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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 4, 2000
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MIM Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-28740 05-0489664
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(State of incorporation) (Commission File Number) (IRS Employer
Identification No.)
100 Clearbrook Road, Elmsford, NY 10523
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (914) 460-1600
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On February 4, 2000, MIM Corporation (the "Company"), through its principal
pharmacy benefit management operating subsidiary, MIM Health Plans, Inc.
("Health Plans"), entered into a $30,000,000 secured revolving credit facility
(the "Facility") with General Electric Capital Corporation, as Agent and Lender,
and other lenders from time to time parties thereto. The Facility will be used
by the Company for general working capital purposes and for future acquisitions.
In addition, a portion of the Facility is available to the Company for the
further development of the Company's e-commerce and other internet operations
under its MIMRx.com, Inc. and Continental Pharmacy, Inc. subsidiaries. The
Facility has a three year term and provides for borrowings of up to $30,000,000
at a rate of interest selected by the Company equal to the Index Rate (defined
as the base rate on corporate loans at large U.S. money center commercial banks,
as quoted in the Wall Street Journal) plus a margin, or a London InterBank
Offered Rate plus a margin. Health Plans's obligations under the Facility are
secured by a first priority security interest in all of Health Plans's
receivables as well as other related collateral. Health Plans's obligations
under the Facility are guaranteed by the Company.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
10.64 Credit Agreement, dated as of
February 4, 2000, among MIM Health
Plans, Inc., MIM Corporation, the
other Credit Parties signatories
thereto, the other credit parties
signatories thereto and General
Electric Capital Corporation, for
itself and as agent for other
lenders from time to time a party
to the Credit Agreement.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: February 9, 2000 MIM Corporation
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By: /s/ Barry A. Posner
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Name: Barry A. Posner
Title: Vice President
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EXHIBIT INDEX
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Exhibit No. Exhibit
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10.64 Credit Agreement, dated as of
February 4, 2000, among MIM Health
Plans, Inc., MIM Corporation, the
other Credit Parties signatories
thereto, the other credit parties
signatories thereto, and General
Electric Capital Corporation, for
itself and as agent for other
lenders from time to time a party
to the Credit Agreement.
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CREDIT AGREEMENT
Dated as of February 4, 2000
among
MIM HEALTH PLANS, INC.
as Borrower,
MIM CORPORATION
as Holdings,
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
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<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT.....................................................................................7
1.1 Credit Facilities....................................................................................7
1.2 Intentionally Omitted................................................................................8
1.3 Prepayments..........................................................................................8
1.4 Use of Proceeds.....................................................................................10
1.5 Interest and Applicable Margins.....................................................................10
1.6 Eligible Accounts...................................................................................12
1.7 Intentionally Omitted...............................................................................14
1.8 Cash Management Systems.............................................................................14
1.9 Fees................................................................................................14
1.10 Receipt of Payments................................................................................15
1.11 Application and Allocation of Payments.............................................................15
1.12 Loan Account and Accounting........................................................................16
1.13 Indemnity..........................................................................................16
1.14 Access.............................................................................................17
1.15 Taxes..............................................................................................18
1.16 Capital Adequacy; Increased Costs; Illegality......................................................19
1.17 Single Loan........................................................................................21
2. CONDITIONS PRECEDENT..........................................................................................21
2.1 Conditions to the Initial Loans.....................................................................21
2.2 Further Conditions to Each Loan.....................................................................21
3. REPRESENTATIONS AND WARRANTIES................................................................................22
3.1 Corporate Existence; Compliance with Law............................................................22
3.2 Executive Offices; FEIN.............................................................................23
3.3 Corporate Power, Authorization, Enforceable Obligations.............................................23
3.4 Financial Statements and Projections................................................................23
3.5 Material Adverse Effect.............................................................................24
3.6 Ownership of Property; Liens........................................................................24
3.7 Labor Matters.......................................................................................25
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness...........................25
3.9 Government Regulation...............................................................................25
3.10 Margin Regulations.................................................................................26
3.11 Taxes..............................................................................................26
3.12 ERISA..............................................................................................26
3.13 No Litigation......................................................................................27
3.14 Brokers............................................................................................27
3.15 Intellectual Property..............................................................................27
3.16 Full Disclosure....................................................................................28
3.17 Environmental Matters..............................................................................28
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3.18 Insurance..........................................................................................28
3.19 Deposit and Disbursement Accounts..................................................................28
3.20 Government Contracts...............................................................................29
3.21 Customer and Trade Relations.......................................................................29
3.22 Agreements and Other Documents.....................................................................29
3.23 Solvency...........................................................................................29
3.24 Year 2000 Representations..........................................................................29
4. FINANCIAL STATEMENTS AND INFORMATION..........................................................................30
4.1 Reports and Notices.................................................................................30
4.2 Communication with Accountants......................................................................30
5. AFFIRMATIVE COVENANTS.........................................................................................30
5.1 Maintenance of Existence and Conduct of Business....................................................30
5.2 Payment of Obligations..............................................................................30
5.3 Books and Records...................................................................................31
5.4 Insurance; Damage to or Destruction of Collateral...................................................31
5.5 Compliance with Laws................................................................................32
5.6 Supplemental Disclosure.............................................................................32
5.7 Intellectual Property...............................................................................32
5.8 Environmental Matters...............................................................................32
5.9 Landlords' Agreements, Mortgagee Agreements.........................................................33
5.10 Procedures Regarding Collection of Unbilled Rebate Accounts; Credit Policies for PBM Contracts.....33
5.11 Further Assurances.................................................................................33
5.12 Continental Intercompany Loans.....................................................................33
5.13 Independent Corporate Existence....................................................................33
5.14 Access.............................................................................................34
5.15 Year 2000 Problems.................................................................................34
6. NEGATIVE COVENANTS............................................................................................34
6.1 Mergers, Subsidiaries, Etc..........................................................................34
6.2 Investments; Loans and Advances.....................................................................37
6.3 Indebtedness........................................................................................37
6.4 Employee Loans and Affiliate Transactions...........................................................38
6.5 Capital Structure and Business......................................................................39
6.6 Guaranteed Indebtedness.............................................................................39
6.7 Liens...............................................................................................39
6.8 Sale of Stock and Assets............................................................................39
6.9 ERISA...............................................................................................40
6.10 Financial Covenants................................................................................40
6.11 Hazardous Materials................................................................................40
6.12 Sale-Leasebacks....................................................................................40
6.13 Cancellation of Indebtedness.......................................................................40
6.14 Restricted Payments................................................................................40
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6.15 Change of Corporate Name or Location; Change of Fiscal Year........................................40
6.16 No Impairment of Intercompany Transfers............................................................41
6.17 No Speculative Transactions........................................................................41
6.18 Changes Relating to Subordinated Debt..............................................................41
7. TERM 42
7.1 Termination.........................................................................................42
7.2 Survival of Obligations Upon Termination of Financing Arrangements..................................42
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES........................................................................42
8.1 Events of Default...................................................................................42
8.2 Remedies............................................................................................44
8.3 Waivers by Credit Parties...........................................................................45
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...........................................................45
9.1 Assignment and Participations.......................................................................45
9.2 Appointment of Agent................................................................................47
9.3 Agent's Reliance, Etc...............................................................................47
9.4 GE Capital and Affiliates...........................................................................48
9.5 Lender Credit Decision..............................................................................48
9.6 Indemnification.....................................................................................48
9.7 Successor Agent.....................................................................................49
9.8 Setoff and Sharing of Payments......................................................................49
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert............................50
10. SUCCESSORS AND ASSIGNS.......................................................................................52
10.1 Successors and Assigns.............................................................................52
11. MISCELLANEOUS................................................................................................52
11.1 Complete Agreement; Modification of Agreement......................................................52
11.2 Amendments and Waivers.............................................................................53
11.3 Fees and Expenses..................................................................................55
11.4 No Waiver..........................................................................................56
11.5 Remedies...........................................................................................56
11.6 Severability.......................................................................................56
11.7 Conflict of Terms..................................................................................57
11.8 Confidentiality....................................................................................57
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....................................................................................59
11.15 Reinstatement.....................................................................................59
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11.16 Advice of Counsel.................................................................................59
11.17 No Strict Construction............................................................................60
</TABLE>
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<TABLE>
<CAPTION>
INDEX OF APPENDICES
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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 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Projections
Schedule 3.5 - Material Adverse Effect
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.18 - Insurance
Schedule 3.19 - Deposit and Disbursement Accounts
Schedule 3.20 - Government Contracts
Schedule 3.22 - Material Agreements
Schedule 5.1 - Trade Names
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.4(b) - Employee Loans
Schedule 6.7 - Existing Liens
Annex A (Recitals) - Definitions
Annex B - Intentionally Omitted
Annex C (Section 1.8) - Cash Management System
Annex D (Section 2.1(a)) - Schedule of Additional Closing Documents
Annex E (Section 4.1(a)) - Financial Statements and Projections - Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A-
Commitments definition) - Commitments as of Closing Date
Annex K (from Annex F -
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Collateral Reports) - Accounts Roll-Forward (Cash Velocity) Calculations
Annex L (from Annex F -
Collateral Reports) - Unbilled Rebate Accounts Calculations
</TABLE>
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CREDIT AGREEMENT, dated as of February 4, 2000 among MIM
HEALTH PLANS, INC., a Delaware corporation ("Borrower"); MIM CORPORATION, a
Delaware corporation ("Holdings"); the other Credit Parties signatory hereto;
GENERAL ELECTRIC CAPITAL CORPORATION, a New York 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, Borrower desires that Lenders extend revolving credit
facilities to Borrower of up to Thirty Million Dollars ($30,000,000) in the
aggregate to provide (a) working capital financing for Borrower, (b) funds for
capital expenditures by Borrower and for future acquisitions by Borrower, (c)
funds for other general corporate purposes of Borrower, and (d) funds to be
advanced by the Borrower to Continental; and for these purposes, Lenders are
willing to make certain loans and other extensions of credit to Borrower of up
to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrower desires to secure all of its obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of its existing and
after-acquired Accounts, deposit accounts, Investment Property, intercompany
notes and General Intangibles; and
WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in Annex A. 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, 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 Revolving
Lender agrees to make available 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
Revolving Lender shall not at any time exceed its separate Revolving
Loan Commitment. The obligations of each Revolving Lender hereunder
shall be several and not joint. The aggregate amount of Revolving
Credit Advances outstanding shall not exceed at any time the lesser of
(A) the Maximum Amount and (B)
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the Borrowing Base ("Borrowing Availability"). Until the Commitment
Termination Date, Borrower 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 Borrower to the representative of Agent identified
on Schedule 1.1 at the address specified thereon. Those notices must be
given no later than (1) 11:00 a.m. (New York time) on the Business Day
of the proposed Revolving Credit Advance, in the case of an Index Rate
Loan, or (2) 11:00 a.m. (New York time) on the date which is three (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 required by Agent. If Borrower desires to have the Revolving Credit
Advances bear interest by reference to a LIBOR Rate, it must comply
with Section 1.5(e).
(ii) Borrower shall execute and deliver to each Revolving
Lender a note to evidence the Revolving Loan Commitment of that
Revolving Lender. Each note shall be in the principal amount of the
Revolving Loan Commitment of the applicable Revolving 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 obligation of Borrower to pay the
amount of each Revolving Lender's Revolving Loan Commitment or, if
less, the applicable Revolving Lender's Pro Rata Share of the aggregate
unpaid principal amount of all Revolving Credit Advances to Borrower
together with interest thereon as prescribed in Section 1.5. The entire
unpaid balance of the Revolving Loan and all other non-contingent
Obligations shall be immediately due and payable in full in immediately
available funds on the Commitment Termination Date.
(b) 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
to be genuine. Agent may assume that each Person executing and delivering such a
notice was duly authorized, unless the responsible individual acting thereon for
Agent has actual knowledge to the contrary.
1.2 Intentionally Omitted.
1.3 Prepayments.
(a) Voluntary Prepayments.
Borrower may at any time on at least ten (10) days' prior
written notice to Agent terminate the Revolving Loan Commitment; provided that
upon such termination, all Loans and other Obligations shall be immediately due
and payable in full. Any such termination of the Revolving Loan Commitment must
be accompanied by the payment of the fee required by Section 1.9(c), if any,
plus the payment of any LIBOR funding breakage costs, if any, in accordance with
Section 1.13(b). Upon any such termination of the Revolving Loan Commitment,
Borrower's right to request Revolving Credit Advances shall simultaneously be
terminated.
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(b) Mandatory Prepayments.
(i) If at any time the outstanding balance of the
Revolving Loan exceeds the lesser of (A) the Maximum Amount and (B) the
Borrowing Base, Borrower shall immediately repay the aggregate
outstanding Revolving Credit Advances to the extent required to
eliminate such excess.
(ii) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (including condemnation proceeds, but
excluding proceeds of asset dispositions permitted by Section 6.8(a))
or any sale of Stock of any Subsidiary of any Credit Party, Borrower
shall prepay the Loans in an amount equal to all such proceeds, net of
(A) commissions and other reasonable and customary transaction costs,
fees and expenses properly attributable to such transaction and payable
by Borrower 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 clause (c) below.
Notwithstanding the foregoing, if the proceeds of any asset disposition
do not exceed any of the limits set forth in Section 6.8 hereof, Agent
shall permit the applicable Credit Party to replace the assets disposed
of; provided that if such Credit Party has not replaced or entered into
binding agreements to replace such assets within 90 days of such
disposition, Agent may apply such proceeds to the Obligations in
accordance with Section 1.3(c).
(iii) If Borrower issues Stock or incurs
Indebtedness, no later than the Business Day following the date of
receipt of the proceeds thereof, Borrower 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 clause (c) below.
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by Borrower pursuant to clauses (b)(ii) or (b)(iii) above 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 the Revolving Credit Advances; third, to the outstanding
principal balance of Revolving Credit Advances until the same shall have been
paid in full. The Revolving Loan Commitment shall not be permanently reduced by
the amount of any such prepayments.
(d) Application of Prepayments from Insurance Proceeds.
Prepayments from insurance proceeds in accordance with Section 5.4(c) shall be
applied to the Revolving Credit Advances to the extent and at the times required
under Section 5.4(c). The Revolving Loan Commitment shall not be permanently
reduced by the amount of any such prepayments.
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(e) Nothing in this Section 1.3 shall be construed to
constitute Agent's or any Lender's consent to any transaction referred to in
clauses (b)(ii) and (b)(iii) above which is not permitted by other provisions of
this Agreement or the other Loan Documents.
1.4 Use of Proceeds.Borrower shall utilize the proceeds of the
Revolving Loan solely to provide (a) funds for capital expenditures by the
Credit Parties and for future acquisitions by the Credit Parties (but only such
acquisitions as are be permitted under the Loan Documents), (b) funds for
Borrower's ordinary working capital and general corporate needs (but excluding
in any event the making of any Restricted Payment not specifically permitted by
Section 6.14), and (c) funds to be advanced by the Borrower to Continental
(subject to the limitations and conditions set forth in this Agreement).
Disclosure Schedule (1.4) contains a description of Borrower's sources and uses
of funds as of the Closing Date, including Loans to be made or incurred on that
date, and a funds flow memorandum detailing how funds from each source are to be
transferred to particular uses.
1.5 Interest and Applicable Margins.
(a) Borrower 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
Borrower, 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 Revolver Index Margin, Applicable Revolver LIBOR
Margin and Applicable Unused Line Fee Margin will be 1.0%, 2.75%, and 0.5% per
annum, respectively.
(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 three hundred and sixty
(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 shall be
determined each day based upon the Index Rate as in effect each day. Each
determination by Agent of an interest rate and Fees hereunder shall be
conclusive, absent manifest error.
(d) So long as an Event of Default shall have occurred and be
continuing under Section 8.1(a), (h) or (i), or so long as any other Event of
Default shall have occurred and be continuing and at the election of Agent (or
upon the written request of Requisite Lenders) confirmed by written notice from
Agent to Borrower, the interest rates applicable to the Loans shall be increased
by two percent (2%) per annum above the rates of interest otherwise applicable
hereunder ("Default Rate"), and all outstanding Obligations shall bear interest
at the Default Rate applicable to such Obligations. Interest at the Default Rate
shall accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand.
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(e) So long as no Default or Event of Default shall have
occurred and be continuing, and subject to the additional conditions precedent
set forth in Section 2.2, Borrower shall have the option to (i) request that any
Revolving Credit Advances 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 last day of the LIBOR Period of the Loan to be continued.
Any Loan to be made or continued as, or converted into, a LIBOR Loan must be in
a minimum amount of $1,000,000 and integral multiples of $100,000 in excess of
such amount. Any such election must be made by 11:00 a.m. (New York time) on the
third (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
Borrower wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR
Period designated by Borrower in such election. If no election is received with
respect to a LIBOR Loan by 11:00 a.m. (New York time) on the third (3rd)
Business Day prior to the end of the LIBOR Period with respect thereto (or if a
Default or an Event of Default shall have occurred and be continuing or 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. Borrower 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, Borrower 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 which 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)
above, 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 exceed the
amount which 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
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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 Borrower or as a court of competent jurisdiction may otherwise
order.
1.6 Eligible Accounts.Based on the most recent Borrowing Base
Certificate delivered by Borrower to Agent and on other information available to
Agent, Agent shall in its reasonable credit judgment determine which Accounts of
any Credit Party shall be "Eligible Accounts" for purposes of this Agreement. In
determining whether a particular Account constitutes an Eligible Account, Agent
shall not include any such Account to which any of the exclusionary criteria set
forth below applies. Agent reserves the right, at any time and from time to time
after the Closing Date, to adjust any such criteria, to establish new criteria
and to adjust advance rates with respect to Eligible Accounts, in its reasonable
credit judgment, subject to the approval of Supermajority Lenders in the case of
adjustments or new criteria or changes in advance rates which have the effect of
making more credit available. Agent shall notify Borrower of any new criteria or
change in criteria, which new or changed criteria shall be given immediate
effect with respect to determining the Borrowing Availability for subsequent
Advances, but which new or changed criteria shall not require a prepayment of
any existing Advances under Section 1.3(b)(i) until five (5) Business Days after
Agent's notification of such new or changed criteria to Borrower. Eligible
Accounts shall not include any Account of any Credit Party:
(a) which does not arise from the sale of goods or the
performance of services by such Credit Party in the ordinary course of its
business;
(b) (i) upon which the Credit Party's right to receive payment
is not absolute or is contingent upon the fulfillment of any condition
whatsoever or (ii) as to which the Credit Party is not able to bring suit or
otherwise enforce its remedies against the Account Debtor through judicial
process, or (iii) if the Account represents a progress billing consisting of an
invoice for goods sold or used or services rendered pursuant to a contract under
which the Account Debtor's obligation to pay that invoice is subject to any
Credit Party's completion of further performance under such contract or is
subject to the equitable lien of a surety bond issuer;
(c) in the event that any defense, counterclaim, setoff or
dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) other than with respect to Unbilled Rebate Receivables,
with respect to which an invoice, acceptable to Agent in form and substance, has
not been sent to the applicable Account Debtor;
(f) that (i) is not owned by a Credit Party or (ii) is subject
to any right, claim, security interest or other interest of any other Person,
other than Liens in favor of Agent, on behalf of itself and Lenders;
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(g) that arises from a sale to any Credit Party or any
director, officer, other employee or Affiliate of any Credit Party, or to any
entity which has any common officer or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any state or
municipality or department, agency or instrumentality thereof unless Agent, in
its sole discretion, has agreed to the contrary in writing and Borrower, if
necessary or desirable, has complied with the Federal Assignment of Claims Act
of 1940, and any amendments thereto, or any applicable state statute or
municipal ordinance of similar purpose and effect with respect to such
obligation;
(i) that is the obligation of an Account Debtor located in a
foreign country (except for Account Debtors located in Puerto Rico, unless there
is a change in applicable law which, in the reasonable judgment of Agent, would
jeopardize the collectibility of the Account by the relevant Credit Party)
unless payment thereof is assured by a letter of credit assigned and delivered
to Agent, satisfactory to Agent as to form, amount and issuer;
(j) to the extent any Credit Party is liable for goods sold or
services rendered by the applicable Account Debtor to any Credit Party but only
to the extent of the potential offset (including Third Party Accounts to the
extent of accrued obligations of a Credit Party to such Account Debtor for
rebate proceeds);
(k) that arises with respect to goods which are delivered on a
bill-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; provided, that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) it is not paid within the earlier of: sixty (60) days
following its due date or ninety (90) days following its original
invoice date;
(ii) if any Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of
creditors or fails to pay its debts generally as they come due; or
(iii) if any petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any
other federal, state or foreign (including any provincial)
receivership, insolvency relief or other law or laws for the relief of
debtors;
(m) which is the obligation of an Account Debtor if fifty
percent (50%) or more of the dollar amount of all Accounts owing by that Account
Debtor are ineligible under the other criteria set forth in this Section 1.6 (it
being understood that, if the ineligible Accounts of such Account Debtor
constitute less than 50% of all of such Account Debtor's Accounts owing to the
Credit Parties, only the ineligible portion of such Accounts shall be excluded);
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(n) as to which Agent's Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties
pertaining to Accounts set forth in this Agreement or the Security Agreement is
untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable discretion;
(r) which is payable in any currency other than Dollars;
(s) to the extent that the Account arises from services
performed by a Credit Party for the benefit of CMPS, Continental or their
respective Affiliates;
(t) which is unacceptable to Agent in its reasonable credit
judgment.
1.7 Intentionally Omitted.
1.8 Cash Management Systems.On or prior to the Closing Date,
Borrower will establish and will maintain until the Termination Date, the cash
management systems described on Annex C (the "Cash Management Systems").
1.9 Fees.(a) Borrower shall pay to GE Capital, individually,
the Fees specified in that certain fee letter dated as of December 17, 1999
between Borrower and GE Capital (the "GE Capital Fee Letter"), at the times
specified for payment therein.
(b) As additional compensation for the Revolving Lenders,
Borrower agrees to pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a fee for Borrower's
non-use of available funds in an amount equal to the Applicable Unused Line Fee
Margin per annum (calculated on the basis of a 360 day year for actual days
elapsed) of the difference between (x) the Maximum Amount (as it may be reduced
from time to time) and (y) the average for the period of the daily closing
balance of the Revolving Loan outstanding during the period for which the such
fee is due.
(c) If Borrower prepays the Revolving Loan and terminates the
Revolving Loan Commitment, whether voluntarily or involuntarily and whether
before or after acceleration of the Obligations, Borrower shall pay to Agent,
for the benefit of Lenders as liquidated damages and compensation for the costs
of being prepared to make funds available hereunder an amount determined by
multiplying the Applicable Percentage (as defined below) by the amount of the
Revolving Loan Commitment. As used herein, the term "Applicable Percentage"
shall mean (x) two percent (2.00%), in the case of a prepayment on or prior to
the first anniversary of the
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Closing Date, (y) one percent (1%), in the case of a prepayment after the first
anniversary of the Closing Date but on or prior to the second anniversary.
Notwithstanding the foregoing, no prepayment fee shall be payable by Borrower
upon a mandatory prepayment made pursuant to Sections 1.3(b) or 1.16(c);
provided that Borrower does not permanently reduce the Revolving Loan Commitment
upon any such prepayment and, in the case of prepayments made pursuant to
Section 1.3(b)(ii) or (b)(iii), the transaction giving rise to the applicable
prepayment is expressly permitted under Section 6. Further, notwithstanding the
foregoing, no prepayment fee shall be payable by Borrower if Borrower terminates
the Revolving Loan Commitment in its entirety within thirty days after Borrower
receives notice from Agent that there will be applied to the determination of
Eligible Accounts any eligibility criteria not specifically recited in Section
1.6, if, as a result of the application of such new criteria, the Borrowing
Availability is reasonably anticipated to be reduced by at least $1,000,000.
Notwithstanding the foregoing, no prepayment fee shall be charged in the event
that Holdings and the Borrower prepay the Obligations and terminate the
Revolving Loan Commitment substantially contemporaneously with a reorganization
of the Continental Parties, the Rx Parties which is not permitted pursuant to
the last sentence of Section 6.
1.10 Receipt of Payments.Borrower 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 and determining Borrowing Availability
or Net Borrowing Availability as of any date, all payments shall be deemed
received on the day of receipt of immediately available funds therefor 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 shall be deemed to have been
received on the following Business Day.
1.11 Application and Allocation of Payments.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, (i) payments consisting of proceeds of Accounts
received in the ordinary course of business shall be applied to the Revolving
Loan; (ii) voluntary prepayments shall be applied as determined by Borrower,
subject to the provisions of Section 1.3(a); and (iii) mandatory prepayments
shall be applied as set forth in Sections 1.3(c) and 1.3(d). 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 each
other payment, and as to all payments made when a Default or Event or Default
shall have occurred and be continuing or following the Commitment Termination
Date, Borrower hereby irrevocably waives the right to direct the application of
any and all payments received from or on behalf of Borrower, and Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to apply
any and all such payments against the Obligations 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 Revolving Credit Loan; (3) to principal payments on
the Revolving Credit Loan; and (4) to all other Obligations including expenses
of Lenders to the extent reimbursable under Section 11.3.
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(b) Agent is authorized to, and at its sole election may,
charge to the Revolving Loan balance on behalf of 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 Borrower under this Agreement or any of the other Loan
Documents if and to the extent Borrower fails to promptly pay any such amounts
as and when due, even if such charges would cause the aggregate balance of the
Revolving Loan to exceed Borrowing Availability. 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 Borrower, and all other debits and credits as 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, absent manifest
error, be presumptive evidence of the amounts due and owing to Agent and Lenders
by Borrower; provided that any failure to so record or any error in so recording
shall not limit or otherwise affect Borrower's duty to pay the Obligations.
Agent shall render to Borrower a monthly accounting of transactions with respect
to the Loans setting forth the balance of the Loan Account. Unless Borrower
notifies Agent in writing of any objection to any such accounting (specifically
describing the basis for such objection), within thirty (30) days after the date
thereof, each and every such accounting shall, absent manifest error, be deemed
final, binding and conclusive upon Borrower 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 Borrower. 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) Holdings and 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 claims, damages, losses,
liabilities and expenses (including reasonable attorneys' fees and disbursements
and other costs of investigation or defense, including those arising in
connection with any suits, actions, or proceedings, and those incurred upon any
appeal) which are 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 to the
extent connected 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 (other than disputes solely between the Lenders, in which case the
indemnity obligations hereunder shall be limited to those in favor of the Agent)
to any of the Loan Documents (collectively, "Indemnified Liabilities");
provided, that neither Holdings nor any Credit Party shall be liable for any
indemnification to an Indemnified Person to the extent that
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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. In addition to the foregoing indemnification obligations, those
Credit Parties who are parties to Security Agreements shall have the
indemnification obligations specified in such Security Agreements.
(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
is the result of acceleration, by operation of law or otherwise), other than as
a result of a mandatory prepayment under Section 1.3(b) or (d) (provided,
however, the Required Lenders shall have the option, in their discretion, of
waiving the requirement that a mandatory prepayment be made); (ii) Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) Borrower shall default in making any borrowing of, conversion
into or continuation of LIBOR Loans after Borrower has given notice requesting
the same in accordance herewith; or (iv) Borrower shall fail to make any
prepayment of a LIBOR Loan after Borrower has given a notice thereof in
accordance herewith, Borrower shall 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, however, 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 Borrower with its written
calculation of all amounts payable pursuant to this Section 1.13(b), and such
calculation shall be binding on the parties hereto unless Borrower shall object
in writing within thirty (30) days of receipt thereof, specifying the basis for
such objection in detail.
1.14 Access.Holdings and each Credit Party which is a party
hereto shall, during normal business hours, from time to time upon five (5)
Business Days' prior notice (provided, however, that such time instead may be up
to thirty (30) days if required to schedule a time mutually convenient for Agent
and the Credit Parties) as frequently as Agent determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
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properties, facilities, advisors and employees (including officers) of each such
Person and to the Collateral, (b) permit Agent, and any of its officers,
employees and agents, to inspect, audit and make extracts from any such Person'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 and other Collateral of any Credit Party. If a Default or Event of
Default shall have occurred and be continuing or if access is necessary to
preserve or protect the Collateral as determined by the Agent, each such Person
shall provide such access to Agent and to each Lender at all times and without
advance notice. Furthermore, so long as any Event of Default shall have occurred
and be continuing, Borrower shall provide Agent and each Lender with access to
its suppliers and customers. Holdings and each Credit Party shall make available
to Agent and its counsel, as quickly as is possible under the circumstances,
originals or copies of all books and records which Agent may request. Holdings
and each Credit Party shall deliver any document or instrument necessary for
Agent, as it may from time to time request, to obtain records from any service
bureau or other Person which maintains records for Holdings or any Credit Party,
and shall maintain duplicate records or supporting documentation on media,
including computer tapes and discs owned by Holdings or any Credit Party. Agent
will give Lenders at least ten (10) days' prior written notice of regularly
scheduled audits. Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to Borrower.
1.15 Taxes.
(a) Any and all payments by Borrower hereunder 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 Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder 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) Borrower shall make such
deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Taxes, Borrower shall furnish
to Agent the original or a certified copy of a receipt evidencing payment
thereof. Each Lender agrees that, if requested by Borrower, the affected Lender
redesignate its lending office to minimize any Taxes payable by Borrower under
this Section 1.15 so long as doing so would not, in such Lender's judgment,
adversely affect such Lender or the Loans and so long as Borrower shall pay any
costs associated with such redesignation. In the event that a Lender or the
Agent receives a refund of, or credit with respect to, any Taxes paid by
Borrower pursuant to this Section 1.15 (and identifiable as such), the party
receiving such refund or credit shall pay the amount of such refund or credit to
the Borrower within thirty (30) days of receipt of such refund or application of
such credit.
(b) Holdings and each Credit Party that is a signatory hereto
shall indemnify and, within ten (10) days of 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
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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
Borrower and Agent a properly completed and executed IRS Form W8-BEN or W8-ECI
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
Borrower and Agent prior to becoming a Lender hereunder. No foreign Person may
become a Lender hereunder if such Person is unable to deliver a Certificate of
Exemption.
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 Borrower
shall from time to time upon 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
submitted by such Lender to Borrower and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes. Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such reduced rate of return, the affected Lender
shall, to the extent not inconsistent with such Lender's internal policies of
general application, use reasonable commercial efforts to minimize the adverse
effect on its rate of return chargeable against Borrower pursuant to this
Section 1.16(a).
(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
Borrower shall from time to time, upon 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, submitted to Borrower and
to Agent by such Lender, shall be conclusive and binding on Borrower 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
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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
Borrower pursuant to this Section 1.16(b). No Lender shall be entitled to recoup
any increased costs incurred by it for any period more than 180 days before the
date on which the Lender notifies the Borrower of such increased costs;
provided, however, that such Lender shall be entitled to recoup such costs as
long as Lender delivers Borrower notice of such increased costs within 180 days
of the date on which such Lender first knew or reasonably should have known that
it was subject to such increased costs.
(c) Notwithstanding anything to the contrary contained herein,
if 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 notice thereof and demand therefor by such Lender to Borrower 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) Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing to such Lender, together with
interest accrued thereon, unless Borrower, within five (5) Business Days after
the delivery of such notice and demand, converts all such Loans into a Loan
bearing interest based on the Index Rate. No termination fee under Section
1.9(c) shall be payable to any Lender on account of the termination of any LIBOR
Loans under this Section 1.16(c).
(d) Replacement of Lender in Respect of Increased Costs.
Within thirty (30) days after receipt by Borrower of written notice and demand
from any Lender (an "Affected Lender") for payment of additional amounts or
increased costs as provided in Section 1.15(a), 1.16(a) or 1.16(b), Borrower
may, at its option, notify Agent and such Affected Lender of its intention to
replace the Affected Lender. So long as no Default or Event of Default shall
have occurred and be continuing, Borrower, with the consent of Agent (such
consent not to be unreasonably withheld), may obtain, at Borrower's expense, a
replacement Lender ("Replacement Lender") for the Affected Lender. If Borrower
obtains a Replacement Lender within ninety (90) days following notice of its
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 (other than a termination fee under Section 1.9(c)) with respect thereto
through the date of such sale, provided that Borrower 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, Borrower shall not have the right to obtain a
Replacement Lender if the Affected Lender rescinds its demand for increased
costs or additional amounts within fifteen (15) days following its receipt of
Borrower's notice of intention to replace such Affected Lender. Furthermore, if
Borrower gives a notice of intention to replace and does not so replace such
Affected Lender within ninety (90) days thereafter, Borrower's rights under this
Section
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1.16(d) shall terminate and Borrower 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.All Loans to Borrower and all of the other
Obligations of Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrower secured, until the
Termination Date, by all Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan on the Closing
Date, 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,
Holdings, Borrower, any other Credit Parties, Agent and Lenders; and Agent shall
have received such documents, instruments, agreements and legal opinions as
Agent shall reasonably request in connection with the 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
satisfactory to Agent.
(b) Intentionally omitted.
(c) Approvals. Agent shall have received (i) satisfactory
evidence that Holdings and 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
satisfactory to Agent affirming that no such consents or approvals are required.
(d) Opening Availability. The Eligible Accounts of Borrower
supporting the initial Revolving Credit Advance and the amount of the Reserves
to be established on the Closing Date shall be sufficient in value, as
determined by Agent, to provide Borrower with Net Borrowing Availability, after
giving effect to the initial Revolving Credit Advance of at least $5,000,000.
(e) Payment of Fees. Borrower 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
presented as of the Closing Date.
2.2 Further Conditions to Each Loan.Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Loan or
convert or continue any Loan as a LIBOR Loan, if, as of the date thereof:
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(a) Any representation or warranty by Holdings or any Credit
Party contained herein or in any of the other Loan Documents shall be untrue or
incorrect 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; or
(b) Any event or circumstance having a Material Adverse Effect
shall have occurred since the date hereof as determined by the Requisite
Lenders; or
(c) (i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Loan or (ii) a Default
shall have occurred and be continuing or would result after giving effect to any
Loan, and Agent or Requisite Lenders shall have determined not to make any Loan
so long as that Default is continuing; or
(d) After giving effect to any Advance, the outstanding
principal amount of the Revolving Loan would exceed the lesser of the Borrowing
Base and the Maximum Amount.
The request and acceptance by Borrower of the proceeds of any Loan or the
conversion or continuation of any Loan into, or as, a LIBOR Loan, as the case
may be, shall be deemed to constitute, as of the date of such request or
acceptance, (i) a representation and warranty by Borrower that the conditions in
this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower 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, Holdings and the Credit
Parties jointly and severally, make the following representations and warranties
to Agent and each Lender, each and all of which shall survive the execution and
delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law.
Each of Holdings and the Credit Parties (a) is a corporation
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation; (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 a Material Adverse
Effect (provided, however, that the parties hereto acknowledge that Holdings is
not currently qualified in the State of New York, but is obligated to become
qualified in New York within the time provided in the post closing undertaking
of even date herewith; (c) has the requisite corporate 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 licenses,
permits, consents or approvals from or by, and has made all filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent material to the ownership, operation and conduct of any such Person;
(e) is in compliance with its charter and by-laws; and (f) subject to specific
representations set forth
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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.
3.2 Executive Offices; FEIN.As of the Closing Date, the
current location of Holdings, and each Credit Party's chief executive office and
principal place of business is set forth in Disclosure Schedule (3.2), and none
of such locations have changed within the twelve (12) months preceding the
Closing Date. In addition, Disclosure Schedule (3.2) lists the federal employer
identification number of Holdings and each Credit Party.
3.3 Corporate Power, Authorization, Enforceable
Obligations.The execution, delivery and performance by Holdings and 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 Person's corporate power; (b) have
been duly authorized by all necessary or proper corporate and shareholder
action; (c) do not contravene any provision of such Person's charter or bylaws;
(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 (i) any indenture, mortgage, deed of
trust, agreement or other instrument related to Indebtedness to which such
Person is a party or by which such Person or any of its property is bound, (ii)
any contracts or agreements listed on Schedule 3.22 or (iii) any other
contracts, leases or agreements material to the operations of any Person; (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 referred to in
Section 2.1(c), all of which will have been duly obtained, made or complied with
prior to the Closing Date. On or prior to the Closing Date, each of the Loan
Documents shall have been duly executed and delivered by Holdings and each
Credit Party thereto and each such Loan Document shall, at each time this
representation is made, constitute a legal, valid and binding obligation of
Holdings and such Credit Party enforceable against it in accordance with its
terms.
3.4 Financial Statements and Projections.Except for the
Projections, all Financial Statements concerning Holdings and its Subsidiaries
which are referenced 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.
(a) The following Financial Statements attached hereto as
Disclosure Schedule (3.4(A)) have been delivered on the date hereof:
(i) The audited consolidated and consolidating balance sheets
at December 31, 1997 and 1998 and the related statements of income and
cash flows of Holdings and its Subsidiaries for the Fiscal Years then
ended, certified by Arthur Andersen.
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(ii) The unaudited balance sheet(s) at December 31, 1999 and
the related statement(s) of income and cash flows of Holdings and its
Subsidiaries for the Fiscal Year then ended.
(b) Projections. The Projections delivered on the date hereof
and attached hereto as Disclosure Schedule (3.4(B)) have been prepared by
Holdings and Borrower in light of the past operations of its businesses, but
including future payments of known contingent liabilities reflected on its
balance sheet, and reflect projections for the two year period beginning on
January 1, 2000 on a month by month basis for the first year and on a year by
year basis thereafter. The Projections are based upon estimates and assumptions
stated therein, all of which Holdings and Borrower believe to be reasonable and
fair in light of current conditions and current facts known to Holdings and
Borrower and, as of the Closing Date, reflect Holdings and Borrower's good faith
and reasonable estimates of the future financial performance of Borrower and of
the other information projected therein for the period set forth therein.
3.5 Material Adverse Effect.Between December 31, 1998 and the
Closing Date, (a) neither Holdings nor any of its Subsidiaries has incurred any
obligations, contingent or non-contingent liabilities, liabilities for Charges,
long-term leases or unusual forward or long-term commitments which, 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
Holdings or any of its Subsidiaries or has become binding upon Holdings or any
of its Subsidiaries' assets and no law or regulation applicable to Holdings or
any of its Subsidiaries has been adopted which has had or could reasonably be
expected to have a Material Adverse Effect, and (c) neither Holdings nor any of
its Subsidiaries is in default and to the best of Holdings' and the Borrower's
knowledge no third party is in default under any material contract, lease or
other agreement or instrument, which alone or in the aggregate could reasonably
be expected to have a Material Adverse Effect. Between December 31, 1998 and the
Closing Date no event has occurred, which alone or together with other events,
could reasonably be expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens.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. Disclosure
Schedule (3.6) describes 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 properties and assets. As of the Closing Date, none of the
properties and assets of Holdings or any Credit Party are subject to any Liens
other than Permitted Encumbrances, and there are no facts, circumstances or
conditions known to Holdings or any Credit Party that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each Credit Party has received all deeds, assignments, waivers,
consents, non-disturbance and recognition 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
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assets. Disclosure Schedule (3.6) also describes any purchase options, rights of
first refusal or other similar contractual rights pertaining to any 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 which has not
heretofore been repaired and restored in all material respects to its original
condition 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 they are 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 with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matter; (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 or any employment agreement (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 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 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), neither
Holdings nor any of its Subsidiaries 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 Holdings or any of its
Subsidiaries is owned by each of the stockholders and in the amounts set forth
on Disclosure Schedule (3.8). There are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which Holdings or
any of its Subsidiaries 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 of Holdings and each of its
Subsidiaries as of the Closing Date is described in Section 6.3 (including
Disclosure Schedule (6.3)).
3.9 Government Regulation.Neither Holdings nor any 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 as amended. Neither Holdings nor any
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 Borrower, 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.
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3.10 Margin Regulations.Neither Holdings nor any 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 security" 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"). Neither Holdings nor any
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 which was originally incurred
to purchase or carry any Margin Stock or for any other purpose which might cause
any of the Loans or other extensions of credit under this Agreement to be
considered a "purpose credit" within the meaning of Regulation T, U or X of the
Federal Reserve Board. Neither Holdings nor any Credit Party will take or permit
to be taken any action which could reasonably be expected to cause any Loan
Document to violate any regulation of the Federal Reserve Board.
3.11 Taxes.All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by
Holdings or any of its Subsidiaries 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 Holdings and
each of its Subsidiaries from their respective employees for all periods in full
and complete compliance with all applicable federal, state, local and foreign
law 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 of Holdings or any Subsidiary'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 on Disclosure
Schedule (3.11), neither Holdings nor any of its Subsidiaries 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. Neither Holdings nor any of its Subsidiaries and
their respective predecessors are liable for any Charges: (a) under any
agreement (including any tax sharing agreements) or (b) to each Person's
knowledge, as a transferee. As of the Closing Date, neither Holdings nor any of
its Subsidiaries 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
would have a Material Adverse Effect.
3.12 ERISA.
(a) Disclosure Schedule (3.12) lists and separately identifies
all Title IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare Plans. Copies
of all such listed Plans, together
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with a copy of the latest form 5500 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, and 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 which would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
with the applicable provisions of ERISA and the IRC, including the filing of
reports required under the IRC or ERISA. Neither Holdings nor any Credit Party
or 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 Holdings nor any Credit Party or ERISA Affiliate has
engaged in a prohibited transaction, as defined in Section 4975 of the IRC, in
connection with any Plan, which would subject Holdings or any Credit Party to a
material tax on prohibited transactions imposed by Section 4975 of the IRC.
(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 Holdings or 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) neither Holdings nor any 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 with Unfunded Pension Liabilities has been transferred outside
of the "controlled group" (within the meaning of Section 4001(a)(14) of ERISA)
of Holdings or any Credit Party or ERISA Affiliate; and (vi) 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
the equivalent 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 Holdings or
any Credit Party, threatened against Holdings or any of its Subsidiaries, before
any Governmental Authority or before any arbitrator or panel of arbitrators
(collectively, "Litigation"), (a) which challenges any such Person'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) which has a reasonable risk of being
determined adversely to such Person and which, if so determined, could
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 threatened which seeks damages in excess of $100,000 or injunctive
relief or alleges criminal misconduct of Holdings or any of its Subsidiaries.
3.14 Brokers.No broker or finder acting on behalf of Holdings
or any Credit Party brought about the obtaining, making or closing of the Loans,
and neither Holdings nor any Credit Party 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
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now or heretofore conducted by it or proposed to be conducted by it, and each
Patent, Trademark, Copyright and License is listed, together with application or
registration numbers, as applicable, in Disclosure Schedule (3.15) hereto,
except where the failure to have such rights would not result in a Material
Adverse Effect. Each Credit Party conducts its business and affairs without
material infringement of or interference with any Intellectual Property of any
other Person.
3.16 Full Disclosure.No information contained in this
Agreement, any of the other Loan Documents, any Projections, Financial
Statements or Collateral Reports or other reports from time to time delivered
hereunder or any written statement furnished by or on behalf of Holdings or any
of its Subsidiaries 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. The Liens granted to Agent, on behalf of itself and
Lenders, pursuant to the Collateral Documents will at all times be fully
perfected first priority Liens in and to the Collateral described therein,
subject, as to priority, only to Permitted Encumbrances with respect to the
Collateral other than Accounts.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of
the Closing Date: (i) Holdings and the Credit Parties are and have been in
compliance with all Environmental Laws, except for such noncompliance which
would not result in Environmental Liabilities which could reasonably be expected
to exceed $250,000; (ii) there is no Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material which seeks
damages, penalties, fines, costs or expenses in excess of $250,000 or injunctive
relief, or which alleges criminal misconduct by Holdings or any Credit Party;
and (iii) no notice has been received by Holdings or any Credit Party
identifying it as a "potentially responsible party" or requesting information
under CERCLA or analogous state statutes, and to the knowledge of Holdings and
the Credit Parties, there are no facts, circumstances or conditions that may
result in Holdings or any Credit Party being identified as a "potentially
responsible party" under CERCLA or analogous state statutes.
(b) Holdings and 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 such Person's affairs, and (ii) does not have the
capacity through the provisions of the Loan Documents or otherwise to influence
any such Person'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 Holdings and 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 deposits and/or other accounts as of the Closing Date, including
any Disbursement Accounts, 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.
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3.20 Government Contracts.Except as set forth in Disclosure
Schedule (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts are subject to the Federal Assignment of Claims Act, as amended (31
U.S.C. Section 3727) or any similar state or local law.
3.21 Customer and Trade Relations.As of the Closing Date,
there exists no actual or, to the knowledge of Holdings or any Credit Party,
threatened termination or cancellation of, or any material adverse modification
or change in the business relationship of any Credit Party with any customer or
group of customers whose Accounts during the preceding twelve (12) months caused
them to be ranked among the ten largest customers of such Credit Party.
3.22 Agreements and Other Documents.As of the Closing Date,
Holdings and each Credit Party have provided to Agent or its counsel accurate
and complete copies (or summaries) of all of the following agreements or
documents to which any of such Credit Parties is subject and each of which are
listed on Disclosure Schedule (3.22): (i) supply agreements and purchase
agreements not terminable by Holdings or such Credit Party within sixty (60)
days following written notice issued by such Person and involving transactions
in excess of $1,000,000 per annum; (ii) all agreements with drug manufacturers
pursuant to which any Credit Party may include in the Borrowing Base any Billed
Rebate Accounts or any Unbilled Rebate Accounts; (iii) any lease of Equipment
having a remaining term of one year or longer and requiring aggregate rental and
other payments in excess of $500,000 per annum; and (iv) licenses and permits
held by Holdings or the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect. Holdings and the Credit Parties
represent and warrant to Agent and the Lenders that, with respect to (i) each
agreement giving rise to any Third Party Account to be included in the Borrowing
Base and (ii) each agreement giving rise to any Billed Rebate Account or
Unbilled Rebate Account to be included in the Borrowing Base: (x) such agreement
is made between the Account Debtor and a Credit Party; and (y) the relevant
Credit Party has the exclusive right, free and clear of all claims and
encumbrances (except the Liens in favor of Agent) to all sums payable under any
such Third Party Account, Billed Rebate Account or Unbilled Rebate Account, as
applicable.
3.23 Solvency.Both before and after giving effect to (a) the
Loans to be made or extended on the Closing Date or such other date as Loans
requested hereunder are made or extended, (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Borrower, and (c) the payment and
accrual of all transaction costs in connection with the foregoing, Holdings and
each Credit Party are Solvent.
3.24 Year 2000 Representations.
Neither Holdings nor any Credit Party have experienced any
Year 2000 Problems.
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4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Holdings and each Credit Party hereby agree that from and
after the Closing Date and until the Termination Date, it shall deliver to Agent
and/or 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.
(b) 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 and/or Lenders, as required, the various Collateral Reports
(including Borrowing Base Certificates in the form of Exhibit 4.1(b)) at the
times, to the Persons and in the manner set forth in Annex F.
4.2 Communication with Accountants.Holdings and each of its
Subsidiaries authorize Agent and, so long as a Default or Event of Default shall
have occurred and be continuing, each Lender, to communicate directly with its
independent certified public accountants including Arthur Andersen, and
authorize and 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 Holdings
or any of its Subsidiaries (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of Holdings
or any such Person.
5. AFFIRMATIVE COVENANTS
Holdings and each Credit Party jointly and severally agree as
to all such Persons that from and after the date hereof and until the
Termination Date:
5.1 Maintenance of Existence and Conduct of Business.Each
Credit Party shall: do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its corporate rights
and franchises; continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; at all times maintain, preserve and protect
all of its 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 obsolescence);
and transact business only in such corporate and trade names as are set forth in
Disclosure Schedule (5.1).
5.2 Payment of Obligations.
(a) Subject to Section 5.2(b), Holdings and each of its
Subsidiaries shall pay and discharge or cause to be paid and discharged promptly
all Charges payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees, and (B) lawful claims for labor, materials, supplies and services or
otherwise, before any thereof shall become past due.
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(b) Holdings and each of its Subsidiaries may in good faith
contest, by appropriate proceedings, the validity or amount of any Charges or
claims described in Section 5.2(a); provided, that (i) adequate reserves with
respect to such contest are maintained on the books of such Person, in
accordance with GAAP, (ii) no Lien shall be imposed to secure payment of such
Charges that is superior to any of the Liens securing payment of 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, and (iv) such Person shall promptly pay or discharge such contested
Charges or claims and all additional charges, interest, penalties and expenses,
if any, and (if requested by Agent) shall deliver to Agent evidence acceptable
to Agent of such compliance, payment or discharge, if such contest is terminated
or discontinued adversely to such Person or the conditions set forth in this
Section 5.2(b) are no longer met.
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
acceptable to Agent. 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 which 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
attorneys' fees, court costs and other charges related thereto, shall be payable
on demand by Borrower to Agent and shall be additional Obligations hereunder
secured by the Collateral.
(b) If requested by Agent, each Credit Party shall deliver to
Agent from time to time a report of a reputable insurance broker, satisfactory
to Agent, with respect to its insurance policies.
(c) Borrower shall promptly notify Agent of any loss, damage,
or destruction to any of Borrower's tangible assets (including, without
limitation, any books, records or equipment useful in the invoicing or
collection of the Collateral, and specifically including computer equipment) in
the amount of $100,000 or more, whether or not covered by insurance. If the
casualty would not reasonably be expected to have a Material Adverse Effect, the
applicable Credit Party shall be entitled to use the proceeds of insurance
received with respect to such casualty to replace, restore, repair or rebuild
the affected property; provided that if such Credit Party has not completed or
entered into binding agreements to complete such replacement, restoration,
repair or rebuilding within 90 days of such casualty, or if the casualty could
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reasonably be expected to have a Material Adverse Effect, then the applicable
Credit Party shall apply such insurance proceeds to the Obligations in
accordance with Section 1.3(d).
5.5 Compliance with Laws.Each Credit Party shall comply with
all federal, state, local and foreign laws and regulations applicable to it,
including those relating to the sale of pharmaceuticals, ERISA and labor matters
and Environmental Laws and Environmental Permits, except 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
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or 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 which, 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 which 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 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 as to representations and
warranties that relate solely to the Closing Date. In addition, any Credit Party
that is also a party to a Security Agreement shall also provide notice of
certain events to Agent as required in Section 5(i) of such Security Agreement.
5.7 Intellectual Property.Each Credit Party will conduct its
business and affairs without infringement of interference with any Intellectual
Property of any other Person in any material respect.
5.8 Environmental Matters.Each Credit Party shall and shall
cause each Person within its control to conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance which could not reasonably be
expected to have a Material Adverse Effect. 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, which, 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 Borrower's 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 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. Borrower shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
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5.9 Landlords' Agreements, Mortgagee Agreements.
Each Credit Party shall obtain a landlord's agreement or
mortgagee agreement from the lessor of each leased property or mortgagee of
owned property where its business records or processing systems are located or
where its chief executive office is located, which agreement or letter shall
contain a waiver or subordination of all Liens or claims that the landlord or
mortgagee may assert against the Collateral at that location, and shall
otherwise be satisfactory in form and substance to Agent. Each Credit Party
shall timely and fully pay and perform its obligations under all leases and
other agreements with respect to each leased location where any Collateral is or
may be located.
5.10 Procedures Regarding Collection of Unbilled Rebate
Accounts; Credit Policies for PBM Contracts.(a) The Credit Parties shall develop
written procedures relating to billing and collection of Unbilled Rebate
Accounts, present such procedures to Agent and obtain Agent's approval thereof
(such approval to be given only if the procedures are acceptable to Agent, in
its sole discretion) no later than March 31, 2000.
(b) The Credit Parties shall develop a written credit policy
to be applied to new pharmacy benefit management contracts (both capitated and
fee-for-service), present such policy to Agent and obtain Agent's approval
thereof (such approval to be given only if the policy is acceptable to Agent, in
its sole discretion) no later than March 31, 2000.
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.
5.12 Continental Intercompany Loans.
If Continental shall cease to be a wholly-owned Subsidiary of
Holdings, all intercompany loans made by Borrower to Continental (including
those made pursuant to 6.2) shall be repaid in full in immediately available
funds at or before the time Continental ceases to be a wholly-owned Subsidiary
of Holdings.
5.13 Independent Corporate Existence.
The Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, books, records and accounts that are separate from the
books, records and accounts of Continental or any of its Subsidiaries such that:
(i) the revenues of the Credit Parties will be credited to the accounts of the
Borrower and its Subsidiaries only; (ii) all expenses incurred by the Borrower
and its Subsidiaries shall be paid only from the accounts of the Borrower and
its Subsidiaries and no funds of any Credit Party may be used, directly or
indirectly, to pay any
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expense or liability of Continental or any Subsidiary of Continental; (iii) only
officers and employees of the Borrower and its Subsidiaries shall have the
authority to make disbursements with respect to the accounts of the Borrower and
its Subsidiaries; (iv) there shall occur no sharing of accounts or funds between
the Credit Parties, on the one hand, and Continental or any of its Subsidiaries,
on the other hand; (v) all cash and funds of the Credit Parties shall be managed
separately from the cash and funds of Continental or any of its Subsidiaries,
and there shall not occur any commingling, including for investment purposes, of
funds or assets of the Credit Parties with the funds or assets of Continental or
any of its Subsidiaries; and (vi) and no Credit Party shall be or become liable
for any debtor liability of Continental or any of its Subsidiaries.
5.14 Access.
Holdings and each of the Credit Parties shall take all action
required to provide Agent and Lenders access as required under Section 1.14.
5.15 Year 2000 Problems.
In the event that Holdings or any Credit Party should
experience any Year 2000 Problems, such Person shall use all reasonable
commercial efforts to eliminate such Year 2000 Problems.
6. NEGATIVE COVENANTS
Holdings and each Credit Party jointly and severally agree as
to all Credit Parties that, without the prior written consent of Agent and the
Requisite Lenders, from and after the date hereof until the Termination Date:
6.1 Mergers, Subsidiaries, Etc.
Neither Holdings nor any of its Subsidiaries (except
Continental) 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 capital stock of, or otherwise combine
with or acquire, any Person. Notwithstanding the foregoing, Borrower may acquire
all or substantially all of the assets or capital Stock of any Person (the
"Target") (in each case, a "Permitted Acquisition") subject to the satisfaction
of each of the following conditions:
(i) Agent shall receive at least thirty (30) days' prior
written notice of such proposed Permitted Acquisition, which notice
shall include a reasonably detailed description of such proposed
Permitted Acquisition;
(ii) such Permitted Acquisition shall only involve assets
located in the United States (and if the capital Stock of the Target is
acquired, the Target must be organized under the laws of, and domiciled
in, the United States) and comprising a business, or those assets of a
business, of the type engaged in by Holdings or any of its Subsidiaries
(other than any business activity maintained by Continental or any of
its Subsidiaries that is not also maintained by one of the Credit
Parties) as of the Closing Date, and which business 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 approvals applicable
to the exercise of such rights and remedies with respect to Borrower
prior to such Permitted Acquisition;
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(iii) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(iv) no additional Indebtedness, Guaranteed Indebtedness,
contingent obligations or other liabilities shall be incurred, assumed
or otherwise be reflected on a consolidated balance sheet of Borrower
and Target after giving effect to such Permitted Acquisition, except
(A) Loans made hereunder,
(B) ordinary course trade payables, accrued expenses
and unsecured Indebtedness of the Target to the extent no
Default or Event of Default shall have occurred and be
continuing or would result after giving effect to such
Permitted Acquisition,
(C) Borrower may incur Indebtedness to the seller of
the acquired assets or Stock, provided that such Indebtedness
(i) constitutes Subordinated Debt, (ii) does not exceed 30% of
the total consideration in connection with any single
Acquisition, (iii) does not, for all Acquisitions in the
aggregate, exceed $5,000,000, and (iv) does not result in the
violation of any of the financial covenants in the Loan
Documents and
(D) Indebtedness otherwise permitted under Section
6.3 hereof;
(v) the sum of all amounts paid or incurred in connection with
all Permitted Acquisitions consummated in any twelve-month period
(including all transaction costs and all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection therewith or
otherwise reflected on a consolidated balance sheet of Borrower and
Target) shall not exceed $15,000,000 and the sum of all such amounts
paid or incurred in connection with any single acquisition shall not
exceed $5,000,000;
(vi) the consideration to be paid by Borrower in connection
with such Permitted Acquisition (including all transaction costs and
all Indebtedness, liabilities and contingent obligations incurred or
assumed in connection therewith or otherwise reflected on a
consolidated balance sheet of Borrower and Target) shall not exceed the
lesser of (i) 8.0 times pro forma EBITDA as shown on the Acquisition
Pro Forma (defined hereafter) and (ii) such other multiple as may be
approved by the Agent and the Requisite Lenders;
(vii) the consideration to be paid by Borrower in connection
with such Permitted Acquisition (including all transaction costs and
all Indebtedness, liabilities and contingent obligations incurred or
assumed in connection therewith or otherwise reflected
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on a consolidated balance sheet of Borrower and Target) shall not
exceed $30 per covered life acquired;
(viii) the business and assets acquired in such Permitted
Acquisition shall be free and clear of all Liens (other than Permitted
Encumbrances);
(ix) 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 acquired or thereafter created accounts
receivable, deposit accounts and general intangibles of Target acquired
pursuant thereto, and Borrower and the Target shall have executed such
documents and taken such actions as may be required by Agent in
connection therewith;
(x) Concurrently with delivery of the notice referred to in
clause (i) above, Borrower shall have delivered to Agent, in form and
substance satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income
statement and cash flow statement of Borrower and its
Subsidiaries (the "Acquisition Pro Forma"), based on recent
financial statements, which shall be complete and shall fairly
present in all material respects the assets, liabilities,
financial condition and results of operations of Borrower 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 all other
Indebtedness related to the Permitted Acquisition), with such
one-time adjustments as may be acceptable to Agent and the
Requisite Lenders (in their good faith discretion), and such
Acquisition Pro Forma shall reflect that, on a pro forma
basis, no Default or Event of Default shall have occurred and
be continuing or would result after giving effect to such
Permitted Acquisition and Borrower would have been in
compliance with the financial covenants set forth in Annex G
for the four quarter period reflected in the Compliance
Certificate most recently delivered to Agent pursuant to Annex
E prior to the consummation of such Permitted Acquisition
(giving effect to such Permitted Acquisition and all Loans
funded in connection therewith as if made on the first day of
such period);
(B) a certificate of the chief financial officer of
Borrower to the effect that: (x) Borrower (after taking into
consideration all rights of contribution and indemnity
Borrower has against each Subsidiary of Borrower) will be
Solvent upon the consummation of the Permitted Acquisition;
(y) the Acquisition Pro Forma fairly presents the financial
condition of Borrower (on a consolidated basis) as of the date
thereof after giving effect to the Permitted Acquisition; and
(z) Borrower has completed a thorough due diligence
investigation with respect to the Target and such Permitted
Acquisition, and has provided to Agent and Lenders any and all
summaries of such diligence investigation as may have been
prepared by or delivered to Holdings or any Credit Party;
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(xi) on or prior to the date of such Permitted Acquisition,
Agent shall have received copies of the acquisition agreement and
related agreements and instruments, and all opinions, certificates,
lien search results and other documents reasonably requested by Agent;
and
(xii) at the time of such Permitted Acquisition and after
giving effect thereto, no Default or Event of Default shall have
occurred and be continuing.
Notwithstanding the foregoing, the Accounts of the Target
shall not be included in Eligible Accounts without the prior written consent of
Agent and Requisite Lenders.
6.2 Investments; Loans and Advances.Except as otherwise
expressly permitted by this Section 6, neither Holdings nor any of its
Subsidiaries (other than Continental) 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) Borrower may hold investments comprised
of notes payable, or stock or other securities issued by Account Debtors to
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 Borrower does not exceed
$100,000; (b) each Credit Party may maintain its existing investments in its
Subsidiaries as of the Closing Date; (c) Borrower may make loans to Continental
of up to $5,000,000 in the aggregate so long as: (i) immediately prior to the
making of any such loan, the Borrower delivers a certificate to the Agent (with
supporting calculations, including a balance sheet for each relevant Person
which depicts such Person's assets at their fair salable values on a going
concern basis and the liabilities set forth therein include all contingent
liabilities of such Person stated substantially at the reasonably estimated
present values thereof) showing to Agent's satisfaction that, after giving
effect to the contemplated loan to Continental, each Credit Party and
Continental is solvent; (ii) each such loan is evidenced by an intercompany note
from Continental to Borrower in form and substance acceptable to Agent, which
note shall be pledged to Agent under the Security Agreement (and such notes
shall be deemed to be "Intercompany Notes" under this Agreement); (iii) after
giving effect to the making of such loan, no Default or Event of Default shall
exist; and (iv) at the time such loan is made, Continental is a wholly-owned
Subsidiary of Holdings; and (d) Holdings may make Investments in and loans to
Continental. No Credit Party shall maintain any deposit accounts or investment
accounts other than those accounts specifically permitted by (and in compliance
with the requirements of) Annex C hereto.
6.3 Indebtedness.
(a) Neither Holdings, nor any Credit Party shall create,
incur, assume or permit to exist any Indebtedness, except (without duplication)
(i) Indebtedness secured by purchase money security interests and Capitalized
Leases permitted in clause (c) of Section 6.7, (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 thereof
which do not have the effect of
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increasing the principal amount thereof or changing the amortization thereof
(other than to extend the same) and which are otherwise on terms and conditions
no less favorable to any Credit Party, Agent or any Lender, as determined by
Agent, than the terms of the Indebtedness being refinanced, amended or modified,
(v) Indebtedness specifically permitted under Section 6.1, (vi) other
Indebtedness not covered by another clause in this Section 6.3(a) not to exceed
$100,000 at any time, (vii) Indebtedness consisting of intercompany loans and
advances made by Borrower to any other Credit Party that is a Guarantor and a
wholly owned Subsidiary of Borrower or by any Guarantor to Borrower; provided
that (A) Borrower shall have executed and delivered to each such Guarantor, and
each such Guarantor shall have executed and delivered to Borrower, on the
Closing Date, a demand note (collectively, the "Intercompany Notes") to evidence
any such intercompany Indebtedness owing at any time by Borrower to such
Guarantor or by such Guarantor to Borrower, which Intercompany Notes shall be in
form and substance satisfactory to Agent and shall be pledged and delivered to
Agent pursuant to the applicable Security Agreement as additional collateral
security for the Obligations; (B) Borrower shall record all intercompany
transactions on its books and records in a manner satisfactory to Agent; (C) the
obligations of Borrower under any such Intercompany Notes shall be subordinated
to the Obligations of Borrower hereunder in a manner satisfactory to Agent; (D)
at the time any such intercompany loan or advance is made by Borrower and after
giving effect thereto, Borrower shall be Solvent; and (E) no Default or Event of
Default would occur and be continuing after giving effect to any such proposed
intercompany loan.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations or (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with Sections 6.8(b) or (c).
6.4 Employee Loans and Affiliate Transactions.
(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate 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 $50,000 in the aggregate, the terms of these transactions must be
disclosed in advance to Agent and Lenders. All such transactions existing as of
the date hereof are described on 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 their
respective employees on an arm's-length basis in the ordinary course of business
consistent with past practices for travel expenses, relocation costs and similar
purposes up to a maximum of $50,000 to any employee and up to a maximum of
$100,000 in the aggregate at any one time outstanding. All such transactions
existing as of the date hereof, which aggregate over $50,000 for any employee,
are described on Disclosure Schedule 6.4(b). Notwithstanding the foregoing,
Holdings shall be permitted to maintain the existing loan made by Holdings to
Richard H. Friedman, with a principal balance
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not to exceed $1,700,000 (exclusive of interest accruals) provided, however,
that the terms of such loan may not be amended without the written consent of
the Requisite Lenders.
6.5 Capital Structure and Business.Neither Holdings nor any
Credit Party shall (a) make any changes in any of its business objectives,
purposes or operations which could in any way adversely affect the repayment of
the Loans or any of the other Obligations or could reasonably be expected to
have or result in a Material Adverse Effect, (b) make any change in its capital
structure as described on Disclosure Schedule (3.8), including the issuance of
any shares of Stock, warrants or other securities convertible into Stock or any
revision of the terms of its outstanding Stock, except that Borrower may make a
Public Offering of its common Stock 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 which would adversely affect Agent or Lenders or
Holdings' or any Credit Party's duty or ability to repay the Obligations.
Neither Holdings nor any of its Subsidiaries (other than Continental) shall
engage in any business other than the businesses currently engaged in by it.
6.6 Guaranteed Indebtedness.Neither Holdings nor any 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 such Person, and (b) for Guaranteed Indebtedness incurred for
the benefit of a Credit Party if the primary obligation is expressly permitted
by this Agreement other than Indebtedness, if any, of a Target existing at the
time such Target is acquired.
6.7 Liens.Neither Holdings nor any 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); 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 Equipment and Fixtures acquired by such Person 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
incurred within twenty (20) days following such purchase and does not exceed
100% of the purchase price of the subject assets); and (d) other Liens securing
Indebtedness not exceeding $100,000 in the aggregate at any time outstanding, so
long as such Liens do not attach to any Accounts. In addition, neither Holdings
nor any of its Subsidiaries (other than Continental) shall become a party to any
agreement, note, indenture or instrument, or take any other action, which 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.No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the capital
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Stock of any of its Subsidiaries (whether in a public or a private offering or
otherwise) or any of their 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 Equipment, Fixtures or Real Estate that are
obsolete or no longer used or useful in such Credit Party's business and having
a value not exceeding $50,000 in any single transaction or $250,000 in the
aggregate in any Fiscal Year and (c) other Equipment and Fixtures having a value
not exceeding $50,000 in any single transaction or $250,000 in the aggregate in
any Fiscal Year. With respect to any disposition of assets or other properties
permitted pursuant to clause (b) and clause (c) above, (i) Borrower shall apply
the proceeds of such sale to repayment of the Obligations to the extent required
by this Agreement.
6.9 ERISA.No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an event which 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.
6.10 Financial Covenants. Neither Holdings nor Borrower shall
breach or fail to comply with any of the Financial Covenants (the "Financial
Covenants") set forth in Annex G.
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 or
marketability of any of the Real Estate or any of the Collateral, other than
such violations or Environmental Liabilities which could not reasonably be
expected to have a Material Adverse Effect.
6.12 Sale-Leasebacks.Neither Holdings nor any of 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, 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.Neither Holdings nor any Credit Party
shall make any Restricted Payment, except (a) intercompany loans and advances
between Borrower and Guarantors to the extent permitted by Section 6.3 above,
(b) dividends and distributions by Subsidiaries of Borrower paid to Borrower and
(c) employee loans permitted under Section 6.4(b) above.
6.15 Change of Corporate Name or Location; Change of Fiscal
Year.No Credit Party shall (a) change its corporate name, or (b) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, in any case without at least thirty
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(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, and provided that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate
structure in any manner which might make any financing or continuation statement
filed in connection herewith seriously misleading within the meaning of Section
9-402(7) of the Code or any other then applicable provision of the Code except
upon prior written notice to Agent and Lenders 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. No Credit
Party shall change its Fiscal Year.
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) which 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 Borrower to Borrower.
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 Changes Relating to Subordinated Debt.No Credit Party
shall change or amend the terms of any Subordinated Debt (or any indenture or
agreement in connection therewith) if the effect of such amendment is to: (a)
increase the interest rate on such Subordinated Debt; (b) change the dates upon
which payments of principal or interest are due on such Subordinated Debt other
than to extend such dates; (c) change any default or event of default other than
to delete or make less restrictive any default provision therein, or add any
covenant with respect to such Subordinated Debt; (d) change the redemption or
prepayment provisions of such Subordinated Debt other than to extend the dates
therefor or to reduce the premiums payable in connection therewith; (e) grant
any security or collateral to secure payment of such Subordinated Debt; or (f)
change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights to
the holder of such Subordinated Debt in a manner adverse to any Credit Party,
Agent or any Lender.
Notwithstanding the provisions of Sections 6.1, 6.2, 6.8 and 6.14,
Holdings, Continental and/or its Subsidiaries (the "Continental Parties"), and
MIMrx.com, Inc. and/or its Subsidiaries (the "Rx Parties") shall be permitted to
transfer the Stock or assets of any of the Continental Parties and/or the Stock
or assets of any of the Rx Parties to any Person other than a Credit Party,
including by way of merger or consolidation of such entites with or into
Holdings or any other transfer of assets of such entities to Holdings (or other
transaction having the same economic effect), so long as (i) such transactions
do not increase the liabilities or affect the assets or increase the liabilities
of the Borrower or any of its Subsidiaries, and (ii) such transactions could
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not reasonably be expected to result in a material increase in the liabilities
of Holdings, where materiality is determined by reference to Holdings and its
Subsidiaries, taken as a whole.
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 Holdings or any other Credit Party 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 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 Holdings or any other Credit Party, 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 however, that in all events the provisions of Sections 11.3,
11.8, 11.9, 11.10, 11.13 and 11.15, 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) Borrower (i) fails to make any payment of principal of the
Loans or any of the other Obligations when due and payable, or any interest on
(or Fees owing in respect of) the Loans within two (2) Business Days after the
date such interest or Fees are first due and payable, or (ii) fails to pay or
reimburse Agent or Lenders for any expense reimbursable hereunder or under any
other Loan Document within ten (10) days following Agent's demand for such
reimbursement or payment of expenses.
(b) Holdings or any Credit Party shall fail or neglect to
perform, keep or observe any of the provisions of Sections 1.4, 1.8 or 6, or any
of the provisions set forth in Annexes C or G, respectively.
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(c) Borrower shall fail or neglect to perform, keep or observe
any of the provisions of Section 4 or any provisions set forth in Annexes E or
F, respectively, and the same shall remain unremedied for five (5) days or more.
(d) Holdings or any Credit Party shall fail or neglect 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
thirty (30) days or more.
(e) A default or breach shall occur under any other agreement,
document or instrument to which Holdings or any of its Subsidiaries is a party
which is not cured within any applicable grace period, and such default or
breach (i) involves the failure to make any payment when due in respect of any
Indebtedness (other than the Obligations) of Holdings or any of its Subsidiaries
in excess of $500,000 in the aggregate, or (ii) causes, or permits any holder of
such Indebtedness or a trustee to cause, 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, regardless of whether such
default is waived, or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect, or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate)
made or delivered to Agent or any Lender by Holdings or any Credit Party is
untrue or incorrect in any material respect as of the date when made or deemed
made.
(g) Assets of Holdings or any Credit Party with a fair market
value of $250,000 or more shall be 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 thirty (30) days or more.
(h) A case or proceeding shall have been commenced against
Holdings or any of its Subsidiaries seeking a decree or order in respect of such
Person (i) under Title 11 of the United States Code, as now constituted or
hereafter amended 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 Person or of
any substantial part of any such Person's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Person, and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or
such court shall enter a decree or order granting the relief sought in such case
or proceeding.
(i) Holdings or any of its Subsidiaries (i) shall file a
petition seeking relief under Title 11 of the United States Code, as now
constituted or hereafter amended, or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) shall fail to contest in a timely
and appropriate manner or shall consent to the institution of proceedings
thereunder or to the filing of any such petition or to the appointment of or
taking possession by a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) of any such Person or of
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any substantial part of any such Person's assets, (iii) shall make an assignment
for the benefit of creditors, or (iv) shall take any corporate action in
furtherance of any of the foregoing, or (v) shall admit in writing its inability
to, or shall be 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 $250,000 in the aggregate at any time outstanding shall be rendered
against Holdings or any of its Subsidiaries and the same shall not, within
thirty (30) days after the entry thereof, have been discharged or execution
thereof stayed or bonded pending appeal, or shall not have been discharged prior
to the expiration of any such stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with its terms
(or Holdings 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 security interest created under any Loan Document shall
cease to be a valid and perfected first priority security interest or Lien
(except as otherwise permitted herein or therein) in any of the Collateral
purported to be covered thereby.
(l) Any Change of Control shall occur.
(m) Any default shall occur under any financing agreements
between Comerica Bank (and its successors in interest) and Continental (and such
default shall continue beyond any applicable cure or grace period in such
agreement).
8.2 Remedies.(a) If any Event of Default shall have occurred
and be continuing, or if a Default shall have occurred and be continuing and
Agent or Requisite Lenders shall have determined not to make any Advances so
long as that specific Default is continuing, Agent may (and at the written
request of the Requisite Lenders shall), without notice, suspend the Revolving
Loan facility with respect to further Advances whereupon any further Advances
shall be made or extended 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 Default or Event
of Default shall have occurred and be 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 Loans
to the Default Rate.
(b) If any Event of Default shall have occurred and be
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; (ii) declare all or any portion of the Obligations,
including all or any portion of any Loan to be forthwith due and payable, all
without presentment, demand, protest or further notice of any kind, all of which
are expressly waived by Holdings, Borrower and each other Credit Party; and
(iii) exercise any rights and remedies provided to Agent under the Loan
Documents and/or at law or equity, including all remedies provided under the
Code; provided, however, that upon the occurrence of an Event of Default
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specified in Sections 8.1(g), (h) or (i), the Revolving Loan facility shall be
immediately terminated and all of the Obligations, including the 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, Holdings and each Credit Party waive:
(a) presentment, demand and protest and notice of presentment, dishonor, notice
of intent to accelerate, notice of 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 such Person 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 which 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) Holdings and the Credit Parties signatory hereto consent
to any Lender's assignment of, and/or sale of participations in, at any time or
times, the Loan Documents, Loans and any Commitment or of any portion thereof or
interest therein, including any Lender's rights, title, interests, remedies,
powers or duties thereunder, whether evidenced by a writing or not; provided,
however, that, in connection with any assignment by a Lender to any Person other
than another Lender or an affiliate of a Lender, the identity of the assignee
Lender shall be subject to the approval of the Borrower, not to be unreasonably
withheld (but no such approval shall be required at any time that a Default or
Event of Default shall exist). The Borrower shall have no right to approve the
identity of any participating Lender. Any assignment by a Lender shall (i)
require the consent of Agent (which shall not be unreasonably withheld or
delayed) 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 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) if a partial assignment, be in an amount at least equal to
$5,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; and (iv) include a payment to Agent of an assignment fee of $3,500.
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 it would if it were a Lender 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. Borrower
hereby acknowledges and agrees that any assignment will give rise to a direct
obligation of Borrower 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
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the event Agent or any Lender assigns or otherwise transfers
all or any part of the Obligations, Agent or any such Lender shall so notify
Borrower and Borrower shall, upon the 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 Agreement and the other Loan Documents to another investment fund
managed by the same investment advisor; provided, however, 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
Borrower 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, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence neither Holdings, nor Borrower nor any other 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 Borrower 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) Holdings and 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 the preparation of informational materials
for, and the participation of management in meetings with, potential assignees
or participants. Holdings and each Credit Party executing this Agreement shall
certify the correctness, completeness and accuracy of all descriptions of
Holdings and the Credit Parties and their affairs contained in any selling
materials prepared by Agent in connection with syndications managed by Agent and
all other information provided by them and included in such materials, except
that any Projections delivered by Borrower shall only be certified by Borrower
as having been prepared by Borrower in compliance with the representations
contained in Section 3.4(b).
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(e) A Lender may furnish any information concerning Holdings
and Credit Parties in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants).
Each Lender 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 shall have occurred and be
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).
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 neither Holdings, nor any 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 obligation toward or
relationship of agency or trust with or for Holdings or 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. 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.
If Agent shall request instructions from Requisite Lenders,
Supermajority 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, Supermajority 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, Supermajority
Lenders or all affected Lenders, as applicable.
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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.
Without limitation of 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 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 in good faith by it 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 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 Holdings or any Credit
Party or to inspect the Collateral (including the books and records) of any such
Person; (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, Holdings or any Credit Party, any of their Affiliates
and any Person who may do business with or own securities of Holdings or 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 Holdings or 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 Holdings and 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.
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9.6 Indemnification.Lenders agree to indemnify Agent (to the
extent not reimbursed by Holdings and the Credit Parties and without limiting
the obligations of Borrower 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 which 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 or omitted by Agent in connection
therewith; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements 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 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 Holdings and the Credit Parties.
9.7 Successor Agent.Agent may resign at any time by giving not
less than thirty (30) days' prior written notice thereof to Lenders and
Borrower. Upon any such resignation, the Requisite Lenders shall have the right
to appoint a successor Agent; provided, however, that if no Default or Event of
Default then exists, the Borrower shall have the right to approve any successor
Agent that is not one of the Lenders (such approval not to be unreasonably
withheld). 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, by the 30th day 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
Requisite Lenders hereunder shall be subject to the approval of Borrower, such
approval not to be unreasonably withheld or delayed; provided that such approval
shall not be required if a Default or an Event of Default shall have occurred
and be 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
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actions taken or omitted to be taken by it while it was 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 any Event of
Default, each Lender and each holder of any Note is hereby authorized at any
time or from time to time, without notice to Holdings or any Credit Party or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of Borrower or any Guarantor (regardless of whether such
balances are then due to Borrower or any Guarantor) and any other properties or
assets any time held or owing by that Lender or that holder to or for the credit
or for the account of Borrower or any Guarantor against and on account of any of
the Obligations which are not paid when due. Any Lender or holder of any Note
exercising a right to set off 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 set off or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares. Borrower and each Guarantor agrees, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and may sell participations in such amount so set off to other Lenders and
holders and (b) any Lender or holders so purchasing a participation in the Loans
made or other Obligations held by other Lenders or holders may exercise all
rights of set-off, 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 set-off amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of set-off, 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) Each Revolving Lender shall make
the amount of such Lender's Pro Rata Share of each Revolving Credit
Advance available to Agent in same day funds by wire transfer to
Agent's account as set forth in Annex H 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 Borrower. All payments by each
Revolving Lender shall be made without setoff, counterclaim or
deduction of any kind.
(ii) On the second (2nd) Business Day of each
calendar week or more frequently as aggregate cumulative payments in
excess of $2,000,000 are received with respect to the Loans (each, a
"Settlement Date"), Agent will advise each Lender by
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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 such Lender has funded
all payments and Advances required to be made by it and purchased all
participations required to be purchased by it under this Agreement and
the other Loan Documents as of such Settlement Date, Agent will pay to
each Lender such Lender's Pro Rata Share of principal, interest and
Fees paid by Borrower since the previous Settlement Date for the
benefit of that 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
Borrower. Such payments shall be made by wire transfer to such Lender's
account (as specified by such Lender in Annex H 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 Revolving 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 Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without set-off,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower 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
Revolving Lender or to relieve any Revolving Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to Borrower on behalf
of any Revolving 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 Revolving
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 Borrower and such related payment is
not received by Agent, then Agent will be entitled to recover such
amount from such Lender on demand without set-off, 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 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 Borrower
or such other Person, without set-off, 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 Revolving Lender (each
such other Revolving 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 or to purchase a participation 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 a "Revolving Lender" (or be included in the
calculation of "Requisite Lenders" or "Supermajority Lenders" hereunder) for any
voting or consent rights under or with respect to any Loan Document.
(e) Dissemination of Information. Agent will use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, Holdings or 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, however, 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. Lenders acknowledge that Borrower is
required to provide Financial Statements and Collateral Reports to Lenders in
accordance with Annexes E and F 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 set-off) 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.
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 Holdings, each
Credit Party, Agent, Lenders and their respective successors and assigns
(including, in the case of Holdings or any Credit Party, a debtor-in-possession
on behalf of such Person), except as otherwise provided herein or therein.
Neither Holdings nor any 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 written consent of Agent and
Lenders. Any such purported assignment, transfer, hypothecation or other
conveyance by Holdings or any Credit Party without the prior 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 Holdings,
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 below. Any letter of interest, commitment letter,
and/or fee letter (other than the GE Capital Fee Letter) between Holdings or 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.
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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 of the Notes, or any consent to
any departure by Holdings, any Credit Party therefrom, shall in any event be
effective unless the same shall be in writing and signed by Agent and Borrower,
and by Requisite Lenders, Supermajority Lenders or all affected Lenders, as
applicable. Except as set forth in clauses (b) and (c) below, all such
amendments, modifications, terminations or waivers requiring the consent of any
Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement which increases the
percentage advance rates set forth in the definition of the Borrowing Base, or
which makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts set forth in Sections 1.6, shall be effective unless the same
shall be in writing and signed by Agent, Requisite Lenders and Borrower. No
amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement which waives compliance with the conditions
precedent set forth in Section 2.2 to the making of any Loan shall be effective
unless the same shall be in writing and signed by Agent, Requisite Lenders and
Borrower. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default (if in connection therewith
Agent or Requisite Lenders, as the case may be, have exercised its or their
right to suspend the making or incurrence of further Advances pursuant to
Section 8.2(a)) or any Event of Default shall be effective for purposes of the
conditions precedent to the making of Loans set forth in Section 2.2 unless the
same shall be in writing and signed by Agent, Requisite Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby,
do any of the following: (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 or Fees payable with respect to any
Loan of any affected Lender; (iii) extend any scheduled payment date 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
herein or in the other Loan Documents, release,
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or permit Holdings or 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 which
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 definitions of the terms
"Requisite Lenders" or "Supermajority Lenders" insofar as such definitions
affect the substance of this Section 11.2. Furthermore, no amendment,
modification, termination or waiver affecting the rights or duties of Agent
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent, 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 Holdings or any Credit Party in any case shall entitle
such Person or any other Person 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 this clause (i) and in clauses
(ii) and (iii) below being referred to as a "Non-Consenting Lender"),
or
(ii) requiring the consent of Supermajority Lenders, the
consent of Requisite Lenders is obtained, but the consent of
Supermajority Lenders is not obtained, or
(iii) requiring the consent of Requisite Lenders, the consent
of Lenders holding 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 Borrower's request,
Agent, or a Person 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 Lender for an amount equal to the
principal balance of all Loans held by the Non-Consenting 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.
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(e) Upon indefeasible payment in full in cash and performance
of all of the Obligations (other than indemnification Obligations under Section
1.13), termination of the Commitments and a 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 deliver to Borrower
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.Holdings and each Credit Party shall
reimburse Agent for all reasonable out-of-pocket expenses incurred in connection
with the preparation of the Loan Documents (including the reasonable fees and
expenses of all of their special loan counsel, advisors, consultants and
auditors retained in connection with the Loan Documents and advice in connection
therewith). Holdings and each Credit Party shall reimburse Agent (and, with
respect to clauses (c), (d) and (e) below, all Lenders) for all reasonable fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel
or other advisors (including auditors or appraisers of the Collateral) for
advice, assistance, or other representation in connection with:
(a) the forwarding to Borrower or any other Person on behalf
of Borrower by Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or advice in connection with the
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, Borrower or any other Person)
in any way relating to the Collateral, any of the Loan Documents or any other
agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, 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 Borrower 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;
(d) any attempt to enforce any remedies of Agent or any Lender
against Holdings or 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 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 work-out or restructuring of the Loans during the
pendency of one or more Events of Default;
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(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess Holdings or any of the Credit
Parties or their respective affairs, and (iii) verify, protect, evaluate,
assess, appraise, collect, sell, liquidate or otherwise dispose of any of the
Collateral (provided, however, that, unless a Default or Event of Default has
occurred, the Borrower shall only be required to pay for the cost of two
Collateral audits/appraisals in any twelve month period); including, as to each
of clauses (a) through (f) above, all reasonable attorneys' and other
professional and service providers' fees arising from such services, including
those in connection with any appellate proceedings; and all reasonable expenses,
costs, charges and other fees incurred by such counsel and others in any way or
respect arising in connection with or relating to any of the events or actions
described in this Section 11.3 shall be payable, on demand, by Borrower to
Agent. Without limiting the generality of the foregoing, such expenses, costs,
charges and fees may include: fees, costs and expenses of accountants,
appraisers of Collateral, 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
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services. Notwithstanding the
foregoing, Borrower shall not be required to pay for the fees of any management
consultants unless such fees are incurred while an Event of Default exists;
provided, however that if management consultants are involved in any audit or
appraisal of Collateral, Borrower shall be required to pay such fees on the same
basis as the other audit or appraisal costs.
11.4 No Waiver.Agent's or any Lender's failure, at any time or
times, to require strict performance by Holdings or any of the Credit Parties of
any provision of this Agreement and any of the other Loan Documents shall not
waive, affect or diminish any right of Agent or such Lender thereafter to demand
strict compliance and performance 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 Holdings
or any Credit Party contained in this Agreement or any of the other Loan
Documents and no Default or Event of Default by Holdings or 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 Borrower 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 which Agent or any Lender may 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 shall be prohibited by or invalid
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under applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
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 is in conflict with, or inconsistent 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 maintain the confidentiality of its own confidential information) to
maintain as confidential all confidential information provided to them by
Holdings and the Credit Parties and designated as confidential until two (2)
years after the Termination Date, except that Agent and each Lender may disclose
such information (a) to Persons employed or engaged by Agent or such Lender in
evaluating, approving, structuring or administering the Loans and the
Commitments; (b) to any bona fide assignee or participant or potential assignee
or participant that has agreed to comply with the covenant contained in this
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 advise of Agent's or such Lender's counsel, 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) which ceases to be confidential through no fault of Agent or
such Lender.
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 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. HOLDINGS AND EACH
CREDIT PARTY HEREBY CONSENT AND AGREE THAT THE STATE OR FEDERAL COURTS LOCATED
IN WESTCHESTER COUNTY, NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN HOLDINGS AND 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, HOLDINGS AND THE CREDIT PARTIES
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF WESTCHESTER COUNTY, NEW YORK AND, PROVIDED, FURTHER NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM
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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. TO THE EXTENT PERMITTED BY LAW,
HOLDINGS AND EACH CREDIT PARTY EXPRESSLY SUBMIT AND CONSENT IN ADVANCE TO SUCH
JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND HOLDINGS AND
EACH CREDIT PARTY HEREBY WAIVE ANY OBJECTION WHICH SUCH PERSON MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND
HEREBY CONSENT TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. HOLDINGS AND EACH CREDIT PARTY HEREBY WAIVE PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREE THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE
MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PERSON AT THE ADDRESS SET
FORTH IN ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED
COMPLETED UPON THE EARLIER OF SUCH PERSON'S ACTUAL RECEIPT THEREOF OR FIVE (5)
DAYS AFTER DEPOSIT IN THE U.S. 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 five (5)
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) one (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 on Annex I 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 Borrower or Agent) designated on Annex I
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.
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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, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, TO THE EXTENT PERMITTED BY LAW 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, HOLDINGS, 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.Holdings and each Credit Party executing
this Agreement agree that neither they nor their 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 two (2) Business Days' prior notice to GE Capital and without
the prior written consent of GE Capital unless (and only to the extent that)
Holdings or any Credit Party or Affiliate is required to do so under law and
then, in any event, such Person will consult with GE Capital before issuing such
press release or other public disclosure. Holdings and each Credit Party consent
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 Holdings and each Credit Party 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 with Borrower's consent which shall not be
unreasonably withheld or delayed.
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 Holdings or Borrower for liquidation or reorganization, should Holdings
or 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 Holdings' or 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.
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IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.
BORROWER:
MIM HEALTH PLANS, INC.
By: /s/ Barry A. Posner
------------------------
Name: Barry A. Posner
Title: Vice President
HOLDINGS:
MIM CORPORATION
By: /s/ Barry A. Posner
------------------------
Name: Barry A. Posner
Title: Vice President
AGENT:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ John P. Crosby
------------------------
Name: John P. Crosby
Title:
LENDER:
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ John P. Crosby
------------------------
Name: John P. Crosby
Title:
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The following Persons are signatories to this Agreement in
their capacity as Credit Parties and not as Borrowers.
PRO-MARK HOLDINGS, INC.
By: /s/ Barry A. Posner
------------------------
Name: Barry A. Posner
Title: Vice President
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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 section references in the following definitions
shall refer to Sections of the Agreement:
"Account Debtor" shall mean any Person who may become
obligated to any Credit Party under, with respect to, or on account of, an
Account.
"Accounts" shall mean all "accounts," as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party and, in any
event, including (a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to any Credit Party, whether arising out of goods sold or
services rendered by it or from any other transaction (including any such
obligations which 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 now owned or hereafter acquired by it 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 monies due or to become due to any Credit Party, under all purchase
orders and contracts for the sale of goods or the performance of services or
both 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) now or
hereafter in existence, including the right to receive the proceeds of said
purchase orders and contracts, and (e) all collateral security and guarantees of
any kind, now or hereafter in existence, given by any Person with respect to any
of the foregoing. "Accounts" shall specifically include Billed Rebate Accounts,
Unbilled Rebate Accounts and Third Party Accounts.
"Advance" shall mean any Revolving Credit Advance.
"Affiliate" shall mean, 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, five percent (5%) or more of the
Stock having ordinary voting power in the election of directors of such Persons,
(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 Holdings, the immediate family members, spouses
and lineal descendants of individuals who are Affiliates of Holdings. 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.
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"Agent" shall mean GE Capital or its successor appointed
pursuant to Section 9.7.
"Agreement" shall mean the Credit Agreement by and among
Holdings, Borrower, the other Credit Parties named therein, GE Capital, as Agent
and Lender and the other Lenders signatory from time to time to the Agreement.
"Appendices" shall have the meaning assigned to it in the
recitals to the Agreement.
"Applicable Margins" means collectively the Applicable Unused
Line Fee Margin, the Applicable Revolver Index Margin and the Applicable
Revolver LIBOR Margin.
"Applicable Revolver Index Margin" shall mean 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) of the Agreement.
"Applicable Revolver LIBOR Margin" shall mean 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) of the Agreement.
"Applicable Unused Line Fee Margin" shall mean the per annum
fee, from time to time in effect, payable in respect to Borrower's non-use of
committed funds pursuant to Section 1.9(b), which fee is determined by reference
to Section 1.5(a).
"Assignment Agreement" shall have the meaning assigned to it
in Section 9.1(a).
"Billed Rebate Account" shall mean any rebate entitlement
which has been fully and irrevocably earned by any Credit Party and is
calculated based on the volume of pharmaceuticals processed through such Credit
Party's pharmacy benefit management system, and for which an invoice has been
submitted for payment to a third party pharmaceutical manufacturer in compliance
with the terms of a written rebate agreement between such Credit Party and such
third party pharmaceutical manufacturer.
"Borrower" shall have the meaning assigned thereto in the
recitals to the Agreement.
"Borrower Accounts" shall have the meaning assigned to it in
Annex C.
"Borrowing Availability" shall have the meaning assigned to it
in Section 1.1(a)(i).
"Borrowing Base" shall mean, as of any date of determination
by Agent, from time to time, an amount equal to the sum at such time of:
(a) seventy percent (70%) of the book value of the Credit
Parties' Eligible Accounts that constitute Billed Rebate Accounts and
Unbilled Rebate Accounts, less any Reserves established by Agent at
such time (provided, however, Unbilled Rebate
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Accounts shall not be included in the Borrowing Base in an
amount that exceeds thirty percent (30%) of the Borrowing Base) and
(b) eighty-five percent (85%) of the book value of the Credit
Parties' Eligible Accounts that constitute Third-Party Accounts, less
any Reserves established by Agent at such time.
"Borrowing Base Certificate" shall mean a certificate to be
executed and delivered from time to time by Borrower in the form attached to the
Agreement as Exhibit 4.1(b).
"Business Day" shall mean 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 New York or Rhode Island and in reference to LIBOR Loans shall mean
any such day that is also a LIBOR Business Day.
"Capital Expenditures" shall mean, 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.
"Capital Lease" shall mean, 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" shall mean, 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 Management Systems" shall have the meaning assigned to
it in Section 1.8.
"Cash Velocity" shall mean, with respect to the Credit
Parties, as at the end of any Fiscal Month (the "Testing Month"), that
percentage obtained by dividing (a) the actual amount collected on Billed Rebate
Accounts for the six Fiscal Months ending with the end of the Testing Month by
(b) the amount of Billed Rebate Accounts that first became Billed Accounts in
six Fiscal Months ending with the end of the Fiscal Month immediately preceding
the Testing Month (less any write offs of Billed Rebate Accounts in the three
Fiscal Months ending with the Fiscal Month immediately preceding the Testing
Month).
"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,
as amended) 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, as amended) of 30% 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
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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 elections 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 shall cease to own and control all of the economic and voting rights
associated with all of the outstanding capital stock of Borrower; or (d)
Borrower shall cease to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its Subsidiaries.
"Charges" shall mean 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" shall mean any "chattel paper," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"Closing Date" shall mean February 4, 2000.
"Closing Checklist" shall mean 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.
"CMPS" shall mean Continental Managed Pharmacy Services, Inc.,
a Ohio corporation.
"Code" shall mean the Uniform Commercial Code as the same may,
from time to time, be enacted and in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Agent's or any Lender's security
interest in 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 hereof relating to such
attachment, perfection or priority and for purposes of definitions related to
such provisions.
"Collateral" shall mean 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.
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"Collateral Documents" shall mean the Security Agreement, the
Guaranties, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Collateral Reports" shall mean the reports with respect to
the Collateral referred to in Annex F.
"Collection Account" shall mean that certain account of Agent,
account number 502-328-54 in the name of Agent at Bankers Trust Company in New
York, New York or such other account as Agent shall specify.
"Commitment Termination Date" shall mean the earliest of (a)
February 3, 2003, (b) the date of termination of Lenders' obligations to make
Advances or permit existing Loans to remain outstanding pursuant to Section
8.2(b), and (c) the date of indefeasible prepayment in full by Borrower of the
Loans and the permanent reduction of the Revolving Loan Commitment to zero
dollars ($0).
"Commitments" shall mean (a) as to any Lender, the aggregate
of such Lender's Revolving Loan Commitment as set forth on Annex J 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 Thirty Million Dollars ($30,000,000) on the
Closing Date, as to each of clauses (a) and (b), as such Commitments may be
reduced, amortized or adjusted from time to time in accordance with the
Agreement.
"Compliance Certificate" shall have the meaning assigned to it
in Annex E.
"Concentration Account" shall have the meaning assigned to it
in Annex C.
"Continental" shall mean CMPS and its Subsidiaries.
"Contracts" shall mean 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 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 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,
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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" shall mean 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" shall mean all of the following now owned or
hereafter acquired by any Credit Party: (a) all copyrights and s of like nature
(whether registered or unregistered), now owned or existing or hereafter adopted
or acquired, 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" shall mean Borrower and each of its
Subsidiaries, if any.
"Default" shall mean any event which, with the passage of time
or notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned to it in
Section 1.5(d).
"Disbursement Accounts" shall have the meaning assigned to it
on Annex C.
"Disclosure Schedules" shall mean the Schedules prepared by
Holdings and Borrower and denominated as Disclosure Schedules 1.4 through 6.7 in
the Index to the Agreement.
"Documents" shall mean any "documents," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
wherever located.
"Dollars" or "$" shall mean lawful currency of the United
States of America.
"EBITDA" shall mean, with respect to any Person for any fiscal
period, an amount equal to (a) consolidated net income of such Person for such
period, 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 which 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
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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. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) 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 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.
"Eligible Accounts" shall have the meaning assigned to it in
Section 1.6 of the Agreement.
"Environmental Laws" shall mean all applicable federal, state,
local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, 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.ss.9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C.ss.5101 et seq.); the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C.ss.136 et seq.); the Solid Waste
Disposal Act (42 U.S.C.ss. 6901 et seq.); the Toxic Substance Control Act (15
U.S.C.ss.2601 et seq.); the Clean Air Act (42 U.S.C.ss.7401 et seq.); the
Federal Water Pollution Control Act (33 U.S.C.ss.1251 et seq.); the Occupational
Safety and Health Act (29 U.S.C.ss.651 et seq.); and the Safe Drinking Water Act
(42 U.S.C.ss. 300(f) et seq.), each as from time to time amended, 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" shall mean, with respect to any
Person, all liabilities, obligations, responsibilities, response, remedial and
removal costs, investigation and feasibility
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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 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 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" shall mean all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Laws.
"Equipment" shall mean 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 with software and peripheral equipment (other
than software constituting part of the Accounts), 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, all whether now owned or hereafter acquired,
and wherever situated, 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" shall mean the Employee Retirement Income Security Act
of 1974 (or any successor legislation thereto), as amended from time to time,
and any regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Holdings or any
Credit Party, any trade or business (whether or not incorporated) which,
together with Holdings or 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" shall mean, with respect to Holdings or 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 Holdings or 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 Holdings
or 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
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Multiemployer Plan by the PBGC; (f) the failure by Holdings or
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 which 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 of
ERISA; (i) the loss of a Qualified Plan's qualification or tax exempt status; or
(j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan which is intended to satisfy the
requirements of Section 4975(e)(7) of the IRC.
"Event of Default" shall have the meaning assigned to it in
Section 8.1.
"Federal Funds Rate" shall mean, 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.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.
"Fees" shall mean any and all fees payable to Agent or any
Lender pursuant to the Agreement or any of the other Loan Documents.
"Financial Statements" shall mean the consolidated and
consolidating income statements, statements of cash flows and balance sheets of
Borrower delivered in accordance with Section 3.4 of the Agreement and Annex E
to the Agreement.
"Fiscal Month" shall mean any of the monthly accounting
periods of Borrower.
"Fiscal Quarter" shall mean any of the quarterly accounting
periods of Borrower, ending on March 31, June 30, September 30 and December 31
of each year.
"Fiscal Year" shall mean any of the annual accounting periods
of Borrower ending on December 31 of each year.
"Fixed Charges" shall mean, 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, plus (c) dividends paid or accrued during such
period (to the extent the same do not constitute Interest Expense such that they
would already be included in "Fixed Charges").
"Fixed Charge Coverage Ratio" shall mean, with respect to any
Person for any fiscal period, the ratio of (a) EBITDA minus Capital
Expenditures, minus cash taxes to (b) Fixed Charges. In computing Fixed Charges
for any fiscal period, interest and principal payments that
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are due within one week after the end of that fiscal period,
without duplication, shall be deemed to have been paid on the last day of that
fiscal period.
"Fixtures" shall mean any "fixtures" as such term is defined
in the Code, now owned or hereafter acquired by any Credit Party.
"Funded Debt" shall mean, with respect to any Person, all
Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness and which 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 cases of
Holdings and Borrower, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, consistently applied, as such term is further
defined in Annex G to the Agreement.
"GE Capital Fee Letter" shall mean that certain letter, dated
as of December 17, 1999, between GE Capital and Borrower with respect to certain
Fees to be paid from time to time by Borrower to GE Capital.
"General Intangibles" shall mean any "general intangibles," as
such term is defined in the Code, now owned or hereafter acquired by any Credit
Party, and, in any event, including all right, title and interest which such
Credit Party may now or hereafter have in or under any Contract, all 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 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.
"Governmental Authority" shall mean 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.
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"Guaranteed Indebtedness" shall mean, as to any Person, any
obligation of such Person guaranteeing any indebtedness, lease, dividend, or
other obligation ("primary obligations") of any other Person (the "primary
obligor") in any manner, including any obligation or arrangement of such Person
(a) to purchase or repurchase any such primary obligation, (b) to 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) to purchase property, securities or services
primarily for the purpose of assuring the owner of any such primary obligation
of the ability of the primary obligor to make payment of such primary
obligation, or (d) to 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 made 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" shall mean, collectively, the Holdings Guaranty,
each Subsidiary Guaranty and any other guaranty executed by any Guarantor in
favor of Agent and Lenders in respect of the Obligations.
"Guarantors" shall mean Holdings and each Subsidiary of
Borrower and each other Person, if any, which executes a guarantee or other
similar agreement in favor of Agent in connection with the transactions
contemplated by the Agreement and the other Loan Documents.
"Hazardous Material" shall mean any substance, material or
waste which is regulated by or forms the basis of liability now or hereafter
under, any Environmental Laws, including any material or substance which 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, (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
"Holdings" shall have the meaning assigned thereto in the
recitals to the Agreement.
"Holdings Guaranty" shall mean the Holdings Guaranty of even
date herewith executed by Holdings in favor of the Agent, on behalf of itself
and the Lenders.
"Indebtedness" of any Person shall mean 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 (6) months or more,
but excluding obligations to trade creditors incurred in
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the ordinary course of business that are not overdue by more
than six (6) 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" shall have the meaning assigned to
it in Section 1.13.
"Index Rate" shall mean, 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 at large U.S. money center
commercial 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 fifty (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.
"Index Rate Loan" shall mean a Loan or portion thereof bearing
interest by reference to the Index Rate.
"Instruments" shall mean any "instrument," 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 notes and other, without limitation, evidences
of indebtedness, other than instruments that constitute, or are a part of a
group of writings that constitute, Chattel Paper. The term "Instruments" shall
specifically include all Intercompany Notes.
"Intellectual Property" shall mean any and all Licenses,
Patents, Copyrights, Trademarks, trade secrets and customer lists.
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"Intercompany Notes" shall have the meaning assigned to it in
Sections 6.2 and 6.3.
"Interest Expense" shall mean, 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, in any event, 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,
(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 which is then accrued under the Agreement.
"Inventory" shall mean any "inventory," as such term is
defined in the Code, now or hereafter owned or acquired by any Credit Party,
wherever located, and in any event including inventory, merchandise, goods and
other personal property which 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 which constitute raw materials, work in process or materials 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 other supplies.
"Investment Property" shall have the meaning ascribed thereto
in Section 9-115 of the Code in those jurisdictions in which such definition has
been adopted and shall include (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 such 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 held by any Credit
Party; (iv) all commodity contracts held by any Credit Party; and (v) all
commodity accounts held by any Credit Party.
"IRC" shall mean the Internal Revenue Code of 1986, as
amended, and any successor thereto.
"IRS" shall mean the Internal Revenue Service, or any
successor thereto.
"Lenders" shall mean GE Capital, the other Lenders named on
the signature page of the Agreement, and, if any such Lender shall decide to
assign all or any portion of the Obligations, such term shall include such
assignee.
"LIBOR Business Day" shall mean a Business Day on which banks
in the city of London are generally open for interbank or foreign exchange
transactions.
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"LIBOR Loan" shall mean a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
"LIBOR Period" shall mean, with respect to any LIBOR Loan,
each period commencing on a LIBOR Business Day selected by Borrower pursuant to
the Agreement and ending one, two or three months thereafter, as selected by
Borrower's 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 on the Commitment Termination
Date;
(c) any LIBOR Period pertaining to a LIBOR Loan that begins on
the last LIBOR Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar month at the
end of such LIBOR Period) shall end on the last LIBOR Business Day of a
calendar month;
(d) Borrower shall use its best efforts to 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) Borrower shall select LIBOR Periods so that there shall be
no more than five (5) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" shall mean 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 which 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 each 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 which is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic,
supplemental, marginal and emergency reserves under any regulations of
the Board of Governors of the Federal Reserve system 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 such
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Board) which 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 Borrower.
"License" shall mean any Copyright License, Patent License,
Trademark License or other license of rights or interests now held or hereafter
acquired by any Credit Party.
"Lien" shall mean 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" shall have the meaning assigned to it in Section
3.13.
"Loan Account" shall have the meaning assigned to it in
Section 1.12.
"Loan Documents" shall mean 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 and/or 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 Holdings
or any Credit Party, or any employee of Holdings or any Credit Party, and
delivered to Agent or any Lender in connection with the Agreement or the
transactions contemplated hereby. 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 such Agreement as the same may be in
effect at any and all times such reference becomes operative.
"Loans" shall mean the Revolving Loan.
"Material Adverse Effect" shall mean a material adverse effect
on (a) the business, assets, operations or financial or other condition of
Holdings or any Credit Party, (b) Borrower's ability to pay any of the Loans or
any of the other Obligations in accordance with the terms of the Agreement or
any Guarantor's ability to perform under its Guaranty, (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 foregoing, any
event or occurrence adverse to Holdings or any one or more Credit Parties which
results or could reasonably be expected to result in costs and/or liabilities
and/or loss of revenues, individually, or in the aggregate, to such Person in
any 30-day period in excess of the lesser of (i) 10% of the Borrowing Base or
(ii) ten
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percent (10%) of the gross profit of the Borrower and its Subsidiaries
(for the most recently ended twelve month period as shown on the
monthly financial statements required to be delivered hereunder, and
calculated in accordance with GAAP, consistently applied), shall be
deemed to have had Material Adverse Effect.
"Maximum Amount" shall mean, at any particular time, an amount
equal to the Revolving Loan Commitment of all Lenders.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, and to which Holdings or any Credit
Party or ERISA Affiliate is making, is obligated to make, has made or been
obligated to make, contributions on behalf of participants who are or were
employed by any of them.
"Net Borrowing Availability" shall mean as of any date of
determination, the lesser of (i) the Maximum Amount and (ii) the Borrowing Base,
in each case less the sum of the Revolving Loan then outstanding.
"Net Worth" shall mean, with respect to any Person as of any
date of determination, the book value of the assets of such Person, minus (a)
reserves applicable thereto, and minus (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"Non-Funding Lender" shall have the meaning assigned to it in
Section 9.9(a)(ii).
"Notes" shall mean the Revolving Notes, collectively.
"Notice of Conversion/Continuation" shall have the meaning
assigned to it in Section 1.5(e).
"Notice of Revolving Credit Advance" shall have the meaning
assigned to it in Section 1.1(a).
"Obligations" shall mean 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
Holdings or 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 which accrues after the commencement of any
case or proceeding in bankruptcy after the insolvency of, or for the
reorganization of Holdings or any Credit Party, whether or not allowed in such
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to Holdings or any Credit Party under the Agreement or any of the
other Loan Documents.
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"Patent License" shall mean 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" shall mean 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 any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or 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 Territory thereof, or any other country, and (b)
all reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"Permitted Encumbrances" shall mean the following
encumbrances: (a) Liens for taxes or assessments or other governmental Charges
not yet due and payable; (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 Holdings or
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 an outstanding aggregate amount not in excess of $100,000 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 Holdings or
any Credit Party is a party; (g) any attachment or judgment lien not
constituting an Event of Default under Section 8.1(j); (h) 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; (i) presently existing or hereinafter created Liens in favor of
Agent, on behalf of Lenders; and (j) Liens expressly permitted under clauses (b)
and (c) of Section 6.7 of the Agreement.
"Person" shall mean 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" shall mean, at any time, an employee benefit plan, as
defined in Section 3(3) of ERISA, which Holdings or any Credit Party maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any Credit Party.
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"Proceeds" shall mean "proceeds," as such term is defined in
the Code and, in any event, shall include (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 recoveries
by any Credit Party against third parties with respect to any litigation or
dispute concerning any of the Collateral, and (d) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral,
upon disposition or otherwise.
"Projections" means each of (i) the Credit Parties' and (ii)
Holdings' forecasted consolidated and consolidating: (a) balance sheets; (b)
profit and loss statements; (c) cash flow statements; and (d) capitalization
statements, all prepared on a Subsidiary by Subsidiary or division by division
basis, if applicable, and otherwise consistent with the historical Financial
Statements of Holdings, together with appropriate supporting details and a
statement of underlying assumptions, substantially in the form delivered on the
Closing Date.
"Pro Rata Share" shall mean with respect to all matters
relating to any Lender (a) prior to the Commitment Termination Date, the
percentage obtained by dividing (i) the Revolving Loan Commitment of that Lender
by (ii) the aggregate Revolving Loan Commitments of all Lenders, (b) 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.
"Public Offering" shall mean a firm underwritten public
offering of common stock registered on form S-1, S-2 or S-3 under the Securities
Act of 1933, as amended, by a nationally recognized investment banking firm and
after giving effect to which the issuer shall be qualified for listing on the
NASDAQ National Market, the American Stock Exchange or the New York Stock
Exchange.
"Qualified Plan" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" shall have the meaning assigned to it in Section
3.6.
"Release" shall mean 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.
"Requisite Lenders" shall mean (a) Lenders having more than
fifty percent (50%) of the Commitments of all Lenders, or (b) if the Commitments
have been terminated, more than fifty percent (50%) of the aggregate outstanding
amount of the Loans.
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"Reserves" shall mean, with respect to the Borrowing Base of
Borrower (a) reserves established pursuant to Section 5.4(c), and (b) such other
reserves against Eligible Accounts or Borrowing Availability of Borrower which
Agent may, in its reasonable credit judgment, establish from time to time.
Without limiting the generality of the foregoing, Reserves established to ensure
the payment of accrued Interest Expenses or Indebtedness shall be deemed to be a
reasonable exercise of Agent's credit judgment.
"Restricted Payment" shall mean (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 a Person's Stock
(other than dividends payable to Borrower), (b) any payment on account of the
purchase, redemption, defeasance, sinking fund or other retirement of a Person'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 Person 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 Person'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 Person
other than payment of compensation in the ordinary course to stockholders who
are employees of such Person; and (g) any payment of management fees (or other
fees of a similar nature) by such Person to any stockholder of such Person or
their Affiliates.
"Retiree Welfare Plan" shall mean, at any time, a Plan that is
a "welfare plan" as defined in Section 3(2) of ERISA, 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" shall have the meaning assigned to
it in Section 1.1(a)(i).
"Revolving Lenders" shall mean, as of any date of
determination, Lenders having a Revolving Loan Commitment.
"Revolving Loan" shall mean, at any time, the aggregate amount
of Revolving Credit Advances outstanding to Borrower.
"Revolving Loan Commitment" shall mean (a) as to any Revolving
Lender, the aggregate commitment of such Revolving Lender to make Revolving
Credit Advances as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Revolving Lender and (b) as to all
Revolving Lenders, the aggregate commitment of all
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Revolving Lenders to make Revolving Credit Advances, which
aggregate commitment shall be Thirty Million Dollars ($30,000,000) on the
Closing Date, as such amount may be adjusted, if at all, from time to time in
accordance with the Agreement.
"Revolving Note" shall have the meaning assigned to it in
Section 1.1(a)(ii).
"Security Agreement" shall mean each of (i) the Security
Agreement of even date herewith entered into between Agent and Borrower and (ii)
the Subsidiary Security Agreement of even date herewith entered into between
Agent and Pro-Mark Holdings, Inc.
"Solvent" shall mean, 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 contingent liabilities (such as litigation, guarantees and pension
plan liabilities) at any time shall be computed as the amount which, in light of
all the facts and circumstances existing at the time, represents the amount
which can be reasonably be expected to become an actual or matured liability.
"Stock" shall mean all shares, options, warrants, general or
limited partnership interests or other equivalents (regardless of how
designated) of or in a corporation, partnership 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, as amended).
"Subordinated Debt" shall mean any Indebtedness of Holdings or
any Credit Party subordinated to the Obligations in a manner and form
satisfactory to Agent and Requisite Lenders in their sole discretion, as to
right and time of payment and as to any other rights and remedies thereunder.
With respect to any Indebtedness incurred under the provisions of Section
6.1(iv), to qualify as Subordinated Debt, such Indebtedness must be Indebtedness
issued by Holdings to a seller in a Permitted Acquisition or issued by a seller
to a predecessor of such seller and assumed by Holdings (i) which Indebtedness,
in each case, shall (A) be subordinated to the Obligations on terms and
conditions acceptable to the Required Lenders in their good faith discretion and
(B) contain only such covenants, events of default and remedies as are
acceptable to the Required Lenders in their good faith discretion, and (ii)
which Indebtedness may provide for the periodic payment of accrued interest, but
shall not require any principal amortization prior to the date that is one year
and one day after the Termination Date.
"Subsidiary" shall mean, 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
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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
and/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.
"Subsidiary Guaranty" shall mean the Subsidiary Guaranty of
even date herewith executed by each Subsidiary of Borrower in favor of Agent, on
behalf of itself and Lenders.
"Supermajority Lenders" shall mean (a) Lenders having
sixty-six and two-thirds percent (66 and 2/3%) or more of the Revolving Loan
Commitments of all Lenders, or (b) if the Revolving Loan Commitments have been
terminated, sixty-six and two-thirds percent (66 and 2/3%) or more of the
aggregate outstanding amount of the Revolving Loan.
"Taxes" shall mean 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 any
political subdivision thereof.
"Termination Date" shall mean the date on which the Loans have
been indefeasibly repaid in full and all other Obligations under the Agreement
and the other Loan Documents have been completely discharged and Borrower shall
not have any further right to borrow any monies under the Agreement.
"Third Party Account" shall mean any account of any Credit
Party that is payable by a government plan payor or private plan payor approved
by Agent (in its discretion), but shall not include Billed Rebate Accounts or
Unbilled Rebate Accounts.
"Third Party Interactives" shall mean all Persons with whom
Holdings or any Credit Party exchanges data electronically in the ordinary
course of business, including, without limitation, customers, suppliers,
third-party vendors, subcontractors, processors-converters, shippers and
warehousemen.
"Title IV Plan" shall mean an employee pension benefit plan,
as defined in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is
covered by Title IV of ERISA, and which 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 License" shall mean rights under any written
agreement now owned or hereafter acquired by any Credit Party granting any right
to use any Trademark.
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"Trademarks" shall mean all of the following now owned or
hereafter 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 of like nature (whether registered or
unregistered), now owned or existing or hereafter adopted or acquired, 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.
"Unbilled Rebate Account" shall mean any rebate entitlement
which has been fully and irrevocably earned by any Credit Party and is
calculated based on the volume of pharmaceuticals processed through such Credit
Party's pharmacy benefit management system, and which rebate entitlement is to
be paid (when eventually invoiced) by a third party pharmaceutical manufacturer
under the terms of a written rebate agreement between such Credit Party and such
third party pharmaceutical manufacturer.
"Unfunded Pension Liability" shall mean, 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 (5) years following a transaction which might reasonably be expected to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by any Credit Party or any ERISA Affiliate as a result of such
transaction.
"Year 2000 Date-Sensitive System/Component" shall mean, as to
any Person, any system software, network software, applications software, data
base, computer file, embedded microchip, firmware or hardware that accepts,
creates, manipulates, sorts, sequences, calculates, compares or outputs
calendar-related data accurately; such systems and components shall include,
without limitation, mainframe computers, file server/client systems, computer
workstations, routers, hubs, other network-related hardware, and other
computer-related software, firmware or hardware and information processing and
delivery systems of any kind and telecommunications systems and other
communications processors, security systems, alarms, elevators and HVAC systems.
"Year 2000 Problems" shall mean, with respect to Holdings and
each Credit Party, limitations on the capacity or readiness of any such Person's
Year 2000 Date-Sensitive Systems/Components to accurately accept, create,
manipulate, sort, sequence, calculate, compare or output calendar date
information with respect to calendar year 1999 or any subsequent calendar year
beginning on or after January 1, 2000 (including leap year computations),
including, without limitation, exchanges of information among Year 2000
Date-Sensitive Systems/Components of Holdings and the Credit Parties and
exchanges of information among
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such Persons and Year 2000 Date-Sensitive Systems/Components of Third Party
Interactives and functionality of peripheral interfaces, firmware and embedded
microchips.
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 as in effect in the State of New York to the extent the
same are used or defined therein. 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"; 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 Holdings or any Credit Party, such words
are intended to signify that such Person has actual knowledge or awareness of a
particular fact or circumstance or that such Person, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
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