
of any Credit Party, (ii) a securities intermediary with respect to securities,
whether certificated or uncertificated, securities entitlements and other
financial assets held in a securities account in the name of any Credit Party,
(iii) a futures commission merchant or clearing house, as applicable, with
respect to commodity accounts and commodity contracts held by any Credit Party,
whereby, among other things, the issuer, securities intermediary or futures
commission merchant disclaims any security interest in the applicable financial
assets, acknowledges the Lien of Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Agent without further consent by the affected Credit Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and General
Intangibles of like nature
Annex A - Page 5
(whether registered or unregistered), all registrations and recordings thereof,
and all applications in connection therewith, including all registrations,
recordings and applications in the United States Copyright Office or in any
similar office or agency of the United States, any state or territory thereof,
or any other country or any political subdivision thereof, and (b) all reissues,
extensions or renewals thereof.
"Credit Parties" means Odyssey Healthcare Management LP, a Delaware
limited partnership, Holdings, Parent, Odyssey GP, Odyssey LP, each Borrower,
and each of their respective Subsidiaries.
"Default" means any event that, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Disclosure Schedules 1.4 through 6.7 in the Index to the
Agreement.
"Documents" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication, plus (d) Pro Forma Acquisition EBITDA. For purposes of
this definition, the following items shall be excluded in determining
consolidated net income of a Person: (1) except as otherwise included in the
calculation of Pro Forma Acquisition EBITDA, the income (or deficit) of any
other Person accrued prior to the date it became a Subsidiary of, or was merged
or consolidated into, such
Annex A - Page 6
Person or any of such Person's Subsidiaries; (2) the income (or deficit) of any
other Person (other than a Subsidiary) in which such Person has an ownership
interest, except to the extent any such income has actually been received by
such Person in the form of cash dividends or distributions; (3) the
undistributed earnings of any Subsidiary of such Person to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary; (4) any restoration to income
of any contingency reserve, except to the extent that provision for such reserve
was made out of income accrued during such period; (5) any write-up of any
asset; (6) any net gain from the collection of the proceeds of life insurance
policies; (7) any net gain arising from the acquisition of any securities, or
the extinguishment, under GAAP, of any Indebtedness, of such Person, (8) in the
case of a successor to such Person by consolidation or merger or as a transferee
of its assets, any earnings of such successor prior to such consolidation,
merger or transfer of assets, and (9) any deferred credit representing the
excess of equity in any Subsidiary of such Person at the date of acquisition of
such Subsidiary over the cost to such Person of the investment in such
Subsidiary.
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or
Annex A - Page 7
presence of a Hazardous Material whether on, at, in, under, from or about or in
the vicinity of any real or personal property.
"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of any Credit Party or ERISA Affiliate from a
Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Credit Party or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Credit Party
or ERISA Affiliate to make when due required contributions to a Multiemployer
Plan or Title IV Plan unless such failure is cured within 30 days; (g) any other
event or condition that might reasonably be expected to constitute grounds under
Section 4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or for the imposition of
liability under Section 4069 or 4212(c) of ERISA; (h) the termination of a
Multiemployer Plan under Section 4041A of ERISA or the reorganization or
insolvency of a Multiemployer Plan under Section 4241 or 4245 of ERISA; (i) the
loss of a Qualified Plan's
Annex A - Page 8
qualification or tax exempt status; or (j) the termination of a Plan described
in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. Section 201 et seq.
"Federal Funds Rate" means, for any day, a floating rate equal to
the weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in
Annex F.
"Financial Statements" means the consolidated income statements,
statements of cash flows and balance sheets of Holdings and its Subsidiaries
delivered in accordance with Section 3.4 and Annex E.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrowers, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of
Borrowers ending on December 31 of each year.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of (1) EBITDA of such Person for such fiscal
period, minus unfinanced Capital Expenditures made by such Person during such
period, minus cash taxes paid by such Person during such period and minus Pro
Forma Acquisition EBITDA for such period, to (2) Fixed Charges incurred or
accrued by such Person for such period.
"Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued during such
period, plus (b) scheduled payments of principal with respect to Indebtedness
during such period.
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
Annex A - Page 9
"Foreign Lender" has the meaning ascribed to it in Section 1.15(c).
"Funded Debt" means, with respect to any Person, without
duplication, all Indebtedness for borrowed money evidenced by notes, bonds,
debentures, or similar evidences of Indebtedness that by its terms matures more
than one year from, or is directly or indirectly renewable or extendible at such
Person's option under a revolving credit or similar agreement obligating the
lender or lenders to extend credit over a period of more than one year from the
date of creation thereof, and specifically including Capital Lease Obligations,
current maturities of long-term debt, revolving credit and short-term debt
extendible beyond one year at the option of the debtor, and also including, in
the case of Borrowers, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in Annex
F to the Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" has the meaning ascribed to it in Section
1.9.
"General Intangibles" means all "general intangibles," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, Software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent
Annex A - Page 10
included in "goods" as defined in the Code, manufactured homes, standing timber
that is cut and removed for sale and unborn young of animals.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, each guaranty executed by any
Guarantor in favor of Agent and Lenders in respect of the Obligations.
"Guarantors" means each Credit Party, other than the Borrowers, and
each other Person, if any, that executes a guaranty or other similar agreement
in favor of Agent, for itself and the ratable benefit of Lenders, in connection
with the transactions contemplated by the Agreement and the other Loan
Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Healthcare Laws" has the meaning ascribed to it in Section 3.24.
Annex A - Page 11
"HIPAA" means the Health Insurance Portability and Accountability
Act of 1996, as the same may be amended, modified or supplemented from time to
time, and any successor statute thereto, and any and all rules or regulations
promulgated from time to time thereunder.
"Holdings" means Odyssey HealthCare, Inc., a Delaware corporation.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred six months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than six months
unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section
1.13.
"Indemnified Person" has the meaning ascribed to in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "base rate on corporate loans posted by at least seventy-five percent (75%)
of the nation's 30 largest banks" (or, if The Wall Street Journal ceases quoting
a base rate of the type described, the highest per annum rate of interest
published by the Federal Reserve Board in Federal Reserve statistical release
H.15 (519) entitled "Selected Interest Rates" as the Bank prime loan rate or its
equivalent), and (ii) the Federal Funds Rate plus 50 basis points per annum.
Each change in any interest rate provided for in the Agreement based upon the
Index Rate shall take effect at the time of such change in the Index Rate.
Annex A - Page 12
"Index Rate Loan" means a Loan or portion thereof bearing interest
by reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined in
the Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of Indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section 6.3.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan, the
first Business Day of each month to occur while such Loan is outstanding, and
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided,
that, in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest that has then accrued under the Agreement.
"Inventory" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded Software.
"Investment Property" means all "investment property" as such term
is defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts
Annex A - Page 13
of any Credit Party; (iv) all commodity contracts of any Credit Party; and (v)
all commodity accounts held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means, collectively, (i) GE Capital, and, if GE Capital
shall decide to assign all or any portion of the Obligations pursuant to the
terms of this Agreement, such term shall include any assignee of GE Capital and
(ii) each other Person or Persons, if any, that shall from time to time become a
party to this Agreement as a Lender pursuant to a joinder in form and substance
acceptable to Agent and, if any, such Person or Persons shall decide to assign
all or any portion of the Obligations, such term shall include any assignees of
such Person or Persons.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrowers, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance of Letters of Credit by Agent or another L/C Issuer or the purchase of
a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.
"Leverage Ratio" means, with respect to Holdings and its
Subsidiaries, on a consolidated basis, the ratio of (a) Funded Debt of Holdings
and its Subsidiaries as of any date of determination, to (b) EBITDA for the
twelve months ending on that date of determination.
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
Annex A - Page 14
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrowers pursuant to the
Agreement and ending one, two or three months thereafter, as selected by
Borrowers' irrevocable notice to Agent as set forth in Section 1.5(e); provided,
that the foregoing provision relating to LIBOR Periods is subject to the
following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next
succeeding LIBOR Business Day unless the result of such extension would be
to carry such LIBOR Period into another calendar month in which event such
LIBOR Period shall end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end 2 LIBOR Business Days prior to such
date;
(c) any LIBOR Period 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 LIBOR Period)
shall end on the last LIBOR Business Day of a calendar month;
(d) Borrowers shall select LIBOR Periods so as not to require a
payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrowers shall select LIBOR Periods so that there shall be no
more than 5 separate LIBOR Loans in existence at any one time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00
a.m. (London time), on the second full LIBOR Business Day next preceding
the first day of such LIBOR Period (unless such date is not a Business
Day, in which event the next succeeding Business Day will be used);
divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is 2 LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal
Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation
D of the Federal Reserve Board
Annex A - Page 15
that are required to be maintained by a member bank of the Federal Reserve
System.
If such interest rates shall cease to be available from Telerate News Service,
the LIBOR Rate shall be determined from such financial reporting service or
other information as shall be mutually acceptable to Agent and Borrowers.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, and all other agreements, instruments, documents and certificates
identified in the Closing Checklist executed and delivered to, or in favor of,
Agent or any Lenders and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of any Credit Party, or
any employee of any Credit Party, and delivered to Agent or any Lender in
connection with the Agreement or the transactions contemplated thereby. Any
reference in the Agreement or any other Loan Document to a Loan Document shall
include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to the
Agreement or such Loan Document as the same may be in effect at any and all
times such reference becomes operative.
"Loans" means the Revolving Loan.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Pledge Agreement" means the Pledge Agreement of even date
herewith executed by Holdings, Parent, Odyssey GP and Odyssey LP in favor of
Agent, on behalf of itself and Lenders, pledging all Stock of Subsidiaries and
all Intercompany Notes owing to or held by any of them.
Annex A - Page 16
"Material Adverse Effect" means a material adverse effect on (a) the
business, industry, assets, operations or financial or other condition of the
Credit Parties considered as a whole, (b) any Credit Party's ability to pay any
of the Loans or any of the other Obligations in accordance with the terms of the
Agreement, (c) the Collateral or Agent's Liens, on behalf of itself and Lenders,
on the Collateral or the priority of such Liens, or (d) Agent's or any Lender's
rights and remedies under the Agreement and the other Loan Documents. Without
limiting the generality of the foregoing, any event or occurrence adverse to one
or more Credit Parties which results or could reasonably be expected to result
in costs and/or liabilities or loss of revenues, individually or in the
aggregate, in any 30-day period in excess of fifteen percent (15%) of the lesser
of (x) the Maximum Amount and (y) EBITDA for the twelve-month period ending as
of the last day of the most recently ended Fiscal Quarter (based on the
Compliance Certificate most recently delivered pursuant to Section 4.1) shall
constitute a Material Adverse Effect.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date less, if
applicable, the Tax Lien Reserve.
"Maximum Lawful Rate" has the meaning ascribed to it in Section
1.5(f).
"Multiemployer Plan" means a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Credit Party or ERISA Affiliate is
making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it
in Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a).
"OpCoA" has the meaning ascribed thereto in the preamble to the
Agreement.
"OpCoB" has the meaning ascribed thereto in the preamble to the
Agreement.
"Obligations" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including
all interest
Annex A - Page 17
that accrues after the commencement of any case or proceeding by or against any
Credit Party in bankruptcy, whether or not allowed in such case or proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Credit Party under the Agreement or any of the other Loan Documents.
"Odyssey GP" means Odyssey HealthCare GP, LLC, a Delaware limited
liability company.
"Odyssey LP" means Odyssey HealthCare LP, LLC, a Delaware limited
liability company.
"Palm Coast" has the meaning ascribed thereto in the preamble to the
Agreement.
"Parent" means Odyssey HealthCare Holding Company, a Delaware
corporation.
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or of any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Acquisition" has the meaning ascribed to it in Section
6.1.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business and securing liabilities in
Annex A - Page 18
an outstanding aggregate amount not in excess of $250,000 at any time, so long
as such Liens attach only to Inventory; (f) deposits securing, or in lieu of,
surety, appeal or customs bonds in proceedings to which any Credit Party is a
party; (g) cash deposits securing reimbursement obligations in respect of
outstanding Permitted L/Cs, in an amount not to exceed 105% of the face amount
of such Permitted L/Cs; (h) any attachment or judgment lien not constituting an
Event of Default under Section 8.1(j); (i) zoning restrictions, easements,
licenses, or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such Real Estate;
(j) presently existing or hereafter created Liens in favor of Agent, on behalf
of Lenders; and (k) Liens expressly permitted under clauses (b) and (c) of
Section 6.7 of the Agreement.
"Permitted L/Cs" means one or more letters of credit (other than
Letters of Credit) in an aggregate stated face amount not to exceed $4,000,000
at any time outstanding, having reimbursement obligations secured by no Liens
other then Permitted Encumbrances.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
seven years on behalf of participants who are or were employed by any Credit
Party or ERISA Affiliate.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
Annex A - Page 19
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
"Pro Forma Acquisition EBITDA" means (i) EBITDA attributable to each
Permitted Acquisition (with such pro forma adjustments as are reasonably
acceptable to Agent, as indicated by its written approval thereof, based upon
data presented to Agent to its reasonable satisfaction) consummated during the
one (1) year period preceding the date of determination calculated solely for a
number of months immediately preceding the consummation of the applicable
Permitted Acquisition, which number equals twelve (12) minus the number of
months following the consummation of the applicable Permitted Acquisition for
which financial statements of Holdings and its Subsidiaries have been delivered
to Agent pursuant to Section 4.1 and (ii) for purposes of determining compliance
with Section 6.1, EBITDA of the Target of any proposed Permitted Acquisition
(adjusted with such pro forma adjustments as are reasonably acceptable to Agent
based upon data presented to Agent to its reasonable satisfaction) calculated
for the twelve (12) months immediately preceding the consummation of the
proposed Permitted Acquisition.
"Projections" means Holdings' and its Subsidiaries forecasted
consolidated profit and loss statements, all consistent with the historical
Financial Statements of the Credit Parties, together with appropriate supporting
details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any
Lender, (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, (b) with respect to all Loans, the
percentage obtained by dividing (i) the aggregate Commitments of that Lender by
(ii) the aggregate Commitments of all Lenders, and (c) with respect to all Loans
on and after the Commitment Termination Date, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Loans held by
that Lender, by (ii) the outstanding principal balance of the Loans held by all
Lenders.
"Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided, that no
Person determined by Agent to be acting in the capacity of a vulture fund or
distressed debt purchaser shall be a Qualified Assignee, and no Person or
Annex A - Page 20
Affiliate of such Person (other than a Person that is already a Lender) holding
Subordinated Debt or Stock issued by any Credit Party shall be a Qualified
Assignee.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Refinancing Offer" has the meaning ascribed to it in Section 5.10.
"Relationship Bank" has the meaning ascribed to it in Annex C.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Replacement Lender" has the meaning ascribed to it in Section
1.16(d).
"Requisite Lenders" means Lenders having (a) more than sixty-six and
two-thirds percent (66 2/3%) of the Commitments of all Lenders, or (b) if the
Commitments have been terminated, more than sixty-six and two-thirds percent (66
2/3%) of the aggregate outstanding amount of all Loans.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Party's Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission; (f) any payment, loan, contribution, or
other transfer of funds or other property to any Stockholder of such Credit
Party other than payment of compensation in the ordinary course of business to
Stockholders who are employees of such Person; and (g) any payment of management
fees (or other fees of a similar nature) by such Credit Party to any Stockholder
of such Credit Party or its Affiliates.
Annex A - Page 21
"Retiree Welfare Plan" means, at any time, a Welfare Plan that
provides for continuing coverage or benefits for any participant or any
beneficiary of a participant after such participant's termination of employment,
other than continuation coverage provided pursuant to Section 4980B of the IRC
and at the sole expense of the participant or the beneficiary of the
participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i).
"Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower. Unless
the context otherwise requires, references to the outstanding principal balance
of the Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances or incur
Letter of Credit Obligations as set forth on Annex I to the Agreement or in the
most recent Assignment Agreement executed by such Lender, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement and (b)
as to all Lenders, the aggregate commitment of all Lenders to make Revolving
Credit Advances or incur Letter of Credit Obligations, which aggregate
commitment shall be $20,000,000 on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Settlement Date" has the meaning ascribed to it in Section
9.9(a)(ii).
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of
Annex A - Page 22
contingent liabilities (such as litigation, guaranties and pension plan
liabilities) at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at the time, represents the amount that can
be reasonably be expected to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of
Stock of such Person.
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent in
their reasonable discretion, as to right and time of payment and as to any other
rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
owned legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner. Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of a Borrower.
"Supporting Obligations" means all "supporting obligations" as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments or Investment Property.
"Target" has the meaning ascribed to it in Section 6.1.
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
Annex A - Page 23
"Tax Lien Reserve" means a reserve against the Revolving Loan
Commitment in an amount equal to $1,500,000, or such lesser amount as determined
by Agent in its sole discretion, established by Agent until such time that Agent
has received evidence, in form and substance reasonably satisfactory to Agent,
that (x) all federal and state tax liens filed against Alternative Healthcare
System, Inc. ("Alternative") prior to the acquisition by the Credit Parties of
certain assets of Alternative have been satisfied and released or (y) the Credit
Parties have established reserves or escrows sufficient to satisfy all such
federal and state tax liens.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged (c) all Letter of
Credit Obligations have been cash collateralized, canceled or backed by standby
letters of credit in accordance with Annex B, and (d) none of Borrowers shall
have any further right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is covered by Title IV of ERISA, and that any Credit Party or ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, service marks, logos,
other source or business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of like
nature (whether registered or unregistered), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA,
Annex A - Page 24
the liabilities (whether or not accrued) that could be avoided by any Credit
Party or any ERISA Affiliate as a result of such transaction.
"Welfare Plan" means a Plan described in Section 3(1) of ERISA.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex F. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated
in either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
Annex A - Page 25
ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of any Borrower, Letter of Credit
Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C Issuer") for
Borrowers' account on behalf of a Credit Party and guaranteed by Agent;
provided, that if the L/C Issuer is a Lender, then such Letters of Credit shall
not be guaranteed by Agent but rather each Lender shall, subject to the terms
and conditions hereinafter set forth, purchase (or be deemed to have purchased)
risk participations in all such Letters of Credit issued with the written
consent of Agent, as more fully described in paragraph (b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the lesser of (i) $0 (the "L/C Sublimit") and (ii) the Maximum Amount
less the aggregate outstanding principal balance of the Revolving Credit
Advances. No such Letter of Credit shall have an expiry date that is more than
one year following the date of issuance thereof, unless otherwise determined by
the Agent, in its sole discretion, and neither Agent nor Lenders shall be under
any obligation to incur Letter of Credit Obligations in respect of, or purchase
risk participations in, any Letter of Credit having an expiry date that is later
than five (5) Business Days prior to the Commitment Termination Date; provided,
that any Letter of Credit may provide for a renewal thereof for additional one
(1) year periods (which shall in no event extend beyond the date which is five
(5) Business Days prior to the Commitment Termination Date).
(b) Advances Automatic; Participations.
(i) In the event that Agent or any Lender shall make any payment
on or pursuant to any Letter of Credit Obligation, such payment shall then
be deemed automatically to constitute a Revolving Credit Advance under
Section 1.1(a) of the Agreement regardless of whether a Default or Event
of Default has occurred and is continuing and notwithstanding any
Borrower's failure to satisfy the conditions precedent set forth in
Section 2, and each Lender shall be obligated to pay its Pro Rata Share
thereof in accordance with the Agreement. The failure of any Lender to
make available to Agent for Agent's own account its Pro Rata Share of any
such Revolving Credit Advance or payment by Agent under or in respect of a
Letter of Credit shall not relieve any other Lender of its obligation
hereunder to make available to Agent its Pro Rata Share thereof, but no
Lender shall be responsible for the failure of any other Lender to make
available such other Lender's Pro Rata Share of any such payment.
Annex B - Page 1
(ii) If it shall be illegal or unlawful for any Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above
because of an Event of Default described in Sections 8.1(h) or (i) or
otherwise or if it shall be illegal or unlawful for any Lender to be
deemed to have assumed a ratable share of the reimbursement obligations
owed to an L/C Issuer, or if the L/C Issuer is a Lender, then (A)
immediately and without further action whatsoever, each Lender shall be
deemed to have irrevocably and unconditionally purchased from Agent (or
such L/C Issuer, as the case may be) an undivided interest and
participation equal to such Lender's Pro Rata Share (based on the
Revolving Loan Commitments) of the Letter of Credit Obligations in respect
of all Letters of Credit then outstanding and (B) thereafter, immediately
upon issuance of any Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer,
as the case may be) an undivided interest and participation in such
Lender's Pro Rata Share (based on the Revolving Loan Commitments) of the
Letter of Credit Obligations with respect to such Letter of Credit on the
date of such issuance. Each Lender shall fund its participation in all
payments or disbursements made under the Letters of Credit in the same
manner as provided in the Agreement with respect to Revolving Credit
Advances.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash collateral for any
Letter of Credit Obligations pursuant to the Agreement prior to the
Commitment Termination Date, Borrowers will pay to Agent for the ratable
benefit of itself and Lenders cash or cash equivalents acceptable to Agent
("Cash Equivalents") in an amount equal to one hundred five percent (105%)
of the maximum amount then available to be drawn under each applicable
Letter of Credit outstanding for the benefit of Borrowers. Such funds or
Cash Equivalents shall be held by Agent in a cash collateral account (the
"Cash Collateral Account") maintained at a bank or financial institution
acceptable to Agent. The Cash Collateral Account shall be in the name of
Borrowers and shall be pledged to, and subject to the control of, Agent,
for the benefit of Agent and Lenders, in a manner satisfactory to Agent.
Each Borrower hereby pledges and grants to Agent, on behalf of itself and
Lenders, a security interest in all such funds and Cash Equivalents held
in the Cash Collateral Account from time to time and all proceeds thereof,
as security for the payment of all amounts due in respect of the Letter of
Credit Obligations and other Obligations, whether or not then due. The
Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then due
and payable, shall for any reason be outstanding on the Commitment
Termination Date, Borrowers shall either (A) provide cash collateral
therefor in the manner described above, or (B) cause all such Letters of
Credit and guaranties thereof, if any, to be canceled and returned, or (C)
deliver a stand-by letter (or letters) of credit in guaranty of such
Letter of Credit Obligations, which stand-by letter (or letters) of credit
shall be of like tenor and duration (plus 30 additional days) as, and in
an amount equal to one
Annex B - Page 2
hundred five percent (105%) of, the aggregate maximum amount then
available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a
Person, and shall be subject to such terms and conditions, as are
satisfactory to Agent in its reasonable discretion.
(iii) From time to time after funds are deposited in the Cash
Collateral Account by any Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held
in the Cash Collateral Account to the payment of any amounts, and in such
order as Agent may elect, as shall be or shall become due and payable by
such Borrower to Agent and Lenders with respect to such Letter of Credit
Obligations of such Borrower and, upon the satisfaction in full of all
Letter of Credit Obligations of such Borrower, to any other Obligations of
any Borrower then due and payable.
(iv) No Borrower nor any Person claiming on behalf of or through
any Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all
amounts payable by Borrowers to Agent and Lenders in respect thereof, any
funds remaining in the Cash Collateral Account shall be applied to other
Obligations then due and owing and upon payment in full of such
Obligations, any remaining amount shall be paid to Borrowers or as
otherwise required by law. Interest earned on deposits in the Cash
Collateral Account shall be for the account of Borrowers.
(d) Fees and Expenses. Borrowers agree to pay to Agent for the
benefit of Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (ii) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
fee (the "Letter of Credit Fee") in an amount equal to two and one-half of one
percent (2.50%) per annum. Such fee shall be paid to Agent for the benefit of
the Lenders in arrears, on the first day of each month and on the Commitment
Termination Date. In addition, Borrowers shall pay to any L/C Issuer, on demand,
such fees (including all per annum fees), charges and expenses of such L/C
Issuer in respect of the issuance, negotiation, acceptance, amendment, transfer
and payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
(e) Request for Incurrence of Letter of Credit Obligations.
Borrowers shall give Agent at least 2 Business Days' prior written notice
requesting the incurrence of any Letter of Credit Obligation. The notice shall
be accompanied by the form of the Letter of Credit (which shall be acceptable to
the L/C Issuer) and a completed application for standby Letter of Credit or
application and agreement for documentary Letter of Credit or application for
documentary Letter of Credit (as applicable), each to be in form and substance
satisfactory to Agent, in its reasonable discretion. Notwithstanding anything
contained herein to the contrary, Letter of Credit applications by Borrowers and
approvals by Agent
Annex B - Page 3
and the L/C Issuer may be made and transmitted pursuant to electronic codes and
security measures mutually agreed upon and established by and among Borrowers,
Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrowers to reimburse
Agent and Lenders for payments made with respect to any Letter of Credit
Obligation shall be absolute, unconditional and irrevocable, without necessity
of presentment, demand, protest or other formalities, and the obligations of
each Lender to make payments to Agent with respect to Letters of Credit shall be
unconditional and irrevocable. Such obligations of Borrowers and Lenders shall
be paid strictly in accordance with the terms hereof under all circumstances
including the following:
(i) any lack of validity or enforceability of any Letter of Credit
or the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, setoff, defense or other right
that any Borrower or any of their respective Affiliates or any Lender may
at any time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection
with the Agreement, the Letter of Credit, the transactions contemplated
herein or therein or any unrelated transaction (including any underlying
transaction between any Borrower or any of their respective Affiliates and
the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit
or guaranty thereof against presentation of a demand, draft or certificate
or other document that does not comply with the terms of such Letter of
Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is similar to
any of the foregoing; or
(vi) the fact that a Default or an Event of Default has occurred
and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the
Agreement, Borrowers hereby agree to pay and to protect, indemnify, and
save harmless Agent and each Lender from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable attorneys' fees and allocated costs of internal
counsel) that Agent or any Lender may
Annex B - Page 4
incur or be subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or guaranty thereof, or (B) the failure
of Agent or any Lender seeking indemnification or of any L/C Issuer to
honor a demand for payment under any Letter of Credit or guaranty thereof
as a result of any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or Governmental
Authority, in each case other than to the extent solely as a result of the
gross negligence or willful misconduct of Agent or such Lender (as finally
determined by a court of competent jurisdiction).
(ii) As between Agent and any Lender and Borrowers, Borrowers
assume all risks of the acts and omissions of, or misuse of any Letter of
Credit by beneficiaries, of any Letter of Credit. In furtherance and not
in limitation of the foregoing, to the fullest extent permitted by law,
neither Agent nor any Lender shall be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect of any
document issued by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be in
any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part,
that may prove to be invalid or ineffective for any reason; (C) failure of
the beneficiary of any Letter of Credit to comply fully with conditions
required in order to demand payment under such Letter of Credit; provided,
that in the case of any payment by Agent under any Letter of Credit or
guaranty thereof, Agent shall be liable to the extent such payment was
made solely as a result of its gross negligence or willful misconduct (as
finally determined by a court of competent jurisdiction) in determining
that the demand for payment under such Letter of Credit or guaranty
thereof complies on its face with any applicable requirements for a demand
for payment under such Letter of Credit or guaranty thereof; (D) errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not
they may be in cipher; (E) errors in interpretation of technical terms;
(F) any loss or delay in the transmission or otherwise of any document
required in order to make a payment under any Letter of Credit or guaranty
thereof or of the proceeds thereof; (G) the credit of the proceeds of any
drawing under any Letter of Credit or guaranty thereof; and (H) any
consequences arising from causes beyond the control of Agent or any
Lender. None of the above shall affect, impair, or prevent the vesting of
any of Agent's or any Lender's rights or powers hereunder or under the
Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrowers in favor of any
L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among Borrowers and
such L/C Issuer.
Annex B - Page 5
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEMS
Borrowers shall, and shall cause their respective Subsidiaries to,
establish and maintain the Cash Management Systems described below:
(a) Borrowers may maintain, in their names, one or more accounts
(each a "Disbursement Account" and collectively, the "Disbursement Accounts") at
a bank reasonably acceptable to Agent into which (i) Agent shall, from time to
time, deposit proceeds of Revolving Credit Advances made to Borrowers and (ii)
proceeds of any checks, cash or other items of payment received by any Borrower
shall be deposited.
(b) On or before the date of the making of the initial Revolving
Credit Advance or the incurrence of the initial Letter of Credit Obligations,
each bank where a Disbursement Account is maintained and all other banks
identified in Disclosure Schedule 3.19 (each, a "Relationship Bank") shall have
entered into tri-party deposit account control agreements with Agent, for the
benefit of itself and Lenders, and Borrowers and the applicable Subsidiaries
thereof, as applicable, in form and substance reasonably acceptable to Agent,
which shall become operative on or prior to the date of the making of the
initial Revolving Credit Advance or the incurrence of the initial Letter of
Credit Obligations. Each such deposit account control agreement shall provide,
among other things, that (i) the bank executing such agreement has no rights of
setoff or recoupment or any other claim against such account, as the case may
be, other than for payment of its service fees and other charges directly
related to the administration of such account and for returned checks or other
items of payment and as may otherwise be agreed to by Agent and (ii) the bank
party thereto shall agree to comply with Agent's instructions directing
disposition of funds on deposit without further consent of any Borrower or the
applicable Subsidiary (as applicable). Agent hereby agrees with each Credit
Party that (A) Agent shall not deliver to any bank described above any notice
directing disposition of funds on deposit unless and until the occurrence and
continuance of an Event of Default and (B) promptly upon the cure or waiver of
the Event of Default that gave rise to the notice in the preceding clause (A),
so long as no other Event of Default has occurred and is continuing at such
time, Agent shall deliver written notice to the applicable bank described above
notifying such bank that the funds on deposit shall thereafter be disposed of as
directed by the Credit Parties; provided, that in the event the applicable bank
refuses to dispose of funds on deposit as directed by the Credit Parties after
receipt of such written notice, the Agent agrees to terminate the applicable
tri-party deposit account control agreement with such bank so long as prior to
such termination such bank has executed and delivered to Agent a replacement
tri-party deposit account control agreement, in form and substance described
above.
(c) So long as no Event of Default has occurred and is continuing,
any Borrower may amend Disclosure Schedule 3.19 to add or replace a Relationship
Bank or
Annex C - Page 1
replace any Disbursement Account; provided, that (i) Agent shall have consented
in writing in advance to the opening of such account with the relevant bank and
(ii) prior to the time of the opening of such account, Borrowers or their
Subsidiaries, as applicable, and such bank shall have executed and delivered to
Agent a tri-party deposit account control agreement, in the form and substance
described above. Borrowers or their applicable Subsidiaries shall close any of
their accounts (and establish replacement accounts in accordance with the
foregoing sentence) promptly and in any event within 30 days following written
notice from Agent that the creditworthiness of any bank holding an account is no
longer acceptable in Agent's reasonable judgment, or as promptly as practicable
and in any event within 60 days following written notice from Agent that the
operating performance, funds transfer or availability procedures or performance
with respect to accounts of the bank holding such accounts or Agent's liability
under any tri-party deposit account control agreement with such bank is no
longer acceptable in Agent's reasonable judgment.
(d) Following the occurrence and during the continuance of an
Event of Default, at the request of Agent or Requisite Lenders Borrowers shall
(i) establish lock boxes ("Lock Boxes") and/or blocked accounts ("Blocked
Accounts") at one or more of the banks set forth in Disclosure Schedule 3.19,
and shall request in writing and otherwise take such reasonable steps to ensure
that all Account Debtors forward payment directly to such Lock Boxes, (ii)
deposit and cause their Subsidiaries to deposit or cause to be deposited
promptly, and in any event no later than the first Business Day after the date
of receipt thereof, all cash, checks, drafts or other similar items of payment
relating to or constituting payments made in respect of any and all Collateral
(whether or not otherwise delivered to a Lock Box) into one or more Blocked
Accounts in such Borrower's name or any such Subsidiary's name and at a
Relationship Bank and (iii) deliver to each Relationship Bank instructions,
revocable only upon Agent's express written authorization, directing each
Relationship Bank to immediately forward all amounts on deposit to the
Collection Account through daily sweeps from such accounts into the Collection
Account.
(e) The Disbursement Accounts, each account maintained with a
Relationship Bank and the Lock Boxes and Blocked Accounts (if any) shall be cash
collateral accounts, with all cash, checks and other similar items of payment in
such accounts securing payment of the Loans and all other Obligations, and in
which each Borrower and each Subsidiary thereof shall have granted a Lien to
Agent, on behalf of itself and Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be
deemed received by Agent in accordance with Section 1.10 and shall be applied
(and allocated) by Agent in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Each Borrower shall and shall cause its officers, employees,
or other Persons acting for or in concert with such Borrower (each a "Related
Person") to (i) at any time after the Agent or Requisite Lenders make the
request referred to in paragraph (d) of
Annex C - Page 2
this Annex C and during the continuance of an Event of Default, hold in trust
for Agent, for the benefit of itself and Lenders, all checks, cash and other
items of payment received by any Borrower or any such Related Person and (ii)
within 1 Business Day after receipt by such Borrower or any such Related Person
of any checks, cash or other items of payment, deposit the same into a deposit
account subject to a deposit account control agreement described herein. Each
Borrower and each Related Person thereof acknowledges and agrees that all cash,
checks or other items of payment constituting proceeds of Collateral are part of
the Collateral. All proceeds of the sale or other disposition of any Collateral,
shall be deposited directly into a deposit account subject to a deposit account
control agreement described herein.
Annex C - Page 3
ANNEX D (SECTION 2.1(a))
TO
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described
in Section 2.1 of the Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date, except with respect to the items specified in
paragraphs E(a)(iii), E(b), I, and R, which items must be received by Agent in
form and substance satisfactory to Agent on or prior to the making of the
initial Revolving Credit Advance or the incurrence of the initial Letter of
Credit Obligations (each capitalized term used but not otherwise defined herein
shall have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Agent.
B. Revolving Notes. Duly executed originals of the Revolving Notes for
each applicable Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the Security
Agreement, dated the Closing Date, and all instruments, documents and agreements
executed pursuant thereto.
D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the benefit of
itself and Lenders) has a valid and perfected first priority security
interest in the Collateral, subject only to Permitted Encumbrances,
including (i) such documents duly executed by each Credit Party as Agent
may request in order to perfect its security interests in the Collateral,
(ii) copies of Code search reports listing all effective financing
statements that name any Credit Party as debtor, together with copies of
such financing statements, none of which shall cover the Collateral and
(iii) evidence that the assets acquired by the Credit Parties from
Palliative Care, Inc. are free and clean of Liens other than Liens
permitted under Section 6.7.
(b) Control Letters from (i) all issuers of uncertificated
securities and financial assets held by each Borrower, (ii) all securities
intermediaries with respect to all securities accounts and securities
entitlements of each Borrower, including without
Annex D - Page 1
limitation, with respect to Credit Parties' investments maintained with
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Inc., and (iii) all futures
commission agents and clearing houses with respect to all commodities
contracts and commodities accounts held by any Borrower.
G. Intellectual Property Security Agreements. Duly executed originals
of Trademark Security Agreements, each dated the Closing Date and signed by each
Credit Party which owns Trademarks, all in form and substance reasonably
satisfactory to Agent, together with all instruments, documents and agreements
executed pursuant thereto.
H. Guaranties. Duly executed originals of Guaranties dated the Closing
Date, executed by each Credit Party (other than Borrowers), and all documents,
instruments and agreements executed pursuant thereto.
I. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Agent that Cash Management Systems complying with Annex C to the
Agreement have been established and are currently being maintained in the manner
set forth in such Annex C, together with copies of duly executed tri-party
blocked account and lock box agreements, reasonably satisfactory to Agent, with
each bank where a Disbursement Account is maintained as required by Annex X.
X. Charter and Good Standing. For each Credit Party, such Person's (a)
charter and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
K. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws (or analogous governing agreement), together with all amendments thereto
and (b) resolutions of such Person's Board of Directors (or analogous governing
board), approving and authorizing the execution, delivery and performance of the
Loan Documents to which such Person is a party and the transactions to be
consummated in connection therewith, each certified as of the Closing Date by
such Person's corporate secretary or an assistant secretary as being in full
force and effect without any modification or amendment.
L. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
M. Opinions of Counsel. Duly executed originals of opinions of Xxxxxx &
Xxxxxx, counsel for the Credit Parties, together with local counsel opinions of
the Credit Parties'
Annex D - Page 2
Florida local counsel, each in form and substance reasonably satisfactory to
Agent and its counsel, dated the Closing Date.
N. Master Pledge Agreement. Duly executed originals of the Master
Pledge Agreement accompanied by (as applicable) (a) share certificates
representing all of the outstanding Stock being pledged pursuant to the Master
Pledge Agreement and stock powers for such share certificates executed in blank
and (b) the original Intercompany Notes and other instruments evidencing
Indebtedness being pledged pursuant to the Master Pledge Agreement, duly
endorsed in blank.
O. Accountants' Letters. A letter from the Credit Parties to their
independent auditors authorizing the independent certified public accountants of
the Credit Parties to communicate with Agent and Lenders in accordance with
Section 4.2.
P. Fee Letter. Duly executed originals of the GE Capital Fee Letter.
Q. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the chief financial officer of each Borrower, in
his or her capacity as an officer but not individually, dated the Closing Date,
stating that, since December 31, 2003 (a) no event or condition has occurred or
is existing which could reasonably be expected to have a Material Adverse
Effect; (b) no Litigation has been commenced which, if successful, could
reasonably be expected to have a Material Adverse Effect or could challenge any
of the transactions contemplated by the Agreement and the other Loan Documents;
and (c) there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of any Borrower or any of its
Subsidiaries.
R. Audited Financials; Financial Condition. Agent shall have received
the Financial Statements, Projections and other materials set forth in Section
3.4, certified by Holdings' chief financial officer, in each case in form and
substance reasonably satisfactory to Agent, and Agent shall be satisfied, in its
sole discretion, with all of the foregoing.
S. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may reasonably request.
Annex D - Page 3
ANNEX E (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS--REPORTING
Borrowers shall deliver or cause to be delivered to Agent or to
Agent and Lenders, as indicated, the following:
(a) Quarterly Financials. To Agent and Lenders, within 45 days
after the end of each Fiscal Quarter, consolidated financial information
regarding Holdings and its Subsidiaries, certified by the chief financial
officer of Holdings, including (i) unaudited balance sheets as of the close of
such Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year, all prepared in accordance with GAAP (subject to
normal year-end adjustments). Such financial information shall be accompanied by
(A) a statement in reasonable detail (each, a "Compliance Certificate") showing
the calculations used in determining compliance with each of the Financial
Covenants that is tested on a quarterly basis and (B) the certification of the
chief financial officer of Holdings that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position, results of operations and statements of cash flows of
Holdings and its Subsidiaries, on both a consolidated basis, as at the end of
such Fiscal Quarter and for that portion of the Fiscal Year then ended, and (ii)
any other information presented is true, correct and complete in all material
respects and that there was no Default or Event of Default in existence as of
such time or, if a Default or Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default.
(b) Operating Plan. To Agent and Lenders, as soon as available,
but not later than 45 days after the end of each Fiscal Year, an annual
operating plan for Borrowers, on a consolidated basis, approved by the Board of
Directors of Borrowers, for the following Fiscal Year, which (i) includes a
statement of all of the material assumptions on which such plan is based, (ii)
includes monthly balance sheets, income statements and statements of cash flows
for the following year and (iii) integrates sales, gross profits, operating
expenses, operating profit and cash flow projections, all prepared on the same
basis and in similar detail as that on which operating results are reported (and
in the case of cash flow projections, representing management's good faith
estimates of future financial performance based on historical performance), and
including plans for personnel, Capital Expenditures and facilities.
(c) Annual Audited Financials. To Agent and Lenders, within 120
days after the end of each Fiscal Year, audited Financial Statements for
Holdings and its Subsidiaries on a consolidated basis, consisting of balance
sheets and statements of income
Annex E - Page 1
and retained earnings and cash flows, setting forth in comparative form in each
case the figures for the previous Fiscal Year, which Financial Statements shall
be prepared in accordance with GAAP and certified without qualification, by an
independent certified public accounting firm of national standing or otherwise
acceptable to Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants as of the end of
such Fiscal Year, (ii) a report from such accounting firm to the effect that, in
connection with their audit examination, nothing has come to their attention to
cause them to believe that a breach of a Financial Covenant has occurred (or
specifying those breaches that they became aware of), it being understood that
such audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) the annual letters to such accountants in connection with their
audit examination detailing contingent liabilities and material litigation
matters, and (iv) the certification of the chief executive officer or chief
financial officer of Borrowers that all such Financial Statements present fairly
in accordance with GAAP the financial position, results of operations and
statements of cash flows of Holdings and its Subsidiaries on a consolidated
basis, as at the end of such Fiscal Year and for the period then ended, and that
there was no Default or Event of Default in existence as of such time or, if a
Default or Event of Default has occurred and is continuing, describing the
nature thereof and all efforts undertaken to cure such Default or Event of
Default.
(d) Management Letters. To Agent and Lenders, within 5 Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent certified public accountants.
(e) Default Notices. To Agent and Lenders, as soon as practicable,
and in any event within 5 Business Days after an executive officer of any
Borrower has actual knowledge of the existence of any Default, Event of Default
or other event that has had a Material Adverse Effect, telephonic or telecopied
notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(f) SEC Filings and Press Releases. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(g) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
within 2 Business Days after
Annex E - Page 2
any Credit Party obtains knowledge of any matured event of default with respect
to any Subordinated Debt, notice of such event of default.
(h) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by Section 5.6.
(i) Litigation. To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any Credit
Party that (i) seeks damages in excess of $500,000, (ii) seeks injunctive
relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its
assets or against any Credit Party or ERISA Affiliate in connection with any
Plan, (iv) alleges criminal misconduct by any Credit Party, or (v) alleges the
violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities.
(j) Insurance Notices. To Agent, disclosure of losses or
casualties required by Section 5.4.
(k) Other Documents. To Agent and Lenders, such other financial
and other information respecting any Credit Party's business or financial
condition as Agent or any Lender shall from time to time reasonably request.
Annex E - Page 3
ANNEX F (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrowers shall not breach or fail to comply with any of the
following financial covenants, each of which shall be calculated in accordance
with GAAP consistently applied:
(a) Minimum Fixed Charge Coverage Ratio. Holdings and its
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter, a Fixed Charge Coverage Ratio for the twelve-month period then ended
(or with respect to the Fiscal Quarters ending on or before December 31, 2004,
the period commencing on March 31, 2004, and ending on the last day of such
Fiscal Quarter) of not less than 1.20 to 1.00.
(b) Maximum Leverage Ratio. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter, a Leverage
Ratio as of the last day of such Fiscal Quarter and for the twelve-month period
then ended of not more than 1.00 to 1.00
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in
Annex F - Page 1
the period the expenditures are made and deducted as part of the calculation of
EBITDA in such period. If Agent, Borrowers and Requisite Lenders agree upon the
required amendments, then after appropriate amendments have been executed and
the underlying Accounting Change with respect thereto has been implemented, any
reference to GAAP contained in the Agreement or in any other Loan Document
shall, only to the extent of such Accounting Change, refer to GAAP, consistently
applied after giving effect to the implementation of such Accounting Change. If
Agent, Borrowers and Requisite Lenders cannot agree upon the required amendments
within 30 days following the date of implementation of any Accounting Change,
then all Financial Statements delivered and all calculations of financial
covenants and other standards and terms in accordance with the Agreement and the
other Loan Documents shall be prepared, delivered and made without regard to the
underlying Accounting Change. For purposes of Section 8.1, a breach of a
Financial Covenant contained in this Annex F shall be deemed to have occurred as
of the earlier of the date the Financial Statements reflecting such breach are
delivered to Agent or the date such Financial Statements were required to be
delivered to Agent.
Annex F - Page 2
ANNEX H (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
Two Bethesda Metro Center, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Odyssey Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
General Electric Capital Corporation
Two Bethesda Metro Center, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
(B) If to Borrowers, at
Odyssey HealthCare, Inc.
000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Annex H - Page 1
ANNEX I (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Lender(s)
Revolving Loan Commitment:
$20,000,000 General Electric Capital Corporation
Annex I - Page 1
