UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _________ to
Commission file number 1-9810
OWENS & MINOR, INC.
- --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Virginia 54-1701843
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4800 Cox Road, Glen Allen, Virginia 23060
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (804) 747-9794
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No _____
The number of shares of Owens & Minor, Inc.'s common stock outstanding
as of July 30, 1996 was 31,863,313 shares.
<PAGE>
Owens & Minor, Inc. and Subsidiaries
Index
Page
Part I. Financial Information
Consolidated Balance Sheets - June 30, 1996 and
December 31, 1995 3
Consolidated Statements of Operations - Three Months and
Six Months Ended June 30, 1996 and 1995 4
Consolidated Statements of Cash Flows - Six Months
Ended June 30, 1996 and 1995 5
Notes to Consolidated Financial Statements 6- 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-11
Part II. Other Information 12-14
2
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Part I. Financial Information
Item 1. Financial Statements
Owens & Minor, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share data)
June 30, December 31,
1996 1995
----------------------------
Assets
Current assets
Cash and cash equivalents $ 546 $ 215
Accounts and notes receivable, net 170,695 265,238
Merchandise inventories 297,074 326,380
Other current assets 18,809 32,069
------------ -------------
Total current assets 487,124 623,902
Property and equipment, net 32,043 39,049
Excess of purchase price over net
assets acquired, net 169,638 171,911
Other assets, net 29,900 22,941
------------ -------------
Total assets $ 718,705 $ 857,803
============ =============
Liabilities and shareholders' equity
Current liabilities
Current maturities of long-term debt $ - $ 4,055
Accounts payable 227,943 241,048
Accrued payroll and related liabilities 4,248 5,534
Other accrued liabilities 38,199 41,602
------------ -------------
Total current liabilities 270,390 292,239
Long-term debt 200,529 323,308
Accrued pension and retirement plans 8,823 6,985
------------ -------------
Total liabilities 479,742 622,532
------------ -------------
Shareholders' equity
Preferred stock, par value $100 per share;
authorized - 10,000
shares Series A; Participating Cumulative
Preferred Stock; none issued - -
Series B; Cumulative Preferred
Stock; 4.5%, convertible;
issued - 1,150 shares 115,000 115,000
Common stock, par value $2 per share;
authorized - 200,000 shares; issued - 31,857 at
June 30, 1996 and 30,862 at December 31, 1995 63,714 61,724
Paid-in capital 4,807 2,144
Retained earnings 55,442 56,403
------------ -------------
Total shareholders' equity 238,963 235,271
------------ -------------
Total liabilities and shareholders' equity $ 718,705 $ 857,803
============ =============
See accompanying notes to consolidated financial statements.
3
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Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Operations
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------ ------------------------------
1996 1995 1996 1995
-------------- --------------- -------------- --------------
<S> <C>
Net sales $ 749,938 $ 743,718 $ 1,521,250 $ 1,490,813
Cost of goods sold 675,427 673,217 1,372,560 1,347,404
------------- ------------- ------------- -------------
Gross margin 74,511 70,501 148,690 143,409
------------- ------------- ------------- -------------
Selling, general and administrative expenses 58,474 54,074 119,514 107,635
Depreciation and amortization 4,071 3,713 8,001 7,229
Interest expense, net 4,974 5,730 10,774 11,121
Discount on accounts receivable securitization 1,851 - 2,595 -
Nonrecurring restructuring expenses - 4,114 - 6,775
------------- ------------- ------------- -------------
Total expenses 69,370 67,631 140,884 132,760
------------- ------------- ------------- -------------
Income before income taxes 5,141 2,870 7,806 10,649
Income tax provision 2,210 1,182 3,356 4,348
------------- ------------- ------------- -------------
Net income 2,931 1,688 4,450 6,301
Dividends on preferred stock 1,294 1,294 2,588 2,588
------------- ------------- ------------- -------------
Net income attributable to common stock $ 1,637 $ 394 $ 1,862 $ 3,713
============= ============= ============= =============
Net income per common share $ 0.05 $ 0.01 $ 0.06 $ 0.12
============= ============= ============= =============
Cash dividends per common share $ 0.045 $ 0.045 $ 0.090 $ 0.090
============= ============= ============= =============
Weighted average common shares
and common share equivalents 32,000 31,077 31,560 31,082
============= ============= ============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
Owens & Minor, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended
(In thousands) June 30,
----------------------------------
1996 1995
------------- -------------
<S> <C>
Operating Activities
Net income $ 4,450 $ 6,301
Adjustments to reconcile net income to cash
provided by (used for) operating activities
Depreciation and amortization 8,001 7,229
Provision for losses on accounts and
notes receivable 523 222
Provision for LIFO reserve 2,248 1,662
Change in operating assets and liabilities
Accounts and notes receivable 94,020 (10,844)
Merchandise inventories 27,058 (18,841)
Accounts payable (5,091) (92,805)
Net change in other current assets
and current liabilities 9,659 (19,566)
Other, net (2,493) (1,895)
------------- --------------
Cash provided by (used for) operating activities 138,375 (128,537)
------------- --------------
Investing Activities
Additions to property and equipment (3,152) (5,359)
Additions to computer software (3,940) (3,595)
Proceeds from sale of property and equipment 5,312 52
------------- --------------
Cash used for investing activities (1,780) (8,902)
------------- --------------
Financing Activities
Additions to long-term debt 150,000 120,166
Reductions of long-term debt (274,022) (119)
Other short-term financing, net (8,014) 22,235
Cash dividends paid (5,411) (5,362)
Exercise of stock options 1,183 259
------------- --------------
Cash provided by (used for) financing activities (136,264) 137,179
------------- --------------
Net increase (decrease) in cash and cash equivalents 331 (260)
Cash and cash equivalents at beginning of year 215 513
------------- -------------
Cash and cash equivalents at end of period $ 546 $ 253
============= ==============
</TABLE>
5
<PAGE>
Owens & Minor, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
1. Accounting Policies
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments (which are comprised only of
normal recurring accruals and the use of estimates) necessary to present
fairly the consolidated financial position of Owens & Minor, Inc. and its
wholly owned subsidiaries (the Company) as of June 30, 1996 and the
consolidated results of operations for the three and six month periods and
cash flows for the six month periods ended June 30, 1996 and 1995.
2. Interim Results of Operations
The results of operations for interim periods are not necessarily indicative
of the results to be expected for the full year.
3. Interim Gross Margin Reporting
In general, the Company uses estimated gross margin rates to determine the
cost of goods sold during interim periods. To improve the accuracy of its
estimated gross margins for interim reporting purposes, the Company takes
physical inventories at selected distribution centers. Reported results of
operations for the three and six month periods ended June 30, 1996 and 1995
reflect the results of such inventories, if materially different. Management
will continue a program of interim physical inventories at selected
distribution centers to the extent it deems appropriate to ensure the
accuracy of interim reporting and to minimize year-end adjustments.
4. Long-Term Debt and Refinancing
During May 1996 the Company completed the refinancing of its $425 million
revolving credit facility (Senior Credit Facility) by issuing $150 million
of 10.875% Senior Subordinated Notes (Notes), increasing its available
receivables financing facility (Receivables Financing Facility) to $150
million from $75 million and entering into a new $225 million revolving
credit facility (New Senior Credit Facility).
The Notes were issued on May 29, 1996, and mature on June 1, 2006. Interest
on the Notes is payable semi-annually on June 1 and December 1. The Notes
are redeemable at the Company's option subject to certain restrictions. The
Notes are unconditionally guaranteed on a joint and several basis by all
direct and indirect subsidiaries of the Company, other than O&M Funding
Corp. (OMF).
To manage the interest rate exposure of the Notes, the Company entered into
interest rate swap agreements with terms of 10 years during the second
quarter of 1996. Under the interest rate swap agreements, the Company pays
the counterparties a variable rate based on
6
<PAGE>
the six-month London Interbank Offered Rate (LIBOR) and the counterparties
pay the Company a fixed interest rate, ranging from 7.29% to 7.32%. The
total notional amount of the interest rate swaps was $100 million at June
30, 1996. The Company is exposed to certain losses in the event of
nonperformance by the counterparties to these agreements. However, the
Company's exposure is not material and nonperformance is not anticipated.
The terms of the Receivables Financing Facility are substantially the same
as the agreement entered into in December 1995 other than an increase in the
available funds to $150 million and the extension of the term of the
agreement from December 1996 to May 1999. At June 30, 1996 the Company had
received $141 million under the Receivables Financing Facility.
The New Senior Credit Facility expires in May 2001 with interest based on
LIBOR or the Prime Rate. The New Senior Credit Facility limits the amount of
indebtedness the Company may incur, requires the Company to maintain certain
financial covenants including covenants related to tangible net worth, cash
flow coverage, current ratio, leverage ratio and fixed charge coverage ratio
and restricts the ability of the Company to materially alter the character
of the business through consolidation, merger or purchase or sale of assets.
5. Condensed Consolidating Financial Information
The following table presents condensed consolidating financial information
for: Owens & Minor, Inc.; on a combined basis, the guarantors of Owens &
Minor, Inc.'s Notes (all of the wholly owned subsidiaries of Owens & Minor,
Inc. except for OMF); and OMF, Owens & Minor, Inc.'s only non-guarantor
subsidiary of the Notes. Separate financial statements of the guarantor
subsidiaries are not presented because the guarantors are jointly, severally
and unconditionally liable under the guarantees and the Company believes the
condensed consolidating financial statements are more meaningful in
understanding the financial position of the guarantor subsidiaries.
(In thousands)
<TABLE>
<CAPTION>
As of and for the Owens
six months ended & Minor, Guarantor
June 30, 1996 Inc. Subsidiaries OMF Eliminations Consolidated
----------------- -------- ------------ ----------- ------------ ------------
<S> <C>
Current assets $201,166 $470,512 $69,866 ($254,420) $487,124
Noncurrent assets 306,152 240,288 - (314,859) 231,581
Total assets 507,318 710,800 69,866 (569,279) 718,705
Current liabilities 3,578 466,457 54,775 (254,420) 270,390
Noncurrent liabilities 190,000 19,352 - - 209,352
Shareholders' equity 313,740 224,991 15,091 (314,859) 238,963
Net sales 14,633 1,521,250 3,912 (18,545) 1,521,250
Expenses 13,471 1,518,279 3,595 (18,545) 1,516,800
Net income 1,162 2,971 317 - 4,450
</TABLE>
7
<PAGE>
Item 2.
Owens & Minor, Inc. and Subsidiaries
Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Second quarter and first six months of 1996 compared with 1995
Net Sales. Net sales increased 0.8% to $749.9 million in the second quarter of
1996 from $743.7 million in the second quarter of 1995. Net sales increased 2.0%
to $1.52 billion in the first six months of 1996 from $1.49 billion in the first
six months of 1995. The Company's expected moderate sales growth has been
primarily a result of the price increases instituted in December 1995 and the
first quarter of 1996 and changes in management focus. Sales growth is expected
to be moderate for the remainder of 1996 as the Company focuses on the
profitability of existing business and obtaining new business that meets
established profitability requirements.
Gross margin. Gross margin as a percentage of net sales increased to 9.9% in the
second quarter of 1996 from 9.5% in the second quarter of 1995, and from 8.7% in
the fourth quarter of 1995. Gross margin as a percentage of net sales increased
to 9.8% in the first six months of 1996 from 9.6% in the first six months of
1995. The increase has been a result of several initiatives. As discussed above,
the Company implemented price increases for the services it provides and the
majority of these price increases have been realized. The Company continues to
remain focused on improving gross margin and continues to implement gross margin
enhancement programs in addition to the price increases. These enhancement
programs include: utilizing an activity-based cost system that charges
incremental fees for additional distribution and enhanced inventory management
services, implementing supplier partnerships that will increase margin
opportunities for the Company as well as the supplier and continuing to improve
the Company's utilization of technology which will continue to reduce the cost
of the order fulfillment cycle. There can be no assurance that the Company's
pricing methods and the other gross margin enhancement programs will produce
increases in net sales or gross margin as a percentage of net sales in future
periods.
Selling, general and administrative expenses. Selling, general and
administrative (SG&A) expenses as a percentage of net sales increased to 7.8% in
the second quarter of 1996 from 7.3% in the second quarter of 1995 and increased
to 7.9% in the first six months of 1996 from 7.2% in the first six months of
1995, but declined from 8.2% in the fourth quarter of 1995. The increase in SG&A
expenses as a percentage of net sales as compared to the second quarter and
first six months of 1995 was primarily a result of increased personnel costs
incurred in connection with new contracts providing for enhanced service levels
and services not previously provided by the Company, a significant increase in
the number of Stock Keeping Units (SKUs) distributed by the Company, system
conversions, opening or expanding 11 distribution centers and reconfiguring
warehouse systems.
During the second quarter of 1996, SG&A expenses decreased $2.6 million from
8.2% of net sales in the fourth quarter of 1995 to 7.9% in the first quarter of
1996 and to 7.8% in the second quarter of 1996. The SG&A expense decline is a
result of many cost saving initiatives, primarily
8
<PAGE>
the reduction of over 200 full time equivalent employees in the second quarter
due to reduced overtime and temporary help. Also, the more cost effective
utilization of the Company's mainframe computer system lowered SG&A expenses.
The reduction in these costs has been achieved through the completion of 22
warehouse reconfigurations in 1995, the implementation of improved inventory
management systems in a majority of its facilities and the refocus on functional
best practices within the Company. Additionally, the implementation of the
Company's restructuring plan to further reduce distribution center costs through
the closure of two and the downsizing of five distribution centers (which
resulted in $3.5 million of the Company's nonrecurring restructuring
charges in the fourth quarter of 1995) has contributed to the reduction of SG&A
expenses. The Company will continue to focus on these programs during 1996 and
in future periods. Although the Company expects these initiatives to continue to
reduce SG&A expenses, their impact cannot be assured.
Depreciation and amortization. Depreciation and amortization increased by 9.6%
in the second quarter of 1996 compared to the second quarter of 1995 and
increased by 10.7 % in the first six months of 1996 compared to the first six
months of 1995. This increase was due primarily to the Company's continued
investment in improved Information Technology (IT). The Company anticipates
increases in depreciation and amortization for the remainder of 1996 associated
with additional capital investment in IT.
Interest expense, net and discount on accounts receivable securitization
(Financing Costs). Financing Costs, net of finance charge income of $1.2 million
in the second quarter of 1996 and 1995 increased from $5.7 million in the
second quarter of 1995 to $6.8 million in the second quarter of 1996. Financing
Costs, net of finance charge income of $2.4 million and $1.6 million in the
first six months of 1996 and 1995, respectively, increased from $11.1 million in
the first six months of 1995 to $13.4 million in the first six months of 1996.
The increases were primarily due to higher borrowing levels to fund increased
working capital requirements and higher interest rates. Although Financing
Costs, net of finance charge income increased compared to the same periods in
1995, Financing Costs, net of finance charge income in the second quarter of
1996 declined approximately 13.9% or $1.1 million from the fourth quarter of
1995. This decline is primarily due to the reduction of outstanding financing by
approximately $40.8 million from March 31, 1996.
Management has taken and continues to take action to reduce Financing Costs,
including (i) improving financing rates (as discussed below in the liquidity
section, the Company completed its refinancing plan during the second quarter of
1996 which will provide the Company improved financing rates) and (ii) reducing
working capital requirements through the implementation of the Company's new
inventory forecasting system, product standardization and the strengthening of
its methods of monitoring and enforcing contract payment terms.
Income taxes. The Company had an income tax provision of $3.4 million in the
first six months of 1996 (representing an effective tax rate of 43.0%) compared
with an income tax provision of $4.3 million in the first six months of 1995
(representing an effective tax rate of 40.8%). The increase in the effective tax
rate was due to the Company's lower earnings level increasing the impact
of certain nondeductible expenses such as goodwill amortization.
9
<PAGE>
Net income. Net income increased $1.2 million in the second quarter of 1996
compared to the second quarter of 1995. Net income declined $1.9 million in the
first six months of 1996 compared to the first six months of 1995. Excluding
nonrecurring restructuring expenses net of taxes, net income has declined $1.2
million in the second quarter of 1996 compared to the second quarter of 1995 and
has declined $5.9 million in the first six months of 1996 compared to the first
six months of 1995. The decline was due to an increase in SG&A expenses and
Financing Costs. Due to the initiatives previously discussed, the Company has
shown improvement from its fourth quarter 1995 net loss of $9.0 million (which
loss included a $3.4 million nonrecurring restructuring charge, net of taxes),
to net income of $1.5 million in the first quarter of 1996 and to net income of
$2.9 million in the second quarter of 1996. Although the trend has been
favorable and the Company continues to pursue the initiatives previously
discussed in an effort to continue improvement in the earnings of the Company,
the impact of these initiatives on net income cannot be assured.
Financial Condition, Liquidity and Capital Resources
Liquidity. The Company's liquidity position improved significantly during
the first six months of 1996 from the fourth quarter of 1995. The improvement
was the result of increased earnings, reduced working capital requirements and
the availability of additional financing sources.
During May 1996 the Company refinanced its $425.0 million revolving credit
facility (Senior Credit Facility) by issuing $150.0 million of 10.875% Senior
Subordinated Notes (Notes), increasing its available receivables financing
facility to $150.0 million from $75.0 million (Receivables Financing Facility)
and entering into a new $225.0 million revolving credit facility (New Senior
Credit Facility).
The Notes were issued on May 29, 1996, and mature on June 1, 2006. Interest on
the Notes is payable semi-annually on June 1 and December 1. The Notes are
redeemable at the Company's option subject to certain restrictions. The Notes
are unconditionally guaranteed on a joint and several basis by all direct and
indirect subsidiaries of the Company, other than O&M Funding Corp. (OMF).
During the second quarter, the Company entered into interest rate swap
agreements to convert a portion of the fixed interest rates under the Notes to a
variable rate. Under the swap agreements, the Company pays the counterparties a
variable rate based on the six-month London Interbank Offered Rate (LIBOR) and
the counterparties pay the Company a fixed interest rate, ranging from 7.29% to
7.32%. The total notional amount of these interest rate swaps was $100.0 million
at June 30, 1996.
The terms of the Receivables Financing Facility are substantially the same as
the agreement entered into in December 1995 other than an increase in the
available funds to $150.0 million and the extension of the term of the agreement
to May 1999. At June 30, 1996 the Company had received $141.0 million under the
Receivables Financing Facility.
The New Senior Credit Facility expires in May 2001 with interest based on LIBOR
or the Prime Rate. The New Senior Credit Facility limits the amount of
indebtedness the Company may incur,
10
<PAGE>
requires the Company to maintain certain financial covenants including covenants
related to tangible net worth, cash flow coverage, current ratio, leverage ratio
and fixed charge coverage ratio and restricts the ability of the Company to
materially alter the character of the business through consolidation, merger or
purchase or sale of assets.
The Company expects that borrowings under the Notes, the New Senior Credit
Facility and proceeds from the Receivables Financing Facility will be sufficient
to fund its working capital needs and long-term strategic growth plans, although
this cannot be assured. Available financing at June 30, 1996 was approximately
$185.0 million.
Working Capital Management. During the first six months of 1996 the Company has
made significant improvement in working capital management. Inventory turnover
has improved from 8.2 times in the fourth quarter of 1995, to 8.7 times in the
first quarter of 1996, to 8.9 times in the second quarter of 1996. This
improvement was due to the continued implementation of the Company's
client/server-based forecasting system scheduled for completion during the third
quarter of 1996 and the limitation of the number of SKUs from multiple
manufacturers distributed by the Company. The Company has also reduced accounts
receivable days sales outstanding from 40.0 in the fourth quarter of 1995 to
39.4 in the second quarter of 1996. This reduction has been achieved through
strengthening the Company's methods of monitoring and enforcing contract payment
terms and basing a portion of its sales force incentives on reducing days sales
outstanding.
Capital Expenditures. Capital expenditures were approximately $7.1 million in
the first six months of 1996, of which approximately $5.8 million were for
computer systems, including the continued conversion of certain applications
from a mainframe computer system to client/server technology. Approximately 75%
of the Company's $25.0 million of capital expenditures planned for 1996 will be
for IT. The Company expects to continue to make this level of investment for the
foreseeable future. These capital expenditures are expected to be funded through
cash flow from operations.
Inflation. Inflation has not had a significant effect on the Company's results
of operations or financial condition.
11
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
In May 1994, Owens & Minor, Inc. acquired all the outstanding capital stock of
Stuart Medical, Inc. (Stuart) through a statutory share exchange. Accordingly,
Stuart, as a wholly owned subsidiary of Owens & Minor, Inc., retains all of its
pre-acquisition liabilities, subject to Stuart's and Owens & Minor, Inc.'s
contractual right of indemnification from the former shareholders of Stuart for
certain pre-acquisition liabilities (including liabilities arising from the
spinal implant litigation discussed below) and the liability insurance coverage
discussed below. Beginning in 1994 and continuing to the present, Stuart has
been named as a defendant along with manufacturers, healthcare providers and
others in approximately 200 lawsuits, filed in various federal and state courts
by multiple plaintiffs, based on alleged injuries attributable to the
implantation of internal spinal fixation devices distributed by a specialty
products division of Stuart from the early 1980s to December 1992 and prior to
Owen & Minor, Inc.'s acquisition of Stuart in 1994. Of the approximately 200
cases naming Stuart, there are approximately 100 plaintiffs implanted with the
type of orthopedic screw distributed by Stuart. Most of the cases seek monetary
damages in varying amounts. The great majority of these cases allege
compensatory and punitive damages in an unspecified amount stated to be in
excess of the jurisdictional minimum for the courts in which such cases are
filed. A smaller group of cases seek specified damages ranging from $50,000 to
$15,000,000. Many of these cases also seek the creation of a fund for medical
research, prejudgment and post-judgment interest and costs of suit.
Substantially all of these cases have been transferred to, and consolidated for
pretrial proceedings in, the Eastern District of Pennsylvania in Philadelphia
under the style MDL Docket No. 1014: In re Orthopedic Bone Screw Products
Liability Litigation. All such cases are in the preliminary stages. In addition,
a motion has been filed to add Stuart and a number of other parties as
additional defendants in approximately 10 additional lawsuits involving multiple
plaintiffs. Owens & Minor, Inc. believes that Stuart may be named as a defendant
in additional similar lawsuits in the future.
Stuart did not manufacture the internal spinal fixation devices. Based upon
management's analysis of indemnification agreements between Stuart and the
manufacturer involved, Owens & Minor, Inc. believes that Stuart is entitled to
indemnification by the manufacturer of the devices with respect to claims
alleging defects in the products. The cases described above are being defended
by the manufacturer's and Stuart's respective insurance carriers. Owens & Minor,
Inc. and Stuart are also contractually entitled to indemnification by the former
shareholders of Stuart for any liabilities and related expenses incurred by
Owens & Minor, Inc. or Stuart in connection with the foregoing litigation.
Because of the preliminary status of the lawsuits, Owens & Minor, Inc. is unable
at this time to determine with certainty whether Stuart may be held liable. In
the event Stuart were to be held liable, Owens & Minor, Inc. believes that
Stuart's available insurance coverage together with the indemnification rights
discussed above are adequate to cover any losses should they occur, and
accordingly has created no reserve therefor. Owens & Minor, Inc. is not aware of
any uncertainty as to the availability and adequacy of such insurance or
indemnification, although there can be no assurance that the manufacturers and
former
12
<PAGE>
shareholders will have sufficient financial resources in the future to meet such
obligations. Owens & Minor, Inc. believes that, with or without regard to such
indemnification or insurance, the likelihood is remote that any liability
resulting from such litigation would have a material adverse effect on the
Company's financial condition or results of operations.
The Company is party to various other legal actions that are ordinary and
incidental to its business. While the outcome of legal actions cannot be
predicted with certainty, management believes the outcome of these proceedings
will not have a material adverse effect on the Company's financial condition or
results of operations.
Item 2. Changes in Securities
On May 29, 1996, Owens & Minor, Inc. issued $150 million of 10.875% Senior
Subordinated Notes. Section 4.06 of the Indenture governing the Notes restricts
the Company's ability to make certain payments, including the payment of
dividends on Owens & Minor, Inc.'s Common Stock. See Section 4.06 of the
Indenture dated as of May 29, 1996 attached as Exhibit 4(a) hereto.
In addition, Section 7.12 of the Company's $225 million revolving credit
facility prohibits Owens & Minor, Inc. from paying dividends unless it is in
compliance with certain financial covenants and is otherwise not in default
either prior to or after giving effect to any such dividend. See Section 7.12 of
the Credit Agreement dated as of May 24, 1996 attached as Exhibit 4(b) hereto.
Item 4. Submission of Matters to a Vote of Shareholders
The following matters were submitted to a vote of Owens & Minor, Inc.'s
shareholders at its annual meeting held on April 30, 1996 with the voting
results designated below each such matter:
(1) Election of Vernard W. Henley, G. Gilmer Minor, III and R.E Cabell, Jr.,
as directors of Owens & Minor, Inc. for a three-year term and election of
Josiah Bunting, III as a director of Owens & Minor, Inc. for a one-year
term.
Votes Against Broker
Directors Votes For or Withheld Abstentions Non-Votes
- --------- ---------- ------------- ----------- ---------
Vernard W. Henley 33,880,253 139,918 0 0
G. Gilmer Minor, III 33,920,876 99,295 0 0
R. E. Cabell, Jr. 33,879,128 141,043 0 0
Josiah Bunting, III 33,902,542 117,629 0 0
(2) Ratification of the appointment of KPMG Peat Marwick LLP as Owens &
Minor, Inc.'s independent auditors.
Votes Against Broker
Votes For or Withheld Abstentions Non-Votes
---------- ------------- ----------- ---------
33,908,260 53,132 58,779 0
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4 (a) Indenture dated as of May 29, 1996 among Owens & Minor, Inc., as
Issuer, Owens & Minor Medical, Inc., National Medical Supply
Corporation, Owens & Minor West, Inc., Koley's Medical Supply, Inc.,
Lyons Physician Supply Company, A. Kuhlman & Co., Stuart Medical,
Inc., as Guarantors, and Crestar Bank, as Trustee
4 (b) Credit Agreement dated as of May 24, 1996 by and among Owens & Minor,
Inc., certain of its subsidiaries, various banks and lending
institutions identified on the signature pages hereto, NationsBank,
N.A., as agent, Bank of America National Trust and Savings Association
and Crestar Bank, as co-agents, and NationsBank, N.A., as
administrative agent
10 (a) Amended and Restated Purchase and Sale Agreement dated as of May 28,
1996 among Owens & Minor Medical, Inc., Stuart Medical, Inc., Owens &
Minor, Inc. and O&M Funding Corp.
10 (b) Amended and Restated Receivables Purchase Agreement dated as of May
28, 1996 among O&M Funding Corp., Owens & Minor Medical, Inc., Owens &
Minor, Inc., Receivables Capital Corporation and Bank of America
National Trust and Savings Association
10 (c) Amended and Restated Parallel Asset Purchase Agreement dated as of May
28, 1996 among O&M Funding Corp., Owens & Minor Medical, Inc., Owens &
Minor, Inc., the Parallel Purchasers from time to time party hereto
and Bank of America National Trust and Savings Association
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K for the three month period ended June
30, 1996.
14
<PAGE>
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 thereunto duly authorized.
Owens & Minor, Inc.
(Registrant)
Date August 9, 1996 /s/ GLENN J. DOZIER
-------------- -----------------------------------
Glenn J. Dozier
Senior Vice President, Finance,
Chief Financial Officer
Date August 9, 1996 /s/ ANN GREER RETOR
--------------- ----------------------------------
Ann Greer Rector
Vice President, Controller
<PAGE>
Exhibit Index
Exhibit #
4 (a) Indenture dated as of May 29, 1996 among Owens & Minor, Inc., as Issuer,
Owens & Minor Medical, Inc., National Medical Supply Corporation, Owens &
Minor West, Inc., Koley's Medical Supply, Inc., Lyons Physician Supply
Company, A. Kuhlman & Co., Stuart Medical, Inc., as Guarantors, and
Crestar Bank, as Trustee
4 (b) Credit Agreement dated as of May 24, 1996 by and among Owens & Minor,
Inc., certain of its subsidiaries, various banks and lending institutions
identified on the signature pages hereto, NationsBank, N.A., as agent,
Bank of America National Trust and Savings Association and Crestar Bank,
as co-agents, and NationsBank, N.A., as administrative agent
10 (a) Amended and Restated Purchase and Sale Agreement dated as of May 28, 1996
among Owens & Minor Medical, Inc., Stuart Medical, Inc., Owens & Minor,
Inc. and O&M Funding Corp.
10 (b) Amended and Restated Receivables Purchase Agreement dated as of May 28,
1996 among O&M Funding Corp., Owens & Minor Medical, Inc., Owens & Minor,
Inc., Receivables Capital Corporation and Bank of America National Trust
and Savings Association
10 (c) Amended and Restated Parallel Asset Purchase Agreement dated as of May
28, 1996 among O&M Funding Corp., Owens & Minor Medical, Inc., Owens &
Minor, Inc., the Parallel Purchasers from time to time party hereto and
Bank of America National Trust and Savings Association
27 Financial Data Schedule
Exhibit 4(a)
INDENTURE
Dated as of May 29, 1996
Among
OWENS & MINOR, INC., as Issuer,
OWENS & MINOR MEDICAL, INC.,
NATIONAL MEDICAL SUPPLY CORPORATION,
OWENS & MINOR WEST, INC.,
KOLEY'S MEDICAL SUPPLY, INC.,
LYONS PHYSICIAN SUPPLY COMPANY,
A. KUHLMAN & CO.,
STUART MEDICAL, INC.,
as Guarantors,
and
CRESTAR BANK, as Trustee
-----------------
$150,000,000
10 7/8% Senior Subordinated Notes due 2006
<PAGE>
CROSS-REFERENCE TABLE
Indenture
Trust Indenture Act Section Section
ss.310(a)(1)............................................... 7.10
(a)(2)............................................ 7.10
(a)(3)............................................ N.A.
(a)(4)............................................ N.A.
(a)(5)............................................ N.A.
(b)............................................... 7.08; 7.10; 13.02
(c)............................................... N.A.
ss. 311(a)................................................. 7.11
(b)............................................... 7.11
(c)............................................... N.A.
ss.312(a).................................................. 2.05
(b)............................................... 13.03
(c)............................................... 13.03
ss.313(a).................................................. 7.06
(b)(1)............................................ N.A.
(b)(2)............................................ 7.06
(c)............................................... 7.06; 13.02
(d)............................................... 7.06
ss.314(a).................................................. 4.11; 4.12; 13.02
(b)............................................... N.A.
(c)(1)............................................ 13.04
(c)(2)............................................ 13.04
(c)(3)............................................ N.A.
(d)............................................... N.A.
(e)............................................... 13.05
(f)............................................... N.A.
ss.315(a).................................................. 7.01(b)
(b)............................................... 7.05; 13.02
(c)............................................... 7.01(a)
(d)............................................... 7.01(c)
(e)............................................... 6.11
ss.316(a)(last sentence)................................... 2.09
(a)(1)(A)......................................... 6.05
(a)(1)(B)......................................... 6.04
(a)(2)............................................ N.A.
(b)............................................... 6.07
(c)............................................... 10.04
ss.317(a)(1)............................................... 6.08
(a)(2)............................................ 6.09
(b)............................................... 2.04
ss.318(a).................................................. 13.01
- --------------------
N.A. means Not Applicable.
NOTE: This Cross-Reference Table shall not, for any purpose, be
deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions................................... 1
SECTION 1.02. Other Definitions............................. 21
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act.............................. 21
SECTION 1.04. Rules of Construction......................... 22
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating............................... 22
SECTION 2.02. Execution and Authentication.................. 23
SECTION 2.03. Registrar and Paying Agent.................... 23
SECTION 2.04. Paying Agent To Hold Money in Trust........... 24
SECTION 2.05. Securityholder Lists.......................... 24
SECTION 2.06. Transfer and Exchange......................... 25
SECTION 2.07. Replacement Securities........................ 25
SECTION 2.08. Outstanding Securities........................ 26
SECTION 2.09. Treasury Securities........................... 26
SECTION 2.10. Temporary Securities.......................... 26
SECTION 2.11. Cancellation.................................. 27
SECTION 2.12. Defaulted Interest............................ 27
ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee............................ 27
SECTION 3.02. Selection of Securities To Be Redeemed........ 28
SECTION 3.03. Notice of Redemption.......................... 28
SECTION 3.04. Effect of Notice of Redemption................ 29
SECTION 3.05. Deposit of Redemption Price................... 29
SECTION 3.06. Securities Redeemed in Part................... 30
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities......................... 30
SECTION 4.02. Maintenance of Office or Agency............... 30
SECTION 4.03. Limitation on Transactions with
Affiliates and Related Persons............. 31
SECTION 4.04. Limitation on Indebtedness.................... 32
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Page
SECTION 4.05. Limitation on Certain Asset Dispositions...... 34
SECTION 4.06. Limitation on Restricted Payments............. 37
SECTION 4.07. Corporate Existence........................... 40
SECTION 4.08. Payment of Taxes and Other Claims............. 40
SECTION 4.09. Notice of Defaults............................ 41
SECTION 4.10. Maintenance of Properties..................... 41
SECTION 4.11. Compliance Certificate........................ 41
SECTION 4.12. Provision of Financial Information............ 42
SECTION 4.13. Waiver of Stay, Extension or Usury Laws....... 42
SECTION 4.14. Change of Control............................. 43
SECTION 4.15. Limitation on Senior Subordinated
Indebtedness............................... 44
SECTION 4.16. Limitations Concerning Distribu- tions
and Transfers by Sub- sidiaries............ 44
SECTION 4.17. Limitation on Issuance and Sale of Capital
Stock of Subsidiaries...................... 46
SECTION 4.18. Limitation on Liens........................... 46
ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers, Consolidations and
Certain Sales of Assets.................... 48
SECTION 5.02. Successor Corporation Substituted............. 49
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default............................. 49
SECTION 6.02. Acceleration.................................. 52
SECTION 6.03. Other Remedies................................ 52
SECTION 6.04. Waiver of Past Default........................ 53
SECTION 6.05. Control by Majority........................... 53
SECTION 6.06. Limitation on Suits........................... 54
SECTION 6.07. Rights of Holders To Receive Payment.......... 55
SECTION 6.08. Collection Suit by Trustee.................... 55
SECTION 6.09. Trustee May File Proofs of Claim.............. 55
SECTION 6.10. Priorities.................................... 56
SECTION 6.11. Undertaking for Costs......................... 56
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee............................. 57
SECTION 7.02. Rights of Trustee............................. 58
SECTION 7.03. Individual Rights of Trustee.................. 59
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<PAGE>
Page
SECTION 7.04. Trustee's Disclaimer.......................... 59
SECTION 7.05. Notice of Defaults............................ 60
SECTION 7.06. Reports by Trustee to Holders................. 60
SECTION 7.07. Compensation and Indemnity.................... 60
SECTION 7.08. Replacement of Trustee........................ 62
SECTION 7.09. Successor Trustee by Merger, etc.............. 63
SECTION 7.10. Eligibility; Disqualification................. 63
SECTION 7.11. Preferential Collection of Claims Against
Company.................................... 63
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior
Indebtedness............................... 64
SECTION 8.02. No Payment on Securities in Certain
Circumstances.............................. 64
SECTION 8.03. Payment Over of Proceeds upon
Dissolution, etc........................... 66
SECTION 8.04. Subrogation................................... 68
SECTION 8.05. Obligations of Company Unconditional.......... 68
SECTION 8.06. Notice to Trustee............................. 69
SECTION 8.07. Reliance on Judicial Order or Certificate
of Liquidating Agent....................... 70
SECTION 8.08. Trustee's Relation to Senior
Indebtedness............................... 70
SECTION 8.09. Subordination Rights Not Impaired by
Acts or Omissions of the Company or
Holders of Senior Indebtedness............. 71
SECTION 8.10. Securityholders Authorize Trustee To
Effectuate Subordination of Securities..... 71
SECTION 8.11. This Article Not To Prevent Events of
Default.................................... 72
SECTION 8.12. Trustee's Compensation Not Prejudiced......... 72
SECTION 8.13. No Waiver of Subordination Provisions......... 72
SECTION 8.14. Subordination Provisions Not Applicable to
Money Held in Trust for Securityholders;
Payments May Be Paid Prior to
Dissolution................................ 72
SECTION 8.15. Acceleration of Securities.................... 73
ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.......... 73
SECTION 9.02. Application of Trust Money.................... 75
SECTION 9.03. Repayment to Company.......................... 75
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<PAGE>
Page
SECTION 9.04. Reinstatement................................. 76
ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.................... 76
SECTION 10.02. With Consent of Holders....................... 77
SECTION 10.03. Compliance with Trust Indenture Act........... 79
SECTION 10.04. Revocation and Effect of Consents............. 79
SECTION 10.05. Notation on or Exchange of Securities......... 80
SECTION 10.06. Trustee To Sign Amendments, etc............... 80
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee....................... 81
SECTION 11.02. Severability.................................. 82
SECTION 11.03. Release of a Guarantor........................ 82
SECTION 11.04. Limitation of Guarantor's Liability........... 82
SECTION 11.05. Contribution.................................. 83
SECTION 11.06. Execution of Guarantee........................ 83
SECTION 11.07. Additional Guarantors......................... 84
SECTION 11.08. Subordination of Subrogation and Other
Rights..................................... 84
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated to
Guarantor Senior Debt...................... 85
SECTION 12.02. No Payment on Guarantees in Certain
Circumstances.............................. 85
SECTION 12.03. Payment Over of Proceeds upon Dissolution,
etc........................................ 87
SECTION 12.04. Subrogation................................... 89
SECTION 12.05. Obligations of Guarantors Unconditional....... 89
SECTION 12.06. Notice to Trustee............................. 90
SECTION 12.07. Reliance on Judicial Order or Certificate
of Liquidating Agent....................... 91
SECTION 12.08. Trustee's Relation to Guarantor Senior
Indebtedness............................... 92
SECTION 12.09. Subordination Rights Not Impaired by Acts
or Omissions of the Guarantors or Holders
of Guarantor Senior Indebtedness........... 92
SECTION 12.10. Securityholders Authorize Trustee To
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<PAGE>
Page
Effectuate Subordination of Guarantee...... 92
SECTION 12.11. This Article Not To Prevent Events of
Default.................................... 93
SECTION 12.12. Trustee's Compensation Not Prejudiced......... 93
SECTION 12.13. No Waiver of Guarantee Subordination
Provisions................................. 93
SECTION 12.14. Payments May Be Paid Prior to
Dissolution................................ 94
ARTICLE THIRTEEN
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.................. 94
SECTION 13.02. Notices....................................... 94
SECTION 13.03. Communications by Holders with Other
Holders.................................... 96
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.................................. 96
SECTION 13.05. Statements Required in Certificate or
Opinion.................................... 96
SECTION 13.06. Rules by Trustee, Paying Agent,
Registrar.................................. 97
SECTION 13.07. Governing Law................................. 97
SECTION 13.08. No Recourse Against Others.................... 97
SECTION 13.09. Successors.................................... 97
SECTION 13.10. Counterpart Originals......................... 97
SECTION 13.11. Severability.................................. 98
SECTION 13.12. No Adverse Interpretation of Other
Agreements................................. 98
SECTION 13.13. Legal Holidays................................ 98
SIGNATURES............................................................... 99
EXHIBIT A - Form of Security............................................. A-1
- --------------------
NOTE: This Table of Contents shall not, for any purpose, be
deemed to be a part of the Indenture.
-v-
<PAGE>
INDENTURE dated as of May 29, 1996, among OWENS & MINOR, INC.,
a Virginia corporation (the "Company"), OWENS & MINOR MEDICAL, INC., a Virginia
corporation, NATIONAL MEDICAL SUPPLY CORPORATION, a Delaware corporation, OWENS
& MINOR WEST, INC., a California corporation, KOLEY'S MEDICAL SUPPLY, INC., a
Nebraska corporation, LYONS PHYSICIAN SUPPLY COMPANY, an Ohio corporation, A.
KUHLMAN & CO., a Michigan corporation, STUART MEDICAL, INC., a Pennsylvania
corporation, and CRESTAR BANK, as trustee.
Each party hereto agrees as follows for the benefit of each
other party and for the equal and ratable benefit of the Holders of the
Company's 10 7/8% Senior Subordinated Notes due
2006:
ARTICLE ONE
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with any specified Person. For purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-
Registrar. See Section 2.03.
"Asset Disposition" means any sale, transfer or other
disposition (including, without limitation, by merger, consolidation or
sale-and-leaseback transaction) of (i) shares of Capital Stock of a Subsidiary
of the Company (other than directors' qualifying shares) or (ii) property or
assets of the Company or any Subsidiary of the Company; provided, however, that
an Asset Disposition shall not include (a) any sale, transfer or other
disposition of shares of Capital Stock, property or assets by a Subsidiary of
the Company to the Company or to any Wholly Owned Subsidiary of the Company
(other than a Securitization Subsidiary), (b) any sale, transfer or other
disposition of defaulted receivables for collection or any sale, transfer or
other disposition of property or assets in the ordinary course of business, (c)
any isolated sale, transfer or other disposition that does not involve aggregate
consideration in excess of $250,000
<PAGE>
-2-
individually, (d) the grant in the ordinary course of business of any
non-exclusive license of patents, trademarks, registrations therefor and other
similar intellectual property, (e) any Lien (or foreclosure thereon) securing
Indebtedness to the extent that such Lien is granted in compliance with Section
4.18, (f) any Restricted Payment permitted by Section 4.06, (g) any disposition
of assets or property in the ordinary course of business to the extent such
property or assets are obsolete, worn out or no longer useful in the Company's
or any of its Subsidiaries' business or (h) any Qualified Securitization
Transaction.
"Average Life" means, as of the date of determination, with
respect to any Indebtedness for borrowed money or Preferred Stock, the quotient
obtained by dividing (i) the sum of the products of the number of years from the
date of determination to the dates of each successive scheduled principal or
liquidation value payments of such Indebtedness or Preferred Stock,
respectively, and the amount of such principal or liquidation value payments, by
(ii) the sum of all such principal or liquidation value payments.
"Board of Directors" means the Board of Directors of the
Company or any Guarantor, as the case may be, or any authorized committee of
that Board.
"Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors of such Person.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday that is not a day on which banking institutions in the City of New
York are authorized or obligated by law, resolution or executive order to close.
"Capital Lease Obligations" of any Person means the
obligations to pay rent or other amounts under a lease of (or other Indebtedness
arrangements conveying the right to use) real or personal property of such
Person which are required to be classified and accounted for as a capital lease
or liability on the face of a balance sheet of such Person in accordance with
GAAP. The amount of such obligations shall be the capitalized amount thereof in
accordance with GAAP and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated)
<PAGE>
-3-
of corporate stock of such Person (including any Preferred Stock outstanding on
the Issue Date).
"Common Stock" of any Person means Capital Stock of such
Person that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this Indenture until a successor shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Consolidated Cash Flow Available for Fixed Charges" of any
Person means for any period the Consolidated Net Income of such Person for such
period increased (to the extent Consolidated Net Income for such period has been
reduced thereby) by the sum of (without duplication) (i) Consolidated Interest
Expense of such Person for such period, plus (ii) Consolidated Income Tax
Expense of such Person for such period, plus (iii) the consolidated depreciation
and amortization expense included in the income statement of such Person for
such period, plus (iv) any other non-cash charges to the extent deducted from or
reflected in Consolidated Net Income except for any non-cash charges that
represent accruals of, or reserves for, cash disbursements to be made in any
future accounting period.
"Consolidated Cash Flow Ratio" of any Person means for any
period the ratio of (i) Consolidated Cash Flow Available for Fixed Charges of
such Person for such period to (ii) the sum of (A) Consolidated Interest Expense
of such Person for such period, plus (B) the annual interest expense with
respect to any Indebtedness proposed to be Incurred by such Person or its
Subsidiaries, minus (C) Consolidated Interest Expense of such Person to the
extent included in clause (ii)(A) with respect to any Indebtedness that will no
longer be outstanding as a result of the Incurrence of the Indebtedness proposed
to be Incurred, plus (D) the annual interest expense with respect to any other
Indebtedness Incurred by such Person or its Subsidiaries since the end of such
period to the extent not included in clause (ii)(A), minus (E) Consolidated
Interest Expense of such Person to the extent included in clause
<PAGE>
-4-
(ii)(A) with respect to any Indebtedness that no longer is outstanding as a
result of the Incurrence of the Indebtedness referred to in clause (ii)(D);
provided, however, that in making such computation, the Consolidated Interest
Expense of such Person attributable to interest on any Indebtedness bearing a
floating interest rate shall be computed on a pro forma basis as if the rate in
effect on the date of computation (after giving effect to any hedge in respect
of such Indebtedness that will, by its terms, remain in effect until the earlier
of the maturity of such Indebtedness or the date one year after the date of such
determination) had been the applicable rate for the entire period; provided,
further, however, that, in the event such Person or any of its Subsidiaries has
made any Asset Dispositions or acquisitions of assets not in the ordinary course
of business (including acquisitions of other Persons by merger, consolidation or
purchase of Capital Stock) during or after such period and on or prior to the
date of measurement, such computation shall be made on a pro forma basis as if
the Asset Dispositions or acquisitions had taken place on the first day of such
period. Calculations of pro forma amounts in accordance with this definition
shall be done in accordance with Rule 11-02 of Regulation S-X under the
Securities Act of 1933 or any successor provision.
"Consolidated Income Tax Expense" of any Person means for any
period the consolidated provision for income taxes of such Person for such
period calculated on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" for any Person means for any
period the consolidated interest expense included in a consolidated income
statement (without deduction of interest or finance charge income) of such
Person for such period calculated on a consolidated basis in accordance with
GAAP, plus discount on receivables sold or other discount related to any
receivables securitization transaction (including any Qualified Securitization
Transaction).
"Consolidated Net Income" of any Person means for any period
the consolidated net income (or loss) of such Person for such period determined
on a consolidated basis in accordance with GAAP; provided, however, that there
shall be excluded therefrom (a) the net income (or loss) of any Person acquired
by such Person or a Subsidiary of such Person in a pooling-of-interests
transaction for any period prior to the date of such transaction, (b) the net
income (but not net loss) of any Subsidiary of such Person which is subject to
restrictions which prevent or limit the payment of dividends or the making of
distributions to such Person to the extent of such restrictions (regardless of
any waiver thereof), (c)
<PAGE>
-5-
the net income of any Person that is not a Subsidiary of such Person, except to
the extent of the amount of dividends or other distributions representing such
Person's proportionate share of such other Person's net income for such period
actually paid in cash to such Person by such other Person during such period,
(d) gains or losses on Asset Dispositions by such Person or its Subsidiaries,
(e) all extraordinary gains and extraordinary losses determined in accordance
with GAAP and (f) in the case of a successor to the referent Person by
consolidation or merger or as a transferee of the referent Person's assets, any
earnings (or losses) of the successor corporation prior to such consolidation,
merger or transfer of assets.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Stock of such Person.
"Continuing Director" means a director who either was a member
of the Board of Directors of the Company on the Issue Date or who became a
director of the Company subsequent to the Issue Date and whose election, or
nomination for election by the Company's stockholders, was duly approved by a
majority of the Continuing Directors then on the Board of Directors of the
Company, either by a specific vote or by approval of the proxy statement issued
by the Company on behalf of the entire Board of Directors of the Company in
which such individual is named as nominee for director.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 13.02 or such other address as the
Trustee may give notice to the Company.
"Default" means any event that is, or after notice or lapse of
time or both would become, an Event of Default.
"Designated Senior Indebtedness" means (i) so long as the
Senior Credit Facility is outstanding, the Senior Indebtedness incurred under
the Senior Credit Facility and (ii) thereafter, any other Senior Indebtedness
which has at the time of initial issuance an aggregate outstanding principal
amount in excess of $15 million which has been designated as Designated Senior
Indebtedness by the Board of Directors of the Company at the time of initial
issuance in a resolution delivered to the Trustee.
"Disqualified Stock" of any Person means any Capital Stock of
such Person which, by its terms (or by the terms of any
<PAGE>
-6-
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at the option of the
holder thereof, in whole or in part, on or prior to the final maturity of the
Securities.
"Eligible Accounts Receivable" means the face value of all
"eligible receivables" of the Company and its Subsidiaries party to any credit
agreement constituting the Senior Credit Facility (as such term is defined for
purposes of such credit agreement).
"Eligible Inventory" means the face value of all "eligible
inventory" of the Company and its Subsidiaries party to any credit agreement
constituting the Senior Credit Facility (as such term is defined for purposes of
such credit agreement).
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the SEC thereunder.
"Expiration Date" has the meaning set forth in the
definition of "Offer to Purchase" below.
"GAAP" means generally accepted accounting principles,
consistently applied, as in effect on the Issue Date in the United States of
America, as set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity as is approved by a significant
segment of the accounting profession.
"guarantee" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Indebtedness of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and including,
without limitation, any obligation of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (ii) to purchase property, securities or
services for the purpose of assuring the holder of such Indebtedness of the
payment of such Indebtedness, or (iii) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness (and
"guaranteed," "guaranteeing" and "guarantor"
<PAGE>
-7-
shall have meanings correlative to the foregoing); provided, however, that the
guarantee by any Person shall not include endorsements by such Person for
collection or deposit, in either case, in the ordinary course of business.
"Guarantee" means the guarantee of the Securities by each
Guarantor under this Indenture.
"Guarantor Senior Indebtedness" means, with respect to any
Guarantor, at any date, (i) the maximum amount of all Indebtedness of such
Guarantor under the Senior Credit Facility, including principal, premium, if
any, and interest on such Indebtedness and all other amounts due on or in
connection with such Indebtedness including all charges, fees and expenses
(without regard to any limitation set forth in the terms thereof and whether or
not such Indebtedness is invalidated or set aside or otherwise legally
unenforceable, unless due to willful misconduct or bad faith on the part of the
lenders under the Senior Credit Facility or their agent), (ii) all other
Indebtedness of such Guarantor for borrowed money, including principal, premium,
if any, and interest on such Indebtedness, unless the instrument under which
such Indebtedness of such Guarantor for borrowed money is created, incurred,
assumed or guaranteed expressly provides that such Indebtedness for borrowed
money is not senior or superior in right of payment to the Guarantee of such
Guarantor, and all renewals, extensions, modifications, amendments or
refinancings thereof and (iii) all interest on any Indebtedness referred to in
clauses (i) and (ii) during the pendency of any bankruptcy or insolvency
proceeding, whether or not allowed thereunder. Notwithstanding the foregoing,
Guarantor Senior Indebtedness shall not include (a) Indebtedness which is
pursuant to its terms or any agreement relating thereto or by operation of law
subordinated or junior in right of payment or otherwise to any other
Indebtedness of such Guarantor (without regard, with respect to the Senior
Credit Facility, to any limitation set forth in the terms thereof and other
than, with respect to the Senior Credit Facility, due to the legal invalidity
thereof, unless due to the willful misconduct or bad faith on the part of the
lenders under the Senior Credit Facility or their agent); provided, however,
that no Indebtedness of such Guarantor shall be deemed to be subordinated or
junior in right of payment or otherwise to any other Indebtedness of such
Guarantor solely by reason of such other Indebtedness being secured and such
Indebtedness not being secured, (b) the Guarantees, (c) any Indebtedness of such
Guarantor to any of its Subsidiaries, (d) any Indebtedness which, when incurred
and without respect to any election under Section 1111(b) of the Bankruptcy Law,
is without recourse to such Guarantor, and (e) any Indebtedness or other
obligation of such Guarantor pursuant to or in connection with any
<PAGE>
-8-
Qualified Securitization Transaction (whether entered into before or after the
Issue Date).
"Guarantors" means (i) each of Owens & Minor Medical, Inc., a
Virginia corporation; National Medical Supply Corporation, a Delaware
corporation; Owens & Minor West, Inc., a California corporation; Koley's Medical
Supply, Inc., a Nebraska corporation; Lyons Physician Supply Company, an Ohio
corporation; A. Kuhlman & Co., a Michigan corporation; and Stuart Medical, Inc.,
a Pennsylvania corporation; and (ii) each Material Subsidiary (other than a
Securitization Subsidiary), whether formed or acquired after the Issue Date;
provided, however, that any Material Subsidiary acquired after the Issue Date
which is prohibited from entering into a Guarantee pursuant to restrictions
contained in any debt instrument in existence at the time such Material
Subsidiary was so acquired and not entered into in anticipation or contemplation
of such acquisition shall not be required to become a Guarantor so long as any
such restriction is in existence and to the extent of any such restriction.
"Holder" or "Securityholder" means the Person in whose name a
Security is registered on the books of the Registrar or any co-Registrar.
"Incur" means, with respect to any Indebtedness or other
obligation of any Person, to create, issue, incur (including by conversion,
exchange or otherwise), assume, guarantee or otherwise become liable in respect
of such Indebtedness or other obligation or the recording, as required pursuant
to GAAP or otherwise, of any such Indebtedness or other obligation on the
balance sheet of such Person (and "Incurrence," "Incurred" and "Incurring" shall
have meanings correlative to the foregoing). Indebtedness of any Person or any
of its Subsidiaries existing at the time such Person becomes a Subsidiary of the
Company (or is merged into or consolidates with the Company or any of its
Subsidiaries), whether or not such Indebtedness was incurred in connection with,
or in contemplation of, such Person becoming a Subsidiary of the Company (or
being merged into or consolidated with the Company or any of its Subsidiaries),
shall be deemed Incurred at the time any such Person becomes a Subsidiary of the
Company or merges into or consolidates with the Company or any of its
Subsidiaries.
"Indebtedness" means (without duplication), with respect to
any Person, whether recourse is to all or a portion of the assets of such Person
and whether or not contingent, (i) every obligation of such Person for money
borrowed, (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
<PAGE>
-9-
with the acquisition of property, assets or businesses, (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person, (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business which are not
overdue or which are being contested in good faith), (v) every Capital Lease
Obligation of such Person, (vi) every net obligation under interest rate swap or
similar agreements or foreign currency hedge, exchange or similar agreements of
such Person and (vii) every obligation of the type referred to in clauses (i)
through (vi) of another Person and all dividends of another Person the payment
of which, in either case, such Person has guaranteed or is responsible or liable
for, directly or indirectly, as obligor, guarantor or otherwise. Indebtedness
shall include the liquidation preference and any mandatory redemption payment
obligations in respect of any Disqualified Stock of the Company, and any
Preferred Stock of a Subsidiary of the Company. Indebtedness shall never be
calculated taking into account any cash and cash equivalents held by such
Person. Indebtedness shall not include (A) obligations of the Company or its
Subsidiaries in respect of loans against life insurance policies of which any of
them is the owner not in excess of the aggregate cash values thereof, (B)
guarantees entered into prior to the Issue Date by the Company or its
Subsidiaries in respect of Indebtedness of their customers in an aggregate
amount of not more than $1 million or (C) the obligations of the Company or its
Subsidiaries in respect of any Qualified Securitization Transaction.
"Indenture" means this Indenture as amended or supplemented
from time to time.
"Initial Securitization" means the transactions entered into
in connection with the Amended and Restated Receivables Purchase Agreement dated
as of May 28, 1996, among O&M Funding Corp., the Company, Receivables Capital
Corporation and Bank of America National Trust and Savings Association, as
further amended, restated, supplemented or otherwise modified from time to time.
"Interest Payment Date" means the stated maturity of an
installment of interest on the Securities.
"Investment" by any Person means any direct or indirect loan,
advance, guarantee or other extension of credit or capital contribution to (by
means of transfers of cash or other property to others or payments for property
or services for the account or use of others, or otherwise), or purchase or
acquisition of Capital
<PAGE>
-10-
Stock, bonds, notes, debentures or other securities or evidence of Indebtedness
issued by any other Person.
"Issue Date" means the original issue date of the Securities,
May 29, 1996.
"Lien" means, with respect to any property or assets, any
mortgage or deed of trust, pledge, hypothecation, assignment, security interest,
lien, charge, easement (other than any easement not materially impairing
usefulness or marketability), encumbrance, preference, priority or other
security agreement with respect to such property or assets (including, without
limitation, any conditional sale or other title retention agreement having
substantially the same economic effect as any of the foregoing).
"Material Subsidiary" means any Subsidiary of the Company
which would constitute a "significant subsidiary" of the Company as defined in
Rule 1.02 of Regulation S-X promulgated by the SEC.
"Maturity Date" means the date, which is set forth on the face
of the Securities, on which the Securities will mature.
"Moody's" means Moody's Investors Service, Inc. and its
successors.
"Net Available Proceeds" from any Asset Disposition by any
Person means cash or readily marketable cash equivalents received (including by
way of sale or discounting of a note, installment receivable or other
receivable, but excluding any other consideration received in the form of
assumption by the acquiror of Indebtedness or other obligations relating to such
properties or assets or received in any other non-cash form) therefrom by such
Person, including any cash received by way of deferred payment or upon the
monetization or other disposition of any non-cash consideration (including notes
or other securities) received in connection with such Asset Disposition, net of
(i) all legal, title and recording tax expenses, commissions and other fees and
expenses incurred and all federal, state, foreign and local taxes required to be
accrued as a liability as a consequence of such Asset Disposition, (ii) all
payments made by such Person or its Subsidiaries on any Indebtedness which is
secured by such assets in accordance with the terms of any Lien upon or with
respect to such assets or which must by the terms of such Lien, or in order to
obtain a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (iii) all payments made
with respect to liabilities associated with the assets which are the subject of
the Asset Disposition, including, without limitation, trade payables and
<PAGE>
-11-
other accrued liabilities, (iv) appropriate amounts to be provided by such
Person or any Subsidiary thereof, as the case may be, as a reserve in accordance
with GAAP against any liabilities associated with such assets and retained by
such Person or any Subsidiary thereof, as the case may be, after such Asset
Disposition, including, without limitation, liabilities under any
indemnification obligations and severance and other employee termination costs
associated with such Asset Disposition, until such time as such amounts are no
longer reserved or such reserve is no longer necessary (at which time any
remaining amounts will become Net Available Proceeds to be allocated in
accordance with the provisions of Section 4.05(a)(iii)) and (v) all
distributions and other payments made to minority interest holders in
Subsidiaries of such Person or joint ventures as a result of such Asset
Disposition.
"O&M Funding Corp." means O&M Funding Corp., a Virginia
corporation, and its successors.
"Obligations" means any principal, premiums, interest,
penalties, fees and other liabilities payable under the documentation governing
any Indebtedness.
"Offer" has the meaning set forth in the definition of
"Offer to Purchase" below.
"Offer to Purchase" means a written offer (the "Offer") sent
by the Company by first class mail, postage prepaid, to each Holder at his
address appearing in the register for the Securities on the date of the Offer
offering to purchase up to the principal amount of Securities specified in such
Offer at the purchase price specified in such Offer (as determined pursuant to
this Indenture). Unless otherwise required by applicable law, the Offer shall
specify an expiration date (the "Expiration Date") of the Offer to Purchase
which shall be not less than 30 days nor more than 60 days after the date of
such Offer and a settlement date (the "Purchase Date") for purchase of
Securities within five Business Days after the Expiration Date. The Company
shall notify the Trustee at least 15 Business Days (or such shorter period as is
acceptable to the Trustee) prior to the mailing of the Offer of the Company's
obligation to make an Offer to Purchase, and the Offer shall be mailed by the
Company or, at the Company's request, by the Trustee in the name and at the
expense of the Company. The Offer shall contain all the information required by
applicable law to be included therein. The Offer shall contain all instructions
and materials necessary to enable such Holders to tender Securities pursuant to
the Offer to Purchase. The Offer shall also state:
<PAGE>
-12-
(1) the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding Securities
offered to be purchased by the Company pursuant to the Offer
to Purchase (including, if less than 100%, the manner by which
such amount has been determined pursuant to the Section of
this Indenture requiring the Offer to Purchase) (the "Purchase
Amount");
(4) the purchase price to be paid by the Company for each $1,000
aggregate principal amount of Securities accepted for payment
(as specified pursuant to this Indenture) (the "Purchase
Price");
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder and that any
portion of a Security tendered must be tendered in an integral
multiple of $1,000 principal amount;
(6) the place or places where Securities are to be
surrendered for tender pursuant to the Offer to Purchase;
(7) that interest on any Security not tendered or tendered
but not purchased by the Company pursuant to the Offer to
Purchase will continue to accrue;
(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Security being accepted for payment
pursuant to the Offer to Purchase and that interest thereon
shall cease to accrue on and after the Purchase Date;
(9) that each Holder electing to tender all or any portion of
a Security pursuant to the Offer to Purchase will be
required to surrender such Security at the place or
places specified in the Offer prior to the close of
business on the Expiration Date (such Security being, if
the Company or the Trustee so requires, duly endorsed by,
or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Trustee duly
executed by, the Holder thereof or his attorney duly
authorized in writing);
(10) that Holders will be entitled to withdraw all or any
portion of Securities tendered if the Company (or its
<PAGE>
-13-
Paying Agent) receives, not later than the close of business
on the fifth Business Day next preceding the Expiration Date,
a telegram, telex, facsimile transmission or letter setting
forth the name of the Holder, the principal amount of the
Security the Holder tendered, the certificate number of the
Security the Holder tendered and a statement that such Holder
is withdrawing all or a portion of his tender;
(11) that (a) if Securities in an aggregate principal amount
less than or equal to the Purchase Amount are duly
tendered and not withdrawn pursuant to the Offer to
Purchase, the Company shall purchase all such Securities
and (b) if Securities in an aggregate principal amount in
excess of the Purchase Amount are tendered and not
withdrawn pursuant to the Offer to Purchase, the Company
shall purchase Securities having an aggregate principal
amount equal to the Purchase Amount on a pro rata basis
(with such adjustments as may be deemed appropriate so
that only Securities in denominations of $1,000 or
integral multiples thereof shall be purchased); and
(12) that in the case of any Holder whose Security is
purchased only in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder of
such Security without service charge, a new Security or
Securities, of any authorized denomination as requested
by such Holder, in an aggregate principal amount equal to
and in exchange for the unpurchased portion of the
Security so tendered.
An Offer to Purchase shall be governed by and effected in
accordance with the provisions above pertaining to any Offer.
"Officer" means the Chairman, the President, any Vice
President, the Chief Financial Officer, the Treasurer, or the
Secretary of the Company.
"Officers' Certificate" means a certificate signed by two
Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of
the Company complying with Sections 13.04 and 13.05.
"Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee. The counsel may be an
employee of or counsel to the Company or the Trustee.
"Permitted Investments" means (i) Investments in
marketable, direct obligations issued or guaranteed by the United
<PAGE>
-14-
States of America, or any governmental entity or agency or political subdivision
thereof (provided, that the good faith and credit of the United States of
America is pledged in support thereof), maturing within one year of the date of
purchase; (ii) Investments in commercial paper issued by corporations or
financial institutions maturing within 180 days from the date of the original
issue thereof, and rated "P-1" or better by Moody's Investors Service or "A-1"
or better by Standard & Poor's Corporation or an equivalent rating or better by
any other nationally recognized securities rating agency; (iii) Investments in
certificates of deposit issued or acceptances accepted by or guaranteed by any
bank or trust company organized under the laws of the United States of America
or any state thereof or the District of Columbia, in each case having capital,
surplus and undivided profits totalling more than $500,000,000, maturing within
one year of the date of purchase; (iv) Investments representing Capital Stock or
obligations issued to the Company or any of its Subsidiaries in the course of
the good faith settlement of claims against any other Person or by reason of a
composition or readjustment of debt or a reorganization of any debtor of the
Company or any of its Subsidiaries; (v) deposits, including interest-bearing
deposits, maintained in the ordinary course of business in banks; (vi) any
acquisition of the Capital Stock of any Person; provided, however, that after
giving effect to any such acquisition such Person shall become a Subsidiary of
the Company; (vii) trade receivables and prepaid expenses, in each case arising
in the ordinary course of business; provided, however, that such receivables and
prepaid expenses would be recorded as assets of such Person in accordance with
GAAP; (viii)endorsements for collection or deposit in the ordinary course of
business by such Person of bank drafts and similar negotiable instruments of
such other Person received as payment for ordinary course of business trade
receivables; (ix)any interest swap or hedging obligation with an unaffiliated
Person otherwise permitted by this Indenture; (x)Investments received as
consideration for an Asset Disposition in compliance with the provisions of
Section 4.05; (xi)Investments for which the sole consideration provided is
Capital Stock of the Company (other than Disqualified Stock); (xii)loans and
advances to employees made in the ordinary course of business; (xiii)
Investments outstanding on the Issue Date and (xiv) Investments made in any
Securitization Subsidiary or Special Purpose Vehicle in connection with and
required pursuant to the terms of any Qualified Securitization Transaction.
"Person" means any individual, corporation, limited or general
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
<PAGE>
-15-
"Preferred Stock," as applied to the Capital Stock of any
Person, means Capital Stock of such Person of any class or classes (however
designated) that ranks prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"principal" of a debt security means the principal of the
security plus, when appropriate, the premium, if any, on the security.
"Purchase Amount" has the meaning set forth in the
definition of "Offer to Purchase" above.
"Purchase Date" has the meaning set forth in the
definition of "Offer to Purchase" above.
"Purchase Price" has the meaning set forth in the
definition of "Offer to Purchase" above.
"Qualified Securitization Transaction" means the Initial
Securitization and any other transaction or series of transactions that has been
or may be entered into by the Company or any of its Subsidiaries in connection
with or reasonably related to a transaction or series of transactions in which
the Company or any of its Subsidiaries may sell, convey or otherwise transfer to
(i) a Securitization Subsidiary or (ii) any other Person, or may grant a
security interest in, any Receivables and Receivables Related Assets or
interests therein secured by the merchandise or services financed thereby
(whether such Receivables and Receivables Related Assets are then existing or
arising in the future) of the Company or any of its Subsidiaries, and any assets
related thereto including, without limitation, all security interests in
merchandise or services financed thereby, all collections received (including
recoveries) and proceeds of such Receivables and Receivables Related Assets, and
other assets which are customarily sold or in respect of which security
interests are customarily granted in connection with securitization transactions
involving such assets.
"Receivables" means any right of payment, whether constituting
an account, chattel paper, instrument, general intangible or otherwise, arising
in connection with the sale, lease or financing by the Company or any Subsidiary
of the Company of merchandise or rendering of services, and monies due
thereunder.
"Receivables Related Assets" means (i) any rights arising
under the documentation governing or relating to Receivables
<PAGE>
-16-
(including rights in respect of Liens securing such Receivables and other credit
support in respect of such Receivables), (ii) any proceeds of such Receivables
and any lockboxes or accounts in which such proceeds are deposited, (iii) spread
accounts and other similar accounts (and any amounts on deposit therein)
established in connection with a Qualified Securitization Transaction, (iv) any
warranty, indemnity, dilution and other intercompany claim arising out of the
documentation evidencing such Qualified Securitization Transaction and (v) other
assets that are customarily transferred or in respect of which security
interests are customarily granted in connection with asset securitization
transactions involving accounts receivable.
"redemption date," when used with respect to any Security to
be redeemed, means the date fixed for such redemption pursuant to this
Indenture.
"redemption price," when used with respect to any Security to
be redeemed, means the price fixed for such redemption pursuant to this
Indenture as set forth in the form of Security annexed as Exhibit A.
"Related Person" of any Person means any other Person directly
or indirectly owning (a) 5% or more of the outstanding Common Stock of such
Person (or, in the case of a Person that is not a corporation, 5% or more of the
equity interest in such Person) or (b) 5% or more of the combined voting power
of the Voting Stock of such Person.
"SEC" means the Securities and Exchange Commission.
"Securities" means the 10 7/8% Senior Subordinated Notes due
2006, as amended or supplemented from time to time pursuant to the terms of this
Indenture, that are issued under this Indenture.
"Securitization Subsidiary" means O&M Funding Corp. and any
other Wholly Owned Subsidiary of the Company which engages in no activities
other than those reasonably related to or in connection with the entering into
of securitization transactions and which is designated by the Board of Directors
of the Company (as provided below) as a Securitization Subsidiary provided that
with respect to O&M Funding Corp. or any such other Wholly Owned Subsidiary (a)
no portion of the indebtedness or any other obligations (contingent or
otherwise) of any such Subsidiary (i) is guaranteed by the Company or any other
Subsidiary of the Company other than pursuant to Standard Securitization
Obligations, (ii) is recourse to or obligates the Company or any other
Subsidiary of the Company in any way other than pursuant to Standard
Securitization
<PAGE>
-17-
Obligations or (iii) subjects the Company or any other Subsidiary of the
Company, directly or indirectly, contingently or otherwise, to any Lien or to
the satisfaction thereof, other than pursuant to Standard Securitization
Obligations, (b) neither the Company nor any other Subsidiary of the Company (i)
provides any credit support to or (ii) has any material contract, agreement,
arrangement or understanding no less favorable to the Company or such Subsidiary
than could be obtained from an unrelated person (other than, in the case of
subclauses (i) and (ii) of this clause (b), entered into in the ordinary course
of business in connection with a Qualified Securitization Transaction and
intercompany notes relating to the sale of Receivables to such Securitization
Subsidiary) with any such Subsidiary and (c) neither the Company nor any
Subsidiary of the Company has any obligation to maintain or preserve the
financial condition of any such Subsidiary or to cause such entity to achieve
certain levels of operating results. Any such designation by the Board of
Directors of the Company (other than with respect to O&M Funding Corp.) shall be
evidenced to the Trustee by filing with the Trustee a certified copy of the
resolutions of the Board of Directors of the Company giving effect to such
designation.
"Senior Credit Facility" means the Credit Agreement, dated as
of May 24, 1996, among the Company as borrower thereunder, any Subsidiaries of
the Company as guarantors thereunder and NationsBank, N.A., as agent on behalf
of itself and the other lenders named therein, including any deferrals,
renewals, extensions, replacements, refinancings or refundings thereof, or
amendments, modifications or supplements thereto and any agreement providing
therefor whether by or with the same or any other lender, creditors, group of
lenders or group of creditors and including related notes, guarantee agreements
and other instruments and agreements executed in connection therewith.
"Senior Indebtedness" means, at any date, (i) all Indebtedness
of the Company under the Senior Credit Facility, including principal, premium,
if any, and interest on such Indebtedness and all other amounts due on or in
connection with such Indebtedness including all charges, fees and expenses, (ii)
all other Indebtedness of the Company for borrowed money, including principal,
premium, if any, and interest on such Indebtedness, unless the instrument under
which such Indebtedness of the Company for money borrowed is created, incurred,
assumed or guaranteed expressly provides that such Indebtedness for money
borrowed is not senior or superior in right of payment to the Securities, and
all renewals, extensions, modifications, amendments or refinancings thereof and
(iii) all interest on any Indebtedness referred to in clauses (i) and (ii)
accruing during the pendency of any bankruptcy
<PAGE>
-18-
or insolvency proceeding, whether or not allowed thereunder. Notwithstanding the
foregoing, Senior Indebtedness shall not include (a) Indebtedness which is
pursuant to its terms or any agreement relating thereto or by operation of law
subordinated or junior in right of payment or otherwise to any other
Indebtedness of the Company; provided, however, that no Indebtedness of the
Company shall be deemed to be subordinate or junior in right of payment or
otherwise to any other Indebtedness of the Company solely by reason of such
other Indebtedness being secured and such Indebtedness not being secured, (b)
the Securities, (c) any Indebtedness of the Company to any Subsidiary of the
Company, (d) any Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Law, is without recourse to the
Company, and (e) any Indebtedness or other obligation of the Company pursuant to
or in connection with any Qualified Securitization Transaction (whether entered
into before or after the Issue Date).
"Special Purpose Vehicle" means a trust, partnership or other
entity established by the Company or its Subsidiaries to implement a Qualified
Securitization Transaction.
"Standard Securitization Obligations" means representations,
warranties, covenants and indemnities (including those related to servicing)
entered into by the Company or any Subsidiary which are reasonably customary in
Qualified Securitization Transactions.
"Stated Maturity," when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than
50% of the outstanding Voting Stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more other Subsidiaries thereof or (ii) any other Person
(other than a corporation) in which such Person, or one or more other
Subsidiaries of such Person or such Person and one or more other Subsidiaries
thereof, directly or indirectly, has at least a majority ownership and voting
power relating to the policies, management and affairs thereof; provided,
however, that any Special Purpose Vehicle shall not be a Subsidiary of the
Company for purposes of this Indenture.
<PAGE>
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"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code
ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture, except as
provided in Section 10.03.
"Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.
"Trust Officer" means any officer within the corporate trust
department (or any successor group of the Trustee) including any vice president,
assistant vice president, assistant secretary or any other officer or assistant
officer of the Trustee customarily performing functions similar to those
performed by the persons who at that time shall be such officers, and also
means, with respect to a particular corporate trust matter, any other officer to
whom such trust matter is referred because of his knowledge of and familiarity
with the particular subject.
"Voting Stock" of any Person means the Capital Stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of
such Person all of the outstanding Capital Stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or by
such Person and one or more Wholly Owned Subsidiaries of such Person.
SECTION 1.02. Other Definitions.
Term Defined in Section
---- ------------------
"Bankruptcy Law" 6.01
"Change of Control" 4.14
"Custodian" 6.01
"Event of Default" 6.01
"Funding Guarantor" 11.05
"Guarantor Blockage Period" 12.02(a)
"Guarantor Payment Blockage Notice" 12.02(a)
"Paying Agent" 2.03
"Payment Blockage Notice" 8.02(a)
"Payment Blockage Period" 8.02(a)
"Registrar" 2.03
"Required Filing Date 4.12
"Subordinated Reorganization Securities" 8.03(c)
<PAGE>
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"United States Government Obligation" 9.01
SECTION 1.03. Incorporation by Reference of Trust
Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Trustee.
"obligor" on the indenture securities means the Company
or any other obligor on the Securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by Commission
rule and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles in effect from time to time, and any other reference in this
Indenture to "generally accepted accounting principles" refers to GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and words
in the plural include the singular;
(5) provisions apply to successive events and
transactions; and
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(6) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
ARTICLE TWO
THE SECURITIES
SECTION 2.01. Form and Dating.
The Securities and the Trustee's certificates of
authentication shall be substantially in the form of Exhibit A. The Securities
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Any notations, legends or endorsements not contained in the form of
Security contained in Exhibit A shall be delivered in writing to the Trustee.
The Company shall approve the form of the Securities and any notation, legend or
endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the form of the
Securities, annexed hereto as Exhibit A, shall constitute, and are hereby
expressly made, a part of this Indenture.
SECTION 2.02. Execution and Authentication.
Two Officers shall sign the Securities for the Company by
facsimile signature. The Company's seal shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds
that office at the time the Trustee authenticates the Security, the Security
shall be valid nevertheless.
A Security shall not be valid until the Trustee manually signs
the certificate of authentication on the Security. The signature shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
The Trustee shall authenticate Securities for original issue
in the aggregate principal amount of up to $150,000,000, upon a written order of
the Company signed by two Officers or by an Officer and an Assistant Treasurer
or Assistant Secretary of the Company. The order shall specify the amount of
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated. The aggregate principal amount of Securities
outstanding at any time may not exceed $150,000,000 except as provided in
Section 2.07.
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The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Securities other than upon original issuance. The
Company shall pay all fees payable to the authenticating agent. Any
authenticating agent appointed hereunder shall be entitled to the benefits of
Section 7.07. Unless limited by the terms of such appointment, any
authenticating agent may authenticate Securities whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Company or an Affiliate as provided in Section 7.03.
The Securities shall be issuable only in registered form
without coupons and only in denominations of $1,000 and any integral multiple
thereof.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("Registrar") and an office or agency where Securities may be presented for
payment ("Paying Agent"). The Company may have one or more co-Registrars and one
or more additional paying agents. The term "Paying Agent" includes any
additional paying agent.
The Company shall enter into an appropriate agency agreement
with any Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent and shall, if required,
incorporate the provisions of the TIA. The Company shall notify the Trustee of
the name and address of any such Agent. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such and shall be entitled
to appropriate compensation in accordance with the provisions of Section 7.07.
The Company initially appoints the Trustee as Registrar and
Paying Agent. The Company shall give written notice to the Trustee in the event
that the Company decides to act as Registrar or Paying Agent.
SECTION 2.04. Paying Agent To Hold Money in Trust.
The Company shall require each Paying Agent to agree in
writing to hold in trust for the benefit of Securityholders or the Trustee all
money held by the Paying Agent for the payment of principal of or interest on
the Securities (whether such money has been paid to it by the Company or any
other obligor on the Securities), and the Company and the Paying Agent shall
each notify
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the Trustee of any default by the Company (or any other obligor on the
Securities) in making any such payment. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate the money and hold it as a separate trust fund.
The Company at any time may require a Paying Agent to pay all money held by it
to the Trustee and account for any funds disbursed and the Trustee may at any
time during the continuance of any payment default, upon written request to a
Paying Agent, require such Paying Agent to pay all money held by it to the
Trustee and to account for any funds disbursed. Upon making such payment the
Paying Agent shall have no further liability for the money delivered to the
Trustee.
SECTION 2.05. Securityholder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of Securityholders. If the Trustee is not the Registrar, the Company
shall furnish to the Trustee at least five Business Days before each Interest
Payment Date and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require of
the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange.
When Securities are presented to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Securities of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. To permit registrations of transfers
and exchanges, the Company shall execute and the Trustee shall authenticate
Securities. The date of any Security issued pursuant to this Section 2.06 shall
be the date of such transfer or exchange. No service charge shall be made to the
Securityholder for any registration of transfer or exchange, but the Company may
require from the Securityholder payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges pursuant to an Offer to Purchase or Section 2.10, 3.06 or 10.05, in
which event the Company shall be responsible for the payment of such taxes).
SECTION 2.07. Replacement Securities.
If a mutilated Security is surrendered to the Trustee or if
the Holder of a Security claims that the Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the
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Trustee shall authenticate a replacement Security if the Trustee's requirements
are met. An indemnity bond in an amount sufficient in the judgment of the
Company and the Trustee to protect the Company, the Trustee or any Agent from
any loss which any of them may suffer if a Security is replaced may be required
by the Trustee or the Company. The Company and the Trustee each may charge such
Holder for its expenses in replacing such Security.
Every replacement Security is an additional obligation of the
Company.
SECTION 2.08. Outstanding Securities.
Securities outstanding at any time are all Securities that
have been authenticated by the Trustee except for those cancelled by it, those
delivered to it for cancellation and those described in this Section as not
outstanding. Except as provided in paragraph 5(b) of the Securities, a Security
does not cease to be outstanding because the Company or one of its Affiliates
holds the Security.
If a Security is replaced pursuant to Section 2.07, it ceases
to be outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company, a Subsidiary or
an Affiliate of the Company) holds on a redemption date or Maturity Date money
sufficient to pay the principal of, and interest on Securities payable on that
date, then on and after that date such Securities cease to be outstanding and
interest on them ceases to accrue.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by the Company, any Guarantor or any of their respective
Affiliates shall be disregarded, except that for the purposes of determining
whether the Trustee shall be protected in relying on any such direction, waiver
or consent, only Securities that the Trustee actually knows are so owned shall
be so disregarded.
The Trustee may require an Officers' Certificate listing
securities owned by the Company, any Guarantor or any of their respective
Affiliates.
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SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the
Company may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Company considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate definitive Securities in exchange for temporary
Securities. Until such exchange, temporary Securities shall be entitled to the
same rights, benefits and privileges as definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities surrendered to them for transfer, exchange or payment.
The Trustee and no one else shall cancel all Securities surrendered for
transfer, exchange, payment or cancellation. The Company may not issue new
Securities to replace, or reissue or resell, Securities which the Company has
redeemed, paid, purchased on the open market or otherwise, or otherwise acquired
or have been delivered to the Trustee for cancellation. The Trustee (subject to
the record-retention requirements of the Exchange Act) may, but shall not be
required to destroy cancelled Securities.
SECTION 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the
Securities, it shall pay the defaulted interest, plus any interest payable on
the defaulted interest pursuant to Section 4.01 hereof, to the persons who are
Securityholders on a subsequent special record date, and such term, as used in
this Section 2.12 with respect to the payment of any defaulted interest, shall
mean the fifteenth day next preceding the date fixed by the Company for the
payment of defaulted interest, whether or not such day is a Business Day. At
least 15 days before such special record date, the Company shall mail to each
Securityholder and to the Trustee a notice that states such special record date,
the payment date and the amount of defaulted interest to be paid.
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ARTICLE THREE
REDEMPTION
SECTION 3.01. Notices to Trustee.
If the Company wants to redeem Securities pursuant to
paragraph 5 of the Securities at the applicable redemption price set forth
thereon, it shall notify the Trustee in writing of the redemption date and the
principal amount of Securities to be redeemed.
The Company shall give the notice provided for in this Section
3.01 at least 45 days before the redemption date (unless a shorter notice shall
be agreed to by the Trustee in writing), together with an Officers' Certificate
stating that such redemption will comply with the conditions contained herein.
SECTION 3.02. Selection of Securities To Be Redeemed.
If less than all of the Securities are to be redeemed pursuant
to paragraph 5 thereof, the Trustee shall select the Securities to be redeemed
pro rata or by lot or in such other manner as the Trustee shall deem appropriate
and fair and in such a manner as to comply with any applicable requirements of
the New York Stock Exchange. The Trustee shall make the selection from the
Securities then outstanding, subject to redemption and not previously called for
redemption. The Trustee may select for redemption portions (equal to $1,000 or
any integral multiple thereof) of the principal of Securities that have
denominations larger than $1,000. Provisions of this Indenture that apply to
Securities called for redemption also apply to portions of Securities called for
redemption.
SECTION 3.03. Notice of Redemption.
At least 30 days but not more than 60 days before a redemption
date, the Company shall mail a notice of redemption by first class mail to each
Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
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(3) the CUSIP number;
(4) the name and address of the Paying Agent to which
the Securities are to be surrendered for redemption;
(5) that Securities called for redemption must be
surrendered to the Paying Agent to collect the redemption
price;
(6) that, unless the Company defaults in making the redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the redemption date and the only remaining right of the
Holders is to receive payment of the redemption price upon surrender to
the Paying Agent; and
(7) if any Security is being redeemed in part, the portion of
the principal amount of such Security to be redeemed and that, after
the redemption date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued.
At the Company's request, the Trustee shall give the notice of
redemption on behalf of the Company, in the Company's name and at the Company's
expense.
SECTION 3.04. Effect of Notice of Redemption.
Once a notice of redemption is mailed, Securities called for
redemption become due and payable on the redemption date and at the redemption
price. Upon surrender to the Paying Agent, such Securities shall be paid at the
redemption price, plus accrued interest thereon to the redemption date, but
interest installments whose maturity is on or prior to such redemption date
shall be payable to the Holders of record at the close of business on the
relevant record dates referred to in the Securities. The Trustee shall not be
required to (i) issue, authenticate, register the transfer of or exchange any
Security during a period beginning 15 days before the date a notice of
redemption is mailed and ending at the close of business on the date the
redemption notice is mailed, or (ii) register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
SECTION 3.05. Deposit of Redemption Price.
At least one Business Day before the redemption date, the
Company shall deposit with the Paying Agent (or if the Company is
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its own Paying Agent, shall, on or before the redemption date, segregate and
hold in trust) money sufficient to pay the redemption price of and accrued
interest on all Securities to be redeemed on that date other than Securities or
portions thereof called for redemption on that date which have been delivered by
the Company to the Trustee for cancellation.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the
Trustee shall authenticate for the Holder a new Security equal in principal
amount to the unredeemed portion of the Security surrendered.
ARTICLE FOUR
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay the principal of and interest on the
Securities in the manner provided in the Securities. An installment of principal
or interest shall be considered paid on the date due if the Trustee or Paying
Agent (other than the Company, a Subsidiary or an Affiliate of the Company)
holds on that date money designated for and sufficient to pay the installment in
full and is not prohibited from paying such money to the Holders of the
Securities pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the
same rate per annum borne by the Securities. The Company shall pay interest on
overdue installments of interest at the same rate per annum borne by the
Securities, to the extent lawful.
SECTION 4.02. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, The
City of New York, an office or agency where Securities may be surrendered for
registration of transfer or exchange or for presentation for payment and where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company shall give prompt written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
address of the Trustee set forth in Section 13.02.
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The Company may also from time to time designate one or more
other offices or agencies where the Securities may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations; provided that no such designation or rescission shall in any
manner relieve the Company of its obligation to maintain an office or agency in
the Borough of Manhattan, The City of New York, for such purposes. The Company
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby designates Harris Trust Co., 77 Water
Street, 5th Floor, New York, New York 10005 as one such office or agency of the
Company.
SECTION 4.03. Limitation on Transactions with
Affiliates and Related Persons.
The Company will not, and will not permit any of its
Subsidiaries to, enter into directly or indirectly any transaction with an
Affiliate or Related Person of the Company (other than the Company or a
Subsidiary of the Company), including, without limitation, the purchase, sale,
lease or exchange of property, the rendering of any service, or the making of
any guarantee, loan, advance or Investment, either directly or indirectly,
involving aggregate consideration in excess of $500,000 unless (i) a majority of
the disinterested directors of the Board of Directors of the Company determines,
in its good faith judgment evidenced by a resolution of such Board of Directors
filed with the Trustee, that such transaction is in the best interests of the
Company or such Subsidiary, as the case may be; and (ii) such transaction is, in
the opinion of a majority of the disinterested directors of the Board of
Directors of the Company evidenced by a resolution of such Board of Directors
filed with the Trustee, on terms no less favorable to the Company or such
Subsidiary, as the case may be, than those that could be obtained in a
comparable arm's-length transaction with an entity that is not an Affiliate or a
Related Person.
The provisions of this Section 4.03 shall not apply to (i) any
Qualified Securitization Transaction, (ii) any employment agreement entered into
by the Company or any of its Subsidiaries in the ordinary course of business,
(iii) transactions permitted by the provisions of Section 4.06, (iv) the payment
of reasonable fees to directors of the Company or its Subsidiaries and (v)
Investments in employees in the ordinary course of business.
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SECTION 4.04. Limitation on Indebtedness.
The Company will not, and will not permit any of its
Subsidiaries to, Incur, directly or indirectly, any Indebtedness, except: (i)
Indebtedness of the Company or its Subsidiaries, if immediately after giving
effect to the Incurrence of such Indebtedness and the receipt and application of
the net proceeds thereof, the Consolidated Cash Flow Ratio of the Company for
the four full fiscal quarters for which quarterly or annual financial statements
are available next preceding the Incurrence of such Indebtedness, calculated on
a pro forma basis as if such Indebtedness had been Incurred on the first day of
such four full fiscal quarters, would be greater than 2.00 to 1.00 if such
Indebtedness is Incurred on or before December 31, 1997 and 2.25 to 1.00 if such
Indebtedness is Incurred after December 31, 1997; (ii) Indebtedness of the
Company, and guarantees of such Indebtedness by any Guarantor, Incurred under
the Senior Credit Facility in an aggregate principal amount outstanding at any
one time not to exceed the greater of (x) $225 million or (y) the sum of (A) 85%
of Eligible Accounts Receivable and (B) 50% of Eligible Inventory; (iii)
Indebtedness owed by the Company to any Wholly Owned Subsidiary of the Company
(other than a Securitization Subsidiary) or Indebtedness owed by a Subsidiary of
the Company to the Company or a Wholly Owned Subsidiary of the Company (other
than a Securitization Subsidiary); provided, however, that upon either (I) the
transfer or other disposition by such Wholly Owned Subsidiary or the Company of
any Indebtedness so permitted under this clause (iii) to a Person other than the
Company or another Wholly Owned Subsidiary of the Company (other than a
Securitization Subsidiary) or (II) the issuance (other than directors'
qualifying shares), sale, transfer or other disposition of shares of Capital
Stock or other ownership interests (including by consolidation or merger) of
such Wholly Owned Subsidiary to a Person other than the Company or another such
Wholly Owned Subsidiary of the Company (other than a Securitization Subsidiary),
the provisions of this clause (iii) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed to have been Incurred at the
time of any such issuance, sale, transfer or other disposition, as the case may
be; (iv) Indebtedness of the Company or its Subsidiaries under any interest rate
or currency swap agreement to the extent entered into to hedge any other
Indebtedness permitted under this Indenture and any interest rate swap agreement
entered into in connection with any Qualified Securitization Transaction; (v)
Indebtedness Incurred to renew, extend, refinance or refund (collectively for
purposes of this clause (v) to "refund") any Indebtedness outstanding on the
Issue Date and Indebtedness Incurred under the prior clause (i) above or the
Securities; provided, however, that (I) such Indebtedness does not exceed the
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principal amount (or accrued amount, if less) of Indebtedness so refunded plus
the amount of any premium required to be paid in connection with such refunding
pursuant to the terms of the Indebtedness refunded or the amount of any premium
reasonably determined by the Company as necessary to accomplish such refunding
by means of a tender offer, exchange offer, or privately negotiated repurchase,
plus the expenses of the Company or such Subsidiary incurred in connection
therewith and (II)(A) in the case of any refunding of Indebtedness that is pari
passu with the Securities, such refunding Indebtedness is made pari passu with
or subordinate in right of payment to the Securities and, in the case of any
refunding of Indebtedness that is subordinate in right of payment to the
Securities, such refunding Indebtedness is subordinate in right of payment to
the Securities on terms no less favorable to the Holders than those contained in
the Indebtedness being refunded, (B) in either case, the refunding Indebtedness
by its terms, or by the terms of any agreement or instrument pursuant to which
such Indebtedness is issued, does not have an Average Life that is less than the
remaining Average Life of the Indebtedness being refunded and does not permit
redemption or other retirement (including pursuant to any required offer to
purchase to be made by the Company or a Subsidiary of the Company) of such
Indebtedness at the option of the holder thereof prior to the final stated
maturity of the Indebtedness being refunded, other than a redemption or other
retirement at the option of the holder of such Indebtedness (including pursuant
to a required offer to purchase made by the Company or a Subsidiary of the
Company) which is conditioned upon a change of control of the Company pursuant
to provisions substantially similar to those contained in Section 4.14 and (C)
any Indebtedness Incurred to refund any other Indebtedness is Incurred by the
obligor on the Indebtedness being refunded or by the Company; (vi) Indebtedness
of the Company or its Subsidiaries, not otherwise permitted to be Incurred
pursuant to clauses (i) through (v) above, which, together with any other
outstanding Indebtedness Incurred pursuant to this clause (vi), has an aggregate
principal amount not in excess of $15 million at any time outstanding; and (vii)
Indebtedness of the Company under the Securities and Indebtedness of the
Guarantors under the Guarantees.
Notwithstanding anything in this Indenture to the contrary,
the consummation of any Qualified Securitization Transaction shall not be deemed
to be the Incurrence of Indebtedness by the Company or by any Subsidiary of the
Company.
SECTION 4.05. Limitation on Certain Asset Dispositions.
(a) The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, make one or more Asset
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Dispositions for aggregate consideration of, or in respect of assets having an
aggregate fair market value of, $5 million or more in any 12-month period,
unless: (i) the Company or the Subsidiary, as the case may be, receives
consideration for such Asset Disposition at least equal to the fair market value
of the assets sold or disposed of as determined by the Board of Directors of the
Company in good faith and evidenced by a resolution of such Board of Directors
filed with the Trustee; (ii) not less than 75% of the consideration for the
disposition consists of cash or readily marketable cash equivalents or the
assumption of Indebtedness (other than non-recourse Indebtedness or any
Indebtedness subordinated to the Securities) of the Company or such Subsidiary
or other obligations relating to such assets (and release of the Company or such
Subsidiary from all liability on the Indebtedness or other obligations assumed);
and (iii) all Net Available Proceeds, less any amounts invested within 360 days
of such Asset Disposition in assets related to the business of the Company
(including the Capital Stock of another Person (other than the Company or any
Person that is a Subsidiary of the Company immediately prior to such
investment); provided, however, that immediately after giving effect to any such
investment (and not prior thereto) such Person shall be a Subsidiary of the
Company (other than a Securitization Subsidiary)), are applied, on or prior to
the 360th day after such Asset Disposition, unless and to the extent that the
Company shall determine to make an Offer to Purchase, either to (A) the
permanent reduction and prepayment of any Senior Indebtedness then outstanding
(including a permanent reduction of commitments in respect thereof) or (B) the
permanent reduction and repayment of any Guarantor Senior Indebtedness then
outstanding of any Subsidiary of the Company (including a permanent reduction of
commitments in respect thereof). Any Net Available Proceeds from any Asset
Disposition that is subject to the immediately preceding sentence that are not
applied as provided in the immediately preceding sentence shall be used promptly
after the expiration of the 360th day after such Asset Disposition, or promptly
after the Company shall have earlier determined to not apply any Net Available
Proceeds therefrom as provided in subclauses (A) or (B) of clause (iii) of the
immediately preceding sentence, to make an Offer to Purchase outstanding
Securities at a purchase price in cash equal to 100% of their principal amount
plus accrued interest to the Purchase Date. Notwithstanding the foregoing, the
Company may defer making any Offer to Purchase outstanding Securities until
there are aggregate unutilized Net Available Proceeds from Asset Dispositions
otherwise subject to the two immediately preceding sentences equal to or in
excess of $5 million (at which time, the entire unutilized Net Available
Proceeds from Asset Dispositions otherwise subject to the two immediately
preceding sentences, and not just the amount in excess
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of $5 million, shall be applied as required pursuant to this
paragraph).
If any Indebtedness of the Company ranking pari passu with the
Securities requires that prepayment of, or an offer to prepay, such Indebtedness
be made with any Net Available Proceeds, the Company may apply such Net
Available Proceeds pro rata (based on the aggregate principal amount of the
Securities then outstanding and the aggregate principal amount (or accreted
value, if less) of all such other Indebtedness then outstanding) to the making
of an Offer to Purchase the Securities in accordance with the foregoing
provisions and the prepayment or the offer to prepay such pari passu
Indebtedness. The Company shall make a further Offer to Purchase Securities in
an amount equal to any such Net Available Proceeds not utilized to actually
prepay such other Indebtedness at a purchase price in cash equal to 100% of the
principal amount of the Securities plus accrued interest to the Purchase Date if
the amount not so utilized equals or exceeds $5 million.
Any remaining Net Available Proceeds following the completion
of the required Offer to Purchase may be used by the Company for any other
purpose (subject to the other provisions of this Indenture) and the amount of
Net Available Proceeds then required to be otherwise applied in accordance with
this Section shall be reset to zero, subject to any subsequent Asset
Disposition.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act, and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed an Event of Default or a Default.
(b) The Company will mail the Offer for an Offer to
Purchase required pursuant to Section 4.05(a) not more than 365
days after consummation of the Asset Disposition resulting in the
Offer to Purchase; provided, however, that the Company may defer
making any Offer to Purchase outstanding Securities until there are
aggregate unutilized Net Available Proceeds from Asset Dispositions
otherwise subject to the first two sentences of Section 4.05(a)
equal to or in excess of $5 million (at which time, the entire
unutilized Net Available Proceeds from Asset Dispositions otherwise
subject to the first two sentences of Section 4.05(a), and not just
the amount in excess of $5 million, shall be applied as required
pursuant to the first paragraph of Section 4.05(a)). Each Holder
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shall be entitled to tender all or any portion of the Securities owned by such
Holder pursuant to the Offer to Purchase, subject to the requirement that any
portion of a Security tendered must be tendered in an integral multiple of
$1,000 principal amount and subject to any proration of the Offer among
tendering Holders if the aggregate amount of Securities tendered exceeds the Net
Available Proceeds.
(c) Not later than the date of the Offer with respect to an
Offer to Purchase pursuant to this Section 4.05, the Company shall deliver to
the Trustee an Officers' Certificate as to the Purchase Amount.
On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment (on a pro rata basis, if
necessary) Securities or portions thereof validly tendered pursuant to this
Offer, (ii) deposit with the Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in Section 2.04) money
sufficient to pay the Purchase Price of all Securities or portions thereof so
accepted and (iii) deliver or cause to be delivered to the Trustee for
cancellation all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent (or the Company, if so acting) shall promptly mail or deliver
to Holders of Securities so accepted payment in an amount equal to the Purchase
Price for such Securities, and the Trustee shall promptly authenticate and mail
or deliver to each Holder a new Security or Securities equal in principal amount
to any unpurchased portion of the Security surrendered as requested by the
Holder. Any Security not accepted for payment shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company shall publicly
announce the results of the Offer on or as soon as practicable after the
Purchase Date.
(d) Notwithstanding the foregoing, this Section 4.05
shall not apply to any Asset Disposition consummated in compliance
with the provisions of Section 5.01.
SECTION 4.06. Limitation on Restricted Payments.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend, or
make any distribution of any kind or character (whether in cash, property or
securities), in respect of any class of its Capital Stock or to the holders
thereof, excluding any (x) dividends or distributions payable solely in shares
of its Capital Stock (other than Disqualified Stock) or in options, warrants or
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other rights to acquire its Capital Stock (other than Disqualified Stock), or
(y) in the case of any Subsidiary of the Company, dividends or distributions
payable to the Company or a Subsidiary of the Company (other than a
Securitization Subsidiary), (ii) purchase, redeem, or otherwise acquire or
retire for value shares of Capital Stock of the Company or any of its
Subsidiaries, any options, warrants or rights to purchase or acquire shares of
Capital Stock of the Company or any of its Subsidiaries or any securities
convertible or exchangeable into shares of Capital Stock of the Company or any
of its Subsidiaries, excluding any such shares of Capital Stock, options,
warrants, rights or securities which are owned by the Company or a Subsidiary of
the Company (other than a Securitization Subsidiary), (iii) make any Investment
in (other than a Permitted Investment), or payment on a guarantee of any
obligation of, any Person, other than the Company or a Wholly Owned Subsidiary
of the Company, or (iv) redeem, defease, repurchase, retire or otherwise acquire
or retire for value, prior to any scheduled maturity, repayment or sinking fund
payment, Indebtedness which is subordinate in right of payment to the Securities
(each of the transactions described in clauses (i) through (iv) (other than any
exception to any such clause) being a "Restricted Payment") if at the time
thereof: (1) an Event of Default, or an event that with the passing of time or
giving of notice, or both, would constitute an Event of Default, shall have
occurred and be continuing, or (2) upon giving effect to such Restricted
Payment, the Company could not Incur at least $1.00 of additional Indebtedness
pursuant to clause (i) of Section 4.04, or (3) upon giving effect to such
Restricted Payment, the aggregate of all Restricted Payments made on or after
the Issue Date exceeds the sum of: (a) 50% of cumulative Consolidated Net Income
of the Company (or, in the case cumulative Consolidated Net Income of the
Company shall be negative, less 100% of such deficit) since the end of the
fiscal quarter in which the Issue Date occurs through the last day of the fiscal
quarter for which financial statements are available; plus (b) 100% of the
aggregate net proceeds received after the Issue Date, including the fair market
value of property other than cash (determined in good faith by the Board of
Directors of the Company as evidenced by a resolution of such Board of Directors
filed with the Trustee), from the issuance of Capital Stock (other than
Disqualified Stock) of the Company and warrants, rights or options on Capital
Stock (other than Disqualified Stock) of the Company (other than in respect of
any such issuance to a Subsidiary of the Company) and the principal amount of
Indebtedness of the Company or any of its Subsidiaries (other than a
Securitization Subsidiary) that has been converted into or exchanged for Capital
Stock of the Company which Indebtedness was Incurred after the Issue Date; plus
(c) in the case of the disposition or repayment of any Investment constituting a
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Restricted Payment made after the Issue Date, an amount equal to the lesser of
the return of capital with respect to such Investment and the cost of such
Investment, in either case, less the cost of the disposition of such Investment;
provided, however, that at the time any such Investment is made the Company
delivers to the Trustee a resolution of its Board of Directors to the effect
that, for purposes of this Section 4.06, such Investment constitutes a
Restricted Payment made after the Issue Date; plus (d) $4 million.
The foregoing provision will not be violated by (i) any
dividend on any class of Capital Stock of the Company or any Subsidiary of the
Company paid within 60 days after the declaration thereof if, on the date when
the dividend was declared, the Company or such Subsidiary, as the case may be,
could have paid such dividend in accordance with the provisions of this
Indenture, (ii) the renewal, extension, refunding or refinancing of any
Indebtedness otherwise permitted pursuant to clause (v) of Section 4.04, (iii)
the exchange or conversion of any Indebtedness of the Company or any Subsidiary
of the Company (other than a Securitization Subsidiary) for or into Capital
Stock of the Company (other than Disqualified Stock of the Company), (iv) any
payments, loans or other advances made pursuant to any employee benefit plans
(including plans for the benefit of directors) or employment agreements or other
compensation arrangements, in each case as approved by the Board of Directors of
the Company in its good faith judgment, (v) the redemption of the Company's
rights issued pursuant to the Amended and Restated Rights Agreement dated as of
May 10, 1994, between the Company and Wachovia Bank of North Carolina, N.A., as
Rights Agent, in an amount per right issued thereunder not to exceed that in
effect on the Issue Date, (vi) so long as no Default or Event of Default has
occurred and is continuing, any Investment made with the proceeds of a
substantially concurrent sale of Capital Stock of the Company (other than
Disqualified Stock); provided, however, that the proceeds of such sale of
Capital Stock shall not be (and have not been) included in subclause (b) of
clause (3) of the preceding paragraph, (vii) so long as no Default or Event of
Default has occurred and is continuing, additional Investments constituting
Restricted Payments in Persons or entities in the same line of business as the
Company as of the Issue Date in an aggregate outstanding amount (valued at the
cost thereof) not to exceed at any time $4 million, (viii) the redemption,
repurchase, retirement or other acquisition of any Capital Stock of the Company
in exchange for or out of the net cash proceeds of the substantially concurrent
sale (other than to a Subsidiary of the Company) of Capital Stock of the Company
(other than Disqualified Stock); provided, however, that the proceeds of such
sale of Capital Stock shall not be (and have not been) included in subclause (b)
of
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clause (3) of the preceding paragraph or (ix) so long as no Default or Event of
Default has occurred and is continuing, the payment of cash dividends on (A) the
Company's 4 1/2% Series B Cumulative Preferred Stock outstanding on the Issue
Date in accordance with the terms of the Articles of Incorporation of the
Company as in effect on the Issue Date and (B) the Company's Common Stock not to
exceed $1.5 million in any fiscal quarter of the Company plus 4.5 cents per
quarter per share of Common Stock of the Company issued on conversion of the
outstanding shares of the Company's 4 1/2% Series B Cumulative Preferred Stock
(which amount per share shall be adjusted periodically (including as adjusted)
upon any change after the Issue Date in the number of shares of Common Stock
issuable upon conversion of the 4 1/2% Series B Cumulative Preferred Stock by
multiplying the amount thereof by a fraction, the numerator of which shall
be the number of shares of Common Stock issuable upon conversion of one
share of the 4 1/2% Series B Cumulative Preferred Stock as of the Issue Date
and the denominator of which shall be the number of shares of Common Stock
issuable upon conversion of one share of the 4 1/2% Series B Cumulative
Preferred Stock as of such date of adjustment). Each Restricted Payment
described in clauses (i), (iii), (iv), (v), (vii) and (ix) of the previous
sentence shall be taken into account for purposes of computing the aggregate
amount of all Restricted Payments pursuant to clause (3) of the preceding
paragraph.
SECTION 4.07. Corporate Existence.
Subject to Article Five, the Company shall do or shall cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence and the corporate, partnership or other existence of
each of its Subsidiaries (other than a Securitization Subsidiary) in accordance
with the respective organizational documents of each such Subsidiary and the
rights (charter and statutory) and material franchises of the Company and its
Subsidiaries (other than a Securitization Subsidiary); provided, however, that
the Company shall not be required to preserve any such right or franchise, or
the corporate existence of any Subsidiary, if the Board of Directors of the
Company shall determine that the preservation thereof is no longer desirable in
the conduct of the business of the Company and its Subsidiaries, taken as a
whole, and that the loss thereof is not, and will not be, adverse in any
material respect to the Holders; provided, further, however, that a
determination of the Board of Directors of the Company shall not be required in
the event of a merger of one or more wholly-owned Subsidiaries of the Company
with or into another wholly-owned Subsidiary of the Company or another Person,
if the surviving Person is a wholly-owned Subsidiary of the Company (other than
a Securitization Subsidiary) organized under the laws
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of the United States or a State thereof or of the District of
Columbia.
SECTION 4.08. Payment of Taxes and Other Claims.
The Company shall pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all material taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary of the Company or upon the income, profits or property of the Company
or any Subsidiary of the Company and (2) all lawful claims for labor, materials
and supplies which, in each case, if unpaid, might by law become a material
liability, or Lien upon the property, of the Company or any Subsidiary of the
Company; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge or
claim whose amount, applicability or validity is being contested in good faith
by appropriate proceedings and for which appropriate provision has been made.
SECTION 4.09. Notice of Defaults.
(1) In the event that any Indebtedness of the Company or any
of its Subsidiaries is declared due and payable before its maturity because of
the occurrence of any default (or any event which, with notice or lapse of time,
or both, would constitute such a default) under such Indebtedness, the Company
shall promptly give written notice to the Trustee of such declaration, the
status of such default or event and what action the Company is taking or
proposes to take with respect thereto.
(2) Upon becoming aware of any Default or Event of Default,
the Company shall promptly deliver an Officers' Certificate to the Trustee
specifying the Default or Event of Default.
SECTION 4.10. Maintenance of Properties.
The Company shall cause all material properties owned by or
leased to it or any of its Subsidiaries and used or useful in the conduct of its
business or the business of any of its Subsidiaries to be maintained and kept in
normal condition, repair and working order and supplied with all necessary
equipment and shall cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that
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nothing in this Section shall prevent the Company or any of its Subsidiaries
from discontinuing the use, operation or maintenance of any of such properties,
or disposing of any of them, if such discontinuance or disposal is, in the
judgment of the Board of Directors or of the board of directors of the
Subsidiary concerned, or of an officer (or other agent employed by the Company
or of any of its Subsidiaries) of the Company or such Subsidiary having
managerial responsibility for any such property, desirable in the conduct of the
business of the Company or any of its Subsidiaries, and if such discontinuance
or disposal is not adverse in any material respect to the Holders.
SECTION 4.11. Compliance Certificate.
The Company shall deliver to the Trustee within 55 days after
the end of each of the first three fiscal quarters of the Company and within 100
days after the close of each fiscal year a certificate signed by the principal
executive officer, principal financial officer or principal accounting officer
stating that a review of the activities of the Company has been made under the
supervision of the signing officers with a view to determining whether a Default
or Event of Default has occurred and whether or not the signers know of any
Default or Event of Default by the Company that occurred during such fiscal
quarter or fiscal year. If they do know of such a Default or Event of Default,
the certificate shall describe all such Defaults or Events of Default, their
status and the action the Company is taking or proposes to take with respect
thereto. The first certificate to be delivered by the Company pursuant to this
Section 4.11 shall be for the fiscal quarter ending September 30, 1996.
SECTION 4.12. Provision of Financial Information.
Whether or not the Company is subject to Section 13(a) or
15(d) of the Exchange Act, or any successor provision thereto, the Company will
file with the SEC the annual reports, quarterly reports and other documents
which the Company would have been required to file with the SEC pursuant to such
Section 13(a) or 15(d) or any successor provision thereto if the Company were so
required, such documents to be filed with the SEC on or prior to the respective
dates (the "Required Filing Dates") by which the Company would have been
required so to file such documents if the Company were so required. The Company
will also in any event (a) within 15 days of each Required Filing Date (i)
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, without cost to such Holders, and (ii) file with the Trustee,
copies of the annual reports, quarterly reports and other documents which the
Company is required to file with the SEC
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pursuant to the preceding sentence, and (b) if, notwithstanding the preceding
sentence, the filing of such documents by the Company with the SEC is not
permitted under the Exchange Act, promptly upon written request supply copies of
such documents to any prospective Holder. The Company will also comply with ss.
314(a) of the TIA.
SECTION 4.13. Waiver of Stay, Extension or Usury Laws.
The Company and each Guarantor covenants (to the extent that
it may lawfully do so) that it shall not at any time insist upon, plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury law or other law, which would prohibit or forgive the
Company or such Guarantor from paying all or any portion of the principal of
and/or interest on the Securities as contemplated herein, wherever enacted, now
or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
the Company and each Guarantor hereby expressly waives all benefit or advantage
of any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein granted to the Trustee, but shall suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 4.14. Change of Control.
(a) The Company shall, within 30 days following the date of
the consummation of a transaction resulting in a Change of Control, mail an
Offer with respect to an Offer to Purchase all outstanding Securities at a
purchase price in cash equal to 101% of their aggregate principal amount plus
accrued interest to the Purchase Date. Each Holder shall be entitled to tender
all or any portion of the Securities owned by such Holder pursuant to the Offer
to Purchase, subject to the requirement that any portion of a Security tendered
must be tendered in an integral multiple of $1,000 principal amount.
(b) On or prior to the Purchase Date specified in the Offer to
Purchase, the Company shall (i) accept for payment all Securities or portions
thereof validly tendered pursuant to the Offer, (ii) deposit with the Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 2.04) money sufficient to pay the Purchase Price
of all Securities or portions thereof so accepted and (iii) deliver or cause to
be delivered to the Trustee for cancellation all Securities so accepted together
with an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company. The Paying Agent (or the Company, if so
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acting) shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Purchase Price for such Securities, and the
Trustee shall promptly authenticate and mail or deliver to each Holder a new
Security or Securities equal in principal amount to any unpurchased portion of
the Security surrendered as requested by the Holder. Any Security not accept for
payment shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Offer on or as
soon as practicable after the Purchase Date.
(c) A "Change of Control" will be deemed to have occurred in
the event that (whether or not otherwise permitted by this Indenture) after the
Issue Date (a) any Person or any Persons acting together that would constitute a
group (for purposes of Section 13(d) of the Exchange Act, or any successor
provision thereto) (a "Group"), together with any Affiliates or Related Persons
thereof, shall "beneficially own" (as defined in Rule 13d-3 under the Exchange
Act, or any successor provision thereto) at least 35% of the voting power of the
outstanding Voting Stock of the Company; (b) any sale, lease or other transfer
(in one transaction or a series of related transactions) is made by the Company
or any of its Subsidiaries of all or substantially all of the consolidated
assets of the Company to any Person (other than a Wholly Owned Subsidiary of the
Company which is a Guarantor (other than a Securitization Subsidiary)); (c)
Continuing Directors cease to constitute at least a majority of the Board of
Directors of the Company; or (d) the stockholders of the Company approve any
plan or proposal for the liquidation or dissolution of the Company.
In the event that the Company makes an Offer to Purchase the
Securities, the Company shall comply with any applicable securities laws and
regulations, including any applicable requirements of Section 14(e) of, and Rule
14e-1 under, the Exchange Act and any violation of the provisions of this
Indenture relating to such Offer to Purchase occurring as a result of such
compliance shall not be deemed a Default or an Event of Default.
SECTION 4.15. Limitation on Senior Subordinated Indebtedness.
The Company shall not (i) directly or indirectly Incur any
Indebtedness that by its terms would expressly rank senior in right of payment
to the Securities and expressly rank subordinate in right of payment to any
Senior Indebtedness and (ii) permit any Guarantor to and no Guarantor will
directly or indirectly Incur any Indebtedness that by its terms would expressly
rank senior in right of payment to the Guarantee of such Guarantor and expressly
rank subordinate in right of payment to any Guarantor Senior Indebtedness.
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SECTION 4.16. Limitations Concerning Distributions
and Transfers by Subsidiaries.
The Company will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist any consensual encumbrance or restriction on the ability of any Subsidiary
of the Company to (i) pay, directly or indirectly, dividends or make any other
distributions in respect of its Capital Stock or pay any Indebtedness or other
obligation owed to the Company or any Subsidiary of the Company, (ii) make loans
or advances to the Company or any Subsidiary of the Company or guarantee any
Indebtedness of the Company or any of its Subsidiaries or (iii) transfer any of
its property or assets to the Company or any Subsidiary of the Company, except
for such encumbrances or restrictions existing under or by reason of (a) any
agreement in effect on the Issue Date (including pursuant to the Senior Credit
Facility and agreements entered into in connection therewith) as any such
agreement is in effect on such date, (b) any agreement relating to any
Indebtedness Incurred by such Subsidiary prior to the date on which such
Subsidiary was acquired by the Company and outstanding on such date and not
Incurred in anticipation or contemplation of becoming a Subsidiary and provided
such encumbrance or restriction shall not apply to any assets of the Company or
its Subsidiaries other than such Subsidiary, (c) customary provisions contained
in an agreement which has been entered into for the sale or disposition of all
or substantially all of the Capital Stock or assets of such Subsidiary;
provided, however, that such encumbrance or restriction is applicable only to
such Subsidiary or assets, (d) an agreement effecting a renewal, exchange,
refunding, amendment or extension of Indebtedness Incurred pursuant to an
agreement referred to in clause (a) or (b) above; provided, however, that the
provisions contained in such renewal, exchange, refunding, amendment or
extension agreement relating to such encumbrance or restriction are no more
restrictive in any material respect than the provisions contained in the
agreement that is the subject thereof in the reasonable judgment of the Board of
Directors of the Company as evidenced by a resolution of such Board of Directors
filed with the Trustee, (e) this Indenture, (f) applicable law, (g) customary
provisions restricting subletting or assignment of any lease governing any
leasehold interest of any Subsidiary of the Company, (h) Indebtedness or any
other contractual requirements (including pursuant to any corporate governance
documents in the nature of a charter or by-laws) of a Securitization Subsidiary
arising in connection with a Qualified Securitization Transaction; provided,
however, that any such
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encumbrance or restriction applies only to such Securitization Subsidiary, (i)
purchase money obligations for property acquired in the ordinary course of
business that impose restrictions of the type referred to in clause (iii) of
this Section 4.16 or (j) restrictions of the type referred to in clause (iii) of
this Section 4.16 contained in security agreements securing Indebtedness of a
Subsidiary of the Company to the extent that such Liens were otherwise incurred
in accordance with Section 4.18 and restrict the transfer of property subject to
such agreements.
SECTION 4.17. Limitation on Issuance and Sale
of Capital Stock of Subsidiaries.
The Company (a) will not, and will not permit any Subsidiary
of the Company to, transfer, convey, sell or otherwise dispose of any shares of
Capital Stock of such Subsidiary or any other Subsidiary (other than to the
Company or a Wholly Owned Subsidiary of the Company (other than a Securitization
Subsidiary)), except that the Company and any Subsidiary may, in any single
transaction, sell all, but not less than all, of the issued and outstanding
Capital Stock of any Subsidiary to any Person, subject to complying with the
provisions of Section 4.05 and (b) will not permit any Subsidiary of the Company
to issue shares of its Capital Stock (other than directors' qualifying shares),
or securities convertible into, or warrants, rights or options to subscribe for
or purchase shares of, its Capital Stock to any Person other than to the Company
or a Wholly Owned Subsidiary of the Company (other than a Securitization
Subsidiary).
SECTION 4.18. Limitation on Liens.
The Company will not, and will not permit any of its
Subsidiaries to, Incur any Lien on or with respect to any property or assets of
the Company or any Subsidiary of the Company owned on the Issue Date or
thereafter acquired or on the income or profits thereof to secure Indebtedness
without making, or causing such Subsidiary to make, effective provision for
securing the Securities (and, if the Company shall so determine, any other
Indebtedness of the Company or such Subsidiary, including Indebtedness which is
subordinate in right of payment to the Securities; provided, however, that Liens
securing the Securities and any Indebtedness pari passu with the Securities are
senior to such Liens securing such subordinated Indebtedness) equally and
ratably with such Indebtedness or, in the event such Indebtedness is subordinate
in right of payment to the Securities or the Guarantees, prior to such
Indebtedness, as to such property or assets for so long as such Indebtedness
shall be so secured. The foregoing restrictions shall not apply to (i) Liens
securing Senior Indebtedness of the Company
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or Guarantor Senior Indebtedness; (ii) Liens securing only the Securities; (iii)
Liens in favor of the Company; (iv) Liens to secure Indebtedness Incurred for
the purpose of financing all or any part of the purchase price or the cost of
construction or improvement of the property subject to such Liens; provided,
however, that (a) the aggregate principal amount of any Indebtedness secured by
such a Lien does not exceed 100% of such purchase price or cost, (b) such Lien
does not extend to or cover any other property other than such item of property
and any improvements on such item, (c) the Indebtedness secured by such Lien is
Incurred by the Company or its Subsidiary within 180 days of the acquisition,
construction or improvement of such property and (d) the Incurrence of such
Indebtedness is permitted by Section 4.04; (v) Liens on property existing
immediately prior to the time of acquisition thereof (and not created in
anticipation or contemplation of the financing of such acquisition); (vi) Liens
on property of a Person existing at the time such Person is merged with or into
or consolidated with the Company or any Subsidiary of the Company (and not
created in anticipation or contemplation thereof); (vii) Liens on property of
the Company or any Subsidiary of the Company in favor of the United States of
America, any state thereof, or any instrumentality of either to secure payments
pursuant to any contract or statute; (viii) Liens granted in connection with any
Qualified Securitization Transaction; (ix) Liens existing on the Issue Date
securing Indebtedness existing on the Issue Date; (x) Liens to secure
Indebtedness Incurred to extend, renew, refinance or refund (or successive
extensions, renewals, refinancings or refundings), in whole or in part, any
Indebtedness secured by Liens referred to in the foregoing clauses (i)-(ix) so
long as such Liens do not extend to any other property and the principal amount
of Indebtedness so secured is not increased except for the amount of any premium
required to be paid in connection with such renewal, refinancing or refunding
pursuant to the terms of the Indebtedness renewed, refinanced or refunded or the
amount of any premium reasonably determined by the Company as necessary to
accomplish such renewal, refinancing or refunding by means of a tender offer,
exchange offer or privately negotiated repurchase, plus the expenses of the
Company or such Subsidiary incurred in connection with such renewal, refinancing
or refunding; and (xi) Liens in favor of the Trustee as provided for in Section
7.07.
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ARTICLE FIVE
MERGERS; SUCCESSOR CORPORATION
SECTION 5.01. Restriction on Mergers, Consolidations
and Certain Sales of Assets.
Neither the Company nor any Subsidiary will consolidate or
merge with or into any Person, and the Company will not, and will not permit any
of its Subsidiaries to, sell, assign, lease, convey or otherwise dispose of all
or substantially all of the Company's consolidated assets (as an entirety or
substantially an entirety in one transaction or a series of related
transactions, including by way of liquidation or dissolution) to, any Person
unless, in each such case: (i) the entity formed by or surviving any such
consolidation or merger (if other than the Company or such Subsidiary, as the
case may be), or to which such sale, assignment, lease, conveyance or other
disposition shall have been made (the "Surviving Entity"), is a corporation
organized and existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the Surviving Entity assumes by supplemental
indenture all of the obligations of the Company or such Subsidiary, as the case
may be, on the Securities or such Subsidiary's Guarantee, as the case may be,
and under this Indenture; (iii) immediately after giving effect to such
transaction and the use of any net proceeds therefrom on a pro forma basis, the
Consolidated Net Worth of the Company or the Surviving Entity (in the case of
any transaction involving the Company), as the case may be, would be at least
equal to the Consolidated Net Worth of the Company immediately prior to such
transaction; (iv) immediately after giving effect to such transaction and the
use of any net proceeds therefrom on a pro forma basis, the Company or the
Surviving Entity (in the case of any transaction involving the Company), as the
case may be, could Incur at least $1.00 of Indebtedness pursuant to clause (i)
of Section 4.04; (v) immediately before and after giving effect to such
transaction and treating any Indebtedness which becomes an obligation of the
Company or any of its Subsidiaries as a result of such transaction as having
been incurred by the Company or such Subsidiary, as the case may be, at the time
of the transaction, no Event of Default or event that with the passing of time
or the giving of notice, or both, would constitute an Event of Default shall
have occurred and be continuing; and (vi) if, as a result of any such
transaction, property or assets of the Company or a Subsidiary would become
subject to a Lien not excepted from the provisions of Section 4.18, the Company,
any such Subsidiary or the Surviving Entity, as the case may be, shall have
secured the Securities as required by said Section 4.18. The provisions of this
Section 5.01 shall not apply to any merger of a Subsidiary of
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the Company with or into the Company or a Wholly Owned Subsidiary of the Company
(other than a Securitization Subsidiary) or any transaction pursuant to which a
Guarantor's Guarantee is to be released in accordance with the terms of the
Guarantee and this Indenture in connection with any transaction complying with
the provisions of Section 4.05.
SECTION 5.02. Successor Corporation Substituted.
Upon any consolidation of the Company or any Subsidiary of the
Company with, or merger of the Company or any such Subsidiary into, any other
Person or any sale, assignment, lease, conveyance or other disposition of all or
substantially all of the Company's consolidated assets (as an entirety or
substantially as an entirety in one transaction or a series of related
transactions, including by way of liquidation or dissolution) in accordance with
Section 5.01, upon the execution of a supplemental indenture by the Surviving
Person in form and substance satisfactory to the Trustee (as evidenced by the
Trustee's execution thereof), the Surviving Person shall succeed to, and be
substituted for, and may exercise every right and power of and shall assume all
obligations of, the Company or such Subsidiary, as the case may be, under this
Indenture and the Securities or the Guarantees, as the case may be, with the
same effect as if such Surviving Person had been named as the Company or such
Subsidiary, as the case may be, herein, and thereafter, except in the case of a
lease, the predecessor Person shall be relieved of all obligations and covenants
under this Indenture and the Securities or the Guarantees, as the case may be.
ARTICLE SIX
DEFAULT AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs if:
(1) the Company fails to pay interest on any Securities when
the same becomes due and payable and the Default continues for a period
of 30 days, whether or not such payment is prohibited by Article Eight
hereof;
(2) the Company fails to pay the principal of any Securities
when the same becomes due and payable at maturity, upon redemption,
upon repurchase pursuant to an Offer to Purchase or otherwise, whether
or not such payment is prohibited by Article Eight hereof;
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(3) the Company fails to perform or comply with any of
the provisions of Section 5.01;
(4) the Company fails to observe or perform any other
covenant, warranty or agreement contained in the Securities or this
Indenture, and the Default continues for the period and after the
notice specified in the last paragraph of this Section 6.01;
(5) a default or defaults under the terms of one or more
instruments evidencing or securing Indebtedness of the Company or any
Subsidiary of the Company having an outstanding principal amount of $10
million or more individually or in the aggregate that has resulted in
the acceleration of the payment of such Indebtedness or the Company or
any of its Subsidiaries fails to pay principal when due at the stated
maturity of any such Indebtedness;
(6) there shall have been any final judgment or judgments (not
subject to appeal) against the Company or any Subsidiary of the Company
in an amount of $5 million or more (net of any amounts covered by
reputable and creditworthy insurance companies) which remains
undischarged or unstayed for a period of 60 days after the date on
which the right to appeal has expired;
(7) the Company or any Material Subsidiary pursuant to
or within the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding,
(B) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(C) consents to the appointment of a Custodian of
it or for all or substantially all of its property, or
(D) makes a general assignment for the benefit of
its creditors;
(8) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(A) is for relief against the Company or any
Material Subsidiary in an involuntary case or proceeding,
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(B) appoints a Custodian of the Company or any
Material Subsidiary or for all or substantially all of
its property, or
(C) orders the liquidation of the Company or any
Material Subsidiary,
and in each case the order or decree remains unstayed and in effect for
60 days; provided, however, that if the entry of such order or decree
is appealed and dismissed on appeal then the Event of Default hereunder
by reason of the entry of such order or decree shall be deemed to have
been cured; or
(9) the Guarantee of any Guarantor which is a Material
Subsidiary ceases to be in full force and effect (other than in
accordance with the terms of such Guarantee and this Indenture) or is
declared null and void and unenforceable or found to be invalid or any
Guarantor which is a Material Subsidiary denies its liability under its
Guarantee (other than by reason of a release of such Guarantor from its
Guarantee in accordance with the terms of such Guarantee and this
Indenture).
The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or
similar official under any Bankruptcy Law.
A Default under clause (4) is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in principal
amount of the outstanding Securities notify the Company and the Trustee, of the
Default in writing and the Company does not cure the Default within 30 days
after receipt of the notice. The notice must specify the Default, demand that it
be remedied and state that the notice is a "Notice of Default." Such notice
shall be given by the Trustee if so requested by the Holders of at least 25% in
principal amount of the Securities then outstanding. When a Default is cured, it
ceases.
SECTION 6.02. Acceleration.
If an Event of Default with respect to the Securities (other
than an Event of Default specified in clause (7) or (8) of Section 6.01 with
respect to the Company) occurs and is continuing, the Trustee or the Holders of
at least 25% in aggregate principal amount of the outstanding Securities by
notice in writing to the Company (and to the Trustee if given by the Holders)
may declare
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the unpaid principal of and accrued interest to the date of acceleration on all
the outstanding Securities to be due and payable immediately and, upon any such
declaration, such principal amount and accrued interest shall become immediately
due and payable.
If an Event of Default specified in clause (7) or (8) of
Section 6.01 with respect to the Company occurs all unpaid principal of and
accrued interest on the outstanding Securities shall ipso facto become
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder thereof.
After a declaration of acceleration, but before a judgment or
decree of the money due in respect of the Notes has been obtained, the Holders
of not less than a majority in aggregate principal amount of the Securities then
outstanding by written notice to the Trustee may rescind an acceleration and its
consequences if all existing Events of Default (other than the nonpayment of
principal of and interest on the Securities which has become due solely by
virtue of such acceleration) have been cured or waived and if the rescission
would not conflict with any judgment or decree. No such rescission shall affect
any subsequent Default or impair any right consequent thereto.
SECTION 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy by proceeding at law or in equity to collect the
payment of principal of or interest on the Securities or to enforce the
performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the proceeding.
A delay or omission by the Trustee or any Securityholder in exercising any right
or remedy maturing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative to the
extent permitted by law.
SECTION 6.04. Waiver of Past Default.
Subject to Sections 2.09, 6.07 and 10.02, prior to the
declaration of acceleration of the Securities, the Holders of not less than a
majority in aggregate principal amount of the outstanding Securities by written
notice to the Trustee may waive
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an existing Default or Event of Default and its consequences, except a Default
in the payment of principal of or interest on any Security as specified in
clauses (1) and (2) of Section 6.01 or a Default in respect of any term or
provision of this Indenture that may not be amended or modified without the
consent of each Holder affected as provided in Section 10.02. The Company shall
deliver to the Trustee an Officers' Certificate stating that the requisite
percentage of Holders have consented to such waiver and attaching copies of such
consents. In case of any such waiver, the Company, the Trustee and the Holders
shall be restored to their former positions and rights hereunder and under the
Securities, respectively. This paragraph of this Section 6.04 shall be in lieu
of ss. 316(a)(1)(B) of the TIA and such ss. 316(a)(1)(B) of the TIA is hereby
expressly excluded from this Indenture and the Securities, as permitted by the
TIA.
Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured and not to have occurred
for every purpose of this Indenture and the Securities, but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereon.
SECTION 6.05. Control by Majority.
Subject to Section 2.09, the Holders of a majority in
principal amount of the outstanding Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on it. However, the Trustee may refuse
to follow any direction that conflicts with law or this Indenture, that the
Trustee determines may be unduly prejudicial to the rights of another
Securityholder, or that may involve the Trustee in personal liability; provided,
however, that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. In the event the Trustee takes
any action or follows any direction pursuant to this Indenture, the Trustee
shall be entitled to indemnification satisfactory to it in its sole discretion
against any loss or expense caused by taking such action or following such
direction. This Section 6.05 shall be in lieu of ss. 316(a)(1)(A) of the TIA,
and such ss. 316(a)(1)(A) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
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SECTION 6.06. Limitation on Suits.
A Securityholder may not pursue any remedy with respect to
this Indenture or the Securities unless:
(1) the Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) the Holders of at least 25% in aggregate principal
amount of the outstanding Securities make a written request to
the Trustee to pursue a remedy;
(3) such Holder or Holders offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(4) the Trustee does not comply with the request within
60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and
(5) during such 60-day period the Holders of a majority in
principal amount of the outstanding Securities (excluding Affiliates of
the Company) do not give the Trustee a direction which, in the opinion
of the Trustee, is inconsistent with the request.
A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over such
other Securityholder.
SECTION 6.07. Rights of Holders To Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder to receive payment of principal of and interest on the
Security, on or after the respective due dates expressed in the Security, or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee.
If an Event of Default in payment of interest or principal
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company or any other obligor on the Securities for the whole amount of principal
and accrued interest remaining unpaid, together with interest overdue on
principal and to the extent that payment of such interest is
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lawful, interest on overdue installments of interest, in each case at the rate
per annum borne by the Securities and such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Securityholders allowed in any judicial proceedings relative to the Company (or
any other obligor upon the Securities), its creditors or its property and shall
be entitled and empowered to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute the same, and any
Custodian in any such judicial proceedings is hereby authorized by each
Securityholder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, and any other amounts due the Trustee under Section 7.07. Nothing
herein contained shall be deemed to authorize the Trustee to authorize or
consent to or accept or adopt on behalf of any Securityholder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Securityholder in any such proceeding.
SECTION 6.10. Priorities.
If the Trustee collects any money or property pursuant to this
Article Six, it shall pay out the money or property in the following order:
First: to the Trustee for amounts due under
Section 7.07;
Second: to Holders for amounts due and unpaid on the
Securities for principal and interest, ratably, without
preference or priority of any kind, according to the amounts
due and payable on the Securities for principal and interest,
respectively; and
Third: to the Company.
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The Trustee, upon prior written notice to the Company, may fix
a record date and payment date for any payment to Securityholders pursuant to
this Section 6.10.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 shall not apply to a suit by the Trustee, a suit by
a Holder or group of Holders of more than 10% in aggregate principal amount of
the outstanding Securities, or to any suit instituted by any Holder for the
enforcement or the payment of the principal or interest on any Securities on or
after the respective due dates expressed in the Security.
ARTICLE SEVEN
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If a Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of a Default:
(1) The Trustee shall not be liable except for the
performance of such duties as are specifically set forth
herein; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions conforming to the requirements of this Indenture; however, the
Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
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(c) The Trustee shall not be relieved from liability for
its own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(1) This paragraph does not limit the effect of
paragraph (b) of this Section 7.01;
(2) The Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or to take or omit to take any
action under this Indenture or take any action at the request or direction of
Holders if it shall have reasonable grounds for believing that repayment of such
funds is not assured to it or it does not receive an indemnity satisfactory to
it in its sole discretion against such risk, liability, loss, fee or expense
which might be incurred by it in compliance with such request or direction.
(e) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and
(d) of this Section 7.01.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 7.02. Rights of Trustee.
Subject to Section 7.01:
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it
may require an Officers' Certificate and an Opinion of
Counsel, which shall conform to the provisions of Section
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13.05. The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on such certificate or opinion.
(c) The Trustee may act through attorneys and agents of its
selection and shall not be responsible for the misconduct or negligence
of any agent or attorney (other than an agent who is an employee of the
Trustee) appointed with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.
(e) The Trustee may consult with counsel and the advice or
opinion of such counsel as to matters of law shall be full and complete
authorization and protection from liability in respect of any action
taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel.
(f) Any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution.
(g) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Securityholders pursuant to this Indenture,
unless such Securithyholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such
request or direction.
(h) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or
attorney.
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Securities and may otherwise deal with the Company or
its Affiliates with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use of the proceeds
from the Securities, and it shall not be responsible for any statement of the
Company in this Indenture or any document issued in connection with the sale of
Securities or any statement in the Securities other than the Trustee's
certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default or an Event of Default occurs and is continuing
and the Trustee knows of such Defaults or Events of Default, the Trustee shall
mail to each Securityholder notice of the Default or Event of Default within 30
days after the occurrence thereof. Except in the case of a Default or an Event
of Default in payment of principal of or interest on any Security or a Default
or Event of Default in complying with Section 5.01, the Trustee may withhold the
notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interest of Securityholders.
This Section 7.05 shall be in lieu of the proviso to ss. 315(b) of the TIA and
such proviso to ss. 315(b) of the TIA is hereby expressly excluded from this
Indenture and the Securities, as permitted by the TIA.
SECTION 7.06. Reports by Trustee to Holders.
If required by TIA ss. 313(a), within 60 days after each June
15 beginning with the June 15 following the date of this Indenture, the Trustee
shall mail to each Securityholder a report dated as of such June 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b),
(c) and (d).
A copy of each such report at the time of its mailing to
Securityholders shall be filed with the SEC and each stock exchange, if any, on
which the Securities are listed.
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The Company shall promptly notify the Trustee in writing if
the Securities become listed on any stock exchange or of any delisting thereof.
SECTION 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time to time agree in
writing for its services. The Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable disbursements, expenses
and advances (including fees, disbursements and expenses of its agents and
counsel) incurred or made by it in addition to the compensation for its services
except any such disbursements, expenses and advances as may be attributable to
the Trustee's negligence or bad faith. Such expenses shall include the
reasonable compensation, disbursements and expenses of the Trustee's agents,
accountants, experts and counsel and any taxes or other expenses incurred by a
trust created pursuant to Section 9.01 hereof.
The Company shall indemnify the Trustee for, and hold it
harmless against any and all loss, damage, claims, liability or expense,
including taxes (other than franchise taxes imposed on the Trustee and taxes
based upon, measured by or determined by the income of the Trustee), arising out
of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own negligence or bad faith. The Trustee
shall notify the Company promptly of any claim asserted against the Trustee for
which it may seek indemnity. However, the failure by the Trustee to so notify
the Company shall not relieve the Company of its obligations hereunder. The
Company shall defend the claim and the Trustee shall cooperate in the defense
(and may employ its own counsel) at the Company's expense; provided, however,
that the Company's reimbursement obligation with respect to counsel employed by
the Trustee will be limited to the reasonable fees of such counsel. The Company
need not pay for any settlement made without its written consent, which consent
shall not be unreasonably withheld. The Company need not reimburse any expense
or indemnify against any loss or liability incurred by the Trustee as a result
of the violation of this Indenture by the Trustee.
To secure the Company's payment obligations in this Section
7.07, the Trustee shall have a Lien prior to the Securities
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against all money or property held or collected by the Trustee, in its capacity
as Trustee, except money or property held in trust to pay principal of or
interest on particular Securities.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(7) or (8) occurs, the expenses
(including the reasonable fees and expenses of its agents and counsel) and the
compensation for the services shall be preferred over the status of the Holders
in a proceeding under any Bankruptcy Law and are intended to constitute expenses
of administration under any Bankruptcy Law. The Company's obligations under this
Section 7.07 and any claim arising hereunder shall survive the resignation or
removal of any Trustee, the discharge of the Company's obligations pursuant to
Article Eight and any rejection or termination under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
The Trustee may resign at any time by so notifying the Company
in writing. The Holders of a majority in principal amount of the outstanding
Securities may remove the Trustee by so notifying the Trustee and the Company in
writing and may appoint a successor Trustee with the Company's consent. The
Company may remove the Trustee if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent
under any Bankruptcy Law;
(3) a custodian or other public officer takes charge of
the Trustee or its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason (the Trustee in such event being referred
to herein as the retiring Trustee), the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the Securities may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. As promptly as
practicable after that, the retiring Trustee shall transfer, after payment of
all sums then owing to the Trustee
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pursuant to Section 7.07, all property held by it as Trustee to the successor
Trustee, subject to the Lien provided in Section 7.07, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Securityholder.
If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company or the Holders of at least 10% in principal amount of the outstanding
Securities may petition any court of competent jurisdiction for the appointment
of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 shall continue for
the benefit of the retiring Trustee.
SECTION 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation or banking corporation, the resulting, surviving or transferee
corporation or banking corporation without any further act shall be the
successor Trustee.
SECTION 7.10. Eligibility; Disqualification.
This Indenture shall always have a Trustee which shall be
eligible to act as Trustee under TIA ss.ss. 310(a)(1) and 310(a)(2). The Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of TIA ss. 310(b),
the Trustee and the Company shall comply with the provisions of TIA ss. 310(b).
If at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect hereinbefore specified in this Article Seven.
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SECTION 7.11. Preferential Collection of Claims
Against Company.
The Trustee shall comply with TIA ss. 311(a), excluding any
creditor relationship listed in TIA ss. 311(b). A Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated therein.
ARTICLE EIGHT
SUBORDINATION OF SECURITIES
SECTION 8.01. Securities Subordinated to Senior Indebtedness.
The Company covenants and agrees, and the Trustee and each
Holder of the Securities by his acceptance thereof likewise covenant and agree,
that all Securities shall be issued subject to the provisions of this Article;
and each person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that all payments
of the principal of and interest on the Securities by the Company shall, to the
extent and in the manner set forth in this Article, be subordinated and junior
in right of payment to the prior payment in full of all amounts payable under
Senior Indebtedness.
SECTION 8.02. No Payment on Securities in
Certain Circumstances.
(a) No direct or indirect payment by or on behalf of the
Company of principal of or interest on the Securities, whether pursuant to the
terms of the Securities, upon acceleration or otherwise, shall be made if, at
the time of such payment, there exists a default in the payment of all or any
portion of the obligations on any Designated Senior Indebtedness, whether at
maturity, on account of mandatory redemption or prepayment, acceleration or
otherwise (and the Trustee has received written notice thereof), and such
default shall not have been cured or waived or the benefits of this sentence
waived by or on behalf of the holders of such Designated Senior Indebtedness. In
addition, during the continuance of any non-payment default or non-payment event
of default with respect to any Designated Senior Indebtedness pursuant to which
the maturity thereof may be accelerated, and upon receipt by the Trustee of
written notice (a "Payment Blockage Notice") from the holder or holders of such
Designated Senior Indebtedness or the trustee or agent acting on behalf of such
Designated Senior Indebtedness, then, unless and until such default or event of
default has been cured or waived or has ceased to exist or such Designated
Senior Indebtedness has been discharged or
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repaid in full, no direct or indirect payment shall be made by or on behalf of
the Company of principal of or interest on the Securities, except from those
funds held in trust for the benefit of the Holders of any Securities to such
Holders, during a period (a "Payment Blockage Period") commencing on the date of
receipt of such notice by the Trustee and ending 179 days thereafter.
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Payment Blockage Period extend beyond 179 days
from the date the Payment Blockage Notice in respect thereof was given and (y)
in no event shall a Payment Blockage Notice be effective for purposes of this
Section 8.02(a) unless and until 360 days shall have elapsed since the
effectiveness of the immediately prior Payment Blockage Notice. Not more than
one Payment Blockage Period may be commenced with respect to the Securities
during any period of 360 consecutive days. No default or event of default that
existed or was continuing on the date of commencement of any Payment Blockage
Period with respect to the Designated Senior Indebtedness initiating such
Payment Blockage Period may be, or be made, the basis for the commencement of
any other Payment Blockage Period by the holder or holders of such Designated
Senior Indebtedness or the trustee or agent acting on behalf of such Designated
Senior Indebtedness, whether or not within a period of 360 consecutive days,
unless such default or event of default has been cured or waived for a period of
not less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 8.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Designated
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Designated Senior
Indebtedness may have been issued, as their respective interests may appear, but
only to the extent that, upon notice from the Trustee to the holders of
Designated Senior Indebtedness that such prohibited payment has been made, the
holders of the Designated Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing of the amounts then
due and owing on the Designated Senior Indebtedness, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Designated Senior Indebtedness.
SECTION 8.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or
securities of the Company of any kind or character, whether in
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cash, property or securities, upon any dissolution or winding-up or total or
partial liquidation or reorganization of the Company, whether voluntary or
involuntary or in bankruptcy, insolvency, receivership or other proceedings, all
amounts due or to become due with respect to Senior Indebtedness shall first be
paid in full before the Holders of the Securities or the Trustee on behalf of
such Holders shall be entitled to receive any payment by the Company of the
principal of or interest on the Securities, or any payment to acquire any of the
Securities for cash, property or securities, or any distribution with respect to
the Securities of any cash, property or securities. Before any payment may be
made by, or on behalf of, the Company of the principal of or interest on the
Securities upon any such dissolution or winding-up or liquidation or
reorganization, any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, to
which the Holders of the Securities or the Trustee on their behalf would be
entitled, but for the subordination provisions of this Indenture, shall be made
by the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, directly to the
holders of the Senior Indebtedness (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders) or their
representatives or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior
Indebtedness in full after giving effect to any concurrent payment, distribution
or provision therefor to or for the holders of such Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Holder of Securities at a
time when such payment or distribution is prohibited by Section 8.03(a) and
before all obligations in respect of Senior Indebtedness are paid in full, or
payment provided for, such payment or distribution shall be received and held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness (pro rata to such holders on the basis of the respective
amounts of Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, for application to the payment of Senior Indebtedness
remaining unpaid until all such Senior Indebtedness has been paid in full after
giving effect
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to any concurrent payment, distribution or provision therefor to or
for the holders of such Senior Indebtedness.
(c) For purposes of this Section, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of these
clauses (x) and (y) is not to cause the Securities to be treated in any case or
proceeding or similar event described in this Section as part of the same class
of claims as the Senior Indebtedness or any class of claims on a parity with or
senior to the Senior Indebtedness for any payment or distribution, (x) any
payment or distribution of securities of the Company or any other corporation
authorized by an order or decree giving effect, and stating in such order or
decree that effect is given, to the subordination of the Securities to the
Senior Indebtedness, and made by a court of competent jurisdiction in a
reorganization proceeding under any applicable bankruptcy, insolvency or other
similar law, or (y) securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment which are subordinated, to at
least the same extent as the Securities, to the payment of all Senior
Indebtedness then outstanding (the securities described in clauses (x) and (y)
being hereinafter referred to as "Subordinated Reorganization Securities");
provided, however, that (i) if a new corporation results from such
reorganization or readjustment, such corporation assumes the Senior Indebtedness
and (ii) the rights of the holders of the Senior Indebtedness are not, without
the consent of such holders, altered by such reorganization or readjustment.
The consolidation of the Company with, or the merger of the
Company with or into, another corporation or the liquidation or dissolution of
the Company following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
SECTION 8.04. Subrogation.
Upon the payment in full of all Senior Indebtedness, or
provision for payment, the Holders of the Securities shall be subrogated to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company made on such Senior
Indebtedness until the principal of and interest on the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to
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the holders of the Senior Indebtedness of any cash, property or securities to
which the Holders of the Securities or the Trustee on their behalf would be
entitled except for the provisions of this Article, and no payment over pursuant
to the provisions of this Article to the holders of Senior Indebtedness by
Holders of the Securities or the Trustee on their behalf shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness. It is understood that the provisions of this
Article are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of the
Senior Indebtedness, on the other hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Senior Indebtedness, then and in such
case, the Holders of the Securities shall be entitled to receive from the
holders of such Senior Indebtedness any payments or distributions received by
such holders of Senior Indebtedness in excess of the amount required to make
payment in full, or provision for payment, of such Senior Indebtedness.
SECTION 8.05. Obligations of Company Unconditional.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company and the Holders of the Securities, the obligation of the Company, which
is absolute and unconditional, to pay to the Holders of the Securities the
principal of and interest on the Securities as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Holders of the Securities and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Holder of any Security or the Trustee on their
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
of the holders of the Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article shall restrict the right of the Trustee or the Holders
of Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity
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pursuant to Section 6.01 or to pursue any rights or remedies hereunder;
provided, however, that all Senior Indebtedness then due and payable shall first
be paid in full before the Holders of the Securities or the Trustee are entitled
to receive any direct or indirect payment from the Company of principal of or
interest on the Securities.
SECTION 8.06. Notice to Trustee.
The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment to
or by the Trustee in respect of the Securities pursuant to the provisions of
this Article. The Trustee shall not be charged with knowledge of the existence
of any default or event of default with respect to any Senior Indebtedness or of
any other facts which would prohibit the making of any payment to or by the
Trustee unless and until the Trustee shall have received notice in writing at
its Corporate Trust Office to that effect signed by an Officer of the Company,
or by a holder of Senior Indebtedness or trustee or agent therefor; and prior to
the receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms of this Indenture
any moneys shall become payable for any purpose (including, without limitation,
the payment of the principal of or interest on any Security), then, regardless
of anything herein to the contrary, the Trustee shall have full power and
authority to receive any moneys from the Company and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such prior date. Nothing
contained in this Section 8.06 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by Section 8.03. The Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Indebtedness or a trustee
or representative on behalf of any such holder.
In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to
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participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
SECTION 8.07. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities
referred to in this Article, the Trustee and the Holders of the Securities shall
be entitled to rely upon any order or decree made by any court of competent
jurisdiction in which bankruptcy, dissolution, winding-up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Securities for the purpose of ascertaining the persons entitled to participate
in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article.
SECTION 8.08. Trustee's Relation to Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it in its individual or any other capacity to the
same extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee or any Paying Agent of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness (except
as provided in Section 8.03(b)).
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SECTION 8.09. Subordination Rights Not Impaired
by Acts or Omissions of the Company
or Holders of Senior Indebtedness.
No right of any present or future holders of any Senior
Indebtedness to enforce subordination as provided herein shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company with the terms of this Indenture,
regardless of any knowledge thereof which any such holder may have or otherwise
be charged with. The provisions of this Article are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness.
SECTION 8.10. Securityholders Authorize Trustee To
Effectuate Subordination of Securities.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
creditors or otherwise) tending towards liquidation of the business and assets
of the Company, the filing of a claim for the unpaid balance of its or his
Securities in the form required in those proceedings.
SECTION 8.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of or
interest on the Securities by reason of any provision of this Article shall not
be construed as preventing the occurrence of an Event of Default specified in
clause (1) or (2) of Section 6.01.
SECTION 8.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 8.13. No Waiver of Subordination Provisions.
Without in any way limiting the generality of Section 8.09,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the
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Trustee or the Holders of the Securities, without incurring responsibility to
the Holders of the Securities and without impairing or releasing the
subordination provided in this Article or the obligations hereunder of the
Holders of the Securities to the holders of Senior Indebtedness, do any one or
more of the following: (a) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, Senior Indebtedness or any
instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding or secured; (b) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Senior
Indebtedness and (d) exercise or refrain from exercising any rights against the
Company and any other Person.
SECTION 8.14. Subordination Provisions Not Applicable
to Money Held in Trust for Securityholders;
Payments May Be Paid Prior to Dissolution.
All money and United States Government Obligations deposited
in trust with the Trustee pursuant to and in accordance with Article Nine shall
be for the sole benefit of the Holders and shall not be subject to this Article
Eight.
Nothing contained in this Article or elsewhere in this
Indenture shall prevent (i) the Company, except under the conditions described
in Section 8.02, from making payments of principal of and interest on the
Securities, or from depositing with the Trustee any moneys for such payments or
from effecting a termination of the Company's and the Guarantors' obligations
under the Securities and the Indenture as provided in Article Nine, or (ii) the
application by the Trustee of any moneys deposited with it for the purpose of
making such payments of principal of and interest on the Securities, to the
holders entitled thereto unless at least two Business Days prior to the date
upon which such payment becomes due and payable, the Trustee shall have received
the written notice provided for in Section 8.02(b) or in Section 8.06. The
Company shall give prompt written notice to the Trustee of any dissolution,
winding-up, liquidation or reorganization of the Company.
SECTION 8.15. Acceleration of Securities.
If payment of the Securities is accelerated because of an
Event of Default, the Company shall promptly notify holders of the Senior
Indebtedness of the acceleration.
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ARTICLE NINE
DISCHARGE OF INDENTURE
SECTION 9.01. Termination of Company's Obligations.
Subject to the provisions of Article Eight, the Company may
terminate its and the Guarantors' substantive obligations in respect of the
Securities by delivering all outstanding Securities to the Trustee for
cancellation and paying all sums payable by it on account of principal of and
interest on all Securities or otherwise. In addition to the foregoing, the
Company may, provided that no Default or Event of Default has occurred and is
continuing or would arise therefrom (or, with respect to a Default or Event of
Default specified in Section 6.01(7) or (8), any time on or prior to the 95th
calendar day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until after such 95th day)) and provided
that no default under any Senior Indebtedness would result therefrom, terminate
its and the Guarantors' substantive obligations in respect of the Securities
(except for its obligations to pay the principal of and interest on the
Securities and the Guarantors' guarantee thereof) by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or direct
non-callable obligations of the United States of America for the payment of
which the full faith and credit of the United States is pledged ("United States
Government Obligations") sufficient (without reinvestment) to pay all remaining
indebtedness on the Securities, (ii) delivering to the Trustee either an Opinion
of Counsel or a ruling directed to the Trustee from the Internal Revenue Service
to the effect that the Holders of the Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such deposit and
termination of obligations, (iii) delivering to the Trustee an Opinion of
Counsel to the effect that the Company's exercise of its option under this
paragraph will not result in any of the Company, the Trustee or the trust
created by the Company's deposit of funds pursuant to this provision becoming or
being deemed to be an "investment company" under the Investment Company Act of
1940, as amended, and (iv) delivering to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating compliance with all conditions precedent
provided for herein. In addition, subject to the provisions of Article Eight
with respect to the creation of the defeasance trust provided for in the
following clause (i), the Company may, provided that no Default or Event of
Default has occurred and is continuing or would arise therefrom (or, with
respect to a Default or Event of Default specified in Section 6.01(7) or (8),
any time on or prior to the 95th calendar day after the date of such deposit (it
being understood that this condition
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shall not be deemed satisfied until after such 95th day)) and provided that no
default under any Senior Indebtedness would arise therefrom, terminate all of
its and the Guarantors' substantive obligations in respect of the Securities
(including its obligations to pay the principal of and interest on the
Securities and the Guarantors' guarantee thereof) by (i) depositing with the
Trustee, under the terms of an irrevocable trust agreement, money or United
States Government Obligations sufficient (without reinvestment) to pay all
remaining indebtedness on the Securities, (ii) delivering to the Trustee either
a ruling directed to the Trustee from the Internal Revenue Service to the effect
that the Holders of the Securities will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and termination of
obligations or an Opinion of Counsel based upon such a ruling addressed to the
Trustee or a change in the applicable Federal tax law since the date of this
Indenture to such effect, (iii) delivering to the Trustee an Opinion of Counsel
to the effect that the Company's exercise of its option under this paragraph
will not result in any of the Company, the Trustee or the trust created by the
Company's deposit of funds pursuant to this provision becoming or being deemed
to be an "investment company" under the Investment Company Act of 1940, as
amended, and (iv) delivering to the Trustee an Officers' Certificate and an
Opinion of Counsel each stating compliance with all conditions precedent
provided for herein.
Notwithstanding the foregoing paragraph, the Company's
obligations in Sections 2.03, 2.05, 2.06, 2.07, 4.01 (but not with respect to
termination of substantive obligations pursuant to the third sentence of the
foregoing paragraph), 4.02, 7.07, 7.08, 9.03 and 9.04 shall survive until the
Securities are no longer outstanding. Thereafter the Company's obligations in
Sections 7.07, 9.03 and 9.04 shall survive.
After such delivery or irrevocable deposit and delivery of an
Officers' Certificate and Opinion of Counsel, the Trustee upon request shall
acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under the Securities and this Indenture except for those surviving
obligations specified above.
SECTION 9.02. Application of Trust Money.
The Trustee shall hold in trust money or United States
Government Obligations deposited with it pursuant to Section 9.01, and shall
apply the deposited money and the money from United States Government
Obligations in accordance with this Indenture
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solely to the payment of principal of and interest on the
Securities.
SECTION 9.03. Repayment to Company.
Subject to Sections 7.07 and 9.01, the Trustee shall promptly
pay to the Company upon written request any excess money held by it at any time.
The Trustee shall pay to the Company upon written request any money held by it
for the payment of principal or interest that remains unclaimed for two years;
provided, however, that the Trustee before being required to make any payment
may at the expense of the Company cause to be published once in a newspaper of
general circulation in The City of New York or mail to each Holder entitled to
such money notice that such money remains unclaimed and that, after a date
specified therein which shall be at least 30 days from the date of such
publication or mailing, any unclaimed balance of such money then remaining shall
be repaid to the Company. After payment to the Company, Securityholders entitled
to money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person and all liability of
the Trustee or Paying Agent with respect to such money shall thereupon cease.
SECTION 9.04. Reinstatement.
If the Trustee is unable to apply any money or United States
Government Obligations in accordance with Section 9.01 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's and the Guarantors' obligations under this Indenture and the
Securities shall be revived and reinstated as though no deposit had occurred
pursuant to Section 9.01 until such time as the Trustee is permitted to apply
all such money or United States Government Obligations in accordance with
Section 9.01; provided, however, that if the Company has made any payment of
interest on or principal of any Securities because of the reinstatement of its
obligations, the Company shall be subrogated to the rights of the Holders of
such Securities to receive such payment from the money or United States
Government Obligations held by the Trustee.
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ARTICLE TEN
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 10.01. Without Consent of Holders.
The Company and the Guarantors, when authorized by a
resolution of their respective Boards of Directors, and the Trustee may amend or
supplement this Indenture or the Securities without notice to or consent of any
Securityholder:
(i) to cure any ambiguity, defect or inconsistency;
provided, however, that such amendment or supplement does not adversely
affect the rights of any Holder;
(ii) to effect the assumption by a successor Person of all
obligations of the Company under the Securities and this Indenture in
connection with any transaction complying with Article Five of this
Indenture;
(iii) to provide for uncertificated Securities in addition
to or in place of certificated Securities;
(iv) to comply with any requirements of the SEC in order
to effect or maintain the qualification of this Indenture
under the TIA;
(v) to make any change that would provide any additional
benefit or rights to the Holders;
(vi) to make any other change that does not adversely
affect the rights of any Holder under this Indenture;
(vii) to evidence the succession of another Person to any
Guarantor and the assumption by any such successor of the covenants of
such Guarantor herein and in the Guarantee;
(viii) to add to the covenants of the Company or the Guarantors
for the benefit of the Holders, or to surrender any right or power
herein conferred upon the Company or any Guarantor;
(ix) to secure the Securities pursuant to the
requirements of Section 4.18 or otherwise; or
(x) to reflect the release of a Guarantor from its
obligations with respect to its Guarantee in accordance with
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the provisions of Section 11.03 and to add a Guarantor
pursuant to the requirements of Section 11.07;
provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 10.01.
SECTION 10.02. With Consent of Holders.
Subject to Section 6.07, the Company and the Guarantors, when
authorized by a resolution of their respective Boards of Directors, and the
Trustee may amend or supplement this Indenture or the Securities with the
written consent of the Holders of at least a majority in principal amount of the
outstanding Securities. Subject to Section 6.07, the Holders of a majority in
principal amount of the outstanding Securities may waive compliance by the
Company or any Guarantor with any provision of this Indenture or the Securities.
However, without the consent of each Securityholder affected, an amendment,
supplement or waiver, including a waiver pursuant to Section 6.04, may not:
(1) change the Stated Maturity of the principal of or any
installment of interest on any Security or alter the optional
redemption or repurchase provisions of any Security or this Indenture
in a manner adverse to the holders of the Securities;
(2) reduce the principal amount of any Security;
(3) reduce the rate or extend the time for payment of
interest on any Security;
(4) change the place or currency of payment of the
principal of or interest on any Security;
(5) modify any provisions of Section 6.04 (other than to add
sections of this Indenture or the Securities subject thereto) or 6.07
or this Section 10.02 (other than to add sections of this Indenture or
the Securities which may not be amended, supplemented or waived without
the consent of each Securityholder affected);
(6) reduce the percentage of the principal amount of
outstanding Securities necessary for amendment to or waiver of
compliance with any provision of this Indenture or the Securities or
for waiver of any Default;
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(7) waive a default in the payment of the principal of,
interest on, or redemption payment with respect to, any Security
(except a recission of acceleration of the Securities by the Holders as
provided in Section 6.02 and a waiver of the payment of default that
resulted from such acceleration);
(8) modify the ranking or priority of the Securities or the
Guarantee of any Guarantor which is a Material Subsidiary, or modify
the definition of Senior Indebtedness or Guarantor Senior Indebtedness,
or amend or modify any of the provisions of Article Eight or Article
Twelve in any manner adverse to the Holders;
(9) release any Guarantor which is a Material Subsidiary from
any of its obligations under its Guarantee or this Indenture otherwise
than in accordance with this Indenture; or
(10) modify the provisions relating to any Offer to Purchase
required pursuant to Section 4.05 or 4.14 in a manner materially
adverse to the Holders.
An amendment under this Section 10.02 may not make any change
under Article Eight, Article Nine, Article Eleven or Article Twelve hereof that
adversely affects in any material respect the rights of any holder of Senior
Indebtedness then outstanding unless the holders of such Senior Indebtedness (or
any representative thereof authorized to give a consent) shall have consented to
such change.
It shall not be necessary for the consent of the Holders under
this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such supplemental indenture.
SECTION 10.03. Compliance with Trust Indenture Act.
Every amendment to or supplement of this Indenture or the
Securities shall comply with the TIA as then in effect.
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SECTION 10.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to
it by a Holder is a continuing consent by the Holder and every subsequent Holder
of that Security or portion of that Security that evidences the same debt as the
consenting Holder's Security, even if notation of the consent is not made on any
Security. Subject to the following paragraph, any such Holder or subsequent
Holder may revoke the consent as to such Holder's Security or portion of such
Security by notice to the Trustee or the Company received before the date on
which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Securities have consented (and not
theretofore revoked such consent) to the amendment, supplement or waiver.
The Company may, but shall not be obligated to, fix a record
date for the purpose of determining the Holders entitled to consent to any
amendment, supplement or waiver. If a record date is fixed, then,
notwithstanding the last sentence of the immediately preceding paragraph, those
persons who were Holders at such record date (or their duly designated proxies),
and only those persons, shall be entitled to consent to such amendment,
supplement or waiver or to revoke any consent previously given, whether or not
such persons continue to be Holders after such record date. No such consent
shall be valid or effective for more than 90 days after such record date.
After an amendment, supplement or waiver becomes effective, it
shall bind every Securityholder, unless it makes a change described in any of
clauses (1) through (10) of Section 10.02. In that case the amendment,
supplement or waiver shall bind each Holder of a Security who has consented to
it and every subsequent Holder of a Security or portion of a Security that
evidences the same debt as the consenting Holder's Security.
SECTION 10.05. Notation on or Exchange of Securities.
If an amendment, supplement or waiver changes the terms of a
Security, the Trustee may require the Holder of the Security to deliver it to
the Trustee. The Trustee may place an appropriate notation on the Security about
the changed terms and return it to the Holder. Alternatively, if the Company or
the Trustee so determines, the Company in exchange for the Security shall issue
and the Trustee shall authenticate a new Security that reflects the changed
terms. Failure to make the appropriate notation or issue a new Security shall
not affect the validity and effect of such amendment, supplement or waiver.
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SECTION 10.06. Trustee To Sign Amendments, etc.
The Trustee shall be entitled to receive, and shall be fully
protected in relying upon, an Opinion of Counsel stating that the execution of
any amendment, supplement or waiver authorized pursuant to this Article Ten is
authorized or permitted by this Indenture and that such amendment, supplement or
waiver constitutes the legal, valid and binding obligation of the Company and
the Guarantors, enforceable in accordance with its terms (subject to customary
exceptions). The Trustee may, but shall not be obligated to, execute any such
amendment, supplement or waiver which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise. In signing any amendment,
supplement or waiver, the Trustee shall be entitled to receive an indemnity
reasonably satisfactory to it.
ARTICLE ELEVEN
GUARANTEE
SECTION 11.01. Unconditional Guarantee.
Each Guarantor hereby unconditionally, jointly and severally,
guarantees to each Holder of a Security authenticated and delivered by the
Trustee and to the Trustee and its successors and assigns that: the principal of
and interest on the Securities will be promptly paid in full when due, subject
to any applicable grace period, whether at maturity, by acceleration or
otherwise, and interest on the overdue principal and interest on any overdue
interest on the Securities and all other obligations of the Company to the
Holders or the Trustee hereunder or under the Securities will be promptly paid
in full or performed, all in accordance with the terms hereof and thereof;
subject, however, to the limitations set forth in Section 11.04. Each Guarantor
hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Securities or
this Indenture, the absence of any action to enforce the same, any waiver or
consent by any Holder of the Securities with respect to any provisions hereof or
thereof, the recovery of any judgment against the Company, any action to enforce
the same or any other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor. Each Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that the Guarantee will not be discharged except by complete
performance of the obligations contained in the Securities, this Indenture, and
this
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Guarantee. If any Holder or the Trustee is required by any court or otherwise to
return to the Company, any Guarantor, or any custodian, trustee, liquidator or
other similar official acting in relation to the Company or any Guarantor, any
amount paid by the Company or any Guarantor to the Trustee or such Holder, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor further agrees that, as between each Guarantor,
on the one hand, and the Holders and the Trustee, on the other hand, (x) the
maturity of the obligations guaranteed hereby may be accelerated as provided in
Article Six for the purpose of this Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
obligations guaranteed hereby, and (y) in the event of any acceleration of such
obligations as provided in Article Six, such obligations (whether or not due and
payable) shall forth become due and payable by each Guarantor for the purpose of
this Guarantee.
SECTION 11.02. Severability.
In case any provision of this Guarantee shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 11.03. Release of a Guarantor.
If the Securities are defeased in accordance with the terms of
this Indenture, or if all or substantially all of the assets of any Guarantor or
all of the Capital Stock of any Guarantor is sold (including by issuance or
otherwise) by the Company or any of its Subsidiaries in a transaction
constituting an Asset Disposition and if (x) the Net Available Proceeds from
such Asset Disposition are used in accordance with Section 4.05 or (y) the
Company delivers to the Trustee an Officers' Certificate covenanting that the
Net Available Proceeds from such Asset Disposition shall be used in accordance
with Section 4.05 and within the time limits specified by such Section 4.05,
then such Guarantor (in the event of a sale or other disposition of all of the
Capital Stock of such Guarantor) or the corporation acquiring such assets (in
the event of a sale or other disposition of all or substantially all of the
assets of such Guarantor), shall be deemed released from all obligations under
this Article Eleven without any further action required on the part of the
Trustee or any Holder. The Trustee shall, at the sole cost and expense of the
Company and upon receipt at the reasonable request of the Trustee of an Opinion
of Counsel that the provisions of this Section 11.03 have been complied with,
deliver an appropriate instrument evidencing such
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release upon receipt of a request by the Company accompanied by an Officers'
Certificate certifying as to the compliance with this Section. Any Guarantor not
so released remains liable for the full amount of principal of and interest on
the Securities and the other obligations of the Company hereunder as provided in
this Article Eleven.
SECTION 11.04. Limitation of Guarantor's Liability.
Each Guarantor, and by its acceptance hereof each Holder and
the Trustee, hereby confirms that it is the intention of all such parties that
the guarantee by such Guarantor pursuant to its Guarantee not constitute a
fraudulent transfer or conveyance for purposes of title 11 of the United States
Code, as amended, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar U.S. Federal or state or other applicable law. To
effectuate the foregoing intention, the Holders and such Guarantor hereby
irrevocably agree that the obligations of such Guarantor under the Guarantee
shall be limited to the maximum amount as will, after giving effect to all other
contingent and fixed liabilities of such Guarantor and after giving effect to
any collections from or payments made by or on behalf of any other Guarantor in
respect of the obligations of such other Guarantor under its Guarantee or
pursuant to Section 11.05, result in the obligations of such Guarantor under the
Guarantee not constituting such fraudulent transfer or conveyance.
SECTION 11.05. Contribution.
In order to provide for just and equitable contribution among
the Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under the
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount, based on the net assets of each Guarantor
(including the Funding Guarantor), determined in accordance with GAAP, subject
to Section 11.04, for all payments, damages and expenses incurred by that
Funding Guarantor in discharging the Company's obligations with respect to the
Securities or any other Guarantor's obligations with respect to the Guarantee.
SECTION 11.06. Execution of Guarantee.
To further evidence their Guarantee to the Holders, the
Guarantors hereby agree to execute the Guarantee in substantially the form set
forth in Exhibit A hereto to be endorsed on each Security ordered to be
authenticated and delivered by the Trustee. Each Guarantor hereby agrees that
its Guarantee set forth in
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Section 11.01 shall remain in full force and effect notwithstanding any failure
to endorse on each Security a notation of such Guarantee. Each such Guarantee
shall be signed on behalf of each Guarantor by its Chairman of the Board, its
President or one of its Vice Presidents prior to the authentication of the
Security on which it is endorsed, and the delivery of such Security by the
Trustee, after the authentication thereof hereunder, shall constitute due
delivery of such Guarantee on behalf of such Guarantor. Such signature upon the
Guarantee may be manual or facsimile signature of such officer and may be
imprinted or otherwise reproduced on the Guarantee, and in case such officer who
shall have signed the Guarantee shall cease to be such officer before the
Security on which such Guarantee is endorsed shall have been authenticated and
delivered by the Trustee or disposed of by the Company, such Security
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed the Guarantee had not ceased to be such officer of the
Guarantor.
SECTION 11.07. Additional Guarantors.
The Company shall cause each Material Subsidiary (other than
any Securitization Subsidiary), whether formed or acquired after the Issue Date,
to execute and deliver to the Trustee, promptly upon any such formation or
acquisition (a) a supplemental indenture in form and substance satisfactory to
the Trustee which subjects such Material Subsidiary to the provisions of this
Indenture as a Guarantor, and (b) an Opinion of Counsel to the effect that such
supplemental indenture has been duly authorized and executed by such Material
Subsidiary and constitutes the legal, valid, binding and enforceable obligation
of such Material Subsidiary (subject to such customary exceptions concerning
fraudulent conveyance laws, creditors' rights and equitable principles as may be
acceptable to the Trustee in its discretion); provided, however, that any
Material Subsidiary acquired after the Issue Date which is prohibited from
entering into a Guarantee pursuant to restrictions contained in any debt
instrument or other agreement in existence at the time such Material Subsidiary
was so acquired and not entered into in anticipation or contemplation of such
acquisition shall not be required to comply with the foregoing provisions of
this Section so long as any such restriction is in existence and to the extent
of any such restriction.
SECTION 11.08. Subordination of Subrogation and Other Rights.
Each Guarantor hereby agrees that any claim against the
Company that arises from the payment, performance or enforcement of such
Guarantor's obligations under its Guarantee or this Indenture, including,
without limitation, any right of subrogation, shall be
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subject and subordinate to, and no payment with respect to any such claim of
such Guarantor shall be made before, the payment in full in cash of all
outstanding Securities in accordance with the provisions provided therefor in
this Indenture.
ARTICLE TWELVE
SUBORDINATION OF GUARANTEE
SECTION 12.01. Guarantee Obligations Subordinated
to Guarantor Senior Debt.
Each Guarantor covenants and agrees, and the Trustee and each
Holder of the Securities by his acceptance thereof likewise covenant and agree,
that the Guarantees shall be issued subject to the provisions of this Article;
and each person holding any Security, whether upon original issue or upon
transfer, assignment or exchange thereof, accepts and agrees that all payments
of the principal of and interest on the Securities pursuant to the Guarantee
made by or on behalf of any Guarantor shall, to the extent and in the manner set
forth in this Article, be subordinated and junior in right of payment to the
prior payment in full of all amounts payable under Guarantor Senior Indebtedness
of such Guarantor.
SECTION 12.02. No Payment on Guarantees in
Certain Circumstances.
(a) No direct or indirect payment by or on behalf of any
Guarantor of principal of or interest on the Securities pursuant to such
Guarantor's Guarantee, whether pursuant to the terms of the Securities, upon
acceleration or otherwise, shall be made if, at the time of such payment, there
exists a default in the payment of all or any portion of the obligations on any
Designated Guarantor Senior Indebtedness of such Guarantor (and the Trustee has
received written notice thereof), and such default shall not have been cured or
waived or the benefits of this sentence waived by or on behalf of the holders of
such Designated Guarantor Senior Indebtedness. In addition, during the
continuance of any non-payment default or event of default with respect to any
Designated Guarantor Senior Indebtedness pursuant to which the maturity thereof
may be accelerated, and upon receipt by the Trustee of written notice (the
"Guarantor Payment Blockage Notice") from the holder or holders of such
Designated Guarantor Senior Indebtedness or the trustee or agent acting on
behalf of such Designated Guarantor Senior Indebtedness, then, unless and until
such default or event of default has been cured or waived or has ceased to exist
or such Designated Guarantor Senior Indebtedness has been discharged or
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paid in full, no direct or indirect payment shall be made by or on behalf of
such Guarantor of principal or interest on the Securities, except from those
funds held in trust for the benefit of the Holders of any Securities to such
Holders, during a period (a "Guarantor Blockage Period") commencing on the date
of receipt of such notice by the Trustee and ending 179 days thereafter.
Notwithstanding anything herein or in the Securities to the
contrary, (x) in no event shall a Guarantor Blockage Period extend beyond 179
days from the date the Guarantor Payment Blockage Notice was given and (y) in no
event shall a Guarantor Blockage Notice be effective for purposes of this
Section 12.02(a) unless and until 360 days shall have elapsed since the
effectiveness of the immediately prior Guarantor Payment Blockage Notice. Not
more than one Guarantor Blockage Period may be commenced with respect to any
Guarantor during any period of 360 consecutive days. No default or event of
default that existed or was continuing on the date of commencement of any other
Guarantor Blockage Period with respect to the Designated Guarantor Senior
Indebtedness initiating such Guarantor Payment Blockage Period may be, or be
made, the basis for the commencement of any other Guarantor Blockage Period by
the holder or holders of such Designated Guarantor Senior Indebtedness or the
trustee or agent acting on behalf of such Designated Guarantor Senior
Indebtedness, whether or not within a period of 360 consecutive days, unless
such default or event of default has been cured or waived for a period of not
less than 90 consecutive days.
(b) In the event that, notwithstanding the foregoing, any
payment shall be received by the Trustee or any Holder when such payment is
prohibited by Section 12.02(a), such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of such
Designated Guarantor Senior Indebtedness or their respective representatives, or
to the trustee or trustees under any indenture pursuant to which any of such
Designated Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that, upon notice from
the Trustee to the holders of such Designated Guarantor Senior Indebtedness that
such prohibited payment has been made, the holders of such Designated Guarantor
Senior Indebtedness (or their representative or representatives or a trustee)
notify the Trustee in writing of the amounts then due and owing on such
Designated Guarantor Senior Indebtedness, if any, and only the amounts specified
in such notice to the Trustee shall be paid to the holders of such Designated
Guarantor Senior Indebtedness.
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SECTION 12.03. Payment Over of Proceeds upon Dissolution, etc.
(a) Upon any payment or distribution of assets or securities
of any Guarantor of any kind or character, whether in cash, property or
securities, upon any dissolution or winding-up or total or partial liquidation
or reorganization of such Guarantor, whether voluntary or involuntary or in
bankruptcy, insolvency, receivership or other proceedings, all amounts due or to
become due with respect to all Guarantor Senior Indebtedness of such Guarantor
shall first be paid in full before the Holders of the Securities or the Trustee
on behalf of such Holders shall be entitled to receive any payment by such
Guarantor of the principal of or interest on the Securities pursuant to such
Guarantor's Guarantee, or any payment to acquire any of the Securities for cash,
property or securities, or any distribution with respect to the Securities of
any cash, property or securities. Before any payment may be made by, or on
behalf of, any Guarantor of the principal of or interest on the Securities upon
any such dissolution or winding-up or liquidation or reorganization, any payment
or distribution of assets or securities of such Guarantor of any kind or
character, whether in cash, property or securities, to which the Holders of the
Securities or the Trustee on their behalf would be entitled, but for the
subordination provisions of this Indenture, shall be made by such Guarantor or
by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, directly to the holders of the
Guarantor Senior Indebtedness of such Guarantor (pro rata to such holders on the
basis of the respective amounts of such Guarantor Senior Indebtedness held by
such holders) or their representatives or to the trustee or trustees under any
indenture pursuant to which any of such Guarantor Senior Indebtedness may have
been issued, as their respective interests may appear, to the extent necessary
to pay all such Guarantor Senior Indebtedness in full after giving effect to any
concurrent payment, distribution or provision therefor to or for the holders of
such Guarantor Senior Indebtedness.
(b) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of any Guarantor of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or any Holder of
Securities at a time when such payment or distribution is prohibited by Section
12.03(a) and before all obligations in respect of the Guarantor Senior
Indebtedness of such Guarantor are paid in full, or payment provided for, such
payment or distribution shall be received and held in trust for the benefit of,
and shall be paid over or delivered to, the holders of such Guarantor Senior
Indebtedness
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(pro rata to such holders on the basis of the respective amounts of such
Guarantor Senior Indebtedness held by such holders) or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Guarantor Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of such
Guarantor Senior Indebtedness remaining unpaid until all such Guarantor Senior
Indebtedness has been paid in full after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such
Guarantor Senior Indebtedness.
(c) For purposes of this Section, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of these
clauses (x) and (y) is not to cause the Guarantee of any Guarantor to be treated
in any case or proceeding or similar event described in this Section as part of
the same class of claims as Guarantor Senior Indebtedness of such Guarantor or
any class of claims on a parity with or senior to Guarantor Senior Indebtedness
of such Guarantor for any payment or distribution, (x) any payment or
distribution of securities of any Guarantor or any other corporation authorized
by an order or decree giving effect, and stating in such order or decree that
effect is given, to the subordination of the Guarantee to the Guarantor Senior
Indebtedness of such Guarantor, and made by a court of competent jurisdiction in
a reorganization proceeding under any applicable bankruptcy, insolvency or other
similar law, or (y) securities of any Guarantor or any other corporation
provided for by a plan of reorganization or readjustment which are subordinated,
to at least the same extent as the Guarantee, to the payment of all Guarantor
Senior Indebtedness of such Guarantor then outstanding; provided, however, that
(i) if a new corporation results from such reorganization or readjustment, such
corporation assumes the Guarantor Senior Indebtedness of such Guarantor and (ii)
the rights of the holders of the Guarantor Senior Indebtedness of such Guarantor
are not, without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of any Guarantor with, or the merger of any
Guarantor with or into, another corporation or the liquidation or dissolution of
any Guarantor following the conveyance or transfer of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided in Article Five shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section if
such other corporation shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions stated in Article Five.
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SECTION 12.04. Subrogation.
Upon the payment in full of all Guarantor Senior Indebtedness
of a Guarantor, or provision for payment, the Holders of the Securities shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness to
receive payments or distributions of cash, property or securities of such
Guarantor made on such Guarantor Senior Indebtedness until the principal of and
interest on the Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Guarantor
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee on their behalf would be entitled except for the
provisions of this Article, and no payment over pursuant to the provisions of
this Article to the holders of such Guarantor Senior Indebtedness by Holders of
the Securities or the Trustee on their behalf shall, as between such Guarantor,
its creditors other than holders of such Guarantor Senior Indebtedness, and the
Holders of the Securities, be deemed to be a payment by such Guarantor to or on
account of such Guarantor Senior Indebtedness. It is understood that the
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of Guarantor Senior Indebtedness of each Guarantor, on the other
hand.
If any payment or distribution to which the Holders of the
Securities would otherwise have been entitled but for the provisions of this
Article shall have been applied, pursuant to the provisions of this Article, to
the payment of all amounts payable under Guarantor Senior Indebtedness, then and
in such case, the Holders of the Securities shall be entitled to receive from
the holders of such Guarantor Senior Indebtedness any payments or distributions
received by such holders of Guarantor Senior Indebtedness in excess of the
amount required to make payment in full, or provision for payment, of such
Guarantor Senior Indebtedness.
SECTION 12.05. Obligations of Guarantors Unconditional.
Nothing contained in this Article or elsewhere in this
Indenture or in the Securities or the Guarantee is intended to or shall impair,
as among the Guarantors and the Holders of the Securities, the obligation of
each Guarantor, which is absolute and unconditional, to pay to the Holders of
the Securities the principal of and interest on the Securities as and when the
same shall become due and payable in accordance with the terms of the Guarantee,
or is intended to or shall affect the relative rights of the Holders of the
Securities and creditors of any Guarantor other
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than the holders of Guarantor Senior Indebtedness, nor shall anything herein or
therein prevent the Holder of any Security or the Trustee on their behalf from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Guarantor Senior Indebtedness in respect of cash, property or securities of
any Guarantor received upon the exercise of any such remedy.
Without limiting the generality of the foregoing, nothing
contained in this Article shall restrict the right of the Trustee or the Holders
of Securities to take any action to declare the Securities to be due and payable
prior to their stated maturity pursuant to Section 6.01 or to pursue any rights
or remedies hereunder; provided, however, that all Guarantor Senior Indebtedness
of any Guarantor then due and payable shall first be paid in full before the
Holders of the Securities or the Trustee are entitled to receive any direct or
indirect payment from such Guarantor of principal of or interest on the
Securities pursuant to such Guarantor's Guarantee.
SECTION 12.06. Notice to Trustee.
The Company and each Guarantor shall give prompt written
notice to the Trustee of any fact known to the Company or such Guarantor which
would prohibit the making of any payment to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article. The Trustee shall not be
charged with knowledge of the existence of any default or event of default with
respect to any Guarantor Senior Indebtedness or of any other facts which would
prohibit the making of any payment to or by the Trustee unless and until the
Trustee shall have received notice in writing at its Corporate Trust Office to
that effect signed by an Officer of the Company or such Guarantor, or by a
holder of Guarantor Senior Indebtedness or trustee or agent therefor; and prior
to the receipt of any such written notice, the Trustee shall, subject to Article
Seven, be entitled to assume that no such facts exist; provided that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms of this Indenture
any moneys shall become payable for any purpose (including, without limitation,
the payment of the principal of or interest on any Security), then, regardless
of anything herein to the contrary, the Trustee shall have full power and
authority to receive any moneys from any Guarantor and to apply the same to the
purpose for which they were received, and shall not be affected by any notice to
the contrary which may be received by it on or after such prior date. Nothing
contained in this Section 12.06 shall limit the right of the holders of
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Guarantor Senior Indebtedness to recover payments as contemplated by Section
12.03. The Trustee shall be entitled to rely on the delivery to it of a written
notice by a Person representing himself or itself to be a holder of any
Guarantor Senior Indebtedness (or a trustee on behalf of, or other
representative of, such holder) to establish that such notice has been given by
a holder of such Guarantor Senior Indebtedness or a trustee or representative on
behalf of any such holder.
In the event that the Trustee determines in good faith that
any evidence is required with respect to the right of any Person as a holder of
Guarantor Senior Indebtedness to participate in any payment or distribution
pursuant to this Article, the Trustee may request such Person to furnish
evidence to the reasonable satisfaction of the Trustee as to the amount of
Guarantor Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 12.07. Reliance on Judicial Order or
Certificate of Liquidating Agent.
Upon any payment or distribution of assets or securities of a
Guarantor referred to in this Article, the Trustee and the Holders of the
Securities shall be entitled to rely upon any order or decree made by any court
of competent jurisdiction in which bankruptcy, dissolution, winding-up,
liquidation or reorganization proceedings are pending, or upon a certificate of
the receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of the Securities for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Guarantor Senior Indebtedness
of such Guarantor and other indebtedness of such Guarantor, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
SECTION 12.08. Trustee's Relation to Guarantor
Senior Indebtedness.
The Trustee and any Paying Agent shall be entitled to all the
rights set forth in this Article with respect to any Guarantor Senior
Indebtedness which may at any time be held by it in its individual or any other
capacity to the same extent as any other
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holder of Guarantor Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee or any Paying Agent of any of its rights as such holder.
With respect to the holders of Guarantor Senior Indebtedness,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Indenture against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness (except as provided in Section 12.03(b)).
SECTION 12.09. Subordination Rights Not Impaired by
Acts or Omissions of the Guarantors or
Holders of Guarantor Senior Indebtedness.
No right of any present or future holders of any Guarantor
Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by any Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with. The provisions of this Article are intended to be for
the benefit of, and shall be enforceable directly by, the holders of Guarantor
Senior Indebtedness.
SECTION 12.10. Securityholders Authorize Trustee To
Effectuate Subordination of Guarantee.
Each Holder of Securities by his acceptance of such Securities
authorizes and expressly directs the Trustee on his behalf to take such action
as may be necessary or appropriate to effectuate the subordination provided in
this Article, and appoints the Trustee his attorney-in-fact for such purposes,
including, in the event of any dissolution, winding up, liquidation or
reorganization of any Guarantor (whether in bankruptcy, insolvency,
receivership, reorganization or similar proceedings or upon an assignment for
the benefit of creditors or otherwise) tending towards liquidation of the
business and assets of such Guarantor, the filing of a claim for the unpaid
balance of its or his Securities in the form required in those proceedings.
SECTION 12.11. This Article Not To Prevent Events of Default.
The failure to make a payment on account of principal of
or interest on the Securities by reason of any provision of this
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Article shall not be construed as preventing the occurrence of an Event of
Default specified in clauses (1) or (2) of Section 6.01.
SECTION 12.12. Trustee's Compensation Not Prejudiced.
Nothing in this Article shall apply to amounts due to the
Trustee pursuant to other sections in this Indenture.
SECTION 12.13. No Waiver of Guarantee
Subordination Provisions.
Without in any way limiting the generality of Section 12.09,
the holders of Guarantor Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Indebtedness, do any one or more of the following: (a) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Guarantor Senior Indebtedness or any instrument evidencing the same or
any agreement under which Guarantor Senior Indebtedness is outstanding or
secured; (b) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Guarantor Senior Indebtedness; (c)
release any Person liable in any manner for the collection of Guarantor Senior
Indebtedness and (d) exercise or refrain from exercising any rights against any
Guarantor and any other Person.
SECTION 12.14. Payments May Be Paid Prior to Dissolution.
Nothing contained in this Article or elsewhere in this
Indenture shall prevent (i) a Guarantor, except under the conditions described
in Section 12.02, from making payments of principal of and interest on the
Securities, or from depositing with the Trustee any moneys for such payments, or
(ii) the application by the Trustee of any moneys deposited with it for the
purpose of making such payments of principal of and interest on the Securities,
to the holders entitled thereto unless at least two Business Days prior to the
date upon which such payment becomes due and payable, the Trustee shall have
received the written notice provided for in Section 12.02(b) or in Section
12.06. A Guarantor shall give prompt written notice to the Trustee of any
dissolution, winding-up, liquidation or reorganization of such Guarantor.
<PAGE>
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ARTICLE 13
MISCELLANEOUS
SECTION 13.01. Trust Indenture Act Controls.
This Indenture is subject to the provisions of the TIA that
are required to be a part of this Indenture, and shall, to the extent
applicable, be governed by such provisions. If any provision of this Indenture
modifies any TIA provision that may be so modified, such TIA provision shall be
deemed to apply to this Indenture as so modified. If any provision of this
Indenture excludes any TIA provision that may be so excluded, such TIA provision
shall be excluded from this Indenture.
The provisions of TIA ss.ss. 310 through 317 that impose
duties on any Person (including the provisions automatically deemed included
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 13.02. Notices.
Any notice or communication shall be sufficiently given if in
writing and delivered in person, by facsimile and confirmed by overnight
courier, or mailed by first-class mail addressed as follows:
if to the Company:
Owens & Minor, Inc.
4800 Cox Road
Glen Allen, Virginia 23060
Attention: Glenn J. Dozier
Senior Vice President, Finance,
Chief Financial Officer
Facsimile: 804-273-0232
Telephone: 804-747-9794
with a copy to:
C. Porter Vaughan, III
Hunton & Williams
951 E. Byrd Street
Richmond, Virginia 23219
<PAGE>
-90-
if to the Trustee:
Crestar Bank
919 E. Main Street, 10th Floor
Richmond, Virginia 23219
Attention: Kelly A. Pickerel, Vice President
Facsimile: 804-782-7855
Telephone: 804-782-5726
The Company or the Trustee by notice to the other may
designate additional or different addresses for subsequent notices or
communications.
Any notice or communication mailed, first class, postage
prepaid, to a Securityholder, including any notice delivered in connection with
TIA ss. 310(b), TIA ss. 313(c), TIA ss. 314(a) and TIA ss. 315(b), shall be
mailed to him at his address as set forth on the registration books of the
Registrar and shall be sufficiently given to him if so mailed within the time
prescribed. To the extent required by the TIA, any notice or communication shall
also be mailed to any Person described in TIA ss. 313(c).
Failure to mail a notice or communication to a Securityholder
or any defect in it shall not affect its sufficiency with respect to other
Securityholders. Except for a notice to the Trustee, which is deemed given only
when received, if a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
SECTION 13.03. Communications by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b)
with other Securityholders with respect to their rights under this Indenture or
the Securities. The Company, the Trustee, the Registrar and any other person
shall have the protection of TIA ss. 312(c).
SECTION 13.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take or refrain from taking any action under this Indenture, the Company
shall furnish to the Trustee at the request of the Trustee:
<PAGE>
-91-
(1) an Officers' Certificate in form and substance
satisfactory to the Trustee stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with; and
(2) an Opinion of Counsel in form and substance satisfactory
to the Trustee stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
SECTION 13.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate
or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with; provided,
however, that with respect to matters of fact an Opinion of Counsel may
rely on an Officers' Certificate or certificates of public officials.
SECTION 13.06.Rules by Trustee, Paying Agent, Registrar.
The Trustee may make reasonable rules for action by or at
a meeting of Securityholders. The Paying Agent or Registrar may
make reasonable rules for its functions.
SECTION 13.07. Governing Law.
The laws of the State of New York shall govern this Indenture,
the Securities and the Guarantee without regard to principles of conflicts of
law.
<PAGE>
-92-
SECTION 13.08. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, the Guarantee or this Indenture
or for any claim based on, in respect of or by reason of such obligations or
their creation. Each Securityholder by accepting a Security waives and releases
all such liability.
SECTION 13.09. Successors.
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of each Guarantor in this
Indenture and Securities shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
SECTION 13.10. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
SECTION 13.11. Severability.
In case any provision in this Indenture, in the Securities or
in the Guarantee shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a Holder shall have no claim therefor against
any party hereto.
SECTION 13.12. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture,
loan or debt agreement of the Company or a Subsidiary. Any such indenture, loan
or debt agreement may not be used to interpret this Indenture.
SECTION 13.13. Legal Holidays.
If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
[Signature Pages Follow]
<PAGE>
-93-
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the date first written above.
OWENS & MINOR, INC.
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Finance, Chief
Financial Officer
OWENS & MINOR MEDICAL, INC.
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Finance, Chief
Financial Officer
NATIONAL MEDICAL SUPPLY
CORPORATION
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Chief Financial Officer
OWENS & MINOR WEST, INC.
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Chief Financial Officer
<PAGE>
-94-
KOLEY'S MEDICAL SUPPLY, INC.
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Chief Financial Officer
LYONS PHYSICIAN SUPPLY COMPANY
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Chief Financial Officer
A. KUHLMAN & CO.
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Chief Financial Officer
STUART MEDICAL, INC.
By: /s/Glenn J. Dozier
Name: Glenn J. Dozier
Title: Senior Vice President,
Finance, Chief
Financial Officer
CRESTAR BANK, as Trustee
By: /s/K.A. Pickerel
Name: K. A. Pickerel
Title: Vice President
<PAGE>
EXHIBIT A
OWENS & MINOR, INC.
No. $
10 7/8% SENIOR SUBORDINATED NOTE DUE 2006
Owens & Minor, Inc. promises to pay to
or registered assigns the principal sum of
Dollars on the Maturity Date of June 1, 2006.
Interest Payment Dates: June 1 and December 1
Record Dates: May 15 and November 15
IN WITNESS WHEREOF, OWENS & MINOR, INC. has caused this
instrument to be executed in its corporate name by a facsimile signature of its
_________________ and its ___________________ and has caused the facsimile of
its corporate seal to be affixed hereunto or imprinted hereon.
OWENS & MINOR, INC.
By
Title:
[SEAL]
Dated: By
Title:
Certificate of Authentication:
This is one of the 10 7/8% Senior Subordinated Notes due 2006
referred to in the within-mentioned Indenture.
By Date:
Authorized Signatory
<PAGE>
A-2
(REVERSE OF SECURITY)
OWENS & MINOR, INC.
10 7/8% Senior Subordinated Note due 2006
1. Interest.
Owens & Minor, Inc., a Virginia corporation (the "Company"),
promises to pay interest at the rate of 10 7/8% per annum on the principal
amount of this Security semiannually commencing on December 1, 1996, until the
principal hereof is paid or made available for payment. Interest on the
Securities will accrue from and including the most recent date to which interest
has been paid or, if no interest has been paid, from and including May 29, 1996,
through but excluding the date on which interest is paid. If an Interest Payment
Date falls on a day that is not a Business Day, the interest payment to be made
on such Interest Payment Date will be made on the next succeeding Business Day
with the same force and effect as if made on such Interest Payment Date, and no
additional interest will accrue as a result of such delayed payment. Interest
will be computed on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment.
The interest payable on the Securities, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the person in whose name this Security is registered at
the close of business on the regular record date, which shall be the May 15 or
November 15 (whether or not a Business Day) next preceding such Interest Payment
Date. Any such interest not so punctually paid or duly provided for, and any
interest payable on such defaulted interest (to the extent lawful), will
forthwith cease to be payable to the Holder on such regular record date and
shall be paid to the person in whose name this Security is registered at the
close of business on a special record date for the payment of such defaulted
interest to be fixed by the Company, notice of which shall be given to Holders
not less than 15 days prior to such special record date. Payment of the
principal of and interest on this Security will be made at the agency of the
Company maintained for that purpose in New York, New York and at any other
office or agency maintained by the Company for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made by check mailed to the
<PAGE>
A-3
address of the person entitled thereto as such address shall appear in the
Security register.
3. Paying Agent and Registrar.
Initially, Crestar Bank (the "Trustee") will act as Paying
Agent and Registrar. The Company may change any Paying Agent, Registrar or
co-Registrar without notice to the Holders of Securities. The Company or any of
its Subsidiaries may act as Registrar, co-Registrar or, except in certain
circumstances specified in the Indenture, Paying Agent.
4. Indenture.
This Security is one of a duly authorized issue of Securities
of the Company, designated as its 10 7/8% Senior Subordinated Notes due 2006
(the "Securities"), limited in aggregate principal amount to $150,000,000
(except for Securities issued in substitution for destroyed, lost or stolen
Securities) issuable under an indenture dated as of May 29, 1996 (the
"Indenture"), among the Company, the Guarantors (herein collectively called the
"Guarantors", which term includes any successor Person or additional Guarantor
under the Indenture) and the Trustee. The terms of the Securities include those
stated in the Indenture and those made part of the Indenture by the Trust
Indenture Act of 1939 (the "Act") (15 U.S. Code ss.ss. 77aaa-77bbbb) as in
effect on the date of the Indenture and the date the Indenture is qualified
under the Act. The Securities are subject to all such terms, and Holders of
Securities are referred to the Indenture and the Act for a statement of them.
Each Securityholder, by accepting a Security, agrees to be bound to all of the
terms and provisions of the Indenture, as the same may be amended from time to
time. Payment on each Security is guaranteed on a senior subordinated basis,
jointly and severally, by the Guarantors pursuant to Article Eleven of the
Indenture.
The Securities are subordinated in right of payment to all
Senior Indebtedness of the Company to the extent and in the manner provided in
the Indenture. Each Holder of a Security, by accepting a Security, agrees to
such subordination, authorizes the Trustee to give effect to such subordination
and appoints the Trustee as attorney-in-fact for such purpose.
Capitalized terms contained in this Security to the extent not
defined herein shall have the meanings assigned to them in the Indenture.
<PAGE>
A-4
5. Optional Redemption.
(a) The Securities are not redeemable prior to June 1, 2001,
except as provided in clause (b) below of this paragraph 5. On and after such
date, the Securities may be redeemed at any time, in whole or in part, at the
option of the Company, at redemption prices (expressed as percentages of the
principal amount) set forth below, if redeemed during the 12-month period
beginning June 1 of the year indicated below, in each case together with
interest accrued to the date fixed for redemption:
Year Percentage
2001.................................................. 105.4375%
2002.................................................. 103.6250
2003.................................................. 101.8125
2004 and thereafter................................... 100.0000
(b) At any time prior to June 1, 1999, the Company may redeem
up to 33-1/3% of the principal amount of the Securities with the net cash
proceeds received by the Company from a public offering of Capital Stock of the
Company (other than Disqualified Stock), at a redemption price (expressed as a
percentage of the principal amount) of 110.875% of the principal amount thereof,
plus accrued and unpaid interest to the date fixed for redemption; provided,
however, that at least $100 million in aggregate principal amount of the
Securities remains outstanding immediately after any such redemption (excluding
any Securities owned by the Company or any of its Affiliates). Notice of
redemption pursuant to this paragraph must be mailed to Holders of Securities
not later than 60 days following consummation of such public offering.
6. Purchase upon Occurrence of a
Change of Control.
Within 30 days of the occurrence of a Change of Control, the
Company will offer to purchase the Securities, in whole and not in part, at a
purchase price equal to 101% of the principal amount thereof plus any accrued
and unpaid interest thereon.
7. Notice of Redemption.
Notice of redemption will be mailed by first class mail at
least 30 days but not more than 60 days before the redemption date to each
Holder of Securities to be redeemed at his registered address. Securities in
denominations larger than $1,000 may be redeemed in part. On and after the
redemption date, interest
<PAGE>
A-5
ceases to accrue on those Securities or portion of them called for
redemption.
8. Denominations; Transfer; Exchange.
The Securities are in registered form without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may transfer
or exchange Securities in accordance with the Indenture. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Securities
selected for redemption.
9. Persons Deemed Owners.
The registered Holder of a Security may be treated as the
owner of it for all purposes.
10. Unclaimed Funds.
If funds for the payment of principal or interest remain
unclaimed for two years, the Trustee or Paying Agent will repay the funds to the
Company at its request. After such repayment Holders of Securities entitled to
such funds must look to the Company for payment unless an abandoned property law
designates another person.
11. Discharge Prior to Redemption or Maturity.
The Indenture will be discharged and cancelled except for
certain Sections thereof, subject to the terms of the Indenture, upon the
payment of all the Securities or upon the irrevocable deposit with the Trustee
of funds or United States Government Obligations sufficient for such payment or
redemption.
12. Amendment; Supplement; Waiver.
Subject to certain exceptions, the Indenture or the Securities
may be amended or supplemented with the consent of the Holders of at least a
majority in principal amount of the outstanding Securities, and any past default
or compliance with any provision may be waived with the consent of the Holders
of a majority in principal amount of the outstanding Securities. Without notice
to or the consent of any Holder, the Company, the Guarantors and the Trustee may
amend or supplement the Indenture or the Securities to cure any ambiguity,
defect or inconsistency, or to make any change that does not adversely affect
the rights of any Holder of Securities.
<PAGE>
A-6
13. Restrictive Covenants.
The Securities are general unsecured senior subordinated
obligations of the Company limited to the aggregate principal amount of
$150,000,000. The Indenture restricts, among other things, the ability of the
Company or any of its Subsidiaries to permit any Liens to be imposed on their
assets, to make certain payments and investments, limits the Indebtedness which
the Company and its Subsidiaries may incur and limits the terms on which the
Company may engage in Asset Dispositions. The Company is also obligated under
certain circumstances to make an offer to purchase Securities with the net cash
proceeds of certain Asset Dispositions. The Company must report quarterly to the
Trustee on compliance with certain covenants in the Indenture.
14. Successor Corporation.
Pursuant to the Indenture, the ability of the Company to
consolidate with, merge with or into or transfer its assets to another person is
conditioned upon certain requirements, including certain financial requirements
applicable to the surviving Person.
15. Defaults and Remedies.
If an Event of Default shall occur and be continuing, the
principal of all of the outstanding Securities, plus all accrued and unpaid
interest, if any, to the date the Securities become due and payable, may be
declared due and payable in the manner and with the effect provided in the
Indenture.
16. Trustee Dealings with Company.
The Trustee in its individual or any other capacity, may
become the owner or pledgee of Securities and make loans to, accept deposits
from, and perform services for the Company or its Affiliates, and may otherwise
deal with the Company or its Affiliates, as if it were not Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the
Company or any Guarantor shall not have any liability for any obligations of the
Company or any Guarantor under the Securities, the Guarantee or the Indenture or
for any claim based on, in respect of or by reason of such obligations or their
creation. Each Holder of a Security by accepting a Security waives and releases
all such liability. The waiver and release are part of the consideration for the
issue of the Securities.
<PAGE>
A-7
18. Authentication.
This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.
19. Abbreviations.
Customary abbreviations may be used in the name of
Securityholder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
20. CUSIP Numbers.
Pursuant to a recommendation promulgated by the Committee on
Uniform Security Identification Procedures, the Company has caused CUSIP numbers
to be printed on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to Securityholders. No
representation is made as to the accuracy of such numbers either as printed on
the Securities or as contained in any notice of redemption and reliance may be
placed only on the other identification numbers placed thereon.
21. Governing Law.
The laws of the State of New York shall govern the Indenture,
this Security and the Guarantee without regard to principles of conflicts of
law.
The Company will furnish to any Holder of record of Securities
upon written request and without charge a copy of the Indenture.
<PAGE>
A-8
[FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]
SENIOR SUBORDINATED GUARANTEE
The Guarantors (as defined in the Indenture referred to in the
Security upon which this notation is endorsed) hereby, jointly and severally,
unconditionally guarantee on a senior subordinated basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") the due and punctual
payment of the principal of, premium, if any, and interest on the Securities,
whether at maturity, by acceleration or otherwise, the due and punctual payment
of interest on the overdue principal, premium and interest, if any, on the
Securities, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee, all in accordance with the terms set
forth in Article Eleven of the Indenture.
The obligations of each Guarantor to the Holders of Securities
and to the Trustee pursuant to the Guarantee and the Indenture are expressly set
forth, and are expressly subordinated and subject in right of payment to the
prior payment in full of all Guarantor Senior Indebtedness of such Guarantor, to
the extent and in the manner provided, in Article Twelve of the Indenture, and
reference is hereby made to such Indenture for the precise terms of the
Guarantee therein made.
The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.
This Guarantee shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflicts of law.
This Guarantee is subject to release upon the terms set forth
in the Indenture.
OWENS & MINOR MEDICAL, INC.
NATIONAL MEDICAL SUPPLY
CORPORATION
OWENS & MINOR WEST, INC.
KOLEY'S MEDICAL SUPPLY, INC.
<PAGE>
A-9
LYONS PHYSICIAN SUPPLY COMPANY
A. KUHLMAN & CO.
STUART MEDICAL, INC.
By:
Name:
Title:
<PAGE>
A-10
ASSIGNMENT FORM
If you the Holder want to assign this Security, fill in the
form below and have your signature guaranteed:
I or we assign and transfer this Security to:
Print or type name, address and zip code and
social security or tax ID number of assignee)
and irrevocably appoint ,
agent to transfer this Security on the books of the Company. The
agent may substitute another to act for him.
Dated: Signed:
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee:
<PAGE>
A-11
OPTION OF HOLDER TO ELECT PURCHASE
If you the Holder want to elect to have this Security purchased by
the Company, check the box: ( )
If you want to elect to have only part of this Security purchased
by the Company, state the amount: $
Dated: Your signature:
(Sign exactly as
name appears on the
other side of this
Security)
Signature Guarantee:
Exhibit 4(b)
CREDIT AGREEMENT
Dated as of May 24, 1996
among
OWENS & MINOR, INC.
as Borrower,
AND
CERTAIN OF ITS SUBSIDIARIES IDENTIFIED HEREIN
as Guarantors
THE BANKS IDENTIFIED HEREIN,
NATIONSBANK, N.A.,
as Agent,
BANK OF AMERICA NT & SA
and
CRESTAR BANK,
as Co-Agents,
AND
NATIONSBANK, N.A.,
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS.................................... 1
1.01 Definitions.................................................. 1
1.02 Computation of Time Periods.................................. 22
1.03 Accounting Terms............................................. 22
SECTION 2
CREDIT FACILITIES................................................... 22
2.01 Revolving Loan Commitment.................................... 22
2.02 Revolving Loan Advances...................................... 24
2.03 Conversion................................................... 25
2.04 Repayment of the Revolving Loans............................. 26
2.05 Interest on Revolving Loans.................................. 26
2.06 Revolving Notes.............................................. 26
2.07 Swingline Loan Subfacility................................... 26
2.08 [RESERVED]................................................... 29
2.09 Conditions of Lending........................................ 29
2.10 Termination of Commitments................................... 30
2.11 Fees......................................................... 30
2.12 Prepayments.................................................. 30
2.13 Increased Costs, Illegality, etc............................. 31
2.14 Capital Adequacy............................................. 33
2.15 Compensation................................................. 33
2.16 Net Payments................................................. 34
2.17 Change of Lending Office; Right to Substitute Lender......... 35
2.18 Payments and Computations.................................... 36
2.19 Pro Rata Treatment........................................... 36
2.20 Sharing of Payments.......................................... 37
2.21 Foreign Lenders.............................................. 37
SECTION 3
GUARANTEE........................................................... 38
3.01 The Guarantee................................................ 38
3.02 Obligations Unconditional.................................... 39
3.03 Reinstatement................................................ 40
3.04 Certain Additional Waivers................................... 40
3.05 Remedies..................................................... 40
3.06 Rights of Contribution....................................... 41
3.07 Continuing Guarantee......................................... 41
SECTION 4
CONDITIONS PRECEDENT................................................ 42
4.01 Conditions to Closing........................................ 42
4.02 Conditions to Initial Loan Advance........................... 42
SECTION 5
REPRESENTATIONS AND WARRANTIES...................................... 43
5.01 Organization and Good Standing............................... 43
5.02 Due Authorization............................................ 44
5.03 No Conflicts................................................. 44
5.04 Consents..................................................... 44
5.05 Enforceable Obligations...................................... 44
5.06 Financial Condition.......................................... 44
5.07 No Default................................................... 45
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<PAGE>
5.08 Liens........................................................ 45
5.09 Indebtedness................................................. 45
5.10 Litigation................................................... 45
5.11 Material Agreements.......................................... 45
5.12 Taxes........................................................ 45
5.13 Compliance with Law.......................................... 46
5.14 ERISA........................................................ 46
5.15 Subsidiaries................................................. 46
5.16 Use of Proceeds; Margin Stock................................ 46
5.17 Government Regulation........................................ 47
5.18 Hazardous Substances......................................... 47
5.19 Patents, Franchises, etc..................................... 47
5.20 Solvency..................................................... 47
5.21 Investments.................................................. 47
SECTION 6
AFFIRMATIVE COVENANTS............................................... 48
6.01 Information Covenants........................................ 48
6.02 Preservation of Existence and Franchises..................... 51
6.03 Books, Records and Inspections............................... 51
6.04 Compliance with Law.......................................... 51
6.05 Payment of Taxes and Other Indebtedness...................... 51
6.06 Insurance.................................................... 52
6.07 Maintenance of Property...................................... 52
6.08 Performance of Obligations................................... 52
6.09 ERISA........................................................ 52
6.10 Use of Proceeds.............................................. 53
6.11 Financial Covenants.......................................... 53
6.12 Additional Credit Parties.................................... 55
SECTION 7
NEGATIVE COVENANTS.................................................. 55
7.01 Indebtedness................................................. 55
7.02 Liens........................................................ 57
7.03 Guaranty Obligations......................................... 57
7.04 Nature of Business........................................... 57
7.05 Consolidation, Merger, Sale or Purchase of Assets, etc.
............................................................ 57
7.06 Advances, Investments and Loans.............................. 58
7.07 Prepayments and Amendments Relating to Other Debt............ 58
7.08 Transactions with Affiliates................................. 59
7.09 Ownership of Subsidiaries.................................... 59
7.10 Fiscal Year.................................................. 59
7.11 Subsidiary Dividends......................................... 59
7.12 Dividends.................................................... 60
7.13 Securitization Transaction................................... 60
SECTION 8
EVENTS OF DEFAULT................................................... 60
8.01 Events of Default............................................ 60
8.02 Acceleration; Remedies....................................... 63
SECTION 9
AGENCY PROVISIONS................................................... 64
9.01 Appointment.................................................. 64
9.02 Delegation of Duties......................................... 65
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<PAGE>
9.03 Exculpatory Provisions....................................... 65
9.04 Reliance on Communications................................... 66
9.05 Notice of Default............................................ 66
9.06 Non-Reliance on Agents and Other Banks....................... 66
9.07 Indemnification.............................................. 67
9.08 Agents in their Individual Capacity.......................... 68
9.09 Successor Agent.............................................. 68
SECTION 10
MISCELLANEOUS............................................................... 69
10.01 Notices....................................................... 69
10.02 Right of Set-Off.............................................. 69
10.03 Benefit of Agreement.......................................... 70
10.04 No Waiver; Remedies Cumulative................................ 73
10.05 Payment of Expenses, etc...................................... 73
10.06 Amendments, Waivers and Consents.............................. 74
10.07 Counterparts.................................................. 75
10.08 Headings...................................................... 75
10.09 Survival...................................................... 75
10.10 Governing Law; Submission to Jurisdiction; Venue.............. 75
10.11 Severability.................................................. 76
10.12 Entirety...................................................... 76
10.13 Survival...................................................... 76
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<PAGE>
SCHEDULES
Schedule 2.01(a) Schedule of Banks and Commitments
Schedule 2.02(1) Form of Notice of Borrowing
Schedule 2.02(2) Form of Notice of Conversion
Schedule 2.06 Form of Committed Revolving Note
Schedule 2.07(d) Form of Swingline Note
Schedule 4.01(b)(1) Form of Legal Opinion of Drew St. J. Carneal
Schedule 4.01(b)(2) Form of Legal Opinion of Hunton & Williams
Schedule 5.09 Schedule of Outstanding Indebtedness
Schedule 5.10 Schedule of Legal Proceedings
Schedule 5.15 Schedule of Subsidiaries
Schedule 5.18 Schedule of Environmental Exceptions
Schedule 6.01(c) Schedule of Borrowing Base Certificate
Schedule 6.01(d) Form of Officer's Compliance Certificate
Schedule 6.06 Schedule of Insurance
Schedule 6.12 Form of Joinder Agreement
Schedule 7.02 Schedule of Permitted Liens
Schedule 10.03 Form of Assignment and Acceptance Agreement
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<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of May 24, 1996 (the "Credit Agreement"), is
by and among OWENS & MINOR, INC., a Virginia corporation (the "Borrower"),
CERTAIN OF ITS SUBSIDIARIES identified as a "Guarantor" in the definition
thereof and on the signature pages hereto (hereinafter sometimes referred to
individually as a "Guarantor" and collectively as the "Guarantors"), the various
banks and lending institutions identified on the signature pages hereto (each a
"Bank" and collectively, the "Banks"), NATIONSBANK, N.A. as agent (in such
capacity, the "Agent" or "Administrative Agent"), BANK OF AMERICA NT & SA and
CRESTAR BANK as co-agents (in such capacity, the "CoAgents") and NATIONSBANK,
N.A., as administrative agent for the Banks (in such capacity, the
"Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Banks provide a $225,000,000
senior revolving credit facility for the purposes hereinafter provided;
WHEREAS, the Banks have agreed to provide the requested credit facility on
the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
1.01 Definitions. As used herein, the following terms shall have the
meanings herein specified unless the context otherwise requires. Defined terms
herein shall include in the singular number the plural and in the plural the
singular:
"Additional Credit Party" means each Person that becomes a Guarantor
after the Closing Date.
"Adjusted Eurodollar Rate" means for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing
(including conversions, extensions and renewals), a per annum
interest rate equal to the rate obtained by dividing (a) the
rate of interest determined by the Administrative Agent to be
the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple)
of the per annum rates at which deposits in U.S. dollars are
offered to the Administrative Agent in the interbank
eurodollar market at 11:00 A.M. (Charlotte, North Carolina
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<PAGE>
time) (or as soon thereafter as is practicable), in each case two Business
Days before the first day of such Interest Period, in an amount
substantially equal to such Eurodollar Loan comprising part of such
borrowing (including conversions, extensions and renewals) and for a period
equal to such Interest Period by (b) a percentage equal to 100% minus the
Adjusted Eurodollar Rate Reserve Percentage for such Interest Period. As
used herein, "Adjusted Eurodollar Rate Reserve Percentage" for the Interest
Period for each Eurodollar Loan comprising part of the same borrowing
(including conversions, extensions and renewals), means the percentage
applicable two Business Days before the first day of such Interest Period
under regulations issued from time to time by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities
consisting of or including "eurocurrency liabilities", as such term is
defined in Regulation D (or with respect to any other category of
liabilities which includes deposits by reference to which the interest rate
on Eurodollar Loans is determined) having a term equal to the Interest
Period for which such Adjusted Eurodollar Rate Reserve Percentage is
determined.
"Administrative Agent" means the administrative agent for the Banks
under this Credit Agreement as identified in the recital of parties
hereinabove, and any successors and assigns in such capacity.
"Administrative Agent's Fee Letter" means the letter agreement dated as
of March __, 1996 between the Administrative Agent and the Borrower, as
amended, modified, supplemented or replaced from time to time.
"Administrative Agent's Fees" means such term as defined in
Section 2.11(c).
"Affiliate" means, with respect to any Person, any other Person directly
or indirectly controlling (including but not limited to all directors and
officers of such Person), controlled by or under direct or indirect common
control with such Person. A Person shall be deemed to control a corporation
if such Person possesses, directly or indirectly, the power (i) to vote 10%
or more of the securities having ordinary voting power for the election of
directors of such corporation or (ii) to direct or cause direction of the
management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" means the agent for the Banks under this Credit Agreement as
identified in the recital of parties hereinabove, and any successors and
assigns in such capacity.
"Agents" means, collectively, the Agent, the Co-Agents and
the Administrative Agent.
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<PAGE>
"Applicable Federal Funds Rate" means, for any day, a per annum rate
equal to the sum of (i) the rate at which Federal funds are offered to the
Swingline Lender on an overnight basis as determined by such Swingline
Lender, plus (ii) one-eighth of one percent (1/8%).
"Applicable Percentage" means for any day, the rate per annum set forth
below opposite the applicable Leverage Ratio then in effect, it being
understood that the Applicable Percentage for (i) Base Rate Loans shall be
the percentage set forth under the column "Base Rate Margin", (ii)
Eurodollar Loans shall be the percentage set forth under the column
"Eurodollar and Fed Funds Swingline Loan Margin", (iii) Fed Funds Swingline
Loans shall be the percentage set forth under "Eurodollar and Fed Funds
Swingline Loan Margin" and (iv) the Commitment Fee shall be the percentage
set forth under the column "Commitment Fee":
Fixed Charge Coverage Ratio
<1.0:1.0 >=1.0:1.0
Eurodollar Eurodollar
and and
Fed Funds Fed Funds
Swingline Swingline
Leverage Loan Loan Base Rate Commitment
Ratio Margin Margin Margin Fee
>.60 1.250% 1.250% 0.25% 0.25%
-
<.60 but >.55 1.000% 1.000% 0.25% 0.25%
-
<.55 but >.50 1.000% 0.875% 0% 0.25%
-
<.50 but >.45 1.000% 0.750% 0% 0.25%
-
<.45 but >.40 1.000% 0.625% 0% 0.20%
-
<.40 1.000% 0.500% 0% 0.15%
The Applicable Percentage shall, in each case, be determined and adjusted
quarterly on the date five (5) Business Days after the date of delivery of
the quarterly compliance certificate and financial information provided in
accordance with Sections 6.01(a) and 6.01(b), as appropriate, provided that
the date of determination and adjustment shall not be later than the date 5
days after the date by which the Borrowers are required to provide such
quarterly or annual compliance certificate and financial information (each
an "Interest Determination Date") based on the information contained in such
quarterly or annual financial information. The Applicable Percentage shall
be effective from an Interest Determination Date until the next such
Interest Determination Date. The Administrative Agent shall determine the
appropriate Applicable Percentages promptly upon receipt of the quarterly or
annual financial information and promptly notify the Borrower and the Banks
of any change thereof. Such determinations by the Administrative Agent shall
be conclusive absent manifest error. The initial Applicable Percentages
shall be 0.25% in the case of Base Rate Loans, 1.25% in the case of
Eurodollar Loans and Fed Funds Swingline Loans, and
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<PAGE>
0.25% in the case of the Commitment Fee, until the first Interest
Determination Date occurring after the Closing Date.
"Assignee" means any bank or financial institution to which all or a
portion of the rights and obligations of a Bank under the terms of this
Credit Agreement have been assigned pursuant to Section 10.03(b) hereof.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United
States Code, as amended, modified, succeeded or replaced from time to time.
"Base Rate" means, for any day, a rate per annum (rounded upwards, if
necessary, to the nearest whole multiple of 1/16 of 1%) equal to the greater
of (a) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%
or (b) the Prime Rate in effect on such day. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate for any reason, including the inability of the
Administrative Agent to obtain sufficient quotations in accordance with the
terms hereof, the Base Rate shall be determined without regard to clause (a)
of the first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate or the
Federal Funds Effective Rate, respectively.
"Base Rate Loan" means a Loan which bears interest based on the Base
Rate.
"Borrower" means Owens & Minor, Inc., a Virginia
corporation.
"Borrowing Base" means, at any time, the sum of 85% of Eligible
Receivables plus 50% of Eligible Inventory.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions are authorized by law or
other governmental action to close in Richmond, Virginia, Charlotte, North
Carolina or New York, New York; except that in the case of Eurodollar Loans,
such day is also a day on which dealings between banks are carried on in
U.S. dollar deposits in the London interbank market.
"Capital Expenditures" means all expenditures for the purchase of
property, plant and equipment that would be capitalized in accordance with
generally accepted accounting principles, including without limitation
Capitalized Leases.
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<PAGE>
"Capitalized Lease" means any lease the payments and obligations with
respect to which would be required to be capitalized in accordance with
generally accepted accounting principles.
"Cash Equivalents" means (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the
United States of America is pledged in support thereof) having maturities of
not more than twelve months from the date of acquisition, (ii) U.S. dollar
denominated (or foreign currency fully hedged) time deposits, certificates
of deposit, Eurodollar time deposits and Eurodollar certificates of deposit
of (y) any domestic commercial bank of recognized standing having capital
and surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent thereof
or from Moody's is at least P-1 or the equivalent thereof (any such bank
being an "Approved Bank"), in each case with maturities of not more than 364
days from the date of acquisition, (iii) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by any domestic
corporation rated A-1 (or the equivalent thereof) or better by S&P or P-1
(or the equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition and (iv) repurchase agreements with a bank
or trust company (including a Bank) or a recognized securities dealer having
capital and surplus in excess of $500,000,000 for direct obligations issued
by or fully guaranteed by the United States of America in which the Borrower
shall have a perfected first priority security interest (subject to no other
liens or encumbrances) and having, on the date of purchase thereof, a fair
market value of at least 100% of the amount of the repurchase obligations.
"Change of Control" means (i) any Person or two or more Persons acting
in concert shall have acquired beneficial ownership, directly or indirectly,
of Voting Stock of the Borrower (or other securities convertible into such
Voting Stock) representing 35% or more of the combined voting power of all
Voting Stock of the Borrower, (ii) during any period of up to 24 consecutive
months, commencing after the Closing Date, individuals who at the beginning
of such 24 month period were directors of the Borrower cease to constitute a
majority of the board of directors of the Borrower and such event is a
result (directly or indirectly) of the acquisition of 5% or more of the
combined voting power of the Voting Stock by a Person or Persons who did not
own at least 5% or more of the combined voting power of the Voting Stock as
of the Closing Date (specifically excluding for purposes of this clause (ii)
the effect of conversion of all or any portion of the convertible preferred
stock held by the Hillman family on the Closing Date), or (iii) any Person
or two or more Persons acting in concert shall have acquired by contract or
otherwise, or shall have entered into a contract or
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<PAGE>
arrangement that, upon consummation, will result in its or their acquisition
of, control over Voting Stock of the Borrower (or other securities
convertible into such securities) representing 35% or more of the combined
voting power of all Voting Stock of the Borrower. As used herein,
"beneficial ownership" shall have the meaning provided in Rule 13d-3 of the
Securities and Exchange Commission under the Securities and Exchange Act of
1934.
"Closing Date" means the date on which the conditions set forth in
Section 4.01 shall have been fulfilled.
"Co-Agent" means the co-agents for the Banks under this Credit Agreement
as identified and defined in the recital of the parties hereinabove, and any
successors and assigns in such capacity.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitment" means the commitments of the Banks to make Revolving Loans,
of the Swingline Lender to make Swingline Loans and of the Banks to purchase
participation interests in the Swingline Loans.
"Commitment Fee" means such term as defined in Section
2.11(b).
"Commitment Period" means the period from and including the Closing Date
to but not including the earlier of (i) the Termination Date, or (ii) the
date on which the Revolving Commitments shall terminate in accordance with
the provisions of this Credit Agreement.
"Consistent Basis" or "consistent basis" means, with regard to the
application of accounting principles, accounting principles consistent in
all material respects with the accounting principles used and applied in
preparation of the financial statements previously delivered to the Banks
and referred to in Section 5.06.
"Consolidated Borrower Group" means the Borrower and its
Restricted Subsidiaries.
"Consolidated Current Assets" means as of the date of determination
thereof the total amount of current assets of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with generally
accepted accounting principles.
"Consolidated Current Liabilities" means as of the date of determination
thereof the total amount of current liabilities of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with generally
accepted accounting principles.
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<PAGE>
"Consolidated Current Ratio" means, at any time, the ratio
of Consolidated Current Assets to Consolidated Current
Liabilities.
"Consolidated Fixed Charges" means, for the applicable period ending as
of a Determination Date, the sum of (i) all Interest Expense on all
Indebtedness during such period, (ii) all Rentals (other than Rentals on
Capitalized Leases to the extent such Rentals are included in Interest
Expense or as a current maturity of a Capitalized Lease under subsection
(iii) hereof) payable during such period, (iii) current maturities of Funded
Debt and current maturities of Capitalized Leases as of such Determination
Date, and (iv) all dividends paid in cash or property and redemptions made
of capital stock (other than dividends paid to, or redemptions of capital
stock owned by, the Borrower or a wholly-owned Subsidiary) during such
period, in each case for the Borrower and its Subsidiaries on a consolidated
basis determined in accordance with generally accepted accounting
principles.
"Consolidated Net Income" means, for the applicable period ending as of
a Determination Date, the net income of the Borrower and its Subsidiaries
for such period, determined on a consolidated basis in accordance with
generally accepted accounting principles, but excluding for purposes of
determining compliance with the Fixed Charge Coverage Ratio in Section
6.11(d) hereof:
(a) any extraordinary gains or losses on the sale or other
disposition of assets, and any taxes on such excluded gains and any tax
deductions or credits on account of any such excluded losses;
(b) the proceeds of any life insurance policy;
(c) net earnings of any business entity (other than a Subsidiary) in
which the Borrower or any Subsidiary has an ownership interest unless
such net earnings shall have actually been received by the Borrower or
such Subsidiary in the form of cash distributions; and
(d) any portion of the net earnings of any Subsidiary which for any
reason is unavailable for payment of dividends to the Borrower or any
other Subsidiary.
"Consolidated Net Income Available for Fixed Charges" means, for the
applicable period ending as of a Determination Date, the sum of Consolidated
Net Income
plus (to the extent deducted in determining Consolidated Net Income)
(i) all provisions for any federal, state or other income taxes, (ii)
depreciation, amortization and other non-cash charges, including without
limitation any accrual necessary for purposes of conforming with
Financial Accounting Standards Board Statement Number 106 (as defined by
generally accepted accounting principles) to the extent
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<PAGE>
that the accrued portion thereof constitutes a non-cash
charge, (iii) Interest Expense, and (iv) all Rentals,
minus (v) all Capital Expenditures,
for the Borrower and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles.
"Consolidated Net Worth" means total stockholders' equity for the
Borrower and its Subsidiaries on a consolidated basis as determined in
accordance with generally accepted accounting principles.
"Consolidated Operating EBITDA" means, for the applicable period ending
as of a Determination Date, the sum of Consolidated Net Income plus (to the
extent deducted in determining Consolidated Net Income)
(i) all provisions for any Federal, state or other income
taxes,
(ii) depreciation, amortization and other non-cash charges, including
without limitation any accrual necessary for purposes of conforming with
Financial Accounting Standards Board Statement Number 106 (as defined by
generally accepted accounting principles) to the extent that the accrued
portion thereof constitutes a non-cash charge, and
(iii) Interest Expense,
for the Borrower and its Subsidiaries on a consolidated basis determined in
accordance with generally accepted accounting principles.
"Consolidated Tangible Net Worth" means total stockholders' equity minus
goodwill, patents, trade names, trade marks, copyrights, franchises,
organizational expense, deferred assets other than prepaid insurance and
prepaid taxes and such other assets as are properly classified as
"intangible assets", for the Borrower and its Subsidiaries on a consolidated
basis as determined in accordance with generally accepted accounting
principles.
"Consolidated Total Assets" means, at any time, all items, which would
be classified as assets of the Borrower and its Subsidiaries on a
consolidated basis determined in accordance with generally accepted
accounting principles.
"Consolidated Total Capitalization" means the sum of (i)
Consolidated Total Debt plus (ii) Consolidated Net Worth.
"Consolidated Total Debt" means all Indebtedness of the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with generally
accepted accounting
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<PAGE>
principles plus to the extent not included under generally accepted
accounting principles, items referenced in the definition of "Indebtedness".
"Controlled Group" means (i) the controlled group of corporations as
defined in Section 414(b) of the Code and the applicable regulations
thereunder, or (ii) the group of trades or businesses under common control
as defined in Section 414(c) of the Code and the applicable regulations
thereunder, of which the Borrower is a part or may become a part.
"Credit Documents" means this Credit Agreement, the Notes, any Joinder
Agreement and all other related agreements and documents issued or delivered
hereunder or thereunder or pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Default" means any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Bank" means, at any time, any Bank that, at such time, (i)
has failed to make an Extension of Credit required pursuant to the terms of
this Credit Agreement, (ii) has failed to pay to the Agent or any Bank an
amount owed by such Bank pursuant to the terms of the Credit Agreement or
any other of the Credit Documents, or (iii) has been deemed insolvent or has
become subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar official.
"Determination Date" means the last day of each quarterly
fiscal period of the Borrower.
"Dividend" means any payment by the Borrower or any of its non-wholly
owned Subsidiaries of a payment, distribution, or dividend (other than a
dividend or distribution payable solely in stock of the Person making such
payment, distribution or dividend) on, or any payment on account of the
purchase, redemption or retirement of, or any other distribution, any shares
of any class of stock or other ownership interest in the Borrower or any of
its Subsidiaries (including any such payment or distribution in cash or in
property or obligations of the Borrower or any of its Subsidiaries).
"Eligible Assignee" means any Bank or Affiliate or subsidiary of a Bank;
and any other commercial bank, financial institution or "accredited
investor" (as defined in Regulation D of the Securities and Exchange
Commission) with combined capital surplus in excess of $500,000,000
reasonably acceptable to the Administrative Agent and the Borrower.
"Eligible Inventory" means, as of any date of determination, the
aggregate book value (based on a FIFO valuation) of all inventory of the
Credit Parties on a consolidated basis after
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<PAGE>
deducting allowances or reserves relating thereto, as shown on the books and
records of the Credit Parties.
"Eligible Receivables" means as of any date of determination, the
aggregate net book value of all accounts, accounts receivable, receivables,
and obligations for payment created or arising from the sale of inventory or
the rendering of services in the ordinary course of business, owned by or
owing to the Credit Parties on a consolidated basis after deducting
allowances or reserves relating thereto, as shown on the books and records
of such Credit Parties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and the rulings
issued thereunder.
"ERISA Affiliate" means each person (as defined in Section 3(9) of
ERISA) which together with the Borrower, any Subsidiary of the Borrower or
member of the Consolidated Borrower Group would be deemed to be a member of
the same "controlled group" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loan" means a Loan which bears interest based on the
Adjusted Eurodollar Rate.
"Event of Default" has the meaning specified in Section 8.
"Extension of Credit" means any Loan advance.
"Fed Funds Swingline Loan" means a Loan which bears interest
based on the Applicable Federal Funds Rate.
"Federal Funds Effective Rate" means, for any day, the weighted average
of the rates on overnight Federal funds transactions with members of the
Federal Reserve Bank of New York, or, if such rate is not so released for
any day which is a Business Day, the arithmetic average (rounded upwards to
the next 1/100th of 1%), as determined by the Administrative Agent, of the
quotations for the day of such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by
it.
"Fees" means all fees payable pursuant to Section 2.11.
"Fitch" means Fitch Investors Service, Inc., and any
successor thereof.
"Fixed Charge Coverage Ratio" means the ratio of
Consolidated Net Income Available for Fixed Charges to
Consolidated Fixed Charges.
"Funded Debt" means, for any Person, (i) all Indebtedness of such Person
for borrowed money or which has been incurred in connection with the
acquisition of assets, in each case having a final maturity of one or more
years from the date of origin
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<PAGE>
thereof (or which is renewable or extendible at the option of the obligor
for a period or periods more than one year from the date of origin), (ii)
all Capitalized Lease obligations for such Person, and (iii) all Guaranty
Obligations by such Person of Funded Debt of others. Funded Debt shall
include, without duplication, payments in respect of Funded Debt which
constitute current liabilities of the obligor under generally accepted
accounting principles.
"Generally Accepted Accounting Principles" or "generally accepted
accounting principles" means generally accepted accounting principles at the
time in the United States. Except as otherwise expressly provided, all
references to generally accepted accounting principles shall be applied on a
consistent basis.
"Governmental Authority" means any Federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guarantor" means those corporations and entities identified as a
"Guarantor" on the signature pages hereto, being Owens & Minor Medical,
Inc., a Virginia corporation, National Medical Supply Corporation, a
Delaware corporation, Owens & Minor West, Inc., a California corporation,
Koley's Medical Supply, Inc., a Nebraska corporation, Lyons Physician Supply
Company, an Ohio corporation, A. Kuhlman & Company, a Michigan corporation,
and Stuart Medical, Inc., a Pennsylvania corporation; and each Additional
Credit Party which has executed a Joinder Agreement.
"Guaranty Obligations" means any obligations (other than (i)
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection and (ii) Standard Securitization Obligations
relating to Qualified Securitization Transactions) guaranteeing or intended
to guarantee any Indebtedness, leases, dividends or other obligations of any
other Person in any manner, whether direct or indirect, and including
without limitation any obligation, whether or not contingent, (i) to
purchase any such Indebtedness or other obligation or any property
constituting security therefor, (ii) to advance or provide funds or other
support for the payment or purchase of such indebtedness or obligation or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements and capital
maintenance agreements), (iii) to lease or purchase property, securities or
services primarily for the purpose of assuring the owner of such
Indebtedness or obligation, or (iv) to otherwise assure or hold harmless the
owner of such Indebtedness or obligation against loss in respect thereof.
The amount of Guaranty Obligations hereunder shall be deemed to be an amount
equal to the stated or determinable amount of the Indebtedness or obligation
in respect of which such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated amount in respect thereof
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<PAGE>
(assuming such other Person is required to perform thereunder) as determined
in good faith.
"Hygeia Note" means that $11,500,000 0% Convertible Subordinated Note of
the Borrower due May 31, 1997.
"Indebtedness" means without duplication, (i) all indebtedness for
borrowed money, (ii) all obligations evidenced by bonds, debentures, notes
or similar instruments, or upon which interest payments are customarily
made, (iii) the deferred purchase price of assets or services which in
accordance with generally accepted accounting principles would be shown to
be a liability (on the liability side of a balance sheet), (iv) all Guaranty
Obligations, (v) the maximum stated amount of all letters of credit issued
or acceptance facilities established for the account of such Person and,
without duplication, all drafts drawn thereunder (other than letters of
credit (x) supporting other Indebtedness of the Borrower or a Subsidiary or
(y) offset by a like amount of cash or government securities pledged or held
in escrow to secure such letter of credit and draws thereunder), (vi) all
Capitalized Lease obligations, (vii) all Indebtedness of another Person
secured by any Lien on any property of the Borrower or a Restricted
Subsidiary, whether or not such Indebtedness has been assumed, in an amount
not to exceed the fair market value of the property of the Borrower or
Restricted Subsidiary securing such Indebtedness, (viii) all obligations
under take-or-pay or similar arrangements or under interest rate, currency,
or commodities agreements, (ix) indebtedness created or arising under any
conditional sale or title retention agreement, (x) all preferred stock which
by its terms requires redemption, mandatory sinking fund payments or the
like, by a fixed date prior to the Termination Date, (xi) the aggregate net
amount of indebtedness or obligations relating to the sale, contribution or
other conveyance of accounts receivable (or similar transaction) (exclusive
of intercompany obligations owing between the Securitization Subsidiary and
a Credit Party pursuant to a Qualified Securitization Transaction permitted
hereunder) regardless of whether such transaction is effected without
recourse or in a manner which would not be reflected on a balance sheet in
accordance with generally accepted accounting principles, (xii) the
principal balance outstanding under any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with generally accepted accounting principles; but speci fically
excluding from the foregoing trade payables and accrued expenses arising or
incurred in the ordinary course of business.
"Initial Funding Date" means the date on which the conditions to initial
funding set forth in Section 4.02 hereof shall have been fulfilled (or
waived) and on which the initial Loan advance shall have been made.
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"Interest Expense" means, for any period, all interest expense,
including the amortization of debt discount and premium and the interest
component under Capitalized Leases, determined in accordance with generally
accepted accounting principles plus the discount in connection with the sale
of Receivables and Receivables Related Assets in connection with a Qualified
Securitization Transaction.
"Interest Payment Date" means (i) as to Base Rate Loans and Fed Funds
Swingline Loans, the last day of each month, the date of repayment and on
the Termination Date and (ii) as to Eurodollar Loans, on the last day of
each Interest Period for such Loan, the date of repayment and on the
Termination Date, and in addition where the applicable Interest Period is
more than 3 months, in the case of Eurodollar Loans, then also on the date 3
months from the beginning of the Interest Period, and each 3 months
thereafter. If an Interest Payment Date falls on a date which is not a
Business Day, such Interest Payment Date shall be deemed to be the next
succeeding Business Day, except that in the case of Eurodollar Loans where
the next succeeding Business Day falls in the next succeeding calendar
month, then on the next preceding day.
"Interest Period" means, a period of one, two, three or six months'
duration, and also as to Eurodollar Loans of up to $20,000,000, a period of
7-days' duration (provided that no more than one such Revolving Loan with a
7-day Interest Period may be outstanding at any time), as the Borrower may
elect, commencing in each case, on the date of the borrowing (including
conversions, extensions and renewals); provided, however, (A) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Termination Date and (C) where an
Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is to
end, such Interest Period shall end on the last day of such calendar month.
"Interest Rate Protection Agreement" means any interest rate swap,
collar or other interest protection agreement.
"Joinder Agreement" means a Joinder Agreement substantially in the form
of Schedule 6.12 hereto executed and delivered by an Additional Credit Party
in accordance with the provisions of Section 6.12.
"Leverage Ratio" means the ratio of Consolidated Total Debt
to Consolidated Total Capitalization.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, security interest, encumbrance, lien (statutory or otherwise)
or charge of any kind (including any agreement to give any of the foregoing,
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any conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the Uniform Commercial Code as
adopted and in effect in the relevant jurisdiction or other similar
recording or notice statute, and any lease in the nature thereof) securing
or purporting to secure any Indebtedness.
"Loan" means a Revolving Loan and/or Swingline Loan, as
appropriate.
"Material Adverse Effect" means a material adverse effect on (i) the
operations or financial condition of the Borrower and its Restricted
Subsidiaries, or of the Borrower and its Subsidiaries, in each case taken as
a whole, (ii) the ability of the Borrower or Guarantors to perform their
respective obligations under this Credit Agreement, or (iii) the validity or
enforceability of this Credit Agreement, or any of the other Credit
Documents, in each case as to the obligations of the Borrower or the
Guarantors hereunder or thereunder, or the rights and remedies of the Banks
hereunder or thereunder.
"Moody's" means Moody's Investors Service, Inc., and any
successor thereof.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made
contributions, including for these purposes any Person which ceased to be a
member of the Controlled Group during such five year period.
"NationsBank" means NationsBank, N.A. or its successor.
"Non-Guarantor Subsidiaries" means Subsidiaries of the Borrower which
are not Guarantors, as referenced in Section 6.12(a).
"Non-U.S. Person" means any Person that is not a United
States person within the meaning of Section 7701(a)(30) of the
Code.
"Note" or "Notes" means the Revolving Notes and/or the Swingline Note,
individually or collectively, as appropriate.
"Notice of Borrowing" shall have such meaning as provided in Sections
2.02(a) and Section 2.07(b).
"Notice of Conversion" shall have such meaning as provided
in Section 2.03.
"Obligations" means, without duplication, all of the obligations of the
Borrower or other Credit Party to the Banks, the Administrative Agent and
the Co-Agents (including the obligations to pay principal of and interest on
the Loans, to pay and satisfy guaranty obligations in respect of the
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Loans, to pay all Fees, to pay certain expenses and the obligations arising
in connection with various indemnities) whenever arising, under this Credit
Agreement, the Notes or any of the other Credit Documents to which the
Borrower or other Credit Party is a party.
"PBGC" means the Pension Benefit Guaranty Corporation established under
ERISA, and any successor thereto.
"Participant" means any Person to which a participation in all or any
part of a Bank's interests and obligations under the terms of this Credit
Agreement have been sold, transferred, granted, or assigned pursuant to
Section 10.03(c) hereof.
"Participation Interest" means the extension of credit by a Bank by way
of purchase of a participation hereunder in Revolving Loans as provided in
Section 2.20 or in Swingline Loans as provided in Section 2.07(b)(iii).
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
receivables owing to the Borrower or its Restricted Subsidiaries or any of
its receivables and advances to suppliers, in each case if created, acquired
or made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms, (iii) subject to the limitations set
out in Section 7.05(b), investments by the Borrower and its Restricted
Subsidiaries in and to a Credit Party, including any investment in a
corporation which, after giving effect to such investment, will become an
Additional Credit Party (provided such Additional Credit Party shall execute
a Joinder Agreement), (iv) loans and advances in the usual and ordinary
course of business to officers, directors and employees for expenses
(including moving expenses related to a transfer) incidental to carrying on
the business of the Borrower or any Restricted Subsidiary in an aggregate
amount not to exceed $1,500,000 at any time outstanding, (v) investments
(including debt obligations) received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in
the ordinary course of business, (vi) investments in a Securitization
Subsidiary or Special Purpose Vehicle relating to a Qualified Securitization
Transaction and (vii) addi tional loan advances and/or investments of a
nature not contemplated by the foregoing clauses hereof, provided that such
loans, advances and/or investments made pursuant to this clause (vii) shall
not exceed $3,000,000 in aggregate amount at any time outstanding. As used
herein, "investment" means all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by acquisition
of shares of capital stock, indebtedness or other obligations or securities
or by loan advance, capital contribution or otherwise.
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"Permitted Liens" means (i) Liens created by, under or in connection
with this Credit Agreement or the other Credit Documents in favor of the
Banks; (ii) Liens described on Schedule 7.02 attached hereto; (iii) Liens
for taxes not yet delinquent or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves determined in
accordance with generally accepted accounting principles have been
established (and as to which the property subject to such lien is not yet
subject to foreclosure, sale or loss on account thereof); (iv) Liens in
respect of property imposed by law arising in the ordinary course of
business such as materialmen's, mechanics', warehousemen's and other like
Liens provided that such Liens secure only amounts not more than 30 days
past due or are being contested in good faith by appropriate proceedings for
which adequate reserves determined in accordance with generally accepted
accounting principles have been established (and as to which the property
subject to such lien is not yet subject to foreclosure, sale or loss on
account thereof); (v) pledges or deposits made to secure payment of worker's
compensation insurance, unemployment insurance, pensions or social security
programs; (vi) Liens arising from good faith deposits in connection with or
to secure performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of
business (other than obligations in respect of the payment of borrowed
money); (vii) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other similar
charges or encumbrances not, in any material respect, impairing the use of
such property for its intended purposes or interfering with the ordinary
conduct of business of the Borrower and its Subsidiaries taken as a whole;
(viii) Liens regarding operating or financing leases permitted by this
Credit Agreement; (ix) leases or subleases granted to others in the ordinary
course of business not interfering in any material respect with the business
or operations of the Borrower or its Subsidiaries; (x) purchase money Liens
securing purchase money indebtedness to the extent permitted under Section
7.01; (xi) Liens in favor of customs and revenue authorities arising as a
matter of law to secure payment of customs duties in connection with the
importation of goods; (xii) any judgment lien which does not create an Event
of Default under Section 8.01(h) of this Credit Agreement, (xiii) Liens
related to a Qualified Securitization Transaction and (xiv) Liens in favor
of a Bank or Affiliate of a Bank hereunder, but only (A) to the extent such
Liens secure obligations under Interest Rate Protection Agreements permitted
under Section 7.01, (B) to the extent such Liens are on the same collateral
as to which the Banks also have a Lien and (C) to the extent such provider
of an Interest Rate Protection Agreement and the Banks hereunder share pari
passu in collateral subject to such Liens.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association,
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trust or other enterprise (whether or not incorporated), or any government
or political subdivision or any agency, department or instrumentality
thereof.
"Plan" means any single-employer plan as defined in Section 4001 of
ERISA, which is maintained, or at any time during the five calendar years
preceding the date of this Credit Agreement was maintained, for employees of
the Borrower, any Subsidiary or an ERISA Affiliate.
"Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect at
its principal office in Charlotte, North Carolina; each change in the Prime
Rate shall be effective on the date such change is publicly announced as
effective. The Prime Rate is not necessarily the best or lowest rate offered
by NationsBank.
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the
four-fiscal quarter period ending as of the end of the fiscal quarter most
recently ended prior to the date of such transaction with respect to which
the Administrative Agent has received the financial information required
under Section 6.01. As used herein, "transaction" means any Dividend as
referred in Section 7.12.
"Qualified Securitization Transaction" means any transaction or series
of transactions that has been or may be entered into by the Borrower or any
of its Subsidiaries in connection with which the Borrower or any of its
Subsidiaries may sell, convey or otherwise transfer to (i) a Securitization
Subsidiary or (ii) any other Person, or may grant a security interest in,
any Receivables or interests therein (whether such Receivables are then
existing or arising in the future) of the Borrower or any of its
Subsidiaries, and any assets related thereto including, without limitation,
all security interests in merchandise or services financed thereby, the
proceeds of such Receivables, and other assets which are customarily sold or
in respect of which security interests are customarily granted in connection
with securitization transactions involving such assets; provided that (A) in
connection therewith, there shall be no recourse to the Borrower or any
Restricted Subsidiary other than pursuant to Standard Securitization
Obligations, (B) such Qualified Securitization Transaction shall not be
supported by Guaranty Obligations of the Borrower or any of its Restricted
Subsidiaries other than pursuant to Standard Securitization Obligations, (C)
the Administrative Agent and the Required Banks shall be reasonably
satisfied with the structure thereof and documentation therefor, including
the discount at which such accounts receivable are sold or the advance rate
against which borrowings are advanced and the applicable termination events
which shall, in any event, be consistent with those prevailing in the market
for similar transactions, and (D) the accounts receivable purchase agreement
or other similar agreements relating thereto shall
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not be amended or modified in a manner materially adverse to the Banks and
their interests hereunder as determined by the Agent in its reasonable
discretion (including any change in (w) the amount of Receivables and
Receivables Related Assets covered thereby, (x) the discount rate at which
such Receivables and Receivables Related Assets are sold, (y) the advance
rate against which amounts are advanced, (z) the applicable termination
events, and any other items materially adverse to the interests of the
Banks) except with the prior written consent of the Administrative Agent and
the Required Banks. The series of transactions contemplated in the
Securitization Agreements are Qualified Securitization Transactions.
"Receivables" means any right of payment whether constituting an
account, chattel paper, instrument, general intangible or otherwise, arising
from the sale, lease or financing by the Borrower or any Subsidiary of the
Borrower of merchandise or rendering of services, and monies due thereunder.
"Receivables Related Assets" means (i) any rights arising under the
documentation governing or relating to such Receivables (including rights in
respect of Liens securing such Receivables and other credit support in
respect of such Receivables), (ii) any proceeds of such Receivables and any
lockboxes or accounts in which such proceeds are deposited, (iii) spread
accounts and other similar accounts (and any amounts on deposit therein)
established in connection with a Qualified Securitization Transaction, (iv)
any warranty, indemnity, dilution and other intercompany claim arising out
of the documentation evidencing such Qualified Securitization Transaction,
and (v) other assets that are customarily transferred or in respect of which
security interests are customarily granted in connection with asset
securitization transactions involving accounts receivable.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing margin requirements.
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"Rentals" means, as of the date of determination thereof, all fixed
payments (including as such all payments which the lessee is obligated to
make to the lessor on termination of the lease or surrender of the leased
property) payable by a Person, as lessee or sublessee under a lease of real
or personal property, but shall be exclusive of any amounts required to be
paid by such Person (whether designated as rents or additional rents) on
account of maintenance, repairs, insurance, taxes and similar charges. Fixed
rents under any so-called "percentage leases" shall be computed solely on
the basis of the minimum rents, if any, required to be paid by the lessee
regardless of sales volume or gross revenues.
"Required Banks" means Banks holding in the aggregate at least 51% of
the Commitments (other than with respect to Swingline Loans) or, if the
aggregate Commitments have been terminated, Banks in the aggregate holding
at least 51% of the principal amount of the Loans then outstanding (taking
into account Participation Interests therein); provided that the Commitments
of, or outstanding Loans owing to, a Defaulting Bank shall be excluded for
purposes of making determinations hereunder.
"Responsible Officer" means, with respect to the subject matter of any
representation, warranty, covenant, agreement, obligation or certificate of
any Credit Party contained in or delivered pursuant to any of the Credit
Documents, the President, any Executive Vice President, Senior Vice
President, Vice President, Chief Financial Officer, Treasurer, Controller,
or any other officer of the Consolidated Borrower Group who in the normal
performance of his operational responsibilities would have knowledge of such
matter and the requirements with respect thereto.
"Restricted Subsidiary" means any Subsidiary other than a Securitization
Subsidiary (i) which is organized under the laws of the United States or any
State thereof; (ii) which conducts substantially all of its business and has
substantially all of its assets within the United States; and (iii) of which
more than 50% (by number of votes) of the Voting Stock is beneficially
owned, directly or indirectly, by the Borrower.
"Revolving Committed Amount" means collectively the aggregate amount of
all of the Banks' commitments, and individually the amount of each such
Bank's commitment to make Revolving Loans specified in Schedule 2.01, as
such amounts may from time to time be reduced in accordance with the
provisions of Sections 2.10 and 2.12(b) hereof.
"Revolving Loan" means a revolving credit loan made by the Banks
pursuant to the provisions of Section 2.01.
"Revolving Note" means the promissory notes of the Borrower in favor of
each of the Banks evidencing the Revolving Loans provided pursuant to
Section 2.06, individually or
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collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Corporation, and any successor
thereof.
"Securitization Agreements" means (i) the Amended and Restated Purchase
and Sale Agreement among Owens & Minor Medical, Inc., Stuart Medical, Inc.,
the Borrower and O&M Funding Corp., dated May 28, 1996, and (ii) the Amended
and Restated Receivables Purchase Agreement among O&M Funding Corp., Owens &
Minor Medical, Inc., Owens & Minor, Inc. Receivables Capital Corporation and
Bank of America National Trust and Savings Association, dated as of May 28,
1996, (iii) the Amended and Restated Parallel Asset Purchase Agreement among
O&M Funding Corp., Owens & Minor Medical, Inc., the Borrower, the Parallel
Purchasers from time to time parties thereto and Bank of America National
Trust and Savings Association, dated as of May 28, 1996 and (iv) such other
agreements and documents executed or delivered under or in connection with
the aforementioned agreements, as any such agreement referred to in clauses
(i) through (iv) may be amended, supplemented or otherwise modified from
time to time.
"Securitization Subsidiary" means (x) O&M Funding Corp. and (y) any
other wholly owned Subsidiary of the Borrower which engages in no activities
other than those reasonably related to or in connection with the entering
into of securitization transactions and which is designated by the Board of
Directors of the Borrower (as provided below) as a Securitization Subsidiary
(a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of which (i) is guaranteed by the Borrower or any other
Subsidiary of the Borrower other than pursuant to Standard Securitization
Obligations, (ii) is recourse to or obligates the Borrower or any other
Subsidiary of the Borrower in any way other than pursuant to Standard
Securitization Obligations or (iii) subjects any property or asset of the
Borrower or any other Subsidiary of the Borrower, directly or indirectly,
contingently or otherwise, to any Lien or to the satisfaction thereof, other
than pursuant to Standard Securitization Obligations, (b) to or with which
neither the Borrower nor any other Subsidiary of the Borrower (i) provides
credit support or (ii) has any contract, agreement, arrangement or
understanding other than on terms that are fair and reasonable and that are
no less favorable to the Borrower or such Subsidiary than could be obtained
from an unrelated Person (other than, in the case of subclauses (i) and (ii)
of this clause (b), representations, warranties and covenants (including
those relating to servicing) entered into in the ordinary course of business
in connection with a Qualified Securitization Transaction and intercompany
notes relating to the sale of Receivables to such Securitization Subsidiary)
and (c) to which neither the Borrower nor any Subsidiary of the Borrower has
any obligation to maintain or preserve such
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<PAGE>
Securitization Subsidiary's financial condition or to cause such
Securitization Subsidiary to achieve certain levels of operating results.
Any such designation by the Board of Directors of the Borrower (other than
with respect to O&M Funding Corp.) shall be evidenced to the Administrative
Agent by filing with the Administrative Agent a certified copy of the
resolutions of the Board of Directors of the Borrower giving effect to such
designation.
"Senior Subordinated Notes" means those $150,000,000 10.875% Senior
Subordinated Notes of the Borrower due 2006.
"Special Purpose Vehicle" means a trust, partnership or other entity
established by the Borrower or its Subsidiaries to implement a Qualified
Securitization Transaction.
"Standard Securitization Obligations" means representations, warranties,
covenants, indemnities and other obligations entered into by the Borrower or
any Subsidiary which are reasonably customary in asset securitization
transactions involving accounts receivable.
"Subordinated Debt" means (i) the indebtedness evidenced by the Senior
Subordinated Notes and (ii) any other Indebtedness which by its terms is
specifically subordinated in right of payment to the prior payment of the
Loans and obligations hereunder and under the other Credit Documents on
terms and conditions satisfactory to the Required Banks.
"Subsidiary" means, as to any Person, (i) any corporation more than 50%
of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time, any 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 owned by such Person directly or
indirectly through Subsidiaries, and (ii) any partnership, association,
joint venture or other entity in which such person directly or indirectly
through Subsidiaries has more than 50% equity interest at any time. Except
as otherwise expressly provided, all references herein to "Subsidiary" shall
mean a Subsidiary of the Borrower; provided, however, that any Special
Purpose Vehicle shall not be considered to be a Subsidiary of the Company
for purposes of this Credit Agreement.
"Swingline Committed Amount" means the amount of the Swingline Lender's
commitment to make Swingline Loans as specified in Section 2.07(a), as such
amount may from time to time be reduced in accordance with the provisions of
Section 2.10 hereof.
"Swingline Lender" means NationsBank, or such other Bank as the Borrower
has requested and as to which such requested successor Swingline Lender and
the Required Banks may agree,
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and their respective successors and assigns. There shall be
no more than one Swingline Lender at any time.
"Swingline Loan" means a swingline revolving credit loan made by the
Swingline Lender pursuant to the provisions of Section 2.07.
"Swingline Note" means the promissory note of the Borrower in favor of
the Swingline Lender evidencing the Swingline Loans as provided pursuant to
Section 2.07(d), as such promissory note may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Taxes" shall have such meaning as provided in Section 2.16.
"Termination Date" means the date which is the fifth (5th) anniversary
of the Closing Date, or if extended in the sole discretion of the Banks as
provided in Section 2.01, such later date as to which the Termination Date
may be extended.
"Threshold Requirement" means such term as defined in
Section 6.12.
"Upfront Fee" means such term as defined in Section 2.11(a).
"Voting Stock" means the voting stock or other securities of any class
or classes, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
1.02 Computation of Time Periods. For purposes of computa
tion of periods of time hereunder, the word "from" means "from
and including" and the words "to" and "until" each mean "to but
excluding."
1.03 Accounting Terms. Accounting terms used but not other wise defined
herein shall have the meanings provided by, and be construed in accordance with,
generally accepted accounting principles. References herein to "consolidating"
financial statements shall mean and include financial statements for each
business segment of the subject Person.
SECTION 2
CREDIT FACILITIES
2.01 Revolving Loan Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Bank severally agrees to make credit loans
(each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower for the purposes hereinafter set forth; provided, however, that (i)
with regard to the Banks collectively, the amount of the Revolving Loans
outstanding shall not at any time exceed TWO HUNDRED TWENTY-FIVE MILLION DOLLARS
($225,000,000) in the aggregate (as
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such aggregate maximum amount may be reduced from time to time as hereinafter
provided, the "Revolving Committed Amount"), and (ii) with regard to each Bank
individually, each such Bank's pro rata share of outstanding Revolving Loans
shall not at any time exceed such Bank's Revolving Committed Amount; and
provided, further, that notwithstanding anything herein to the contrary, the sum
of Revolving Loans plus Swingline Loans shall not at any time exceed the lesser
of the aggregate Revolving Committed Amount or the Borrowing Base. Revolving
Loans hereunder may consist of Base Rate Loans or Eurodollar Loans (or a
combination thereof) as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof.
The Borrower may, not more than 90 days but not less than 60 days prior to the
third anniversary date of the Closing Date and each anniversary date thereafter,
by notice to the Administrative Agent, make written request of the Banks to
extend the Termination Date for an additional period of one year. The
Administrative Agent will give prompt notice to each of the Banks of its receipt
of any such request for extension of the Termination Date. Each Bank shall make
a determination not later than 30 days prior to the then applicable anniversary
date as to whether or not it will agree to extend the Termination Date as
requested; provided, however, that failure by any Bank to make a timely response
to the Borrower's request for extension of the Termination Date shall be deemed
to constitute a refusal by the Bank to extend the Termination Date. If, in
response to a request for an extension of the Termination Date, one or more
Banks shall fail to agree to the requested extension (the "Disapproving Banks"),
then provided that the requested extension is approved by Banks holding at least
75% of the Commitments hereunder (the "Approving Banks"), the Borrower may, at
its own expense with the assistance of the Administrative Agent, within a period
of 30 days thereafter, make arrangements for another bank or financial
institution agreeable to the extension of such Termination Date and reasonably
acceptable to the Administrative Agent, to acquire, in whole or in part, the
Loans and Commitments of the Disapproving Banks, whereupon after giving effect
to the assignment of the Disapproving Banks' Loans and Commitments in accordance
with the terms hereof the Termination Date shall be extended and the credit
facility continued hereunder at existing levels. If on the other hand the
Borrower is unable to make arrangements for the replacement of the Disapproving
Banks in accordance with the terms hereof, then the Borrower shall have the
option of (i) continuing the credit facility hereunder at existing levels until
the Termination Date then in effect without extension, or (ii) upon payment to
the Disapproving Banks of the amount of Loans and other amounts owing to them
and termination of their Commitments hereunder, extending and continuing the
credit facility hereunder at a lower aggregate amount equal to the Commitments
held by the Approving Banks until the new Termination Date as extended. Where
any such arrangements are made for another bank or financial institution to
acquire the Loans and Commitments of a Disapproving Bank, or any portion
thereof, then upon payment of the Loans and other amounts owing to it and
termination of its Commitments relating thereto, such
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Disapproving Bank shall promptly transfer and assign, in whole or in part, as
requested, without recourse (in accordance with and subject to the provisions of
Section 10.03), all or part of its interests, rights and obligations under this
Credit Agreement to such bank or financial institution which shall assume such
assigned obligations and become a "Bank" under this Credit Agreement (which
assignee may be another Bank, if a Bank accepts such assignment); provided, that
such assignment shall not conflict with any law, rule or regulation or order of
any court or other Governmental Authority.
2.02 Revolving Loan Advances.
(a) Notices. Whenever the Borrower desires a Revolving Loan advance
hereunder, it shall give written notice (or telephone notice promptly
confirmed in writing) to the Administrative Agent (a "Notice of Borrowing")
not later than 12:00 Noon (Charlotte, North Carolina time) on the Business
Day of the requested advance in the case of Base Rate Loans and on the third
Business Day prior to the requested advance in the case of Eurodollar Loans.
Each such notice shall be irrevocable and shall specify (i) that a Revolving
Loan is requested, (ii) the date of the requested advance (which shall be a
Business Day), (iii) the aggregate principal amount of Revolving Loans
requested, and (iv) whether the Loan requested shall consist of Base Rate
Loans, Eurodollar Loans or a combination thereof, and if Eurodollar Loans
are requested, the Interest Periods with respect thereto. If the Borrower
shall fail to specify in any Notice of Borrowing (A) an applicable Interest
Period in the case of a Eurodollar Loan, then such notice shall be deemed to
be a request for an Interest Period of one month, or (B) the type of
Revolving Loan requested, then such notice shall be deemed to be a request
for a Base Rate Loan hereunder. The Administrative Agent shall as promptly
as practicable give each Bank notice of each requested Revolving Loan
advance, of such Bank's pro rata share thereof and of the other matters
covered in the Notice of Borrowing.
(b) Minimum Amounts. Revolving Loan advances shall be
in a minimum aggregate amount of $5,000,000 and integral
multiples of $1,000,000 in excess thereof.
(c) Advances. Each Bank will make its pro rata share of each Revolving
Loan advance available to the Administrative Agent by 2:00 P.M. (Charlotte,
North Carolina time) on the date specified in the Notice of Borrowing by
deposit in U.S. dollars of immediately available funds at the offices of the
Administrative Agent in Charlotte, North Carolina, or at such other address
in the United States as the Administrative Agent may designate in writing.
All Revolving Loan advances shall be made by the Banks pro rata on the basis
of each Bank's respective share of the aggregate Revolving Committed Amount.
No Bank shall be responsible for the failure or delay by any other Bank in
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its obligation to make Revolving Loan advances hereunder; provided, however,
that the failure of any Bank to fulfill its commitments hereunder shall not
relieve any other Bank of its commitments hereunder. Unless the
Administrative Agent shall have been notified by any Bank prior to the date
of any such Revolving Loan advance that such Bank does not intend to make
available to the Administrative Agent its portion of the Revolving Loan
advance to be made on such date, the Administrative Agent may assume that
such Bank has made such amount available to the Administrative Agent on the
date of such Revolving Loan advance, and the Administrative Agent, in
reliance upon such assumption, may (in its sole discretion without any
obligation to do so) make available to the Borrower a corresponding amount.
If such corresponding amount is not in fact made available to the
Administrative Agent by a Bank, the Administrative Agent shall be entitled
to recover such corresponding amount from such Bank. If such Bank does not
pay such corresponding amount forthwith upon the Administrative Agent's
demand therefor, the Administrative Agent will promptly notify the Borrower
and the Borrower shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to
recover from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent, at
a per annum rate equal to (i) if paid by such Bank, within two (2) Business
Days of making such corresponding amount available to the Borrower, the
overnight Federal Funds Effective Rate, and thereafter the Base Rate, and
(ii) if paid by the Borrower, the then applicable rate calculated in
accordance with Section 2.05.
2.03 Conversion. The Borrower shall have the option, on any Business Day, to
extend existing Eurodollar Loans into a subsequent Interest Period or to convert
Revolving Loans of one type into Revolving Loans of another type; provided,
however, that (i) except as provided in Section 2.13(iii), Eurodollar Loans may
be converted into Base Rate Loans only on the last day of an Interest Period
applicable thereto, (ii) Eurodollar Loans may be extended, and Base Rate Loans
may be converted into Eurodollar Loans, only if no Default or Event of Default
is in existence on the date of extension or conversion, (iii) Revolving Loans
extended as, or converted into, Eurodollar Loans shall be in such minimum
amounts as provided in Section 2.02(b), and (iv) any request for extension of or
conversion to a Eurodollar Loan which shall fail to specify an Interest Period
shall be deemed to be a request for an Interest Period of one month. Each such
extension or conversion shall be effected by the Borrower by giving written
notice (or telephone notice promptly confirmed in writing) to the Administrative
Agent (including requests for extensions and renewals, a "Notice of Conversion")
prior to 10:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in
the case of Base Rate Loans, and on the third Business Day prior
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to, in the case of Eurodollar Loans, the date of the proposed extension or
conversion, specifying the date of the proposed extension or conversion, the
Revolving Loans to be so extended or converted, the types of Revolving Loans
into which such Revolving Loans are to be converted and, if appropriate, the
applicable Interest Periods with respect thereto. Each request for extension or
conversion shall be deemed to be a reaffirmation by the Borrower that no Default
or Event of Default then exists and is continuing and that the representations
and warranties set forth in Section 5 are true and correct in all material
respects (except to the extent they relate to an earlier period). In the event
the Borrower fails to request extension of or conversion to any Eurodollar Loan
in accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Revolving Loans shall be
automatically converted into Base Rate Loans at the end of their Interest Period
or remain as Base Rate Loans, as the case may be. The Administrative Agent shall
give each Bank notice as promptly as practicable of any such proposed conversion
affecting any Revolving Loans.
2.04 Repayment of the Revolving Loans. The Revolving Loans
shall be due and payable in full on the Termination Date.
2.05 Interest on Revolving Loans. The Revolving Loans shall
bear interest at a per annum rate equal to:
(a) Base Rate Loans. During such periods as Revolving
Loans shall consist of Base Rate Loans, the sum of the Base
Rate plus the Applicable Percentage; and
(b) Eurodollar Loans. During such periods as Revolving
Loans shall consist of Eurodollar Loans, the sum of the
Adjusted Eurodollar Rate plus the Applicable Percentage;
provided, however, that from and after any failure to make any payment of
principal or interest in respect of any of the Loans hereunder when due, whether
at scheduled or accelerated maturity or on account of any mandatory prepayment,
the principal of and, to the extent permitted by law, interest on, the Revolving
Loans shall bear interest, payable on demand, at a per annum rate two percent
(2%) in excess of the rate otherwise applicable hereunder. Interest on Revolving
Loans shall be payable in arrears on each Interest Payment Date.
2.06 Revolving Notes. Revolving Loans by each Bank shall be evidenced by a
duly executed promissory note of the Borrower to each such Bank dated as of the
Closing Date in an original principal amount equal to such Bank's Revolving
Committed Amount and substantially in the form of Schedule 2.06 (such promissory
note, as amended, modified, extended, renewed or replaced from time to time is
hereinafter referred to individually as a "Revolving Note" and collectively as
the "Revolving Notes").
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2.07 Swingline Loan Subfacility.
(a) Swingline Commitment. During the Commitment Period, subject to the terms
and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans to the Borrower (each a
"Swingline Loan" and, collectively, the "Swingline Loans") for the purposes
hereinafter set forth; provided, however, (i) the aggregate amount of
Swingline Loans outstanding at any time shall not exceed TWENTY MILLION
DOLLARS ($20,000,000) (the "Swingline Committed Amount"), and (ii) the sum
of Revolving Loans plus Swingline Loans outstanding at any time shall not
exceed the lesser of the Revolving Committed Amount or the Borrowing Base.
Swingline Loans hereunder may consist of Base Rate Loans or Fed Funds
Swingline Loans (or a combination thereof) as the Borrower may request, and
may be repaid and reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires a Swingline
Loan advance hereunder it shall give written notice (or telephone notice
promptly confirmed in writing) to the Swingline Lender and to the
Administrative Agent (not later than 12:00 Noon (Charlotte, North
Carolina time) on the Business Day of the requested Swingline Loan
advance. Each such notice shall be irrevocable and shall specify (A)
that a Swingline Loan advance is requested, (B) the date of the
requested Swingline Loan advance (which shall be a Business Day), (C)
the aggregate principal amount of the Swingline Loan advance requested
and (D) whether the Swingline Loan shall consist of Base Rate Loans, Fed
Funds Swingline Loans or a combination thereof. The Swingline Lender
shall initiate the transfer of funds representing the Swingline Loan
advance to the Borrower by 1:30 p.m. (Charlotte, North Carolina time) on
the Business Day specified by the Borrower in the applicable Notice of
Borrowing.
(ii) Minimum Amounts. Each Swingline Loan advance shall be
in a minimum principal amount of $250,000 and integral
multiples of $100,000 in excess thereof.
(iii) Repayment of Swingline Loans. Each Swingline Loan advance shall be
due and payable on the earliest of (A) 30 days from the date of advance
thereof, (B) the date of the next Revolving Loan advance hereunder, if
sooner, or (C) the Termination Date. If, and to the extent, any
Swingline Loan advances shall be outstanding on the date of any
Revolving Loan advance, such Swingline Loans shall first be repaid from
the proceeds of such Revolving Loan advance prior to distribution to the
Borrower. If, and to the extent, Revolving Loans are not requested prior
to the Termination Date or the end of any such 30 day period from the
date of any such Swingline Loan advance, the Borrower shall be deemed to
have requested a Revolving Loan comprised solely
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of Base Rate Loans in the amount of such Swingline Loan advance then
outstanding, the proceeds of which shall be used to repay the Swingline
Lender for such Swingline Loan. In addition, the Swingline Lender may,
at any time, in its sole discretion, by written notice to the Borrower
and the Administrative Agent, demand repayment of its Swingline Loans by
way of a Revolving Loan advance, in which case the Borrower shall be
deemed to have requested a Revolving Loan advance comprised solely of
Base Rate Loans in the amount of such Swingline Loans; provided,
however, that any such demand shall be deemed to have been given one
Business Day prior to the Termination Date and upon the occurrence of
any Event of Default described in Section 8.01(f) and also upon
acceleration of the Obligations hereunder, whether on account of an
Event of Default described in Section 8.01(f) or any other Event of
Default, and the exercise of remedies in accordance with the provisions
of Section 8.02 hereof (each such Revolving Loan advance made on account
of any such deemed request therefor as provided herein being hereinafter
referred to as a "Mandatory Borrowing"). Each Bank hereby irrevocably
agrees to make such Revolving Loans promptly upon any such request or
deemed request on account of each Mandatory Borrowing in the amount and
in the manner specified in the preceding sentence and on the same such
date notwithstanding (I) the amount of Mandatory Borrowing may not
comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (II) whether any conditions specified in Section
2.09 are then satisfied, (III) whether a Default or an Event of Default
then exists, (IV) failure for any such request or deemed request for
Revolving Loan to be made by the time otherwise required in Section
2.02(a), (V) the date of such Mandatory Borrowing, or (VI) any reduction
in the Revolving Committed Amount or termination of the Commitments
relating thereto immediately prior to such Mandatory Borrowing or
contemporaneous therewith. In the event that any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower or any
other Credit Party), then each Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase) from the
Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Bank to share in such Swingline
Loans ratably based upon its respective Revolving Committed Amount
(determined before giving effect to any termination of the Commitments
pursuant to Section 8.02), provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline Lender until
the date as of which the respective participation is purchased, and (B)
at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Bank shall be required to pay to the
Swingline Lender interest on the
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principal amount of participation purchased for each day from and
including the day upon which the Mandatory Borrowing would otherwise
have occurred to but excluding the date of payment for such
participation, at the rate equal to, if paid within two (2) Business
Days of the date of the Mandatory Borrowing, the Federal Funds Effective
Rate, and thereafter at a rate equal to the Base Rate.
(c) Interest on Swingline Loans. Swingline Loans shall
bear interest at a per annum rate equal to:
(i) Base Rate Loans. During such periods as a Swingline
Loan shall consist of Base Rate Loans, the sum of the
Base Rate plus the Applicable Percentage; and
(ii) Fed Funds Swingline Loans. During such period as a
Swingline Loan shall consist of Fed Funds Swingline
Loans, the sum of the Applicable Federal Funds Rate plus
the Applicable Percentage;
provided, however, that from and after any failure to make any payment of
principal or interest in respect of any of the Loans hereunder when due,
whether at scheduled or accelerated maturity or on account of any mandatory
prepayment, the principal of and, to the extent permitted by law, interest
on, Swingline Loans shall bear interest, payable on demand, at a per annum
rate two percent (2%) in excess of the rate otherwise applicable hereunder.
Interest on Swingline Loans shall be payable in arrears on each Interest
Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrower to the Swingline Lender dated as of
the Closing Date in the original amount of the Swingline Committed Amount
and substantially in the form of Schedule 2.07(d) (as amended, modified,
supplemented, extended, renewed or replaced from time to time, the
"Swingline Note").
2.08 [RESERVED]
2.09 Conditions of Lending.
(a) Conditions. The obligation to make any Extension of
Credit hereunder is subject to satisfaction of the following
conditions:
(i) receipt of a Notice of Borrowing pursuant to Section
2.02(a) or 2.07(b)(i);
(ii) the representations and warranties set forth in Section 5 hereof
shall be true and correct in all material respects as of such date
(except for those which expressly relate to an earlier date);
(iii) immediately after giving effect to the requested
Extension of Credit, (A) with regard to each Bank
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individually, the Bank's pro rata share of the outstanding Revolving
Loans and Swingline Loans shall not exceed such Bank's Revolving
Committed Amount, and (B) with regard to the Banks collectively, (I) the
sum of Revolving Loans plus Swingline Loans then outstanding shall not
exceed the lesser of the aggregate Revolving Committed Amount or the
Borrowing Base, and (II) the aggregate amount of Swingline Loans shall
not exceed the Swingline Committed Amount; and
(iv) no Default or Event of Default shall exist and be continuing either
prior to or after giving effect thereto.
(b) Reaffirmation. Each request for a Revolving Loan advance or
Swingline Loan advance pursuant to a Notice of Borrowing or a Notice of
Conversion shall be deemed to be representation and warranty by the Borrower
of the correct ness of the matters specified in this subsections (a)(ii),
(iii) and (iv) hereof.
2.10 Termination of Commitments. The Borrower may from time to time
permanently reduce the Revolving Committed Amount and/or the Swingline Committed
Amount in whole or in part (in minimum aggregate amounts of $10,000,000 and
integral multiples of $1,000,000 in excess thereof) upon 3 Business Days' prior
written notice to the Administrative Agent and, in the case of a reduction in
the Swingline Commitment, also to the Swingline Lender.
2.11 Fees.
(a) Upfront Fee. The Borrower agrees to pay in
immediately available funds to the Administrative Agent for
the benefit of the Banks on or before the Closing Date an
upfront fee (the "Upfront Fee") in the amounts provided in
the Administrative Agent's Fee Letter between the Borrower
and the Administrative Agent.
(b) Commitment Fees. In consideration for the Commitments by the Banks
hereunder, the Borrower agrees to pay to the Administrative Agent quarterly
in arrears on the 15th day of the month following the last day of each of
the Borrower's fiscal quarters for the ratable benefit of the Banks a
commitment fee (the "Commitment Fee") equal to the Applicable Percentage per
annum on the average daily unused amount of the Revolving Committed Amount
for the prior quarter. For purposes of computation of the Commitment Fee,
Swingline Loans shall not be counted toward or considered usage under the
Revolving Loan facility.
(c) Administrative Agent's Fee. The Borrower agrees to
pay to the Administrative Agent, for its own account, the
administrative and other fees referred to in the
Administrative Agent's Fee Letter other than the Upfront Fee
(the "Administrative Agent's Fees").
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2.12 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right to prepay
Loans in whole or in part from time to time without premium or penalty;
provided, however, that (A) Eurodollar Loans may only be prepaid (y) on the
last day of an Interest Period applicable thereto or (z) on a day that is
not the last day of an Interest Period applicable thereto if the Borrower
pays to the applicable Banks any amounts due under Section 2.15(ii), and (B)
each such partial prepayment shall be a minimum principal amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof (or the
amount then outstanding, if less). Amounts prepaid on the Loans may be
reborrowed in accordance with the provisions hereof. If the Borrower shall
fail to specify the manner of application, prepayments shall be applied
first to Base Rate Loans and Fed Funds Swingline Loans, then to Eurodollar
Loans.
(b) Mandatory Prepayments. If at any time (i) the sum of Revolving Loans
plus Swingline Loans shall exceed the lesser of the aggregate Revolving
Committed Amount or the Borrowing Base, or (ii) the aggregate amount of
Swingline Loans shall exceed the Swingline Committed Amount, then in any
such instance the Borrower shall immediately make pay ment on the Loans in
an amount sufficient to eliminate the difference. In the case of a mandatory
payment required on account of subsection (ii), the amount required to be
paid hereby shall serve to temporarily reduce the Revolving Committed Amount
(for purposes of borrowing availability hereunder, but not for purposes of
computation of fees) by the amount of the payment required until such time
as the situation described in subsection (ii) shall no longer exist.
Payments made under this subsection 2.12(b) shall be applied first to
Revolving Loans, then to Swingline Loans, and with respect to the types of
Loans, first to Base Rate Loans and Fed Funds Swingline Loans and then to
Eurodollar Loans. The Administrative Agent will, to the extent it may have
knowledge, as a courtesy and not as a requirement, give prompt notice to the
Borrower of any situation which may give rise to a mandatory prepayment
under this Section 2.12(b); provided, however, delivery of any such notice
by the Administrative Agent shall not constitute any kind of condition to
the Borrower's obligation to make such mandatory prepayment, which
obligation shall exist and be immediately owing notwithstanding the failure
or inability of the Administrative Agent to give such notice.
(c) Notice. The Borrower will provide notice to the
Administrative Agent of any prepayment by 10:00 a.m.
(Charlotte, North Carolina time) on the date of prepayment.
2.13 Increased Costs, Illegality, etc. In the event any Bank shall determine
(which determination shall be final and conclusive and binding on all the
parties hereto absent manifest error) that:
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(i) Unavailability. On any date for determining the appropriate Adjusted
Eurodollar Rate for any Interest Period, that by reason of any changes
arising on or after the date of this Credit Agreement affecting the
interbank Eurodollar market, dollar deposits in the principal amount
requested are not generally available in the interbank Eurodollar Market, or
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Adjusted
Eurodollar Rate; then Eurodollar Loans will no longer be available, and
request for a Eurodollar Loan shall be deemed requests for Base Rate Loans,
until such time as such Bank shall notify the Borrower that the
circumstances giving rise thereto no longer exist.
(ii) Increased Costs. At any time that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loans because of (x) any change since the date of
this Credit Agreement in any applicable law, governmental rule, regulation,
guideline or order (or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule, regulation,
guideline or order) including without limitation the imposition,
modification or deemed applicability of any reserves, deposits or similar
requirements (excluding taxes) as related to Eurodollar Loans (such as, for
example, but not limited to, a change in official reserve requirements, but,
in all events, excluding reserves required under Regulation D to the extent
included in the computation of the Adjusted Eurodollar Rate and/or (y) other
circumstances (excluding taxes) arising after the date of this Credit
Agreement affecting such Bank, the interbank Eurodollar market or the
position of such Bank in such market; then the Borrower shall pay to such
Bank promptly upon written demand therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest
or otherwise as such Bank may determine in its reasonable discretion) as may
be required to compensate such Bank for such increased costs or reductions
in amounts receivable hereunder (written notice as to the additional amounts
owed to such Bank, showing the basis for calculation thereof, shall, absent
manifest error, be final and conclusive and binding on all parties hereto;
provided, however, that such determinations are made on a reasonable basis).
(iii) Illegality. At any time after the date of this Credit Agreement,
that the making or continuance of any Eurodollar Loan has become unlawful by
compliance by such Bank in good faith with any law, governmental rule,
regulation, guideline or order (or would conflict with any such governmental
rule, regulation, guideline or order not having the force of law even though
the failure to comply therewith would not be unlawful), or has become
impossible as a result of a contingency occurring after the date of
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this Credit Agreement which materially and adversely affects the interbank
Eurodollar market; then Eurodollar Loans will no longer be available,
requests for Eurodollar Loans shall be deemed requests for Base Rate Loans
and the Borrower may, and upon direction of the Bank, shall, as promptly as
possible and, in any event within the time period required by law, have any
such Eurodollar Loans then outstanding converted into Base Rate Loans.
2.14 Capital Adequacy. If after the date of this Credit Agreement, any Bank
has determined that the adoption or effectiveness of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital or assets as a consequence of
its commitments or obligations hereunder to a level below that which such Bank
could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Bank's policies with respect to capital
adequacy), then from time to time, within 15 days after demand by such Bank, the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank for such reduction. Upon determining in good faith that any
additional amounts will be payable pursuant to this Section, such Bank will give
prompt written notice thereof to the Borrower, which notice shall set forth the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish any of the Borrower's
obligations to pay additional amounts pursuant to this Section. Determination by
any such Bank of amounts owing under this Section shall, absent manifest error,
be final and conclusive and binding on the parties hereto; provided, however,
that such determinations are made on a reasonable basis. Failure on the part of
any Bank to demand compensation for any period hereunder shall not constitute a
waiver of such Bank's rights to demand any such compensation in such period or
in any other period; provided, however, that if such demand is made more than
180 days after the Bank had knowledge of the occurrence of any event described
above regarding capital adequacy, the Borrower shall not be obligated to
reimburse the Bank for amounts incurred prior to the date on which the Borrower
receives such demand for compensation under this Section 2.14.
2.15 Compensation. The Borrower shall compensate each Bank, upon its written
request (which request shall set forth the basis for requesting such
compensation), for all reasonable losses, expenses and liabilities (including,
without limitation, any loss, expense or liability incurred by reason of the
liquidation or reemployment of deposits or other funds required by the Bank to
fund its Eurodollar Loans) which such Bank may sustain:
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(i) if for any reason a borrowing of Eurodollar Loans
does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion;
(ii) if any repayment or conversion of any Eurodollar Loan occurs on a
date which is not the last day of an Interest Period applicable thereto
including without limitation in connection with any demand, repayment,
acceleration or otherwise;
(iii) if any prepayment of any Eurodollar Loan is not
made on any date specified in a notice of prepayment given
by the Borrower; or
(iv) as a consequence of (x) any other default by the Borrower to repay
its Loans when required by the terms of this Credit Agreement or (y) an
election made pursuant to this Section.
Calculation of all amounts payable to a Bank under this Section shall be made as
though the Bank has actually funded its relevant Eurodollar Loan, through the
purchase of a Eurodollar deposit bearing interest at the Adjusted Eurodollar
Rate in an amount equal to the amount of that Loan, having a maturity comparable
to the relevant Interest Period and, through the transfer of such Eurodollar
deposit from an offshore office of that Bank to a domestic office of that Bank
in the United States of America; provided, however, that each Bank may fund each
of its Eurodollar Loans in any manner it sees fit and the foregoing assumption
shall be utilized only for the calculation of amounts payable under this
Section.
2.16 Net Payments.
(i) Except as otherwise provided herein, all payments made by the
Borrower hereunder to a Bank will be made without setoff or counterclaim. In
addition, all payments made by the Borrower hereunder to a Bank also shall
be made free and clear of and without deduction for any and all current or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto excluding: (A) taxes imposed on or measured
by all or part of the gross or net income (but not including any such tax in
the nature of a withholding tax) of such Bank or franchise taxes imposed on
such Bank by the jurisdiction under the laws of which such Bank is organized
or has its applicable lending office or any political subdivision thereof,
(B) taxes that are imposed on such Bank with respect to transactions
unrelated to this Credit Agreement and (C) in the case of a Bank that is a
NonU.S. Person or that has participated all or any part of its interests and
obligations under the terms of this Credit Agreement to a Participant that
is a Non-U.S. Person, taxes imposed upon income effectively connected with
such Bank's or such Participant's conduct of a business in the United States
or taxes that would not have been imposed absent the failure of such Bank or
such Participant to provide the documentation
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required by Section 2.21 or Section 10.03(c)(ii) hereof, respectively (all
such nonexcluded taxes, levies, imposts, deductions, charges, withholdings,
and liabilities collectively or individually referred to herein as "Taxes").
If the Borrower shall be required to withhold or deduct Taxes from any sum
payable to a Bank hereunder, (i) the sum payable shall be increased as may
be necessary so that the amount received is equal to the sum which would
have been received had no withholdings or deductions been made, (ii) the
Borrower shall make such necessary withholdings or deductions, and (iii) the
Borrower shall pay the full amount withheld or deducted to the relevant
authority according to applicable law so that such Bank shall not be
required to make any deduction or payment of Taxes.
(ii) The Borrower hereby agrees to indemnify each Bank for the full
amount of Taxes and any liability (including penalties, interest, and
expenses (including reasonable attorney's fees and expenses)) arising
therefrom or with respect thereto paid or payable by such Bank, whether or
not such Taxes were correctly or legally asserted by the relevant
Governmental Authority; provided, however, that such Bank made written
demand for indemnification within 180 days after the earlier of (A) the date
on which such Bank pays such Taxes and (B) the date on which the relevant
authority makes written demand upon such Bank for payment of such Taxes. A
certificate as to the amount of any Taxes and liabilities arising therefrom
or with respect thereto paid or payable by a Bank that is prepared by such
Bank, absent manifest error, shall be final, conclusive, and binding for all
purposes. Indemnification by the Borrower hereunder shall be made within a
reasonable period after the date the relevant Bank makes written demand
therefor.
If any such Bank receives a refund or credit (against any other tax) of any
Taxes paid by the Borrower hereunder, the Bank shall promptly pay the full
amount of such refund (including any interest received thereon) or credit to
the Borrower.
2.17 Change of Lending Office; Right to Substitute Lender.
(a) Each Bank agrees that, upon the occurrence of any event giving rise
to the operation of Section 2.13(ii) or (iii) or 2.16, it will, if requested
by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any
Loans affected by such event, provided that such designation is made on such
terms that such Bank and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of any such Section. Except in the case
of a change of lending office made at the request of the Borrower, no change
in lending office will be made if greater costs and expenses would result
under Section 2.13(ii) or (iii) or 2.16 on account of any such change in
designation. Nothing in this
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Section shall affect or postpone any of the obligations of the Borrower or
the right of any Bank provided in Section 2.13, 2.14 or 2.16.
(b) In addition to the Borrower's rights under Section 2.17(a), upon the
occurrence of any event giving rise to the operation of Section 2.13(ii) or
(iii) or 2.16, the Borrower may, within a period of sixty (60) days
following the Borrower's obtaining knowledge of the occurrence of the event
giving rise to the operation of such provisions, at its own expense, make
arrangements for another bank or financial institution reasonably acceptable
to the Administrative Agent to purchase and accept the rights and
obligations under this Credit Agreement of any Bank entitled to payment
under Section 2.13(ii) or (iii) or Section 2.16, whereupon such Bank shall
assign to the bank or financial institution designated by the Borrower its
rights and obligations hereunder pursuant to the provisions of Section
10.03(b) of this Credit Agreement.
2.18 Payments and Computations. Except as otherwise specifically provided
herein, all payments hereunder shall be made to the Administrative Agent in U.S.
dollars in immediately available funds at its offices at NationsBank Plaza,
NC1-002-06- 19, Charlotte, North Carolina not later than 2:00 p.m. (Charlotte,
North Carolina time) on the date when due. Payments received after such time
shall be deemed to have been received on the next succeeding Business Day. The
Administrative Agent may (but shall not be obligated to) debit the amount of any
such payment which is not made by such time to any ordinary deposit account of
the Borrower maintained with the Administrative Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under this
Credit Agreement, specify to the Administrative Agent the Loans, Fees or other
amounts payable by the Borrower hereunder to which such payment is to be applied
(and in the event that it fails so to specify, or if such application would be
inconsistent with the terms hereof, the Administrative Agent shall distribute
such payment to the Banks in such manner as the Administrative Agent may
determine to be appropriate in respect of obligations owing by the Borrower
hereunder, subject to the terms of Section 2.20). The Administrative Agent will
thereafter cause to be distributed promptly like funds relating to the payment
of principal or interest or fees ratably to the Banks entitled to receive such
payments in accordance with the terms of this Credit Agreement. Whenever any
payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day. Except as expressly provided
otherwise herein, all computations of interest and fees shall be made on the
basis of actual number of days elapsed over a year of 365/366 days, in the case
of interest on Base Rate Loans, and over a year of 360 days in all other
instances. Interest shall accrue from
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and include the date of advance, but exclude the date of payment.
2.19 Pro Rata Treatment. Except to the extent otherwise provided herein,
each Revolving Loan (including without limitation each Mandatory Borrowing),
each payment or prepayment of principal of any Revolving Loan, each payment of
interest on the Revolving Loans, each payment of Commitment Fees, each reduction
of the Revolving Committed Amount, and each conversion or continuation of any
Revolving Loan, shall be allocated pro rata among the relevant Banks in
accordance with the respective applicable Revolving Committed Amount (or, if the
Commitments of such Banks have expired or been terminated, in accordance with
the principal amounts of the outstanding Revolving Loans and Participation
Interests of such Banks).
2.20 Sharing of Payments. The Banks agree among themselves that, in the
event that any Bank shall obtain payment in respect of any Loan through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise in
excess of its pro rata share as provided for in this Credit Agreement, such Bank
shall promptly purchase from the other Banks a participation in such Loans and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Banks share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Banks further agree among themselves that if payment to a Bank
obtained by such Bank through the exercise of a right of set-off, banker's lien,
counterclaim or otherwise as aforesaid shall be rescinded or must otherwise be
restored, each Bank which shall have shared the benefit of such payment shall,
by repurchase of a participation theretofore sold, return its share of that
benefit to each Bank whose payment shall have been rescinded or otherwise
restored. The Borrower and each other Credit Party agrees that any Bank so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including set-off, banker's lien or
counterclaim, with respect to such participation as fully as if such Bank were a
holder of such Loan or other obligation in the amount of such participation.
Except as otherwise expressly provided in this Credit Agreement, if any Bank or
the Administrative Agent shall fail to remit to the Administrative Agent or any
other Bank an amount payable by such Bank or the Administrative Agent to the
Administrative Agent or such other Bank pursuant to this Credit Agreement on the
date when such amount is due, such payments shall be made together with interest
thereon for each date from the date such amount is due until the date such
amount is paid to the Administrative Agent or such other Bank at a rate per
annum equal to the Federal Funds Effective Rate.
2.21 Foreign Lenders. Each Bank (which, for purposes of this Section 2.21,
shall include any Affiliate of a Bank that makes any Eurodollar Loan advance
pursuant to the terms of this Credit Agreement) that is a Non-U.S. Person shall
submit to the Borrower and the Administrative Agent on or before the Closing
Date (or, in the case of a Non-U.S. Person that will become a Bank under
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the terms of this Credit Agreement after the Closing Date pursuant to an
assignment under Section 10.03(b) hereof, on or before the date of such
assignment), either: (A) two copies of either United States Internal Revenue
Service Form 1001 or Form 4224 (whichever is applicable) or (B) in the case of a
Bank claiming an exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio interest", a
Form W-8 (or any subsequent versions thereof or successors thereto) and a
certificate representing that such Bank is not a bank for purposes of Section
881(C)(3)(A) of the Code, is not a 10% shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Borrower, and is not a controlled
foreign corporation related to the Borrower (within the meaning of Section
864(d)(4) of the Code), in either case properly completed and duly executed by
such Bank and entitling such Bank to receive a complete exemption from U.S.
federal withholding tax on payments by the Borrower under this Credit Agreement.
Each Bank that is organized under the laws of the United States or any state
thereof or the District of Columbia shall deliver to the Borrower promptly upon
request (or, in the case of a Person that is organized under the laws of the
United States or any state thereof or the District of Columbia and will become a
Bank under the terms of this Credit Agreement after the Closing Date pursuant to
an assignment under Section 10.03(b) hereof, on or before the date of such
assignment) an original copy of Internal Revenue Service Form W-9 (or applicable
successor form) properly completed and duly executed by such Bank. Each Bank
also shall, from time to time submit to the Borrower and the Administrative
Agent such additional duly completed and signed copies of such forms (or such
successor forms or other documents as shall be adopted from time to time by the
relevant United States taxing authorities) as may be (1) reasonably requested in
writing by the Borrower or the Administrative Agent, (2) appropriate under then
current United States laws or regulations or (iii) required due to the
obsolescence or invalidity of any form previously delivered by such Bank. Upon
the reasonable request of the Borrower or the Administrative Agent, each Bank
that has not provided the forms or other documents, as provided above, on the
basis of being a United States person shall submit to the Borrower and the
Administrative Agent a certificate to the effect that it is such a "United
States person."
SECTION 3
GUARANTEE
3.01 The Guarantee. Each of the Guarantors hereby jointly and severally
guarantees to each Bank and the Administrative Agent as hereinafter provided the
prompt payment of the Obligations in full when due (whether at stated maturity,
as a mandatory prepayment, by acceleration or otherwise) strictly in accordance
with the terms thereof. The Guarantors hereby further agree that if any of the
Obligations are not paid in full when due (whether at stated maturity, as a
mandatory prepayment, by
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acceleration or otherwise), the Guarantors will, jointly and severally, promptly
pay the same, without any demand or notice whatsoever, and that in the case of
any extension of time of payment or renewal of any of the Obligations, the same
will be promptly paid in full when due (whether at extended maturity, as a
mandatory prepayment, by acceleration or otherwise) in accordance with the terms
of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in any
other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
3.02 Obligations Unconditional. The obligations of the Guarantors under
Section 3.01 hereof are joint and several, absolute and unconditional,
irrespective of the value, genuineness, validity, regularity or enforceability
of any of the Credit Documents, or any other agreement or instrument referred to
therein, or any substitution, release or exchange of any other guarantee of or
security for any of the Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Section 3.02 that the obligations of the
Guarantors hereunder shall be absolute and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Obligations for amounts paid under this Guaranty
until such time as the Banks have been paid in full, all Commitments under the
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Banks in connection with monies received under the Credit Documents. Without
limiting the generality of the foregoing, it is agreed that, to the fullest
extent permitted by law, the occurrence of any one or more of the following
shall not alter or impair the liability of any Guarantor hereunder which shall
remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to any Guarantor,
the time for any performance of or compliance with any of the Obligations
shall be extended, or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any of the
Credit Documents or any other agreement or instrument referred to in the
Credit Documents shall be done or omitted;
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(iii) the maturity of any of the Obligations shall be accelerated, or
any of the Obligations shall be modified, supplemented or amended in any
respect, or any right under any of the Credit Documents, or any other
agreement or instrument referred to in the Credit Documents shall be waived
or any other guarantee of any of the Obligations or any security therefor
shall be released or exchanged in whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Administrative Agent or
any Bank or Banks as security for any of the Obligations shall fail to
attach or be perfected; or
(v) any of the Obligations shall be determined to be void or voidable
(including, without limitation, for the benefit of any creditor of any
Guarantor) or shall be subordinated to the claims of any Person (including,
without limitation, any creditor of any Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or any Bank exhaust any right,
power or remedy or proceed against any Person under any of the Credit Documents
or any other agreement or instrument referred to in the Credit Documents or
against any other Person under any other guarantee of, or security for, any of
the Obligations.
3.03 Reinstatement. The obligations of the Guarantors under this Section 3
shall be automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Obligations is rescinded
or must be otherwise restored by any holder of any of the Obligations, whether
as a result of any proceedings in bankruptcy or reorganization or otherwise, and
each Guarantor agrees that it will indemnify the Administrative Agent and each
Bank on demand for all reasonable costs and expenses (including, without
limitation, fees and expenses of counsel) incurred by the Administrative Agent
or such Bank in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
3.04 Certain Additional Waivers. Each Guarantor further agrees that such
Guarantor shall have no right of recourse to security for the Obligations,
except through the exercise of the rights of subrogation pursuant to Section
3.02.
3.05 Remedies. The Guarantors agree that, to the fullest extent permitted by
law, as between the Guarantors, on the one hand, and the Administrative Agent
and the Banks, on the other hand, the Obligations may be declared to be
forthwith due and payable as provided in Section 8.02 hereof (and shall be
deemed to have become automatically due and payable in the circumstances
provided in said Section 8.02) for purposes of Section 3.01
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hereof notwithstanding any stay, injunction or other prohibition preventing such
declaration (or preventing the Obligations from becoming automatically due and
payable) as against any other Person and that, in the event of such declaration
(or the Obligations being deemed to have become automatically due and payable),
the Obligations (whether or not due and payable by any other Person) shall
forthwith become due and payable by the Guarantors for purposes of said Section
3.01.
3.06 Rights of Contribution. The Guarantors hereby agree, as among
themselves, that if any Guarantor shall become an Excess Funding Guarantor (as
defined below), each other Guarantor shall, on demand of such Excess Funding
Guarantor (but subject to the succeeding provisions of this Section 3.06), pay
to such Excess Funding Guarantor an amount equal to such Guarantor's Pro Rata
Share (as defined below and determined, for this purpose, without reference to
the properties, assets, liabilities and debts of such Excess Funding Guarantor)
of such Excess Payment (as defined below). The payment obligation of any
Guarantor to any Excess Funding Guarantor under this Section 3.06 shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Guarantor under the other provisions of this Section 3, and
such Excess Funding Guarantor shall not exercise any right or remedy with
respect to such excess until payment and satisfaction in full of all of such
obligations. For purposes hereof, (i) "Excess Funding Guarantor" shall mean, in
respect of any obligations arising under the other provisions of this Section 3
(hereafter, the "Obligations"), a Guarantor that has paid an amount in excess of
its Pro Rata Share of the Obligations; (ii) "Excess Payment" shall mean, in
respect of any Obligations, the amount paid by an Excess Funding Guarantor in
excess of its Pro Rata Share of such Obligations; and (iii) "Pro Rata Share",
for the purposes of this Section 3.06, shall mean, for any Guarantor, the ratio
(expressed as a percentage) of (a) the amount by which the aggregate present
fair saleable value of all of its assets and properties exceeds the amount of
all debts and liabilities of such Guarantor (including contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of such
Guarantor hereunder) to (b) the amount by which the aggregate present fair
saleable value of all assets and other properties of the Borrower and all of the
Guarantors exceeds the amount of all of the debts and liabilities (including
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of the Borrower and the Guarantors hereunder) of the Borrower
and all of the Guarantors, all as of the Closing Date (if any Guarantor becomes
a party hereto subsequent to the Closing Date, then for the purposes of this
Section 3.06 such subsequent Guarantor shall be deemed to have been a Guarantor
as of the Closing Date and the information pertaining to, and only pertaining
to, such Guarantor as of the date such Guarantor became a Guarantor shall be
deemed true as of the Closing Date).
3.07 Continuing Guarantee. The guarantee in this Section 3
is a continuing guarantee, and shall apply to all Obligations
whenever arising.
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SECTION 4
CONDITIONS PRECEDENT
4.01 Conditions to Closing. The closing of this credit facility is subject
to satisfaction of the following conditions (in form and substance acceptable to
the Administrative Agent:
(a) Executed Credit Documents. Receipt by the Administrative Agent of
copies of the Credit Agreement, the Notes and the other Credit Documents, if
any (in sufficient numbers to provide a fully executed original to each
Bank) as executed by the Borrower and the other Credit Parties.
(b) Fees. Payment to the Administrative Agent of the
portion of the Upfront Fees and Administrative Agent's Fees
payable on the Closing Date.
4.02 Conditions to Initial Loan Advance. The obligation of the Banks to make
the initial Loan advance is subject, at the time of the making of such initial
Loan advance, to satisfaction of the following conditions (in form and substance
acceptable to the Administrative Agent and the Required Banks):
(a) No Default; Representations and Warranties. Both at the time of the
making of such Loan and after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in the other Credit Documents then in effect shall be
true and correct in all material respects.
(b) Opinions of Counsel. Receipt by the Administrative Agent of the
opinions of Drew St.J. Carneal, Esq., Senior Vice President and General
Counsel of the Borrower, and Hunton & Williams, special counsel to the
Borrower and the Guarantors, substantially in the forms of Schedules
4.01(b)(1) and (2), respectively, (in sufficient numbers to provide a fully
executed original to each Bank).
(c) Corporate Documents. Receipt by the Administrative
Agent of the following:
(i) Articles of Incorporation. Copies of the articles of
incorporation or charter documents of the Borrower and the Guarantors
certified to be true and complete as of a recent date by the appropriate
governmental authority of the state of its incorporation.
(ii) Resolutions. Copies of resolutions of the Board of Directors of
the Borrower and the Guarantors approving and adopting the Credit
Documents, the transactions contemplated therein and authorizing
execution and delivery thereof, certified by a secretary or assistant
secretary as of the Closing Date to be true and correct and in force and
effect as of such date and containing therein certification of the
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incumbency and specimen signatures of the officers of the
Credit Parties executing the Credit Documents.
(iii) Bylaws. A copy of the bylaws of the Borrower and the Guarantors
certified by a secretary or assistant secretary as of the Closing Date
to be true and correct and in force and effect as of such date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to the Borrower and the
Guarantors certified as of a recent date by the appropriate governmental
authorities of the state of incorporation and each other state in which
the failure to so qualify and be in good standing would have a Material
Adverse Effect and (ii) a certificate indicating payment of all
corporate franchise taxes in such states of incorporation certified as
of a recent date by the appropriate governmental taxing authorities, to
the extent generally available from such authorities.
(d) Termination of Existing Credit Facilities. Receipt by the
Administrative Agent of evidence of repayment and termination of commitments
under the existing revolving credit facility extended to Owens & Minor, Inc.
by NationsBank, N.A., as Agent, Chase Manhattan Bank (formerly Chemical
Bank) and Crestar Bank as Co-Agents and the other lenders party thereto.
(e) Senior Subordinated Notes. Receipt by the
Administrative Agent of evidence of receipt by the Borrower of
at least $150,000,000 in gross proceeds from the issuance of
the Senior Subordinated Notes.
(f) Outside Initial Funding Date. The Initial Funding Date
shall not occur later than June 30, 1996.
(g) Fees. Payment to the Administrative Agent of the
portion of any fees payable on or before the Initial Funding
Date.
SECTION 5
REPRESENTATIONS AND WARRANTIES
Each Credit Party hereby represents and warrants to the Agents and each Bank
that:
5.01 Organization and Good Standing. Such Credit Party is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of its incorporation, is duly qualified and in good standing as a foreign
corporation authorized to do business in every jurisdiction where the failure to
so qualify would have a Material Adverse Effect, and has the requisite corporate
power and authority to own its properties and to carry on its business as now
conducted and as proposed to be conducted.
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5.02 Due Authorization. Such Credit Party (i) has the requisite corporate
power and authority to execute, deliver and perform this Credit Agreement and
the other Credit Documents to which it is a party and to incur the obligations
herein and therein provided for, and (ii) is duly authorized to, and has been
authorized by all necessary corporate action, to execute, deliver and perform
this Credit Agreement and the other Credit Documents to which it is a party.
5.03 No Conflicts. Neither the execution and delivery of the Credit
Documents, nor the consummation of the transactions contemplated therein, nor
performance of and compliance with the terms and provisions thereof by such
Credit Party will (i) violate or conflict with any provision of its articles of
incorporation or bylaws, (ii) violate, contravene or materially conflict with
any law, regulation (including without limitation Regulation U or Regulation X),
order, writ, judgment, injunction, decree or permit applicable to it, (iii)
violate, contravene or materially conflict with contractual provisions of, or
cause an event of default under, any indenture, loan agreement, mortgage, deed
of trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, the violation of which would have a Material Adverse
Effect, (iv) result in or require the creation of any lien, security interest or
other charge or encumbrance (other than those contemplated in or created in
connection with the Credit Documents) upon or with respect its properties, the
creation of which would have a Material Adverse Effect.
5.04 Consents. No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or third
party in respect of such Credit Party is required in connection with the
execution, delivery or performance of this Credit Agreement or any of the other
Credit Documents by the Borrower or any Guarantor, or if required, such consent,
approval and authorization has been obtained.
5.05 Enforceable Obligations. This Credit Agreement and the other Credit
Documents have been duly executed and delivered and constitute legal, valid and
binding obligations of such Credit Party enforceable against such Credit Party
in accordance with their respective terms, except as may be limited by
bankruptcy or insolvency laws or similar laws affecting creditors' rights
generally or by general equitable principles.
5.06 Financial Condition. The financial statements and financial information
provided to the Banks, consisting of, among other things, an audited
consolidated balance sheet of the Borrower and its Subsidiaries dated as of
December 31, 1995 together with related consolidated statements of income,
stockholders' equity and changes in financial position or cash flow certified by
KPMG Peat Marwick, certified public accountants, are true and correct in all
material respects and fairly represent the financial condition of the Borrower
and its Subsidiaries as of such date; such financial statements were prepared in
accordance with generally accepted accounting
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principles applied on a consistent basis (except as noted therein); and since
the date of such financial statements there have occurred no changes or
circumstances which have had or are likely to have a Material Adverse Effect.
5.07 No Default. No Default or Event of Default presently
exists.
5.08 Liens. Except for Permitted Liens, such Credit Party has good and
marketable title to all of its properties and assets free and clear of all
liens, encumbrances, mortgages, pledges, security interests and other adverse
claims of any nature.
5.09 Indebtedness. Such Credit Party has no Indebtedness (including without
limitation Guaranty Obligations, reimbursement or other contingent obligations)
except (a) as disclosed in the financial statements referenced in Section 5.06
and as set forth in Schedule 5.09 and (b) Indebtedness related to a Qualified
Securitization Transaction.
5.10 Litigation. Except as disclosed in Schedule 5.10, there are no actions,
suits or legal, equitable, arbitration or admini strative proceedings, pending
or, to the knowledge of a Responsible Officer of such Credit Party, threatened
against such Credit Party or any of its Restricted Subsidiaries which, if
adversely determined, would likely have a Material Adverse Effect. For purposes
hereof, in the case of proceedings involving only monetary damages, $5,000,000
or more in any instance shall be considered as having a Material Adverse Effect.
Since the date of this Credit Agreement (or the date of the most recent update
hereunder), there has been no material adverse change in the status of any
actions, suits, investigations, litigation or proceedings disclosed hereunder
which is likely to result in a Material Adverse Effect.
5.11 Material Agreements. Such Credit Party is not in default in any
material respect under any contract, lease, loan agreement, indenture, mortgage,
security agreement or other material agreement or obligation to which it is a
party or by which any of its properties is bound which default would have a
Material Adverse Effect.
5.12 Taxes. Such Credit Party has filed, or caused to be filed, all material
tax returns (federal, state, local and foreign) required to be filed and paid
all amounts of taxes shown thereon to be due (including interest and penalties)
and has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing (or neces sary to preserve any liens in favor of the
Banks) by it, except for such taxes (i) which are not yet delinquent or (ii) as
are being contested in good faith and by proper proceedings, and against which
adequate reserves are being maintained in accordance with generally accepted
accounting principles. Such Credit Party is not aware of any proposed material
tax
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assessments against it or any other members of the Consolidated
Borrower Group.
5.13 Compliance with Law. Such Credit Party is in substantial compliance
with all laws, rules, regulations, orders and decrees (including without
limitation environmental laws) applicable to it, or to its properties, the
failure to comply with which would have a Material Adverse Effect.
5.14 ERISA. (i) No Reportable Event (as defined in ERISA) has occurred and
is continuing with respect to any Plan; (ii) no Plan has an unfunded current
liability (determined under Section 412 of the Code) or an accumulated funding
deficiency, (iii) no proceedings have been instituted, or, to the knowledge of
any Responsible Officer of such Credit Party, planned, to terminate any Plan,
(iv) neither such Credit Party nor any member of a Controlled Group, nor any
duly-appointed administrator of a Plan has instituted or intends to institute
proceedings to withdraw from any Multiemployer Plan; and (v) each Plan has been
maintained and funded in all material respects with its terms and with the
provisions of ERISA applicable thereto.
5.15 Subsidiaries. Set forth in Schedule 5.15 is a complete and accurate
list of all Subsidiaries of each of such Credit Party. Further, the
Non-Guarantor Subsidiaries (not including any Securitization Subsidiary), as a
group, do not exceed the Threshold Requirement as provided in Section 6.12.
Information on the attached Schedule includes state of incorporation; the shares
of each class of capital stock or other equity interests outstanding; the number
and percentage of outstanding shares of each class owned (directly or
indirectly) by such Credit Party; and the number and effect, if exercised, of
all outstanding options, warrants, rights of conversion or purchase and similar
rights. The outstanding capital stock and other equity interests of all such
Subsidiaries is validly issued, fully paid and non-assessable and is owned by
such Credit Party, directly or indirectly, free and clear of all liens, security
interests and other charges or encumbrances (other than those arising under or
contemplated in connection with the Credit Documents).
5.16 Use of Proceeds; Margin Stock. The proceeds of the Loans hereunder will
be used solely for the purposes specified in Section 6.10. None of such proceeds
will be used for the purpose of purchasing or carrying any "margin stock" as
defined in Regulation U, Regulation X or Regulation G, or for the purpose of
reducing or retiring any Indebtedness which was originally incurred to purchase
or carry "margin stock" or for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation U, Regulation X
or Regulation G. Such Credit Party does not own "margin stock" except as
identified in the financial statements referred to in Section 5.06 hereof and,
as of the date hereof, the aggregate value of all "margin stock" owned by such
Credit Party and its Subsidiaries does not exceed 25% of the value of all such
Credit Party's and its Subsidiaries' assets.
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5.17 Government Regulation. Such Credit Party is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Investment Company Act of 1940 or the Interstate Commerce Act, each as amended.
In addition, such Credit Party is not (i) an "investment company" registered or
required to be registered under the Investment Company Act of 1940, as amended,
and is not controlled by such a company, or (ii) a "holding company," or a
"Subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or of a "Subsidiary" or a "holding company," within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
5.18 Hazardous Substances. Except as disclosed on Schedule 5.18 or except as
would not reasonably be expected to have a Material Adverse Effect, to the
knowledge of any Responsible Officer of such Credit Party, the real property
owned or leased by such Credit Party and its Subsidiaries or on which it or its
Subsidiaries operates (the "Subject Property") (i) is free from "hazardous
substances" as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, 42 U.S.C. ss.ss. 9601 et seq., as amended, and the
regulations promulgated thereunder; (ii) no portion of the Subject Property is
subject to federal, state or local regulation or liability because of the
presence of stored, leaked or spilled petroleum products, waste materials or
debris, "PCB's" or PCB items (as defined in 40 C.F.R. ss.763.3), underground
storage tanks, "asbestos" (as defined in 40 C.F.R. ss.763.63) or the past or
present accumulation, spillage or leakage of any such substance; (iii) such
Credit Party and its Subsidiaries are in substantial compliance with all
federal, state and local requirements relating to protection of health or the
environment in connection with the operation of their businesses; and (iv) no
Responsible Officer of such Credit Party knows of any complaint or investigation
regarding real property which it or any other Credit Party owns or leases or on
which it or any other Credit Party operates.
5.19 Patents, Franchises, etc. Such Credit Party possesses all material
patents, trademarks, service marks, trade names, copyrights, licenses and other
rights, free from burdensome restrictions, that are reasonably necessary for the
operation of its business as presently conducted and as proposed to be
conducted. Such Credit Party has obtained all material licenses, permits,
franchises or other governmental authorizations necessary to the ownership of
its respective property and to the conduct of its business except as would not
reasonably be expected to have a Material Adverse Effect.
5.20 Solvency. Such Credit Party and each of its Restricted Subsidiaries,
both collectively and individually, is and, after consummation of this Credit
Agreement and after giving effect to all Indebtedness incurred hereunder, will
be, solvent.
5.21 Investments. All investments of such Credit Party are
Permitted Investments.
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SECTION 6
AFFIRMATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this Credit
Agreement is in effect and until the Loans, together with interest, fees and
other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
6.01 Information Covenants. The Credit Parties will furnish,
or cause to be furnished, to the Administrative Agent and each
Bank:
(a) Annual Financial Statements. As soon as available and in any event
within 90 days after the close of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as at the
end of such fiscal year together with related consolidated statements of
income and retained earnings and of cash flows for such fiscal year, setting
forth in comparative form consolidated figures for the preceding fiscal
year, all in reasonable detail and examined by KPMG Peat Marwick, or other
independent certified public accountants of recognized national standing
reasonably acceptable to the Required Banks and whose opinion shall be to
the effect that such consolidated financial statements have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis (except for changes with which such accountants concur). It
is specifically understood and agreed that failure of the annual financial
statements to be accompanied by an opinion and certificate of such
accountants in form and substance as provided herein shall constitute a
Default hereunder.
(b) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each of the first three fiscal
quarters of the Borrower, a consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries, and consolidated and consolidating
statements of income and retained earnings and a consolidated statement of
cash flows for the Borrower and its Subsidiaries, each for such quarterly
period and for the portion of the fiscal year ending with such period
(except in the case of consolidated statements of cash flow, in which case
such statements shall be prepared on a year to date basis), in each case
setting forth in comparative form consolidated figures for the corresponding
period of the preceding fiscal year (except that the balance sheet shall be
compared to that at prior year end), all in reasonable form and detail
acceptable to the Required Banks, and accompanied by a certificate of the
chief financial officer, treasurer, controller or chief accounting officer
of the Borrower, to the best of his knowledge and belief, as being true and
correct in all material respects, in the case of consolidated statements,
and as having been prepared in accordance with generally accepted accounting
principles
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applied on a consistent basis, subject to changes resulting from normal
year-end audit adjustments. As used in this Section 6.01(b), the term
"consolidating" shall be deemed to include Owens & Minor Medical, Inc. and
Stuart Medical, Inc. only. All consolidating statements delivered under this
Section 6.01(b) shall be prepared based on the Borrower's internal practices
consistently applied and may not be in strict conformity with generally
accepted accounting principles.
(c) Borrowing Base Certificates. As soon as practicable and in any event
within 15 days after the end of each fiscal quarter of the Borrower, a
statement of the Borrowing Base and its components as of the end of the
immediately preceding fiscal quarter, substantially in the form of Schedule
6.01(c) hereto, certified by the chief financial officer, treasurer,
controller or chief accounting officer of the Borrower as being, to the best
of his knowledge and belief, true and correct in all material respects as of
such date.
(d) Officer's Certificate. At the time of delivery of the financial
statements provided for in Sections 6.01(a) and (b) hereof, a certificate of
the chief financial officer, treasurer, controller or chief accounting
officer of the Borrower substantially in the form of Schedule 6.01(d) to the
effect that no Default or Event of Default exists, or if any Default or
Event of Default does exist specifying the nature and extent thereof and
what action the Borrower proposes to take with respect thereto. In addition,
the Officer's Certificate shall demonstrate compliance of the financial
covenants contained in Section 6.11 by calculation thereof as of the end of
each such fiscal period.
(e) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 6.01(a), a certificate of
the accountants conducting the annual audit stating that they have reviewed
this Credit Agreement and stating further whether, in the course of their
audit, they have become aware of any Default or Event of Default arising as
a result of a violation of the financial covenants contained in Section 6.11
of this Credit Agreement and, if any such Default or Event of Default
exists, specifying the nature and extent thereof.
(f) SEC and Other Reports. Promptly upon transmission thereof, copies of
any filings and registrations with, and reports to, (i) the Securities and
Exchange Commission, or any successor agency, by the Borrower or any of its
Subsidiaries, and copies of all financial statements, proxy statements,
notices and reports as the Borrower or its Subsidiaries shall send to its
shareholders or to the holders of any other Indebtedness (including
specifically without limitation, any Subordinated Debt) in their capacity as
such holders and (ii) the United States Environmental
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Protection Agency, or any state or local agency responsible for
environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(g) Other Information. With reasonable promptness upon any such request,
such other information regarding the business, properties or financial
condition of the Borrower and its Subsidiaries as the Administrative Agent
or the Required Banks may reasonably request.
(h) Notice of Default or Litigation. Upon any Responsible Officer of a
Credit Party obtaining knowledge thereof, such Credit Party will give
written notice to the Administrative Agent (i) immediately, but in any event
within 3 Business Days, of the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and
existence thereof and what action the Borrower proposes to take with respect
thereto, and (ii) promptly, but in any event within 5 Business Days, of the
occurrence of any of the following with respect to any member of the
Consolidated Borrower Group: (A) the pendency or commencement of any
litigation, arbitral or governmental proceeding against any member of the
Consolidated Borrower Group which if adversely determined is likely to have
a Material Adverse Effect, (B) any levy of an attachment, execution or other
process against its assets having a value of $500,000 or more, (C) the
occurrence of an event or condition which shall constitute a default or
event of default under any Indebtedness of any member of the Consolidated
Borrower Group which, if accelerated as a result of such event of default
would have a Material Adverse Effect, (D) any development in its business or
affairs which has resulted in, or which any Credit Party reasonably believes
may result in, a Material Adverse Effect, or (E) the institution of any
proceedings against any member of the Consolidated Borrower Group with
respect to, or the receipt of notice by a Responsible Officer of such Person
of potential liability or responsibility for violation, or alleged violation
of any federal, state or local law, rule or regulation, including but not
limited to, regulations promulgated under the Resource Conservation and
Recovery Act of 1976, 42 U.S.C. ss.ss. 6901 et seq., regulating the
generation, handling or disposal of any toxic or hazardous waste or
substance or the release into the environment or storage of any toxic or
hazardous waste or substance, the violation of which would likely have a
Material Adverse Effect, or (F) any notice or determination concerning the
imposition of any withdrawal liability by a multiemployer Plan against any
member of the Consolidated Borrower Group or any of its ERISA Affiliates,
the determination that a multiemployer Plan is, or is expected to be, in
reorganization within the meaning of Title IV or ERISA, the termination of
any Plan, and the amount of
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liability incurred or which may be incurred in connection
with any such event.
6.02 Preservation of Existence and Franchises. Except as otherwise permitted
under Section 7.05, each member of the Consolidated Borrower Group will do all
things necessary in any material respect to preserve and keep in full force and
effect its existence, rights, franchises and authority for the normal conduct of
its business.
6.03 Books, Records and Inspections. Each member of the Consolidated
Borrower Group will keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of
generally accepted accounting principles applied on a consistent basis
(including the establishment and maintenance of appropriate reserves). Each
member of the Consolidated Borrower Group will permit on reasonable notice and,
prior to the occurrence or during the continuance of an Event of Default, during
normal business hours, officers or designated representatives of Administrative
Agent or any Bank to visit and inspect its books of account and records and any
of its properties or assets (in whomever's possession) and to discuss the
affairs, finances and accounts of such member of the Consolidated Borrower Group
with, and be advised as to the same by, its and their officers, directors and
independent accountants.
6.04 Compliance with Law. Each member of the Consolidated Borrower Group
will comply with all applicable laws, rules, regulations and orders of, and all
applicable restrictions imposed by all applicable Governmental Authorities
applicable to it and its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls) if
noncompliance with any such law, rule, regulation or restriction would have a
Material Adverse Effect.
6.05 Payment of Taxes and Other Indebtedness. Each member of the
Consolidated Borrower Group will pay and discharge (i) all material taxes,
assessments and governmental charges or levies imposed upon it, or upon its
income or profits, or upon any of its properties, before they shall become
delinquent, (ii) all lawful claims (including claims for labor, materials and
supplies) which, if unpaid, might give rise to a Lien or charge upon any of its
properties, and (iii) except as prohibited hereunder, all of its other
Indebtedness as it shall become due; provided, however, that members of the
Consolidated Borrower Group shall not be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with generally accepted accounting principles,
unless the failure to make any such payment (a) shall give rise to an immediate
right to foreclosure on a Lien securing such amounts or (b) otherwise would have
a Material Adverse Effect.
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6.06 Insurance. Each member of the Consolidated Borrower Group will at all
times maintain in full force and effect insurance (including worker's
compensation insurance, liability insurance, casualty insurance and business
interruption insurance) in such amounts, covering such risks and liabilities and
with such deductibles or self-insurance retentions as are in accordance with
normal industry practice unless higher limits or other types of coverage are
required by the terms of the other Credit Documents or are otherwise reasonably
required by the Required Banks. The present coverage of the members of the
Consolidated Borrower Group is outlined as to carrier, policy number, expiration
date, type and amount on Schedule 6.06 hereto and is acceptable to the Banks as
of the Closing Date.
6.07 Maintenance of Property. Each member of the Consolidated Borrower Group
will maintain and preserve its properties and equipment used or useful in any
material portion of its business (in whomsoever's possession as they may be) in
good repair, working order and condition, normal wear and tear, obsolescence and
replacement excepted, and will make, or cause to be made, in such properties and
equipment from time to time all repairs, renewals, replacements, extensions,
additions, betterments and improvements thereto as may be needed or proper, to
the extent and in the manner customary for companies in similar businesses.
6.08 Performance of Obligations. Each member of the Consolidated Borrower
Group will perform in all material respects all of its obligations (including,
except as may be otherwise prohibited or contemplated hereunder, payment of
Indebtedness in accordance with its terms) under the terms of all material
agreements, indentures, mortgages, security agreements or other debt instruments
to which it is a party or by which it is bound if the failure to do so would
have a Material Adverse Effect.
6.09 ERISA. Each Credit Party and ERISA Affiliate will, (a) at all times,
make prompt payment of all contributions required under all employee pension
benefit plans (as defined in Section 3(2) of ERISA) ("Pension Plans") and
required to meet the minimum funding standard set forth in ERISA with respect to
each Plan; (b) promptly upon request, furnish the Administrative Agent and the
Banks copies of each annual report/return (Form 5500 Series), as well as all
schedules and attachments required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA, and the regulations
promulgated thereunder, in connection with each of its Pension Plans for each
Plan Year; (c) notify the Administrative Agent immediately of any fact,
including, but not limited to, any Reportable Event (as defined in ERISA)
arising in connection with any Plan, which might constitute grounds for
termination thereof by the PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer such Plan, together with a
statement, if requested by the Bank, as to the reason therefor and the action,
if any, proposed to be taken with respect thereof; and (d) furnish to the
Administrative Agent, upon its request, such additional information concerning
any of the Pension Plans as may
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be reasonably requested. The Borrower will not, nor will it permit any of its
Subsidiaries or ERISA Affiliates to (I) terminate a Plan if any such termination
would have a Material Adverse Effect, or (II) cause or permit to exist any
Reportable Event (as defined in ERISA) or other event or condition which
presents a material risk of termination at the request of the PBGC.
6.10 Use of Proceeds. The proceeds of the Loans hereunder shall be used for
the purpose of (i) refinancing and replacing the existing credit facility
extended to Owens & Minor, Inc. by NationsBank and the other lenders and other
existing bank indebtedness, (ii) general working capital purposes, (iii) payment
of the Hygeia Note, (iv) capital expenditures and (v) other general corporate
purposes.
6.11 Financial Covenants.
(a) Consolidated Current Ratio. The Borrower will
maintain a Consolidated Current Ratio, as determined on each
Determination Date, of at least 1.4 to 1.0.
(b) Consolidated Tangible Net Worth. The Borrower will maintain
Consolidated Tangible Net Worth, as determined on each Determination
Date, of not less than $53,500,000; provided, however, the minimum
Consolidated Tangible Net Worth required hereunder shall be increased on
the last day of each of the Borrower's fiscal quarters to occur after
March 31, 1996, by an amount equal to 50% of Consolidated Net Income for
the fiscal quarter then ended (or if Consolidated Net Income for such
period is a deficit figure, then zero).
(c) Leverage Ratio. As of each Determination Date
during the periods set out below, the Leverage Ratio will
not exceed:
Leverage Ratio
For the fiscal quarter ending
on June 30, 1996 through and
including the fiscal quarter
ending on March 31, 1998 .65 to 1.0
For the fiscal quarter ending
on June 30, 1998 and thereafter .60 to 1.0
(d) Fixed Charge Coverage Ratio. As of each
Determination Date for the Applicable Period set forth
below, the Fixed Charge Coverage Ratio will not be less
than:
Fixed Charge
Coverage Ratio
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For the fiscal quarter ending
on June 30, 1996 .80 to 1.0
For the fiscal quarter ending
on September 30, 1996 .90 to 1.0
For the fiscal quarter ending
on December 31, 1996 1.0 to 1.0
For the fiscal quarter ending
on March 31, 1997 through
and including the fiscal
quarter ending on June 30, 1997 1.1 to 1.0
For the fiscal quarter ending
on September 30, 1997 through
and including the fiscal quarter
ending on December 31, 1997 1.2 to 1.0
For the fiscal quarter ending
on March 31, 1998 through and
including the fiscal quarter
ending on December 31, 1998 1.3 to 1.0
For the fiscal quarter ending on
March 31, 1999 and thereafter 1.5 to 1.0
The Applicable Period for which the Fixed Charge Coverage Ratio shall be
determined shall be for the period shown ending as of the Determination
Date, except that determination of current maturities of Funded Debt and
current maturities of Capitalized Leases under subsection (iii) of the
definition of Consolidated Fixed Charges shall be as of the applicable
Determination Date:
Duration of
Determination Date Applicable Period
For the fiscal quarter ending
on June 30, 1996 One Quarter
For the fiscal quarter ending
on September 30, 1996 Two Quarters
For the fiscal quarter ending
on December 31, 1996 Three Quarters
For the fiscal quarter ending
on March 31, 1997 and thereafter Four Quarters
(e) Consolidated Operating EBITDA. As of each Determination Date
to occur during the period from Closing Date through December 31, 1996
(being the last day of the Borrower's fiscal year 1996), Consolidated
Operating EBITDA for the fiscal quarter then ending will not be less
than:
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For the Fiscal Quarter
Ending
June 30, 1996 $13,000,000
September 30, 1996 $15,000,000
December 31, 1996 $16,000,000
6.12 Additional Credit Parties.
(a) Additional Subsidiaries. Where the Subsidiaries (other than a
Securitization Subsidiary) which are not Guarantors hereunder (the
"Non-Guarantor Subsidiaries") shall, as a group, at any time constitute
more than either (i) 5% of the consolidated gross revenues for the
Borrower and its Subsidiaries, (ii) 5% of consolidated net income for
the Borrower and its Subsidiaries, or (iii) 5% of consolidated assets
for the Borrower and its Subsidiaries (collectively, the "Threshold
Requirement"), the Borrower will promptly notify the Administrative
Agent thereof, and promptly cause one or more of the Non-Guarantor
Subsidiaries (other than a Securitization Subsidiary) to become a
"Guarantor" hereunder by way of execution of a Joinder Agreement, such
that immediately after the joinder of such Subsidiaries as Guarantors
hereunder, the remaining NonGuarantor Subsidiaries shall not, as a
group, exceed the Threshold Requirement. The Borrower may at any time,
at its option, cause a Non-Guarantor Subsidiary to sign a Joinder
Agreement at which time such Subsidiary shall become a Guarantor and a
Credit Party under this Credit Agreement.
(b) Guaranties Relating to Other Debt. Where a NonGuarantor
Subsidiary shall give a guaranty or become obligated under Guaranty
Obligations relating to other Indebtedness (including specifically
without limitation, the Senior Subordinated Notes), the Borrower will
promptly notify the Administrative Agent thereof, and promptly cause
such Non-Guarantor Subsidiary to become a "Guarantor" hereunder by way
of execution of a Joinder Agreement.
SECTION 7
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans, together with interest, fees
and other obligations hereunder, have been paid in full and the Commitments
hereunder shall have terminated:
7.01 Indebtedness. Neither the Borrower nor any of its Restricted
Subsidiaries will contract, create, incur, assume or permit to exist any
Indebtedness, except:
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(a) Indebtedness arising under this Credit
Agreement and the other Credit Documents;
(b) Indebtedness existing as of the Closing Date as referenced in
Section 5.09 (and renewals, refinancings or extensions thereof on terms
and conditions no more favorable to such Person than such existing
Indebtedness (taking into account reasonable market conditions existing
at such time) and in a principal amount not in excess of that
outstanding as of the date of such renewal, refinancing or extension);
(c) Indebtedness in respect of current accounts payable or
accrued (other than for borrowed money or purchase money obligations)
and incurred in the ordinary course of business, provided, that all such
liabilities, accounts and claims shall be paid when due (or in
conformity with customary trade terms);
(d) Purchase money Indebtedness and capital lease obligations
relating to Capitalized Leases incurred to finance the purchase or lease
of fixed assets provided that (i) the total of all such Indebtedness and
obligations shall not exceed an aggregate principal amount of
$10,000,000 at any one time outstanding; (ii) such Indebtedness and
obligations when incurred shall not exceed the purchase price of the
asset financed; and (iii) no such Indebtedness and obligations shall be
refinanced for a principal amount in excess of the principal balance
outstanding thereon at the time of such refinancing; and
(e) (i) Indebtedness evidenced by the Senior Subordinated Notes
and (ii) other Subordinated Debt acceptable to the Required Lenders in
their sole discretion;
(f) Indebtedness and obligations relating to Qualified
Securitization Transactions, provided that the aggregate principal
amount outstanding pursuant to all facilities under such Qualified
Securitization Transactions shall not exceed $150,000,000 at any time;
(g) Unsecured intercompany Indebtedness among the
Credit Parties;
(h) Other short term unsecured indebtedness for borrowed money
(including Guaranty Obligations) by the Borrower which does not exceed
$10,000,000 in the aggregate at any time outstanding; and
(i) Obligations under or arising in connection with Interest Rate
Protection Agreements entered into in order to manage existing or
anticipated interest rate risks and not for speculative purposes and
relating to Indebtedness otherwise permitted under this Section 7.01.
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7.02 Liens. Neither the Borrower nor any of its Restricted Subsidiaries
will contract, create, incur, assume or permit to exist any Lien with respect to
any of its property or assets of any kind (whether real or personal, tangible or
intangible), whether now owned or after acquired, except for Permitted Liens.
7.03 Guaranty Obligations. Neither the Borrower nor any of its
Restricted Subsidiaries will enter into or otherwise become or be liable in
respect of any Guaranty Obligations (excluding specifically therefrom
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) other than (i) those in favor of the Banks in connection
herewith, (ii) guaranty of indebtedness of account debtors of the Credit Parties
relating to the financing or refinancing of trade receivables owing to the
Credit Parties in an aggregate amount not to exceed $1,000,000, (iii) guaranty
by the Credit Parties in respect of the Indebtedness evidenced by the Senior
Subordinated Notes and in respect of Obligations under or arising in connection
with Interest Rate Protection Agreements permitted hereunder, (iv) guaranty by a
Credit Party of operating lease obligations of another Credit Party entered into
in the ordinary course of business, and (v) other Guaranty Obligations to the
extent permitted pursuant to Section 7.01.
7.04 Nature of Business. Neither the Borrower nor any of its Restricted
Subsidiaries will substantively alter the character of its business in any
material respect from that conducted as of the Closing Date.
7.05 Consolidation, Merger, Sale or Purchase of Assets, etc. Neither
the Borrower nor any of its Restricted Subsidiaries will
(a) dissolve, liquidate, or wind up its affairs, sell, transfer,
lease or otherwise dispose of all or any substantial part of its
property or assets (other than in the ordinary course of business for
fair consideration), or agree to any of the foregoing at a future time,
except for (i) the sale or disposition of machinery and equipment no
longer useful in the conduct of its business, (ii) sales, transfers or
other dispositions of property where the proceeds of such sale, transfer
or other disposition are reinvested within 90 days in property of the
Borrower or a Restricted Subsidiary of substantially equal value and
(iii) the sale of Receivables and Receivables Related Assets pursuant to
the terms of a Qualified Receivables Transaction permitted hereunder. As
used herein, "substantial part" shall mean if the book value of such
assets, when added to the book value of all other assets sold, leased or
otherwise disposed of by the Borrower and its Restricted Subsidiaries
(other than in the ordinary course of business) during the period
beginning on the date of this Credit Agreement and ending on the date of
such sale, lease or other disposition, exceeds at any time an amount
equal to 5% of Consolidated Total Assets determined as of the end of the
immediately preceding fiscal year; or
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(b) purchase, lease or otherwise acquire (in a single transaction
or a series of related transactions) all or any substantial part of the
property or assets of any Person (other than purchases or other
acquisitions of inventory, leases, materials, property and equipment in
the ordinary course of business, except as otherwise limited or
prohibited herein), or enter into any transaction of merger or
consolidation, or agree to do any of the foregoing at a future time,
except for (i) Capital Expenditures to the extent of the limitations set
out in Section 6.11(d) by way of inclusion of Capital Expenditures in
the definition of "Consolidated Net Income Available for Fixed Charges"
as used therein, (ii) investments, acquisitions and transfers or
dispositions of properties permitted pursuant to Section 7.06, (iii) the
merger or consolidation of a Restricted Subsidiary into, or a sale,
transfer or lease of all or a substantial part of its properties (at
fair value) to, a Credit Party, (iv) the sale of Receivables and
Receivables Related Assets pursuant to the terms of a Qualified
Securitization Transaction permitted hereunder, and (v) the merger of
any Person into a Credit Party, provided that the Credit Party shall be
the surviving corporation, and management and control of the Credit
Party shall remain substantially unchanged and no Default or Event of
Default shall exist either immediately prior to or after giving effect
to such merger. Notwithstanding the foregoing, other than Capital
Expenditures permitted pursuant to Section 6.11(d) by way of inclusion
of Capital Expenditures in the definition of "Consolidated Net Income
Available for Fixed Charges" as used therein, investments pursuant to
Section 7.06, in the case of an acquisition by the Borrower or its
Restricted Subsidiaries, whether by way of asset purchase, stock or
securities purchase or merger or consolidation, the aggregate
consideration paid in connection with such acquisitions whether in cash,
securities, property or other consideration, shall not exceed 20% of
Consolidated Tangible Net Worth in any fiscal year. The Borrower will,
in connection with any such material purchase, lease or acquisition and
prior to giving effect thereto, deliver to the Administrative Agent a
pro forma statement demonstrating compliance with the provisions hereof.
7.06 Advances, Investments and Loans. Neither the Borrower nor any of
its Restricted Subsidiaries will lend money or credit or make advances to any
Person, or purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to any Person except for
Permitted Investments.
7.07 Prepayments and Amendments Relating to Other Debt.
The Borrower will not, without the prior written consent of the
Required Banks, nor will it permit any of its Restricted
Subsidiaries to,
(a) after the issuance thereof, amend or modify, or
permit any amendment to or modification of, any of the terms
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of any Subordinated Debt (including specifically without limitation, the
Indebtedness evidenced by the Senior Subordinated Notes) or any other
senior Funded Debt, if reasonably adverse to the Banks and their
interests hereunder;
(b) make, or give any notice with respect thereto, any voluntary
or optional payment, prepayment, redemption, defeasance or acquisition
for value of (including by way of deposit of money or securities with a
trustee with respect thereto before due for the purpose of paying when
due) or exchange of any other Indebtedness for borrowed money, other
than (i) prepayments in respect of capital lease obligations relating to
Capital Leases not to exceed $10,000,000 in the aggregate in any fiscal
year, and (ii) prepayments on the Hygeia Note;
(c) make any payment, prepayment, redemption, defeasance or
acquisition for value (including without limitation by way of deposit of
money or securities with a trustee with respect thereto before due for
the purpose of paying when due), or refund, refinance or exchange of any
Subordinated Debt other than (i) regularly scheduled non-default
principal payments and regularly scheduled non-default semiannual
interest payments on the Senior Subordinated Notes, and (ii) prepayment
on the Hygeia Note.
7.08 Transactions with Affiliates. Other than transactions relating to a
Qualified Securitization Transaction, no member of the Consolidated Borrower
Group will enter into any transaction or series of transactions, whether or not
in the ordinary course of business, with any officer, director, shareholder,
Subsidiary or Affiliate other than on terms and conditions substantially as
favorable as would be obtainable in a comparable arm's-length transaction with a
Person other than an Affiliate.
7.09 Ownership of Subsidiaries. Neither the Borrower nor any of its
Restricted Subsidiaries will sell, transfer or otherwise dispose of, any shares
of capital stock of any Subsidiaries or permit any Subsidiaries to issue, sell
or otherwise dispose of, any shares of capital stock of any Subsidiary to any
Person other than a Subsidiary. The Borrower will not create, form or acquire,
nor will it permit any of its Subsidiaries to create, form or acquire, any
Subsidiary, unless such Subsidiary is either (i) promptly joined as an
Additional Credit Party pursuant to the requirements of Section 6.12, if such
joinder is required thereby or (ii) a Securitization Subsidiary.
7.10 Fiscal Year. Neither the Borrower nor any of its
Restricted Subsidiaries will change its fiscal year.
7.11 Subsidiary Dividends. Neither the Borrower nor any of
the other Credit Parties will enter into, assume or otherwise
become subject to, or permit any of their respective Subsidiaries
(other than a Securitization Subsidiary pursuant to a Qualified
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Securitization Transaction permitted hereunder) to enter into, assume or
otherwise become subject to, any agreement prohibiting or otherwise restricting
the payment of dividends by any of the Borrower's Subsidiaries (other than a
Securitization Subsidiary pursuant to a Qualified Securitization Transaction
permitted hereunder), except as may be provided herein or in the indenture
relating to the Senior Subordinated Notes.
7.12 Dividends. On and after July 1, 1996, the Borrower will not make or
pay, nor will it permit any non-wholly owned Subsidiary to make or pay, any
Dividend, unless (i) no Default or Event of Default shall exist either
immediately prior to or immediately after giving effect thereto, and (ii) the
Borrower shall have demonstrated compliance with the financial covenants set out
in Section 6.11 on a Pro Forma Basis after giving effect thereto.
7.13 Securitization Transaction. As part of the refinancing contemplated
by this Credit Agreement, the Borrower and two of its Restricted Subsidiaries
are entering into a Qualified Securitization Transaction pursuant to the
Securitization Agreements. The execution and delivery of the Securitization
Agreement and the performance by the Borrower and its Subsidiaries of their
obligations under the Securitization Agreements and any related agreements shall
not constitute a default under this Credit Agreement; provided, however, that
any default which shall occur with respect to the Securitization Agreements
resulting from any action or inaction by any of the Borrower or its Restricted
Subsidiaries shall constitute an Event of Default hereunder.
SECTION 8
EVENTS OF DEFAULT
8.01 Events of Default. An Event of Default shall exist upon the
occurrence of any of the following specified events (each an "Event of
Default"):
(a) Payment. Any Credit Party shall
(i) default in the payment when due of any
principal of any of the Loans, or
(ii) default, and such default shall continue for three
(3) or more days, in the payment when due of any interest on the
Loans, or of any fees or other amounts owing hereunder, under any
of the other Credit Documents or in connection herewith; or
(b) Representations. Any representation,
warranty or statement made or deemed to be made by any
Credit Party herein, in any of the other Credit
Documents, or in any statement or certificate delivered
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or required to be delivered pursuant hereto or thereto shall prove
untrue in any material respect on the date as of which it was made or
deemed to have been made; or
(c) Covenants. Any Credit Party shall
(i) default in the due performance or observance of any
term, covenant or agreement contained in Sections 6.01(h), 6.02,
6.10 or 7.01 through 7.11, inclusive, or
(ii) default in the due performance or observance of any
of the financial covenants contained in Section 6.11 and the
continuance thereof for a period of 15 days after knowledge
thereof by a Responsible Officer (but in no event later than 15
days after the date by which the Borrower is required to deliver
annual or quarterly financial statements in accordance with
Sections 6.01(a) and (b), as appropriate) without the Borrower
having obtained an effective waiver hereunder; or
(iii) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to
in subsections (a), (b) or (c)(i) or (ii) of this Section 8.01)
contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of a Responsible Officer becoming aware of such default
or notice thereof by the Administrative Agent; provided, however,
that if such default cannot be cured within such period, the
Borrower or other Credit Party may have such additional period of
time not to exceed 30 days after the expiration of such original
30 day period, and such default shall not constitute an Event of
Default hereunder, so long as the applicable Credit Party shall
commence within such original 30 day period, and diligently
pursue, appropriate curative efforts; or
(d) Other Credit Documents. (i) Any Credit Party shall default in
the due performance or observance of any term, covenant or agreement in
any of the other Credit Documents (subject to applicable grace or cure
periods, if any), or (ii) any Credit Document shall fail to be in full
force and effect or to give the Administrative Agent and/or the Banks
the liens, rights, powers and privileges purported to be created
thereby; or
(e) Guaranties. The guaranty given by the Credit
Parties hereunder or by any Additional Credit Party
hereafter or any material provision thereof shall cease
to be in full force and effect, or any Guarantor
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thereunder or any Person acting by or on behalf of such Guarantor shall
deny or disaffirm such Guarantor's obligations under such guaranty, or
any Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to any guaranty; or
(f) Bankruptcy, etc. The Borrower or any Restricted Subsidiary
shall commence a voluntary case concerning itself under the Bankruptcy
Code; or an involuntary case is commenced against the Borrower or any
Restricted Subsidiary under the Bankruptcy Code and the petition is not
dismissed within 90 days after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of
all or substantially all of the property of the Borrower or any
Restricted Subsidiary; or the Borrower or any Restricted Subsidiary
commences any other proceeding under any reorganization, arrangement,
adjustment of the debt, relief of creditors, dissolution, insolvency or
similar law of any jurisdiction whether now or hereafter in effect
relating to the Borrower or any Restricted Subsidiary; or there is
commenced against the Borrower or any Restricted Subsidiary any such
proceeding which remains undismissed for a period of 90 days; or the
Borrower or any Restricted Subsidiary is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case
or proceeding is entered; or the Borrower or any Restricted Subsidiary
suffers appointment of any custodian or the like for it or for any
substantial part of its property to continue unchanged or unstayed for a
period of 90 days; or the Borrower or any Restricted Subsidiary makes a
general assignment for the benefit of creditors; or any corporate action
is taken by the Borrower or any Restricted Subsidiary for the purpose of
effecting any of the foregoing; or
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) in excess of $10,000,000 in the aggregate for the Borrower
and its Restricted Subsidiaries, (i) the Borrower or any of its
Restricted Subsidiaries shall (A) default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to
any such Indebtedness, or (B) default in the observance or performance
relating to such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit, the holder or
holders of such Indebtedness (or trustee or agent on behalf of such
holders) to cause, any such Indebtedness to become due prior to its
stated
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maturity; or (ii) any such Indebtedness shall be declared due and
payable, or required to be prepaid other than by a regularly scheduled
required prepayment, prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against the Borrower or any Restricted Subsidiary involving a liability
of $500,000 or more in the aggregate (to the extent not paid or fully
covered by insurance provided by a carrier who has acknowledged
coverage) and any such judgments or decrees shall not have been vacated,
discharged or stayed or bonded pending appeal within 30 days from the
entry thereof; or
(i) ERISA. (i) Any Credit Party or any member of the Controlled
Group shall fail to pay when due an amount or amounts aggregating in
excess of $500,000 which it shall have become liable to pay under Title
IV of ERISA; or notice of intent to terminate a Plan or Plans which in
the aggregate have unfunded liabilities in excess of $500,000
(individually and collectively, a "Material Plan") shall be filed under
Title IV of ERISA by any such member of the Consolidated Borrower Group
or any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings
under Title IV of ERISA to terminate, to impose liability (other than
for premiums under Section 4007 of ERISA) in respect of, or to cause a
trustee to be appointed to administer any Material Plan; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Material Plan must be terminated; or there
shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the
Controlled Group to incur a current payment obligation in excess of
$500,000; or
(j) Ownership. There shall occur a Change of
Control; or
(k) Default under Senior Subordinated Notes. The
occurrence of an event of default under the Senior
Subordinated Notes; or
(l) Default under Securitization Agreement. The
occurrence of an event of default under any of the
Securitization Agreements.
8.02 Acceleration; Remedies. Upon the occurrence of an Event of Default,
and at any time thereafter unless and until such Event of Default has been
waived by the Required Banks or cured to the satisfaction of the Required Banks
(pursuant to the voting procedures in Section 10.06), the Administrative Agent
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may, and upon the request and direction of the Required Banks, shall, by written
notice to the Borrower take any of the following actions without prejudice to
the rights of the Administrative Agent or any Bank to enforce its claims against
the Credit Parties, except as otherwise specifically provided for herein:
(i) Termination of Commitments. Declare the
Commitments terminated whereupon the Commitments shall
be immediately terminated.
(ii) Acceleration of Loans. Declare the unpaid principal of and any
accrued interest in respect of all Loans and any and all other
indebtedness or obligations of any and every kind owing by the Borrower
to any of the Banks hereunder to be due whereupon the same shall be
immediately due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by the
Borrower.
(iii) Enforcement of Rights. Enforce any and all
rights and interests created and existing under the
Credit Documents and all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
8.01(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Banks hereunder shall immediately
become due and payable without the giving of any notice or other action by the
Administrative Agent or the Banks.
SECTION 9
AGENCY PROVISIONS
9.01 Appointment. Each Bank hereby designates and appoints NationsBank,
N.A. as agent (in such capacity as Agent hereunder, the "Agent"), Bank of
America NT & SA and Crestar Bank as coagents (in such capacity as Co-Agent
hereunder, the "Co-Agents") and NationsBank, N.A. as administrative agent (in
such capacity as Administrative Agent hereunder, the "Administrative Agent") of
such Bank to act as specified herein and the other Credit Documents, and each
such Bank hereby authorizes the Agent, the Administrative Agent and the
Co-Agents, respectively, as the agent for such Bank, to take such action on its
behalf under the provisions of this Credit Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated by the terms hereof and of the other Credit Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere herein and in the other Credit Documents,
neither the Agent, the Co-Agents nor the Administrative Agent shall have any
duties or responsibilities, except those expressly set forth herein and therein,
or any fiduciary relationship with
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any Bank, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Credit Agreement or any of
the other Credit Documents, or shall otherwise exist against the Agents. To the
extent that the provisions of this Section relate to intercreditor or other
issues as between and among the Agents and the Banks, they are solely for the
benefit of the Agents and the Banks and none of the Credit Parties shall have
any rights as a third party beneficiary of the provisions hereof. In performing
its functions and duties under this Credit Agreement and the other Credit
Documents, the Agent, the Administrative Agent and the CoAgents shall act solely
as agents of the Banks and do not assume and shall not be deemed to have assumed
any obligation or relationship of agency or trust with or for the Borrower or
any other Credit Party.
9.02 Delegation of Duties. The Agents may execute any of their
respective duties hereunder or under the other Credit Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agents shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by it with reasonable care.
9.03 Exculpatory Provisions. Neither the Agent, the CoAgents nor the
Administrative Agent nor any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by any of the Credit Parties contained herein
or in any of the other Credit Documents or in any certificate, report, statement
or other document referred to or provided for in, or received by the
Administrative Agent under or in connection herewith or in connection with the
other Credit Documents, or enforceability or sufficiency hereof or of any of the
other Credit Documents, or for any failure of the Borrower to perform its
obligations hereunder or thereunder. Neither the Agent, the Co-Agents nor the
Administrative Agent shall be responsible to any Bank for the effectiveness,
genuineness, validity, enforceability, collectability or sufficiency of this
Credit Agreement, or any of the other Credit Documents or for any
representations, warranties, recitals or statements made herein or therein or
made by the Borrower or any Credit Party in any written or oral statement or in
any financial or other statements, instruments, reports, certificates or any
other documents in connection herewith or therewith furnished or made by the
Agent, the Co-Agents or the Administrative Agent to the Banks or by or on behalf
of the Credit Parties to the Agent, the Co-Agents or the Administrative Agent or
any Bank or be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or agreements
contained herein or therein or as to the use of the proceeds of
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the Loans or of the existence or possible existence of any Default or Event of
Default or to inspect the properties, books or records of the Credit Parties.
9.04 Reliance on Communications. The Agent, the Co-Agents and the
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Borrower or any of the other Credit Parties,
independent accountants and other experts selected by the Administrative Agent
with reasonable care). The Administrative Agent may deem and treat the Banks as
the owner of their respective interests hereunder for all purposes unless a
written notice of assignment, negotiation or transfer thereof shall have been
filed with the Administrative Agent in accordance with Section 10.03(b) hereof.
The Administrative Agent shall be fully justified in failing or refusing to take
any action under this Credit Agreement or under any of the other Credit
Documents unless it shall first receive such advice or concurrence of the
Required Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder or under any of the other Credit Documents in
accordance with a request of the Required Banks (or to the extent specifically
provided in Section 10.06, all the Banks) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Banks
(including their successors and assigns).
9.05 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Bank or a
Credit Party referring to the Credit Document, describing such Default or Event
of Default and stating that such notice is a "notice of default." In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give prompt notice thereof to the Banks. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Banks.
9.06 Non-Reliance on Agents and Other Banks. Each Bank expressly
acknowledges that neither the Agent, the Co-Agents nor the Administrative Agent
nor any of their respective officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Agent, the Co-Agents or the Administrative Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any
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representation or warranty by the Agent, the Co-Agents or the Administrative
Agent to any Bank. Each Bank represents to the Agent, the Co-Agents and the
Administrative Agent that it has, independently and without reliance upon the
Agent, the Co-Agents or the Administrative Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Borrower
and made its own decision to make its Loans hereunder and enter into this Credit
Agreement. Each Bank also represents that it will, independently and without
reliance upon the Agent, the Co-Agents or the Administrative Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, appraisals and decisions
in taking or not taking action under this Credit Agreement, and to make such
investigation as it deems necessary to inform itself as to the business, assets,
operations, property, financial and other conditions, prospects and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required to be furnished to the Banks by the Administrative
Agent hereunder, neither the Agent, the Co-Agents nor the Administrative Agent
shall have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, operations, assets, property,
financial or other conditions, prospects or creditworthiness of the Borrower
which may come into the possession of the Agent, the Co-Agents nor the
Administrative Agent or any of their respective officers, directors, employees,
agents, attorneys-in-fact or affiliates.
9.07 Indemnification. The Banks agree to indemnify the Agent, the
Co-Agents and the Administrative Agent in their respective capacities as such
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Obligations) be imposed on, incurred by or
asserted against the Agent, the Co-Agents or the Administrative Agent in their
respective capacities as such in any way relating to or arising out of this
Credit Agreement or the other Credit Documents or any documents contemplated by
or referred to herein or therein or the transactions contemplated hereby or
thereby or any action taken or omitted by the Agent, the Co-Agents or the
Administrative Agent under or in connection with any of the foregoing; provided
that no Bank shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent, a Co-Agent or the Administrative Agent. If any
indemnity furnished to the Agent, the Co-Agents or the Administrative Agent for
any purpose shall, in the opinion of the Agent, the Co-Agents or the
Administrative Agent, be insufficient or become impaired, the Administrative
Agent may call for
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additional indemnity and cease, or not commence, to do the acts indemnified
against until such additional indemnity is furnished. The agreements in this
Section shall survive the payment of the Obligations and all other amounts
payable hereunder and under the other Credit Documents.
9.08 Agents in their Individual Capacity. The Agent, the Co-Agents and
the Administrative Agent and their respective affiliates may make loans to,
accept deposits from and generally engage in any kind of business with the
Borrower or any other members of the Consolidated Borrower Group as though the
Agent, the Co-Agents or the Administrative Agent were not the Agent, a Co-Agent
or Administrative Agent hereunder. With respect to the Loans made and all
Obligations owing to it, the Agent, the CoAgent or the Administrative Agent
shall have the same rights and powers under this Credit Agreement as any Bank
and may exercise the same as though they were not the Agent, a Co-Agent or
Administrative Agent, and the terms "Bank" and "Banks" shall include the Agent,
the Co-Agents and the Administrative Agent in their individual capacity.
9.09 Successor Agent. The Agent, the Administrative Agent and any
Co-Agent may, at any time, resign upon 30 days' written notice to the Banks and
the Borrower, and be removed with or without cause by the Required Banks upon 30
days' written notice to the Borrower and the Agent, the Co-Agent or
Administrative Agent. Upon any such resignation or removal, the Required Banks,
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed), shall have the right to appoint a successor Agent,
Co-Agent or Administrative Agent. If no successor Agent, Co-Agent or
Administrative Agent shall have been so appointed by the Required Banks, and
shall have accepted such appointment, within 30 days after the notice of
resignation or notice of removal, as appropriate, then the retiring Agent or
Administrative Agent shall select a successor Agent or Administrative Agent,
with the consent of the Borrower (which consent shall not be unreasonably
withheld or delayed), provided such successor is a Bank hereunder or a
commercial bank 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
$400,000,000. There is no requirement for a successor Co-Agent to be appointed.
Upon the acceptance of any appointment as Agent, Co-Agent or Administrative
Agent hereunder by a successor, such successor Co-Agent or Administrative Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, Co-Agent or Administrative Agent,
and the retiring Agent, Co-Agent or Administrative Agent shall be discharged
from its duties and obligations as Agent, Co-Agent or Administrative Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 9.09 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent, Co-Agent or
Administrative Agent under this Credit Agreement.
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SECTION 10
MISCELLANEOUS
10.01 Notices. Except as otherwise expressly provided herein, all
notices and other communications shall have been duly given and shall be
effective (i) when delivered, (ii) when transmitted via telecopy (or other
facsimile device) to the number set out below, (iii) the day following the day
on which the same has been delivered prepaid to a reputable national overnight
air courier service, or (iv) the third Business Day following the day on which
the same is sent by certified or registered mail, postage prepaid, in each case
to the respective parties at the address, in the case of the Borrower and the
Administrative Agent, set forth below, and in the case of the Banks, set forth
on Schedule 2.01(a), or at such other address as such party may specify by
written notice to the other parties hereto:
if to the Borrower or the Guarantors:
Owens & Minor, Inc.
4800 Cox Road
Glen Allen, Virginia 23060
Attn: Richard F. Bozard
Telephone: (804) 965-2921
Telecopy: (804) 965-5403
if to the Agent, the Administrative Agent or the
Swingline Lender:
NationsBank, N.A.
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Tonya Sloan
Agency Services
Telephone: (704) 386-3916
Telecopy: (704) 386-9923
With a copy to:
NationsBank, N.A.
NationsBank Healthcare Finance Group
6610 Rockledge Drive, First Floor
Bethesda, Maryland 20817-1876
Attn: Michael B. Andry
Vice President
Telephone: (301) 571-0710
Telecopy: (301) 571-0719
10.02 Right of Set-Off. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by
way of limitation of any such rights, the Borrower agrees that
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upon the occurrence and during the continuance of an Event of Default and the
commencement of the remedies described in Section 8.02 hereof, each Bank is
authorized at any time and from time to time, without presentment, demand,
protest or other notice of any kind (all of which rights being hereby expressly
waived), to set-off and to appropriate and apply any and all deposits (general
or special) and any other indebtedness at any time held or owing by such Bank
(including, without limitation branches, agencies or Affiliates of such Bank
wherever located) to or for the credit or the account of the Borrower against
obligations and liabilities of the Borrower to such Bank hereunder, under the
Notes, the other Credit Documents or otherwise, irrespective of whether such
Bank shall have made any demand hereunder and although such obligations,
liabilities or claims, or any of them, may be contingent or unmatured, and any
such set-off shall be deemed to have been made immediately upon the occurrence
of an Event of Default even though such charge is made or entered on the books
of such Bank subsequent thereto. The Borrower hereby agrees that any Person
purchasing a participation in the Loans and Commitments hereunder pursuant to
Section 10.03(c) or Section 2.20. may exercise all rights of set-off with
respect to its participation interest as fully as if such Person were a Bank
hereunder. The Administrative Agent and the Banks agree to give written notice
to the appropriate Credit Party of any exercise of set-off, bankers' lien or
other similar right; provided, however, that any such notice need not be given
in advance of the exercise thereof.
10.03 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that the Borrower may not
assign and transfer any of its interests without prior written consent
of the Banks; provided further that the rights of each Bank to transfer,
assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 10.03, provided
however that nothing herein shall prevent or prohibit any Bank from (i)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank, or (ii)
granting assignments or participation in such Bank's Loans and/or
Commitments hereunder to its parent company and/or to any affiliate of
such Bank which is at least 50% owned by such Bank or its parent
company.
(b) Assignments. Each Bank may with the prior written consent of
the Administrative Agent, and so long as no Event of Default then
exists, the Borrower, which consent shall not be unreasonably withheld
or delayed, assign all or a portion of its rights and obligations
hereunder pursuant to an assignment agreement (an "Assignment")
substantially in the form
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of Schedule 10.03(b) to one or more Eligible Assignees, provided that
(i) any such prospective assignment shall first be offered to the other
Banks on the same terms and conditions as are available to the
prospective assignee, (ii) so long as no Event of Default shall then
exist and be continuing, after a period of 15 days from first offering
such assignment interest to the Banks as provided in the foregoing
subsection (i) hereof, the assigning Bank shall give notice to the
Borrower of any such prospective assignment and the Borrower may, at its
own expense with the assistance of the Administrative Agent, within a
period of 30 days thereafter, make arrangements for another bank or
financial institution reasonably acceptable to the Administrative Agent
to purchase and accept such assignment interest (at par without payment
of any fee, other than the $1,500 transfer fee to the Administrative
Agent described below, on account thereof), (iii) any such assignment
shall be in a minimum aggregate amount of $10,000,000 of the Commitments
and in integral multiples of $1,000,000 above such amount, and (iv) each
such assignment shall be of a constant not varying the percentage of all
of the assigning Bank's rights and obligations under this Credit
Agreement. The Administrative Agent shall maintain a copy of each
Assignment and the names and addresses of the Banks, and the Commitment
of, and principal amount of the Loans owing to, each Bank pursuant to
the terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive in the absence of manifest error and the
Credit Parties, the Agents and the Banks may treat each person whose
name is recorded in the Register pursuant to the terms hereof as a Bank
hereunder for all purposes of this Credit Agreement. The Register shall
be available for inspection by the Borrower and any Bank, at any
reasonable time and from time to time upon reasonable prior notice. Any
such assignment hereunder shall be effective upon (i) the written
consent of the Borrower and the Administrative Agent as provided above,
(ii) delivery to the Administrative Agent of a copy of the Assignment
together with a transfer fee of $1,500 payable by the assigning Bank to
the Administrative Agent for its own account and (iii) the
Administrative Agent's recordation of the name of the assignee in the
Register. The assigning Bank will give prompt notice to the
Administrative Agent and the Borrower of any Assignment. Upon the
effectiveness of any such assignment (and after notice to the Borrower
as provided herein), the assignee shall become a "Bank" for all purposes
of this Credit Agreement and the other Credit Documents and, to the
extent of such assignment, the assigning Bank shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment
components being assigned. Along such lines the Borrower agrees that
upon notice of any such assignment
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<PAGE>
and surrender of the appropriate Note or Notes, it will promptly provide
to the assigning Bank and to the assignee separate promissory notes in
the amount of their respective interests substantially in the form of
the original Note (but with notation thereon that it is given in
substitution for and replacement of the original Note or any replacement
notes thereof). All surrendered Notes shall be canceled and returned to
the Borrower.
(c) Participations.
(i) Each Bank may sell, transfer, grant or assign participations
in all or any part of such Bank's interests and obligations hereunder;
provided that (i) such selling Bank shall remain a "Bank" for all
purposes under this Credit Agreement (such selling Bank's obligations
under the Credit Documents remaining unchanged) and the participant
shall not constitute a Bank hereunder, (ii) no such participant shall
have, or be granted, rights to approve any amendment or waiver relating
to this Credit Agreement or the other Credit Documents except to the
extent any such amendment or waiver would (A) reduce the principal of or
rate of interest on or fees in respect of any Loans in which the
participant is participating, (B) postpone the date fixed for any
payment of principal (including extension of the Termination Date or the
date of any mandatory prepayment), interest or fees in which the
participant is participating, or (C) release all or substantially all of
the collateral or guaranties (except as expressly provided in the Credit
Documents) supporting any of the Loans or Commitments in which the
participant is participating, (iii) sub-participations by the
participant (except to an affiliate, parent company or affiliate of a
parent company of the participant) shall be prohibited and (iv) any such
participations shall be in a minimum aggregate amount of $5,000,000 of
the Commitments and in integral multiples of $1,000,000 in excess
thereof. In the case of any such participation, except as provided in
Section 10.02, the participant shall not have any rights under this
Credit Agreement or the other Credit Documents (the participant's rights
against the selling Bank in respect of such participation to be those
set forth in the participation agreement with such Bank creating such
participation) and all amounts payable by the Borrower hereunder shall
be determined as if such Bank had not sold such participation.
(ii) Each prospective participant that is a Non-U.S. Person must
submit to the Borrower and the Administrative Agent on or before the
effective date of the related participation either: (A) two copies of
either United States Internal Revenue Service Form 1001 or Form 4224
(whichever is applicable) or (B) in the case of a participant claiming
an exemption from U.S. federal withholding tax under Section 871(h) or
881(c) of the Code with respect to payments of "portfolio interest", a
Form W-8
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<PAGE>
(or any subsequent versions thereof or successors thereto) and a
certificate representing that such participant is not a bank for
purposes of Section 881(c)(3)(A) of the Code, is not a 10 percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of
the Borrower, and is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code), in
either case properly completed and duly executed by such participant and
entitling such participant to receive a complete exemption from U.S.
federal withholding tax with respect to payments received pursuant to
such participation. Each prospective participant that is organized under
the laws of the United States or any state thereof or the District of
Columbia shall deliver to the Borrower on or before the date of the
related participation an original copy of the Internal Revenue Service
Form W-9 (or applicable successor form) properly completed and duly
executed by such participant. Each participant also shall, from time to
time, submit to the Borrower and the Administrative Agent such
additional duly completed and signed copies of such forms (or such
successor forms or other documents as shall be adopted from time to time
by the relevant United States taxing authorities) as may be (i)
reasonably requested in writing by the Borrower or the Administrative
Agent, (ii) appropriate under then current United States laws or
regulations, or (iii) required due to the obsolescence or invalidity of
any form previously delivered by such participant. Upon the reasonable
request of the Borrower or the Administrative Agent, each participant
that has not provided the forms or other documents, as provided above,
on the basis of being a United States person shall submit to the
Borrower and the Administrative Agent a certificate to the effect that
it is such a "United States person."
10.04 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Administrative Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
the Borrower or any Guarantor and the Administrative Agent or any Bank shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Credit Document preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies provided herein
are cumulative and not exclusive of any rights or remedies which the
Administrative Agent or any Bank would otherwise have. No notice to or demand on
the Borrower in any case shall entitle the Borrower or any Guarantor to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent or the Banks to
any other or further action in any circumstances without notice or demand.
10.05 Payment of Expenses, etc. The Borrower agrees to:
(i) pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent in connection with the negotiation,
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<PAGE>
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Moore & Van Allen, special counsel to the Administrative Agent) and any
amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Borrower under this Credit Agreement and of the Administrative Agent and the
Banks in connection with enforcement of the Credit Documents and the documents
and instruments referred to therein (including, without limitation, in
connection with any such enforcement, the reasonable fees and disbursements of
counsel for the Administrative Agent and each of the Banks, including in-house
counsel); (ii) pay and hold each of the Banks harmless from and against any and
all present and future stamp and other similar taxes with respect to the
foregoing matters and save each of the Banks harmless from and against any and
all liabilities with respect to or resulting from any delay or omission (other
than to the extent attributable to such Bank) to pay such taxes; and (iii)
indemnify each Bank, its officers, directors, employees, representatives and
agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a result of,
or arising out of, or in any way related to, or by reason of, any investigation,
litigation or other proceeding (whether or not any Bank is a party thereto)
related to the entering into and/or performance of any Credit Document or the
use of proceeds of any Loans (including other extensions of credit) hereunder or
the consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding (i) any costs or expenses associated with the transfer
of a participation interest under Section 10.03(a)(ii) or 10.03(c), and (ii) any
such losses, liabilities, claims, damages or expenses to the extent incurred by
reason of gross negligence or willful misconduct on the part of the Person to be
indemnified).
10.06 Amendments, Waivers and Consents. Neither this Credit Agreement
nor any other Credit Document nor any of the terms hereof or thereof may be
amended, changed, waived, discharged or terminated unless such amendment,
change, waiver, discharge or termination is in writing signed by the Required
Banks, provided that no such amendment, change, waiver, discharge or termination
shall, without the consent of each Bank affected thereby, (i) extend the
scheduled maturities (including the final maturity and any mandatory
prepayments) of any Loan, or any portion thereof, or reduce the rate or extend
the time of payment of interest (other than as a result of waiving the
applicability of any post-default increase in interest rates) thereon or fees
hereunder or reduce the principal amount thereof, or increase the Commitments or
the Revolving Committed Amount of the Banks over the amount thereof in effect
(it being understood and agreed that a waiver of any Default or Event of Default
or of a mandatory
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<PAGE>
reduction in the total commitments shall not constitute a change in the terms of
any Commitment of any Bank), (ii) release of Stuart Medical, Inc. or
substantially all of the other Guarantors from their guaranty obligations
hereunder, (iii) amend, modify or waive any provision of this Section or Section
2.13, 2.14, 2.15, 2.16, 2.19, 8.01(a), 9.07, 10.02 and 10.03, (iv) reduce any
percentage specified in, or otherwise modify, the definition of Required Banks
(v) consent to the assignment or transfer by the Borrower (or Guarantor) of any
of its rights and obligations under (or in respect of) this Credit Agreement or
(vi) release all or substantially all of the collateral, if any, pledged to
secure the Loans and Obligations hereunder. No provision of Section 9 may be
amended without the consent of the Administrative Agent.
10.07 Counterparts. This Credit Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Credit Agreement to produce or
account for more than one such counterpart.
10.08 Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Credit Agreement.
10.09 Survival of Indemnification. All indemnities set forth herein,
including, without limitation, in Sections 2.13, 2.15 or 10.05 shall survive the
execution and delivery of this Credit Agreement, and the making of the Loans,
the repayment of the Loans and other obligations and the termination of the
Commitment hereunder.
10.10 Governing Law; Submission to Jurisdiction; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF
THE COMMONWEALTH OF VIRGINIA. Any legal action or proceeding with
respect to this Credit Agreement or any other Credit Document may be
brought in the courts of the Commonwealth of Virginia in City of
Richmond, or of the United States for the Eastern District of Virginia,
and, by execution and delivery of this Credit Agreement, each of the
Credit Parties hereby irrevocably accepts for itself and in respect of
its property, generally and unconditionally, the jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for
notices pursuant to Section 10.01, such service to become
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<PAGE>
effective 30 days after such mailing. Nothing herein shall affect the
right of the Agent to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against the
Borrower in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of
any of the aforesaid actions or proceedings arising out of or in
connection with this Credit Agreement or any other Credit Document
brought in the courts referred to in subsection (a) hereof and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
(c) EACH OF THE AGENTS, EACH OF THE BANKS AND EACH OF THE CREDIT
PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS
CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
10.11 Severability. If any provision of any of the Credit Documents is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
10.12 Entirety. This Credit Agreement together with the other Credit
Documents represent the entire agreement of the parties hereto and thereto, and
supersede all prior agreements and understandings, oral or written, if any,
including any commitment letters or correspondence relating to the Credit
Documents or the transactions contemplated herein and therein.
10.13 Survival of Representations and Warranties. All representations
and warranties made by the Borrower herein shall survive delivery of the Notes
and the making of the Loans hereunder.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER:
OWENS & MINOR, INC.,
a Virginia corporation
By /s/Richard F. Bozard
Richard F. Bozard
Vice President and Treasurer
GUARANTORS:
OWENS & MINOR MEDICAL, INC.
a Virginia corporation
NATIONAL MEDICAL SUPPLY CORPORATION
a Delaware corporation
OWENS & MINOR WEST, INC.
a California corporation
KOLEY'S MEDICAL SUPPLY, INC.
a Nebraska corporation
LYONS PHYSICIAN SUPPLY COMPANY
an Ohio corporation
A. KUHLMAN & COMPANY
a Michigan corporation
STUART MEDICAL, INC.
a Pennsylvania corporation
By /s/Richard F. Bozard
Vice President and Treasurer
of each of the Companies listed above
BANKS:
NATIONSBANK, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent and
Administrative Agent
By /s/Michael B. Andry
Michael B. Andry,
Senior Vice President
<PAGE>
Signature Pages to
Owens & Minor, Inc. Credit Agreement
BANK OF AMERICA NT & SA,
individually in its capacity as a
Bank and in its capacity as a Co-Agent
By /s/Michelle W. Kacergis
Title Vice President
CRESTAR BANK,
individually in its capacity as a
Bank and in its capacity as a Co-Agent
By /s/T. Patrick Collins
Title Vice President
FIRST UNION NATIONAL BANK OF VIRGINIA
By /s/Andrew Calhoun
Title S.V.P.
PNC BANK, NATIONAL ASSOCIATION
By /s/Gary Tyrrell
Title V.P.
THE BANK OF NEW YORK
By /s/Greg Shefrin
Title A.V.P.
MELLON BANK, N.A.
By /s/Ronald J. Bucci
Title Asst. Vice President
NBD BANK
By /s/Larry Schuster
Title Authorized Agent
<PAGE>
Signature Pages to
Owens & Minor, Inc. Credit Agreement
THE SANWA BANK LTD.
By /s/William B. Plough /s/ Shinji Osumi
Title Authorized Agent Vice President
SIGNET BANK
By /s/J. Charles Link
Title S.V.P.
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By /s/Hayward Edmundson V
Title Vice President
THE BANK OF NOVA SCOTIA
By /s/J. Alan Edwards
Title Authorized Signatory
<PAGE>
Schedule 2.01(a)
Schedule of Banks and
Commitments
<TABLE>
<CAPTION>
Address Revolving
for Funding Address for Committed
Bank and Payments Other Notices Amount
<S> <C>
NationsBank, N.A. NationsBank, N.A. NationsBank, N.A. $25,000,000
101 N. Tryon Street NationsBank Healthcare
Independence Center Finance Group
NC1-005-15-04 6610 Rockledge Drive
Charlotte, NC 28255 First Floor
Attn: Tonya Sloan Bethesda, MD 20817-1876
Phone: (704) 386-3916 Phone: (301) 571-0710
Fax: (704) 386-9923 Fax: (301) 571-0719
Bank of America NT & SA Bank of America NT & Bank of America NT & SA $22,500,000
SA 1230 Peachtree Street
1850 Gateway Boulevard Suite 3800
Concord, CA 94520 Atlanta, Georgia 30309
Attn: Aaron Wilson Attn: Bill Tucker
Phone: (510)675-7329 Phone: (404)788-9732
Fax: (510)675-7531 Fax: (404)788-9673
Crestar Bank Crestar Bank $22,500,000
919 East Main Street
Richmond, VA 23219
Attn: Pat Collins
Phone: (804)782-7781
Fax: (804)782-5413
The Bank of Nova Scotia The Bank of Nova Scotia $20,000,000
26th Floor
One Liberty Plaza
New York, NY 10006
Attn: Jim Trimble
Phone: (416)866-4707
Fax: (416)866-3770
</TABLE>
<PAGE>
Schedule 2.01(a)
Schedule of Banks and
Commitments
<TABLE>
<CAPTION>
Address Revolving
for Funding Address for Committed
Bank and Payments Other Notices Amount
---- ------------ ------------- ------
<S> <C>
First Union National Bank of First Union National Bank of $20,000,000
Virginia Virginia
901 East Cary Street
2nd Floor
Richmond, VA 23219
Attn: Lowndes Burke
Phone: (804)788-9732
Fax: (804)788-9673
PNC Bank, National PNC Bank, National $20,000,000
Association Association
100 South Broad Street
7th Floor
Philadelphia, PA 19110
Attn: Gary Tyrrell
Phone: (215)585-5934
Fax: (215)585-6037
The Bank of New York The Bank of New York $15,000,000
One Wall Street
22nd Floor
New York, NY 10286
Attn: Gregory Shefrin
Phone: (212)635-6724
Fax: (212)635-6434
Mellon Bank, N.A. Mellon Bank, N.A. $15,000,000
Mellon Bank Center
1735 Market Street
7th Floor
Philadelphia, PA 19101
Attn: Ronald J. Bucci
Phone: (215)553-3875
Fax: (215)553-4899
</TABLE>
<PAGE>
Schedule 2.01(a)
Schedule of Banks and
Commitments
<TABLE>
<CAPTION>
Address Revolving
for Funding Address for Committed
Bank and Payments Other Notices Amount
---- ------------ ------------- ------
<S> <C>
NBD Bank NBD Bank $20,000,000
611 Woodward Avenue
Detroit, MI 48225
Attn: Larry Schuster
Phone: (313)225-1164
Fax: (313)225-2649
The Sanwa Bank Ltd. The Sanwa Bank Ltd. $15,000,000
Atlanta Agency Atlanta Agency
4750 Georgia-Pacific Center
133 Peachtree St., N.E.
Atlanta, GA 30303
Attn: Peter Pawlak
Phone: (404)586-6888
Fax: (404)589-1629
Signet Bank Signet Bank $15,000,000
800 East Main Street
Richmond, VA 23260
Attn: Charles Link
Phone: (804)771-7034
Fax: (804)771-7151
Wachovia Bank of North Wachovia Bank of North $15,000,000
Carolina, N.A. Carolina, N.A.
100 North Main Street
Winston-Salem, NC 27150-7202
Attn: Hayward Edmundson, V
Phone: (910)770-7614
Fax: (910)761-6458
------------------
$225,000,000
</TABLE>
<PAGE>
Schedule 2.02(1)
FORM OF NOTICE OF BORROWING
NationsBank, N.A., NationsBank, N.A.,
as Administrative Agent for as Swingline Lender
the Lenders referred to below 101 N. Tryon Street, 15th Floor
101 N. Tryon Street, 15th Floor Independence Center, NC1-001-15-04
Independence Center, NC1-001-15-04 Charlotte, North Carolina 28255
Charlotte, North Carolina 28255 Attention: Tonya Sloan
Attention: Tonya Sloan Agency Services
Agency Services
Ladies and Gentlemen:
The undersigned, OWENS & MINOR, INC. (the "Borrower"), refers to the
Credit Agreement dated as of May __, 1996 (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the other Credit Parties party thereto, the Banks party thereto, and
NationsBank, N.A., as Administrative Agent. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement. The Borrower hereby gives you notice that it requests a
Revolving Loan advance or a Swingline Loan advance pursuant to the provisions of
Section 2.02 or 2.07 of the Credit Agreement, as appropriate, and in that
connection sets forth below the terms on which such advance is requested to be
made:
(A) Type of Loan Advance Requested (Check One)
_____ Revolving Loan
_____ Swingline Loan
(B) Date of Borrowing
(which is a Business Day) _______________________
(C) Principal Amount of
Borrowing1 _______________________
(D) Interest rate basis (Check One)
_____ Eurodollar Loan2
_____ Base Rate Loan
(E) Interest Period and the
last day thereof3 _______________________
- --------
1 In the case of Revolving Loans, a minimum of $5,000,000 and $1,000,000
increments in excess thereof (or the remaining Revolving Committed
Amount, if less) and in the case of Swingline Loans, a minimum of
$250,000 and $100,000 increments in excess thereof (or the remaining
Swingline Committed Amount, if less).
2 Fixed ratefor applicable Interest Period in the case of Revolving Loans.
Floating rate applicable in the case of Swingline Loans.
3 Revolving Loans only. Subject to the provisions and definitions of the
Credit Agreement, but generally one, two, three or six months' duration
for Fixed Eurodollar Loans, and also with respect to a single Eurodollar
Loan of up to $20,000,000 under the Revolving Loan facility also for 7
days duration.
<PAGE>
Upon acceptance of any or all of the Loans made by the Banks in response
to this request, the Borrower shall be deemed to have represented and warranted
that the conditions to lending specified in Section 2.09(b) of the Credit
Agreement have been satisfied.
Very truly yours,
OWENS & MINOR, INC.
By:________________________________
Title:
<PAGE>
Schedule 2.02(2)
FORM OF NOTICE OF CONVERSION
NationsBank, N.A., NationsBank, N.A.,
as Administrative Agent for as Swingline Lender
the Lenders referred to below 101 N. Tryon Street, 15th Floor
101 N. Tryon Street, 15th Floor Independence Center, NC1-001-15-04
Independence Center, NC1-001-15-04 Charlotte, North Carolina 28255
Charlotte, North Carolina 28255 Attention: Tonya Sloan
Attention: Tonya Sloan Agency Services
Agency Services
Ladies and Gentlemen:
The undersigned, OWENS & MINOR, INC. (the "Borrower"), refers to the
Credit Agreement dated as of May __, 1996 (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the other Credit Parties party thereto, the Banks party thereto, and
NationsBank, N.A., as Administrative Agent. Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to such terms in
the Credit Agreement. The Borrower hereby gives you notice pursuant to Section
2.03 of the Credit Agreement that it requests an extension or conversion of a
Revolving Loan outstanding under the Credit Agreement, and in that connection
sets forth below the terms on which such extension or conversion is requested to
be made:
(A) Type of Loan (Check One)
_____ Revolving Loan
_____ Swingline Loan
(B) Date of Extension or Conversion
(which is the last day of the _______________________
the applicable Interest Period)
(C) Principal Amount of
Extension or Conversion1 _______________________
(D) Interest rate basis (Check One) ______________________
_____ Eurodollar Loan2
_____ Base Rate Loan
(E) Interest Period and the
last day thereof3 _______________________
- --------
1 In the case of Revolving Loans, a minimum of $5,000,000 and $1,000,000
increments in excess thereof (or the remaining Revolving Committed
Amount, if less) and in the case of Swingline Loans, a minimum of
$250,000 and $100,000 increments in excess thereof (or the remaining
Swingline Committed Amount, if less).
2 Fixed ratefor applicable Interest Period in the case of Revolving Loans.
Floating rate applicable in the case of Swingline Loans.
3 Revolving Loans only. Subject to the provisions and definitions of the
Credit Agreement, but generally one, two, three or six months' duration
for Eurodollar Loans, and also with respect to a single Eurodollar Loan
of up to $20,000,000 under the Revolving Loan facility also for 7 days
duration.
<PAGE>
Upon acceptance of extension or conversion of any or all of the Loans
made by the Banks in response to this request, the Borrower shall be deemed to
have represented and warranted that the conditions to lending specified in
Section 2.09(b) of the Credit Agreement have been satisfied.
Very truly yours,
OWENS & MINOR, INC.
By:________________________________
Title:
<PAGE>
Schedule 2.06
FORM OF REVOLVING NOTE
$____________________ May __, 1996
FOR VALUE RECEIVED, OWENS & MINOR, INC., a Virginia corporation (the
"Borrower"), hereby promises to pay to the order of __________________________
(the "Bank"), its successors and registered assigns, at the office of
NationsBank, N.A., as Administrative Agent (the "Administrative Agent"), at 101
N. Tryon Street, Independence Center, 15th Floor, NC1-001-15-04, Charlotte,
North Carolina 28255 (or at such other place or places as the holder hereof may
designate), at the times set forth in the Credit Agreement dated as of the date
hereof, among the Borrower, certain other Credit Parties party thereto, the
Administrative Agent, the Bank and certain other lenders (as it may be amended,
modified, extended or restated from time to time, the "Credit Agreement"; all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Credit Agreement), but in no event later than the Termination Date, in
Dollars and in immediately available funds, the principal amount of
________________________ ($____________) or, if less than such principal amount,
the aggregate unpaid principal amount of all Revolving Loans made by the Bank to
the Borrower pursuant to the Credit Agreement, and to pay interest from the date
hereof on the unpaid principal amount hereof, in like money, at said office, on
the dates and at the rates selected in accordance with Section 2.05 of the
Credit Agreement.
From and after any failure to make any payment of principal or interest in
respect of any of the Loans when due, whether at scheduled or accelerated
maturity or on account of any mandatory prepayment, the principal of and, to the
extent permitted by law, interest on, the Revolving Loans, including the
Revolving Loans evidenced hereby, shall bear interest as provided in Section
2.05 of the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note, and
all other indebtedness of the Borrower to the Bank shall become immediately due
and payable, without presentment, demand, protest or notice (except as expressly
provided in the Credit Agreement) of any kind, all of which are hereby waived by
the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on Schedule A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be attached hereto
and made a part hereof; provided, however, that any failure to endorse such
information on such schedule or continuation thereof shall not in any manner
affect the obligation of the Borrower to make payments of principal and interest
in accordance with the terms of this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by
its duly authorized officer as of the day and year first above written.
OWENS & MINOR, INC.
By____________________________
Title_________________________
<PAGE>
SCHEDULE A TO REVOLVING NOTE OF OWENS & MINOR, INC.
DATED May __, 1996
<TABLE>
<CAPTION>
Person
Making Interest Payments Balance
Date Notation Amount Period Rate Principal Interest of Note
---- -------- ------ ------ ---- --------- -------- -------
<S> <C>
</TABLE>
<PAGE>
Schedule 2.07(d)
FORM OF SWINGLINE NOTE
$20,000,000 May __, 1996
FOR VALUE RECEIVED, OWENS & MINOR, INC., a Virginia corporation (the
"Borrower"), hereby promises to pay to NATIONSBANK, N.A. (the "Swingline
Lender"), its successors and registered assigns, at the office of NationsBank,
N.A., as Administrative Agent (the "Administrative Agent"), at 101 N. Tryon
Tryon Street, Independence Center, 15th Floor, NC1-001-15-04, Charlotte, North
Carolina 28255 (or at such other place or places as the holder hereof may
designate), at the times set forth in the Credit Agreement dated as of the date
hereof among the Borrower, certain other Credit Parties party thereto, the
Administrative Agent, the Swingline Lender and certain other lenders (as it may
be amended, modified, extended or restated from time to time, the "Credit
Agreement"; all capitalized terms not otherwise defined herein shall have the
meanings set forth in the Credit Agreement), but in no event later than the
Termination Date, in Dollars and in immediately available funds, the principal
amount of TWENTY MILLION DOLLARS ($20,000,000) or, if less than such principal
amount, the aggregate unpaid principal amount of all Swingline Loans made by the
Swingline Lender to the Borrower pursuant to the Credit Agreement, and to pay
interest from the date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates selected in accordance with
Section 2.07(c) of the Credit Agreement.
From and after any failure to make any payment of principal or interest in
respect of any of the Loans when due, whether at scheduled or accelerated
maturity or on account of any mandatory prepayment, the principal of and, to the
extent permitted by law, interest on, the Swingline Loans evidenced hereby,
shall bear interest as provided in Section 2.07(c) of the Credit Agreement.
Further, in the event the payment of all sums due hereunder is accelerated under
the terms of the Credit Agreement, this Note, and all other indebtedness of the
Borrower to the Swingline Lender shall become immediately due and payable,
without presentment, demand, protest or notice of any kind (except as expressly
provided in the Credit Agreement), all of which are hereby waived by the
Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and interest,
all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on Schedule A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be attached hereto
and made a part hereof; provided, however, that any failure to endorse such
information on such schedule or continuation thereof shall not in any manner
affect the obligation of the Borrower to make payments of principal and interest
in accordance with the terms of this Note.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by
its duly authorized officer as of the day and year first above written.
OWENS & MINOR, INC.
By____________________________
Title_________________________
<PAGE>
SCHEDULE A TO
SWINGLINE NOTE EXECUTED IN FAVOR OF
NATIONSBANK, N.A., AS SWINGLINE LENDER
DATED May __, 1996
<TABLE>
<CAPTION>
Person
Making Interest Payments Balance
Date Notation Amount Period Rate Principal Interest of Note
---- -------- ------ ------ ---- --------- -------- -------
<S> <C>
</TABLE>
<PAGE>
Schedule 4.01(b)(1)
Form of Legal Opinion of Drew St. J. Carneal
<PAGE>
Schedule 4.01(b)(2)
Form of Legal Opinion of Hunton & Williams
<PAGE>
Schedule 5.09
Schedule of Outstanding Indebtedness
<PAGE>
Schedule 5.10
Schedule of Legal Proceedings
<PAGE>
Schedule 5.15
Schedule of Subsidiaries
<PAGE>
Schedule 5.18
Schedule of Environmental Exceptions
<PAGE>
Schedule 6.01(c)
Form of Borrowing Base Certificate
For the calendar month ended _______________, 19__.
I, the undersigned, the _______________________ of OWENS & MINOR, INC. (the
"Borrower"), certify as of the date hereof and prior to giving effect to any
payment due as of the date hereof under the Credit Agreement dated as of May __,
1996 (as it may be amended, modified, extended or restated from time to time,
the "Credit Agreement"; all capitalized terms used herein shall have the
meanings given to such terms in the Credit Agreement) among the Borrower, the
other Credit Parties party thereto, the Banks party thereto and NationsBank,
N.A., as Administrative Agent:
Eligible Inventory
Aggregate Net Book Value of Inventory of the Credit Parties on a
consolidated basis after deducting allowances and
reserves relating thereto $____________
LIFO Reserve $____________
Total Eligible Inventory $____________
Eligible Receivables
Aggregate Net Book Value of Accounts Receivable of the Credit Parties on a
consolidated basis after deducting
allowances and reserves relating thereto $____________
Total Borrowing Base
Borrowing Base Advance Rate -
85% of foregoing Eligible Receivables $_____________
Borrowing Base Advance Rate -
50% of foregoing Eligible Inventory + $_____________
Total Borrowing Base $______________
With reference to this Borrowing Base certificate, I hereby certify on behalf of
the Borrower that, to the best of my knowledge and belief, the above statements
are true and correct in all material respects as of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this _____ day of
____________, 199_.
OWENS & MINOR, INC.
By________________________
Title_____________________
<PAGE>
Schedule 6.01(d)
Form of Officer's Compliance Certificate
For the fiscal quarter ended _________________, 1996.
I, ______________________, [Title] of OWENS & MINOR, INC. (the
"Borrower") hereby certify that, to the best of my knowledge and belief, with
respect to that certain Credit Agreement dated as of May __, 1996 (as it may be
amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the other Credit Parties party thereto,
the Banks party thereto and NationsBank, N.A., as Administrative Agent:
a. The company-prepared consolidated financial statements which
accompany this certificate are true and correct in all material
respects and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis. The
company-prepared consolidating statements which accompany this
certificate are true and correct in all material respects and have
been prepared consistent with the Borrower's internal practices
consistently applied and may not be in strict conformity with
generally accepted accounting principles. Both sets of such
financial statements are subject to changes resulting from normal
year-end audit adjustments.
b. Since __________ (the date of the last similar certification, or,
if none, the Closing Date) no Default or Event of Default has
occurred under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by the
Credit Parties with the financial covenants contained in Section 6.11 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, 199_.
OWENS & MINOR, INC.
--------------------------------
Title:
<PAGE>
Attachment to Officer's Certificate
Computation of Financial Covenants
<PAGE>
Schedule 6.06
Schedule of Insurance
<PAGE>
Schedule 6.12
Form of Joinder Agreement
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________, 19__,
is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N.A., in its capacity as Administrative Agent
under that certain Credit Agreement (as it may be amended, modified, extended or
restated from time to time, the "Credit Agreement"), dated as of May __, 1996,
by and among OWENS & MINOR, INC., a Virginia corporation (the "Borrower"), the
other Credit Parties party thereto, the Banks party thereto and NationsBank,
N.A., as Administrative Agent. All of the defined terms in the Credit Agreement
are incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 6.12 of the Credit Agreement to cause the
Subsidiary to become a "Guarantor".
Accordingly, the Subsidiary hereby agrees as follows with the
Administrative Agent, for the benefit of the Banks:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Credit Agreement, the Subsidiary will be deemed to be a party
to the Credit Agreement and a "Guarantor" for all purposes of the Credit
Agreement, and shall have all of the obligations of a Guarantor thereunder as if
it had executed the Credit Agreement. The Subsidiary hereby ratifies, as of the
date hereof, and agrees to be bound by, all of the terms, provisions and
conditions contained in the Credit Agreement, including without limitation (i)
all of the representations and warranties set forth in Section 5 of the Credit
Agreement as they relate to such Subsidiary, (ii) all of the affirmative and
negative covenants set forth in Sections 6 and 7 of the Credit Agreement and
(iii) all of the undertakings and waivers set forth in Section 3 of the Credit
Agreement (subject to the limitations set forth therein). Without limiting the
generality of the foregoing terms of this paragraph 1, the Subsidiary hereby (i)
subject to the limitation set forth in Section 3.07 of the Credit Agreement,
jointly and severally together with the other Guarantors, guarantees to each
Bank, the Administrative Agent and the CoAgents, as provided in Section 3 of the
Credit Agreement, the prompt payment and performance of the Obligations in full
when due (whether at stated maturity, as a mandatory prepayment, by acceleration
or otherwise) strictly in accordance with the terms thereof and (ii) agrees that
if any of the Obligations are not paid or performed in full when due (whether at
stated maturity, as a mandatory prepayment, by acceleration or otherwise), the
Subsidiary will, jointly and severally together with the other Guarantors,
promptly pay and perform the same, without any demand or notice whatsoever, and
that in the case of any extension of time of payment or renewal of any of the
Obligations, the same will be promptly paid in full when due (whether at
extended maturity, as a mandatory prepayment, by acceleration or otherwise) in
accordance with the terms of such extension or renewal.
2. This Credit Agreement may be executed in two or more counterparts, each
of which shall constitute an original but all of which when taken together shall
constitute one contract.
<PAGE>
IN WITNESS WHEREOF, the Subsidiary has caused this Credit Agreement to be
duly executed by its authorized officers, and the Administrative Agent, for the
benefit of the Banks, has caused the same to be accepted by its authorized
officer, as of the day and year first above written.
[SUBSIDIARY]
By____________________________
Title_________________________
Acknowledged and accepted:
NATIONSBANK, N.A.,
as Administrative Agent
By______________________________
Title___________________________
- 104 -
<PAGE>
Schedule 7.02
Schedule of Permitted Liens
- 105 -
<PAGE>
Schedule 10.03(b)
Form of Assignment and Acceptance
THIS ASSIGNMENT AND ACCEPTANCE dated as of ________, 199_ is entered into
between ________________ ("Assignor") and ____________________ ("Assignee").
Reference is made to the Credit Agreement dated as of May __, 1996, as
amended and modified from time to time thereafter (the "Credit Agreement") among
OWENS & MINOR, INC., the other Credit Parties party thereto, the Banks party
thereto and NationsBank, N.A., as Administrative Agent. Terms defined in the
Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth below in the Commitments of the Assignor on the effective
date of the assignment designated below (the "Effective Date") and the Revolving
Loans owing to the Assignor and in the Swingline Loans in which Assignor has or
may have a participation interest which are outstanding on the Effective Date,
together with unpaid interest accrued on the assigned Loans to the Effective
Date and the amount, if any, set forth below of the Fees accrued to the
Effective Date for the account of the Assignor. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 10.03(b) of the Credit Agreement,
a copy of which has been received by each such party. The Assignee has submitted
to the Borrower and the Administrative Agent the documents required pursuant to
Section 10.03(c) of the Credit Agreement. From and after the Effective Date (i)
the Assignee, if it is not already a Bank under the Credit Agreement, shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the interests assigned by this Assignment and Acceptance, have the
rights and obligations of a Bank thereunder and (ii) the Assignor shall, to the
extent of the interests assigned by this Assignment and Acceptance, relinquish
its rights and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Revolving Committed Amount
Percentage Assigned (expressed
as a percentage of the total
Commitment of the Banks to
make Revolving Loans and set
forth to at least 8 decimals) %
(f) Revolving Committed Amount
Percentage of Assignor after
Assignment (set forth to at
- 106 -
<PAGE>
least 8 decimals) %
(g) Total Revolving Loans outstanding
as of Effective Date $_____________
(h) Principal Amount of Revolving
Loans assigned on Effective
Date (the amount set forth
in (g) multiplied by the
percentage set forth in (e)) $_____________
The terms set forth above are hereby agreed to:
____________________, as Assignor
By:_____________________________________
Title:__________________________________
_____________________, as Assignee
By:_____________________________________
Title:__________________________________
CONSENTED TO:
NATIONSBANK, N.A.,
as Administrative Agent
By:____________________________________
Title:_________________________________
OWENS & MINOR, INC.
By:____________________________________
Title:_________________________________
- 107 -
Exhibit 10(a)
DRAFT: 05/28/96
AMENDED AND RESTATED
PURCHASE AND SALE AGREEMENT
among
OWENS & MINOR MEDICAL, INC.,
as an Originator and as Servicer,
STUART MEDICAL, INC., as an Originator,
the other Originators
that may become parties hereto
from time to time,
OWENS & MINOR, INC.,
as Parent and Guarantor
and
O&M FUNDING CORP.,
as the Initial Purchaser
Dated as of May 28, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PAGE
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Agreement to Purchase and Sell...................................... 2
SECTION 1.2. Timing of Purchases................................................. 2
SECTION 1.3. Calculation of Purchase Price....................................... 3
SECTION 1.4. Definitions and Calculations Related to
Purchase Discount................................................... 4
SECTION 1.5. Purchase Price Payments......................................................... 5
SECTION 1.6. The Initial Purchaser Note...................................................... 6
SECTION 1.7. Initial Purchaser Agreement to Make
Demand Loans........................................................ 7
SECTION 1.8. Deemed Collections, Etc............................................. 7
SECTION 1.9. No Recourse......................................................... 8
SECTION 1.10. True Sales.......................................................... 8
SECTION 1.11. Payments and Computations, Etc...................................... 9
SECTION 1.12. Facility Fee................................................................... 9
ARTICLE II
CONDITIONS TO PURCHASES; REPRESENTATIONS AND
WARRANTIES; COVENANTS; PURCHASE AND SALE TERMINATION EVENTS
SECTION 2.1. Conditions to Purchases............................................. 12
SECTION 2.2. Representations and Warranties;
Covenants........................................................... 12
SECTION 2.3. Purchase and Sale Termination Events................................ 12
ARTICLE III
INDEMNIFICATION
SECTION 3.1. Indemnities by the Originators; Taxes............................... 13
SECTION 3.2. Contribution........................................................ 19
ARTICLE IV
ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS
AND OBLIGATIONS IN RESPECT OF THE POOL RECEIVABLES
SECTION 4.1. Servicing of Pool Receivables and
Related Assets...................................................... 20
SECTION 4.2. Rights of the Initial Purchaser;
Enforcement Rights.................................................. 20
-i-
SECTION 4.3. Responsibilities of the Originators................................. 22
SECTION 4.4. Further Action Evidencing Purchases................................. 23
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee........................................................... 24
SECTION 5.2. Representation and Warranty......................................... 26
SECTION 5.3. Subrogation......................................................... 26
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Additional Originators.............................................. 26
SECTION 6.2. Amendments, Etc..................................................... 27
SECTION 6.3. Notices, Etc........................................................ 27
SECTION 6.4. Acknowledgment and Consent.......................................... 27
SECTION 6.5. Binding Effect; Assignability....................................... 28
SECTION 6.6. Costs and Expenses.................................................. 29
SECTION 6.7. No Proceedings; Limitation on Payments.............................. 29
SECTION 6.8. GOVERNING LAW AND JURISDICTION...................................... 29
SECTION 6.9. Execution in Counterparts........................................... 30
SECTION 6.10. Survival of Termination............................................. 30
SECTION 6.11. WAIVER OF JURY TRIAL................................................ 30
SECTION 6.12. Entire Agreement.................................................... 30
SECTION 6.13. Headings............................................................ 31
</TABLE>
EXHIBIT I CONDITIONS OF PURCHASES
EXHIBIT II REPRESENTATIONS AND WARRANTIES
EXHIBIT III COVENANTS
EXHIBIT IV PURCHASE AND SALE TERMINATION EVENTS
SCHEDULE I TRADE NAMES AND LOCATIONS
SCHEDULE II LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
ANNEX A FORM OF INITIAL PURCHASER NOTE
ANNEX B FORM OF ORIGINATOR NOTE
ANNEX C OPINION CERTIFICATE
-ii-
<PAGE>
This AMENDED AND RESTATED PURCHASE AND SALE AGREEMENT (this
"Agreement") is entered into as of May 28, 1996 among OWENS & MINOR MEDICAL,
INC. ("O&M Medical"), a Virginia corporation, as an Originator and as initial
Servicer, STUART MEDICAL, INC. ("Stuart"), a Pennsylvania corporation, as an
Originator, the other Originators which may from time to time become parties
hereto pursuant to Section 6.1 hereof (each individually an "Originator" and,
with O&M Medical and Stuart, collectively the "Originators"), OWENS & MINOR,
INC., as Parent and Guarantor (the "Parent") and O&M FUNDING CORP., a Virginia
corporation, as Initial Purchaser (the "Initial Purchaser").
PRELIMINARY STATEMENTS
A. Unless otherwise defined herein or the context otherwise requires,
certain terms that are used throughout this Agreement (including the Exhibits
hereto) are defined in Exhibit I to the Amended and Restated Receivables
Purchase Agreement, dated of even date herewith, among the Initial Purchaser,
the Servicer, Receivables Capital Corporation, as Issuer, and Bank of America
National Trust and Savings Association, as Administrator (as the same may be
amended, modified or supplemented from time to time, the "Amended and Restated
Receivables Purchase Agreement"). Any reference to "this Agreement" or "the
Purchase and Sale Agreement", including any such reference in any Exhibit
hereto, shall mean this Agreement in its entirety, including the Exhibits and
other attachments hereto, as amended, modified or supplemented from time to time
in accordance with the terms hereof.
B. O&M Medical, Parent and the Initial Purchaser have entered into a
Purchase and Sale Agreement dated as of December 28, 1995 (the "Original
Purchase and Sale Agreement"). Such parties wish to amend and restate the
Original Purchase and Sale Agreement as set forth herein, and Stuart wishes to
become a party hereto as an Originator.
C. The Originators wish to sell Pool Receivables that each now owns and
from time to time hereafter will own to the Initial Purchaser, and the Initial
Purchaser is willing, on the terms and subject to the conditions contained in
this Agreement, to purchase such Pool Receivables from each of the Originators
at such time.
D. The Initial Purchaser has entered into the Amended and Restated
Receivables Purchase Agreement, pursuant to which, among other things, the
Initial Purchaser may sell to the Issuer undivided ownership interests in the
Pool Receivables and Related Assets.
<PAGE>
E. It is a condition precedent for Issuer and the Originators to enter
into this Agreement that Parent guaranty the performance of each Originator
hereunder, and Parent is willing to guaranty such performance.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree that the Original Purchase and Sale
Agreement is amended and restated, effective as of the Restatement Effective
Date, to read in full as follows:
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Agreement to Purchase and Sell. On the terms
and conditions hereinafter set forth, each Originator agrees to
sell to the Initial Purchaser, and the Initial Purchaser agrees
to purchase from each of the Originators, at the times set forth
in Section , but prior to the Purchase and Sale Termination
Date, such Originator's right, title, and interest in, to and
under (a) all Pool Receivables of each of the Originators, (b)
all Related Security with respect to such Pool Receivables and
(c) all Collections with respect to, and other proceeds of, such
Pool Receivables and Related Security. The items listed in
clauses (b) and (c) of the preceding sentence in relation to any
Pool Receivables are herein collectively called the "Related
Assets" or, with respect to any such Pool Receivable, the
"Related Asset".
SECTION 1.2. Timing of Purchases.
(a) Initial Purchase. All of the Pool Receivables and the Related
Assets of each of the Originators that exist at the close of such Originator's
business on the date of the initial purchase from such Originator hereunder
(other than Pool Receivables contributed by O&M Medical to the Initial Purchaser
pursuant to the Subscription Agreement) shall be deemed to have been sold to the
Initial Purchaser on the date of the initial purchase from such Originator
without any formal or other instrument of assignment and without further action
by any Person.
(b) Regular Purchases. After the date of the initial purchase hereunder
from each Originator until the Purchase and Sale Termination Date, each Pool
Receivable and Related Asset of such Originator shall be deemed to have been
sold to the Initial Purchaser pursuant hereto immediately (and without any
formal or other instrument of assignment and without further action by any
Person) upon the creation of such Pool Receivable.
2
<PAGE>
(c) Lock-Box Accounts. Each of the Originators hereby sells to the
Initial Purchaser, and the Initial Purchaser hereby purchases from each
Originator, all of such Originator's right, title and interest in (but not such
Originator's obligations with respect to) the Lock-Box Accounts, all amounts on
deposit therein, all certificates and instruments, if any, from time to time
evidencing such Lock-Box Accounts and amounts on deposit therein, and all
related agreements between any Originator and the Lock-Box Banks.
SECTION 1.3. Calculation of Purchase Price. On the
fifteenth day of each calendar month, or, if such day is not a
Business Day, the next succeeding Business Day (a "Payment
Date"), the Servicer shall deliver to the Initial Purchaser, the
Administrator and each of the Originators a monthly Seller Report
with respect to the Initial Purchaser's purchases of Pool
Receivables and Related Assets from each such Originator during
the Purchase Period immediately preceding such Reporting Date.
"Purchase Period" means, with respect to the Receivables, each
calendar month. The Initial Purchaser shall pay for the Pool
Receivables and Related Assets purchased by it during any
Purchase Period on the Payment Date for such Purchase Period, or,
in the case of the initial purchase from any Originator
hereunder, on the date of such purchase, by an increase in the
outstanding amount of each applicable Initial Purchaser Note, it
being understood that the Initial Purchaser will pay the Initial
Purchaser Note of any Originator in respect of such initial
purchase from such Originator promptly after, and to the extent
that, cash is available to the Initial Purchaser for such purpose
under the Amended and Restated Receivables Purchase Agreement.
The "Purchase Price" to be paid to the applicable Originator on
each Payment Date (or other applicable date in the case of the
initial purchase from such Originator) for the Pool Receivables
and Related Assets sold by such Originator pursuant to Section
1.2 during the Purchase Period immediately preceding such Payment
Date shall be set forth in the relevant Seller Report (or, in the
case of the initial purchase from such Originator, in a
calculation delivered by the Servicer at the time of such initial
purchase based on the November 30, 1995 Month End Date, in the
case of the initial purchase from O&M Medical, or the April 30,
1996 Month End Date, in the case of the initial purchase from
Stuart (or such other date agreed upon in the applicable
Supplement)) and shall be determined in accordance with the
following formula:
PP = AOB - PD
where:
PP = the Purchase Price to be paid to such Originator
on the relevant Payment Date (or other applicable
3
<PAGE>
date in the case of the initial purchase from such
Originator).
AOB = the aggregate Outstanding Balance of the Pool
Receivables that were purchased from such
Originator during the Purchase Period immediately
preceding such Payment Date or on the date of the
initial purchase from such Originator. (For
purposes of this calculation, the Outstanding
Balance of a Pool Receivable shall be measured
only at the time of such Pool Receivable's
creation and sale (or in the case of the initial
purchase from such Originator, sale) to the
Initial Purchaser.)
PD = the Purchase Discount as measured on such Payment
Date pursuant to Section 1.4.
For purposes of calculating the Purchase Price payable in connection
with the initial purchase hereunder from any Originator, the AOB shall be
estimated based on the aggregate Outstanding Balance of the Pool Receivables on
the November 30, 1995 Month End Date, in the case of the initial purchase from
O&M Medical, or the April 30, 1996 Month End Date in the case of the initial
purchase from Stuart, or such other date as is agreed upon in the applicable
Supplement. In connection with the delivery of the first Seller Report following
the initial purchase hereunder from any Originator, the actual aggregate
Outstanding Balance of the Pool Receivables of the applicable Originator on the
November 30, 1995 Month End Date or the April 30, 1996 Month End Date, as the
case may be (or such other date agreed upon in the applicable Supplement) will
be calculated by the Servicer and appropriate adjustments will be made to the
applicable Purchase Price payable to such Originator on subsequent Payment Dates
and to the applicable Initial Purchaser Note, to reflect any excess or
deficiency in the Purchase Price paid on the date of the initial purchase from
such Originator.
SECTION 1.4. Definitions and Calculations Related to
Purchase Discount.
(a) Purchase Discount. (i) "Purchase Discount" for the
Pool Receivables and Related Assets which were purchased from O&M
Medical on or before May 31, 1996 will be calculated as provided
in the Original Purchase and Sale Agreement.
(ii) "Purchase Discount" for the Pool Receivables and Related
Assets that were purchased from any Originator other than O&M Medical
during the Purchase Period immediately preceding a Payment Date (or on
the initial purchase date for such Originator), or from O&M Medical
during any
4
<PAGE>
Purchase Period which commences on or after June 1, 1996, shall be
determined in accordance with the following formula:
PD = AOB x WALD
where:
PD = the Purchase Discount as measured on such Payment
Date (or the initial purchase date);
AOB, in respect of such Originator, has the meaning set
forth in Section 1.3; and
WALD = the Weighted Average Loss Discount as measured on
such Payment Date (or the initial purchase date), as
determined pursuant to paragraph (b) below.
(b) Weighted Average Loss Discount. "Weighted Average Loss Discount" as
measured on any Payment Date (or the initial purchase date) means the Weighted
Average Loss Discount over the last three Purchase Periods ending on the Month
End Date immediately preceding such Payment Date (or the initial purchase date
for such Originator), calculated as the quotient of
(i) the sum of (A) a rate equal to three times the Six Month
Loss-to-Liquidation Ratio for the most recent Purchase Period, plus (B)
a rate equal to two times the Six Month Loss-to-Liquidation Ratio for
the second most recent Purchase Period, plus (C) a rate equal to the
actual Six Month Loss-to-Liquidation Ratio for the third most recent
Purchase Period, divided by
(ii) six.
SECTION 1.5. Purchase Price Payments. On the date of the initial
purchase from each Originator, and on each Payment Date falling after the date
of the initial purchase pursuant to Section , on the terms and subject to the
conditions of this Agreement, the Initial Purchaser shall pay to each Originator
the Purchase Price for the Pool Receivables and Related Assets which were
purchased from such Originator on the date of such initial purchase or during
the immediately preceding Purchase Period, as the case may be, as follows:
(i) First, by making a cash payment to or at the direction of
each Originator to the extent that the Initial Purchaser has cash
available to make such payment subject to the terms of clause m of
Exhibit V to the Amended and Restated Receivables Purchase Agreement;
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(ii) Second, in the case of O&M Medical, to the extent any
portion of the Purchase Price payable to O&M Medical remains unpaid,
the principal amount outstanding under the Originator Note of O&M
Medical automatically shall be reduced and deemed paid in an amount
equal to such remaining Purchase Price, until such outstanding
principal amount is reduced to zero; and
(iii) Third, in the case of each Originator, to the extent any
portion of the Purchase Price payable to such Originator remains
unpaid, the principal amount outstanding under the Initial Purchaser
Note issued to such Originator automatically shall be increased in an
amount equal to such remaining Purchase Price.
In the event that there is insufficient cash available to the Initial
Purchaser to pay all Originators in full the Purchase Prices payable to such
Originators on any Payment Date, the available cash will be allocated to the
Originators pursuant to clause First above pro rata according to the respective
aggregate Outstanding Balance of the Pool Receivables sold by such Originators
hereunder during the applicable Purchase Period.
SECTION 1.6. The Initial Purchaser Note.
(a) On or prior to the date hereof with respect to O&M Medical and
Stuart (or at the time of execution and delivery of the Supplement applicable to
any other Originator), the Initial Purchaser shall deliver to such Originator a
promissory note in the form of Annex to this Agreement payable to the order of
such Originator (such promissory note, as it may be amended, supplemented,
endorsed or otherwise modified from time to time, together with any promissory
notes issued from time to time in substitution therefor or renewal thereof in
accordance with the Transaction Documents, being called an "Initial Purchaser
Note"), which Initial Purchaser Note shall, in accordance with its terms, be
subordinated to all interests in Pool Receivables and Related Assets and all
obligations of the Initial Purchaser, of any nature, whether now or hereafter
arising, under or in connection with the Amended and Restated Receivables
Purchase Agreement.
(b) The Servicer shall hold each Initial Purchaser Note for the benefit
of the Originator to which it is payable, and shall make all appropriate
record-keeping entries with respect to each of the Initial Purchaser Notes or
otherwise to reflect payments on and adjustments of each such Initial Purchaser
Note. The Servicer's books and records shall constitute rebuttable presumptive
evidence of the principal amount of and accrued interest on each Initial
Purchaser Note at any time. Each Originator hereby irrevocably authorizes the
Servicer to mark its Initial Purchaser Note "CANCELLED" and to return such
Initial
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Purchaser Note to the Initial Purchaser upon the full and final payment thereof
after the Purchase and Sale Termination Date.
SECTION 1.7. Initial Purchaser Agreement to Make Demand Loans. On the
terms and subject to the conditions set forth in this Agreement and in the
Amended and Restated Receivables Purchase Agreement, the Initial Purchaser
agrees to make demand loans (each such loan being herein called an "Originator
Loan") to O&M Medical prior to the Purchase and Sale Termination Date in such
amounts as O&M Medical may request from time to time; provided, however, that:
(a) the Originator Loans made to O&M Medical shall be evidenced by a demand
promissory note in the form of Annex B to this Agreement issued by O&M Medical
to the order of the Initial Purchaser (such demand promissory note, as it may be
amended, supplemented, endorsed or otherwise modified from time to time in
accordance with the Transaction Documents, together with all promissory notes
issued from time to time in substitution therefor or renewal thereof in
accordance with the Transaction Documents, being called the "Originator Note");
(b) no Originator Loan shall be made to the extent that the making of
such Originator Loan would violate clause m of Exhibit V to the Amended and
Restated Receivables Purchase Agreement.
SECTION 1.8. Deemed Collections, Etc.
(a) If on any day the Outstanding Balance or any portion of any Pool
Receivable is reduced or adjusted as a result of any Dilution Adjustment, the
Originator that sold such Pool Receivable to the Initial Purchaser shall deliver
to the Servicer in same day funds an amount equal to the portion of such Pool
Receivable which constitutes such Dilution Adjustment for application by the
Servicer to the same extent as if Collections of such amount of the Outstanding
Balance of such Pool Receivable had actually been received on such date;
(b) if on any day any of the representations or warranties in paragraph
(g) of Exhibit II hereto is not true with respect to any Pool Receivable, the
Originator which sold such Pool Receivable hereunder shall deliver to the
Servicer in same day funds an amount equal to the Outstanding Balance of such
Pool Receivable for application by the Servicer to the same extent as if
Collections of such amount of the Outstanding Balance of such Pool Receivable
had actually been received on such date;
(c) except as provided in paragraph (a) or (b) of this Section, or as
otherwise required by applicable law or the relevant Contract, all Collections
received from an Obligor of any Receivables shall be applied to the Receivables
of such Obligor in the order of the age of such Receivables, starting with the
oldest such Receivable, unless such Obligor designates
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in writing or otherwise clearly indicates its payment for application to
specific Receivables; and
(d) if and to the extent the Initial Purchaser shall be required for
any reason to pay over to an Obligor (or any trustee, receiver, custodian or
similar official for an Obligor in any Insolvency Proceeding) any amount
received by it hereunder, such amount shall be deemed not to have been so
received and the Pool Receivable to which such amount has been applied shall be
reinstated.
SECTION 1.9. No Recourse. Except as specifically provided in this
Agreement, the purchase and sale of Pool Receivables and Related Assets under
this Agreement shall be without recourse to the applicable Originator; provided
that each Originator shall be liable to the Initial Purchaser for all
representations, warranties, covenants and indemnities made by such Originator
pursuant to the terms of this Agreement, it being understood that such
obligation of the Originators will not arise on account of the failure of the
Obligor for credit reasons to make any payment in respect of a Pool Receivable.
SECTION 1.10. True Sales.
(a) Each of the Originators and the Initial Purchaser intend the
transactions hereunder to constitute true sales (or where the Subscription
Agreement applies, conveyances in the form of capital contributions) of Pool
Receivables, Related Assets and the Lock-Box Accounts (and the other items
described in Section 1.2(c)) by each of the Originators to the Initial Purchaser
providing the Initial Purchaser with the full benefits of ownership thereof, and
no party hereto intends the transactions contemplated hereunder to be, or for
any purpose to be characterized as, a loan from the Initial Purchaser to any
Originator.
(b) In the event (but only to the extent) that the conveyance of Pool
Receivables and Related Assets hereunder is characterized by a court or other
Governmental Authority as a loan rather than a sale, each Originator shall be
deemed hereunder to have granted to the Initial Purchaser a security interest in
all of such Originator's right, title and interest in, to and under all of the
following, whether now or hereafter owned, existing or arising: (A) all Pool
Receivables of such Originator, (B) all Related Security with respect to each
such Pool Receivable, (C) all Collections with respect to each such Pool
Receivable, (D) the Lock-Box Accounts, all amounts on deposit therein, all
certificates and instruments, if any, from time to time evidencing such Lock-Box
Accounts and amounts on deposit therein, and all related agreements between such
Originator and the Lock-Box Banks, and (E) all proceeds of, and
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all amounts received or receivable under any or all of, the foregoing. Such
security interest shall secure all of such Originator's obligations (monetary or
otherwise) under this Agreement and the other Transaction Documents to which it
is a party, whether now or hereafter existing or arising, due or to become due,
direct or indirect, absolute or contingent. The Initial Purchaser shall have,
with respect to the property described in this Section 1.10(b), and in addition
to all the other rights and remedies available to the Initial Purchaser under
this Agreement and applicable law, all the rights and remedies of a secured
party under any applicable UCC, and this Agreement shall constitute a security
agreement under applicable law.
SECTION 1.11. Payments and Computations, Etc.
(a) All amounts to be paid or deposited by an Originator or the
Servicer hereunder shall be paid or deposited no later than 1:00 p.m. (New York
City time) on the day when due in same day funds. All amounts received after
1:00 p.m. (New York City time) will be deemed to have been received on the
immediately succeeding Business Day.
(b) Each Originator shall, to the extent permitted by law, pay interest
on any amount not paid or deposited by such Originator (whether as Servicer or
otherwise) when due hereunder, at an interest rate per annum equal to 2.0% per
annum above the Base Rate, payable on demand.
(c) All computations of interest under Section 1.11(b) and all
computations of the Purchase Price, fees, and other amounts hereunder shall be
computed on the following basis: (i) in respect of the Funding Rate pursuant to
Section 1.12, when such computation is based on the Base Rate, and the Base Rate
is determined by Bank of America's "reference rate", such computations shall be
made on the basis of a year of 365 or 366 days, as the case may be, and actual
days elapsed; and (ii) all other such computations shall be made on the basis of
a 360-day year and actual days elapsed. Whenever any payment or deposit to be
made hereunder shall be due on a day other than a Business Day, such payment or
deposit shall be made on the next succeeding Business Day and such extension of
time shall be included in the computation of such payment or deposit.
SECTION 1.12. Facility Fee. (a) In consideration for the agreement by
the Initial Purchaser to provide the receivables purchase facility hereunder and
to purchase Pool Receivables and Related Assets from the Originators pursuant to
this Agreement, each Originator agrees to pay the Initial Purchaser a facility
fee (the "Facility Fee") as set forth in this Section 1.12. The Facility Fee
shall accrue from (i) in the case of O&M Medical,
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June 1, 1996, and (ii) in the case of each other Originator, from the date of
the initial purchase from such Originator hereunder, in each case to the
Purchase and Sale Termination Date, and shall be payable in arrears by such
Originator on each Payment Date and on the Purchase and Sale Termination Date.
(b) The Facility Fee payable by each Originator on any Payment Date and
on the Purchase and Sale Termination Date shall be calculated in accordance with
the following formula:
FF = FFOB x FFP
where:
FF = the Facility Fee payable by such Originator on
such date.
FFOB = the aggregate Outstanding Balance of the Pool
Receivables that were purchased from such
Originator during the Purchase Period immediately
preceding such Payment Date or the Purchase and
Sale Termination Date. (For purposes of this
calculation, the Outstanding Balance of a Pool
Receivable shall be measured only at the time of
such Pool Receivable's creation and sale (or in
the case of the initial purchase from any
Originator, sale) to the Initial Purchaser.)
FFP = the Facility Fee Percentage as measured on such
Payment Date (or the Purchase and Sale Termination
Date), as determined pursuant to paragraph (c)
below.
(c) Facility Fee Percentage. "Facility Fee Percentage" as
measured on any Payment Date (or the Purchase and Sale
Termination Date) means for each Originator a percentage
determined in accordance with the following formula:
FFP = (OTD/360) x FR
where:
FFP = the Facility Fee Percentage as measured on such
Payment Date (or the Purchase and Sale Termination
Date);
OTD = the "Originator Turnover Days" for such Originator,
which shall be equal to the product of (x) the
quotient of (i) the aggregate Outstanding Balance of
Pool Receivables originated by such Originator during
the Purchase Period which occurs
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two months prior to the month in which such Payment
Date (or the Purchase and Sale Termination Date)
occurs, divided by (ii) the aggregate amount of the
Collections received during the Purchase Period
ending on the Month End Date immediately preceding
such Payment Date (or the Purchase and Sale
Termination Date) on Pool Receivables originated by
such Originator, multiplied by (y) the number of days
in the calendar month coinciding with such Purchase
Period; and
FR = the Funding Rate as measured on such Payment Date,
as determined pursuant to paragraph (d) below.
(d) Funding Rate. "Funding Rate" as measured on any
Payment Date (or the Purchase and Sale Termination Date) means a
per annum percentage rate determined in accordance with the
following formula:
FR = 0.02% + DRP + SFP + EXP
where:
FR = the Funding Rate as measured on such Payment Date
(or the Purchase and Sale Termination Date);
DRP = the "Discount Rate Percentage", which shall be
equal to a fraction (expressed as a percentage)
(x) the numerator of which is the sum of the
products obtained by multiplying (A) each CP Rate
or Alternate Rate applicable to each Portion of
Capital outstanding as of the first day of the
calendar month ending immediately prior to such
Payment Date (or the Purchase and Sale Termination
Date), times (B) the amount of the Portion of
Capital to which such CP Rate or Alternate Rate
applied on such first day, and (y) the denominator
of which is the aggregate outstanding amount of
Capital on such first day;
SFP = the "Servicer's Fee Percentage", which shall be
equal to the per annum percentage rate
contemplated by the definition of Servicing Fee;
and
EXP = the amount, which shall be equal to a fraction
(expressed as a percentage), (x) the numerator of
which is the sum of any fees, costs and expenses
incurred by the Initial Purchaser during the
Purchase Period preceding such Payment Date or
Purchase and Sale Termination Date (and not
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accounted for in the Discount Rate Percentage),
including without limitation reserve costs, tax
payments and indemnity obligations of the Initial
Purchaser for which the Initial Purchaser is not
indemnified pursuant to this Agreement and (y) the
denominator of which is the aggregate Outstanding
Balance of the Pool Receivables that were purchased
from such Originator during the Purchase Period
immediately preceding such Payment Date or Purchase
and Sale Termination Date; provided, however, that,
for purposes of minimizing fluctuations in the rate
calculated as the Funding Rate, the Servicer may
allocate and spread any unscheduled or unaccruable
costs and expenses of the Initial Purchaser over
several Payment Dates and the Purchase and Sale
Termination Date at the Servicer's reasonable
discretion, subject to the requirement that such
allocation be reasonably calculated to allow the
Initial Purchaser to recover such costs and expenses
over a reasonable period of time.
ARTICLE II
CONDITIONS TO PURCHASES; REPRESENTATIONS AND
WARRANTIES; COVENANTS; PURCHASE AND SALE TERMINATION EVENTS
SECTION 2.1. Conditions to Purchases. The obligation of the Initial
Purchaser to make any purchase of Pool Receivables and Related Assets hereunder
is subject to (a) the occurrence of the Restatement Effective Date and (b)
satisfaction of the conditions to purchase set forth in Exhibit I hereto.
SECTION 2.2. Representations and Warranties; Covenants. Each Originator
hereby makes the representations and warranties, and hereby agrees to perform
and observe the covenants, in each case, as applicable to such Originator as set
forth in Exhibits II and III, respectively, hereto.
SECTION 2.3. Purchase and Sale Termination Events. If any
of the Purchase and Sale Termination Events set forth in
Exhibit IV hereto shall occur, the Initial Purchaser may, with
the prior written consent of the Administrator, by notice to each
of the Originators (with a copy to the Administrator), declare
the Purchase and Sale Termination Date to have occurred; provided
that automatically upon the occurrence of a Termination Event
described in clause (f) of Exhibit IV hereto, the Purchase and
Sale Termination Date shall occur.
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The agreement of the Originators to sell Pool Receivables and Related
Assets hereunder, and the agreement of the Initial Purchaser to purchase Pool
Receivables and Related Assets from the Originators hereunder, shall terminate
automatically on the earlier to occur of (i) the Purchase and Sale Termination
Date and (ii) the Facility Termination Date. Notwithstanding the occurrence of
the Purchase and Sale Termination Date, all obligations of each Originator under
the Transaction Documents that shall have arisen prior to the Purchase and Sale
Termination Date shall survive until each such obligation has been finally and
fully paid and performed by such Originator.
Upon the occurrence of a Purchase and Sale Termination Event, the
Initial Purchaser shall have, in addition to all other rights and remedies under
this Agreement or otherwise, all other rights and remedies provided under the
UCC of each applicable jurisdiction and other applicable laws, which rights
shall be cumulative. Without limiting the foregoing, the occurrence of a
Purchase and Sale Termination Event hereunder shall not deny to the Initial
Purchaser any remedy to which the Initial Purchaser may be otherwise
appropriately entitled, whether by statute or applicable law, at law or in
equity.
ARTICLE III
INDEMNIFICATION
SECTION 3.1. (a) Indemnities by the Originators; Taxes. Without
limiting any other rights which the Initial Purchaser or any Securitization
Party may have hereunder or under applicable law, each Originator hereby agrees
to indemnify the Initial Purchaser and each Securitization Party from and
against any and all Indemnified Amounts actually incurred by them arising out of
or resulting from this Agreement (whether directly or indirectly) or the use of
proceeds of purchases or the ownership of any Pool Receivable or Related Asset,
excluding, however, (a) Indemnified Amounts to the extent resulting from gross
negligence, willful misconduct or violation of applicable law on the part of the
Initial Purchaser or such Securitization Party, as the case may be, seeking such
indemnity (b) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables, or (c) any taxes imposed on such
Indemnified Party. Without limiting or being limited by the foregoing, but
subject to the exclusions set forth in the preceding sentence, each Originator
shall pay to the Initial Purchaser and each Securitization Party (within three
Business Days after written demand for such indemnification) any and all amounts
necessary to indemnify the Initial Purchaser and such Securitization Party from
and against any and all Indemnified Amounts actually incurred relating to or
resulting from any of the following:
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(i) the failure of any information provided by such
Originator, as Servicer or otherwise, to the Initial Purchaser, the
Issuer, the Administrator or the Servicer with respect to Pool
Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty or
statement made or deemed made by such Originator (or any of its
officers), as Servicer or otherwise, under or in connection with this
Agreement to have been true and correct when made;
(iii) the failure by such Originator, as Servicer or
otherwise, to comply with any applicable law, rule or regulation with
respect to any Pool Receivable or any Related Asset; or the failure of
any Pool Receivable or Related Asset to conform to any such applicable
law, rule or regulation;
(iv) the failure to vest in the Initial Purchaser a valid
and enforceable (A) perfected ownership interest in each Pool
Receivable at any time existing and the Related Assets and Collections
with respect thereto and (B) perfected ownership interest in the items
described in Section 1.10(b), in each case free and clear of any
Adverse Claim;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Pool Receivables and the Related Assets and Collections
in respect thereof, whether at the time of any purchase or at any
subsequent time;
(vi) any dispute, claim, offset or defense of an Obligor to
the payment of any Pool Receivable (including, without limitation, a
defense based on such Pool Receivable or the related Contract not being
a legal, valid and binding obligation of each Obligor enforceable
against it in accordance with its terms but excluding a defense based
on a discharge of such obligation in the bankruptcy of the applicable
Obligor), or any other claim resulting from the sale of goods or
services related to such Pool Receivable or the furnishing or failure
to furnish such goods or services or relating to collection activities
with respect to such Pool Receivable (if such collection activities
were performed by the Originator, or any of its Affiliates, acting as
Servicer or by any agent or independent contractor retained by the
Originator or any of its Affiliates);
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(vii) any failure of such Originator, as Servicer or
otherwise, to perform its duties or obligations in accordance with the
provisions hereof or to perform its duties or obligations under the
Contracts;
(viii) any products liability or other claim, investigation,
litigation or proceeding arising out of or in connection with
merchandise, services or other property or rights which are the subject
of any Contract;
(ix) the commingling of Collections of Pool
Receivables at any time with other funds;
(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments or
the ownership of any Pool Receivable, Related Asset or Contract; or
(xi) any requirement that all or a portion of the
distributions made to the Initial Purchaser pursuant to this Agreement
shall be rescinded or otherwise must be returned to such Originator for
any reason.
(b) Taxes. (i) Any and all payments made hereunder to the Initial
Purchaser or an Affected Person shall be made free and clear of and without
deduction for any and all current or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto excluding: (A)
taxes imposed on or measured by all or part of the gross or net income (but not
including any such tax in the nature of a withholding tax) of the Initial
Purchaser or such Affected Person by the jurisdiction under the laws of which
the Initial Purchaser or such Affected Person is organized or has its applicable
lending office or any political subdivision of any thereof and (B) taxes that
would not have been imposed if the only connection between the Initial Purchaser
or such Affected Person and the jurisdiction imposing such taxes was the
activities of the Initial Purchaser or such Affected Person pursuant to or in
respect of this Agreement (including entering into, lending money or extending
credit pursuant to, receiving payments under, or enforcing this Agreement) (all
such excluded taxes, levies, imposts, deductions, changes, withholding and
liabilities collectively or individually referred to herein as "Excluded Taxes"
and all such nonexcluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities collectively or individually referred to herein as
"Taxes"). If any Originator or Servicer shall be required to deduct any Taxes
from or in respect of any sum payable hereunder to the Initial Purchaser or any
Affected Person: (A) the sum payable shall be increased by the amount (an
"additional amount") necessary so that after making all required deductions
(including deductions
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applicable to additional sums payable under this Section 3.1(b)) the Initial
Purchaser or such Affected Person shall receive an amount equal to the sum it
would have received had no such deductions been made, (B) the Originator or
Servicer shall make such deductions and (C) the Originator or Servicer shall pay
the full amount deducted to the relevant Governmental Authority in accordance
with applicable law.
(ii) In addition, each Originator and Servicer agrees to pay
to the relevant Governmental Authority in accordance with applicable
law all taxes, levies, imposts, deductions, charges, assessments or
fees of any kind (including but not limited to any current or future
stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies, but excluding any Excluded Taxes) imposed
upon the Initial Purchaser or any Affected Person as a result of the
transactions contemplated by this Agreement or that arise from any
payment made hereunder or from the execution, delivery, or registration
of or otherwise similarly with respect to, this Agreement ("Other
Taxes").
(iii) Each Originator, Servicer and the Parent hereby jointly
and severally agree to indemnify the Initial Purchaser and each
Affected Person from and against the full amount of Taxes and Other
Taxes arising out of this Agreement or any other Transaction Document
(whether directly or indirectly) imposed upon or paid by such Person
and any liability (including penalties, interest, and expenses
(including Attorney Costs)) arising with respect thereto whether or not
such Taxes or Other Taxes were correctly or legally asserted by the
relevant Governmental Authority. A certificate as to the amount of such
amounts prepared by the Initial Purchaser or an Affected Person, absent
manifest error, shall be final, conclusive, and binding for all
purposes. Such indemnification shall be made within 30 days after the
date the Initial Purchaser or Affected Person makes a timely written
demand therefor or the time at which such amount is payable after a
timely written demand therefor has been made, whichever is earlier. A
written demand will be considered "timely" for purposes of the
preceding sentence only if it is received by the Parent no later than
180 days after the earlier of (A) the date on which the Initial
Purchaser or such Affected Person as the case may be, making such
demand, makes such payment of Taxes or Other Taxes or liability arising
therefrom or with respect thereto and (B) the date on which the
relevant Governmental Authority or other party makes written demand
upon the Initial Purchaser or such Affected Person as the case may be,
making such demand, for payment of such Taxes or Other Taxes or
liability arising therefrom or with respect thereto.
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(iv) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Servicer, the Parent or any Originator to a
Governmental Authority hereunder, such Person will deliver to the
Initial Purchaser or the relevant Affected Person the original or a
certified copy of a receipt issued by such Governmental Authority
evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 3.1(b) shall survive the termination of this Agreement.
(vi) Each Program Support Provider that is granted a
participating interest in the Purchased Interest and is organized under
the laws of a jurisdiction other than the United States, any State
thereof, or the District of Columbia (each a "Non-U.S. Purchaser")
shall deliver to the Initial Purchaser or the Administrator: (A) two
copies of either United States Internal Revenue Service Form 1001 or
Form 4224 (whichever is applicable), or (B) in the case of a Non-U.S.
Purchaser claiming an exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a Form W-8 (or any subsequent versions thereof or
successors thereto) and a certificate representing that such Non-U.S.
Purchaser is not a bank for purposes of Section 881(c) of the Code, in
either case properly completed and duly executed by such Non-U.S.
Purchaser claiming complete exemption from U.S. federal withholding tax
on payments by the Seller under this Agreement. Such forms shall be
delivered by each Non-U.S. Purchaser before the date it receives its
first payment with respect to a Purchased Interest, and before the date
it receives its first payment with respect to a Purchased Interest
occurring after the date, if any, that such NonU.S. Purchaser changes
its applicable lending office by designating a different lending office
(a "new Landing Office"). In addition, each Non-U.S. Purchaser shall
deliver such forms promptly after (or, if reasonably practicable, prior
to) the obsolescence or invalidity of any form previously delivered by
such Non-U.S. Purchaser. Notwithstanding any other provision of this
Section 3.1(b)(vi), a Non-U.S. Purchaser shall not be required to
deliver any form pursuant to this Section 3.1(b)(vi) that such Non-U.S.
Purchaser is not legally able to deliver. Each Program Support Provider
(other than any exempt person as described in applicable Treasury
Regulations) that is granted a participating interest in the Purchased
Interest and is organized under the laws of the United States or any
state thereof or the District of Columbia shall deliver to the Initial
Purchaser
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or the Administrator an original copy of Internal Revenue Service Form
W-9 (or applicable successor form) properly completed and duly executed
by such Program Support Provider.
(vii) The Originators, the Parent and the Servicer shall not
be required to indemnify any Non-U.S. Purchaser, or to pay any
additional amounts to any Non-U.S. Purchaser, in respect of United
States federal withholding tax (or any withholding tax imposed by a
state that applies only when such United States federal withholding tax
is imposed) pursuant to this Section 3.1(b) to the extent that: (A) the
obligation to withhold amounts with respect to United States federal
withholding tax existed on the date such Non-U.S. Purchaser was granted
a participating interest in the Purchased Interest or, with respect to
payments to a New Lending Office, the date such Non-U.S. Purchaser
designated such New Lending Office; provided, however, that this clause
(A) shall not apply to any Non-U.S. Purchaser or New Lending Office
that is granted, assigned, or transferred a participating interest in
the Purchased Interest at the request of the Initial Purchaser and
provided further, however, that this clause (A) shall not apply to any
NonU.S. Purchaser or New Lending Office that is assigned an interest in
the Purchased Interest by a Program Support Provider to the extent that
the indemnity payment or additional amounts such Non-U.S. Purchaser or
New Lending Office would be entitled to receive (without regard to this
clause (A)) do not exceed the indemnity payment or additional amounts
that the Program Support Provider making the assignment to such
Non-U.S. Purchaser or New Lending Office would have been entitled to
receive in the absence of such assignment; or (B) the obligation to
make such indemnification or to pay such additional amounts would not
have arisen but for a failure by such Non-U.S. Purchaser to comply with
the provisions of paragraph (vi) above (it being understood that the
Non-U.S. Purchaser shall not have failed to comply with the provisions
of paragraph (vi) above if it is legally unable to deliver the forms
described therein on any date after it is granted a participation
interest in a Purchased Interest or designated a New Lending Office).
(viii) The Initial Purchaser or any Affected Person claiming
any indemnity payment or additional amounts payable pursuant to this
Section 3.1(b) shall use reasonable efforts (consistent with legal and
regulatory restrictions) to file any certificate or document reasonable
requested in writing by an Originator, the Parent, or the Servicer or
to change the jurisdiction of its applicable lending office if the
making of such a filing or change would avoid the need for or reduce
the amount of any such indemnity payment or
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additional amounts that may thereafter accrue and would not, in the
good faith determination of the Initial Purchaser or such Affected
Person, be otherwise disadvantageous to the Initial Purchaser or such
Affected Person.
(ix) Nothing contained in this Section 3.1(b) shall require
the Initial Purchaser or an Affected Person to make available any of
its tax returns (or any other information that it deems to be
confidential or proprietary).
(x) If the Initial Purchaser or any Affected Person receiving
an indemnification payment from any Originator, the Servicer, or the
Parent hereunder with respect to Taxes or Other Taxes or liabilities
arising therefrom shall subsequently receive a refund from any taxing
authority which is specifically attributable to such indemnification
payment, such Purchaser or Person shall promptly pay such refund to
such Originator, the Servicer, or the Parent.
SECTION 3.2. Contribution. If for any reason the indemnification
provided above in this Article (and subject to the exceptions set forth therein)
is unavailable (other than by reason of a final adjudication by a court of
competent jurisdiction that a claim is not within the scope of such
indemnification) to the Initial Purchaser or a Securitization Party or is
insufficient to hold the Initial Purchaser or a Securitization Party harmless,
then the applicable Originator shall contribute to the maximum amount of
Indemnified Amounts payable or paid by the Initial Purchaser or such
Securitization Party in such proportion as is appropriate to reflect not only
the relative benefits received by the Initial Purchaser or such Securitization
Party on the one hand and such Originator on the other hand, but also the
relative fault of such Securitization Party (if any) and such Originator and any
other relevant equitable considerations. Upon the occurrence of the Final Payout
Date, the applicable Originator shall be subrogated, to the extent of such
Originator's payments pursuant to this Section 3.2, to the Initial Purchaser and
a Securitization Party's claims relating to the subject of such indemnification
payment, but neither the Initial Purchaser nor a Securitization Party shall have
any duty whatsoever to take any action to preserve such subrogated rights of any
Originator or refrain from taking any action which impairs or may impair such
subrogated rights of any Originator.
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ARTICLE IV
ADMINISTRATION AND COLLECTIONS; ADDITIONAL RIGHTS
AND OBLIGATIONS IN RESPECT OF THE POOL RECEIVABLES
SECTION 4.1. Servicing of Pool Receivables and Related Assets.
Consistent with the Initial Purchaser's ownership of the Pool Receivables and
the Related Assets, the Initial Purchaser shall have the sole right to service,
administer and collect the Pool Receivables, to assign such right and to
delegate such right to others. In consideration of the Initial Purchaser's
purchase of the Pool Receivables and the Related Assets, each Originator agrees
to cooperate fully with the Initial Purchaser to facilitate the full and proper
performance of such duties and obligations for the benefit of the Initial
Purchaser, the Issuer and the Administrator. To the extent that the Initial
Purchaser, individually or through the Servicer, has granted or grants powers of
attorney to the Administrator under the Amended and Restated Receivables
Purchase Agreement, each Originator hereby grants a corresponding power of
attorney on the same terms to the Initial Purchaser. Each Originator hereby
acknowledges and agrees that the Initial Purchaser, in all of its capacities,
shall assign to the Administrator for the benefit of the Issuer and the
Administrator such powers of attorney and other rights and interests granted by
such Originator to the Initial Purchaser hereunder, and agrees to cooperate
fully with the Administrator in the exercise of such rights. Until the
Administrator gives notice to the Seller and the Servicer of the designation of
a new Servicer, Owens & Minor Medical, Inc. will perform the duties and
obligations of the Servicer.
SECTION 4.2. Rights of the Initial Purchaser;
Enforcement Rights.
(a) The Initial Purchaser shall have no obligation to account for, to
replace, to substitute or to return any Pool Receivable and Related Asset to any
Originator. The Initial Purchaser shall have no obligation to account for, or to
return to any Originator, Collections, or any interest or other finance charge
collected pursuant thereto, without regard to whether such Collections and
charges are in excess of the Purchase Price for such Pool Receivables and
Related Assets.
(b) The Initial Purchaser shall have the unrestricted right to further
assign, transfer, deliver, hypothecate, subdivide or otherwise deal with the
Pool Receivables and Related Assets, and all of the Initial Purchaser's right,
title and interest in, to and under this Agreement, on whatever terms the
Initial Purchaser shall determine, pursuant to the Amended and Restated
Receivables Purchase Agreement or otherwise.
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(c) The Initial Purchaser shall have the sole right to retain any gains
or profits created by buying, selling or holding the Pool Receivables and
Related Assets and shall have the sole risk of and responsibility for losses or
damages created by such buying, selling or holding.
(d) At any time following the designation of a Servicer (other than O&M
Medical or any of its Affiliates) pursuant to Section 4.1 of the Amended and
Restated Receivables Purchase
Agreement:
(i) the Administrator may direct the Obligors that
payment of all amounts payable under any Pool Receivable be
made directly to the Administrator or its designee;
(ii) the Administrator may instruct each Originator to give
notice of the Initial Purchaser's or the Issuer's interest in Pool
Receivables to each Obligor, which notice shall direct that payments be
made directly to the Administrator or its designee, and upon such
instruction from the Administrator each Originator shall give such
notice at its expense; provided, that if any Originator fails to so
notify each Obligor, the Administrator may so notify the Obligors; and
(iii) the Administrator may request any or all of the
Originators to, and upon such request each applicable Originator shall,
(A) assemble all of the records necessary or desirable to collect the
Pool Receivables and the Related Assets, and transfer or license the
use of, to the new Servicer, all software necessary or desirable to
collect the Pool Receivables and the Related Assets, and make the same
available to the Administrator or its designee at a place selected by
the Administrator (provided that if any Originator is unable to
transfer or license the use of the appropriate software to the new
Servicer, such Originator shall pay to the new Servicer the amount
necessary for the new Servicer to purchase the use of such software),
and (B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections with respect to the Pool
Receivables in a manner acceptable to the Administrator and, promptly
upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Administrator or its designee.
(e) Each Originator hereby authorizes the Initial Purchaser, and
irrevocably appoints the Initial Purchaser as its attorney-in-fact with full
power of substitution and with full authority in the place and stead of such
Originator, which appointment is coupled with an interest, to take any and all
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steps in the name of such Originator and on behalf of such Originator necessary
or desirable, in the determination of the Initial Purchaser, to collect any and
all amounts or portions thereof due under any and all Pool Receivables or
Related Assets, including, without limitation, endorsing the name of such
Originator on checks and other instruments representing Collections and
enforcing such Pool Receivables and Related Assets. Notwithstanding anything to
the contrary contained in this subsection (e), none of the powers conferred upon
such attorney-in-fact pursuant to the immediately preceding sentence shall
subject such attorney-in-fact to any liability (except for its own gross
negligence or willful misconduct) if any action taken by it shall prove to be
inadequate or invalid, nor shall they confer any obligations upon such
attorney-in-fact in any manner whatsoever.
SECTION 4.3. Responsibilities of the Originators. Any-
thing herein to the contrary notwithstanding:
(a) Each Originator agrees to deliver directly to the Servicer
(for the Initial Purchaser's account), within two Business Days of
receipt thereof, any Collections that it receives, in the form so
received, and agrees that all such Collections shall be deemed to be
received in trust for the Initial Purchaser and shall be maintained and
segregated separate and apart from all other funds and moneys of such
Originator until delivery of such Collections to the Servicer; and
(b) Each Originator shall (i) perform all of its obligations
hereunder and under the Contracts related to the Pool Receivables and
Related Assets (and under its agreements with the Lock-Box Banks) to
the same extent as if the Receivables, Related Assets and Lock-Box
Accounts (and the other items described in Section 1.2(c)) had not been
sold hereunder, and the exercise by the Initial Purchaser or its
designee or assignee of the Initial Purchaser's rights hereunder or in
connection herewith shall not relieve any Originator from such
obligations and (ii) pay when due any taxes, including, without
limitation, any sales taxes payable in connection with the Pool
Receivables and their creation and satisfaction. Notwithstanding
anything to the contrary in this Agreement, the Initial Purchaser, the
Administrator and the Issuer shall not have any obligation or liability
with respect to any Pool Receivable, Related Asset, or Lock-Box Account
(or any other item described in Section 1.2(c)) nor shall any of them
be obligated to perform any of the obligations of any Originator under
any of the foregoing.
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SECTION 4.4. Further Action Evidencing Purchases. Each
Originator agrees that from time to time, at its expense, it will promptly
execute and deliver all further instruments and documents, and take all further
action, in order to perfect, protect or more fully evidence the purchase of the
Pool Receivables and the Related Assets by the Initial Purchaser hereunder, or
to enable the Initial Purchaser to exercise or enforce any of its rights
hereunder or under any other Transaction Document. Each Originator further
agrees from time to time, at its expense, promptly to take all action that the
Initial Purchaser, the Servicer or the Administrator may reasonably request in
order to perfect, protect or more fully evidence such purchase of the Pool
Receivables and the Related Assets or to enable the Initial Purchaser or the
Issuer (as the assignee of the Initial Purchaser) or any Program Support
Provider to exercise or enforce any of its or their respective rights hereunder
or under any other Transaction Document or Program Support Agreement in respect
of the Pool Receivables and the Related Assets. Without limiting the generality
of the fore- going, upon the request of the Initial Purchaser, each Originator
will:
(a) execute and file such financing or continuation
statements, or amendments thereto or assignments thereof, and such
other instruments or notices, as the Initial Purchaser or the
Administrator may reasonably determine to be necessary or appropriate;
and
(b) mark the master data processing records evidencing the
Receivables and, if requested by the Initial Purchaser or the
Administrator, legend the related Contracts, to reflect the sale of the
Pool Receivables and Related Assets pursuant to this Agreement, the
Amended and Restated Receivables Purchase Agreement and the Amended and
Restated Parallel Asset Purchase Agreement.
Each Originator hereby authorizes the Initial Purchaser or its designee
or assignee to file one or more financing or continuation statements, and
amendments thereto and assignments thereof, relative to all or any of the Pool
Receivables and Related Assets of such Originator, in each case whether now
existing or hereafter generated. If any Originator fails to perform any of its
agreements or obligations under this Agreement, the Initial Purchaser or its
designee or assignee may (but shall not be required to) itself perform, or cause
performance of, such agreement or obligation, and the reasonable expenses of the
Initial Purchaser or its designee or assignee incurred in connection therewith
shall be payable by such Originator under Section 6.6.
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ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee. (a) Parent hereby unconditionally and
irrevocably covenants and agrees that it will cause each other Originator duly
and punctually to perform and observe all of the terms, conditions, covenants,
agreements (including, without limitation, agreements to make payments or deemed
Collections) and indemnities of each other Originator under this Agreement and
the other Transaction Documents strictly in accordance with the terms hereof and
thereof and that if for any reason whatsoever any other Originator shall fail to
so perform and observe such terms, conditions, covenants, agreements and
indemnities, Parent will duly and punctually perform and observe the same.
(b) The liabilities and obligations of Parent, in its capacity as a
guarantor under this Section 5.1, shall be absolute and unconditional under all
circumstances and shall be performed by Parent regardless of (i) whether the
Initial Purchaser, the Issuer (as assignee of the Initial Purchaser) or the
Administrator shall have taken any steps to collect from any Originator any of
the amounts payable by such Originator to the Initial Purchaser under this
Agreement or shall otherwise have exercised any of their rights or remedies
under this Agreement or the other Transaction Documents against such Originator
or against any Obligor under any of the Pool Receivables, (ii) the validity,
legality or enforceability of this Agreement or any other Transaction Documents,
or the disaffirmance of any thereof in any event of bankruptcy relating to such
Originator, (iii) any law, regulation or decree now or hereafter in effect which
might in any manner affect any of the terms or provisions of this Agreement or
any other Transaction Document or any of the rights of Issuer (as assignee of
the Initial Purchaser) or the Administrator as against such Originator or as
against any Obligor under any of such Pool Receivables or which might cause or
permit to be invoked any alteration in time, amount, manner of payment or
performance of any amount payable by such Originator to the Initial Purchaser,
Issuer (as assignee of the Initial Purchaser) or the Administrator under this
Agreement, (iv) the merger or consolidation of such Originator into or with any
corporation or any sale or transfer by such Originator or all or any part of its
property, (v) the existence or assertion of any Adverse Claim with respect to
any Pool Receivable, or (vi) any other circumstance whatsoever (with or without
notice to or knowledge of Parent) which may or might in any manner or to any
extent vary the risk of Parent, or might otherwise constitute a legal or
equitable discharge of a surety or guarantor, it being the purpose and intent of
Parent that the liabilities and obligations of Parent under this Section 5.1
shall be absolute
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and unconditional under any and all circumstances, and shall not be discharged
except by payment and performance as in this Agreement provided. The guaranty
set forth in this Section 5.1 is a guaranty of payment and performance and not
just of collection.
(c) Without in any way affecting or impairing the liabilities and
obligations of Parent, in its capacity as a guarantor under this Section 5.1,
the Initial Purchaser, Issuer (as assignee of the Initial Purchaser) or the
Administrator may at any time and from time to time in its discretion, without
the consent of, or notice to, Parent, and without releasing or affecting
Parent's liability hereunder (i) extend or change the time, manner, place or
terms of this Agreement or any other Transaction Document, (ii) settle or
compromise any of the amounts payable by any Originator to the Initial Purchaser
or Issuer (as assignee of the Initial Purchaser) under this Agreement or
subordinate the same to the claims of others, (iii) retain or obtain a lien upon
or security interest in any property to secure any of the obligations hereunder,
(iv) retain or obtain the primary or secondary obligation of any obligor or
obligors, in addition to Parent, with respect to any of the obligations due
hereunder, or (v) release or fail to perfect any lien upon or security interest
in, or impair, surrender, release or permit any substitution in exchange for,
all or any part of any property securing any of the obligations under this
Agreement, it being understood that nothing contained in this Section 5.1(c)
shall give the Initial Purchaser, Issuer (as assignee of the Initial Purchaser)
or the Administrator the right to take any of the foregoing actions if not
permitted by the other provisions of this Agreement, by law or otherwise.
Nothing in this Section 5.1(c) shall be deemed to waive any of the rights the
Initial Purchaser may otherwise have.
(d) The provisions of this Section 5.1 shall continue to be effective
or be reinstated, as the case may be, if at any time payment of any of the
amounts payable by any Originator, to the Initial Purchaser, Issuer (as assignee
of the Initial Purchaser) or the Administrator under this Agreement is rescinded
or must otherwise be restored or returned by any of such Persons, as the case
may be, upon any event of bankruptcy involving any Originator, or otherwise, all
as though such payment had not been made. Parent, in its capacity as a guarantor
under this Section 5.1, hereby waives (i) notices of the occurrence of any
default hereunder, (ii) any requirement of diligence or promptness on the part
of the Initial Purchaser, Issuer (as assignee of the Initial Purchaser) or the
Administrator in making demand, commencing suit or exercising any other right or
remedy under this Agreement, or otherwise, and (iii) any right to require the
Initial Purchaser, Issuer or the Administrator to exercise any right or remedy
against any Originator or the Pool
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Receivables prior to enforcing any of their rights against Parent under this
Section 5.1. Parent, in its capacity as a guarantor under this Section 5.1,
agrees that, in the event of an event of bankruptcy with respect to any
Originator (including Parent), and if such event shall occur at a time when all
of the indemnified amounts and other amounts due from such Originator under this
Agreement may not then be due and payable, Parent will pay to Initial Purchaser
or Issuer (as assignee of the Initial Purchaser) forthwith the full amount which
would be payable hereunder by Parent if all such indemnified amounts and other
obligations were then due and payable.
SECTION 5.2. Representation and Warranty. Parent, in its
capacity as a guarantor under this Section 5.2, represents and
warrants that it now has, and will continue to have, independent
means of obtaining information concerning each Originator's
affairs, financial condition and business. Neither the Initial
Purchaser, Issuer nor the Administrator shall have any duty or
responsibility to provide Parent with any credit or other
information concerning any Originator's affairs, financial
condition or business which may come into the possession of the
Initial Purchaser, Issuer or the Administrator.
SECTION 5.3. Subrogation. Parent will not exercise or assert any rights
which it may acquire by way of subrogation under this Agreement unless and until
all of the Obligations of each Originator shall have been paid and performed in
full. If any payment shall be made to Parent on account of any subrogation
rights at any time when all of the Obligations of each Originator shall not have
been paid and performed in full, each and every amount so paid will be held in
trust for the benefit of the Initial Purchaser and Issuer (as assignee of the
Initial Purchaser) and any other applicable Person and forthwith be paid to the
Administrator to be credited and applied to the Obligations of the applicable
Originator to the extent then unsatisfied, in accordance with the terms of the
Transaction Documents or any document delivered in connection with the
Transaction Documents, as the case may be.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Additional Originators. The Parent and any
Subsidiary of the Parent may become an Originator by executing a
Supplement. Upon such execution of the Supplement and the
satisfaction of any conditions set forth therein, such executing
party will become an Originator hereunder.
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SECTION 6.2. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or consent to any departure by any Originator therefrom shall
be effective unless in a writing (a) signed by the Administrator and the
Administrative Agent, and (b) in the case of any amendment, signed by each
Originator, the Initial Purchaser, the Parent, the Administrator and the
Administrative Agent. Any such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
failure on the part of the Initial Purchaser, Administrator or Administrative
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right.
SECTION 6.3. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and sent or delivered, to each party hereto, at
its address set forth under its name on the signature pages hereof or at such
other address as shall be designated by such party in a written notice to the
other parties hereto. Notices and communications by facsimile shall be effective
when sent (and shall be followed by hard copy sent by first class mail), and
notices and communications sent by other means shall be effective when received.
SECTION 6.4. Acknowledgment and Consent.
(a) Each Originator, O&M Medical, as an Originator and as initial
Servicer and the Parent, acknowledge that, contemporaneously herewith or at any
time hereafter, the Initial Purchaser (i) is assigning or will assign to the
Issuer, pursuant to the Amended and Restated Receivables Purchase Agreement, and
to the Administrative Agent on behalf of the Parallel Purchasers under the
Amended and Restated Parallel Asset Purchase Agreement one or more undivided
interests in all of the Initial Purchaser's rights, title and interest in, to
and under the Pool Receivables and Related Assets, and (ii) is assigning
pursuant to the Amended and Restated Receivables Purchase Agreement and/or the
Amended and Restated Parallel Asset Purchase Agreement all of the Initial
Purchaser's right, title and interest in, to and under this Agreement, except
for the Initial Purchaser's right, title and interest in, to and under the
Originator Note, it being understood that such assignment shall not relieve any
party hereto from (or require the Issuer, the Administrator, the Administrative
Agent or any Parallel Purchaser to undertake) the performance of any term,
covenant or agreement on the part of any party hereto to be performed or
observed under or in connection with this Agreement. Each Originator, O&M
Medical, as an Originator and as initial Servicer and the Parent, hereby consent
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to such assignments, including, without limitation, the assignment by the
Initial Purchaser to the Issuer and/or the Administrative Agent of (i) the right
of the Initial Purchaser, at any time, to enforce this Agreement against any
Originator and the obligations of any Originator hereunder, (ii) the right to
appoint a successor to the Servicer as set forth therein, (iii) the right, at
any time, to give or withhold any and all consents, requests, notices,
directions, approvals, demands, extensions or waivers under or with respect to
this Agreement, any other Transaction Document or the obligations in respect of
any Originator thereunder to the same extent as the Initial Purchaser may do,
and (iv) all of the Initial Purchaser's rights, remedies, powers and privileges,
and all claims of the Initial Purchaser against any Originator, under or with
respect to this Agreement and the other Transaction Documents (whether arising
pursuant to the terms of this Agreement or otherwise available at law or in
equity). Each of the parties hereto acknowledges and agrees that the Issuer, the
Administrator, the Administrative Agent, the Parallel Purchasers and the other
Affected Persons are third party beneficiaries of the rights of the Initial
Purchaser arising hereunder and under the other Transaction Documents to which
any Originator is a party.
(b) Each of the Originators and the Parent hereby agrees to execute all
agreements, instruments and documents, and to take all other action, that the
Initial Purchaser, the Administrator or the Administrative Agent determines is
necessary or reasonably desirable to evidence its consent described in Section
5.3(a).
(c) Each of the Originators and the Parent hereby acknowledges that its
obligations to the Issuer and the Administrative Agent on behalf of the Parallel
Purchasers, as assignees of the Initial Purchaser, are and shall be, to the
extent permitted by applicable law or not prohibited by any order of any court
or administrative or regulatory authority, absolute and unconditional under any
and all circumstances and shall be unaffected by any claims, offsets or other
defenses any such Originator may have against the Initial Purchaser (other than
in respect of the Initial Purchaser Note), and each Originator agrees that it
shall not interpose any such claims, offsets or defenses as a defense to its
performance of its obligations under the Transaction Documents to which it is a
party.
SECTION 6.5. Binding Effect; Assignability. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns. Neither the Parent nor
any Originator may assign any of its rights or delegate its obligations
hereunder or any interest herein without the prior written consent of the
Initial Purchaser and the Administrator. Without limiting any other rights that
may be available under applicable law, the rights of the Initial
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Purchaser may be enforced through it or by its agents and assignees.
SECTION 6.6. Costs and Expenses. In addition to the rights of
indemnification granted under Section 3.1 hereof, each of the Originators and
the Parent jointly and severally agree to pay on demand all reasonable costs and
expenses in connection with the preparation, execution, delivery and
administration (including audit fees and expenses generated by an internal or
external auditor appointed by the Administrative Agent for the periodic auditing
of Pool Receivables) of this Agreement, the Amended and Restated Liquidity Asset
Purchase Agreement, the Amended and Restated Parallel Asset Purchase Agreement,
any asset purchase agreement, reimbursement agreement, letter of credit or
similar agreement relating to the sale or transfer of interests in Purchased
Interests and the other documents and agreements to be delivered hereunder,
including, without limitation, Attorney Costs for the Administrator, the Issuer,
the Administrative Agent and their respective Affiliates and agents with respect
thereto and with respect to advising the Administrator, the Issuer, the
Administrative Agent and their respective Affiliates and agents as to their
rights and remedies under this Agreement and the other Transaction Documents,
and all costs and expenses, if any (including Attorney Costs), of the
Administrator, the Issuer, the Administrative Agent, the Parallel Purchasers and
their respective Affiliates and agents, in connection with the enforcement of
this Agreement and the other Transaction Documents.
SECTION 6.7. No Proceedings; Limitation on Payments.
(a) Each party hereto hereby agrees that it will not institute against,
or join any other Person in instituting against, the Initial Purchaser or the
Issuer any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law, for one year and one day after the latest maturing Note is paid in full.
(b) Notwithstanding any provisions contained in this Agreement to the
contrary, the Initial Purchaser shall not, and shall not be obligated to, pay
any amount pursuant to this Agreement unless the Initial Purchaser has excess
cash flow from operations or has received funds with respect to such obligation
which may be used to make such payment.
SECTION 6.8. GOVERNING LAW AND JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO THE
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EXTENT THAT THE PERFECTION (OR THE EFFECT OF PERFECTION OR NONPERFECTION) OF THE
INTERESTS OF THE INITIAL PURCHASER IN THE POOL RECEIVABLES AND THE OTHER ITEMS
DESCRIBED IN SECTION 1.10(b) IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARTIES HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES
HERETO IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS
AGREEMENT OR ANY TRANSACTION DOCUMENT. EACH PARTY HERETO WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY NEW YORK LAW.
SECTION 6.9. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
SECTION 6.10. Survival of Termination. The provisions of Section 1.11,
Section 2.3, Article , Article V, Section 6.4, Section 6.6, Section 6.7, Section
6.8, Section 6.11, and of this Section 6.10, shall survive any termination of
this Agreement.
SECTION 6.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH
OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
SECTION 6.12. Entire Agreement. This Agreement embodies
the entire agreement and understanding of the parties hereto, and
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supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof.
The Exhibits, Schedules and Annexes to this Agreement shall be deemed
incorporated by reference into this Agreement as if set forth herein.
SECTION 6.13. Headings. The captions and headings of this
Agreement and in any Exhibit hereto are for convenience of
reference only and shall not affect the interpretation hereof or
thereof.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
OWENS & MINOR MEDICAL, INC., as an
Originator and as Servicer
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: Vice President & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
STUART MEDICAL, INC.,
as Originator
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: Vice President & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
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OWENS & MINOR, INC., as Guarantor
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: Vice President & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
O&M FUNDING CORP., as
Initial Purchaser
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: Vice President & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
<PAGE>
EXHIBIT I
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial purchase under
the Amended and Restated Purchase and Sale Agreement on or after the Restatement
Effective Date is subject to the condition precedent that the Initial Purchaser
shall have received each of the following (with copies to the Administrator), on
or before the date of such purchase, each in form and substance (including the
date thereof) satisfactory to the Initial Purchaser and the Administrator:
(a) The Amended and Restated Receivables Purchase Agreement,
duly executed by the parties thereto, together with evidence reasonably
satisfactory to the Initial Purchaser that all conditions precedent to
the initial purchase of an undivided interest thereunder (other than
any condition relating to the effectiveness of the purchase commitment
under this Agreement) shall have been met;
(b) Duly executed copies of the Amended and Restated
Parallel Asset Purchase Agreement;
(c) A duly executed counterpart of a contribution agreement
(the "Contribution Agreement"), together with evidence that an
additional capital contribution of Pool Receivables and Related Assets
in an aggregate amount of not less than $7,500,000 shall have been made
to the Initial Purchaser thereunder by O&M Medical; and
(d) Certified copies of (i) the resolutions of the respective
Board of Directors of each of the Originators and the Parent
authorizing the execution, delivery and performance by such Persons of
the Amended and Restated Purchase and Sale Agreement and the other
Transaction Documents, (ii) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to
the Amended and Restated Purchase and Sale Agreement and the other
Transaction Documents and (iii) the articles of incorporation and
by-laws of each of the Originators and the Parent, to the extent not
previously delivered to the Initial Purchaser and the Administrator in
connection with the Original Purchase and Sale Agreement;
(e) A certificate of the Secretary or Assistant Secretary of
each of the Originators and the Parent certifying the names and true
signatures of the officers of such Persons authorized to sign the
Amended and Restated Purchase and Sale Agreement and the other
Transaction Documents. Until the Administrator receives a subsequent
incumbency certificate from an Originator or the Parent in form and
substance satisfactory to the Administrator, the
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Administrator shall be entitled to rely on the last such
certificate delivered to it by such Originator; and
(f) Such other agreements, instruments, UCC financing
statements, certificates, opinions and other documents as the Initial
Purchaser or the Administrator may reasonably request.
2. Certification as to Representations and Warranties. Each Originator,
by accepting the Purchase Price paid to it for each purchase of Pool Receivables
and Related Assets on any day, shall be deemed to have certified that its
representations and warranties contained in Exhibit II to this Amended and
Restated Purchase and Sale Agreement are true and correct on and as of such day,
with the same effect as though made on and as of such day (except for
representations or warranties expressly stated to have been made or given as of
a specific date).
3. Automatic Transfer of Title on Creation of Pool Receivable. Upon the
creation of any Pool Receivable, such Pool Receivable and any Related Assets
shall be automatically sold and transferred to the Initial Purchaser without
further action, and title to such Pool Receivables and Related Assets shall vest
in the Initial Purchaser, whether or not the conditions precedent to such
purchase were in fact satisfied; provided that the Initial Purchaser shall not
be deemed to have waived any claim it may have under the Amended and Restated
Purchase and Sale Agreement for the failure by any applicable Originator in fact
to satisfy any such condition precedent and no Originator shall be deemed to
have waived any claim it may have under the Amended and Restated Purchase and
Sale Agreement for payment of the Purchase Price of any Pool Receivables.
4. Conditions Precedent to All Purchases. Each purchase under the
Amended and Restated Purchase and Sale Agreement is subject to the condition
precedent that the agreement of the Originators to sell Pool Receivables and
Related Assets, and the agreement of the Initial Purchaser to purchase Pool
Receivables and Related Assets, shall not have terminated pursuant to Section
2.3 of the Amended and Restated Purchase and Sale Agreement.
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EXHIBIT II
REPRESENTATIONS AND WARRANTIES
In order to induce the Initial Purchaser to enter into the Amended and
Restated Purchase and Sale Agreement and to make purchases thereunder, each
Originator, as to matters relating to it or its Pool Receivables or other
property, hereby represents and warrants as follows and the Parent makes all of
the following representations and warranties except those set forth in clauses
(g), (i), (j), (l), (n), (o) and (r) herein:
(a) Organization and Good Standing. It is a corporation duly
incorporated, validly existing and in good standing under the laws of
the jurisdiction of its organization, and is duly qualified to do
business, and is in good standing, as a foreign corporation in every
jurisdiction where the nature of its business requires it to be so
qualified.
(b) Due Qualification; No Conflicts. The execution, delivery
and performance by it of this Agreement and the other Transaction
Documents to which it is a party, including, without limitation, its
use of the proceeds of purchases, (i) are within its corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii)
do not contravene or result in a default under or conflict with (1) its
articles of incorporation or by-laws, (2) any law, rule or regulation
applicable to it, (3) any contractual restriction binding on or
affecting it or its property or (4) any order, writ, judgment, award,
injunction or decree binding on or affecting it or its property and
(iv) do not result in or require the creation of any Adverse Claim upon
or with respect to any of its properties. The Amended and Restated
Purchase and Sale Agreement and the other Transaction Documents to
which it is a party have been duly executed and delivered by it.
(c) Consents. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or any
other Person is required for the due execution, delivery and
performance by it of the Amended and Restated Purchase and Sale
Agreement or any other Transaction Document to which it is a party
other than (a) the filing of financing statements against O&M Medical
and Stuart in the State Corporation Commission of Virginia and against
Stuart in the Secretary of State of Pennsylvania and (b) comparable
filings with respect to all other Originators in the jurisdiction
provided in their respective Supplement to perfect the Initial
Purchaser's interest in the Pool Receivables under the Amended and
Restated Receivables Purchase Agreement.
<PAGE>
(d) Binding Obligations. Each of the Amended and Restated
Purchase and Sale Agreement and any other Transaction Document to which
it is a party constitutes the legal, valid and binding obligation of it
enforceable against it in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditor's rights
generally and by general principles of equity regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(e) Financial Statements.
(i) The consolidated balance sheet of the Parent and
its Subsidiaries as of December 31, 1995, and the related
consolidated statements of income and retained earnings of the
Parent and its Subsidiaries for the fiscal year then ended and
(y) the consolidated and consolidating balance sheet of the
Parent and its Subsidiaries as of March 31, 1996, and the
related consolidated and consolidating statements of income
and retained earnings of the Parent and its Subsidiaries for
the fiscal quarter then ended, copies of which have been
furnished to the Administrator, fairly present the financial
condition of the Parent and its Subsidiaries as at such date
and the results of the operations of the Originators and their
Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles
consistently applied, and since December 31, 1995, there has
been no material adverse change in the business, operations,
property or financial or other condition or operations of the
Originators or the Parent or any of their Subsidiaries taken
as a whole, the ability of any Originator or the Parent to
perform its obligations under the Amended and Restated
Purchase and Sale Agreement or the other Transaction Documents
or the collectibility of the Pool Receivables, or which
affects the legality, validity or enforceability of the
Amended and Restated Purchase and Sale Agreement or the other
Transaction Documents.
(ii) The unaudited condensed balance sheet of the
Originators as of December 31, 1995, and the related condensed
statements of income of the Originators for the fiscal year
ended December 31, 1995, heretofore furnished to the
Administrator, are the financial statements of the Originators
routinely prepared for internal use.
(f) No Proceedings. There is no pending or threatened
action or proceeding affecting either (x) any Originator and
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its Subsidiaries taken as a whole or (y) the Parent and its
Subsidiaries taken as a whole, which is before any Governmental
Authority or arbitrator and which would reasonably be expected to
materially adversely affect the business, operations, property,
financial or other condition or operations of either (x) any Originator
and its Subsidiaries taken as a whole or (y) the Parent and its
Subsidiaries taken as a whole, or their ability to perform their
obligations under the Amended and Restated Purchase and Sale Agreement
or the other Transaction Documents or the collectibility of the Pool
Receivables, or which affects or purports to affect the legality,
validity or enforceability of the Amended and Restated Purchase and
Sale Agreement or the other Transaction Documents.
(g) Quality of Title; Valid Sale; Etc. Upon its creation and
prior to its sale to the Initial Purchaser under this Agreement, it is
the legal and beneficial owner of each of the Pool Receivables and
Related Assets free and clear of any Adverse Claim; and upon each
purchase the Initial Purchaser shall acquire a valid and enforceable
ownership interest in each Pool Receivable then existing or thereafter
arising, in the Related Assets with respect thereto, and the items
described in Section 1.2(c) of the Amended and Restated Purchase and
Sale Agreement, free and clear of any Adverse Claim, which interest has
been duly perfected; the Amended and Restated Purchase and Sale
Agreement creates a valid ownership interest in favor of the Initial
Purchaser in the items described in Section 1.10(b) of the Amended and
Restated Purchase and Sale Agreement, free and clear of any Adverse
Claims, which interest has, to the extent required, been duly
perfected. No effective financing statement or other instrument similar
in effect naming Initial Purchaser or any Originator as debtor and
covering any Pool Receivable or Related Asset with respect thereto or
any Lock-Box Account or any other item described in Section 1.10(b) of
this Amended and Restated Purchase and Sale Agreement is on file in any
recording office, except those filed in favor of the Initial Purchaser
pursuant to the Amended and Restated Purchase and Sale Agreement and in
favor of the Issuer pursuant to the Amended and Restated Receivables
Purchase Agreement.
(h) Accuracy of Information. Each report (if prepared by an
Originator or the Initial Purchaser or one of its Affiliates, or to the
extent that information contained therein is supplied by an Originator
or the Initial Purchaser or one of its Affiliates), information,
exhibit, financial statement, document, book or record furnished or to
be furnished at any time by or on behalf of it to the Initial
Purchaser, the Issuer or the Administrator in connection with this
Agreement is or will be accurate in all
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<PAGE>
material respects as of its date or (except as otherwise disclosed to
the Administrator at such time) as of the date so furnished, and no
such item contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary in order
to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading.
(i) Principal Place of Business. The principal place of
business and chief executive office (as such terms are used in the UCC)
of each Originator and the office where each Originator keeps its
records concerning the Receivables are located at the addresses
referred to on Schedule I of the Amended and Restated Purchase and Sale
Agreement (or in such Originator's Supplement) (or at such other
addresses designated in accordance with paragraph (b) of Exhibit III),
and except as set forth on Schedule I of this Agreement, during the six
years prior to the initial purchase under the Amended and Restated
Purchase and Sale Agreement such principal place of business, chief
executive office and office where each Originator keeps its records
concerning the Receivables were located in the Commonwealth of
Virginia.
(j) Lock-Box Banks, Accounts. The names and addresses
of all the Lock-Box Banks, together with the account numbers
of the Lock-Box Accounts of each Originator at such Lock-Box
Banks, are specified in Schedule II to the Amended and
Restated Purchase and Sale Agreement, and all Lock-Box
Accounts are subject to Lock-Box Agreements.
(k) No Violation. It is not in violation of any order of any
arbitrator or Governmental Authority which violation would reasonably
be expected to have a material adverse effect on its business,
operations, property or financial or other condition of the Originator.
(l) Proceeds. No proceeds of any purchase will be used for any
purpose that violates any applicable law, rule or regulation,
including, without limitation, Regulations G or U of the Federal
Reserve Board.
(m) No Purchase and Sale Termination Events. No event has
occurred and is continuing, or would result from a purchase, in respect
of the Pool Receivables or Related Assets or from the application of
the proceeds therefrom, which constitutes a Purchase and Sale
Termination Event.
(n) Maintenance of Books and Records. It has accounted for
each sale of Pool Receivables and Related Assets in its books and
financial statements as sales, consistent with Generally Accepted
Accounting Principles.
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(o) Credit and Collection Policy. It has complied in
all material respects with the Credit and Collection Policy
with regard to each Pool Receivable.
(p) Solvency. It is Solvent; and at the time of (and
immediately after) each purchase pursuant to the Amended and
Restated Purchase and Sale Agreement, such Originator shall
have been Solvent.
(q) Compliance with Transaction Documents. It, as Servicer or
Originator or guarantor, has complied in all material aspects with all
of the terms, covenants and agreements contained in the Amended and
Restated Purchase and Sale Agreement and the other Transaction
Documents and applicable to it.
(r) Corporate Name. Its complete corporate name is set forth
in the preamble to the Amended and Restated Purchase and Sale
Agreement, and it does not use and has not during the last six years
used any other corporate name, trade name, doing business name or
fictitious name, except for those names set forth in Schedule I and
except for names first used after the date of the Amended and Restated
Purchase and Sale Agreement and set forth in a notice delivered to the
Administrator pursuant to clause (b) of Exhibit III to the Amended and
Restated Purchase and Sale Agreement.
(s) No Labor Disputes. There are no strikes, lockouts or other
labor disputes against it or any of its subsidiaries, or, to the best
of its knowledge, threatened against or affecting it or any of its
subsidiaries, and no significant unfair labor practice complaint is
pending against it or any of its subsidiaries or, to the best knowledge
of it, threatened against any of them by or before any Governmental
Authority that would have a material adverse effect on its business,
operations, property or financial or other condition.
(t) Pension Plans. During the preceding twelve months, no
steps have been taken to terminate any Pension Plan which was not fully
funded, unless adequate reserves have been set aside for the funding
thereof, and no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a lien under section 302(f) of
ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the
applicable Originator of any material liability, fine or penalty.
(u) Investment Company Act. It is not, and is not
controlled by, an "investment company" registered or
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<PAGE>
required to be registered under the Investment Company Act
of 1940, as amended.
II-6
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EXHIBIT III
COVENANTS
Until the later of the Purchase and Sale Termination Date and the Final
Payout Date and as to matters relating to it or its Pool Receivables or other
property, each Originator covenants as follows; and the Parent only covenants as
set forth in clauses (a), (l) and (m) herein:
(a) Compliance with Laws, Etc. It shall comply in all material
respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so
to comply with such laws, rules and regulations or the failure so to
preserve and maintain such existence, rights, franchises,
qualifications, and privileges would not materially adversely affect
the collectibility of the Pool Receivables or the enforceability of any
related Contract or the ability of the Originator to perform its
obligations under any related Contract or under the Agreement.
(b) Location of Offices, Records and Books of Account; Change
of Name, Mergers, etc.; Maintenance of Records, etc. Each Originator
(i) shall keep its principal place of business and chief executive
office (as such terms are used in the UCC) and the office where it
keeps its records concerning the Pool Receivables at the address of
such Originator set forth on Schedule I attached hereto or, upon at
least 60 days' prior written notice of a proposed change to the
Administrator, at any other locations in jurisdictions where all
actions reasonably requested by the Administrator to protect and
perfect the interest of the Issuer in the Pool Receivables and related
items (including without limitation the items described in Section
1.10(b) of this Amended and Restated Purchase and Sale Agreement) have
been taken and completed and (ii) shall provide the Administrator with
at least 60 days' written notice prior to making any change in such
Originator's or the Initial Purchaser's name or making any other change
in such Originator's or the Initial Purchaser's identity or corporate
structure (including a merger) which could render any UCC financing
statement filed in connection with this Agreement "seriously
misleading" as such term is used in the UCC; each notice to the
Administrator pursuant to this sentence shall set forth the applicable
change and the effective date thereof. Each Originator also will
maintain and implement administrative and operating procedures
(including, without limitation, an ability to recreate records
evidencing Pool Receivables and related Contracts in the event of the
destruction of the originals thereof), and keep and maintain all
documents, books, records, computer
<PAGE>
tapes and disks and other information reasonably necessary or advisable
for the collection of all Pool Receivables (including, without
limitation, records adequate to permit the daily identification of each
Pool Receivable and all Collections of and adjustments to each existing
Pool Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. Each Originator shall, at its expense, timely and
fully perform and comply with all material provisions, covenants and
other promises required to be observed by it under the Contracts
related to the Pool Receivables, and timely and fully comply in all
material respects with the Credit and Collection Policy with regard to
each Pool Receivable and the related Contract.
(d) Ownership Interest, Etc. Each Originator shall, at its
expense, take all action necessary or desirable to establish and
maintain a valid and enforceable perfected ownership interest in the
Pool Receivables, the Related Assets, and the items described in
Section 1.2(c) of the Purchase and Sale Agreement, and an ownership
interest in the items described in Section 1.10(b) of the Amended and
Restated Purchase and Sale Agreement, in each case fully perfected and
free and clear of any Adverse Claim, in favor of the Initial Purchaser,
including, without limitation, taking such action to perfect, protect
or more fully evidence the interest of the Initial Purchaser under the
Amended and Restated Purchase and Sale Agreement as the Administrator
may request.
(e) Sales, Liens, Etc. Other than a sale to the Initial
Purchaser as contemplated by the Amended and Restated Purchase and Sale
Agreement, no Originator shall sell, assign (by operation of law or
otherwise) or otherwise dispose of, or create or suffer to exist any
Adverse Claim upon or with respect to, any or all of its right, title
or interest in, to or under, (i) any item described in Section 1.10(b)
of the Amended and Restated Purchase and Sale Agreement, (ii) any
Originator Note or the Initial Purchaser Note or (iii) any post office
box to which any payments in respect of any Receivable are sent,
including, without limitation, any assignment of any right to receive
income in respect of items contemplated by clause (i) or (ii) of this
paragraph .
(f) Extension or Amendment of Pool Receivables. The applicable
Originator shall not (i) extend the maturity or adjust the Outstanding
Balance or otherwise modify the terms of any Pool Receivable, or (ii)
amend, modify or waive any term or condition of any related Contract in
a way which would adversely affect the collectibility of any
Receivable;
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provided that this clause (f) shall not limit the ability of the
Servicer to extend the maturity, adjust the Outstanding Balance or
otherwise modify the terms of any Pool Receivable in accordance with
Section 4.2(a) of the Amended and Restated Receivables Purchase
Agreement.
(g) Change in Business or Credit and Collection Policy.
Without the written consent of the Administrator, no Originator shall
make (i) any material change in the character of its business or in the
Credit and Collection Policy, or (ii) any change at all in the Credit
and Collection Policy that would adversely affect the collectibility of
the Pool Receivables or the enforceability of any related Contract or
the ability of the Originator to perform its obligations under any
related Contract or under the Amended and Restated Purchase and Sale
Agreement.
(h) Audits. Each Originator shall, from time to time during
regular business hours as requested by the Administrator, permit the
Administrator, or its agents or representatives, (i) to examine and
make copies of and make abstracts from all books, records and documents
(including, without limitation, computer tapes and disks) in the
possession or under the control of such Originator relating to Pool
Receivables and the Related Assets, provided that copies of the related
Contracts may only be made if the Servicer is not such Originator or if
a Termination Event has occurred and (ii) to visit the offices and
properties of such Originator for the purpose of examining such
materials described in clause (i) above, and to discuss matters
relating to Pool Receivables and the Related Assets or such
Originator's performance hereunder or under the Contracts with any of
the officers, employees, agents or contractors of such Originator
having knowledge of such matters.
(i) Lock-Box Agreements; Change in Lock-Box Banks, Lock-Box
Accounts and Payment Instructions to Obligors. No Originator shall add
or terminate any bank as a Lock-Box Bank or any account as a Lock-Box
Account from those listed in Schedule II to the Amended and Restated
Purchase and Sale Agreement, or make any change in its instructions to
Obligors regarding payments to be made to an Originator or payments to
be made to any Lock-Box Account (or related post office box), unless
the Administrator shall have consented thereto in writing and the
Administrator shall have received copies of all agreements and
documents (including without limitation Lock-Box Agreements) that it
may request in connection therewith.
(j) Deposits to Lock-Box Accounts. Each Originator
shall (i) instruct all Obligors (other than Obligors which
customarily make direct payment to such Originator for
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deposit in one of the Lock-Box Accounts designated on Schedule II as a
"Deposit Account", provided that such Originator complies with Clause
(ii) of this subsection (j)) to make payments of all Pool Receivables
to one or more Lock-Box Accounts or to post office boxes to which only
Lock-Box Banks have access (and shall instruct the Lock-Box Banks to
cause all items and amounts relating to such Pool Receivables received
in such post office boxes to be removed and deposited into a Lock-Box
Account on a daily basis), and (ii) deposit, or cause to be deposited,
any Collections of Pool Receivables received by it into Lock-Box
Accounts not later than one Business Day after receipt thereof. Each
Lock-Box Account shall at all times be subject to a Lock-Box Agreement.
No Originator will deposit or otherwise credit, or cause or permit to
be so deposited or credited, to any Lock-Box Account cash or cash
proceeds other than Collections of Pool Receivables.
(k) Marking of Records. At its expense, each Originator shall
mark its master data processing records relating to Pool Receivables
and related Contracts, including with a legend evidencing that the Pool
Receivables and related Contracts (and interests therein) have been
sold in accordance with the Amended and Restated Purchase and Sale
Agreement and the Amended and Restated Receivables Purchase Agreement.
(l) ERISA Matters. Each of the Originators and the Parent
shall notify the Administrator as soon as is practicable and in any
event not later than two Business Days after (i) the institution of any
steps by such Originator or the Parent or any other Person to terminate
any Pension Plan which is not fully funded, unless adequate reserves
have been set aside for the funding thereof, (ii) the failure to make a
required contribution to any Pension Plan if such failure is sufficient
to give rise to a lien under section 302(f) of ERISA, (iii) the taking
of any action with respect to a Pension Plan which could result in the
requirement that such Originator furnish a bond or other security to
the PBGC or such Pension Plan or (iv) the occurrence of any other event
concerning any Pension Plan which is reasonably likely to result in a
material adverse effect.
(m) Separate Corporate Existence of the Initial Purchaser.
Each of the Originators and the Parent hereby acknowledges that the
Initial Purchaser, the Issuer and the Administrator are entering into
the transactions contemplated by the Amended and Restated Purchase and
Sale Agreement and by the Amended and Restated Receivables Purchase
Agreement in reliance upon the Initial Purchaser's identity as a legal
entity separate from its Affiliates.
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Therefore, each of the Originators and the Parent shall take all steps
to continue the Initial Purchaser's identity as such a separate legal
entity and to make it apparent to third Persons that the Initial
Purchaser is an entity with assets and liabilities distinct from those
of its Affiliates and those of any other Person, and not a division of
any of its Affiliates or any other Person. Without limiting the
generality of the foregoing, each of the Originators and the Parent
will, and will cause its Affiliates to, take such actions as shall be
required in order that:
(i) The Initial Purchaser will be a limited purpose
corporation whose primary activities are restricted in its
articles of incorporation to purchasing Pool Receivables from
each Originator (or other Persons approved in writing by the
Administrator), entering into agreements for the servicing of
such Pool Receivables, selling undivided interests in the Pool
Receivables to the Issuer and conducting such other activities
as it deems necessary or appropriate to carry out its primary
activities;
(ii) At least one member of the Initial Purchaser's
Board of Directors shall be an individual who is not a direct,
indirect or beneficial stockholder, officer, director,
employee, affiliate, associate, customer or supplier of any of
its Affiliates;
(iii) No director or officer of the Initial
Purchaser shall at any time serve as a trustee in
bankruptcy for any of its Affiliates;
(iv) Any employee, consultant or agent of the Initial
Purchaser will be compensated from the Initial Purchaser's own
bank accounts for services provided to the Initial Purchaser
except as provided in the Amended and Restated Receivables
Purchase Agreement in respect of the Servicing Fee. The
Initial Purchaser will engage no agents other than a Servicer
for the Pool Receivables, which Servicer (if an Affiliate)
will be fully compensated for its services to the Initial
Purchaser by payment of the Servicing Fee;
(v) The Initial Purchaser may incur indirect or
overhead expenses for items shared between the Initial
Purchaser and any of its Affiliates which are not reflected in
the Servicing Fee, such as legal, auditing and other
professional services, but such expenses will be allocated to
the extent practical on the basis of cost, it being understood
that each of the Originators and the Parent shall jointly and
severally pay all
III-5
<PAGE>
expenses relating to the preparation, negotiation,
execution and delivery of the Transaction Documents,
including legal and other fees;
(vi) The Initial Purchaser's operating expenses
will not be paid by any of its Affiliates;
(vii) The Initial Purchaser will have its own
separate telephone number, stationery and bank checks signed
by it and in its own name and, if it uses premises leased,
owned or occupied by any of its Affiliates, its portion of
such premises will be defined and separately identified and it
will pay such other Affiliates reasonable compensation for the
use of such premises;
(viii) The books and records of the Initial
Purchaser will be maintained separately from those of
its Affiliates;
(ix) The assets of the Initial Purchaser will be
maintained in a manner that facilitates their identification
and segregation from those of its Affiliates; and the Initial
Purchaser will strictly observe corporate formalities in its
dealings with each of its Affiliates;
(x) The Initial Purchaser shall not maintain joint
bank accounts with any of its Affiliates or other depository
accounts to which any of its Affiliates (other than O&M
Medical (or any of its Affiliates) in its capacity as the
Servicer under the Amended and Restated Purchase and Sale
Agreement or under the Amended and Restated Receivables
Purchase Agreement) has independent access;
(xi) The Initial Purchaser shall not, directly or
indirectly, be named and shall not enter into any agreement to
be named as a direct or contingent beneficiary or loss payee
on any insurance policy covering the property of any other O&M
Party or any Affiliate of any other O&M Party unless it pays a
proportional share of the premium relating to any such
insurance policy;
(xii) The Initial Purchaser will maintain arm'slength
relationships with each other O&M Party and each Affiliate of
such other O&M Party. Any of its Affiliates that renders or
otherwise furnishes services or merchandise to the Initial
Purchaser will be compensated by the Initial Purchaser at
market rates for such services or merchandise;
III-6
<PAGE>
(xiii) Neither the Initial Purchaser, on the one
hand, nor any other O&M Party or any of its Affiliates, on the
other hand, will be or will hold itself out to be responsible
for the debts of the other or the decisions or actions in
respect of the daily business and affairs of the other; and
(xiv) Every representation and warranty of each of
the O&M Parties contained in the Officer's Certificates (the
"Certificate") delivered in connection with the opinion of
Hunton & Williams pursuant to Section 1(j) of Exhibit II of
the Amended and Restated Receivables Purchase Agreement, a
true copy of which Certificate is attached hereto as Annex C,
is true and correct in all material respects as of the date
hereof; and each of the O&M Parties shall comply with all of
its respective covenants and other obligations set forth in
the Certificate.
III-7
<PAGE>
EXHIBIT IV
PURCHASE AND SALE TERMINATION EVENTS
Each of the following events or occurrences described in this Exhibit
IV shall constitute a "Purchase and Sale Termination Event":
(a) (i) the Servicer (if O&M Medical or any of its Affiliates)
shall fail to perform or observe any term, covenant or agreement under
any Transaction Document to which it is a party and such failure shall
continue for two Business Days or (ii) any Person which is the Servicer
shall fail to make when due any payment or deposit to be made by it
under any Transaction Document to which it is a party and such failure
shall continue for two Business Days; or
(b) Any Originator shall fail to make any payment required
under any Transaction Document to which it is a party within two
Business Days after the date on which such payment is due; or
(c) Any representation or warranty made or deemed to be made
by any Originator (or any of its officers) under or in connection with
any Transaction Document to which it is a party or any other
information or report delivered by such Originator or the Servicer
pursuant to the Amended and Restated Purchase and Sale Agreement shall
prove to have been incorrect or untrue in any material respect when
made or deemed made or delivered; or
(d) Any Originator shall fail to perform or observe any other
term, covenant or agreement contained in any Transaction Document to
which it is a party on its part to be performed or observed and such
failure shall remain unremedied for thirty (30) days after the earlier
of (A) the date when the chief financial officer, treasurer, assistant
treasurer or chief accounting officer of the applicable Originator (an
"Originator Financial Officer") of the applicable Originator shall have
knowledge thereof or (B) notice to the applicable Originator from the
Administrator; or
(e) The Amended and Restated Purchase and Sale Agreement shall
for any reason (other than pursuant to the terms thereof) (i) cease to
create in favor of the Initial Purchaser a valid and enforceable
perfected ownership interest in each Pool Receivable, the Related
Assets, and the items described in Section 1.2(c) of the Amended and
Restated Purchase and Sale Agreement, or (ii) cease to create, with
respect to the items described in Section 1.10(b) of the Amended and
Restated Purchase and Sale Agreement, a valid and enforceable ownership
interest in
IV-1
<PAGE>
favor of the Initial Purchaser, in each case free and clear
of any Adverse Claim; or
(f) Parent or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general
assignment for the benefit of creditors; or any proceeding shall be
instituted by or against Parent or any of its Subsidiaries seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding
up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief of debtors, or seeking the entry
of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part
of its property and, in the case of any such proceeding instituted
against it (but not instituted by it), either such proceeding
(including, without limitation, the entry of an order for relief
against, or the appointment of a receiver, trustee, custodian or other
similar official for, it or for any substantial part of its property)
shall occur; or Parent or any of its Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in
this clause (f); or
(g) As of the last day of any calendar month, either (i) the
Six Month Default Ratio shall exceed 4% or (ii) the Six Month Dilution
Ratio shall exceed 5% or (iii) the Six Month Loss-to-Liquidation Ratio
shall exceed 1.0% or (iv) the average of the Delinquency Ratios for the
six consecutive Month End Dates ending with such last day shall exceed
30%; or
(h) The Purchased Interest shall exceed 100%; or
(i) Any O&M Party shall contract, create, incur, assume or
permit to exist any Lien with respect to any of its property of assets
of any kind (whether real or personal, tangible or intangible), whether
now owned or after acquired, except for Permitted Liens; or
(j) The Tangible Net Worth of Initial Purchaser shall
at any time be less than $10,000,000; or
(k) Any Change of Control shall occur.
(l) A Termination Event of the type described in
Exhibit VI to the Amended and Restated Receivables Purchase
Agreement shall have occurred.
IV-2
<PAGE>
SCHEDULE I
TRADE NAMES AND LOCATIONS
IV-3
<PAGE>
TRADE NAMES AND LOCATIONS
Owens & Minor Medical, Inc.
Address: 4800 Cox Road
Richmond, Virginia 23060
Former Corporate Names:
Owens & Minor, Inc.
Stuart Medical, Inc.
Address: 4800 Cox Road
Richmond, Virginia 23060
Former Corporate Names:
Stuart's Drug and Surgical Supply, Inc.
Former Address:
1 Stuart Plaza
Donohue - Luxer Road
Greenburg, Pennsylvania 15601
IV-4
<PAGE>
SCHEDULE II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Applicable Originator Lock-Box Bank Lock-Box Account
<PAGE>
ANNEX A
FORM OF INITIAL PURCHASER NOTE
<PAGE>
NON-NEGOTIABLE PROMISSORY NOTE
____________, 199_
FOR VALUE RECEIVED, the undersigned, O&M FUNDING CORP., a Virginia
corporation (the "Initial Purchaser"), promises to pay to [NAME OF ORIGINATOR],
a ____________ corporation (the "Originator"), on the terms and subject to the
conditions set forth herein and in the Amended and Restated Purchase and Sale
Agreement referred to below, the aggregate unpaid Purchase Price of all
Receivables and Related Assets purchased and to be purchased by the Initial
Purchaser pursuant to the Purchase and Sale Agreement (subject to adjustment
pursuant to Section 1.8 of such Purchase and Sale Agreement). Such amount as
shown in the records of the Servicer will be rebuttable presumptive evidence of
the principal amount owing under this Note.
1. Purchase and Sale Agreement. This Note is an "Initial Purchaser
Note" described in, and is subject to the terms and conditions set forth in,
that certain Amended and Restated Purchase and Sale Agreement, dated as of May
__, 1996 (as the same may be amended, supplemented, or otherwise modified in
accordance with its terms, the "Purchase and Sale Agreement"), between the
Originators, the Servicer, and the Initial Purchaser. Reference is hereby made
to the Purchase and Sale Agreement for a statement of certain other rights and
obligations of the Initial Purchaser and the Originator. In the case of any
conflict between the terms of this Note and the terms of the Purchase and Sale
Agreement, the terms of the Purchase and Sale Agreement shall control.
2. Definitions. Capitalized terms used (but not defined)
herein have the meanings ascribed thereto in the Purchase and
Sale Agreement. In addition, as used herein, the following terms
have the following meanings:
"Final Maturity Date" means the date that falls ninety one
(91) days after the later of (x) the Purchase and Sale Termination Date
and (y) the Final Payout Date.
"Junior Liabilities" means all obligations of the Initial
Purchaser to the Originator under this Note.
"Senior Agent" means the Administrator.
"Senior Interests" means (a) the undivided percentage
ownership interests acquired by the Issuer pursuant to the Amended and
Restated Receivables Purchase Agreement and by the Administrative Agent
on behalf of the Parallel Purchasers pursuant to the Amended and
Restated Parallel Asset Purchase Agreement and (b) all obligations of
the Initial Purchaser to the
<PAGE>
Senior Interest Holders, howsoever created, arising or evidenced,
whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due on or before the Final Maturity Date.
"Senior Interest Holders" means, collectively, the Issuer, the
Administrator, the Administrative Agent, the Parallel Purchasers, each
Program Support Provider and their respective successors and assigns.
"Subordination Provisions" means, collectively,
clauses (a) through (k) of Section 7 hereof.
3. Interest. Subject to the Subordination Provisions, the Initial
Purchaser promises to pay interest on the aggregate unpaid principal amount of
this Note outstanding on each day (a) prior to the final payment in full and in
cash of the Senior Interests, at a variable rate per annum equal to the Discount
Rate Percentage, determined as of the then most recent Payment Date, and (b)
after such final payment, at a variable rate per annum equal to the Base Rate,
as determined by the Servicer.
4. Interest Payment Dates. Subject to the Subordination Provisions, the
Initial Purchaser shall pay accrued interest on this Note on January 2 and July
1 of each calendar year and on the Final Maturity Date (or, if any such day is
not a Business Day, the next succeeding Business Day). The Initial Purchaser
also shall pay accrued interest on the principal amount of each prepayment
hereof on the date of each such prepayment.
5. Basis of Computation. Interest accrued hereunder
shall be computed for the actual number of days elapsed on
the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination Provisions,
any unpaid principal of this Note shall be paid on the Final Maturity Date (or,
if such date is not a Business Day, the next succeeding Business Day). Subject
to the Subordination Provisions, the principal amount of and accrued interest on
this Note may be prepaid on any Business Day without premium or penalty.
7. Subordination Provisions. The Initial Purchaser covenants and
agrees, and the Originator, by its acceptance of this Note, likewise covenants
and agrees, that the payment of all Junior Liabilities is hereby expressly
subordinated in right of payment to the payment and performance of the Senior
Interests to the extent and in the manner set forth in the following clauses of
this Section :
-2-
<PAGE>
(a) No payment or other distribution of the Initial
Purchaser's assets of any kind or character, whether in cash,
securities, or other rights or property, shall be made on account of
this Note except to the extent such payment or other distribution is
made pursuant to Sections 4 or 6 of this Note;
(b) (i) In the event of any Insolvency Proceeding, and (ii) on
and after the occurrence of the Purchase and Sale Termination Date, the
Senior Interests shall first be paid and performed in full and in cash
before the Originator shall be entitled to receive and to retain any
payment or distribution in respect of the Junior Liabilities. In order
to implement the foregoing: (x) all payments and distributions of any
kind or character in respect of the Junior Liabilities to which the
Originator would be entitled except for this subsection shall be made
directly to the Senior Agent (for the benefit of the Senior Interest
Holders); and (y) the Originator hereby irrevocably agrees that the
Issuer (or the Senior Agent acting on its behalf) and the
Administrative Agent, in the name of the Originator or otherwise, may
demand, sue for, collect, receive and receipt for any and all such
payments or distributions, and file, prove and vote or consent in any
such Insolvency Proceeding with respect to any and all claims of the
Originator relating to the Junior Liabilities, in each case until the
Senior Interests shall have been paid and performed in full and in
cash.
(c) In the event that the Originator receives any payment or
other distribution of any kind or character from the Initial Purchaser
or from any other source whatsoever, in respect of the Junior
Liabilities, other than as expressly permitted by the terms of this
Note, such payment or other distribution shall be received in trust for
the Senior Interest Holders and shall be turned over by the Originator
to the Senior Agent (for the benefit of the Senior Interest Holders)
forthwith. All payments and distributions received by the Senior Agent
in respect of this Note, to the extent received in or converted into
cash, may be applied by the Senior Agent (for the benefit of the Senior
Interest Holders) first to the payment of any and all reasonable
expenses (including, without limitation, reasonable attorneys' fees and
other legal expenses) paid or incurred by the Senior Agent or the
Senior Interest Holders in enforcing these Subordination Provisions, or
in endeavoring to collect or realize upon the Junior Liabilities, and
any balance thereof shall, solely as between the Originator and the
Senior Interest Holders, be applied by the Senior Agent toward the
payment of the Senior Interests
-3-
<PAGE>
in a manner determined by the Senior Agent to be in accordance with the
Amended and Restated Receivables Purchase Agreement and the Amended and
Restated Parallel Asset Purchase Agreement; but as between the Initial
Purchaser and its creditors, no such payments or distributions of any
kind or character shall be deemed to be payments or distributions in
respect of the Senior Interests.
(d) Upon the final payment in full and in cash of all Senior
Interests, the Originator shall be subrogated to the rights of the
Senior Interest Holders to receive payments or distributions from the
Initial Purchaser that are applicable to the Senior Interests until the
Junior Liabilities are paid in full.
(e) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Originator, on the one
hand, and the Senior Interest Holders, on the other hand. Nothing
contained in the Subordination Provisions or elsewhere in this Note is
intended to or shall impair, as between the Initial Purchaser, its
creditors (other than the Senior Interest Holders) and the Originator,
the Initial Purchaser's obligation, which is unconditional and
absolute, to pay the Junior Liabilities as and when the same shall
become due and payable in accordance with the terms hereof and of the
Purchase and Sale Agreement or to affect the relative rights of the
Originator and creditors of the Initial Purchaser (other than the
Senior Interest Holders).
(f) The Originator shall not, until the Senior Interests have
been finally paid and performed in full and in cash, (i) cancel, waive,
forgive, transfer or assign, or commence legal proceedings to enforce
or collect, or subordinate to any obligation of the Initial Purchaser,
howsoever created, arising or evidenced, whether direct or indirect,
absolute or contingent, or now or hereafter existing, or due or to
become due, other than the Senior Interests, the Junior Liabilities, or
any rights in respect thereof or (ii) convert the Junior Liabilities
into an equity interest in the Initial Purchaser, unless, in the case
of each of clauses (i) and (ii) above, the Originator shall have
received the prior written consent of the Administrator in each case.
(g) The Originator shall not, without the advance written
consent of the Administrator and the Administrative Agent, commence, or
join with any other Person in commencing, any Insolvency Proceedings
with
-4-
<PAGE>
respect to the Initial Purchaser until at least one year and one day
shall have passed since the Senior Interests shall have been finally
paid and performed in full and in cash.
(h) If, at any time, any payment (in whole or in part) made
with respect to any Senior Interest is rescinded or must be restored or
returned by a Senior Interest Holder (whether in connection with any
Insolvency Proceedings or otherwise), these Subordination Provisions
shall continue to be effective or shall be reinstated, as the case may
be, as though such payment had not been made.
(i) Each of the Senior Interest Holders may, from time to
time, at its sole discretion, without notice to the Originator, and
without waiving any of its rights under these Subordination Provisions,
take any or all of the following actions: (i) retain or obtain an
interest in any property to secure any of the Senior Interests; (ii)
retain or obtain the primary or secondary obligations of any other
obligor or obligors with respect to any of the Senior Interests; (iii)
extend or renew for one or more periods (whether or not longer than the
original period), alter or exchange any of the Senior Interests, or
release or compromise any obligation of any nature with respect to any
of the Senior Interests; (iv) amend, supplement, or otherwise modify
any Transaction Document; and (v) release its security interest in, or
surrender, release or permit any substitution or exchange for all or
any part of any rights or property securing any of the Senior
Interests, or extend or renew for one or more periods (whether or not
longer than the original period), or release, compromise, alter or
exchange any obligations of any nature of any obligor with respect to
any such rights or property.
(j) The Originator hereby waives: (i) notice of acceptance of
these Subordination Provisions by any of the Senior Interest Holders;
(ii) notice of the existence, creation, non-payment or non-performance
of all or any of the Senior Interests; and (iii) all diligence in
enforcement, collection or protection of, or realization upon the
Senior Interests, or any thereof, or any security therefor.
(k) These Subordination Provisions constitute a continuing
offer from the Initial Purchaser to all Persons who become the holders
of, or who continue to hold, Senior Interests; and these Subordination
Provisions are made for the benefit of the Senior Interest Holders, and
the Administrator may proceed to
-5-
<PAGE>
enforce such provisions on behalf of each of such
Persons.
8. Amendments, Etc. No failure or delay on the part of the Originator
in exercising any power or right hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Note shall in any event be effective unless (a) the same shall
be in writing and signed and delivered by the Initial Purchaser and the
Originator, and (b) all consents required for such actions under the Transaction
Documents shall have been received by the appropriate Persons.
9. Limitation on Interest. Notwithstanding anything in this Note to the
contrary, the Initial Purchaser shall never be required to pay unearned interest
on any amount outstanding hereunder, and shall never be required to pay interest
on the principal amount outstanding hereunder, at a rate in excess of the
maximum interest rate that may be contracted for, charged or received without
violating applicable federal or state law.
10. No Negotiation. This Note is not negotiable.
11. Governing Law. THIS NOTE SHALL GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
PRINCIPLES THEREOF).
12. Captions. Paragraph captions used in this Note are
provided solely for convenience of reference only and shall
not affect the meaning or interpretation of any provision of
this Note.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed
by its officer thereunto duly authorized on the date first above written.
O&M FUNDING CORP., a Virginia
corporation
By:
Title:
-6-
<PAGE>
ANNEX B
FORM OF ORIGINATOR NOTE
<PAGE>
DEMAND NOTE
____________, 199_
The undersigned, [NAME OF ORIGINATOR], a ____________ corporation (the
"Originator"), for value received, promise to pay to the order of O&M FUNDING
CORP., a Virginia corporation (the "Initial Purchaser"), ON DEMAND, the
aggregate unpaid principal amount of all loans made by the Initial Purchaser to
the Originator (the "Originator Loans") together with accrued interest on such
amounts from time to time outstanding hereunder at the rate provided below. Such
amounts as shown in the records of the Servicer (as such term is defined in the
Purchase and Sale Agreement referred to below) will be rebuttable presumptive
evidence of the principal amount owing under this Demand Note.
The unpaid principal amount of each Originator Loan from time to time
outstanding shall bear interest (which also shall be payable ON DEMAND) from
(and including) the date on which such Originator Loan was made to (but
excluding) the date on which such Originator Loan is paid in full (a) prior to
the final payment in full and in cash of the Senior Interests (as such term is
defined in the Initial Purchaser Note), at a variable rate per annum equal to
the Discount Rate Percentage, determined as of the then most recent Payment
Date, and (b) after such final payment, at a variable rate per annum equal to
the Base Rate, as determined by the Servicer. Interest hereunder shall be
computed for the actual number of days elapsed on the basis of a year consisting
of 365 or, where appropriate, 366 days.
This Demand Note is an Originator Note described in, and is subject to
the terms and conditions set forth in, that certain Amended and Restated
Purchase and Sale Agreement, dated as of May __, 1996 (as the same may at any
time be amended, supplemented, or otherwise modified from time to time in
accordance with its terms, the "Purchase and Sale Agreement"), between the
Originators, the Servicer, and the Initial Purchaser. Reference is hereby made
to the Purchase and Sale Agreement for a statement of certain other rights and
obligations of the Initial Purchaser. All capitalized terms used but not
otherwise defined herein have the meanings assigned thereto in the Purchase and
Sale Agreement.
All payments of principal and interest hereunder are to be made in
lawful money of the United States of America in same day funds to the account
designated from time to time by the Servicer to the Initial Purchaser.
-1-
<PAGE>
In addition to and not in limitation of the foregoing, the Originator
further agrees, subject to any limitation imposed by applicable law, to pay all
expenses, including without limitation reasonable Attorney Costs, incurred by
the holder of this Demand Note in seeking to collect any amounts payable
hereunder which are not paid when due.
No failure or delay on the part of the Initial Purchaser or any other
holder of this Demand Note in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power or right preclude any other or further exercise thereof or the
exercise of any other power or right. No notice to or demand on the Originator
shall entitle it to any notice or demand in similar or other circumstances. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Demand Note shall in any event be effective unless (i) the same shall be
in writing and signed and delivered by the holder hereof and (ii) all consents
required for such action under the Transaction Documents shall have been given
by the appropriate Persons.
Upon the occurrence of any Insolvency Proceeding with respect to the
Originator, the principal balance hereof and all interest accrued hereon shall
be immediately due and payable, without demand, presentment, protest or notice
of dishonor.
Notwithstanding anything in this Demand Note to the contrary, the
Originator shall never be required to pay unearned interest on any amount
outstanding hereunder, and shall never be required to pay interest on the
principal amount outstanding hereunder, at a rate in excess of the maximum
nonusurious interest rate that may be contracted for, charged or received under
applicable federal or state law.
THIS DEMAND NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAWS PRINCIPLES THEREOF).
[NAME OF ORIGINATOR]
By:
Title:
-2-
<PAGE>
ANNEX C
OPINION CERTIFICATE
-3-
Exhibit 10(b)
DRAFT 5/28/96
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
among
O&M FUNDING CORP.
as Seller,
OWENS & MINOR MEDICAL, INC.,
as Servicer,
OWENS & MINOR, INC.,
as Parent and Guarantor,
RECEIVABLES CAPITAL CORPORATION,
as Issuer
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrator
Dated as of May 28, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Page
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility......................................................................2
Section 1.2. Making Purchases.......................................................................2
Section 1.3. Purchased Interest Computation.........................................................3
Section 1.4. Settlement Procedures..................................................................3
Section 1.5. Fees...................................................................................7
Section 1.6. Payments and Computations, Etc.........................................................7
Section 1.7. Dividing or Combining Portions of the Capital
of the Purchased Interest..............................................................8
Section 1.8. Increased Costs........................................................................8
Section 1.9. Additional Discount on Portions of Purchased
Interest Bearing a Eurodollar Rate.....................................................9
Section 1.10. Requirements of Law................................................................................9
Section 1.11. Inability to Determine Eurodollar Rate............................................................10
ARTICLE II.
REPRESENTATIONS AND WARRANTIES;
COVENANTS; TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants.............................................11
Section 2.2. Termination Events....................................................................11
ARTICLE III.
INDEMNIFICATION
Section 3.1. Indemnities by the Seller.............................................................12
Section 3.2. Parent's Performance Guaranty.........................................................17
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer...............................................................19
Section 4.2. Duties of Servicer....................................................................20
Section 4.3. Lock-Box Arrangements.................................................................22
Section 4.4. Enforcement Rights....................................................................23
Section 4.5. Responsibilities of Seller and O&M Medical............................................24
Section 4.6. Servicing Fee.........................................................................24
-i-
ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc.......................................................................24
Section 5.2. Notices, Etc..........................................................................25
Section 5.3. Assignability; Restrictions on Assignability..........................................25
Section 5.4. Costs and Expenses....................................................................26
Section 5.5. No Proceedings; Limitation on Payments................................................27
Section 5.6. Confidentiality.......................................................................27
Section 5.7. GOVERNING LAW AND JURISDICTION........................................................28
Section 5.8. Execution in Counterparts.............................................................28
Section 5.9. Survival of Termination...............................................................28
Section 5.10. WAIVER OF JURY TRIAL..............................................................................28
Section 5.11. Entire Agreement..................................................................................29
Section 5.12. Headings..........................................................................................29
Section 5.13. Issuer's Liabilities..............................................................................29
Section 5.14. Treatment of Purchased Interest for Tax
Purposes..............................................................................29
</TABLE>
EXHIBIT I DEFINITIONS
EXHIBIT II CONDITIONS OF PURCHASES
EXHIBIT III REPRESENTATIONS AND WARRANTIES OF SELLER, SERVICER
EXHIBIT IV REPRESENTATIONS AND WARRANTIES OF ISSUER
EXHIBIT V COVENANTS
EXHIBIT VI TERMINATION EVENTS
SCHEDULE I CREDIT AND COLLECTION POLICY
SCHEDULE II PERMITTED LIENS
SCHEDULE III TRADE NAMES AND LOCATIONS
ANNEX A FORM OF LOCK-BOX AGREEMENT
ANNEX B FORM OF HUNTON & WILLIAMS OPINION
ANNEX C FORM OF CORPORATE COUNSEL'S OPINION
ANNEX D OPINION CERTIFICATE
-ii-
<PAGE>
AMENDED AND RESTATED
RECEIVABLES PURCHASE AGREEMENT
This AMENDED AND RESTATED RECEIVABLES PURCHASE AGREEMENT (this
"Amended and Restated Receivables Purchase Agreement" or this "Agreement") is
entered into as of May 28, 1996 among O&M FUNDING CORP., a Virginia corporation,
as seller (the "Seller"), OWENS & MINOR MEDICAL, INC. ("O&M Medical"), a
Virginia corporation, as initial servicer (in such capacity, together with its
successors and permitted assigns in such capacity, the "Servicer"), OWENS &
MINOR, INC., a Virginia corporation, as parent and guarantor (the "Parent"),
RECEIVABLES CAPITAL CORPORATION, a Delaware corporation (together with its
successors and permitted assigns, the "Issuer"), and BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, a national banking association, as Administrator
(in such capacity, together with its successors and assigns in such capacity,
the "Administrator") for the Issuer pursuant to an agreement between the Issuer
and the Administrator.
PRELIMINARY STATEMENTS.
1. Certain terms that are capitalized and used throughout this
Agreement are defined in Exhibit I to this Agreement. References in the Exhibits
hereto to "the Agreement" refer to this Agreement, as amended, modified or
supplemented from time to time.
2. The Seller, the Servicer, the Parent, the Issuer and the
Administrator have entered into a Receivables Purchase Agreement (the "Existing
Receivables Agreement") dated as of December 28, 1995. Such Parties wish to
amend and restate the Existing Receivables Agreement as set forth herein.
3. The Seller desires to sell, transfer and assign an undivided
variable percentage interest in a pool of receivables, and the Issuer may, from
time to time, in its sole discretion, acquire such undivided variable percentage
interest, as such percentage interest shall be adjusted from time to time based
upon, in part, reinvestment payments which are made by the Issuer and additional
incremental payments made to the Seller.
4. The Issuer expects generally to fund its purchases and reinvestments
in the Receivables Pool hereinafter through the issuance of Notes. The Issuer
has also entered into one or more Program Support Agreements under which a
Program Support Provider or Providers may purchase Purchased Interests (or
portions thereof), make loans to the Issuer or otherwise provide funds to the
Issuer or for the Issuer's account (which loans or fundings may or may not be
secured by Purchased Interests (or portions
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thereof)) in the event the Issuer hereunder is unable to fund its purchases or
reinvestments pursuant to this Agreement by the issuance of Notes or otherwise
prefers to fund such purchases or reinvestments under any Program Support
Agreement rather than by the issuance of Notes, or is unable to pay such Notes
at maturity from the proceeds of collections from Pool Receivables in which it
holds a Purchased Interest hereunder.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree that the Existing Receivables
Agreement is amended and restated, effective as of the Restatement Effective
Date, to read in full as follows:
ARTICLE I.
AMOUNTS AND TERMS OF THE PURCHASES
Section 1.1. Purchase Facility. (a) On the terms and conditions
hereinafter set forth, the Issuer may, in its sole discretion, purchase and make
reinvestments in the Purchased Interest from the Seller from time to time during
the period from the date hereof to the Facility Termination Date. Under no
circumstances shall the Issuer make any such purchase or reinvestment if after
giving effect to such purchase or reinvestment the aggregate outstanding Capital
of the Purchased Interest, together with the aggregate outstanding Capital of
Purchased Interests under the Amended and Restated Parallel Asset Purchase
Agreement, would exceed the Purchase Limit. Nothing in this Agreement shall be
deemed to be or construed as a commitment by the Issuer to purchase or reinvest
in the Purchased Interest. Issuer will notify Seller if it decides not to
purchase or reinvest under this Agreement on any day.
(b) The Seller may, upon at least 10 Business Days' notice to the
Administrator, terminate the purchase facility provided in this Section 1 in
whole or, from time to time, irrevocably reduce in part the unused portion of
the Purchase Limit; provided that each partial reduction shall be in the amount
of at least $5,000,000 or an integral multiple of $1,000,000 in excess thereof.
Termination of the purchase facility in whole shall cause the Termination Date
to occur.
Section 1.2. Making Purchases. (a) Each purchase (but not
reinvestments) of the Purchased Interest hereunder shall be made upon the
Seller's irrevocable written notice delivered to the Administrator in accordance
with Section 5.2 (which notice must be received by the Administrator prior to
noon, New York City time) (i) three Business Days prior to the requested
purchase date, in the case of a purchase to be funded at the Alternate Rate and
based on the Eurodollar Rate, (ii) one Business Day prior to the requested
purchase date, in the case of a purchase to be funded at the Alternate Rate and
based on the Base Rate and
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(iii) two Business Days prior to the requested purchase date, in the case of a
purchase to be funded at the CP Rate, which notice shall specify (A) the amount
requested to be paid to the Seller (such amount, which shall not be less than
$1,000,000, being the "Capital" relating to the undivided ownership interest
then being purchased), (B) the date of such purchase (which shall be a Business
Day) and (C) the desired funding basis for such purchase (which shall be either
the Alternate Rate or the CP Rate) and the desired duration of the initial Fixed
Period(s) for such purchase. The Administrator shall promptly thereafter notify
the Seller whether such terms are acceptable to the Issuer and whether the
Issuer is willing to make such a purchase.
(b) On the date of each purchase (but not reinvestment) of undivided
ownership interests with regard to the Purchased Interest hereunder, the Issuer
shall, if it is willing to make such purchase, upon satisfaction of the
applicable conditions set forth in Exhibit II hereto, make available to the
Seller in same day funds, at Crestar Bank, account # 201334771, ABA # 051000020
an amount equal to the Capital relating to the undivided ownership interest then
being purchased.
(c) Effective on the date of each purchase pursuant to this Section 1.2
and each reinvestment pursuant to Section 1.4, the Seller hereby sells and
assigns to the Issuer an undivided percentage ownership interest in (i) each
Pool Receivable then existing, (ii) all Related Security with respect to such
Pool Receivables, and (iii) Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security.
(d) To secure all of the Seller's obligations (monetary or otherwise)
under this Agreement and the other Transaction Documents to which it is a party,
whether now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent, the Seller hereby grants to the Administrator,
for its benefit and the benefit of the Issuer, a security interest in all of the
Seller's right, title and interest (including without limitation any undivided
interest of the Seller) in, to and under all of the following, whether now or
hereafter owned, existing or arising (A) all Pool Receivables, (B) all Related
Security with respect to each such Pool Receivable, (C) all Collections with
respect to each such Receivable, (D) the Lock Box Accounts and all amounts on
deposit therein and all certificates and instruments, if any, from time to time
evidencing such Lock Box Accounts and amounts on deposit therein, and (E) all
proceeds of, and all amounts received or receivable under any or all of, the
foregoing. The Administrator and the Issuer shall have, with respect to the
property described in this Section 1.2(d), and in addition to all the other
rights and remedies available to the Administrator and the Issuer, all the
rights and remedies of a secured party under any applicable UCC. The
Administrator and the Issuer acknowledge that the
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Seller shall contemporaneously herewith grant an identical security interest in
the same collateral as described in the first sentence of this Section 1.2(d),
to the Administrative Agent, for its benefit and the benefit of the Parallel
Purchasers under the Amended and Restated Parallel Asset Purchase Agreement and
that the respective rights of the Administrator, the Issuer, the Administrative
Agent and the Parallel Purchasers with respect thereto shall be governed by the
Amended and Restated Intercreditor Agreement.
Section 1.3. Purchased Interest Computation. The Purchased Interest was
initially computed on the date of the initial purchase under the Existing
Receivables Agreement and shall be recomputed on the date of the initial
purchase hereunder. Thereafter until the Termination Date, the Purchased
Interest shall be automatically recomputed (or deemed to be recomputed) on each
Business Day other than a Run-off Day. The Purchased Interest, as computed (or
deemed recomputed) as of the day immediately preceding the Termination Date,
shall thereafter remain constant. The Purchased Interest shall become zero when
the Capital thereof and Discount thereon shall have been paid in full, all the
amounts owed by the Seller hereunder to the Issuer, the Administrator, and any
other Indemnified Party or Affected Person, are paid in full and the Servicer
shall have received the accrued Servicing Fee thereon.
Section 1.4. Settlement Procedures. (a) Collection of the Pool
Receivables shall be administered by the Servicer in accordance with the terms
of this Agreement. The Seller shall provide to the Servicer on a timely basis
all information needed for such administration, including notice of the
occurrence of any Run-off Day and current computations of the Purchased
Interest.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or Servicer:
(i) set aside and hold in trust (and, at the request of the
Administrator, segregate) for the Issuer, out of the percentage of such
Collections represented by the Purchased Interest, first an amount
equal to the Discount accrued through such day for each Portion of
Capital and not previously set aside and second, to the extent funds
are available therefor, an amount equal to the Servicing Fee determined
in accordance with Section 4.6 accrued through such day for the
Purchased Interest which was not previously set aside; and
(ii) subject to Section 1.4(f), if such day is not a Run-off
Day, remit to the Seller, on behalf of the Issuer, the remainder of the
percentage of such Collections,
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represented by the Purchased Interest, to the extent representing a
return of Capital; such Collections shall be automatically reinvested
in Pool Receivables, and in the Related Security and Collections and
other proceeds with respect thereto, and the Purchased Interest shall
be automatically recomputed pursuant to Section 1.3;
(iii) if such day is a Run-off Day, (x) set aside, segregate
and hold in trust for the Issuer the entire remainder of the percentage
of the Collections represented by the Purchased Interest; provided that
if amounts are set aside and held in trust on any Run-off Day and
thereafter, the conditions set forth in Section 2 of Exhibit II are
satisfied or are waived by the Administrator, such previously set aside
amounts shall, to the extent representing a return of Capital, be
reinvested in accordance with the preceding paragraph (ii) on the day
of such subsequent satisfaction or waiver of conditions; and (y)
transfer the Seller's share of the Collections to the Seller;
(iv) during such times as amounts are required to be
reinvested in accordance with the foregoing paragraph (ii) or the
proviso to paragraph (iii), release to the Seller (subject to Section
1.4(f)) for its own account any Collections in excess of (x) such
amounts, (y) the amounts that are required to be set aside pursuant to
paragraph (i) above and (z) any other Obligations of the Seller
hereunder which are then due and owing.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrator), on the last day of each
Settlement Period relating to a Portion of Capital (or at such other times as
the Administrator shall require), Collections held for the Issuer pursuant to
Section 1.4(b)(i) or Section 1.4(f) with respect to such Portion of Capital and
the lesser of (x) the amount of Collections then held for the Issuer pursuant to
Section 1.4(b)(iii) and (y) such Portion of Capital.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to Section 1.4(c) with respect to any Portion of Capital, the
Administrator shall cause such funds to be distributed as follows:
(i) if such distribution occurs on a day that is not a Run-off
Day, first to the Issuer in payment in full of (x) all accrued Discount
with respect to such Portion of Capital and (y) an amount equal to the
amount of any reduction of such Portion of Capital pursuant to Section
1.4(f), if any, and second, if the Servicer has set aside amounts in
respect of the Servicing Fee pursuant to Section 1.4(b)(i), to the
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Servicer (payable in arrears on the last day of each calendar month) in
payment in full of accrued Servicing Fees so set aside with respect to
such Portion of Capital; and
(ii) if such distribution occurs on a Run-off Day, first to
the Issuer in payment in full of all accrued Discount with respect to
such Portion of Capital, second to the Issuer in payment in full of
such Portion of Capital, third, if the Servicer is not O&M Medical or
an Affiliate thereof, to the Servicer in payment in full of all accrued
Servicing Fees with respect to such Portion of Capital, fourth, if the
Capital and accrued Discount with respect to each Portion of Capital
has been reduced to zero, and all accrued Servicing Fees payable to the
Servicer (if other than O&M Medical or an Affiliate thereof) have been
paid in full, to the Issuer, the Administrator and any other
Indemnified Party or Affected Person in payment in full of any other
amounts owed thereto by the Seller hereunder and then to the Servicer
(if O&M Medical or an Affiliate thereof is the Servicer) in payment in
full of all accrued Servicing Fees.
After the Capital and Discount and Servicing Fees with respect to the Purchased
Interest, and any other amounts payable by the Seller to the Issuer, the
Administrator or any other Indemnified Party or Affected Person hereunder, have
been paid in full, all additional Collections with respect to the Purchased
Interest shall be paid to the Seller for its own account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed goods or services, or any
discount or other adjustment made by the Seller, or any setoff or
dispute between the Seller and an Obligor, or any credit memorandum, or
any billing error, but not including reductions or adjustments in
respect of finance charges (any of the foregoing reductions or
adjustments being herein called a "Dilution Adjustment"), the Seller
shall be deemed to have received on such day a Collection of such Pool
Receivable in the amount of such reduction or adjustment;
(ii) if on any day any of the representations or warranties in
paragraphs (g) or (n) of Exhibit III is not true with respect to any
Pool Receivable, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in full;
(iii) except as provided in paragraph (i) or (ii) of
this Section 1.4(e), or as otherwise required by applicable
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law or the relevant Contract, all Collections received from an Obligor
of any Receivable shall be applied to the Receivables of such Obligor
in the order of the age of such Receivables, starting with the oldest
such Receivable, unless such Obligor designates in writing its payment
for application to specific Receivables; and
(iv) if and to the extent the Administrator or the Issuer
shall be required for any reason to pay over to an Obligor (or any
trustee, receiver, custodian or similar official in any Insolvency
Proceeding) any amount received by it hereunder, such amount shall be
deemed not to have been so received but rather to have been retained by
the Seller and, accordingly, the Administrator or the Issuer, as the
case may be, shall have a claim against the Seller for such amount,
payable when and to the extent that any distribution from or on behalf
of such Obligor is made in respect thereof.
(f) Except for reductions in connection with the division or
combination of Portions of Capital pursuant to Section 1.7 hereof or pursuant to
any other Purchase Agreement, if at any time the Seller shall wish to cause the
reduction of a Portion of Capital (but not to commence the liquidation, or
reduction to zero, of the entire Capital of the Purchased Interest), the Seller
may do so as follows:
(i) the Seller shall give the Administrator at least five
Business Days' prior written notice thereof (including the amount of
such proposed reduction and the proposed date on which such reduction
will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, the Servicer shall cause Collections with
respect to such Portion of Capital not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of
reduction, and
(iii) the Servicer shall hold such Collections in trust for
the Issuer, for payment to the Administrator on the last day of the
current Settlement Period relating to such Portion of Capital, and the
applicable Portion of Capital shall be deemed reduced in the amount to
be paid to the Administrator only when in fact finally so paid;
provided that,
A. the amount of any such reduction shall be not less
than $1,000,000 and shall be an integral multiple of
$100,000, and the entire Capital of the Purchased Interest
after giving effect to such reduction shall be not less than
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$10,000,000 and shall be in an integral multiple of
$1,000,000,
B. the Seller shall choose a reduction amount, and the
date of commencement thereof, so that to the extent
practicable such reduction shall commence and conclude in
the same Fixed Period, and
C. if two or more Portions of Capital shall be outstanding at
the time of any proposed reduction, such proposed reduction shall be
applied, unless the Seller shall otherwise specify in the notice given
pursuant to Section 1.4(f)(i), to the Portion of Capital with the
shortest remaining Fixed Period.
Section 1.5. Fees. The Seller shall pay to the Administrator certain
fees in the amounts and on the dates set forth in a letter dated May 28, 1996
between the Seller and the Administrator, as such letter agreement may be
amended, supplemented or otherwise modified from time to time.
Section 1.6. Payments and Computations, Etc. (a) All amounts to be paid
or deposited by the Seller or the Servicer hereunder shall be paid or deposited
no later than 1:00 p.m. (New York City time) on the day when due in same day
funds to the Administration Account. All amounts received after 1:00 p.m. (New
York City time) will be deemed to have been received on the immediately
succeeding Business Day.
(b) The Seller shall, to the extent permitted by law, pay interest on
any amount not paid or deposited by the Seller (whether as Servicer or
otherwise) when due hereunder, at an interest rate equal to 2.0% per annum above
the Base Rate, payable on demand.
(c) All computations of interest under subsection (b) above and all
computations of Discount, fees, and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
Section 1.7. Dividing or Combining Portions of the Capital of the
Purchased Interest. The Seller may, on the last day of any Fixed Period, either
(i) divide the Capital of the Purchased Interest into two or more portions
(each, a "Portion of Capital") equal, in aggregate, to the Capital of the
Purchased Interest, provided that after giving effect to such division the
amount of each such Portion of Capital shall not be less than $5,000,000, or
(ii) combine any two or more Portions of Capital outstanding
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on such last day and having Fixed Periods ending on such last day into a single
Portion of Capital equal to the aggregate of the Capital of such Portions of
Capital.
Section 1.8. Increased Costs. (a) If the Administrator, the Issuer, any
Purchaser, any other Program Support Provider or any of their respective
Affiliates (each an "Affected Person") determines that the existence of or
compliance with (i) any law or regulation or any change therein or in the
interpretation or application thereof, in each case adopted, issued or occurring
after the date hereof or (ii) any request, guideline or directive from any
central bank or other Governmental Authority (whether or not having the force of
law) issued or occurring after the date of this Agreement affects or would
affect the amount of capital required or expected to be maintained by such
Affected Person (and is not a change by way of imposition or increase of reserve
requirements referred to in Section 1.9) and such Affected Person determines
that the amount of such capital is increased by or based upon the existence of
any commitment to make purchases of or otherwise to maintain the investment in
Pool Receivables related to this Agreement or any related liquidity facility or
credit enhancement facility and other commitments of the same type, then, upon
demand by such Affected Person within 180 days after such determination and from
time to time thereafter (with a copy to the Administrator), the Seller shall
immediately pay to the Administrator, for the account of such Affected Person,
from time to time as specified by such Affected Person, additional amounts
sufficient to compensate such Affected Person in the light of such
circumstances, to the extent that such Affected Person reasonably determines
such increase in capital to be allocable to the existence of any of such
commitments. A certificate as to such amounts submitted to the Seller and the
Administrator by such Affected Person shall be conclusive and binding for all
purposes, absent prima facia error.
(b) If, due to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve requirements referred to
in Section 1.9) in or in the interpretation of any law or regulation or (ii)
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Affected Person of agreeing to purchase or
purchasing, or maintaining the ownership of the Purchased Interest in respect of
which Discount is computed by reference to the Eurodollar Rate (excluding,
however, any increase in the cost to such Affected Person due to the imposition
of any tax on such Affected Person), then, upon written demand by such Affected
Person no later than 180 days after such Affected Person shall determine the
amount of any increased cost and from time to time thereafter, the Seller shall
promptly pay to such Affected Person, from time to time as specified, additional
amounts reasonably determined by such
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Affected Person to be sufficient to compensate such Affected Person for such
increased costs. A certificate as to such amounts submitted to the Seller by
such Affected Person shall be conclusive and binding for all purposes, absent
prima facia error.
Section 1.9. Additional Discount on Portions of Purchased Interest
Bearing a Eurodollar Rate. The Seller shall pay to any Affected Person, so long
as such Affected Person shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional Discount on the unpaid Capital of the applicable Portion of Capital
during each Fixed Period in respect of which Discount is computed by reference
to the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all
times during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing
such Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Reserve Percentage for such Fixed Period, payable on
each date on which Discount is payable on the applicable Portion of Capital.
Such additional Discount shall be reasonably determined by the Affected Person
and notified to the Seller through the Administrator within 90 days after any
Discount payment is made with respect to which such additional Discount is
requested. A certificate as to such additional Discount submitted to the Seller
by the Affected Person shall be conclusive and binding for all purposes, absent
prima facia error.
Section 1.10. Requirements of Law. In the event that any Affected
Person determines that the existence of or compliance with (a) any law or
regulation or any change therein or in the interpretation or application
thereof, in each case adopted, issued or occurring after the date hereof or (b)
any request, guideline or directive from any central bank or other Governmental
Authority (whether or not having the force of law) issued or occurring after the
date of this Agreement:
(i) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, purchases, advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Affected
Person which are not otherwise included in the determination of the
Eurodollar Rate or the Base Rate hereunder; or
(ii) does or shall impose on such Affected Person any
other condition;
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and the result of any of the foregoing is (x) to increase the cost to such
Affected Person of acting as Administrator, or of agreeing to purchase or
purchasing or maintaining the ownership of undivided ownership interests with
regard to the Purchased Interest (or interests therein) or any Portion of
Capital in respect of which Discount is computed by reference to the Eurodollar
Rate or the Base Rate except to the extent such increase in cost is due to the
imposition of any tax on such Affected Person or (y) to reduce any amount
receivable hereunder (whether directly or indirectly) funded or maintained by
reference to the Eurodollar Rate or the Base Rate except to the extent that such
reduced amount receivable is due to the imposition of any tax on such Affected
Person, then, in any such case, upon written demand by such Affected Person no
later than 180 days after such Affected Person shall determine the amount of any
such increased cost or reduced amount, and from time to time thereafter, the
Seller shall promptly pay such Affected Person any additional amounts necessary
to compensate such Affected Person for such increased cost or reduced amount
receivable. All such amounts shall be payable as incurred. A written certificate
delivered by such Affected Person to the Seller certifying, in reasonably
specific detail, the basis for, calculation of, and amount of such increased
costs or reduced amount receivable shall be conclusive in the absence of prima
facia error; provided, however, that no Affected Person shall be required to
disclose any confidential or tax planning information in any such certificate.
Section 1.11. Inability to Determine Eurodollar Rate. In the event that
the Administrator shall have determined prior to the first day of any Fixed
Period (which determination shall be conclusive and binding upon the parties
hereto) by reason of circumstances affecting the interbank Eurodollar market,
either (a) dollar deposits in the relevant amounts and for the relevant Fixed
Period are not available, (b) adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Fixed Period or (c) the Eurodollar
Rate determined pursuant hereto does not accurately reflect the cost to the
Issuer (as conclusively determined by the Administrator) of maintaining any
Portion of Capital during such Fixed Period, the Administrator shall promptly
give telephonic notice of such determination, confirmed in writing, to the
Seller prior to the first day of such Fixed Period. Upon delivery of such notice
(a) no Portion of Capital shall be funded thereafter at the Alternate Rate
determined by reference to the Eurodollar Rate, unless and until the
Administrator shall have given notice to the Seller that the circumstances
giving rise to such determination no longer exist, and (b) with respect to any
outstanding Portions of Capital then funded at the Alternate Rate determined by
reference to the Eurodollar Rate, such Alternate Rate shall automatically be
converted to the Alternate Rate determined by reference to the
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Base Rate at the respective last days of the then current Fixed Periods relating
to such Portions of Capital.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES;
COVENANTS; TERMINATION EVENTS
Section 2.1. Representations and Warranties; Covenants. (a) The Seller
and the Parent hereby jointly and severally make the representations and
warranties set forth in Exhibit III, and hereby jointly and severally agree that
the covenants set forth in Exhibit V will be performed and observed.
(b) The Issuer hereby makes the representations and warranties set
forth in Exhibit IV hereto.
Section 2.2. Termination Events. If any of the Termination Events set
forth in Exhibit VI hereto shall occur, the Administrator may, by notice to the
Seller, declare the Facility Termination Date to have occurred (in which case
the Facility Termination Date shall be deemed to have occurred); provided that,
automatically upon the occurrence of any event (without any requirement for the
passage of time or the giving of notice) described in subsection (g) of Exhibit
VI, the Facility Termination Date shall occur; provided, further, that, in the
case of a Termination Event described in subsection (j) of Exhibit VI, the
Facility Termination Date shall be deemed to have occurred on the Business Day
following the date of such notice unless such Termination Event is cured during
the intervening period. Upon any such declaration, occurrence or deemed
occurrence of the Facility Termination Date, the Issuer and the Administrator
shall have, in addition to the rights and remedies which they may have under
this Agreement, all other rights and remedies provided after default under the
UCC and under other applicable law, which rights and remedies shall be
cumulative.
ARTICLE III.
INDEMNIFICATION; PERFORMANCE GUARANTY
Section 3.1. Indemnities by the Seller. (a) Without limiting any other
rights that any Securitization Party (each, an "Indemnified Party") may have
hereunder or under applicable law, the Seller and the Parent hereby jointly and
severally agree to indemnify each Indemnified Party from and against any and all
claims, damages, expenses, losses and liabilities (including Attorney Costs)
(all of the foregoing being collectively referred to as "Indemnified Amounts")
arising out of or resulting from this Agreement (whether directly or indirectly)
or the use of
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proceeds of purchases or reinvestments or the ownership of the Purchased
Interest, or any interest therein, or in respect of any Receivable or any
Contract, excluding, however, (1) Indemnified Amounts to the extent resulting
from gross negligence or willful misconduct on the part of such Indemnified
Party, (2) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables, or (3) any taxes imposed on such
Indemnified Party. Without limiting or being limited by the foregoing, and
subject to the exclusions set forth in the preceding sentence, the Seller shall
pay to each Indemnified Party (within three Business Days after written demand
for such indemnification) any and all amounts necessary to indemnify such
Indemnified Party from and against any and all Indemnified Amounts relating to
or resulting from any of the following:
(i) the failure of any Receivable included in the calculation
of the Net Receivables Pool Balance as an Eligible Receivable to be an
Eligible Receivable, the failure of any information contained in a
Seller Report to be true and correct, or the failure of any other
information provided to the Issuer or the Administrator with respect to
Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty or
statement made or deemed made by the Seller (or any of its officers),
as Servicer or otherwise, under or in connection with this Agreement to
have been true and correct in all respects when made;
(iii) the failure by the Seller, as Servicer or otherwise, to
comply with any applicable law, rule or regulation with respect to any
Pool Receivable or the related Contract; or the failure of any Pool
Receivable or the related Contract to conform to any such applicable
law, rule or regulation;
(iv) the failure to vest (A) in the Issuer a valid and
enforceable perfected undivided percentage ownership interest, to the
extent of the Purchased Interest, in the Receivables in, or purporting
to be in, the Receivables Pool and the Related Security and Collections
with respect thereto and (B) in the Administrator, on its behalf and on
behalf of the Issuer, a first priority perfected security interest in
the items described in Section 1.2(d), in each case, free and clear of
any Adverse Claim;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool and the Related Security and Collections in respect thereof,
whether at the
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time of any purchase or reinvestment or at any subsequent
time;
(vi) any dispute, claim, offset or defense or claim of billing
error, (other than discharge in bankruptcy of the Obligor) of the
Obligor to the payment of any Receivable in, or purporting to be in,
the Receivables Pool (including, without limitation, a defense based on
such Receivable or the related Contract not being a legal, valid and
binding obligation of such Obligor enforceable against it in accordance
with its terms), or any other claim resulting from the sale of the
goods or services related to such Receivable or the furnishing, failure
to furnish, or agreement to accept returns of, such goods or services
or relating to collection activities with respect to such Receivable
(if such collection activities were performed by the Seller or any of
its Affiliates acting as Servicer or by any agent or independent
contractor retained by the Seller or any of its Affiliates);
(vii) any failure of the Seller, as Servicer or otherwise, to
perform its duties or obligations in accordance with the provisions
hereof or to perform its duties or obligations under the Contracts;
(viii) any breach of warranty, products liability or other
claim, investigation, litigation or proceeding arising out of or in
connection with merchandise, insurance or services which are the
subject of any Contract;
(ix) the commingling of any portion of Collections of
Pool Receivables relating to the Purchased Interest at any
time with other funds;
(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments or
the ownership of the Purchased Interest or in respect of any
Receivable, Related Security or Contract; or
(xi) any reduction in Capital as a result of the distribution
of Collections pursuant to Section 1.4(d), in the event that all or a
portion of such distributions shall thereafter be rescinded or
otherwise must be returned for any reason.
(b) Taxes. (i) Any and all payments made hereunder to an Affected
Person shall be made free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or withholdings,
and all liabilities with respect thereto excluding: (A) taxes imposed on or
measured by all or part of the gross or net income (but not including any
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such tax in the nature of a withholding tax) of such Affected Person by the
jurisdiction under the laws of which such Affected Person is organized or has
its applicable lending office or any political subdivision of any thereof and
(B) taxes that would not have been imposed if the only connection between such
Affected Person and the jurisdiction imposing such taxes was the activities of
such Affected Person pursuant to or in respect of this Agreement (including
entering into, lending money or extending credit pursuant to, receiving payments
under, or enforcing this Agreement) (all such excluded taxes, levies, imposts,
deductions, changes, withholding and liabilities collectively or individually
referred to herein as "Excluded Taxes" and all such nonexcluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities collectively or
individually referred to herein as "Taxes"). If the Seller shall be required to
deduct any Taxes from or in respect of any sum payable hereunder to any Affected
Person: (A) the sum payable shall be increased by the amount (an "additional
amount") necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 3.1(b)) such
Affected Person shall receive an amount equal to the sum it would have received
had no such deductions been made, (B) the Seller shall make such deductions and
(C) the Seller shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(ii) In addition, the Seller agrees to pay to the relevant
Governmental Authority in accordance with applicable law all taxes,
levies, imposts, deductions, charges, assessments or fees of any kind
(including but not limited to any current or future stamp or
documentary taxes or any other excise or property taxes, charges, or
similar levies, but excluding any Excluded Taxes) imposed upon any
Affected Person as a result of the transactions contemplated by this
Agreement or that arise from any payment made hereunder or from the
execution, delivery, or registration of or otherwise similarly with
respect to, this Agreement ("Other Taxes").
(iii) The Seller and the Parent hereby jointly and severally
agree to indemnify each Affected Person from and against the full
amount of Taxes and Other Taxes arising out of this Agreement (whether
directly or indirectly) imposed upon or paid by such Person and any
liability (including penalties, interest, and expenses (including
Attorney Costs)) arising with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted by the relevant
Governmental Authority. A certificate as to the amount of such amounts
prepared by an Affected Person, absent manifest error, shall be final,
conclusive, and binding for all purposes. Such indemnification shall be
made within 30 days after the date the Affected Person makes
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a timely written demand therefor or the time at which such amount is
payable after a timely written demand therefor has been made, whichever
is earlier. A written demand will be considered "timely" for purposes
of the preceding sentence only if it is received by the Seller and the
Parent no later than 180 days after the earlier of (A) the date on
which such Affected Person makes such payment of Taxes or Other Taxes
or liability arising therefrom or with respect thereto and (B) the date
on which the relevant Governmental Authority or other party makes
written demand upon such Affected Person for payment of such Taxes or
Other Taxes or liability arising therefrom or with respect thereto.
(iv) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Seller to a Governmental Authority
hereunder, the Seller will deliver to the relevant Affected Person the
original or a certified copy of a receipt issued by such Governmental
Authority evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 3.1(b) shall survive the termination of this Agreement.
(vi) Each Program Support Provider that is granted a
participating interest in the Purchased Interest and is organized under
the laws of a jurisdiction other than the United States, any State
thereof, or the District of Columbia (each a "Non-U.S. Purchaser")
shall deliver to the Seller or to the Administrator: (A) two copies of
either United States Internal Revenue Service Form 1001 or Form 4224
(whichever is applicable), or (B) in the case of a NonU.S. Purchaser
claiming an exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8 (or any subsequent versions thereof or successors
thereto) and a certificate representing that such Non-U.S. Purchaser is
not a bank for purposes of Section 881(c) of the Code, in either case
properly completed and duly executed by such Non-U.S. Purchaser
claiming complete exemption from U.S. federal withholding tax on
payments by the Seller under this Agreement. Such forms shall be
delivered by each Non-U.S. Purchaser before the date it receives its
first payment with respect to a Purchased Interest, and before the date
it receives its first payment with respect to a Purchased Interest
occurring after the date, if any, that such NonU.S. Purchaser changes
its applicable lending office by designating a different lending office
(a "New Lending Office"). In addition, each Non-U.S. Purchaser shall
deliver such forms promptly after (or, if reasonably practicable, prior
to) the obsolescence or invalidity of any
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form previously delivered by such Non-U.S. Purchaser. Notwithstanding
any other provision of this Section 3.1(b)(vi), a Non-U.S. Purchaser
shall not be required to deliver any form pursuant to this Section
3.1(b)(vi) that such Non-U.S. Purchaser is not legally able to deliver.
Each Program Support Provider (other than any exempt person as
described in applicable Treasury Regulations) that is granted a
participating interest in the Purchased Interest and is organized under
the laws of the United States or any state thereof or the District of
Columbia shall deliver to the Seller an original copy of Internal
Revenue Service Form W-9 (or applicable successor form) properly
completed and duly executed by such Program Support Provider.
(vii) The Seller and the Parent shall not be required to
indemnify any Non-U.S. Purchaser, or to pay any additional amounts to
any Non-U.S. Purchaser, in respect of United States federal withholding
tax (or any withholding tax imposed by a state that applies only when
such United States federal withholding tax is imposed) pursuant to this
Section 3.1(b) to the extent that: (A) the obligation to withhold
amounts with respect to United States federal withholding tax existed
on the date such Non-U.S. Purchaser was granted a participating
interest in the Purchased Interest or, with respect to payments to a
New Lending Office, the date such Non-U.S. Purchaser designated such
New Lending Office; provided, however, that this clause (A) shall not
apply to any Non-U.S. Purchaser or New Lending Office that is granted,
assigned, or transferred a participating interest in the Purchased
Interest at the request of the Seller and provided further, however,
that this clause (A) shall not apply to any Non-U.S. Purchaser or New
Lending Office that is assigned an interest in the Purchased Interest
by a Program Support Provider to the extent that the indemnity payment
or additional amounts such Non-U.S. Purchaser or New Lending Office
would be entitled to receive (without regard to this clause (A)) do not
exceed the indemnity payment or additional amounts that the Program
Support Provider making the assignment to such Non-U.S. Purchaser or
New Lending Office would have been entitled to receive in the absence
of such assignment; or (B) the obligation to make such indemnification
or to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Purchaser to comply with the provisions of
paragraph (vi) above (it being understood that the Non-U.S. Purchaser
shall not have failed to comply with the provisions of paragraph (vi)
above if it is legally unable to deliver the forms described therein on
any date after it is granted a participation interest in a Purchased
Interest or designated a New Lending Office).
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(viii) Any Affected Person claiming any indemnity payment or
additional amounts payable pursuant to this Section 3.1(b) shall use
reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing by
the Seller or the Parent or to change the jurisdiction of its
applicable lending office if the making of such a filing or change
would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not,
in the good faith determination of such Affected Person, be otherwise
disadvantageous to such Affected Person.
(ix) Nothing contained in this Section 3.1(b) shall require an
Affected Person to make available any of its tax returns (or any other
information that it deems to be confidential or proprietary).
(x) If any Affected Person receiving an indemnification
payment hereunder with respect to Taxes or Other Taxes or liabilities
arising therefrom shall subsequently receive a refund from any taxing
authority which is specifically attributable to such indemnification
payment, such Person shall promptly pay such refund to the Seller or
the Parent, as the case may be.
Section 3.2. Parent's Performance Guaranty. (a) Parent hereby
unconditionally and irrevocably covenants and agrees that it will cause the
Seller and the Servicer duly and punctually to perform and observe all of the
terms, conditions, covenants, agreements (including, without limitation,
agreements to make payments or deemed Collections) and indemnities of the Seller
and the Servicer under this Agreement and the other Transaction Documents
strictly in accordance with the terms hereof and thereof and that if for any
reason whatsoever the Seller or the Servicer shall fail to so perform and
observe such terms, conditions, covenants, agreements and indemnities, Parent
will duly and punctually perform and observe the same.
(b) The liabilities and obligations of Parent, in its capacity as a
guarantor under this Section 3.2, shall be absolute and unconditional under all
circumstances and shall be performed by Parent regardless of (i) whether the
Issuer or the Administrator shall have taken any steps to collect from the
Seller or the Servicer any of the amounts payable by such party under this
Agreement or shall otherwise have exercised any of their rights or remedies
under this Agreement or the other Transaction Documents against such party or
against any Obligor under any of the Pool Receivables, (ii) the validity,
legality or enforceability of this Agreement or any other Transaction Documents,
or the disaffirmance of any thereof in any event of bankruptcy relating to the
Seller or the Servicer, (iii) any law,
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regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of this Agreement or any other Transaction
Document or any of the rights of Issuer or the Administrator as against the
Seller or the Servicer or as against any Obligor under any of such Pool
Receivables or which might cause or permit to be invoked any alteration in time,
amount, manner of payment or performance of any amount payable by the Seller or
the Servicer to the Issuer or the Administrator under this Agreement, (iv) the
merger or consolidation of the Seller or the Servicer into or with any
corporation or any sale or transfer by such party or all or any part of its
property, (v) the existence or assertion of any Adverse Claim with respect to
any Pool Receivable, or (vi) any other circumstance whatsoever (with or without
notice to or knowledge of Parent) which may or might in any manner or to any
extent vary the risk of Parent, or might otherwise constitute a legal or
equitable discharge of a surety or guarantor, it being the purpose and intent of
Parent that the liabilities and obligations of Parent under this Section 3.2
shall be absolute and unconditional under any and all circumstances, and shall
not be discharged except by payment and performance as provided in this
Agreement. The guaranty set forth in this Section 3.2 is a guaranty of payment
and performance and not just of collection.
(c) Without in any way affecting or impairing the liabilities and
obligations of Parent, in its capacity as a guarantor under this Section 3.2,
the Seller, Issuer or the Administrator may at any time and from time to time in
its discretion, without the consent of, or notice to, Parent, and without
releasing or affecting Parent's liability hereunder (i) extend or change the
time, manner, place or terms of this Agreement or any other Transaction
Document, (ii) settle or compromise any of the amounts payable by Seller or
Servicer to the Issuer or the Administrator under this Agreement or subordinate
the same to the claims of others, (iii) retain or obtain a lien upon or security
interest in any property to secure any of the obligations hereunder, (iv) retain
or obtain the primary or secondary obligation of any obligor or obligors, in
addition to Parent, with respect to any of the obligations due hereunder, or (v)
release or fail to perfect any lien upon or security interest in, or impair,
surrender, release or permit any substitution in exchange for, all or any part
of any property securing any of the obligations under this Agreement, it being
understood that nothing contained in this Section 3.2(c) shall give the Issuer
or the Administrator the right to take any of the foregoing actions if not
permitted by the other provisions of this Agreement, by law or otherwise.
Nothing in this Section 3.2(c) shall be deemed to waive any of the rights the
Seller may otherwise have.
(d) The provisions of this Section 3.2 shall continue to be
effective or be reinstated, as the case may be, if at any time
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payment of any of the amounts payable by Seller or Servicer, to the Issuer or
the Administrator under this Agreement is rescinded or must otherwise be
restored or returned by any of such Persons, as the case may be, upon any event
of bankruptcy involving Seller or Servicer, or otherwise, all as though such
payment had not been made. Parent, in its capacity as a guarantor under this
Section 3.2, hereby waives (i) notices of the occurrence of any default
hereunder, (ii) any requirement of diligence or promptness on the part of the
Issuer or the Administrator in making demand, commencing suit or exercising any
other right or remedy under this Agreement, or otherwise, and (iii) any right to
require the Issuer or the Administrator to exercise any right or remedy against
Seller or Servicer or the Pool Receivables prior to enforcing any of their
rights against Parent under this Section 3.2. Parent, in its capacity as a
guarantor under this Section 3.2, agrees that, in the event of an event of
bankruptcy with respect to Seller or Servicer (including Parent), and if such
event shall occur at a time when all of the indemnified amounts and other
amounts due from Seller or Servicer under this Agreement may not then be due and
payable, Parent will pay to Issuer or the Administrator forthwith the full
amount which would be payable hereunder by Parent if all such indemnified
amounts and other obligations were then due and payable.
ARTICLE IV.
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as Servicer in accordance with this Section 4.1.
Until the Administrator gives notice to the Seller and the Servicer (in
accordance with this Section 4.1) of the designation of a new Servicer, O&M
Medical is hereby designated as, and hereby agrees to perform the duties and
obligations of, the Servicer pursuant to the terms hereof. Upon either (i)
ninety (90) days' prior written notice to O&M Medical or (ii) the occurrence of
a Termination Event, the Administrator may designate as Servicer any Person
(including itself) to succeed O&M Medical or any successor Servicer, on the
condition in each case that any such Person so designated shall agree to perform
the duties and obligations of the Servicer pursuant to the terms hereof.
(b) Upon the designation of a successor Servicer as set forth in
Section 4.1(a) hereof, O&M Medical (or any successor Servicer) agrees that it
will terminate its activities as Servicer hereunder in a manner which the
Administrator determines will facilitate the transition of the performance of
such activities to the new Servicer, and O&M Medical shall cooperate with and
assist such new Servicer. Such cooperation shall
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include (without limitation) access to and transfer of records and use by the
new Servicer of all licenses, hardware or software necessary or desirable to
collect the Pool Receivables and the Related Security.
(c) O&M Medical acknowledges that the Administrator and the Issuer have
relied on O&M Medical's agreement to act as Servicer hereunder in making their
decision to execute and deliver this Agreement. Accordingly, O&M Medical agrees
that it will not voluntarily resign as Servicer.
(d) The Servicer may delegate its duties and obligations hereunder to
any subservicer (each, a "Sub-Servicer"); provided that, in each such
delegation, (i) such Sub-Servicer shall agree in writing to perform the duties
and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable to the Issuer for the performance of the duties
and obligations so delegated, (iii) the Seller, the Administrator and the Issuer
shall have the right to look solely to the Servicer for performance and (iv) the
terms of any agreement with any Sub-Servicer shall provide that the
Administrator may terminate such agreement upon the termination of the Servicer
hereunder by giving notice of its desire to terminate such agreement to the
Servicer (and the Servicer shall provide appropriate notice to such
Sub-Servicer).
Section 4.2. Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to collect each
Pool Receivable from time to time, all in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy. The Servicer shall
segregate and hold in trust for the accounts of the Seller and the Issuer the
amount of the Collections to which each is entitled in accordance with Article I
hereto. The Servicer may, in accordance with the Credit and Collection Policy,
extend the maturity of any Pool Receivable (but (x) not beyond sixty (60) days
from the original maturity date of such Pool Receivable and (y) not more than
once for any Pool Receivable) and extend the maturity or adjust the Outstanding
Balance of any Defaulted Receivable as the Servicer may determine to be
appropriate to maximize Collections thereof; provided, however, that (i) such
extension or adjustment shall not alter the status of such Pool Receivable as a
Delinquent Receivable or a Defaulted Receivable or limit the rights of the
Issuer or the Administrator under this Agreement and (ii) if a Termination Event
has occurred and O&M Medical is still serving as Servicer, O&M Medical may make
such extension or adjustment only upon the prior written approval of the
Administrator. The Servicer may adjust the Outstanding Balance of any Receivable
to account for any Dilution Adjustment, provided that the appropriate Originator
shall have made the corresponding payment pursuant to Section 1.8 of the Amended
and
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Restated Purchase and Sale Agreement. The Seller shall deliver to the Servicer
and the Servicer shall hold for the benefit of the Seller and the Administrator
(for the benefit of the Issuer and individually) in accordance with their
respective interests, all records and documents (including without limitation
computer tapes or disks) with respect to each Pool Receivable. Notwithstanding
anything to the contrary contained herein, the Administrator may direct the
Servicer (whether the Servicer is O&M Medical or any other Person) to commence
or settle any legal action to enforce collection of any Pool Receivable or to
foreclose upon or repossess any Related Security; provided, however, that no
such direction may be given unless either (i) a Termination Event has occurred
or (ii) the Administrator believes in good faith that failure to commence,
settle, or effect such legal action, foreclosure or repossession could adversely
affect Receivables constituting a material portion of the Pool Receivables.
(b) The Servicer shall as soon as practicable following actual receipt
of collected funds turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less, in the event that O&M Medical or one of its
Affiliates is not the Servicer, all reasonable and appropriate out-of-pocket
costs and expenses of such Servicer of servicing, collecting and administering
such collections; provided, however, the Servicer shall not be under any
obligation to remit any such funds to the Seller unless and until the Servicer
has received from the Seller evidence satisfactory to the Administrator and the
Servicer that the Seller is entitled to such funds hereunder and under
applicable law. The Servicer, if other than O&M Medical or one of its
Affiliates, shall as soon as practicable upon demand, deliver to the Seller all
records in its possession which evidence or relate to any indebtedness that is
not a Pool Receivable, and copies of records in its possession which evidence or
relate to any indebtedness that is a Pool Receivable.
(c) Notwithstanding anything to the contrary contained in this Article
IV, the Servicer, if not O&M Medical or one of its Affiliates, shall have no
obligation to collect, enforce or take any other action described in this
Article IV with respect to any indebtedness that is not a Pool Receivable other
than to deliver to the Seller the collections and documents with respect to any
such indebtedness as described in Section 4.2(b). It is expressly understood and
agreed by the parties that such Servicer's duties in respect of any indebtedness
that is not a Pool Receivable are set forth in this Section 4.2 in their
entirety. Upon delivery by such Servicer of funds or records relating to any
indebtedness that is not a Pool Receivable to the Seller, such Servicer shall
have discharged in full all of its responsibilities to make any such delivery.
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(d) The Servicer's obligations hereunder shall terminate on the later
of (i) the Facility Termination Date and (ii) the date on which all amounts
required to be paid to the Issuer, the Administrator and any other Indemnified
Party or Affected Person hereunder shall have been paid in full.
After such termination, the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer in connection with this Agreement.
Section 4.3. Lock-Box Arrangements. Prior to the initial purchase
hereunder, in accordance with Section 1 of Exhibit II, the Seller shall enter
into Lock-Box Agreements with all of the Lock-Box Banks, and deliver original
counterparts thereof to the Administrator. Upon the occurrence of a Termination
Event, the Administrator may at any time thereafter give notice to each Lock-Box
Bank that the Administrator is exercising its rights under the Lock-Box
Agreements to do any or all of the following: (i) to have the exclusive
ownership and control of the Lock-Box Accounts transferred to the Administrator
and to exercise exclusive dominion and control over the funds deposited therein,
(ii) to have the proceeds that are sent to the respective LockBox Accounts be
redirected pursuant to its instructions rather than deposited in the applicable
Lock-Box Account, and (iii) to take any or all other actions permitted under the
applicable Lock-Box Agreement. The Seller hereby agrees that if the
Administrator, at any time, takes any action set forth in the preceding
sentence, the Administrator shall have exclusive control of the proceeds
(including Collections) of all Pool Receivables and the Seller hereby further
agrees to take any other action that the Administrator may reasonably request to
transfer such control. Any proceeds of Pool Receivables received by the Seller,
as Servicer or otherwise, thereafter shall be sent immediately to the
Administrator. The parties hereto hereby acknowledge that if at any time the
Administrator takes control of any Lock-Box Account, the Administrator shall not
have any rights to the funds therein in excess of the unpaid amounts due to the
Administrator, the Issuer or any other Person hereunder and the Administrator
shall distribute or cause to be distributed such funds in accordance with
Section 4.2(b) hereof (including the proviso thereto) and Article I hereof (in
each case as if such funds were held by the Servicer thereunder); provided,
however, that the Administrator shall not be under any obligation to remit any
such funds to the Seller or any other Person unless and until the Administrator
has received from the Seller or such Person evidence satisfactory to the
Administrator that the Seller or such Person is entitled to such funds hereunder
and under applicable law.
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Section 4.4. Enforcement Rights. (a) At any time following
the occurrence of a Termination Event or the designation of a
Servicer (other than O&M Medical or any of its Affiliates)
pursuant to Section 4.1 hereof:
(i) the Administrator may direct the Obligors that payment of
all amounts payable under any Pool Receivable be made directly to the
Administrator or its designee;
(ii) the Administrator may instruct the Seller to give notice
of the Issuer's interest in Pool Receivables to each Obligor, which
notice shall direct that payments be made directly to the Administrator
or its designee, and upon such instruction from the Administrator the
Seller shall give such notice at the expense of the Seller; provided,
that if the Seller fails to so notify each Obligor, the Administrator
may so notify the Obligors; and
(iii) the Administrator may request the Seller to, and upon
such request the Seller shall, (A) assemble all of the records
necessary or desirable to collect the Pool Receivables and the Related
Security, and transfer or license the use of, to the new Servicer, all
software necessary or desirable to collect the Pool Receivables and the
Related Security, and make the same available to the Administrator or
its designee at a place selected by the Administrator, and (B)
segregate all cash, checks and other instruments received by it from
time to time constituting Collections with respect to the Pool
Receivables in a manner acceptable to the Administrator and, promptly
upon receipt, remit all such cash, checks and instruments, duly
endorsed or with duly executed instruments of transfer, to the
Administrator or its designee.
(b) The Seller hereby authorizes the Administrator, and irrevocably
appoints the Administrator as its attorney-in-fact with full power of
substitution and with full authority in the place and stead of the Seller, which
appointment is coupled with an interest, to take any and all steps in the name
of the Seller and on behalf of the Seller necessary or desirable, in the
determination of the Administrator, to collect any and all amounts or portions
thereof due under any and all Pool Receivables or Related Security, including,
without limitation, endorsing the name of the Seller on checks and other
instruments representing Collections and enforcing such Pool Receivables,
Related Security and the related Contracts. Notwithstanding anything to the
contrary contained in this subsection (b), none of the powers conferred upon
such attorney-in-fact pursuant to the immediately preceding sentence shall
subject such attorney-in-fact to any liability if any action taken by it shall
prove to be inadequate or invalid, nor shall they confer any obligations upon
such attorney-in-fact in any manner whatsoever.
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Section 4.5. Responsibilities of Seller and O&M Medical (a) Anything
herein to the contrary notwithstanding, Seller shall pay when due any taxes,
including, without limitation, any sales taxes payable in connection with the
Pool Receivables and their creation and satisfaction. The Administrator and the
Issuer shall not have any obligation or liability with respect to any Pool
Receivable, any Related Security or any related Contract, nor shall any of them
be obligated to perform any of the obligations of Seller or any Originator under
any of the foregoing.
(b) O&M Medical hereby irrevocably agrees that if at any time it shall
cease to be the Servicer hereunder, it shall act (if the then current Servicer
so requests) as the data-processing agent of the Servicer and, in such capacity,
O&M Medical shall conduct the data-processing functions of the administration of
the Receivables and the Collections thereon in substantially the same way that
O&M Medical conducted such data-processing functions while it acted as the
Servicer.
Section 4.6. Servicing Fee. For so long as the Servicer is O&M Medical
or an Affiliate of O&M Medical, the Servicer shall be paid a fee, through
distributions contemplated by Section 1.4(d), equal to 0.50% per annum of the
average outstanding Capital. If the Servicer is not O&M Medical or an Affiliate
of O&M Medical, then the Servicer shall be paid a fee as negotiated in good
faith by such Servicer and by the Administrator in the Administrator's sole
discretion.
ARTICLE V.
MISCELLANEOUS
Section 5.1. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or consent to any departure by the Seller or Servicer
therefrom shall be effective unless in a writing signed by the Administrator,
and, in the case of any amendment, by the Seller and the Servicer and then such
amendment, waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given. No failure on the part of the
Issuer or Administrator to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
Section 5.2. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and sent or delivered, to each party hereto, at
its address set forth under its name on the signature pages hereof or at such
other address
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as shall be designated by such party in a written notice to the other parties
hereto. Notices and communications by facsimile shall be effective when sent
(and shall be followed by hard copy sent by first class mail), and notices and
communications sent by other means shall be effective when received.
Section 5.3. Assignability; Restrictions on Assignability. (a) This
Agreement and the Issuer's rights and obligations herein (including ownership of
the Purchased Interest) shall be assignable, in whole or in part, by the Issuer
and its successors and assigns subject to the limitations set forth in Section
5.3(f) hereof and with the prior written consent of the Seller; provided;
however, that such consent shall not be unreasonably withheld; and provided,
further, however, that no such consent shall be required if the assignment is
made to Bank of America, any Affiliate of Bank of America (other than a director
or officer of Bank of America), any Purchaser or other Program Support Provider
or any Person which is (i) in the business of issuing Notes and (ii) associated
with or administered by Bank of America or any Affiliate of Bank of America.
Each assignor may, in connection with the assignment, disclose to the applicable
assignee any information relating to the Seller or the Pool Receivables
furnished to such assignor by or on behalf of the Seller, the Issuer or the
Administrator.
(b) The Issuer may at any time grant to one or more banks or other
institutions (each a "Purchaser") party to the Amended and Restated Liquidity
Asset Purchase Agreement or to any other Program Support Provider participating
interests in the Purchased Interest subject to the limitations set forth in
Section 5.3(f) hereof. In the event of any such grant by the Issuer of a
participating interest to a Purchaser or other Program Support Provider, the
Issuer shall remain responsible for the performance of its obligations
hereunder. The Seller agrees that each Purchaser or other Program Support
Provider shall be entitled to the benefits of Sections 1.8, 1.9 and 1.10 with
respect to its participating interest subject to the limitations set forth in
Section 3.1(b) hereof.
(c) This Agreement and the rights and obligations of the Administrator
hereunder shall be assignable, in whole or in part, by the Administrator and its
successors and assigns.
(d) Except as provided in Section 4.1(d), neither the Seller nor the
Servicer may assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrator.
(e) Without limiting any other rights that may be available under
applicable law, the rights of the Issuer may be enforced through it or by its
agents.
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(f) Neither the Issuer nor the Seller shall allow the Purchased
Interest or any participating interest therein to become (i) traded on an
established securities market (as defined in U.S. Department of the Treasury
(the "Treasury") regulations section 1.7704-1(b) or (ii) readily tradable on a
secondary market or the substantial equivalent thereof (as defined in Treasury
regulations section 1.7704-1(c)). In addition, neither the Purchased Interest
nor any participating interest therein may be issued or sold in a transaction or
transactions that are required to be registered under the Securities Act of 1933
(15 U.S.C. 77a et seq.), and at no time may more than 100 Persons own interests
in the Receivables Pool. In determining the number of Persons that own interests
in the Receivables Pool for purposes of the preceding sentence, any beneficial
owner of an interest in a partnership, grantor trust, or S corporation
("Flow-Through Entity") will be treated as owning an interest in the Receivables
Pool only if substantially all of the value of such beneficial owner's interest
in the Flow-Through Entity is attributable to such Flow-Through Entity's
interest (direct or indirect) in the Receivables Pool. Any assignment or
transfer of the Purchased Interest or any participating interest therein in
violation of the foregoing restrictions will be void ab initio.
Section 5.4. Costs and Expenses. In addition to the rights of
indemnification granted under Section 3.1 hereof, the Seller agrees to pay on
demand all reasonable costs and expenses in connection with the preparation,
execution, delivery and administration (including audit fees and expenses
generated by an internal or external auditor appointed by the Administrator for
the periodic auditing of Pool Receivables) of this Agreement, the Amended and
Restated Purchase and Sale Agreement, the Amended and Restated Liquidity Asset
Purchase Agreement, the Amended and Restated Parallel Asset Purchase Agreement,
any asset purchase agreement, reimbursement agreement, letter of credit or
similar agreement relating to the sale or transfer of interests in Purchased
Interests and the other documents and agreements to be delivered hereunder,
including, without limitation, Attorney Costs for the Administrator, the Issuer
and their respective Affiliates and agents with respect thereto and with respect
to advising the Administrator, the Issuer and their respective Affiliates and
agents as to their rights and remedies under this Agreement and the other
Transaction Documents, and all costs and expenses, if any (including Attorney
Costs), of the Administrator, the Issuer and their respective Affiliates and
agents, in connection with the enforcement of this Agreement and the other
Transaction Documents.
Section 5.5. No Proceedings; Limitation on Payments. Each of the
Seller, the Servicer, the Parent, the Administrator, each assignee of the
Purchased Interest or any interest therein and each Person which enters into a
commitment to purchase the Purchased Interest or interests therein hereby
covenants and
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agrees that it will not institute against, or join any other Person in
instituting against, the Issuer any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and one day after the latest
maturing Note issued by the Issuer is paid in full.
Section 5.6. Confidentiality. The Seller, the Servicer, the Parent, the
Issuer and the Administrator each agrees to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of this
Agreement, any Program Support Agreement and the other Transaction Documents
(and all drafts thereof), and all information identified as "confidential" or
"secret" by the Seller and provided to the other parties by the Seller under any
Program Support Agreement, this Agreement or any other Transaction Document, and
no such Person nor any of their respective Affiliates shall use any such
information other than in connection with or in enforcement of any Program
Support Agreement, this Agreement and the other Transaction Documents, except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by such Person, or (ii) was or becomes
available on a non-confidential basis from a source other than such Person,
provided that such source is not bound by a confidentiality agreement with
respect thereto; provided, however, that any Person may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Person is subject or in connection with an
examination of such Person by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable requirement of law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which such Person or
its Affiliates may be party; (E) to the extent reasonably required in connection
with the exercise of any remedy hereunder or under any other Transaction
Document; (F) to such Person's independent auditors, legal counsel and other
professional advisors; (G) to any nationally recognized rating agency; (H) to
any assignee or participant of the Issuer, actual or potential, provided that
such Person agrees in writing to keep such information confidential to the same
extent required hereunder; (I) to the extent reasonably required by commercial
paper dealers in connection with the sale of Notes; and (J) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which such Person and any of the other parties hereto is
party.
Section 5.7. GOVERNING LAW AND JURISDICTION. (a) THIS AGREEMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT
TO THE EXTENT THAT THE PERFECTION (OR THE EFFECT OF PERFECTION OR
NON-PERFECTION) OF THE INTERESTS OF THE ISSUER IN THE POOL RECEIVABLES, RELATED
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SECURITY, COLLECTIONS AND PROCEEDS THEREOF, IS GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE ISSUER, THE SELLER, THE SERVICER, THE PARENT AND THE
ADMINISTRATOR CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE ISSUER, THE SELLER, THE
SERVICER, THE PARENT AND THE ADMINISTRATOR IRREVOCABLY WAIVES, TO THE MAXIMUM
EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE ISSUER, THE
SELLER, THE SERVICER, THE PARENT AND THE ADMINISTRATOR EACH WAIVE PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY NEW YORK LAW.
Section 5.8. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
Section 5.9. Survival of Termination. The provisions of Sections 1.8,
1.9, 1.10, 3.1, 5.4, 5.5, 5.6, 5.7, 5.10 and 5.13 shall survive any termination
of this Agreement.
Section 5.10. WAIVER OF JURY TRIAL. THE ISSUER, THE SELLER, THE
SERVICER, THE PARENT AND THE ADMINISTRATOR EACH WAIVE THEIR RESPECTIVE RIGHTS TO
A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY
ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES
AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE. THE ISSUER, THE SELLER, THE SERVICER, THE PARENT AND
THE ADMINISTRATOR EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH OF
THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY JURY
IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER
PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT.
Section 5.11. Entire Agreement. This Agreement embodies
the entire agreement and understanding between the Issuer, the
Seller, the Servicer, the Parent and the Administrator, and
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supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof,
except for any prior arrangements made with respect to the payment by the Issuer
of (or any indemnification for) any fees, costs or expenses payable to or
incurred (or to be incurred) by or on behalf of the Seller, the Servicer and the
Administrator.
Section 5.12. Headings. The captions and headings of this
Agreement and in any Exhibit hereto are for convenience of
reference only and shall not affect the interpretation hereof or
thereof.
Section 5.13. Issuer's Liabilities. The obligations of the Issuer under
this Agreement are solely the corporate obligations of the Issuer. No recourse
shall be had for any obligation or claim arising out of or based upon this
Agreement against "MLMMI" or against any stockholder, employee, officer,
director or incorporator of the Issuer. For purposes of this paragraph, "MLMMI"
shall mean and include Merrill Lynch Money Markets, Inc. and all affiliates
thereof and any employee, officer, director, incorporator, shareholder or
beneficial owner of any of them; provided, however, that the Issuer shall not be
considered to be an affiliate of MLMMI; and provided, further, that this Section
5.13 shall not relieve any such Person of any liability it might otherwise have
for its own gross negligence or willful misconduct.
Section 5.14. Treatment of Purchased Interest for Tax Purposes. The
Seller and the Issuer hereby agree to treat the Purchased Interest and any
participating Interest therein as a debt instrument for purposes of federal and
state income tax, franchise tax, and any other federal or state tax measured in
whole or in part by income, to the extent permitted by applicable law.
Notwithstanding any other provision of this Agreement, no Program Support
Provider shall be entitled to any indemnification for any Taxes, Other Taxes or
other liabilities arising therefrom if and to the extent that such Taxes, Other
Taxes or other liabilities arise from such Program Support Provider treating the
Purchased Interest or any participating interest therein as other than a debt
instrument for purposes of federal and state income tax, and any other federal
or state tax measured in whole or in part by income when under applicable law
such interest could be treated as a debt instrument.
SECTION 5.15. Purchase and Sale Agreement. In consideration of the
obligations of the Purchaser now or hereafter arising under this Agreement, the
Seller hereby sells and assigns to the Administrator, for the benefit of the
Issuer, without any formal or other instrument of assignments all of the
Seller's right, title and interest in, to and under the Amended and Restated
Purchase and Sale Agreement, except for all of
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Seller's right, title and interest in, to and under any Originator Note,
including all amounts due and to become due to the Seller from any of the
Originators thereunder and all rights, remedies, powers, privileges and claims
of the Seller against any of the Originators under the Amended and Restated
Purchase and Sale Agreement (whether arising pursuant to the terms of the
Amended and Restated Purchase and Sale Agreement or otherwise available to the
Seller at law or in equity). Notwithstanding the foregoing the Seller shall
nevertheless be permitted to give all consents, requests, notices, directions,
approvals, extensions or waivers, if any, which are required by the specific
terms of the Amended and Restated Purchase and Sale Agreement to be given by it
to any Originator, unless the Administrator shall otherwise direct the Seller.
The assignment pursuant to the first sentence of this Section 5.15 shall not
relieve the Seller or any Originator from (or require the Issuer or the
Administrator to undertake) the performance of any term, covenant or agreement
on the part of the Seller or any Originator to be performed or observed under or
in connection with the Amended and Restated Purchase and Sale Agreement, any
Pool Receivable or any Related Security. The Administrator and the Issuer
acknowledge that the Seller shall contemporaneously herewith grant an identical
assignment as described in the first sentence of this Section 5.15, to the
Administrative Agent, for its benefit and the benefit of the Parallel
Purchasers, under the Amended and Restated Parallel Asset Purchase Agreement and
that the respective rights of the Administrator, the Issuer, the Administrative
Agent and the Parallel Purchasers with respect thereto shall be governed by the
Amended and Restated Intercreditor Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
O&M FUNDING CORP.
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: V.P & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
OWENS & MINOR MEDICAL, INC.
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: V.P & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
OWENS & MINOR, INC.
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: V.P & Treasurer
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804-965-5403
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RECEIVABLES CAPITAL CORPORATION
By: /s/Gerad M. Haugh
Name: Gerad M. Haugh
Title:
c/o Merrill Lynch & Co., Inc.
World Financial Center
New York, New York 10281-1310
Attention:
Telephone: 212/449-1606
Facsimile: 212/449-2234
with a copy to:
Bank of America National Trust
and Savings Association
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mark A. Wegener
Telephone: 312/828-3343
Facsimile: 312/828-7855
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrator
By: /s/Mark A. Wegener
Name: Mark A. Wegener
Title: Attorney-in-fact
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mark A. Wegener
Telephone: 312/828-3343
Facsimile: 312/828-7855
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EXHIBIT I
DEFINITIONS
As used in the Amended and Restated Receivables Purchase Agreement to
which this Exhibit I is attached (including its Exhibits), the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined). Unless otherwise
indicated, all Section, Annex, Exhibit and Schedule references in this Exhibit
are to Sections of and Annexes, Exhibits and Schedules to the Agreement.
"Administration Account" means the special account (account
number 7062178, ABA number 07100039, Attention: Loan Division, Reference: Owens
& Minor) of the Issuer maintained at Bank of America Illinois, or such other
account as may be so designated in writing by the Administrator to the Seller
and the Servicer.
"Administrative Agent" has the meaning set forth in the
preamble to the Amended and Restated Parallel Asset Purchase Agreement.
"Administrator" has the meaning set forth in the
preamble to the Agreement.
"Adverse Claim" means a lien, security interest or other
charge or encumbrance, or any other type of preferential arrangement, it being
understood that a lien, security interest or other charge or encumbrance, or any
other type of preferential arrangement, in favor of the Issuer shall not
constitute an Adverse Claim.
"Affected Person" has the meaning set forth in
Section 1.8.
"Affiliate" means, as to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by or is under common
control with such Person or is a director or officer of such Person, except that
with respect to the Issuer, Affiliate shall mean the holder(s) of its capital
stock.
"Agreement" means the Amended and Restated Receivables
Purchase Agreement dated as of May 28, 1996, among the Seller, the Servicer, the
Parent, the Issuer and the Administrator, as the same may be amended,
supplemented or otherwise modified from time to time.
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"Agent-Related Person" has the meaning assigned thereto in
Section 5.2 of the Amended and Restated Parallel Asset Purchase Agreement.
"Alternate Rate" for any Fixed Period for any Portion of
Capital of the Purchased Interest means an interest rate per annum equal to:
(i) the Eurodollar Rate for such Fixed Period plus (x) 0.50%
or (y) on each day when the Alternate Rate has been applicable for any
portion of the Purchased Interest for more than ninety (90) days within
any twelve-month period, 0.25% plus the appropriate spread for such
date determined by reference to the Pricing Grid Rate or
(ii) the Base Rate for such Fixed Period;
provided, however, that in the case of
(i) any Fixed Period on or prior to the first day of which the
Administrator shall have been notified by the Issuer or a Purchaser or
other Program Support Provider that the introduction of or any change
in or in the interpretation of any law or regulation makes it unlawful,
or any central bank or other Governmental Authority asserts that it is
unlawful, for the Issuer or such Purchaser or other Program Support
Provider to fund any Portion of Capital based on the Eurodollar Rate
set forth above (and the Issuer or such Purchaser or other Program
Support Provider shall not have subsequently notified the Administrator
that such circumstances no longer exist),
(ii) any Fixed Period of one to (and including)
13 days,
(iii) any Fixed Period as to which the Administrator does not
receive notice, by no later than 12:00 noon (New York City time) on (x)
the second Business Day preceding the first day of such Fixed Period
that the Seller desires that the related Portion of Capital be funded
at the CP Rate (or the Seller has given such notice and the
Administrator has notified the Seller that funding the related Portion
of Capital at the CP Rate is unacceptable to the Issuer) or (y) the
third Business Day preceding the first day of such Fixed Period that
the Seller desires that the related Portion of Capital be funded at the
Alternate Rate and based on the Eurodollar Rate, or
(iv) any Fixed Period relating to a Portion of Capital
which is less than $1,000,000,
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the "Alternate Rate" for each such Fixed Period shall be an interest rate per
annum equal to the Base Rate in effect on each day of such Fixed Period. The
"Alternate Rate" for any Run-off Day (other than a Run-off Day of the type
described in clause (iii) of the definition of Run-off Day) shall be an interest
rate equal to 2% per annum above the Base Rate in effect on such day.
"Amended and Restated Intercreditor Agreement" means the
Amended and Restated Intercreditor Agreement dated as of May 28, 1996 among the
Issuer, the Administrator, the Administrative Agent and the Parallel Purchasers.
"Amended and Restated Liquidity Asset Purchase Agreement"
means the Amended and Restated Liquidity Asset Purchase Agreement dated as of
May 28, 1996 among Bank of America as Purchaser, Liquidity Agent and
Administrator, the other Purchasers from time to time parties thereto and the
Issuer, as amended, supplemented or otherwise modified from time to time.
"Amended and Restated Parallel Asset Purchase Agreement" means
the Amended and Restated Parallel Asset Purchase Agreement dated as of May 28,
1996 among O&M Funding Corp., as Seller, O&M Medical, as Servicer, Owens &
Minor, Inc., as Parent and Guarantor, certain financial institutions from time
to time parties thereto, as the Parallel Purchasers, and Bank of America, as
Administrative Agent, as the same may be amended, supplemented or otherwise
modified in accordance with its terms.
"Amended and Restated Purchase and Sale Agreement" means the
Amended and Restated Purchase and Sale Agreement dated as of May 28, 1996
between O&M Medical as an Originator and as Servicer, the other Originators
which may from time to time be party thereto, Owens & Minor, Inc., as Parent and
Guarantor, and O&M Funding Corp. as the Initial Purchaser, as the same may be
amended, supplemented or otherwise modified in accordance with its terms.
"Attorney Costs" means and includes all fees and disbursements
of any law firm or other external counsel, the allocated cost of internal legal
services and all disbursements of internal counsel.
"Average Maturity" means at any time that period of days equal
to the average maturity of the Pool Receivables calculated by the Servicer in
the then most recent Seller Report; provided that if the Administrator shall
disagree with any such calculation, the Administrator may recalculate such
Average Maturity, and any such recalculation shall be prima facie evidence of
such Average Maturity.
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"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association.
"Bankruptcy Code" means the United States Bankruptcy
Reform Act of 1978 (11 U.S.C. ss. 101, et seq.), as amended from
time to time.
"Base Rate" means for any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall be at all times
equal to the higher of:
(a) the rate of interest in effect for such day as publicly
announced from time to time by Bank of America in San Francisco,
California, as its "reference rate." It is a rate set by Bank of
America based upon various factors including Bank of America's costs
and desired return, general economic conditions and other factors, and
is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate; and
(b) 0.50% per annum above the latest Federal Funds
Rate.
"Business Day" means any day on which (i) banks are not
authorized or required to close in Chicago, New York City, Richmond or San
Francisco and (ii) if this definition of "Business Day" is utilized in
connection with the Eurodollar Rate, dealings are carried out in the London
interbank market.
"Capital" means with respect to the Amended and Restated
Receivables Purchase Agreement and the Amended and Restated Parallel Asset
Purchase Agreement, the amount paid to the Seller in respect of the Purchased
Interest by the Issuer or by a Parallel Purchaser pursuant to such Purchase
Agreement, or such amount divided or combined in accordance with Section 1.7 of
such Purchase Agreement, in each case reduced from time to time by Collections
distributed and applied on account of such Capital pursuant to Section 1.4(d) of
such Purchase Agreement and increased from time to time by reinvestments
pursuant to Section 1.4(b)(ii) of such Purchase Agreement; provided, that if
such Capital shall have been reduced by any distribution and thereafter all or a
portion of such distribution is rescinded or must otherwise be returned for any
reason, such Capital shall be increased by the amount of such rescinded or
returned distribution, as though it had not been made.
"Change of Control" means any of the following events
or circumstances:
(a) any Person or "group" (within the meaning of
Section 13(d) or 14(d) of the Securities Exchange Act of
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1934, as amended) shall either (i) acquire beneficial ownership of more
than 20% of any outstanding class of common stock of the Parent having
ordinary voting power in the election of directors of the Parent or
(ii) obtain the power (whether or not exercised) to elect a majority of
the Parent's directors;
(b) the Parent shall not own, directly or indirectly,
100% of all issued and outstanding capital stock of the
Seller and of each Originator;
(c) the Parent or the Seller shall (i) merge with any
other Person and not be the surviving company or (ii) sell
all or any substantial part of its assets to another Person;
or
(d) the Board of Directors of the Parent shall not consist of
a majority of "Continuing Directors". As used in this definition,
Continuing Directors shall mean the directors of the Parent on the
effective date of this Agreement and each other director of the Parent,
if such other director's nomination for election to the Board of
Directors of the Parent is recommended by a majority of the then
Continuing Directors.
"Collection Delay Period" means 45 days or such other number
of days as the Administrator may from time to time select upon three Business
Days' notice to the Seller.
"Collections" means, with respect to any Pool Receivable, (a)
all funds which are received by any Originator, the Seller, the Servicer, the
Administrator or the Administrative Agent in payment of any amounts owed in
respect of such Receivable (including, without limitation, purchase price,
finance charges, interest and all other charges), or applied to amounts owed in
respect of such Receivable (including, without limitation, insurance payments
and net proceeds of the sale or other disposition of repossessed goods or other
collateral or property of the related Obligor or any other Person directly or
indirectly liable for the payment of such Pool Receivable and available to be
applied thereon), (b) all amounts deemed to have been received pursuant to
Section 1.4(e) of the Amended and Restated Receivables Purchase Agreement or the
Amended and Restated Parallel Asset Purchase Agreement, as applicable, and (c)
all other proceeds of such Receivable.
"Contract" means, with respect to any Receivable, any and all
contracts, understandings, instruments, agreements, leases, invoices, notes, or
other writings pursuant to which such Receivable arises or which evidences such
Receivable or under
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which an Obligor becomes or is obligated to make payment in
respect of such Receivable.
"CP Market Disruption Event" means, at any time for any reason
whatsoever, the Issuer shall be unable or unwilling to raise, or shall be
precluded or prohibited from raising, funds through the issuance of Notes in the
United States' commercial paper market at such time.
"CP Rate" for any Fixed Period for any Portion of Capital of
the Purchased Interest means, to the extent the Issuer funds such Portion of
Capital for such Fixed Period by issuing Notes, a fluctuating rate per annum
equal to the sum of (i) the rate (or if more than one rate, the weighted average
of the rates) at which Notes of the Issuer having a term equal to such Fixed
Period and to be issued to fund such Portion of Capital may be sold by any
placement agent or commercial paper dealer selected by the Administrator on
behalf of the Issuer, as agreed between each such agent or dealer and the
Administrator and notified by the Administrator to the Servicer; provided that
if the rate (or rates) as agreed between any such agent or dealer and the
Administrator with regard to any Fixed Period for such Portion of Capital is a
discount rate (or rates), then such rate shall be the rate (or if more than one
rate, the weighted average of the rates) resulting from converting such discount
rate (or rates) to an interest-bearing equivalent rate per annum, plus (ii)
0.05% of the face amount of such Notes, expressed as a percentage of such face
amount and converted to an interest-bearing equivalent rate per annum.
"Credit and Collection Policy" means those receivables credit
and collection policies and practices of the Originators in effect on the date
of the Agreement and described in Schedule I hereto, as modified in compliance
with the Agreement.
"Debt" means (i) indebtedness for borrowed money, (ii)
obligations evidenced by bonds, debentures, notes or other similar instruments,
(iii) obligations to pay the deferred purchase price of property or services,
(iv) obligations as lessee under leases which shall have been or should be, in
accordance with generally accepted accounting principles, recorded as capital
leases, (v) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of kinds referred to in clauses (i) through (iv) above,
and (vi) liabilities in respect of unfunded vested benefits under plans covered
by Title IV of ERISA.
"Defaulted Receivable" means a Receivable:
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(i) as to which any payment, or part thereof, remains
unpaid for at least 91 days from the original due date for
such payment;
(ii) as to which the Obligor thereof or any other
Person obligated thereon or owning any Related Security in
respect thereof has taken any action, or suffered any event to
occur, of the type described in paragraph (g) of Exhibit VI
hereto; or
(iii) which, consistent with the Credit and
Collection Policy, would be written off any Originator's books
as uncollectible.
"Delinquency Ratio" means the ratio (expressed as a percentage
and rounded upwards to the nearest 1/100 of 1%) computed as of each Month End
Date by dividing (i) the aggregate Outstanding Balance of all Pool Receivables
that were Delinquent Receivables or Defaulted Receivables on such day by (ii)
the aggregate Outstanding Balance of all Pool Receivables on such day.
"Delinquent Receivable" means a Receivable which is not
a Defaulted Receivable and:
(i) as to which any payment, or part thereof, remains
unpaid for at least 31 days from the original due date for
such payment; or
(ii) which, consistent with the Credit and Collection
Policy, would be classified as delinquent by the Servicer.
"Determination Date" means the last day of each
quarterly fiscal period of the Parent.
"Dilution Adjustment" has the meaning set forth in
Section 1.4(e).
"Dilution Reserve" means, for the Purchased Interest
under the Amended and Restated Receivables Purchase Agreement and
the Amended and Restated Parallel Asset Purchase Agreement, on
any date, an amount equal to:
(i) the greater of (x) 3.0% and (y) 3 times the
greatest Six Month Dilution Ratio for any of the 12 or fewer
most recent Month End Dates
times
(ii) Capital.
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"Discount" means:
(i) for the Portion of Capital of the Purchased
Interest for any Fixed Period to the extent the Issuer will be
funding such Portion of Capital on the first day of such Fixed
Period through the issuance of Notes,
CPR x C x ED + TF
360
(ii) for the Portion of Capital of the Purchased
Interest for any Fixed Period to the extent the Issuer will
not be funding such Portion of Capital on the first day of
such Fixed Period through the issuance of Notes,
ED
AR x C x 360 + TF
where:
AR = the Alternate Rate for the Portion of Capital
of the Purchased Interest for such Fixed Period
C = the Portion of Capital of the Purchased
Interest during such Fixed Period
CPR = the CP Rate for the Portion of Capital of the
Purchased Interest for such Fixed Period
ED = the actual number of days during such Fixed
Period
TF = the Termination Fee, if any, for the Portion of
Capital of the Purchased Interest for such
Fixed Period;
provided that no provision of the Amended and Restated Receivables Purchase
Agreement or the Amended and Restated Parallel Asset Purchase Agreement shall
require the payment or permit the collection of Discount in excess of the
maximum permitted by applicable law; and provided, further, that Discount for
the Portion of Capital of the Purchased Interest shall not be considered paid by
any distribution to the extent that at any time all or a portion of such
distribution is rescinded or must otherwise be returned for any reason; and
provided, further, that on each day during any period when the Issuer shall have
indicated pursuant to Section 1.1(a) that it will not purchase or reinvest in
the Purchased Interest under the Agreement, Discount will accrue on each
remaining Portion of Capital under this Agreement at the highest rate then
applicable to any portion of
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Capital under the Amended and Restated Parallel Asset Purchase
Agreement.
"Discount Reserve" for the Purchased Interest under the
Amended and Restated Receivables Purchase Agreement and the Amended and Restated
Parallel Asset Purchase Agreement at any time means the sum of (i) the
Termination Discount at such time for the Purchased Interest, and (ii) the then
accrued and unpaid Discount for the Purchased Interest.
"Dividend" means in respect of any corporation or any O&M
Party, as the case may be, (i) cash distributions or any other distributions on,
or in respect of, any class of capital stock of such corporation or such O&M
Party, as the case may be, except for distributions made solely in shares of
stock of the same class, and (ii) any and all funds, cash or other payments made
in respect of the redemption, repurchase or acquisition of such stock, unless
such stock shall be redeemed or acquired through the exchange of such stock with
stock of the same class.
"Eligible Agent" means a commercial bank having a combined
capital and surplus of at least $250,000,000 whose short-term debt is rated by
Standard & Poor's Ratings Services not lower than A-1, and at least as highly as
the Notes by each rating agency which then rates the Notes.
"Eligible Assignee" means any commercial bank having a
combined capital and surplus of at least $250,000,000 (i) whose short-term debt
is rated by Standard & Poor's Ratings Services not lower than A-1, and at least
as highly as the Notes by each rating agency which then rates the Notes or (ii)
if a written statement is obtained from each of the rating agencies rating the
Notes that the rating of the Notes will not be downgraded or withdrawn solely as
a result of the assignment of rights and obligations under this Agreement to
such Eligible Institution.
"Eligible Receivables" means, at any time, Receivables:
(i) each Obligor of which is (a) not an Affiliate of any
Originator or the Seller, (b) not subject to any action of the type
described in paragraph (g) of Exhibit VI and (c) not an Excluded
Obligor;
(ii) the Obligor of which is a United States resident or a
resident of such other jurisdiction as has been approved in writing by
the Administrator, or which are fully guaranteed by a United States
resident;
(iii) which are not Excluded Receivables;
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<PAGE>
(iv) which are denominated and payable only in U.S.
dollars in the United States;
(v) which have a stated maturity and which stated maturity
is not more than sixty (60) days after the original billing date
thereof;
(vi) which arise in the ordinary course of an
Originator's business;
(vii) which arise under a Contract which is in full force and
effect and which is a legal, valid and binding obligation of the
related Obligor, enforceable against such Obligor in accordance with
its terms;
(viii) which conform with all applicable laws, rulings
and regulations in effect;
(ix) which are not the subject of any asserted dispute
(whether or not in writing), offset, hold back defense, Adverse Claim
or other claim and which do not arise from the sale of inventory which
is subject to any Adverse Claim, provided that the partial payment of
an invoice shall not be considered a dispute;
(x) which comply with the requirements of the
Credit and Collection Policy;
(xi) which arise from the completion of the sale and
delivery of goods or services performed, and which do not represent an
invoice in advance of such completion;
(xii) which are not subject to any contingent performance
requirements of the applicable Originator unless such requirements are
guaranteed or insured by third parties acceptable to the Administrator;
(xiii) which do not require the consent of the related
Obligor to be sold or assigned;
(xiv) which have not been modified or restructured since
their creation, except as permitted pursuant to Section 4.2 of the
Agreement;
(xv) (A) to which the applicable Originator has good and
marketable title immediately prior to the sale thereof to the Seller,
and as to which the Seller has good and marketable title, and (B)
which, immediately prior to the applicable Originator's sale thereof to
the Seller, were freely assignable by the applicable Originator and
which are freely assignable by the Seller;
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(xvi) for which the Issuer shall have a valid, perfected and
enforceable undivided percentage ownership interest, to the extent of
the Purchased Interest, therein and in the Related Security and
Collections with respect thereto, in each case free and clear of any
Adverse Claim; provided that for the purposes of determining
eligibility of Receivables, such ownership interest need be perfected
only in the Related Security of the type described in clause (ii) of
the definition of Related Security and clause (iii) of the definition
of Related Security to the extent that such perfection can be achieved
by filing financing statements pursuant to the UCC;
(xvii) which constitute accounts as defined in the
UCC, and which are not evidenced by instruments or chattel
paper;
(xviii) which are not Delinquent Receivables at the time of
their inclusion in the Receivables Pool (excluding Receivables
transferred as part of the initial sale hereunder);
(xix) which are not Defaulted Receivables;
(xx) for which the applicable Originator has
established no offset arrangements with the related Obligor;
(xxi) for which the Defaulted Receivables of the related
Obligor do not exceed 50% of all such Obligor's Receivables, or such
other percentage not less than 25% as the Administrator shall approve
in its sole discretion;
(xxii) which represent the amount in excess of (x) the
outstanding credits granted by the applicable Originator to the related
Obligor and (y) security, collateral or other deposits placed by the
related Obligor with the applicable Originator or any Affiliate of the
applicable Originator; and
(xxiii) which do not include amounts payable for
finance charges.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time to
time. References to sections of ERISA also refer to any successor sections.
"Eurodollar Rate" means, for any Fixed Period, an interest
rate per annum (rounded upward to the nearest 1/16th of 1%) determined pursuant
to the following formula:
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Eurodollar Rate = LIBOR
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means, for any Fixed
Period, the maximum reserve percentage (expressed as a decimal, rounded
upward to the nearest 1/100th of 1%) in effect on the date LIBOR for
such Fixed Period is determined under regulations issued from time to
time by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) with respect to Eurocurrency funding (currently
referred to as "Eurocurrency liabilities") having a term comparable to
such Fixed Period; and
"LIBOR" means the rate of interest per annum
determined by the Liquidity Agent to be the arithmetic mean (rounded
upward to the nearest 1/16th of 1%) of the rates of interest per annum
notified to the Liquidity Agent by each Reference Bank as the rate of
interest at which dollar deposits in the approximate amount of the
Capital associated with such Fixed Period would be offered to major
banks in the London interbank market at their request at or about 11:00
a.m. (London time) on the second Business Day prior to the commencement
of such Fixed Period.
"Existing Receivables Agreement" means the Receivables
Purchase Agreement dated as of December 28, 1995, among the Seller, the
Servicer, the Parent, the Issuer and the Administrator.
"Excluded Obligor" means an Obligor, so designated in writing
as such by the Administrator to the Servicer, from time to time, it being
understood that from time to time the Administrator may revoke its designation
of one or more Obligors as Excluded Obligors by written notice to the Servicer.
"Excluded Receivables" means all Receivables originated by all
divisions of Stuart other than the Greensburg, Pennsylvania, Allentown,
Pennsylvania and Franklin, Massachusetts
divisions of Stuart.
"Facility Fee" has the meaning set forth in Section 1.12 of
the Amended and Restated Purchase and Sale Agreement.
"Facility Fee Percentage" has the meaning set forth in Section
1.12 of the Amended and Restated Purchase and Sale Agreement.
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<PAGE>
"Facility Termination Date" means the earliest to occur of (a)
May 30, 1999, (b) the Purchase Termination Date, as defined in the Amended and
Restated Liquidity Asset Purchase Agreement, which on the date of the Agreement
is May 30, 1999, or such later date designated as the Purchase Termination Date
from time to time pursuant to the Amended and Restated Liquidity Asset Purchase
Agreement (it being understood that the Administrator shall notify the Servicer
of the designation of such later date, provided that failure to provide such
notice shall not limit or otherwise affect the obligations of the Servicer or
the rights of the Administrator, the Issuer, or any other party to the Amended
and Restated Liquidity Asset Purchase Agreement), (c) the date of termination of
the commitment under any other Program Support Agreement, (d) the date
determined pursuant to Section 2.2 and (e) the date the Purchase Limit reduces
to zero pursuant to Section 1.1(b).
"Federal Funds Rate" means, for any period, the per annum rate
set forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor, "H.15(519)") for such day opposite the caption "Federal Funds
(Effective)". If on any relevant day such rate is not yet published in
H.15(519), the rate for such day will be the rate set forth in the daily
statistical release designated as the Composite 3:30 p.m. Quotations for U.S.
Government Securities, or any successor publication, published by the Federal
Reserve Bank of New York (including any such successor, the "Composite 3:30 p.m.
Quotation") for such day under the caption "Federal Funds Effective Rate". If on
any relevant day the appropriate rate for such previous day is not yet published
in either H.15(519) or the Composite 3:30 p.m. Quotations, the rate for such day
will be the arithmetic mean as determined by the Administrator of the rates for
the last transaction in overnight Federal funds arranged prior to 9:00 a.m. (New
York time) on that day by each of three leading brokers of Federal funds
transactions in New York City selected by the Administrator.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any entity succeeding to any of its principal
functions.
"Final Payout Date" means the date following the Facility
Termination Date on which no Capital or Discount in respect of the Purchased
Interest shall be outstanding and all other amounts (excluding contingent
obligations under indemnities and the like as to which no present payment
obligation exists) payable by any O&M Parties or the Servicer to the Issuer, the
Purchaser, the Administrator or any other Securitization Party or Affected
Person under the Transaction Documents shall have been paid in full.
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<PAGE>
"Fixed Period" means with respect to each Portion of
Capital:
(a) initially the period commencing on the date of a purchase
pursuant to Section 1.2 and ending such number of days as the Seller
shall select, subject to the approval of the Administrator pursuant to
Section 1.2, up to 90 days after such date; and
(b) thereafter each period commencing on the last day of the
immediately preceding Fixed Period for any Portion of Capital of the
Purchased Interest and ending such number of days (not to exceed 90
days) as the Seller shall select, subject to the approval of the
Administrator pursuant to Section 1.2, on notice by the Seller received
by the Administrator (including notice by telephone, confirmed in
writing) not later than 11:00 a.m. (New York City time) on such last
day, except that if the Administrator shall not have received such
notice or approved such period on or before 11:00 a.m. (New York City
time) on such last day, such period shall be one day; provided that
(i) any Fixed Period in respect of which Discount is
computed by reference to the Alternate Rate shall be a period
from one to and including 90 days, or a period of one, two or
three months, as the Seller may select as provided above;
(ii) any Fixed Period (other than of one day) which
would otherwise end on a day which is not a Business Day shall
be extended to the next succeeding Business Day; provided,
however, if Discount in respect of such Fixed Period is
computed by reference to the Eurodollar Rate, and such Fixed
Period would otherwise end on a day which is not a Business
Day, and there is no subsequent Business Day in the same
calendar month as such day, such Fixed Period shall end on the
next preceding Business Day;
(iii) in the case of any Fixed Period of one day, (A)
if such Fixed Period is the initial Fixed Period for a
purchase pursuant to Section 1.2, such Fixed Period shall be
the day of purchase of the Purchased Interest; (B) any
subsequently occurring Fixed Period which is one day shall, if
the immediately preceding Fixed Period is more than one day,
be the last day of such immediately preceding Fixed Period,
and, if the immediately preceding Fixed Period is one day, be
the day next following such immediately preceding Fixed
Period; and (C) if such Fixed Period occurs on a day
immediately preceding a day which is not a Business
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<PAGE>
Day, such Fixed Period shall be extended to the next
succeeding Business Day;
(iv) in the case of any Fixed Period for any Portion
of Capital of the Purchased Interest which commences before
the Termination Date and would otherwise end on a date
occurring after the Termination Date, such Fixed Period shall
end on such Termination Date and the duration of each Fixed
Period which commences on or after the Termination Date shall
be of such duration as shall be selected by the Administrator;
(v) any Fixed Period in respect of which Discount is
computed by reference to the CP Rate may be terminated at the
election of, and upon notice thereof to the Seller by, the
Administrator any time upon the occurrence and during the
continuance of any CP Market Disruption Event; and
(vi) if at any time after the occurrence and during
the continuance of any CP Market Disruption Event, the
Administrator elects to terminate any Fixed Period in respect
of which Discount is computed by reference to the CP Rate, the
Portion of Capital allocated to such terminated Fixed Period
shall be allocated to a new Fixed Period to be designated by
the Administrator (but in no event to exceed 5 days) and shall
accrue Discount at the Alternate Rate.
"Funding Rate" has the meaning set forth in Section 1.12 of
the Amended and Restated Purchase and Sale Agreement.
"Generally Accepted Accounting Principles" or "generally
accepted accounting principles" means generally accepted accounting principles
at the time in the United States. Except as otherwise expressly provided, all
references to generally accepted accounting principles shall be applied on a
consistent basis.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any body or entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including without limitation any court, and any Person
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
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<PAGE>
"Governmental Obligors" means any Obligor which is a
Governmental Authority (other than any state or other political subdivision of
any state or hospital owned by the foregoing).
"Guaranty Obligations" means any obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) guaranteeing or intended to guarantee any Indebtedness,
leases, dividends or other obligations of any other Person in any manner,
whether direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or other
obligation or any property constituting security therefore, (ii) to advance or
provide funds or other support for the payment or purchase of such indebtedness
or obligation or to maintain working capital, solvency or other balance sheet
condition of such other Person (including without limitation keep well
agreements and capital maintenance agreements), (iii) to lease or purchase
property, securities or services primarily for the purpose of assuring the owner
of such Indebtedness or obligation, or (iv) to otherwise assure or hold harmless
the owner of such Indebtedness or obligation against loss in respect thereof.
The amount of Guaranty Obligations hereunder shall be deemed to be an amount
equal to the stated or determinable amount of the Indebtedness or obligation in
respect of which such Guaranty Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated amount in respect thereof
(assuming such other Person is required to perform thereunder) as determined in
good faith.
"Indebtedness" means without duplication, (i) all indebtedness
for borrowed money, (ii) the deferred purchase price of assets or services which
in accordance with generally accepted accounting principles would be shown to be
a liability (on the liability side of a balance sheet), (iii) all Guaranty
Obligations, (iv) the maximum stated amount of all letters of credit issued or
acceptance facilities established for the account of such Person and, without
duplication, all drafts drawn thereunder (other than letters of credit (x)
supporting other Indebtedness of any O&M Party or (y) offset by a like amount of
cash or government securities pledged or held in escrow to secure such letter of
credit and draws thereunder), (v) all Capitalized Lease obligations, (vi) all
Indebtedness of another Person secured by any Lien on any property of any O&M
Party, whether or not such Indebtedness has been assumed, in an amount not to
exceed the fair market value of the property of any O&M Party securing such
Indebtedness, (vii) all obligations under take-or-pay or similar arrangements or
under interest rate, currency, or commodities agreements, and (viii)
indebtedness created or arising under any conditional sale or title retention
agreement; but specifically excluding from the foregoing trade payables and
accrued expenses arising or incurred in the ordinary course of business.
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"Indemnified Amounts" has the meaning set forth in
Section 3.1.
"Indemnified Party" has the meaning set forth in
Section 3.1.
"Initial Purchaser Note" has the meaning set forth in Section
1.6 of the Amended and Restated Purchase and Sale Agreement.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidations, receivership, dissolution,
winding-up or relief of debtors, or (b) any general assignment for the benefit
of creditors, composition, marshalling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or any substantial
portion of its creditors; in each case (a) and (b) undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code.
"Investment Grade" means (i) with respect to any Person's long
term public senior debt securities, a rating of at least BBB- by Standard &
Poor's Ratings Services or Baa3 by Moody's Investors Service, Inc. or, if such
Person's long-term public senior debt securities are rated by Duff & Phelps
Credit Rating Co., at least BBB- by such rating agency and (ii) with respect to
any Person's short-term public senior debt securities, a rating of at least A-2
by Standard & Poor's Ratings Services or P-2 by Moody's Investors Service, Inc.
or, if such Person's short-term public senior debt securities are rated by Duff
& Phelps Credit Rating Co., at least D-2 by such rating agency; provided, that
in either of the foregoing cases if such Person's public senior debt securities
are rated by more than one of the foregoing rating agencies, then each such
rating agency which rates such securities shall have given them a rating at
least equal to the categories specified above;
"Issuer" has the meaning set forth in the preamble to
the Agreement.
"LIBOR" means the rate of interest per annum determined by the
Liquidity Agent to be the arithmetic mean (rounded upward to the nearest 1/16th
of 1%) of the rates of interest per annum notified to the Liquidity Agent by
each Reference Bank as the rate of interest at which dollar deposits in the
approximate amount of the Capital associated with such Fixed Period would be
offered to major banks in the London interbank market at their request at or
about 11:00 a.m. (London time) on the second Business Day prior to the
commencement of such Fixed Period.
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"Lien" means any mortgage, pledge, hypothecation, assignment
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise) or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or other similar
recording or notice statute, and any lease in the nature thereof) securing or
purporting to secure any Indebtedness.
"Liquidity Agent" means Bank of America in its capacity
as Liquidity Agent pursuant to the Amended and Restated Liquidity
Asset Purchase Agreement.
"Lock-Box Account" means an account maintained at a bank or
other financial institution for the purpose of receiving or holding Collections,
either directly from Obligors, from any Originators or Seller or otherwise.
"Lock-Box Agreement" means an agreement, in substantially the
applicable form set forth in Annex B, between the Seller and each Lock-Box Bank.
"Lock-Box Bank" means any of the banks or other financial
institutions holding one or more Lock-Box Accounts.
"Loss Reserve" for the Purchased Interest under the
Amended and Restated Receivables Purchase Agreement and the Amended and Restated
Parallel Asset Purchase Agreement on any date means an amount equal to the
greater of
(x) Capital times the greatest of the following: (i) 6 times
the highest Six Month Default Ratio for any of the twelve most recent
Month End Dates, (ii) 10 times the highest Six Month
Loss-to-Liquidation Ratio for any of the twelve most recent Month End
Dates, (iii) 2 times the highest Normal or Special Concentration
Percentage for any Obligor that is Investment Grade, (iv) 4 times the
highest Normal or Special Concentration Percentage for any Obligor that
is not Investment Grade, and (v) 10%; and
(y) $6,000,000.
"Majority Parallel Purchasers" means, at any time, Parallel
Purchasers with Percentages under the Amended and Restated Parallel Asset
Purchase Agreement that are more than 50% in the aggregate.
"Maximum Parallel Purchase" means, with respect to each
Parallel Purchaser and the Amended and Restated Parallel Asset
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Purchase Agreement, the maximum amount of Capital which such Parallel Purchaser
is obligated to pay in respect of the Purchased Interest acquired by the
Parallel Purchasers under such Amended and Restated Parallel Asset Purchase
Agreement, as set forth below its signature to such Amended and Restated
Parallel Asset Purchase Agreement or in the Assignment pursuant to which it
became a Parallel Purchaser thereunder, as such amount may be modified
(w) in connection with any subsequent Assignment
pursuant to Section 6.3 of the Amended and Restated Parallel
Asset Purchase Agreement,
(x) in connection with a change in the Purchase Limit
applicable to such Amended and Restated Parallel Asset Purchase
Agreement pursuant to Section 6.1 of the Amended and Restated Parallel
Asset Purchase Agreement,
(y) as provided in Section 1.1(a) of the Amended and Restated
Parallel Asset Purchase Agreement to reflect the aggregate outstanding
Capital of the Purchased Interest under the Agreement to which the
Seller under such Amended and Restated Parallel Asset Purchase
Agreement is a party, or
(z) in connection with a termination of such Purchaser's
Purchase Commitment pursuant to Section 1.1(b) of the Amended and
Restated Parallel Asset Purchase
Agreement.
"Month End Date" means the last day of a calendar
month.
"Net Receivables Pool Balance" means at any time the
Outstanding Balance of Eligible Receivables then in the Receivables Pool reduced
by the sum of (i) the Outstanding Balance of such Eligible Receivables that have
become Defaulted Receivables and (ii) the aggregate amount by which the
Outstanding Balance of Eligible Receivables of each Obligor then in the
Receivables Pool exceeds the product of (A) the Normal Concentration Percentage
or Special Concentration Percentage, as the case may be, for such Obligor
multiplied by (B) the Outstanding Balance of the Eligible Receivables then in
the Receivables Pool.
"Normal Concentration Percentage" means at any time 2.0% (i)
for any Obligor except a Governmental Obligor or (ii) for all Governmental
Obligors taken as a whole.
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"Notes" means short-term promissory notes issued or to be
issued by the Issuer to fund its investments in accounts receivable or other
financial assets.
"O&M Credit Agreement" means the Credit Agreement, dated as of
May 24, 1996, among the Parent, as borrower, certain of the subsidiaries of the
Parent, as guarantors, the banks identified therein, NationsBank N.A., as agent,
Bank of America and Crestar Bank, as co-agents, and NationsBank N.A., as
administrative agent, as amended from time to time.
"O&M Medical" means Owens & Minor Medical, Inc., a
Virginia corporation.
"O&M Party" means the Parent or any of its Subsidiaries
(including the Seller).
"Obligor" means, with respect to any Receivable, the Person
obligated to make payments pursuant to the Contract relating to such Receivable.
"Originator" shall have the meaning set forth in the
Introduction to the Amended and Restated Purchase and Sale Agreement.
"Originator Note" shall have the meaning set forth in Section
1.7 of the Amended and Restated Purchase and Sale Agreement.
"Outstanding Balance" of any Receivable at any time means the
then outstanding principal balance thereof.
"Parallel Purchase Termination Date", with respect to each
Parallel Purchaser, has the meaning set forth in Section 6.6 of such Amended and
Restated Parallel Asset Purchase Agreement.
"Parallel Purchaser", with respect to each Parallel Purchaser,
has the meaning set forth in the preamble to the Amended and Restated Parallel
Asset Purchase Agreement.
"Parent" has the meaning set forth in the preamble to
the Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Pension Plan" means a "pension plan", as such term is defined
in section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which any
Originator or the
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Seller or any corporation, trade or business that is, along with such Originator
or the Seller, a member of a controlled group of corporations or a controlled
group of trades or businesses, as described in sections 414(b) and 414(c),
respectively, of the Internal Revenue Code of 1986, as amended or section 4001
of ERISA may have any liability, including any liability by reason of having
been a substantial employer within the meaning of section 4063 of ERISA at any
time during the preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Permitted Liens" means (i) Liens described on Schedule II
attached hereto; (ii) Liens for taxes not yet delinquent or Liens for taxes
being contested in good faith by appropriate proceedings for which adequate
reserves determined in accordance with generally accepted accounting principles
have been established (and as to which the property subject to such lien is not
yet subject to foreclosure, sale or loss on account thereof); (iii) Liens in
respect of property imposed by law arising in the ordinary course of business
such as materialmen's, mechanics', warehousemen's and other like Liens provided
that such Liens secure only amounts not more than 30 days past due or are being
contested in good faith by appropriate proceedings for which adequate reserves
determined in accordance with generally accepted accounting principles have been
established (and as to which the property subject to such lien is not yet
subject to foreclosure, sale or loss on account thereof); (iv) pledges or
deposits made to secure payment of worker's compensation insurance, unemployment
insurance, pensions or social security programs; (v) Liens arising from good
faith deposits in connection with or to secure performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations incurred in
the ordinary course of business (other than obligations in respect of the
payment of borrowed money); (vi) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or irregularities in title and
other similar charges or encumbrances not, in any material respect, impairing
the use of such property for its intended purposes or interfering with the
ordinary conduct of business of the O&M Parties taken as a whole, (vii) Liens
regarding operating or financing leases permitted by the O&M Credit Agreement;
(viii) leases or subleases granted to others in the ordinary course of business
not interfering in any material respect with the business or operations of the
borrower or its Subsidiaries; (ix) purchase money Liens securing purchase money
indebtedness to the extent permitted under the O&M Credit Agreement; (x) Liens
in favor of customs and revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods; (xi) any
judgment lien which does not create an event of default under the O&M Credit
Agreement or a
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Termination Event hereunder and (xii) Liens arising under this Agreement and any
other Transaction Document.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture, limited liability company or other entity, or a
government or any political subdivision or agency thereof.
"Pool Receivable" means a Receivable in the Receivables
Pool.
"Portion of Capital" has the meaning set forth in Section 1.7.
In addition, at any time when the Capital of the Purchased Interest is not
divided into two or more portions, "Portion of Capital" means 100% of the
Capital of the Purchased Interest.
"Pricing Grid Rate" means, at any time for any Fixed
Period:
(i) a rate per annum equal to the "Applicable Percentage"
which would then apply to "Eurodollar Loans", (as such terms are
defined in the O&M Credit Agreement); or
(ii) if the terms set forth in clause (i) of this definition
are no longer used in the O&M Credit Agreement, the highest applicable
margin above the Eurodollar Rate that the Parent is or would be charged
for a borrowing under the O&M Credit Agreement on such day; or
(iii) if the O&M Credit Agreement is no longer in effect, the
highest applicable margin above the Eurodollar Rate that the Parent is
or would be charged for a borrowing under any revolving committed
credit facility or agreement then in effect on such day; or
(iv) if the O&M Credit Agreement is no longer in effect and
there is no other revolving committed credit facility or agreement then
in effect, the applicable margin as set forth in clause (i) of this
definition, pursuant to the O&M Credit Agreement as in effect on the
day immediately prior to the termination thereof.
For purposes of clauses (ii), (iii), and (iv) of this definition, if
the Alternate Rate at such time is calculated with reference to the Interbank
Rate, and the applicable credit agreement contains provisions for calculating
interest based on a "eurodollar," "LIBOR," "IBOR," or similar rate index, then
the applicable margin shall be the margin calculated under such credit agreement
by reference to such "eurodollar," "LIBOR,"
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<PAGE>
"IBOR," or similar rate index. In all other circumstances, the applicable margin
will be the margin calculated under such credit agreement by reference to the
highest interest rate index available to the Parent under the applicable credit
agreement.
"Program Support Agreement" means and includes the Amended and
Restated Liquidity Asset Purchase Agreement and any other agreement entered into
by any Program Support Provider providing for the issuance of one or more
letters of credit for the account of the Issuer, the issuance of one or more
surety bonds for which the Issuer is obligated to reimburse the applicable
Program Support Provider for any drawings thereunder, the sale by the Issuer to
any Program Support Provider of the Purchased Interest (or portions thereof)
and/or the making of loans and/or other extensions of credit to the Issuer in
connection with the Issuer's securitization program, together with any letter of
credit, surety bond or other instrument issued thereunder (but excluding any
discretionary advance facility provided by the Administrator).
"Program Support Provider" means and includes any Purchaser
and any other or additional Person (other than any customer of the Issuer) now
or hereafter extending credit or having a commitment to extend credit to or for
the account of, or to make purchases from, the Issuer or issuing a letter of
credit, surety bond or other instrument to support any obligations arising under
or in connection with the Issuer's securitization program.
"Purchase and Sale Termination Date" means the date determined
in accordance with Section 2.3 of the Amended and Restated Purchase and Sale
Agreement.
"Purchase and Sale Termination Event" has the meaning set
forth in Exhibit IV to the Amended and Restated Purchase and Sale Agreement.
"Purchase Agreement" means the Agreement, the Amended and
Restated Purchase and Sale Agreement or the Amended and Restated Parallel Asset
Purchase Agreement, and "Purchase Agreements" means the Agreement, Amended and
Restated the Purchase and Sale Agreement, and the Amended and Restated Parallel
Asset Purchase Agreement.
"Purchase Limit" means the lesser of (i) $150,000,000, as such
amount may be reduced pursuant to Section 1.1(b) and (ii) (A) the aggregate of
the Maximum Liquidity Purchase (as defined in the Amended and Restated Liquidity
Asset Purchase Agreement) of the Purchasers under the Amended and Restated
Liquidity Asset Purchase Agreement less (B) the aggregate of the Discount of the
existing Fixed Periods (for the entirety of such
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Fixed Periods), as such amount may be reduced pursuant to Section 1.1(b).
References to the unused portion of the Purchase Limit shall mean, at any time,
the Purchase Limit minus the then outstanding Capital of the Purchased Interest
under the Agreement.
"Purchased Interest" means, with respect to the Amended and
Restated Receivables Purchase Agreement and the Amended and Restated Parallel
Asset Purchase Agreement, at any time, the undivided percentage ownership
interest in (i) each and every Pool Receivable now existing or hereafter
arising, other than any Pool Receivable that arises on or after the Facility
Termination Date, (ii) all Related Security with respect to such Pool
Receivables, and (iii) all Collections with respect to, and other proceeds of,
such Pool Receivables and Related Security. Such undivided percentage interest
shall be computed as
C + DCR + LR + DLR + SFR
NRB
where:
C = the Capital of the Purchased Interest at the
time of computation under the applicable
Purchase Agreement.
DCR = the Discount Reserve of the Purchased Interest
under the applicable Purchase Agreement at the
time of computation.
LR = the Loss Reserve of the Purchased Interest
under the applicable Purchase Agreement at the
time of computation.
DLR = the Dilution Reserve of the Purchased Interest
under the applicable Purchase Agreement at the
time of computation.
SFR = the Servicing Fee Reserve of the Purchased
Interest under the applicable Purchase Agreement
at the time of computation.
NRB = the Net Receivables Pool Balance at the time
of computation.
The Purchased Interest shall be determined from time to time pursuant to the
provisions of Section 1.3 and shall be computed separately for the Amended and
Restated Receivables Purchase Agreement and the Amended and Restated Parallel
Asset Purchase Agreement.
"Purchaser" has the meaning set forth in Section
5.3(b).
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<PAGE>
"Rate Variance Factor" means a number greater than one that
reflects the potential variance in selected interest rates over a period of time
designated by the Administrator, as specified by the Administrator from time to
time, notified to the Seller and set forth in the Seller Report in accordance
with the provisions thereof; provided that the "Rate Variance Factor" may be
changed from time to time upon at least five days' prior notice to the Servicer.
The initial Rate Variance Factor shall be 1.25.
"Receivable" means any indebtedness and other obligations owed
to any Originator or any rights of any Originator to payment from or on behalf
of an Obligor whether constituting an account, chattel paper, instrument or
general intangible, arising in connection with the sale or lease of goods or the
rendering of services by any Originator, and includes, without limitation, the
obligation to pay any finance charges, fees and other charges with respect
thereto. Indebtedness and other obligations arising from any one transaction,
including, without limitation, indebtedness and other obligations represented by
an individual invoice or agreement, shall constitute a Receivable separate from
a Receivable consisting of the indebtedness and other obligations arising from
any other transaction.
"Receivables Pool" means at any time all of the then
outstanding Receivables excluding the Excluded Receivables.
"Reference Bank" means Bank of America.
"Related Assets" has the meaning set forth in Section 1.1 of
the Amended and Restated Purchase and Sale Agreement.
"Related Security" means with respect to any
Receivable:
(i) all of any Originator's interest in any goods
(including returned goods), and documentation or title
evidencing the shipment or storage of any goods (including
returned goods), relating to any sale giving rise to such
Receivable;
(ii) all other security interests or liens and
property subject thereto from time to time purporting to
secure payment of such Receivable, whether pursuant to the
Contract related to such Receivable or otherwise, together
with all UCC financing statements or similar filings signed by
an Obligor relating thereto; and
(iii) all guaranties, indemnities, insurance and
other agreements (including the related Contract) or
arrangements of whatever character from time to time
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<PAGE>
supporting or securing payment of such Receivable or otherwise
relating to such Receivable whether pursuant to the Contract
related to such Receivable or otherwise.
"Restatement Effective Date" means the date on which the
conditions set forth in section (2) of Exhibit II of the Amended and Restated
Receivables Purchase Agreement have been
met.
"Restricted Payments" has the meaning given thereto in
paragraph (m) of Exhibit V.
"Run-off Day" means (i) each day on which the conditions set
forth in Section 2 of Exhibit II are not satisfied, (ii) each day which occurs
on or after the Termination Date, and (iii) each day as to which the Issuer has
indicated to the Seller pursuant to Section 1.1(a) that it will not reinvest in
the Purchased Interest hereunder.
"Securitization Parties" means the Issuer, the Administrator,
any Purchaser, any Parallel Purchaser, the Administrative Agent, any Program
Support Provider, their respective Affiliates, employees, agents and
representatives, and the respective successors, transferees and assigns of any
of the foregoing.
"Seller" has the meaning set forth in the preamble to
the Agreement.
"Seller Report" means a report, in substantially the form of
Annex A hereto, furnished by the Servicer to the Administrator pursuant to the
Agreement.
"Servicer" has the meaning set forth in the preamble to
the Agreement.
"Servicing Fee" shall mean the fee referred to in
Section 4.6.
"Servicing Fee Reserve" for the Purchased Interest under the
Amended and Restated Receivables Purchase Agreement and the Amended and Restated
Parallel Asset Purchase Agreement at any time means the sum of (i) the unpaid
Servicing Fee relating to the Purchased Interest accrued to such time, plus (ii)
an amount equal to (a) the Capital of the Purchased Interest at the time of
computation multiplied by (b) the product of (x) the percentage per annum at
which the Servicing Fee is accruing on such date and (y) a fraction having the
sum of the Average Maturity plus the Collection Delay Period (each as in effect
at such date) as its numerator and 360 as its denominator.
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"Settlement Period" for each Portion of Capital means each
period commencing on the first day and ending on the last day of each Fixed
Period for such Portion of Capital and, on and after the Termination Date, such
period (including, without limitation, a period of one day) as shall be selected
from time to time by the Administrator or, in the absence of any such selection,
each period of 30 days from the last day of the immediately preceding Settlement
Period.
"Sub-Servicer" has the meaning set forth in
Section 4.1.
"Six Month Default Ratio" means the ratio (expressed as a
percentage and rounded to the nearest 1/100 of 1%) computed as of each Month End
Date by dividing (i) the amount of Pool Receivables that became Defaulted
Receivables during the six month period ending on such Month End Date by (ii)
the aggregate amount of Pool Receivables invoiced by the Originators during the
six month period ending on the Month End Date which occurred four months before
such Month End Date.
"Six Month Dilution Ratio" means the ratio (expressed as a
percentage and rounded to the nearest 1/100 of 1%) computed as of each Month End
Date by dividing (i) the aggregate reduction attributable to Dilution
Adjustments in each case occurring during the six month period ending on such
Month End Date by (ii) the aggregate amount of Pool Receivables invoiced by the
Originators during the six month period ending on the Month End Date which
occurred one month before such Month End Date.
"Six Month Loss-to-Liquidation Ratio" means the ratio
(expressed as a percentage and rounded to the nearest 1/100th of 1%) computed as
of each Month End Date by dividing (i) the aggregate Outstanding Balance of all
Pool Receivables written off by the Seller, or which should have been written
off by the Seller in accordance with the Credit and Collection Policy, during
the six month period ending on such Month End Date by (ii) the aggregate amount
of Collections of Pool Receivables actually received during such six month
period.
"Solvent" means, as to any Person at any time, that (a) the
fair value of the property of such Person is greater than the amount of such
Person's liabilities (including disputed, contingent and unliquidated
liabilities) as such value is established and liabilities evaluated for purposes
of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes
of Sections 55-80 and 55-81 of the Virginia Code Annotated; (b) the present fair
saleable value of the property 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 is able to realize upon its
property and pay its debts and other liabilities (including disputed, contingent
and unliquidated liabilities) as
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<PAGE>
they mature in the normal course of business; (d) 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 (e) such
Person is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would constitute
unreasonably small capital.
"Special Concentration Percentage" means, for any Obligor,
such percentage as has been so designated in writing as such by the
Administrator at its sole discretion to the Seller, from time to time, with
respect to an Obligor, it being understood that the Administrator may (i) lower
such percentage from time to time at its sole discretion by written notice to
the Seller and (ii) raise such percentage only with the written consent of the
Seller.
"Stuart" means Stuart Medical, Inc., a Pennsylvania
corporation.
"Subsidiary" means, with respect to any Person, any
corporation of which more than 50% of the outstanding capital stock having
ordinary voting power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time capital stock of any other
class or classes of such corporation shall or might have voting power upon the
occurrence of any contingency) is at the time directly or indirectly owned by
such Person, by such Person and one or more other Subsidiaries of such Person,
or by one or more other Subsidiaries of such Person.
"Supplement" means a Supplement executed by the Parent or any
Subsidiary of the Parent in form and substance satisfactory to the Administrator
and the Administrative Agent under the Amended and Restated Parallel Asset
Purchase Agreement, pursuant to which the Parent or a Subsidiary of the Parent
shall become an Originator under the Amended and Restated Purchase and Sale
Agreement.
"Tangible Net Worth" means total stockholders' equity minus
goodwill, patents, trade names, trade marks, copyrights, franchises,
organizational expense, deferred assets other than prepaid insurance and prepaid
taxes and such other assets as are properly classified as "intangible assets",
for any corporation as determined in accordance with generally accepted
accounting principles.
"Termination Date" means the earlier of (i) the Business Day
which the Seller or the Administrator so designates by notice to the other at
least 10 Business Days in advance and (ii) the Facility Termination Date.
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<PAGE>
"Termination Discount" means, for the Purchased Interest on
any date, an amount equal to the Rate Variance Factor on such date multiplied by
the product of (i) the Capital of the Purchased Interest on such date and (ii)
the product of (a) the Base Rate for the Purchased Interest for a 30-day Fixed
Period deemed to commence on such date and (b) a fraction having as its
numerator the sum of the Average Maturity plus the Collection Delay Period (each
as in effect at such date) and 360 as its denominator.
"Termination Event" has the meaning specified in
Exhibit VI.
"Termination Fee" means, for any Fixed Period during which a
Run-off Day occurs, the amount, if any, by which (i) the additional Discount
(calculated without taking into account any Termination Fee or any shortened
duration of such Fixed Period pursuant to clause (b)(iv) of the definition
thereof) which would have accrued during such Fixed Period on the reductions of
Capital of the Purchased Interest relating to such Fixed Period had such
reductions remained as Capital, exceeds (ii) the income, if any, received by the
Issuer from the Issuer investing the proceeds of such reductions of Capital, as
determined by the Administrator, which determination shall be binding and
conclusive for all purposes, absent manifest error.
"Transaction Documents" means the Agreement, the Amended and
Restated Purchase and Sale Agreement, the Amended and Restated Parallel Asset
Purchase Agreement, the Lock-Box Agreements, the Amended and Restated Liquidity
Asset Purchase Agreement and all other certificates, instruments, UCC financing
statements, reports, notices, agreements and documents executed or delivered
under or in connection with the Agreement, in each case as the same may be
amended, supplemented or otherwise modified from time to time in accordance with
the Agreement.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the applicable jurisdiction.
"Unmatured Termination Event" means, with respect to any
Purchase Agreement, an event which, with the giving of notice or lapse of time,
or both, would constitute a Termination Event under such Purchase Agreement.
Other Terms. All accounting terms not specifically defined herein shall
be construed in accordance with generally accepted accounting principles. All
terms used in Article 9 of the UCC in the State of New York, and not
specifically defined herein, are used herein as defined in such Article 9.
Unless the context otherwise requires, "or" means "and/or", and "including" (and
with correlative meaning "include" and "includes") means including without
limiting the generality of any description preceding such term.
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<PAGE>
EXHIBIT II
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial
purchase under the Agreement shall not occur until on or after the Restatement
Effective Date. The Restatement Effective Date shall occur on the date on which
the Administrator shall have received the following, each in form and substance
(including the date thereof) satisfactory to the Administrator:
(a) A duly executed counterpart of this Amended and
Restated Receivables Purchase Agreement.
(b) A duly executed counterpart of the Amended and
Restated Purchase and Sale Agreement.
(c) A duly executed counterpart copy of the Amended
and Restated Parallel Asset Purchase Agreement.
(d) Certified copies of (i) the resolutions of the Board of
Directors of each of the Originators, the Seller, the Servicer and the Parent
authorizing the execution, delivery, and performance by such Originator, the
Seller, the Servicer and the Parent, respectively, of the Agreement and the
other Transaction Documents, (ii) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to the
Agreement and the other Transaction Documents and (iii) the certificate of
incorporation and by-laws of each of the Originators, the Seller, the Servicer
and the Parent
(e) A certificate of the Secretary or Assistant Secretary of
each of the Originators, the Seller, the Servicer and the Parent certifying the
names and true signatures of the officers of the Seller, the Servicer and the
Parent, respectively, authorized to sign the Transaction Documents to which it
is a party. Until the Administrator receives a subsequent incumbency certificate
from an Originator, the Seller, the Servicer or the Parent in form and substance
satisfactory to the Administrator, the Administrator shall be entitled to rely
on the last such certificate delivered to it.
(f) Signed copies of proper financing statements, in a form
suitable for filing under the UCC of all jurisdictions that the Administrator
may deem necessary or desirable in order to perfect the interests of the Issuer
contemplated by the Agreement.
(g) Signed copies of proper financing statements, if any, in a
form suitable for filing under the UCC of all jurisdictions that the
Administrator may deem necessary to
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release all security interests and other rights of any Person in the
Receivables, Contracts or Related Security previously granted by any Originator.
(h) Completed UCC requests for information, dated on or before
the date of such initial purchase, listing the financing statements referred to
in subsection (d) above and all other effective financing statements filed in
the jurisdictions referred to in subsection (f) above that name any Originator
as debtor, together with copies of such other financing statements (none of
which shall cover any Receivables, Contracts or Related Security), and similar
search reports with respect to federal tax liens and liens of the Pension
Benefit Guaranty Corporation in such jurisdictions as the Administrator may
request, showing no such liens on any of the Receivables, Contracts or Related
Security.
(i) A favorable opinion of Hunton & Williams, counsel for the
Seller, the Servicer and the Parent, substantially in the form of Annex B hereto
and as to such other matters as the Administrator may reasonably request.
(j) A favorable opinion of Drew St. J. Carneal, Esq.,
Senior Vice President, Corporate Counsel and Secretary of the
Parent, substantially in the form of Annex C hereto and as to
such other matters as the Administrator may reasonably request.
(k) Satisfactory results of a review and audit of the
Originators' collection, operating and reporting systems, Credit and Collection
Policy, historical receivables data and accounts, including satisfactory results
of a review of the Originators' operating location(s) and satisfactory review
and approval of the Eligible Receivables in existence on the date of the initial
purchase under this Amended and Restated Receivables Purchase Agreement.
(l) Seller Report representing the performance of the
portfolio to be purchased through the Amended and Restated Receivables Purchase
Agreement for the month prior to closing.
(m) Evidence of payment by O&M Medical and the Seller of all
accrued and unpaid fees (including those contemplated by the letter agreement
referred to in Section 1.5), costs and expenses to the extent then due and
payable on the date thereof, together with Attorney Costs of the Administrator
to the extent invoiced prior to or on such date, plus such additional amounts of
Attorney Costs as shall constitute the Administrator's reasonable estimate of
Attorney Costs incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude final settling of
accounts between the Seller and the Administrator); including any such
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costs, fees and expenses arising under or referenced in Section 5.4.
(n) A letter agreement between the Seller and the
Administrator contemplated by Section 1.5.
(o) Good standing certificates with respect to each of the
Originators, the Seller, the Servicer and the Parent issued by the Secretary of
the State Corporation Commission of Virginia.
(p) Executed counterparts of the Lock-Box Agreements with each
of the Lock-Box Banks identified in Schedule II to the Amended and Restated
Purchase and Sale Agreement.
(q) A certificate of the Treasurer or Assistant Treasurer of
the Parent certifying as to (1) the closing of the senior subordinated note
offering (x) substantially on the terms set forth in the draft Indenture dated
May 3, 1996 (previously received by the Administrator), among the Parent, the
guarantors named therein and Crestar Bank, as Trustee and (y) generating net
cash proceeds to the Parent in an amount not less than $150,000,000 (less any
customary fees and expenses) and (ii) the closing of the O&M Credit Agreement
substantially on the terms set forth in the draft O&M Credit Agreement dated May
__, 1996 previously received by the Administrator.
(r) A certificate from an officer of O&M to the effect that
the Seller has a Tangible Net Worth of at least $15,000,000 (it being understood
that all Receivables transferred to the Seller as capital contributions shall be
valued at the lower of the book value thereof or the Outstanding Balance
thereof).
(s) Such other approvals, opinions or documents as the
Administrator or Purchasers may reasonably request.
2. Conditions Precedent to All Purchases and Reinvestments.
Each purchase (including the initial purchase under this Amended and Restated
Receivables Purchase Agreement) and each reinvestment shall be subject to the
further conditions precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the Administrator on or prior to such purchase, in form and
substance satisfactory to the Administrator, a completed Seller Report with
respect to the immediately preceding calendar month, dated within three (3)
Business Days prior to the date of such purchase and such additional information
as may reasonably be requested by the Administrator including, without
limitation, a listing of Obligors and their respective portions of the Pool
Receivables at any time;
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(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller and the
Parent that such statements are then true):
(i) the representations and warranties contained in
Exhibit III are true and correct on and as of the date of such purchase
or reinvestment as though made on and as of such date; and
(ii) in the case of each purchase, no event has
occurred and is continuing, or would result from such purchase, that
constitutes a Termination Event or that would constitute a Termination
Event but for the requirement that notice be given or time elapse or
both; and
(iii) in the case of each reinvestment, no event has
occurred and is continuing, or would result from such reinvestment,
that constitutes (x) any Termination Event, or (y) an Unmatured
Termination Event under clause (g) or (j) of Exhibit VI to the Amended
and Restated Receivables Purchase Agreement.
(c) the Administrator shall have received such other
approvals, opinions or documents as it may reasonably request.
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EXHIBIT III
REPRESENTATIONS AND WARRANTIES
OF
SELLER, SERVICER AND THE PARENT
The Seller, the Servicer and the Parent each jointly and
severally make the following representations and warranties:
(a) Organization and Good Standing. It is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and is duly qualified to do business, and is in good
standing, as a foreign corporation in every jurisdiction where the nature of its
business requires it to be so qualified.
(b) Due Qualification; No Conflicts. The execution, delivery
and performance by it of the Agreement and the other Transaction Documents to
which it is a party, including, in the case of the Seller, the Seller's use of
the proceeds of purchases and reinvestments, (i) are within its corporate
powers, (ii) have been duly authorized by all necessary corporate action, (iii)
do not contravene or result in a default under or conflict with (1) its charter
or by-laws, (2) any law, rule or regulation applicable to it, (3) any
contractual restriction binding on or affecting it or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and (iv) do not result in or require the creation of any Adverse
Claim upon or with respect to any of its properties. The Agreement and the other
Transaction Documents to which it is a party have been duly executed and
delivered by it.
(c) Consents. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by it of the Agreement
or any other Transaction Document to which it is a party other than (i) the
filing of financing statements against O&M Medical and the Seller in the State
Corporation Commission of Virginia and (ii) comparable filings with respect to
all other Originators in the jurisdiction provided in their respective
Supplement to perfect the Initial Purchaser's interest in the Pool Receivables
under the Amended and Restated Purchase and Sale Agreement.
(d) Binding Obligations. Each of the Agreement and the other
Transaction Documents to which it is a party (and which on its face purports to
create an obligation) constitutes the legal, valid and binding obligation of it
enforceable against it in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditor's rights generally and by general
principles of equity regardless of
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whether such enforceability is considered in a proceeding in
equity or at law.
(e) Financial Statements.
(i) (x) The consolidated balance sheet of the Parent
and its Subsidiaries as of December 31, 1995, and the related
consolidated statement of income and retained earnings of the
Parent and its Subsidiaries for the fiscal year then ended and
(y) the consolidated balance sheet of the Parent and its
Subsidiaries as of March 31, 1996, and the related
consolidated and consolidating statements of income and
retained earnings of the Parent and its Subsidiaries for the
fiscal quarter then ended, copies of which have been furnished
to the Administrator, fairly present the financial conditions
of the Parent and its Subsidiaries as at such date and the
results of the operations of the Seller for the periods ended
on such dates, all in accordance with generally accepted
accounting principles consistently applied and since December
31, 1995, there has been no material adverse change in the
business, operations, property or financial or other condition
or operations of the Seller or the Parent or any of their
Subsidiaries taken as a whole, the ability of the Seller or
the Parent to perform its obligations under the Agreement or
the other Transaction Documents or the collectibility of the
Pool Receivables, or which affects the legality, validity or
enforceability of the Amended and Restated Purchase and Sale
Agreement or the other Transaction Documents.
(ii) The unaudited condensed balance sheet of the
Originators as of March 31, 1996, and the related condensed
statements of income of the Originators for the fiscal quarter
ended March 31, 1996, heretofore furnished to the
Administrator, are the financial statements of the Originators
routinely prepared for internal use.
(f) No Proceedings. There is no pending or threatened action
or proceeding affecting either (x) the Seller and its Subsidiaries taken as a
whole or (y) the Parent and its Subsidiaries taken as a whole, which is before
any Governmental Authority or arbitrator and which would reasonably be expected
to materially adversely affect the business, operations, property, financial or
other condition or operations of either (x) the Seller and its Subsidiaries
taken as a whole or (y) the Parent and its Subsidiaries taken as a whole, or
their ability to perform its obligations under the Agreement or the other
Transaction Documents or the collectibility of the Receivables, or which affects
or purports to affect the legality, validity or
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enforceability of the Agreement or the other Transaction
Documents.
(g) Quality of Title; Valid Sale; Etc. The Seller is the legal
and beneficial owner of the Pool Receivables and Related Security free and clear
of any Adverse Claim; upon each purchase or reinvestment, the Issuer shall
acquire a valid and enforceable perfected undivided percentage ownership
interest, to the extent of the Purchased Interest, in each Pool Receivable then
existing or thereafter arising and in the Related Security and Collections and
other proceeds, with respect thereto, free and clear of any Adverse Claim; the
Agreement creates a security interest in favor of the Administrator, on its
behalf and on behalf of the Issuer, in the items described in Section 1.2(d),
and the Administrator, on its behalf and on behalf of the Issuer, has a first
priority perfected security interest in such items free and clear of any Adverse
Claims. No effective financing statement or other instrument similar in effect
covering any Contract or any Pool Receivable or the Related Security or
Collections with respect thereto or any Lock-Box Account is on file in any
recording office, except those filed in favor of the Issuer relating to the
Agreement.
(h) Accuracy of Information. Each Seller Report (if prepared
by the Seller or one of its Affiliates, or to the extent that information
contained therein is supplied by the Seller or an Affiliate), information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of the Seller to the Administrator in
connection with the Agreement is or will be accurate in all material respects as
of its date or (except as otherwise disclosed to the Administrator at such time)
as of the date so furnished, and no such item contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary in order to make the statements contained therein, in the light
of the circumstances under which they were made, not misleading.
(i) Principal Place of Business. The principal place of
business and chief executive office (as such terms are used in the UCC) of the
Seller and the office where the Seller keeps its records concerning the
Receivables are located at the address referred to in Schedule III (or at such
other addresses designated in accordance with such paragraph (b) of Exhibit V).
(j) Lock-Box Banks, Accounts. The names and addresses of all
the Lock-Box Banks, together with the account numbers of the Lock-Box Accounts
of the Seller at such Lock-Box Banks, are specified in Schedule IV to the
Agreement (or at such other LockBox Banks and/or with such other Lock-Box
Accounts as have been notified to the Administrator in accordance with the
Agreement) and all Lock-Box Accounts are subject to Lock-Box Agreements.
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(k) No Violation. It is not in violation of any order of any
court, arbitrator or Governmental Authority which violation would reasonably be
expected to have a material adverse effect on its business, operations, property
or financial or other condition.
(l) Ownership of Issuer. Neither it nor any of its
Affiliates has any direct or indirect ownership or other
financial interest in the Issuer.
(m) Proceeds. No proceeds of any purchase or reinvestment will
be used for any purpose that violates any applicable law, rule or regulation,
including, without limitation, Regulations G or U of the Federal Reserve Board.
(n) Eligible Receivables. Each Pool Receivable
included as an Eligible Receivable in the calculation of the Net
Receivables Pool Balance, is an Eligible Receivable.
(o) No Purchase and Sale Termination Events. No event has
occurred and is continuing, or would result from a purchase in respect of, or
reinvestment in respect of the Purchased Interest or from the application of the
proceeds therefrom, which constitutes a Termination Event.
(p) Maintenance of Books and Records. The Seller has accounted
for each sale of undivided percentage ownership interests in Receivables in its
books and financial statements as a sale, consistent with Generally Accepted
Accounting Principles.
(q) Credit and Collection Policy. The Seller has
complied in all material respects with the Credit and Collection
Policy with regard to each Receivable.
(r) Compliance with Transaction Documents. It has
complied with all of the terms, covenants and agreements
contained in the Agreement and the other Transaction Documents
and applicable to it.
(s) Corporate Name. The Seller's complete corporate name is
set forth in the preamble to the Agreement, and the Seller does not use and has
not during the last six years used any other corporate name, trade name, doing
business name or fictitious name, except as set forth on Schedule III and except
for names first used after the date of the Agreement and set forth in a notice
delivered to the Administrator pursuant to paragraph (l)(vi) of Exhibit V.
(t) No Labor Disputes. There are no strikes, lockouts
or other labor disputes against it or any of its subsidiaries,
or, to the best of its knowledge, threatened against or affecting
it or any of its subsidiaries, and no significant unfair labor
practice complaint is pending against it or any of its
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subsidiaries or, to the best knowledge of it, threatened against any of them by
or before any Governmental Authority that would have a material adverse effect
on its business, operations, property or financial or other condition.
(u) Pension Plans. During the preceding twelve months, no
steps have been taken to terminate any Pension Plan of the Seller, the Servicer
or the Parent which was not fully funded, unless adequate reserves have been set
aside for the funding thereof, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the Seller,
the Servicer or the Parent of any material liability, fine or penalty.
(v) Investment Company Act. It is not, and is not
controlled by, an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as
amended.
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EXHIBIT IV
REPRESENTATIONS AND WARRANTIES OF ISSUER
The Issuer represents and warrants as follows:
(a) Organization and Good Standing. The Issuer is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware, and is duly qualified to do business, and is in
good standing, as a foreign corporation in every jurisdiction where the nature
of its business requires it to be so qualified.
(b) Due Qualification; No Conflicts. The execution, delivery
and performance by the Issuer of the Agreement and the other Transaction
Documents to which it is a party, including the Issuer's use of the proceeds of
purchases and reinvestments, (i) are within the Issuer's corporate powers, (ii)
have been duly authorized by all necessary corporate action, (iii) do not
contravene or result in a default under or conflict with (1) the Issuer's
charter or by-laws, (2) any law, rule or regulation applicable to the Issuer,
(3) any contractual restriction binding on or affecting the Issuer or its
property or (4) any order, writ, judgment, award, injunction or decree binding
on or affecting the Issuer or its property, and (iv) do not result in or require
the creation of any Adverse Claim upon or with respect to any of its properties.
The Agreement and the other Transaction Documents to which it is a party have
been duly executed and delivered by the Issuer.
(c) Consents. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by the Issuer of the
Agreement or any other Transaction Document to which it is a party.
(d) Binding Obligations. Each of the Agreement and the other
Transaction Documents to which it is a party constitutes the legal, valid and
binding obligation of the Issuer enforceable against the Issuer in accordance
with its terms except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditor's rights generally and by general principles of equity regardless of
whether such enforceability is considered in a proceeding in equity or at law.
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EXHIBIT V
COVENANTS
Covenants of the Seller and the Parent. Until the latest of the
Facility Termination Date, the date on which no Capital of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to the Issuer, the Administrator
and any other Indemnified Party or Affected Person shall be paid in full, each
of the Seller and the Parent, jointly and severally, agree that obligations set
forth in this Exhibit V shall be performed and observed.
(a) Compliance with Laws, Etc. The Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables or
the enforceability of any related Contract or the ability of the Seller to
perform its obligations under any related Contract or under the Agreement.
(b) Offices, Records and Books of Account; Etc. The
Seller (i) shall keep its principal place of business and chief executive office
(as such terms are used in the UCC) and the office where it keeps its records
concerning the Receivables at the address of the Seller set forth on Schedule
III attached hereto or, upon at least 60 days' prior written notice of a
proposed change to the Administrator, at any other locations in jurisdictions
where all actions reasonably requested by the Administrator to protect and
perfect the interests of the Administrator and the Issuer in the Receivables and
related items (including without limitation the items described in Section
1.2(d)) have been taken and completed and (ii) shall provide the Administrator
with at least 60 days' written notice prior to making any change in the Seller's
name or making any other change in the Seller's identity or corporate structure
(including a merger) which could render any UCC financing statement filed in
connection with this Agreement "seriously misleading" as such term is used in
the UCC; each notice to the Administrator pursuant to this sentence shall set
forth the applicable change and the effective date thereof. The Seller also
will maintain and implement administrative and operating procedures (including,
without limitation, an ability to recreate records evidencing Receivables and
related Contracts in the event of the destruction of the originals thereof), and
keep and maintain all documents,
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books, records, computer tapes and disks and other information reasonably
necessary or advisable for the collection of all Receivables (including, without
limitation, records adequate to permit the daily identification of each
Receivable and all Collections of and adjustments to each existing Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller shall, at its expense, timely and fully perform
and comply with all material provisions, covenants and other promises required
to be observed by it under the Contracts related to the Receivables, and timely
and fully comply in all material respects with the Credit and Collection Policy
with regard to each Receivable and the related Contract.
(d) Ownership Interest, Etc. The Seller shall, at its expense,
take all action necessary or desirable to establish and maintain a valid and
enforceable and perfected undivided ownership interest, to the extent of the
Purchased Interest, in the Pool Receivables and the Related Security and
Collections and other proceeds with respect thereto, and a first priority
perfected security interest in the items described in Section 1.2(d), free and
clear of any Adverse Claim, in favor of the Issuer, including, without
limitation, taking such action to perfect, protect or more fully evidence the
interest of the Issuer under the Agreement as the Issuer, through the
Administrator, may request.
(e) Sales, Liens, Etc. The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any or all of its right, title
or interest in, to or under any item described in Section 1.2(d) or the Seller's
undivided interest in any Receivable, Related Security, or Collections, or upon
or with respect to any account to which any Collections of any Receivables are
sent, or assign any right to receive income in respect of any items contemplated
by this paragraph (e).
(f) Extension or Amendment of Receivables. Except as provided
in Section 4.2(a) the Agreement, the Seller shall not extend the maturity or
adjust the Outstanding Balance or otherwise modify the terms of any Pool
Receivable. The Seller will not amend, modify or waive any term or condition of
any related Contract in a way which would adversely affect the collectibility of
any Receivables.
(g) Change in Business or Credit and Collection Policy.
Without the written consent of the Administrator, the Seller
shall not make (i) any material change in the character of its
business or in the Credit and Collection Policy, or (ii) any
change at all in the Credit and Collection Policy that would
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adversely affect the collectibility of the Receivables Pool or the
enforceability of any related Contract or the ability of the Seller to perform
its obligations under any related Contract or under the Agreement.
(h) Audits. The Seller shall, from time to time during regular business
hours as requested by the Administrator, permit the Administrator, or its agents
or representatives, (i) to examine and make copies of and make abstracts from
all books, records and documents (including, without limitation, computer tapes
and disks) in the possession or under the control of the Seller relating to
Receivables and the Related Security, provided that copies of the related
Contracts may only be made if the Servicer is not the Seller or if a Termination
Event has occurred and (ii) to visit the offices and properties of the Seller
for the purpose of examining such materials described in clause (i) above, and
to discuss matters relating to Receivables and the Related Security or the
Seller's performance hereunder or under the Contracts with any of the officers,
employees, agents or contractors of the Seller having knowledge of such matters.
(i) Lock-Box Agreements; Change in Lock-Box Banks, Lock-Box
Accounts and Payment Instructions to Obligors. The Seller shall not add or
terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account from
those listed in Schedule IV to the Agreement, or make any change in its
instructions to Obligors regarding payments to be made to the Seller or payments
to be made to any Lock-Box Account (or related post office box), unless the
Administrator shall have consented thereto in writing and the Administrator
shall have received copies of all agreements and documents (including without
limitation Lock-Box Agreements) that it may request in connection therewith.
(j) Deposits to Lock-Box. The Seller shall (i) instruct all
Obligors (other than Obligors which customarily make direct payment to the
Company for deposit in one of the Lock-Box Accounts designated on Schedule IV as
a "Deposit Account", provided that the Company complies with Clause (ii) of this
subsection (j)) to make payments of all Receivables to one or more Lock-Box
Accounts or to post office boxes to which only Lock-Box Banks have access (and
shall instruct the Lock-Box Banks to cause all items and amounts relating to
such Receivables received in such post office boxes to be removed and deposited
into a Lock-Box Account on a daily basis), and (ii) deposit, or cause to be
deposited, any Collections of Pool Receivables received by it into Lock-Box
Accounts not later than one Business Day after receipt thereof. Each Lock-Box
Account shall at all times be subject to a Lock-Box Agreement. The Seller will
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than Collections
of Pool Receivables.
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(k) Marking of Records. At its expense, the Seller shall mark
its master data processing records relating to Pool Receivables and related
Contracts, including with a legend evidencing that the undivided percentage
ownership interests with regard to the Purchased Interest related to such
Receivables and related Contracts have been sold in accordance with the
Agreement.
(l) Reporting Requirements. The Seller will provide
to the Administrator (in multiple copies, if requested by the
Administrator) the following:
(i) as soon as available and in any event within 45
days after the end of the first three quarters of each fiscal year of
the Parent, the consolidated and consolidating balance sheet of the
Parent and its Subsidiaries as of the end of such quarter and the
consolidated and consolidating statement of income and retained
earnings of the Parent and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer or Treasurer of the
Parent;
(ii) as soon as available and in any event within 90
days after the end of each fiscal year of the Parent, a copy of the
annual report for such year for the Parent and its Subsidiaries,
containing financial statements for such year audited by KPMG Peat
Marwick or other independent certified public accountants acceptable to
the Administrator;
(iii) as soon as available and in any event not later
than 10th Day of each Calendar Month, a Seller Report as of the
previous Month End Date; and within five Business Days of a request by
the Administrator for a Seller Report as of a date other than a Month
End Date, such Seller Report;
(iv) as soon as possible and in any event within five
days after the occurrence of each Termination Event or event which,
with the giving of notice or lapse of time, or both, would constitute a
Termination Event, a statement of the chief financial officer or
Treasurer of the Parent setting forth details of such Termination Event
or event and the action that the Seller has taken and proposes to take
with respect thereto;
(v) promptly after the sending or filing thereof,
copies of all reports that the Seller or the Parent sends to any of its
security holders, and copies of all reports and registration statements
that the Seller or the Parent or any
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of their Subsidiaries files with the Securities and Exchange
Commission or any national securities exchange;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller, the Parent or any of
their Affiliates files under ERISA with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or that the Seller, the Parent or any of their Affiliates
receives from any of the foregoing or from any multiemployer plan
(within the meaning of Section 4001(a)(3) of ERISA) to which the
Seller, the Parent or any of their Affiliates is or was, within the
preceding five years, a contributing employer, in each case in respect
of the assessment of withdrawal liability or an event or condition
which could, in the aggregate, result in the imposition of liability on
the Seller, the Parent and/or any such Affiliate in excess of $500,000;
(vii) at least thirty days prior to any change in the
Seller's name or any other change requiring the amendment of UCC
financing statements, a notice setting forth such changes and the
effective date thereof;
(viii) such other information respecting the
Receivables or the condition or operations, financial or otherwise, of
the Seller, the Parent or any of their Affiliates as the Administrator
may from time to time reasonably request;
(ix) promptly after the Seller or the Parent obtains
knowledge thereof, notice of any (a) litigation, investigation or
proceeding which may exist at any time between any O&M Party and any
Governmental Authority which, if not cured or if adversely determined,
as the case may be, would have a material adverse effect on the
business, operations, property or financial or other condition of the
Seller or the Parent; or (b) litigation or proceeding adversely
affecting any O&M Party in which the amount involved is $5,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought or (c) litigation or proceeding relating to any
Transaction Document; and
(x) promptly after the occurrence thereof, notice of
a material adverse change in the business, operations, property or
financial or other condition of the Seller or the Parent affecting any
O&M Party.
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(m) General Restriction.
(i) The Seller shall not (A) pay or declare any
Dividend, (B) lend or advance any funds, including in respect
of any Originator Note, or (C) repay any loans or advances to,
for or from any Originator or any other Affiliated Party
(including making any payment pursuant to any Initial
Purchaser Note) except in accordance with clause (o) of this
Exhibit V and this clause (m) and clauses (m) and (o) of
Exhibit III of the Amended and Restated Parallel Asset
Purchase Agreement. Actions of the type described in the
preceding sentence are herein collectively called "Restricted
Payments".
(ii) Types of Permitted Payments. Subject to the
limitations set forth in clause (o) below, the Seller may make
Restricted Payments so long as such Restricted Payments are
made only to an Originator and only in one or more of the
following ways:
(A) the Seller may make cash payments on any
Initial Purchaser Note in accordance with its
terms; and
(B) if no amounts are then outstanding under
any Initial Purchaser Note, the Seller may
(1) make demand loans to O&M Medical,
so long as each such loan is evidenced by an
Originator Note; and
(2) declare and pay Dividends to any
shareholder (provided, that payment of such
Dividends must comply with Virginia law; and
provided, further, that Dividends may not be
paid more frequently than once every month).
(iii) Additional Specific Restrictions. The Seller
may make Restricted Payments only out of Collections paid or
released to the Seller pursuant to Sections 1.4(b)(ii) and
1.4(b)(iv) of this Agreement or the Amended and Restated
Parallel Asset Purchase Agreement or from other net income of
the Seller. Furthermore, the Seller shall not pay, make or
declare:
(A) any Dividend if, after giving effect
thereto, the Seller's Tangible Net Worth would be
less than $15,000,000;
(B) any Restricted Payment if, after giving
effect thereto, a Termination Event or Unmatured
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Termination Event shall have occurred and be
continuing; or
(C) any Restricted Payment if, after giving
effect thereto, the Seller would not be Solvent.
(n) ERISA Matters. Each of the Seller and the Parent shall
notify the Administrator as soon as is practicable and in any event not later
than two Business Days after (i) the institution of any steps by the Seller or
the Parent or any other Person to terminate any Pension Plan which is not fully
funded, unless adequate reserves have been set aside for the funding thereof,
(ii) the failure to make a required contribution to any Pension Plan if such
failure is sufficient to give rise to a lien under section 302(f) of ERISA,
(iii) the taking of any action with respect to a Pension Plan which could result
in the requirement that the Seller or the Parent furnish a bond or other
security to the PBGC or such Pension Plan or (iv) the occurrence of any other
event concerning any Pension Plan which is reasonably likely to result in a
material adverse effect.
(o) Separate Corporate Existence of the Seller. Each of
the Seller and the Parent hereby acknowledges that the Seller, the Issuer and
the Administrator are entering into the transactions contemplated by the Amended
and Restated Purchase and Sale Agreement and by the Amended and Restated
Receivables Purchase Agreement in reliance upon the Seller's identity as a legal
entity separate from its Affiliates. Therefore, each of the Seller and the
Parent shall take all steps to continue the Seller's identity as such a separate
legal entity and to make it apparent to third Persons that the Seller is an
entity with assets and liabilities distinct from those of its Affiliates and
those of any other Person, and not a division of any of its Affiliates or any
other Person. Without limiting the generality of the foregoing, each of the
Seller and the Parent will, and will cause its Affiliates to, take such actions
as shall be required in order that:
(i) The Seller will be a limited purpose corporation whose
primary activities are restricted in its articles of incorporation to
purchasing Pool Receivables from each Originator (or other Persons
approved in writing by the Administrator), entering into agreements for
the servicing of such Pool Receivables, selling undivided interests in
the Pool Receivables to the Issuer and conducting such other activities
as it deems necessary or appropriate to carry out its primary
activities;
(ii) At least one member of the Seller's Board of Directors
shall be an individual who is not a direct, indirect or beneficial
stockholder, officer, director, employee, affiliate, associate,
customer or supplier of any of its Affiliates;
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(iii) No director or officer of the Seller shall at
any time serve as a trustee in bankruptcy for any of its
Affiliates;
(iv) Any employee, consultant or agent of the Seller will be
compensated from the Seller's own bank accounts for services provided
to the Seller except as provided in the Amended and Restated
Receivables Purchase Agreement in respect of the Servicing Fee. The
Seller will engage no agents other than a Servicer for the Pool
Receivables, which Servicer (if an Affiliate) will be fully compensated
for its services to the Seller by payment of the Servicing Fee;
(v) The Seller may incur indirect or overhead expenses for
items shared between the Seller and any of its Affiliates which are not
reflected in the Servicing Fee, such as legal, auditing and other
professional services, but such expenses will be allocated to the
extent practical on the basis of cost, it being understood that each of
the Originators and the Parent shall jointly and severally pay all
expenses relating to the preparation, negotiation, execution and
delivery of the Transaction Documents, including legal and other fees;
(vi) The Seller's operating expenses will not be paid
by any of its Affiliates;
(vii) The Seller will have its own separate telephone number,
stationery and bank checks signed by it and in its own name and, if it
uses premises leased, owned or occupied by any of its Affiliates, its
portion of such premises will be defined and separately identified and
it will pay such other Affiliates reasonable compensation for the use
of such premises;
(viii) The books and records of the Seller will be
maintained separately from those of its Affiliates;
(ix) The assets of the Seller will be maintained in a manner
that facilitates their identification and segregation from those of its
Affiliates; and the Seller will strictly observe corporate formalities
in its dealings with each of its Affiliates;
(x) The Seller shall not maintain joint bank accounts with any
of its Affiliates or other depository accounts to which any of its
Affiliates (other than O&M Medical (or any of its Affiliates) in its
capacity as the Servicer under this Agreement, the Amended and Restated
Purchase and Sale Agreement or under the Amended and Restated Parallel
Asset Purchase Agreement) has independent access;
V-8
<PAGE>
(xi) The Seller shall not, directly or indirectly, be named
and shall not enter into any agreement to be named as a direct or
contingent beneficiary or loss payee on any insurance policy covering
the property of any other Seller Party or any Affiliate of any other
Seller Party unless it pays a proportional share of the premium
relating to any such insurance policy;
(xii) The Seller will maintain arm's-length relationships with
each of its Affiliates. Any of its Affiliates that renders or otherwise
furnishes services or merchandise to the Seller will be compensated by
the Seller at market rates for such services or merchandise; and
(xiii) Neither the Seller, on the one hand, nor any of its
Affiliates, on the other hand, will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions in
respect of the daily business and affairs of the other.
(xiv) Every representation and warranty of the Seller and the
Parent contained in the Officer's Certificates delivered in connection
with the opinion of Hunton & Williams pursuant to Section 1(j) of
Exhibit II of this Agreement (the "Certificate"), a true copy of which
Certificate is attached hereto as Annex D, is true and correct in all
material respects as of the date hereof; and each of the Seller and the
Parent shall comply with all of its respective covenants and other
obligations set forth in the Certificate.
(p) Mergers, Acquisitions, Sales, Investments, etc.
The Seller shall not
(i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in, any other Person,
(ii) sell, transfer, convey or lease any of its assets other
than pursuant to this Amended and Restated Receivables Purchase
Agreement or the Amended and Restated Parallel Asset Purchase
Agreement, or
(iii) make, incur or suffer to exist any investment in, equity
contribution to, loan or advance to, or payment obligation in respect
of the deferred purchase price of property from, any other Person,
except as expressly contemplated by this Agreement, the Amended and
Restated Purchase and Sale Agreement and the Amended and Restated
Parallel Asset Purchase Agreement.
V-9
<PAGE>
EXHIBIT VI
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) The Servicer (if O&M Medical or any of its Affiliates)
shall fail to perform or observe any term, covenant or agreement under any
Transaction Document to which it is a party and such failure shall continue for
two Business Days or (ii) any Person which is the Servicer shall fail to make
when due any payment or deposit to be made by it under any Transaction Document
to which it is a party and such failure shall continue for two Business Days; or
(b) The Servicer shall fail (i) to transfer to any successor
Servicer when required any rights, pursuant to the Agreement, which the Servicer
then has, or (ii) to make any payment required under the Agreement; or
(c) Any representation or warranty made or deemed made by the
Seller, the Servicer or the Parent (or any of their respective officers) under
or in connection with the Agreement or any information or report delivered by
the Seller, the Servicer or the Parent pursuant to the Agreement shall prove to
have been incorrect or untrue in any material respect when made or deemed made
or delivered; or
(d) The Seller, the Servicer or the Parent shall fail to
perform or observe any other term, covenant or agreement contained in the
Agreement on its part to be performed or observed and any such failure shall
remain unremedied for 10 days (or, with respect to a failure to deliver the
Seller Report pursuant to the Agreement, such failure shall remain unremedied
for five days); or
(e) Any O&M Party shall fail to pay any principal of or
premium or interest on any of its Debt (including Debt owing pursuant to the O&M
Credit Agreement) which is outstanding in a principal amount of at least
$10,000,000 in the aggregate when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement, mortgage, indenture or instrument relating to such Debt; or
any other event shall occur or condition shall exist under any agreement,
mortgage, indenture or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the
VI-1
<PAGE>
maturity of such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(f) The Agreement or any purchase or any reinvestment pursuant
to the Agreement shall for any reason (other than pursuant to the terms hereof)
(i) cease to create, or the Purchased Interest shall for any reason cease to be,
a valid and enforceable perfected undivided percentage ownership interest to the
extent of the Purchased Interest in each Pool Receivable and the Related
Security and Collections and other proceeds with respect thereto, free and clear
of any Adverse Claim or (ii) cease to create with respect to the items described
in Section 1.2(d), or the interest of the Administrator, on its behalf and on
behalf of the Issuer, with respect to such items shall cease to be, a valid and
enforceable first priority perfected security interest, free and clear of any
Adverse Claim; or
(g) Any O&M Party shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against any O&M Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days, or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or any O&M Party shall take any corporate action to
authorize any of the actions set forth above in this paragraph (g); or
(h) Any event occurs which materially adversely affects the
collectibility of the Eligible Receivables or there shall have occurred any
other event which materially adversely affects the ability of the Servicer to
collect Eligible Receivables; or
(i) As of the last day of any calendar month, either
(i) the Six Month Default Ratio shall exceed 4% or (ii) the Six
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<PAGE>
Month Dilution Ratio shall exceed 5% or (iii) the Six Month Lossto-Liquidation
Ratio shall exceed 1.0% or (iv) the average of the Delinquency Ratios for the
six consecutive Month End Dates ending with such last day shall exceed 30%; or
(j) The Purchased Interest shall exceed 100%; or
(k) Any O&M Party shall contract, create, incur, assume or permit to
exist any Lien with respect to any of its property of assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens; or
(l) The Tangible Net Worth of Initial Purchaser shall at
any time be less than $10,000,000; or
(m) Any Change of Control shall occur; or
(n) A Termination Event of the type described in Exhibit IV to the
Amended and Restated Purchase and Sale Agreement shall have occurred.
VI-3
<PAGE>
SCHEDULE I
CREDIT AND COLLECTION POLICY
<PAGE>
SCHEDULE II
PERMITTED LIENS
<PAGE>
SCHEDULE III
TRADE NAMES AND LOCATIONS
<PAGE>
SCHEDULE IV
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
Lock-Box Bank Lock-Box Account
<PAGE>
ANNEX A
FORM OF LOCK-BOX AGREEMENT
18239839.6 080196 1657C 95213815
<PAGE>
LOCK-BOX AGREEMENT
May ____, 1996
Address of Lock-Box Bank
Dear __________:
Reference is made to lock-box account no. _____ (the "Lock Box
Account") and our deposit account no. _____ (together with the Lock Box Account,
the "Accounts") maintained by [NAME OF ORIGINATOR] ("NAME") with you. Reference
is further made to (i) the Amended and Restated Purchase and Sale Agreement
dated as of May 28, 1996 (as the same may be amended, modified or otherwise
supplemented from time to time, the "Purchase and Sale Agreement") between the
Originators party thereto, Owens & Minor Medical, Inc. ("O&M Medical"), as an
Originator and as Servicer, and O&M Funding Corp., as Initial Purchaser ("O&M
Funding") and Owens & Minor, Inc. ("O&M"), and (ii) the Amended and Restated
Receivables Purchase Agreement dated as of May 28, 1996 (as the same may be
amended, modified or otherwise supplemented from time to time, the "Receivables
Purchase Agreement") among O&M Funding, as Seller, O&M Medical, as Servicer,
O&M, Receivables Capital Corporation ("RCC"), as Issuer, and Bank of America
National Trust and Savings Association, as administrator (the "Administrator"),
and (iii) the Amended and Restated Parallel Asset Purchase Agreement dated as of
May 28, 1996 (as it may be amended, modified, or otherwise supplemented from
time to time, the "Parallel Asset Purchase Agreement") among O&M Funding, O&M
Medical, O&M, the Parallel Purchasers from time to time parties thereto, and
Bank of America National Trust and Savings Association, as Administrative Agent
for such Parallel Purchasers (in such capacity the "PAPA Agent")
Please be advised that pursuant to the Purchase and Sale Agreement
[Name of Originator] has sold all of its right, title and interest in (but not
its obligations under) the Accounts, all amounts on deposit therein, all
certificates and instruments, if any, evidencing such Accounts and amounts on
deposit therein and any related agreements between you and [Name of Originator]
to O&M Funding. In addition:
(i)(a) pursuant to the Purchase and Sale Agreement, [Name of
Originator] has sold to O&M Funding and may hereafter sell to O&M
Funding all of [Name of Originator's] right, title and interest in
accounts, chattel paper, instruments or general intangibles
(collectively, "Receivables") with respect to which payments are or may
hereafter be made to the Accounts, (b) pursuant to the Receivables
Purchase Agreement, O&M Funding has assigned and/or may hereafter
assign to RCC one or
A-1
<PAGE>
more undivided percentage interests in Receivables with respect to
which payments are or may hereafter be made to the Accounts, and (c)
pursuant to the Parallel Asset Purchase Agreement, O&M Funding has
assigned and may hereafter assign to the PAPA Agent for the benefit of
the Parallel Purchasers one or more undivided percentage interests in
Receivables with respect to which payment may be made hereafter to the
Accounts; and
(ii)(a) pursuant to the Purchase and Sale Agreement, [Name of
Originator] has granted a security interest in such Receivables, the
Accounts and related property to O&M Funding, (b) pursuant to the
Receivables Purchase Agreement O&M Funding has granted a security
interest in such Receivables, the Accounts and related property to RCC,
and (c) pursuant to the Parallel Asset Purchase Agreement, O&M Funding
has granted a security interest in such Receivables, the Accounts and
related property to the PAPA Agent for the benefit of the Parallel
Purchasers.
Your execution of this letter agreement is a condition precedent to
continued maintenance of the Accounts with you.
[Name of Originator] and O&M Funding hereby transfer exclusive
ownership and control of the Accounts to the Administrator on behalf of RCC and
the PAPA Agent as their interests may appear, subject only to the condition
subsequent that the Administrator shall have given you notice of its election to
assume such ownership and control, which notice may be in the form attached
hereto as Exhibit A or in any other form that gives you reasonable notice of
such election.
We hereby irrevocably instruct you, at all times from and after the
date of your receipt of notice from the Administrator as described above, to
make all payments to be made by you out of or in connection with the Accounts
directly to the Administrator, at its address set forth below its signature
hereto or as the Administrator otherwise notifies you (at account no. 7062178,
ABA no. 071000039) for the account of RCC and the PAPA Agent as their interests
may appear, or otherwise in accordance with the instructions of the
Administrator.
The PAPA Agent hereby agrees with you and the Administrator, that you
are authorized and instructed to accept all instructions with respect to the
Accounts from the Administrator and not the PAPA Agent, irrespective of whether
such instructions conflict with an instruction given to you by the PAPA Agent,
and the PAPA Agent hereby irrevocably appoints the Administrator as the agent of
the PAPA Agent for the purpose of giving you instructions hereunder.
We also hereby notify you that, at all times from and after the date of
your receipt of notice from the Administrator as
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<PAGE>
described above, the Administrator shall be irrevocably entitled to exercise in
our place and stead any and all rights in respect of or in connection with the
Accounts, including, without limitation, (a) the right to specify when payments
are to be made out of or in connection with the Accounts and (b) the right to
require preparation of duplicate monthly bank statements on the Accounts for the
Administrator's audit purposes and mailing of such statements directly to an
address specified by the Administrator.
Notice from the Administrator may be personally served or sent by
Telex, facsimile or U.S. mail, certified return receipt requested, to the
address, Telex or facsimile number set forth under your signature to this letter
agreement (or to such other address, Telex or facsimile number as to which you
shall notify the Administrator in writing). If notice is given by Telex or
facsimile, it will be deemed to have been received when the notice is sent and
the answerback is received (in the case of Telex) or receipt is confirmed by
telephone or other electronic means (in the case of facsimile). All other
notices will be deemed to have been received when actually received or, in the
case of personal delivery, delivered.
By executing this letter agreement, you acknowledge and consent to the
existence of the Administrator's right to ownership and control of the Accounts
and RCC's and the PAPA Agent's security interest in the Accounts, as their
interests may appear, and amounts from time to time on deposit therein and agree
that from the date hereof the Accounts shall be maintained by you for the
benefit of, and amounts from time to time therein held by you as agent for, the
Administrator on the terms provided herein. The Accounts are to be titled "O&M
Funding Corp. and Bank of America National Trust and Savings Association as the
Administrator for Receivables Capital Corporation, and as Administrative Agent
for the Parallel Purchasers, as their interests may appear". Except as otherwise
provided in this letter agreement, payments to the Accounts are to be processed
in accordance with the standard procedures currently in effect. All service
charges and fees with respect to the Accounts shall continue to be payable by us
as under the arrangements currently in effect.
By executing this letter agreement, you irrevocably waive and agree not
to assert, claim or endeavor to exercise, irrevocably bar and estop yourself
from asserting, claiming or exercising, and acknowledge that you have not
heretofore received a notice, writ, order or any form of legal process from any
other person or entity asserting, claiming or exercising, any right of set-off,
banker's lien or other purported form of claim with respect to the Accounts or
any funds from time to time therein. Except for your right to payment of your
service charges and fees and to make deductions for returned items, you shall
have no rights in the Accounts or funds therein. To the extent you may ever have
such rights, you hereby
A-3
<PAGE>
expressly subordinate all such rights to all rights of the
Administrator and the PAPA Agent.
You may terminate this letter agreement by cancelling the Accounts
maintained with you, which cancellation and termination shall become effective
only upon thirty days' prior written notice thereof from you to the
Administrator. Incoming mail addressed to or wire transfers to the Accounts
received after such cancellation shall be forwarded in accordance with the
Administrator's instructions. This letter agreement may also be terminated upon
written notice to you by the Administrator stating that the Receivables Purchase
Agreement pursuant to which this letter agreement was obtained is no longer in
effect. Except as otherwise provided in this paragraph, this letter agreement
may not be terminated or amended without the prior written consent of the
Administrator. This letter agreement may be executed in any number of
counterparts, and by the parties hereto on separate counterparts, each of which
when so executed shall be deemed to be an original and all of which when taken
together shall constitute one and the same agreement.
Please acknowledge your agreement to the terms set forth in this letter
agreement by signing the two copies of this letter agreement enclosed herewith
in the space provided below, sending one such signed copy to the Administrator
at its address provided above and returning the other signed copy to us.
Very truly yours,
[NAME OF ORIGINATOR]
By:
Name:
Title:
A-4
<PAGE>
O&M FUNDING CORP.
By:
Name:
Title:
Acknowledged and agreed to as of the date first written above:
RECEIVABLES CAPITAL CORPORATION
By: Bank of America National Trust
and Savings Association,
as attorney-in-fact
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Administrator
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as PAPA Agent
By:
Name:
Title:
Address for notice:
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mr. Mark Wegener
Telephone: 312/828-3343
Facsimile: 312/828-7855
[Lock Box Bank]
A-5
<PAGE>
By:
Name:
Title:
Address for notice:
Attention: _____________________
Telex No.: _____________________
(Answerback: ____________________)
Telephone: _____________________
Facsimile: _____________________
A-6
<PAGE>
EXHIBIT A to
Lock-Box Agreement
[Letterhead of Bank of America National
Trust and Savings Association]
Address of Lock-Box Bank
Re: [Name of Originator]
Lock Box Account No. _____
Deposit Account No. _____
Dear __________:
Reference is made to the letter agreement dated May __, 1996 (the
"Letter Agreement") among [Name of Originator], O&M Funding Corp., Receivables
Capital Corporation ("RCC"), the undersigned, as Administrator and you
concerning the above described accounts (the "Accounts"). We hereby give you
notice of our assumption of ownership and control of the Accounts as provided in
the Letter Agreement.
We hereby instruct you to make all payments to be made by you out of or
in connection with the Accounts directly to the undersigned, at our address set
forth above, to account no. 7062178 for the Accounts of RCC and the PAPA Agent
(as defined in the Letter Agreement) as their interests may appear.
[other instructions]
Very truly yours,
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Administrator
By:
Name:
Title:
<PAGE>
ANNEX B
FORM OF HUNTON & WILLIAMS OPINION
<PAGE>
ANNEX C
FORM OF CORPORATE COUNSEL'S OPINION
<PAGE>
ANNEX D
OPINION CERTIFICATE
Exhibit 10(c)
AMENDED AND RESTATED
PARALLEL ASSET PURCHASE AGREEMENT
among
O&M FUNDING CORP.,
as Seller,
OWENS & MINOR MEDICAL, INC.,
as Servicer,
OWENS & MINOR, INC.,
as Parent and Guarantor,
THE PARALLEL PURCHASERS
FROM TIME TO TIME PARTY HERETO,
as Parallel Purchasers,
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent
Dated as of May 28, 1996
18241126.4 080196 176C 95213815
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
PAGE
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Parallel Purchase Facility........................................................... 2
SECTION 1.2. Making Purchases..................................................................... 3
SECTION 1.3. Purchased Interest Computation....................................................... 5
SECTION 1.4. Settlement Procedures................................................................ 5
SECTION 1.5. [Reserved.]
SECTION 1.6. Payments and Computations, Etc....................................................... 9
SECTION 1.7. Dividing or Combining Portions of the
Capital of the Purchased Interest.................................................... 10
SECTION 1.8. Increased Costs...................................................................... 10
SECTION 1.9. Additional Discount on Portions of Purchased
Interest Bearing a Eurodollar Rate................................................... 11
SECTION 1.11. Inability to Determine Eurodollar Rate............................................... 12
ARTICLE II
REPRESENTATIONS AND WARRANTIES;
COVENANTS; TERMINATION EVENTS
SECTION 2.1. Representations and Warranties; Covenants............................................ 13
SECTION 2.2. Termination Events................................................................... 13
ARTICLE III
INDEMNIFICATION
SECTION 3.1. Indemnities by the Seller............................................................ 14
Section 3.2. Parent's Performance Guaranty........................................................ 20
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer.............................................................. 22
Section 4.2. Duties of Servicer................................................................... 23
Section 4.3. Lock-Box Arrangements................................................................ 24
Section 4.4. Enforcement Rights................................................................... 25
Section 4.5. Responsibilities of the Seller and O&M Medical....................................... 26
Section 4.6. Servicing Fee........................................................................ 27
ARTICLE V
ADMINISTRATIVE AGENT
SECTION 5.1. Authorization and Action............................................................. 27
SECTION 5.2. Reliance, Etc........................................................................ 27
SECTION 5.3. Purchase Decisions................................................................... 28
SECTION 5.4. Indemnification...................................................................... 30
SECTION 5.5. Bank of America and its Affiliates................................................... 30
SECTION 5.6. Resignation of Administrative Agent.................................................. 31
i
<PAGE>
PAGE
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Amendments, Etc...................................................................... 32
SECTION 6.2. Notices, Etc......................................................................... 32
SECTION 6.3. Binding Effect; Assignability; Restrictions
on Assignment........................................................................ 33
SECTION 6.4. Participations....................................................................... 35
SECTION 6.5. Change in Purchase Limit............................................................. 36
SECTION 6.6. Parallel Purchase Termination Date; Extension
of Parallel Purchase Termination Date................................................ 37
SECTION 6.7. Rights of Program Support Providers.................................................. 37
SECTION 6.8. Costs and Expenses................................................................... 38
SECTION 6.9. No Proceedings; Limitation on Payments............................................... 38
SECTION 6.10. Confidentiality...................................................................... 39
SECTION 6.11. GOVERNING LAW AND JURISDICTION....................................................... 39
SECTION 6.12. Execution in Counterparts............................................................ 40
SECTION 6.13. Survival of Termination.............................................................. 40
SECTION 6.14. WAIVER OF JURY TRIAL................................................................. 40
SECTION 6.15. Entire Agreement..................................................................... 40
SECTION 6.16. Headings............................................................................. 41
SECTION 6.17. Purposes............................................................................. 41
SECTION 6.18. Acknowledgment of Benefits Under Surety Bond......................................... 41
</TABLE>
EXHIBIT I - CONDITIONS OF PURCHASES
EXHIBIT II - REPRESENTATIONS AND WARRANTIES OF SELLER,
THE SERVICER
EXHIBIT III - COVENANTS
EXHIBIT IV - TERMINATION EVENTS
ANNEX A - ASSIGNMENT OF PARALLEL ASSET PURCHASE
COMMITMENT
ANNEX B - FORM OF INTERCREDITOR AGREEMENT
ANNEX C - FORM OF OFFICER'S CERTIFICATE
SCHEDULE I - TRADE NAMES AND LOCATIONS
SCHEDULE II - LOCK-BOX BANK AND LOCK-BOX ACCOUNTS
ii
<PAGE>
AMENDED AND RESTATED
PARALLEL ASSET PURCHASE AGREEMENT
This AMENDED AND RESTATED PARALLEL ASSET PURCHASE AGREEMENT (this
"Amended and Restated Parallel Asset Purchase Agreement" or "Agreement") is
entered into as of May 28, 1996 among O&M FUNDING CORP., a Virginia corporation,
as seller (the "Seller"), OWENS & MINOR MEDICAL, INC. ("O&M Medical"), a
Virginia corporation, as the initial Servicer (in such capacity, together with
its successors and permitted assigns in such capacity, the "Servicer"), OWENS &
MINOR, INC., a Virginia corporation, as parent and guarantor (the "Parent"),
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION (in its individual
capacity "Bank of America"), each of the other parties executing this Agreement
as a "Parallel Purchaser" and each of the parties that has executed as an
"Assignee" an Assignment of Parallel Asset Purchase Commitment in the form of
Annex A hereto (each, an "Assignment") (Bank of America and each such other
party being referred to collectively as the "Parallel Purchasers" and
individually as a "Parallel Purchaser") and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association, as administrator and agent
for the Parallel Purchasers (the "Administrative Agent").
PRELIMINARY STATEMENTS
A. The Seller desires to sell, transfer and assign an undivided
variable percentage interest in a pool of receivables to the Administrative
Agent, on behalf of the Parallel Purchasers, and the Parallel Purchasers desire
to acquire such undivided variable percentage interest, as such percentage
interest shall be adjusted from time to time based upon, in part, reinvestment
payments which are made by the Parallel Purchasers and additional incremental
payments made to the Seller; and each Parallel Purchaser, by becoming a party
hereto, agrees to purchase and make reinvestments on the terms and conditions
set forth in this Agreement in its ratable portion of the Purchased Interest
hereunder (its "Purchase Commitment").
B. The parties hereto, other than certain Parallel Purchasers
hereunder, have entered into a Parallel Asset Purchase Agreement (the "Existing
Parallel Asset Purchase Agreement") dated as of December 28, 1995 among the
Seller, the Servicer, the Parent, the Parallel Purchasers named therein and the
Administrative Agent. The parties hereto wish to amend and restate the Existing
Parallel Asset Purchase Agreement as set forth herein and each Parallel
Purchaser party hereto that was not also a party to the Existing Parallel Asset
Purchaser Agreement wishes to become a party hereunder.
<PAGE>
C. Reference is made to the Amended and Restated Receivables Purchase
Agreement dated as of May 28, 1996 (the "Amended and Restated Receivables
Purchase Agreement") among Seller, Owens & Minor Medical, Inc., as Servicer,
Owens & Minor, Inc., Receivables Capital Corporation, as the Issuer, and Bank of
America, as agent for the Issuer, a copy of which has been delivered to each
Parallel Purchaser; under which agreement the Seller thereunder may sell,
transfer and assign, and the Issuer may acquire, an undivided variable
percentage interest in a pool of receivables owned by Seller, as such percentage
interest shall be adjusted from time to time based upon, in part, reinvestment
payments which are made by the Issuer and additional incremental payments made
to the Seller.
D. Certain terms that are used throughout this Agreement are defined in
Exhibit I to the Amended and Restated Receivables Purchase Agreement (as
incorporated herein by reference). References in the Amended and Restated
Receivables Purchase Agreement to a Parallel Asset Purchase Agreement are
references to this Agreement, as the same may be amended, modified or
supplemented from time to time.
E. Bank of America has been requested and is willing to
act as Administrative Agent hereunder.
In consideration of the mutual agreements, provisions and covenants
contained herein, the parties hereto agree that the Existing Parallel Asset
Purchase Agreement is amended and restated, effective as of the Restatement
Effective Date, to read in full.
ARTICLE I
AMOUNTS AND TERMS OF THE PURCHASES
SECTION 1.1. Parallel Purchase Facility. (a) On the terms and
conditions hereinafter set forth, each Parallel Purchaser severally shall
purchase undivided percentage ownership interests and shall make reinvestments
with regard to their Purchased Interest from the Seller from time to time during
the period from the date hereof to the Parallel Purchase Termination Date. Under
no circumstances shall any Parallel Purchaser be obligated to make any purchase
or reinvestment under this Agreement if after giving effect to such purchase or
reinvestment the aggregate outstanding Capital of the Purchased Interest of the
Parallel Purchasers, together with the aggregate outstanding Capital of
Purchased Interests under the Amended and Restated Receivables Purchase
Agreement, would exceed the Purchase Limit. Each purchase and reinvestment shall
be made ratably by the Parallel Purchasers according to their respective Maximum
Parallel Purchase. Each Parallel Purchaser shall make its respective
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ratable portions of each purchase and reinvestment on the same day as the other
parties making such purchase or reinvestment.
(b) The Seller may, upon at least 10 Business Days' notice to the
Administrative Agent, terminate the purchase facility provided in this Section
1.1 in whole or, from time to time, irrevocably reduce in part the unused
portion of the Purchase Limit; provided that each partial reduction shall be in
the amount of at least $5,000,000 or an integral multiple of $1,000,000 in
excess thereof and; provided further that each such reduction shall be made
ratably with respect to each Parallel Purchaser according to its respective
Maximum Parallel Purchase.
SECTION 1.2. Making Purchases. (a) Each purchase (not
including reinvestments) of the Purchased Interest hereunder
shall be made upon the Seller's irrevocable written notice delivered to the
Administrative Agent in accordance with Section 6.2 (which notice must be
received by the Administrative Agent prior to noon New York City time and, with
respect to which, the Administrative Agent will provide prompt notice to each
Parallel Purchaser by telephone or facsimile) (i) three Business Days prior to
the requested purchase date, in the case of a purchase to be funded at the
Alternate Rate and based on the Eurodollar Rate and (ii) one Business Day prior
to the requested purchase date, in the case of a purchase to be funded at the
Alternate Rate and based on the Base Rate, which notice shall specify (A) the
amount requested to be paid to the Seller (such amount, which shall not be less
than $1,000,000, being the "Capital" relating to the undivided ownership
interest then being purchased), (B) the date of such purchase (which shall be a
Business Day) and (C) the desired funding basis for such purchase and the
desired duration of the initial Fixed Period(s) for such purchase. The notice
delivered by the Administrative Agent to the Parallel Purchasers shall contain a
brief description of the circumstances giving rise to the purchase hereunder
which description shall be based upon information available to the
Administrative Agent at the time of such purchase and be made in good faith by
the Administrative Agent; it being understood that the failure of any such
notice to provide such a description shall not affect the obligations of the
Parallel Purchasers hereunder.
(b) On the date of each purchase (not including reinvestments) of
undivided ownership interests with regard to the Purchased Interest hereunder,
each Parallel Purchaser shall, upon satisfaction of the applicable conditions
set forth in Exhibit I, deposit in the Administrative Account in same day funds,
an amount equal to such Parallel Purchaser's ratable portion (calculated
according to its Maximum Parallel Purchase (its "Percentage")) of the Capital
relating to the undivided ownership interest then being purchased. Each Parallel
Purchaser's obligation hereunder shall be several, such that the
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failure of any Parallel Purchaser to make payment to the Administrative Agent in
connection with any purchase hereunder shall not relieve any other Parallel
Purchaser of its obligation hereunder to make payment for any purchase. Further,
in the event any Parallel Purchaser fails to satisfy its obligation to purchase
any Purchased Interest as required hereunder, upon receipt of notice of such
failure from the Administrative Agent (which shall be provided within one
Business Day after the Administrative Agent receives notice or otherwise obtains
knowledge of such failure), subject to satisfaction of the applicable conditions
set forth in Exhibit I, the non-defaulting Parallel Purchasers shall purchase
the defaulting Parallel Purchaser's Percentage in the related Purchased Interest
pro rata in proportion to their relative Percentages; provided that, in no event
shall any Parallel Purchaser be obligated to make any purchase or reinvestment
under this Agreement if after giving effect to such purchase or reinvestment (i)
the aggregate outstanding Capital of the Purchased Interest of the Parallel
Purchasers, together with the aggregate outstanding Capital of Purchased
Interests under the Amended and Restated Receivables Purchase Agreement, would
exceed the Purchase Limit or (ii) the aggregate outstanding Capital of the
Purchased Interest attributable to such Parallel Purchaser exceeds such Parallel
Purchaser's Maximum Parallel Purchase. Unless the Administrative Agent shall
have received notice from a Parallel Purchaser on the date of the sale of any
Purchased Interest prior to 2:30 P.M. (New York City time) on the date of any
proposed sale, that such Parallel Purchaser will not make available to the
Administrative Agent the amount of that Parallel Purchaser's Percentage, the
Administrative Agent may assume that each Parallel Purchaser has made such
amount available to the Administrative Agent on the purchase date and the
Administrative Agent may (but shall not be so required), in reliance upon such
assumption, make available to the Seller on such date a corresponding amount by
depositing such amount in the Administrative Account. If and to the extent any
Parallel Purchaser shall not have made its full amount available to the
Administrative Agent, and the Administrative Agent in such circumstances has
made available to the Seller the corresponding amount, that Parallel Purchaser
shall on the next Business Day following the date of such sale make such amount
available to the Administrative Agent, together with interest at the Federal
Funds Rate for each day during such period. A certificate of the Administrative
Agent submitted to any Parallel Purchaser with respect to amounts owing under
this clause (b) shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Administrative Agent shall constitute such
Parallel Purchaser's purchase on the date of sale for all purposes of this
Agreement. If such amount is not made available to the Administrative Agent on
the next Business Day following the date of such purchase, the Administrative
Agent shall notify the Seller of such failure to fund and, upon demand by the
Administrative Agent, the Seller shall pay such amount to
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the Administrative Agent for the Administrative Agent's account, together with
interest thereon for each day elapsed since the date of such purchase, at a rate
per annum equal to the Federal Funds Rate.
(c) Effective on the date of each purchase pursuant to this Section 1.2
and each reinvestment pursuant to Section 1.4, the Seller hereby sells and
assigns to the Administrative Agent on behalf of each Parallel Purchaser
(without any formal or other instrument of assignment) an undivided percentage
ownership interest in (i) each Pool Receivable then existing, (ii) all Related
Security with respect to such Pool Receivables, and (iii) Collections with
respect to, and other proceeds of, such Pool Receivables and Related Security,
equal to such Parallel Purchaser's Percentage of the Purchased Interest
hereunder.
(d) Each Parallel Purchaser's Purchase Commitment shall be irrevocable
from the effective date of this Agreement or as set forth in the applicable
Assignment, as the case may be, until the earliest of the (i) Parallel Purchase
Termination Date and (ii) the date on which the Parallel Purchasers' obligation
to purchase and reinvest hereunder is terminated pursuant to Section 1.1(b).
(e) To secure all of the Seller's obligations (monetary or otherwise)
under this Agreement and the other Transaction Documents to which it is a party,
whether now or hereafter existing or arising, due or to become due, direct or
indirect, absolute or contingent, the Seller hereby grants to the Administrative
Agent, for its benefit and the benefit of the Parallel Purchasers, a security
interest in all of the Seller's right, title and interest (including without
limitation any undivided interest of the Seller) in, to and under all of the
following, whether now or hereafter owned, existing or arising (A) all Pool
Receivables, (B) all Related Security with respect to each such Pool Receivable,
(C) all Collections with respect to each such Receivable, (D) the Lock Box
Accounts and all amounts on deposit therein and all certificates and
instruments, if any, from time to time evidencing such Lock Box Accounts and
amounts on deposit therein, and (E) all proceeds of, and all amounts received or
receivable under any or all of, the foregoing. The Administrative Agent and the
Parallel Purchasers shall have, with respect to the property described in this
Section 1.2(e), and in addition to all the other rights and remedies available
to the Administrative Agent and the Parallel Purchasers, all the rights and
remedies of a secured party under any applicable UCC. The Administrative Agent
and the Parallel Purchasers acknowledge that the Seller shall contemporaneously
herewith grant an identical security interest in the same collateral as
described in the first sentence of this Section 1.2(e), to the Administrator,
for its benefit and the benefit of the Issuer under the Amended and Restated
Receivables Purchase Agreement and that the respective
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rights of the Administrator, the Issuer, the Administrative Agent and the
Parallel Purchasers with respect thereto shall be governed by the Amended and
Restated Intercreditor Agreement.
SECTION 1.3. Purchased Interest Computation. The
Purchased Interest shall be initially computed on the date of the
initial purchase hereunder. Thereafter until the Parallel
Purchase Termination Date, the Purchased Interest shall be
automatically recomputed (or deemed to be recomputed) on each
Business Day other than a Run-off Day. The Purchased Interest,
as computed (or deemed recomputed) as of the day immediately
preceding the Parallel Purchase Termination Date, shall
thereafter remain constant. The Purchased Interest shall become
zero when the Capital thereof and Discount thereon shall have
been paid in full, all the amounts owed by the Seller hereunder
to the Parallel Purchasers or the Administrative Agent, or any
other Securitization Party or Affected Person, are paid in full
and the Servicer shall have received the accrued Servicing Fee
thereon.
SECTION 1.4. Settlement Procedures. (a) Collection of
the Pool Receivables shall be administered by the Servicer in
accordance with the terms of this Agreement. The Seller shall provide to the
Servicer on a timely basis all information needed for such administration,
including notice of the occurrence of any Run-off Day and current computations
of the Purchased Interest.
(b) The Servicer shall, on each day on which Collections of Pool
Receivables are received (or deemed received) by the Seller or the Servicer:
(i) set aside and hold in trust (and, at the request of the
Administrative Agent, segregate) for the Parallel Purchasers, out of
the percentage of such Collections represented by the Purchased
Interest, first an amount equal to the Discount accrued through such
day for each Portion of Capital and not previously set aside and
second, to the extent funds are available therefor, if O&M Medical or
an Affiliate thereof Seller is not the Servicer, an amount equal to the
Servicing Fee determined in accordance with Section 4.6 accrued through
such day for the Purchased Interest which was not previously set aside;
and
(ii) subject to Section 1.4(f), if such day is not a Run-off
Day, remit to the Seller, on behalf of the Parallel Purchasers
according to the Percentage of each, the remainder of the percentage of
such Collections, represented by the Purchased Interest, to the extent
representing a return of Capital; such Collections shall be
automatically reinvested in Pool Receivables, and in the Related
Security and Collections and other proceeds with respect thereto, and
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the Purchased Interest shall be automatically recomputed
pursuant to Section 1.3;
(iii) if such day is a Run-off Day, (x) set aside, segregate
and hold in trust for the Parallel Purchasers according to the
Percentage of each the entire remainder of the percentage of the
Collections represented by the Purchased Interest; provided that if
amounts are set aside and held in trust on any Run-off Day and
thereafter, the conditions set forth in Section 2 of Exhibit I are
satisfied or are waived by the Administrative Agent, such previously
set aside amounts shall, to the extent representing a return of
Capital, be reinvested in accordance with the preceding paragraph (ii)
on the day of such subsequent satisfaction or waiver of conditions; and
(y) transfer the Seller's share of the Collections represented by the
Purchased Interest to the Seller; and
(iv) during such times as amounts are required to be
reinvested in accordance with the foregoing paragraph (ii) or the
proviso to paragraph (iii), release to the Seller (subject to Section
1.4(f)) any Collections in excess of (x) such amounts, (y) the amounts
that are required to be deposited pursuant to paragraph (i) above and
(z) any other Obligations of the Seller hereunder which are then due
and owing.
(c) The Servicer shall deposit into the Administration Account (or such
other account designated by the Administrative Agent), on the last day of each
Settlement Period relating to a Portion of Capital (or at such other times as
the Administrative Agent shall require), Collections held in the Administration
Account for the Parallel Purchasers pursuant to Section 1.4(b)(i) or Section
1.4(f) with respect to such Portion of Capital and the lesser of (x) the amount
of Collections then held for the Parallel Purchasers pursuant to Section
1.4(b)(iii) and (y) such Portion of Capital.
(d) Upon receipt of funds deposited into the Administration Account
pursuant to Section 1.4(c), with respect to any Portion of Capital, the
Administrative Agent shall cause such funds to be distributed as follows:
(i) if such distribution occurs on a day that is not a
Run-off Day, first to each Parallel Purchaser in payment in full of (x)
its Percentage of all accrued Discount and (y) its Percentage of an
amount equal to the amount of any reduction of such Portion of Capital
pursuant to Section 1.4(f), if any, and then to the Servicer (payable
in arrears on each Month End Date) in payment in full of all accrued
Servicing Fees so set aside with respect to such Portion of Capital;
and
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(ii) if such distribution occurs on a Run-off Day, first to
each Parallel Purchaser in payment in full of its Percentage of all
accrued Discount, second to each Parallel Purchaser in payment in full
of its Percentage of Capital, third, if O&M Medical or one of its
Affiliates is not the Servicer, to the Servicer in payment in full of
all accrued Servicing Fees with respect to such Portion of Capital,
fourth, if the Capital and accrued Discount with respect to each
Portion of Capital has been reduced to zero, and all accrued Servicing
Fees payable to the Servicer (if other than O&M Medical or one of its
Affiliates) have been paid in full, to the Parallel Purchasers, the
Administrative Agent and any other Securitization Party or Affected
Person in payment in full of any other amounts owed thereto by the
Seller hereunder and then to the Servicer (if the Servicer is O&M
Medical or one of its Affiliates) in payment in full of all accrued
Servicing Fees.
After the Capital and Discount and Servicing Fees with respect to the Purchased
Interest, and any other amounts payable by the Seller to the Parallel
Purchasers, the Administrative Agent or any other Securitization Party or
Affected Person hereunder, have been paid in full, all additional Collections
with respect to the Purchased Interest shall be paid to the Seller for its own
account.
(e) For the purposes of this Section 1.4:
(i) if on any day the Outstanding Balance of any Pool
Receivable is reduced or adjusted as a result of any defective,
rejected, returned, repossessed or foreclosed goods or services, or any
discount or other adjustment made by the Seller, or any setoff or
dispute between the Seller and an Obligor, or any credit memorandum or
any billing error, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in the amount of such
reduction or adjustment;
(ii) if on any day any of the representations or warranties
in paragraphs (g) or (m) of Exhibit II is not true with respect to any
Pool Receivable, the Seller shall be deemed to have received on such
day a Collection of such Pool Receivable in full;
(iii) except as provided in paragraph (i) or (ii) of this
Section 1.4(e), or as otherwise required by applicable law or the
relevant Contract, all Collections received from an Obligor of any
Receivable shall be applied to the Receivables of such Obligor in the
order of the age of such Receivables, starting with the oldest such
Receivable, unless such Obligor designates in writing its payment for
application to specific Receivables; and
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(iv) if and to the extent the Administrative Agent or any
Parallel Purchaser shall be required for any reason to pay over to an
Obligor (or any trustee, receiver, custodian or similar official in any
Insolvency Proceeding) any amount received by it hereunder, such amount
shall be deemed not to have been so received but rather to have been
retained by the Seller and, accordingly, the Administrative Agent or
such Parallel Purchaser, as the case may be, shall have a claim against
the Seller for such amount, payable when and to the extent that any
distribution from or on behalf of such Obligor is made in respect
thereof.
(f) Except for reductions in connection with the division or
combination of Portions of Capital pursuant to Section 1.7 hereof, if at any
time Seller shall wish to cause the reduction of a Portion of Capital (but not
to commence the liquidation, or reduction to zero, of the entire Capital of the
Purchased Interest), the Seller may do so as follows:
(i) the Seller shall give the Administrative Agent at least
five Business Days' prior written notice thereof (including the amount
of such proposed reduction and the proposed date on which such
reduction will commence),
(ii) on the proposed date of commencement of such reduction
and on each day thereafter, the Servicer shall cause Collections with
respect to such Portion of Capital not to be reinvested until the
amount thereof not so reinvested shall equal the desired amount of
reduction, and
(iii) the Servicer shall hold such Collections in trust for
each Parallel Purchaser in proportion to its Percentage, for payment to
the Administrative Agent on the last day of the current Settlement
Period relating to such Portion of Capital, and the applicable Portion
of Capital shall be deemed reduced in the amount to be paid to the
Administrative Agent only when in fact finally so paid;
provided that,
A. the amount of any such reduction shall be not less than
$1,000,000 and shall be an integral multiple of $100,000, and the
entire Capital of the Purchased Interest after giving effect to such
reduction shall be not less than $10,000,000 and shall be in an
integral multiple of $1,000,000,
B. the Seller shall choose a reduction amount, and the
date of commencement thereof, so that to the extent
practicable such reduction shall commence and conclude in
the same Fixed Period, and
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C. if two or more Portions of Capital shall be outstanding at
the time of any proposed reduction, such proposed reduction shall be
applied, unless the Seller shall otherwise specify in the notice given
pursuant to Section 1.4(f)(i), to the Portion of Capital with the
shortest remaining Fixed Period.
SECTION 1.5. [Reserved.]
SECTION 1.6. Payments and Computations, Etc. (a) All
amounts to be paid or deposited by the Seller or the Servicer
hereunder shall be paid or deposited no later than 1:00 p.m.
(New York City time) on the day when due in same day funds to the
Administration Account. All amounts received after 1:00 p.m.
(New York City time) will be deemed to have been received on the
immediately succeeding Business Day. The Administrative Agent
will promptly thereafter (on such day) cause to be distributed
like funds relating to the payment of Discount, Capital or other
amounts to the Parallel Purchasers in accordance with their
Percentages in each case to be applied in accordance with the
terms of this Agreement.
(b) The Seller shall, to the extent permitted by law, pay interest on
any amount not paid or deposited by the Seller (whether as Servicer or
otherwise) when due hereunder, at an interest rate equal to 2.0% per annum above
the Base Rate, payable on demand. Such interest shall be for the account of, and
distributed by the Administrative Agent to, the Parallel Purchasers or other
Persons to which such amounts are owed.
(c) All computations of interest under subsection (b) above and all
computations of Discount, fees, and other amounts hereunder shall be made on the
basis of a year of 360 days for the actual number of days elapsed. Whenever any
payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.
SECTION 1.7. Dividing or Combining Portions of the Capital of the
Purchased Interest. The Seller may, on the last day of any Fixed Period, either
(i) divide the Capital of the Purchased Interest into two or more portions, but
not to exceed ten portions in effect at any time, (each, a "Portion of Capital")
equal, in aggregate, to the Capital of the Purchased Interest, provided that
after giving effect to such division the amount of each such Portion of Capital
shall not be less than $5,000,000, or (ii) combine any two or more Portions of
Capital outstanding on such last day and having Fixed Periods ending on such
last day into a single Portion of Capital equal to the aggregate of the Capital
of such Portions of Capital.
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SECTION 1.8. Increased Costs. (a) If any Securitization Party, any
Parallel Purchaser or any of their respective Affiliates (each an "Affected
Person") determines that the existence of or compliance with (i) any law or
regulation or any change therein or in the interpretation or application
thereof, in each case adopted, issued or occurring after the date hereof or (ii)
any request, guideline or directive from any central bank or other Governmental
Authority (whether or not having the force of law) issued or occurring after the
date of this Agreement affects or would affect the amount of capital required or
expected to be maintained by such Affected Person (and is not a change by way of
imposition or increase of reserve requirements referred to in Section 1.9)
otherwise accounted for in the determination of the Eurodollar Rate) and such
Affected Person determines that the amount of such capital is increased by or
based upon the existence of any commitment to make purchases of or otherwise to
maintain the investment in Pool Receivables related to this Agreement or any
Program Support Agreement and other commitments of the same type related to this
Agreement, then, upon demand by such Affected Person within 180 days of such
determination (with a copy to the Administrative Agent), the Seller shall pay to
the Administrative Agent, for the account of such Affected Person, from time to
time as specified by such Affected Person, additional amounts sufficient to
compensate such Affected Person in the light of such circumstances, to the
extent that such Affected Person reasonably determines such increase in capital
to be allocable to the existence of any of such commitments. A certificate as to
such amounts submitted to the Seller and the Administrative Agent by such
Affected Person setting forth in reasonable detail the calculation of such
amounts shall be conclusive and binding for all purposes, absent prima facia
error.
(b) If, due to either (i) the introduction of or any change (other than
any change by way of imposition or increase of reserve requirements referred to
in Section 1.9) in or in the interpretation of any law or regulation or (ii)
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Affected Person of agreeing to purchase or
purchasing, or maintaining the ownership of the Purchased Interest in respect of
which Discount is computed by reference to the Eurodollar Rate excluding,
however, any increase in the cost to such Affected Person due to the imposition
of any tax on such Affected Person, then, upon written demand by such Affected
Person no later than 180 days after such Affected Person shall determine its
liability for such increased cost and from time to time thereafter, the Seller
shall promptly pay to such Affected Person, from time to time as specified,
additional amounts reasonably determined by such Affected Person to be
sufficient to compensate such Affected Person for such increased costs. A
certificate as to such amounts submitted to
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the Seller by such Affected Person shall be conclusive and binding for all
purposes, absent prima facia error.
SECTION 1.9. Additional Discount on Portions of Purchased Interest
Bearing a Eurodollar Rate. The Seller shall pay to any Affected Person, so long
as such Affected Person shall be required under regulations of the Board of
Governors of the Federal Reserve System to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities,
additional Discount on the unpaid Capital of the applicable Portion of Capital
during each Fixed Period in respect of which Discount is computed by reference
to the Eurodollar Rate, for such Fixed Period, at a rate per annum equal at all
times during such Fixed Period to the remainder obtained by subtracting (i) the
Eurodollar Rate for such Fixed Period from (ii) the rate obtained by dividing
such Eurodollar Rate referred to in clause (i) above by that percentage equal to
100% minus the Eurodollar Rate Reserve Percentage for such Fixed Period, payable
on each date on which Discount is payable on the applicable Portion of Capital.
Such additional Discount shall be reasonably determined by the Affected Person
and notified to the Seller through the Administrative Agent within 90 days after
any Discount payment is made with respect to which such additional Discount is
requested. A certificate as to such additional Discount submitted to the Seller
by the Affected Person shall be conclusive and binding for all purposes, absent
prima facia error.
SECTION 1.10. Requirements of Law. In the event that any Affected
Person determines that the existence of or compliance with (i) any law or
regulation or any change therein or in the interpretation or application
thereof, in each case adopted, issued or occurring after the date hereof or (ii)
any request, guideline or directive from any central bank or other Governmental
Authority (whether or not having the force of law) issued or occurring after the
date of this Agreement:
(A) does or shall impose, modify or hold applicable any
reserve, special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or for the
account of, purchases, advances or loans by, or other credit extended
by, or any other acquisition of funds by, any office of such Affected
Person which are not otherwise included in the determination of the
Eurodollar Rate or the Base Rate hereunder; or
(B) does or shall impose on such Affected Person any
other condition;
and the result of any of the foregoing is (x) to increase the cost to such
Affected Person of acting as Administrative Agent, or of agreeing to purchase or
purchasing or maintaining the
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ownership of undivided ownership interests with regard to the Purchased Interest
(or interests therein) or any Portion of Capital in respect of which Discount is
computed by reference to the Eurodollar Rate or the Base Rate (except to the
extent that such increase in cost is due to the imposition of any tax on such
Affected Person) or (y) to reduce any amount receivable hereunder (whether
directly or indirectly) funded or maintained by reference to the Eurodollar Rate
or the Base Rate (except to the extent that such reduced amount receivable is
due to the imposition of any tax on such Affected Person), then, in any such
case, upon written demand by such Affected Person no later than 180 days after
such Affected Person shall determine the amount of any such increased cost or
reduced amount, and from time to time thereafter, the Seller shall promptly pay
such Affected Person any additional amounts necessary to compensate such
Affected Person for such increased cost or reduced amount receivable. All such
amounts shall be payable as incurred. A written certificate delivered by such
Affected Person to the Seller certifying, in reasonably specific detail, the
basis for, calculation of, and amount of such increased costs or reduced amount
receivable shall be conclusive in the absence of prima facia error; provided,
however, that no Affected Person shall be required to disclose any confidential
or tax planning information in any such certificate.
SECTION 1.11. Inability to Determine Eurodollar Rate. In
the event that the Administrative Agent shall have determined
prior to the first day of any Fixed Period (which determination
shall be conclusive and binding upon the parties hereto) by
reason of circumstances affecting the interbank Eurodollar
market, either (a) dollar deposits in the relevant amounts and
for the relevant Fixed Period are not available, (b) adequate and
reasonable means do not exist for ascertaining the Eurodollar
Rate for such Fixed Period or (c) the Eurodollar Rate determined
pursuant hereto does not accurately reflect the cost to the
Parallel Purchasers (as conclusively determined by the
Administrative Agent) of maintaining any Portion of Capital
during such Fixed Period, the Administrative Agent shall promptly
give telephonic notice of such determination, confirmed in
writing, to the Seller prior to the first day of such Fixed
Period. Upon delivery of such notice (a) no Portion of Capital
shall be funded thereafter at the Alternate Rate determined by
reference to the Eurodollar Rate, unless and until the
Administrative Agent shall have given notice to the Seller that
the circumstances giving rise to such determination no longer
exist, and (b) with respect to any outstanding Portions of
Capital then funded at the Alternate Rate determined by reference
to the Eurodollar Rate, such Alternate Rate shall automatically
be converted to the Alternate Rate determined by reference to the
Base Rate at the respective last days of the then current Fixed
Periods relating to such Portions of Capital.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES; COVENANTS; TERMINATION EVENTS
SECTION 2.1. Representations and Warranties; Covenants.
(a) The Seller, Servicer and the Parent hereby jointly and severally
make the representations and warranties set forth in Exhibit II, and hereby
jointly and severally agree that the covenants set forth in Exhibit III will be
performed and observed.
SECTION 2.2. Termination Events. If any of the Termination Events set
forth in Exhibit IV shall occur, the Administrative Agent may, by notice to the
Seller, declare the Parallel Purchase Termination Date to have occurred (in
which case the Parallel Purchase Termination Date shall be deemed to have
occurred); provided that, automatically upon the occurrence of any event
(without any requirement for the passage of time or the giving of notice)
described in subsection (g) of Exhibit IV, the Parallel Purchase Termination
Date shall occur; provided, further, that, in the case of a Termination Event
described in subsection (j) of Exhibit IV, the Facility Termination Date shall
be deemed to have occurred on the Business Day following the date of such notice
unless such Termination Event is cured during the intervening period. Upon any
such declaration, occurrence or deemed occurrence of the Parallel Purchase
Termination Date, the Parallel Purchasers and the Administrative Agent shall
have, in addition to the rights and remedies which they may have under this
Agreement, all other rights and remedies provided after default under the UCC
and under other applicable law, which rights and remedies shall be cumulative.
Notwithstanding anything to the contrary in this Agreement (including without
limitation any Exhibit hereto), this Section 2.2 shall not be limited or
otherwise affected by satisfaction of the conditions to reinvestments or
purchases set forth in Section 2 of Exhibit I.
ARTICLE III
INDEMNIFICATION
SECTION 3.1. (a) Indemnities by the Seller. Without
limiting any other rights that any Securitization Party (each an
"Indemnified Party") may have hereunder or under applicable law,
the Seller and the Parent hereby jointly and severally agree to
indemnify each Indemnified Party from and against any and all
claims, damages, expenses, losses and liabilities (including
Attorney Costs) (all of the foregoing being collectively referred
to as "Indemnified Amounts") arising out of or resulting from
this Agreement (whether directly or indirectly) or the use of
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proceeds of purchases or reinvestments or the ownership of the Purchased
Interest, or any interest therein, or in respect of any Receivable or any
Contract, excluding, however, (1) Indemnified Amounts to the extent resulting
from gross negligence or willful misconduct on the part of such Indemnified
Party, (2) recourse (except as otherwise specifically provided in this
Agreement) for uncollectible Receivables, or (3) any taxes imposed on such
Indemnified Party. Without limiting or being limited by the foregoing, and
subject to the exclusions set forth in the preceding sentence, the Seller and
the Parent jointly and severally agree to pay to each Indemnified Party (within
three Business Days after written demand for such indemnification) any and all
amounts necessary to indemnify such Indemnified Party from and against any and
all Indemnified Amounts relating to or resulting from any of the following:
(i) the failure of any Receivable included in the calculation
of the Net Receivables Pool Balance as an Eligible Receivable to be an
Eligible Receivable, the failure of any information contained in a
Seller Report to be true and correct, or the failure of any other
information provided to the Administrative Agent with respect to
Receivables or this Agreement to be true and correct;
(ii) the failure of any representation or warranty or
statement made or deemed made by the Seller (or any of its officers),
Servicer or Parent under or in connection with this Agreement to have
been true and correct in all respects when made;
(iii) the failure by the Seller to comply with any applicable
law, rule or regulation with respect to any Pool Receivable or the
related Contract; or the failure of any Pool Receivable or the related
Contract to conform to any such applicable law, rule or regulation;
(iv) the failure to vest in the Administrative Agent, on
behalf of each Parallel Purchaser, (A) a valid and enforceable
perfected undivided percentage ownership interest, to the extent of the
Purchased Interest, in the Receivables in, or purporting to be in, the
Receivables Pool and the Related Security and Collections with respect
thereto and (B) a first priority perfected security interest in the
items described in Section 1.2(e), in each case, free and clear of any
Adverse Claim;
(v) the failure to have filed, or any delay in filing,
financing statements or other similar instruments or documents under
the UCC of any applicable jurisdiction or other applicable laws with
respect to any Receivables in, or purporting to be in, the Receivables
Pool and the Related Security and Collections in respect thereof,
whether at the
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time of any purchase or reinvestment or at any subsequent
time;
(vi) any dispute, claim, offset or defense or claim of
billing error, (other than discharge in bankruptcy of the Obligor) of
the Obligor to the payment of any Receivable in, or purporting to be
in, the Receivables Pool (including, without limitation, a defense
based on such Receivable or the related Contract not being a legal,
valid and binding obligation of such Obligor enforceable against it in
accordance with its terms), or any other claim resulting from the sale
of the goods or services related to such Receivable or the furnishing
or failure to furnish, or agreement to accept returns of, such goods or
services or relating to collection activities with respect to such
Receivable (if such collection activities were performed by the Seller
or any of its Affiliates acting as Servicer or by any agent or
independent contractor retained by the Seller or any of its
Affiliates);
(vii) any failure of the Seller or any Originator or any
Servicer, to perform its duties or obligations in accordance with the
provisions hereof or to perform its duties or obligations under the
Contracts;
(viii) any breach of warranty, products liability or other
claim, investigation, litigation or proceeding arising out of or in
connection with merchandise, insurance or services which are the
subject of any Contract;
(ix) the commingling of any portion of Collections
of Pool Receivables relating to the Purchased Interest at
any time with other funds;
(x) any investigation, litigation or proceeding related to
this Agreement or the use of proceeds of purchases or reinvestments or
the ownership of the Purchased Interest or in respect of any
Receivable, Related Security or Contract; or
(xi) any reduction in Capital as a result of the distribution
of Collections pursuant to Section 1.4(d), in the event that all or a
portion of such distributions shall thereafter be rescinded or
otherwise must be returned for any reason.
(b) Taxes.
(i) Any and all payments made hereunder to an Affected Person
shall be made free and clear of and without deduction for any and all
current or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities
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with respect thereto excluding: (A) taxes imposed on or measured by all
or part of the gross or net income (but not including any such tax in
the nature of a withholding tax) of such Affected Person by the
jurisdiction under the laws of which such Affected Person is organized
or has its applicable lending office or any political subdivision of
any thereof and (B) taxes that would not have been imposed if the only
connection between such Affected Person and the jurisdiction imposing
such taxes was the activities of such Affected Person pursuant to or in
respect of this Agreement (including entering into, lending money or
extending credit pursuant to, receiving payments under, or enforcing
this Agreement) (all such excluded taxes, levies, imposts, deductions,
changes, withholding and liabilities collectively or individually
referred to herein as "Excluded Taxes" and all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities
collectively or individually referred to herein as "Taxes"). If the
Seller shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to any Affected Person: (A) the sum payable shall
be increased by the amount (an "additional amount") necessary so that
after making all required deductions (including deductions applicable
to additional sums payable under this Section 3.1(b)) such Affected
Person shall receive an amount equal to the sum it would have received
had no such deductions been made, (B) the Seller shall make such
deductions and (C) the Seller shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(ii) In addition, the Seller agrees to pay to the relevant
Governmental Authority in accordance with applicable law all taxes,
levies, imposts, deductions, charges, assessments or fees of any kind
(including but not limited to any current or future stamp or
documentary taxes or any other excise or property taxes, charges, or
similar levies, but excluding any Excluded Taxes) imposed upon any
Affected Person as a result of the transactions contemplated by this
Agreement or that arise from any payment made hereunder or from the
execution, delivery, or registration of or otherwise similarly with
respect to, this Agreement ("Other Taxes").
(iii) The Seller and the Parent hereby jointly and severally
agree to indemnify each Affected Person from and against the full
amount of Taxes and Other Taxes arising out of this Agreement (whether
directly or indirectly) imposed upon or paid by such Person and any
liability (including penalties, interest, and expenses (including
Attorney Costs)) arising with respect thereto whether or not such Taxes
or Other Taxes were correctly or legally asserted by
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the relevant Governmental Authority. A certificate as to the amount of
such amounts prepared by an Affected Person, absent manifest error,
shall be final, conclusive, and binding for all purposes. Such
indemnification shall be made within 30 days after the date the
Affected Person makes a timely written demand therefor or the time at
which such amount is payable after a timely written demand therefor has
been made, whichever is earlier. A written demand will be considered
"timely" for purposes of the preceding sentence only if it is received
by the Seller and the Parent no later than 180 days after the earlier
of (A) the date on which such Affected Person makes such payment of
Taxes or Other Taxes or liability arising therefrom or with respect
thereto and (B) the date on which the relevant Governmental Authority
or other party makes written demand upon such Affected Person for
payment of such Taxes or Other Taxes or liability arising therefrom or
with respect thereto.
(iv) As soon as practicable after the date of any payment of
Taxes or Other Taxes by the Seller to a Governmental Authority
hereunder, the Seller will deliver to the relevant Affected Person the
original or a certified copy of a receipt issued by such Governmental
Authority evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this
Section 3.1(b) shall survive the termination of this Agreement.
(vi) Each Program Support Provider that is granted a
participating interest in the Purchased Interest and is organized under
the laws of a jurisdiction other than the United States, any State
thereof, or the District of Columbia (each a "Non-U.S. Purchaser")
shall deliver to the Seller or the Administrator: (A) two copies of
either United States Internal Revenue Service Form 1001 or Form 4224
(whichever is applicable), or (B) in the case of a NonU.S. Purchaser
claiming an exemption from U.S. federal withholding tax under Section
871(h) or 881(c) of the Code with respect to payments of "portfolio
interest", a Form W-8 (or any subsequent versions thereof or successors
thereto) and a certificate representing that such Non-U.S. Purchaser is
not a bank for purposes of Section 881(c) of the Code, in either case
properly completed and duly executed by such Non-U.S. Purchaser
claiming complete exemption from U.S. federal withholding tax on
payments by the Seller under this Agreement. Such forms shall be
delivered by each Non-U.S. Purchaser before the date it receives its
first payment with respect to a Purchased Interest, and before the date
it receives its first payment with respect to a Purchased Interest
occurring after the date, if any, that such Non-
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U.S. Purchaser changes its applicable lending office by designating a
different lending office (a "New Lending Office"). In addition, each
Non-U.S. Purchaser shall deliver such forms promptly after (or, if
reasonably practicable, prior to) the obsolescence or invalidity of any
form previously delivered by such Non-U.S. Purchaser. Notwithstanding
any other provision of this Section 3.1(b)(vi), a Non-U.S. Purchaser
shall not be required to deliver any form pursuant to this Section
3.1(b)(vi) that such Non-U.S. Purchaser is not legally able to deliver.
Each Program Support Provider (other than any exempt person as
described in applicable Treasury Regulations) that is granted a
participating interest in the Purchased Interest and is organized under
the laws of the United States or any state thereof or the District of
Columbia shall deliver to the Seller an original copy of Internal
Revenue Service Form W-9 (or applicable successor form) properly
completed and duly executed by such Program Support Provider.
(vii) The Seller and the Parent shall not be required to
indemnify any Non-U.S. Purchaser, or to pay any additional amounts to
any Non-U.S. Purchaser, in respect of United States federal withholding
tax (or any withholding tax imposed by a state that applies only when
such United States federal withholding tax is imposed) pursuant to this
Section 3.1(b) to the extent that: (A) the obligation to withhold
amounts with respect to United States federal withholding tax existed
on the date such Non-U.S. Purchaser was granted a participating
interest in the Purchased Interest or, with respect to payments to a
New Lending Office, the date such Non-U.S. Purchaser designated such
New Lending Office; provided, however, that this clause (A) shall not
apply to any Non-U.S. Purchaser or New Lending Office that is granted,
assigned, or transferred a participating interest in the Purchased
Interest at the request of the Seller and provided further, however,
that this clause (A) shall not apply to any Non-U.S. Purchaser or New
Lending Office that is assigned an interest in the Purchased Interest
by a Program Support Provider to the extent that the indemnity payment
or additional amounts such Non-U.S. Purchaser or New Lending Office
would be entitled to receive (without regard to this clause (A)) do not
exceed the indemnity payment or additional amounts that the Program
Support Provider making the assignment to such Non-U.S. Purchaser or
New Lending Office would have been entitled to receive in the absence
of such assignment; or (B) the obligation to make such indemnification
or to pay such additional amounts would not have arisen but for a
failure by such Non-U.S. Purchaser to comply with the provisions of
paragraph (vi) above (it being understood that the Non-U.S. Purchaser
shall not have failed to comply with the provisions of paragraph (vi)
above if it is legally unable
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to deliver the forms described therein on any date after it is granted
a participation interest in a Purchased Interest or designated a New
Lending Office).
(viii) Any Affected Person claiming any indemnity payment or
additional amounts payable pursuant to this Section 3.1(b) shall use
reasonable efforts (consistent with legal and regulatory restrictions)
to file any certificate or document reasonably requested in writing by
the Seller or the Parent or to change the jurisdiction of its
applicable lending office if the making of such a filing or change
would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not,
in the good faith determination of such Affected Person, be otherwise
disadvantageous to such Affected Person.
(ix) Nothing contained in this Section 3.1(b) shall require an
Affected Person to make available any of its tax returns (or any other
information that it deems to be confidential or proprietary).
(x) If any Affected Person receiving an indemnification
payment hereunder with respect to Taxes or Other Taxes or liabilities
arising therefrom shall subsequently receive a refund from any taxing
authority which is specifically attributable to such indemnification
payment, such Person shall promptly pay such refund to Seller or the
Parent, as the case may be.
Section 3.2. Parent's Performance Guaranty. (a) Parent hereby
unconditionally and irrevocably covenants and agrees that it will cause the
Seller and the Servicer duly and punctually to perform and observe all of the
terms, conditions, covenants, agreements (including, without limitation,
agreements to make payments or deemed Collections) and indemnities of the Seller
and the Servicer under this Agreement and the other Transaction Documents
strictly in accordance with the terms hereof and thereof and that if for any
reason whatsoever the Seller or the Servicer shall fail to so perform and
observe such terms, conditions, covenants, agreements and indemnities, Parent
will duly and punctually perform and observe the same.
(b) The liabilities and obligations of Parent, in its capacity as a
guarantor under this Section 3.2, shall be absolute and unconditional under all
circumstances and shall be performed by Parent regardless of (i) whether any
Parallel Purchaser or the Administrative Agent shall have taken any steps to
collect from the Seller or the Servicer any of the amounts payable by such party
under this Agreement or shall otherwise have exercised any of their rights or
remedies under this Agreement or the other Transaction Documents against such
party or against any Obligor
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under any of the Pool Receivables, (ii) the validity, legality or enforceability
of this Agreement or any other Transaction Documents, or the disaffirmance of
any thereof in any event of bankruptcy relating to the Seller or the Servicer,
(iii) any law, regulation or decree now or hereafter in effect which might in
any manner affect any of the terms or provisions of this Agreement or any other
Transaction Document or any of the rights of any Parallel Purchaser or the
Administrative Agent as against the Seller or the Servicer or as against any
Obligor under any of such Pool Receivables or which might cause or permit to be
invoked any alteration in time, amount, manner of payment or performance of any
amount payable by the Seller or the Servicer to any Parallel Purchaser or the
Administrative Agent under this Agreement, (iv) the merger or consolidation of
the Seller or the Servicer into or with any corporation or any sale or transfer
by such party or all or any part of its property, (v) the existence or assertion
of any Adverse Claim with respect to any Pool Receivable, or (vi) any other
circumstance whatsoever (with or without notice to or knowledge of Parent) which
may or might in any manner or to any extent vary the risk of Parent, or might
otherwise constitute a legal or equitable discharge of a surety or guarantor, it
being the purpose and intent of Parent that the liabilities and obligations of
Parent under this Section 3.2 shall be absolute and unconditional under any and
all circumstances, and shall not be discharged except by payment and performance
as provided in this Agreement. The guaranty set forth in this Section 3.2 is a
guaranty of payment and performance and not just of collection.
(c) Without in any way affecting or impairing the liabilities and
obligations of Parent, in its capacity as a guarantor under this Section 3.2,
the Seller, any Parallel Purchaser or the Administrative Agent may at any time
and from time to time in its discretion, without the consent of, or notice to,
Parent, and without releasing or affecting Parent's liability hereunder (i)
extend or change the time, manner, place or terms of this Agreement or any other
Transaction Document, (ii) settle or compromise any of the amounts payable by
Seller or Servicer to any Parallel Purchaser or the Administrative Agent under
this Agreement or subordinate the same to the claims of others, (iii) retain or
obtain a lien upon or security interest in any property to secure any of the
obligations hereunder, (iv) retain or obtain the primary or secondary obligation
of any obligor or obligors, in addition to Parent, with respect to any of the
obligations due hereunder, or (v) release or fail to perfect any lien upon or
security interest in, or impair, surrender, release or permit any substitution
in exchange for, all or any part of any property securing any of the obligations
under this Agreement, it being understood that nothing contained in this Section
3.2(c) shall give any Parallel Purchaser or the Administrative Agent the right
to take any of the foregoing actions if not permitted by the other provisions of
this
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Agreement, by law or otherwise. Nothing in this Section 3.1(c) shall be deemed
to waive any of the rights the Seller may otherwise have.
(d) The provisions of this Section 3.2 shall continue to be effective
or be reinstated, as the case may be, if at any time payment of any of the
amounts payable by Seller or Servicer, to any Parallel Purchaser or the
Administrative Agent under this Agreement is rescinded or must otherwise be
restored or returned by any of such Persons, as the case may be, upon any event
of bankruptcy involving Seller or Servicer, or otherwise, all as though such
payment had not been made. Parent, in its capacity as a guarantor under this
Section 3.2, hereby waives (i) notices of the occurrence of any default
hereunder, (ii) any requirement of diligence or promptness on the part of any
Parallel Purchaser or the Administrative Agent in making demand, commencing suit
or exercising any other right or remedy under this Agreement, or otherwise, and
(iii) any right to require any Parallel Purchaser or the Administrative Agent to
exercise any right or remedy against Seller or Servicer or the Pool Receivables
prior to enforcing any of their rights against Parent under this Section 3.2.
Parent, in its capacity as a guarantor under this Section 3.2, agrees that, in
the event of an event of bankruptcy with respect to Seller or Servicer
(including Parent), and if such event shall occur at a time when all of the
indemnified amounts and other amounts due from Seller or Servicer under this
Agreement may not then be due and payable, Parent will pay to the Administrative
Agent forthwith the full amount which would be payable hereunder by Parent if
all such indemnified amounts and other obligations were then due and payable.
ARTICLE IV
ADMINISTRATION AND COLLECTIONS
Section 4.1. Appointment of Servicer. (a) The servicing, administering
and collection of the Pool Receivables shall be conducted by the Person so
designated from time to time as Servicer in accordance with this Section 4.1.
Until the Administrative Agent gives notice to O&M Medical (in accordance with
this Section 4.1) of the designation of a new Servicer, O&M Medical is hereby
designated as, and hereby agrees to perform the duties and obligations of, the
Servicer pursuant to the terms hereof. Upon either (i) ninety (90) days' prior
written notice to O&M Medical or (ii) the occurrence of a Termination Event, the
Administrative Agent may designate as Servicer any Person (including itself) to
succeed O&M Medical or any successor Servicer, on the condition in each case
that any such Person so designated shall agree to perform the duties and
obligations of the Servicer pursuant to the terms hereof.
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(b) Upon the designation of a successor Servicer as set forth in
Section 4.1(a) hereof, O&M Medical agrees that it will terminate its activities
as Servicer hereunder in a manner which the Administrative Agent determines will
facilitate the transition of the performance of such activities to the new
Servicer, and O&M Medical shall cooperate with and assist such new Servicer.
Such cooperation shall include (without limitation) access to and transfer of
records and use by the new Servicer of all licenses, hardware or software
necessary or desirable to collect the Pool Receivables and the Related Security.
(c) O&M Medical acknowledges that the Administrative Agent and each
Parallel Purchaser have relied on O&M Medical's agreement to act as Servicer
hereunder in making their decision to execute and deliver this Agreement.
Accordingly, O&M Medical agrees that it will not voluntarily resign as Servicer.
(d) The Servicer may delegate its duties and obligations hereunder to
any subservicer (each, a "Sub-Servicer"); provided that, in each such
delegation, (i) such Sub-Servicer shall agree in writing to perform the duties
and obligations of the Servicer pursuant to the terms hereof, (ii) the Servicer
shall remain primarily liable to each Parallel Purchaser for the performance of
the duties and obligations so delegated, (iii) the Seller, the Administrative
Agent and each Parallel Purchaser shall have the right to look solely to the
Servicer for performance and (iv) the terms of any agreement with any
Sub-Servicer shall provide that the Administrative Agent may terminate such
agreement upon the termination of the Servicer hereunder by giving notice of its
desire to terminate such agreement to the Servicer (and the Servicer shall
provide appropriate notice to such Sub-Servicer).
Section 4.2. Duties of Servicer. (a) The Servicer shall take or cause
to be taken all such action as may be necessary or advisable to collect each
Pool Receivable from time to time, all in accordance with this Agreement and all
applicable laws, rules and regulations, with reasonable care and diligence, and
in accordance with the Credit and Collection Policy. The Servicer shall
segregate and hold in trust for the accounts of the Seller and each Parallel
Purchaser the amount of the Collections to which each is entitled in accordance
with Article I hereto. The Servicer may, in accordance with the Credit and
Collection Policy, extend the maturity of any Pool Receivable (but not beyond
sixty (60) days from the original maturity date of such Pool Receivable and (y)
not more than once for any Pool Receivable) and extend the maturity or adjust
the Outstanding Balance of any Defaulted Receivable as the Servicer may
determine to be appropriate to maximize Collections thereof; provided, however,
that (i) such extension or adjustment shall not alter the status of such Pool
Receivable as a Delinquent Receivable or a Defaulted Receivable or limit the
rights of each Parallel
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Purchaser or the Administrative Agent under this Agreement and (ii) if a
Termination Event has occurred and O&M Medical is still serving as Servicer, O&M
Medical may make such extension or adjustment only upon the prior written
approval of the Administrative Agent. The Servicer may adjust the Outstanding
Balance of any Receivable to account for any Dilution Adjustment, provided that
the appropriate Originator shall have made the corresponding payment pursuant to
Section 1.8 of the Amended and Restated Purchase and Sale Agreement. The Seller
shall deliver to the Servicer and the Servicer shall hold for the benefit of the
Seller and the Administrative Agent (for the benefit of each Parallel Purchaser
and individually) in accordance with their respective interests, all records and
documents (including without limitation computer tapes or disks) with respect to
each Pool Receivable. Notwithstanding anything to the contrary contained herein,
the Administrative Agent may direct the Servicer whether the Servicer is O&M
Medical or any other Person to commence or settle any legal action to enforce
collection of any Pool Receivable or to foreclose upon or repossess any Related
Security; provided, however, that no such direction may be given unless either
(i) a Termination Event has occurred or (ii) the Administrative Agent believes
in good faith that failure to commence, settle, or effect such legal action,
foreclosure or repossession could adversely affect Receivables constituting a
material portion of the Pool Receivables.
(b) The Servicer shall as soon as practicable following actual receipt
of collected funds turn over to the Seller the collections of any indebtedness
that is not a Pool Receivable, less in the event O&M Medical or one of its
Affiliates is not such Servicer, all reasonable and appropriate out-of-pocket
costs and expenses of such Servicer of servicing, collecting and administering
such collections; provided, however, the Servicer shall not be under any
obligation to remit any such funds to the Seller unless and until the Servicer
has received from the Seller evidence satisfactory to the Administrative Agent
and the Servicer that the Seller is entitled to such funds hereunder and under
applicable law. The Servicer shall as soon as practicable upon demand, deliver
to the Seller all records in its possession which evidence or relate to any
indebtedness that is not a Pool Receivable, and copies of records in its
possession which evidence or relate to any indebtedness that is a Pool
Receivable.
(c) Notwithstanding anything to the contrary contained in this Article
IV, the Servicer, if not, O&M Medical or one of its Affiliates shall have no
obligation to collect, enforce or take any other action described in this
Article IV with respect to any indebtedness that is not a Pool Receivable other
than to deliver to the Seller the collections and documents with respect to any
such indebtedness as described in Section 4.2(b). It is expressly understood and
agreed by the parties that such Servicer's duties in respect of any indebtedness
that is not a
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Pool Receivable are set forth in this Section 4.2 in their entirety. Upon
delivery by such Servicer of funds or records relating to any indebtedness that
is not a Pool Receivable to the Seller, such Servicer shall have discharged in
full all of its responsibilities to make any such delivery.
(d) The Servicer's obligations hereunder shall terminate on the later
of (i) the Parallel Purchase Termination Date and (ii) the date on which all
amounts required to be paid to each Parallel Purchaser, the Administrative Agent
and any other Indemnified Party or Affected Person hereunder shall have been
paid in full.
After such termination the Servicer shall promptly deliver to the
Seller all books, records and related materials that the Seller previously
provided to the Servicer in connection with this Agreement.
Section 4.3. Lock-Box Arrangements. Prior to the initial purchase
hereunder, in accordance with Section (i) of Exhibit III, the Seller shall enter
into Lock-Box Agreements with all of the Lock-Box Banks, and deliver original
counterparts thereof to the Administrative Agent. Upon the occurrence of a
Termination Event, the Administrative Agent may at any time thereafter give
notice to each Lock-Box Bank that the Administrative Agent is exercising its
rights under the Lock-Box Agreements to do any or all of the following: (i) to
have the exclusive ownership and control of the Lock-Box Accounts transferred to
the Administrative Agent and to exercise exclusive dominion and control over the
funds deposited therein, (ii) to have the proceeds that are sent to the
respective Lock-Box Accounts be redirected pursuant to its instructions rather
than deposited in the applicable Lock-Box Account, and (iii) to take any or all
other actions permitted under the applicable Lock-Box Agreement. The Seller
hereby agrees that if the Administrative Agent, at any time, takes any action
set forth in the preceding sentence, the Administrative Agent shall have
exclusive control of the proceeds (including Collections) of all Pool
Receivables and the Seller hereby further agrees to take any other action that
the Administrative Agent may reasonably request to transfer such control. Any
proceeds of Pool Receivables received by the Seller, as Servicer or otherwise,
thereafter shall be sent immediately to the Administrative Agent. The parties
hereto hereby acknowledge that if at any time the Administrative Agent takes
control of any Lock-Box Account, the Administrative Agent shall not have any
rights to the funds therein in excess of the unpaid amounts due to the
Administrative Agent, any Parallel Purchaser or any other Person hereunder and
the Administrative Agent shall distribute or cause to be distributed such funds
in accordance with Section 4.2(b) hereof (including the proviso thereto) and
Article I hereof (in each case as if such funds were held by the Servicer
thereunder); provided, however, that the
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Administrative Agent shall not be under any obligation to remit any such funds
to the Seller or any other Person unless and until the Administrative Agent has
received from the Seller or such Person evidence satisfactory to the
Administrative Agent that the Seller or such Person is entitled to such funds
hereunder and under applicable law.
Section 4.4. Enforcement Rights. (a) At any time following
the occurrence of a Termination Event or the designation of a
Servicer (other than O&M Medical or any of its Affiliates)
pursuant to Section 4.1 hereof:
(i) the Administrative Agent may direct the Obligors that
payment of all amounts payable under any Pool Receivable be made
directly to the Administrative Agent or its designee;
(ii) the Administrative Agent may instruct the Seller to give
notice of each Parallel Purchaser's interest in Pool Receivables to
each Obligor, which notice shall direct that payments be made directly
to the Administrative Agent or its designee, and upon such instruction
from the Administrative Agent the Seller shall give such notice at the
expense of the Seller; provided, that if the Seller fails to so notify
each Obligor, the Administrative Agent may so notify the Obligors; and
(iii) the Administrative Agent may request the Seller to, and
upon such request the Seller shall, (A) assemble all of the records
necessary or desirable to collect the Pool Receivables and the Related
Security, and transfer or license the use of, to the new Servicer, all
software necessary or desirable to collect the Pool Receivables and the
Related Security, and make the same available to the Administrative
Agent or its designee at a place selected by the Administrative Agent,
and (B) segregate all cash, checks and other instruments received by it
from time to time constituting Collections with respect to the Pool
Receivables in a manner acceptable to the Administrative Agent and,
promptly upon receipt, remit all such cash, checks and instruments,
duly endorsed or with duly executed instruments of transfer, to the
Administrative Agent or its designee.
(b) The Seller hereby authorizes the Administrative Agent, and
irrevocably appoints the Administrative Agent as its attorney-in-fact with full
power of substitution and with full authority in the place and stead of the
Seller, which appointment is coupled with an interest, to take any and all steps
in the name of the Seller and on behalf of the Seller necessary or desirable, in
the determination of the Administrative Agent, to collect any and all amounts or
portions thereof due under any and
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all Pool Receivables or Related Security, including, without limitation,
endorsing the name of the Seller on checks and other instruments representing
Collections and enforcing such Pool Receivables, Related Security and the
related Contracts. Notwithstanding anything to the contrary contained in this
subsection (b), none of the powers conferred upon such attorney-in-fact pursuant
to the immediately preceding sentence shall subject such attorney-in-fact to any
liability if any action taken by it shall prove to be inadequate or invalid, nor
shall they confer any obligations upon such attorney-in-fact in any manner
whatsoever.
Section 4.5. Responsibilities of the Seller and O&M Medical. (a)
Anything herein to the contrary notwithstanding, the Seller shall pay when due
any taxes, including, without limitation, any sales taxes payable in connection
with the Pool Receivables and their creation and satisfaction. Neither the
Administrative Agent nor any Parallel Purchaser shall have any obligation or
liability with respect to any Pool Receivable, any Related Security or any
related Contract, nor shall any of them be obligated to perform any of the
obligations of the Seller or any Originator under any of the foregoing.
(b) O&M Medical hereby irrevocably agrees that if at any time it shall
cease to be the Servicer hereunder, it shall act (if the then current Servicer
so requests) as the data-processing agent of the Servicer and, in such capacity,
O&M Medical shall conduct the data-processing functions of the administration of
the Receivables and the Collections thereon in substantially the same way that
O&M Medical conducted such data-processing functions while it acted as the
Servicer.
Section 4.6. Servicing Fee. For so long as the Servicer is O&M Medical
or an Affiliate of O&M Medical, the Servicer shall be paid a fee, through
distributions contemplated by Section 1.4(d), equal to 0.50% per annum of the
average outstanding Capital. If the Servicer is not O&M Medical or one of its
Affiliates, then the Servicer shall be paid a fee as negotiated in good faith by
such Services and by the Administrator in the Administrator's sole discretion.
ARTICLE V
ADMINISTRATIVE AGENT
SECTION 5.1. Authorization and Action. (a) Each Parallel Purchaser
hereby irrevocably appoints, designates and authorizes the Administrative Agent
to take such action on its behalf under the provisions of this Agreement and to
exercise such powers and perform such duties as are expressly delegated to it by
the terms of this Agreement, together with such powers as are reasonably
incidental thereto. Without limiting the foregoing, each
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Parallel Purchaser hereby irrevocably authorizes the Administrative Agent to
execute an O&M Intercreditor Agreement substantially in the form attached hereto
as Annex B and agrees to be bound thereby. Notwithstanding any provision to the
contrary contained elsewhere in this Agreement, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Administrative Agent have or be deemed to have any
fiduciary relationship with any Parallel Purchaser, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise exist against the Administrative Agent.
(b) The Administrative Agent may execute any of its duties under this
Agreement by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Administrative Agent shall not be responsible for the negligence or
misconduct of any agent or attorney-in-fact that it selects with reasonable
care.
SECTION 5.2. Reliance, Etc. (a) None of the Administrative Agent or any
of its Affiliates or any of the officers, directors, employees, agents or
attorneys-in-fact of the Administrative Agent or any of its Affiliates (each, an
"Agent-Related Person") shall (i) be liable for any action taken or omitted to
be taken by any of them under or in connection with this Agreement or the other
Transaction Documents or the transactions contemplated hereby or thereby (except
for its own gross negligence or willful misconduct), or (ii) be responsible in
any manner to any of the Parallel Purchasers for any recital, statement,
representation or warranty made by the Seller or any Affiliate of the Seller, or
any officer thereof, contained in this Agreement or in any other Transaction
Document, or in any certificate, report, statement or other document referred to
or provided for in, or received by the Administrative Agent under or in
connection with, this Agreement or any other Transaction Document, or for the
value of or title to any Purchased Interest, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Transaction Document, or for any failure of the Seller or any other party to
this Agreement or any other Transaction Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Parallel Purchaser to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Transaction Document, or to inspect the properties, books
or records of the Seller or any of the Seller's Affiliates.
(b) The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing,
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resolution, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, statement or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel (including counsel to the Seller), independent accountants and
other experts selected by the Administrative Agent. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement unless it shall first receive such advice or concurrence of the
Majority Parallel Purchasers as it deems appropriate and, if it so requests, it
shall first be indemnified to its satisfaction by the Parallel Purchasers
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement in accordance with a request or consent of the Majority Parallel
Purchasers and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Parallel Purchasers.
SECTION 5.3. Purchase Decisions. (a) Each Parallel Purchaser
acknowledges that none of the Agent-Related Persons has made any representation
or warranty to it, and that no act by the Administrative Agent hereinafter
taken, including any review of the affairs of the Seller shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Parallel Purchaser. Each Parallel Purchaser represents to the Administrative
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Seller, the value of and title to the Purchased Interest, and all applicable
bank regulatory laws relating to the transactions contemplated hereby, and made
its own decision to enter into this Agreement and to extend its purchase
commitment to the Seller hereunder. Each Parallel Purchaser also represents that
it will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and to make such investigations
as it deems necessary to inform itself as to the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Seller. Except for notices, reports and other documents expressly herein
required to be furnished to the Parallel Purchasers by the Administrative Agent,
the Administrative Agent shall not have any duty or responsibility to provide
any Parallel Purchaser with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
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creditworthiness of the Seller which may come into the possession
of any of the Agent-Related Persons.
(b) The Administrative Agent shall not be liable to any Parallel
Purchaser in connection with (x) the administration of any of the Transaction
Documents or (y) this Agreement or any purchases hereunder except for its own
gross negligence or willful misconduct. Without limiting the foregoing, the
Administrative Agent:
(i) may consult with legal counsel (including counsel for
the Seller), independent public accountants or other experts and shall
not be liable for any action taken or omitted to be taken in good faith
in accordance with the advice of such counsel, accountants or other
experts;
(ii) shall not be responsible for the performance or
observance by either Seller or the Servicer of any of the terms,
covenants or conditions of any of the Transaction Documents or any
instrument or document furnished pursuant thereto;
(iii) shall incur no liability by acting upon any notice,
consent, certificate or other instrument or writing, or any other
communication believed to be genuine and signed, sent or made by the
proper party; and
(iv) shall not be deemed to be acting as any Parallel
Purchaser's trustee or otherwise in a fiduciary capacity hereunder or
under or in connection with any of the Transaction Documents or any
Purchased Interest.
SECTION 5.4. Indemnification. Whether or not the transactions
contemplated hereby shall be consummated, the Parallel Purchasers shall
indemnify upon demand the Agent-Related Persons ratably from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, charges, expenses and disbursements (including Attorney Costs) of
any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement, the other
Transaction Documents or any document contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby, and with respect to
any investigation, litigation or proceeding (including any insolvency proceeding
or appellate proceeding) related to this Agreement, the acquisition of Purchased
Interests or the use of the proceeds thereof, whether or not any Agent-Related
Person is a party thereto (all of the foregoing, collectively, the "Indemnified
Liabilities"); provided, however, that no Parallel Purchaser shall be liable for
the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct.
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Without limitation of the foregoing, each Parallel Purchaser shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Administrative
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, the other Transaction Documents or any
document contemplated by or referred to herein to the extent that the
Administrative Agent is not reimbursed for such expenses by or on behalf of the
Seller. The agreements in this Section 5.4 shall survive termination of this
Agreement, the Parallel Purchase Termination Date, the Final Payout Date and
payment of all obligations hereunder.
SECTION 5.5. Bank of America and its Affiliates. Bank of America and
its Affiliates may make loans to, issue letters of credit for the account of,
accept deposits from, acquire equity interests in and generally engage in any
kind of banking, trust, financial advisory, underwriting or other business with
the Seller and its Affiliates as though Bank of America were not the
Administrative Agent hereunder and without notice to or consent of the Parallel
Purchasers. The Parallel Purchasers acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
the Seller or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Seller or such Affiliate) and
acknowledge that the Administrative Agent shall be under no obligation to
provide such information to them. With respect to its purchases hereunder, Bank
of America shall have the same rights and powers under this Agreement as any
other Parallel Purchaser and may exercise the same as though it were not the
Administrative Agent, and the terms "Parallel Purchaser" and "Parallel
Purchasers" include Bank of America in its individual capacity.
SECTION 5.6. Resignation of Administrative Agent. The Administrative
Agent may resign at any time by giving 30 days' prior written notice thereof to
the Parallel Purchasers and the Issuer. The Administrative Agent may be removed
at any time by the affirmative vote of the Majority Parallel Purchasers upon 30
days' prior written notice thereof to the Administrative Agent and the Issuer,
if the Administrative Agent shall have engaged in willful misconduct or shall
have been grossly negligent in the performance of its duties as Administrative
Agent. Such resignation or removal shall become effective upon the acceptance of
appointment by a successor Administrative Agent as set forth below. The Majority
Parallel Purchasers shall have the right to appoint a successor Administrative
Agent, which shall be an Eligible Agent. If no successor Administrative Agent
shall have been so appointed by the Majority Parallel Purchasers, and shall
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have accepted such appointment, within 30 days after the prior Administrative
Agent's giving of notice of resignation or the Majority Parallel Purchasers'
removal of the prior Administrative Agent, then the prior Administrative Agent
may, on behalf of the Parallel Purchasers, appoint a successor Administrative
Agent which shall be an Eligible Agent. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the prior Administrative Agent,
and the prior Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any Administrative Agent's resignation
or removal hereunder as Administrative Agent, the provisions of this Article V
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement. If no successor agent
has accepted appointment as Administrative Agent by the date which is 30 days
following a retiring Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become effective
and the Parallel Purchasers shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the Majority Parallel
Purchasers appoint a successor agent as provided for above.
ARTICLE VI
MISCELLANEOUS
SECTION 6.1. Amendments, Etc. No amendment or waiver of any provision
of this Agreement or consent to any departure by the Seller or the Servicer
therefrom shall be effective unless in a writing (a) signed by the
Administrative Agent and the Majority Parallel Purchasers, and (b) in the case
of any amendment, signed by the Seller, the Servicer, the Administrative Agent
and the Majority Parallel Purchasers; provided, however, that no amendment,
modification or waiver of any provision of this Agreement shall be effective
without the prior written consent of the Administrative Agent, the Seller and
all Parallel Purchasers if the effect of such amendment, modification or waiver
would:
(a) reduce the amount of Capital or Discount that is
payable on account of any Purchased Interest or delay any
scheduled date for payment thereof; or
(b) increase the Purchase Limit hereunder or under the Amended and
Restated Receivables Purchase Agreement to which such Seller is a party; or
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(c) modify the reserve requirements hereunder for
uncollectible Receivables, Dilution Reserve, Discount or the
Servicing Fee; or
(d) modify any yield protection or indemnity provision
which expressly inures to the benefit of assignees or
participants of the Parallel Purchasers; or
(e) modify the Purchase Commitment or Percentage of any
Parallel Purchaser; or
(f) amend this Section 6.1; or
(g) extend the Parallel Purchase Termination Date; or
(h) modify the definition of "Majority Parallel
Purchasers."
Any such amendment, waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given. No failure on the part of
any Securitization Party to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right.
SECTION 6.2. Notices, Etc. All notices and other communications
hereunder shall, unless otherwise stated herein, be in writing (which shall
include facsimile communication) and sent or delivered, to each party hereto, at
its address for notices set forth under its name on the signature pages hereof
or at such other address as shall be designated by such party in a written
notice to the other parties hereto. Notices and communications by facsimile
shall be effective when sent (and shall be followed by hard copy sent by first
class mail), and notices and communications sent by other means shall be
effective when received.
SECTION 6.3. Binding Effect; Assignability; Restrictions on Assignment.
(a) This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns. This Agreement and
each Parallel Purchaser's rights and obligations herein (including ownership of
the Purchased Interest) shall be assignable, in whole or in part, by such
Parallel Purchaser and its successors and assigns (subject to the limitations
set forth in Section 6.3(g) hereof) and any assignee shall become a party hereto
and shall become a Parallel Purchaser hereunder upon (i) satisfaction of the
conditions set forth in Section 6.3(b), (ii) acceptance and recording of an
Assignment by the Administrative Agent in a register (the "Register") maintained
by the Administrative agent for the recordation of the names and addresses of
the Parallel
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Purchasers, their respective Percentages and effective dates and (iii) the
occurrence of the effective date of such Parallel Purchaser's Purchase
Commitment (as set forth in such Assignment) and subject to the approval of such
Parallel Purchaser by the Administrative Agent.
(b) Each Parallel Purchaser may assign all or a portion of its rights
and obligations under this Agreement (subject to the limitations set forth in
Section 6.3(g) hereof); provided, however that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of the aggregate rights and obligations of the
assigning Parallel Purchaser under this Agreement (including, without
limitation, its Purchase Commitment and its Percentage of any Purchased
Interest owned by it),
(ii) the amount of the assigning Parallel Purchaser's
Purchase Commitment being assigned pursuant to such assignment shall in
no event be less than the lesser of (a) its entire Parallel Purchaser's
Purchase Commitment and (b) $10,000,000 and, if the amount being
assigned is greater than $10,000,000 shall be in an integral multiple
of $5,000,000, and, unless such assigning Parallel Purchaser is
assigning its entire Purchase Commitment, such assigning Parallel
Purchaser's retained Purchase Commitment after giving effect to such
assignment shall in no event be less than $10,000,000,
(iii) the parties to each such assignment shall execute and
deliver an Assignment to the Administrative Agent, for its acceptance
and recording in the Register,
(iv) the assignee shall deliver to the Administrative Agent at
least five days prior to the effective date specified in the Assignment
an enforceability opinion of counsel for such assignee, addressed to
the Administrative Agent and the Issuer, in form and substance
reasonably satisfactory to such addressees (and the Administrative
Agent shall promptly deliver copies of the same to each of such
addressees), and
(v) any Parallel Purchaser assigning an interest hereunder
must simultaneously assign its interest under the Amended and Restated
Liquidity Asset Purchase Agreement to the same assignee and to the same
extent as hereunder.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in the Assignment, (x) the assignee thereunder shall be
a party hereto and, to the extent that rights and obligations hereunder have
been assigned to it
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pursuant to this Agreement, have the rights and obligations of a Parallel
Purchaser hereunder and (y) the Parallel Purchaser which is the assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to this Agreement, relinquish its rights (other than the
right to receive payments which accrued in favor of such Parallel Purchaser
prior to such assignment) and be released from its obligations under this
Agreement (and, if such Assignment provides for an assignment of all such
assigning Parallel Purchaser's Purchase Commitment, such Parallel Purchaser
shall cease to be a party hereto).
(c) Upon receipt by the Administrative Agent of an Assignment executed
by an assigning Parallel Purchaser and by an assignee who is an Eligible
Assignee and the satisfaction of the other conditions set forth in Section
6.3(b), the Administrative Agent shall (i) accept such Assignment, (ii) record
the information contained therein in the Register and (iii) give prompt notice
thereof to the Issuer and the Seller. The assigning Parallel Purchaser shall pay
to the Administrative Agent an assigning fee equal to $2,500 for each assignment
hereunder. Each assigning Parallel Purchaser may, in connection with the
assignment, disclose to the assignee any information relating to the Seller or
the Pool Receivables furnished to such assignor by or on behalf of the Seller,
any Parallel Purchaser or the Administrative Agent.
(d) This Agreement and the rights and obligations of the Administrative
Agent hereunder shall be assignable, in whole or in part, by the Administrative
Agent and its successors and assigns.
(e) Except as provided in Section 4.1(d), neither the Seller nor the
Servicer may not assign its rights or delegate its obligations hereunder or any
interest herein without the prior written consent of the Administrative Agent.
The Seller may not assign its rights or delegate its obligations hereunder or
any interest herein without the prior written consent of the Administrative
Agent.
(f) Without limiting any other rights that may be available under
applicable law, the rights of each Parallel Purchaser may be enforced through it
or by its agents.
(g) Neither the Seller nor any Purchaser (in the case of a Purchaser,
only with respect to its own participation in the Purchased Interest) shall
allow the Purchased Interest or any participating interest therein to become (i)
traded on an established securities market (as defined in U.S. Department of the
Treasury (the "Treasury") regulations section 1.7704-1(b) or (ii) readily
tradable on a secondary market or the substantial equivalent thereof (as defined
in Treasury regulations section
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1.7704-1(c)). In addition, neither the Purchased Interest nor any participating
interest therein may be issued or sold in a transaction or transactions that are
required to be registered under the Securities Act of 1933 (15 U.S.C. 77a et
seq.), and at no time may more than 100 Persons own interests in the Receivables
Pool. In determining the number of Persons that own interests in the Receivables
Pool for purposes of the preceding sentence, any beneficial owner of an interest
in a partnership, grantor trust, or S corporation ("Flow-Through Entity") will
be treated as owning an interest in the Receivables Pool only if substantially
all of the value of such beneficial owner's interest in the Flow-Through Entity
is attributable to such FlowThrough Entity's interest (direct or indirect) in
the Receivables Pool. Any assignment or transfer of the Purchased Interest or
any participating interest therein in violation of the foregoing restrictions
will be void ab initio.
SECTION 6.4. Participations. Each Parallel Purchaser (including Bank of
America) may grant a participation herein to any financial institution
reasonably acceptable to the Administrative Agent (each such financial
institution is referred to herein as a "Designated Participant") The parties
hereto consent to the release and delivery of all information in such selling
Parallel Purchaser's possession concerning or relating to this Agreement or the
Amended and Restated Receivables Purchase Agreement and copies of all notices
and other communications received by such selling Parallel Purchaser pursuant or
related to this Agreement and the Amended and Restated Receivables Purchase
Agreement.
The parties hereto further agree that, unless otherwise provided in the
participation agreement between a selling Parallel Purchaser and the applicable
Designated Participant, to the extent a Designated Participant purchases a
participation hereunder from a selling Parallel Purchaser:
(i) whenever any consent, amendment, waiver or other action
under or pursuant to this Agreement shall require the vote or consent of the
Majority Parallel Purchasers, the Purchase Commitment hereunder of the selling
Parallel Purchaser shall be deemed reduced by such Designated Participants's
participation interest in such Purchase Commitment, and such Designated
Participant's participation interest in such selling Parallel Purchaser's
Purchase Commitment hereunder shall be deemed to constitute a Purchase
Commitment of such Designated Participant hereunder, it being understood that
the effect of this subclause (ii) shall entitle such Designated Participant to
vote its participation interest hereunder directly in connection with such
consent, amendment, waiver of action; and
(ii) whenever any consent, amendment, waiver or other
action under or pursuant to this Agreement shall require the vote
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or consent of all Parallel Purchasers, if a Designated Participant has a
participation interest hereunder at such time from a selling Parallel Purchaser,
such Designated Participant's direct vote or consent shall be required.
Whenever any notice or other communication is to be given by the
Administrative Agent to a selling Parallel Purchaser, hereunder or in connection
herewith, the Administrative Agent shall, at the same time, send a copy of such
notice or communication to each applicable Designated Participant at its
address, telex number or telecopy number in the manner provided in a written
notice to the Administrative Agent delivered in accordance with Section 6.2.
Any parallel Purchaser granting a participation hereunder must
simultaneously grant a participation in its interest under the Amended and
Restated Liquidity Asset Purchase Agreement to the same Designated Participant
and to the same extent as
hereunder.
SECTION 6.5. Change in Purchase Limit. (a) If, pursuant to Section 6.1
hereof, this Agreement shall be amended to increase the Purchase Limit
hereunder, then unless all the Parallel Purchasers shall have agreed to a
different allocation and shall have so advised the Administrative Agent in
writing, on the effective date of such amendment, each Parallel Purchaser's
Maximum Parallel Purchase amount with respect to this Agreement shall be deemed
to be proportionately increased.
(b) If the Purchase Limit under this Agreement shall be reduced, the
Percentage of each Parallel Purchaser shall remain the same and each Parallel
Purchaser's Maximum Parallel Purchase amount with respect to this Agreement
shall be deemed to be proportionately reduced.
SECTION 6.6. Parallel Purchase Termination Date; Extension of Parallel
Purchase Termination Date. Subject to earlier termination of a Parallel
Purchaser's Purchase Commitment pursuant to Section 1.1(b) or Section 2.2
hereof, the Parallel Purchasers' Purchase Commitments under this Agreement shall
expire at the close of business on May 30, 1999 (such date being the "Parallel
Purchase Termination Date"). If at any time the Seller requests that the
Parallel Purchasers renew their Purchase Commitments hereunder and less than all
the Parallel Purchasers consent to such renewal within 30 days of the
Administrative Agent's request, the Administrative Agent may arrange for an
assignment to one or more Eligible Assignees of all the rights and obligations
hereunder of each such non-consenting Parallel Purchaser in accordance with
Section 6.3, provided, that the fee payable pursuant to Section 6.3(c) shall be
payable by the assignee Parallel Purchaser. Any such assignment shall become
effective on the then current Parallel Purchase Termination Date.
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Each Parallel Purchaser which does not so consent to any renewal shall cooperate
fully with the Administrative Agent in effectuating any such assignment. The
Administrative Agent will provide written notice to the Parallel Purchasers of
any proposed modifications to this Agreement requested in connection with any
renewal hereof and, even if the Parallel Purchasers have previously indicated
that they will renew the Agreement, the Parallel Purchasers shall each have the
right to elect not to renew this Agreement in light of such modifications.
SECTION 6.7. Rights of Program Support Providers. Seller
hereby agrees that, upon notice to Seller and the Administrative
Agent, a Program Support Provider may exercise any or all the
rights of the Administrative Agent hereunder with respect to
Purchased Interests, and Collections with respect thereto, and
all other rights and interests of a Parallel Purchaser in, to or
under this Agreement or any other Transaction Document which have
been assigned (or in which a security interest has been granted)
to such Program Support Provider. Without limiting the
foregoing, upon such notice such Program Support Provider may
request Servicer to segregate the Parallel Purchasers' and
Program Support Provider's allocable shares of Collections from
Seller's allocable share, and from each other's allocable share,
in accordance with Section 1.4, may designate a successor
servicer pursuant to Section 4.1, may give or require the
Administrative Agent to give notice to the Lock-Box Banks as
referred to in Section 4.3, and may direct the Obligors of Pool
Receivables to make payments in respect thereof directly to an
account designated by them (provided that such Program Support
Provider shall designate a single account for the making of such
payments with respect to any Pool Receivable), in each case, to
the same extent as the Administrative Agent might have done. If,
in its commercially reasonable judgment, the Servicer determines
that any notice or instruction furnished under this Section 6.7
by a Program Support Provider is in any material respect
inconsistent with any notice or instruction furnished under this
Section 6.7 by the Administrative Agent or any Program Support
Provider, as soon as practicable following such determination,
the Servicer shall, by telephonic or facsimile notice, request
that the Administrative Agent provide supplemental instructions
to the Servicer that resolve such inconsistency. The Servicer
shall be entitled to rely upon any such supplemental instructions
provided by the Administrative Agent.
SECTION 6.8. Costs and Expenses. In addition to the rights of
indemnification granted under Section 3.1 hereof, the Seller agrees to pay on
demand all costs and expenses in connection with the preparation, execution,
delivery, administration and auditing (including audit fees and expenses
generated by an internal or external auditor as appointed by the Administrative
Agent) of this Agreement, any Program Support Agreement and the other
Transaction Documents, and any amendment,
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modification or waiver of any of the foregoing, including, without limitation,
Attorney Costs for the Administrative Agent, each Parallel Purchaser, any
Program Support Provider and their respective Affiliates and agents with respect
thereto and with respect to advising the Administrative Agent, each Parallel
Purchaser, any Program Support Provider and their respective Affiliates and
agents as to their rights and remedies under this Agreement and the other
Transaction Documents referred to above, and all costs and expenses, if any
(including Attorney Costs), of the Administrative Agent, each Parallel Purchaser
and their respective Affiliates and agents, in connection with the enforcement
of this Agreement and the other Transaction Documents.
SECTION 6.9. No Proceedings; Limitation on Payments. Each
of the Seller, the Servicer, the Administrative Agent, each
Parallel Purchaser and each assignee of the Purchased Interest or
any interest therein and each Person which enters into a
commitment to purchase the Purchased Interest or interests
therein hereby covenants and agrees that it will not institute
against, or join any other Person in instituting against, the
Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding, or other proceeding under any federal or
state bankruptcy or similar law, for one year and one day after
the latest maturing Note issued by the Issuer is paid in full.
SECTION 6.10. Confidentiality. The Seller, the Servicer, the Parent,
each Parallel Purchaser and the Administrative Agent each agrees to take normal
and reasonable precautions and exercise due care to maintain the confidentiality
of this Agreement, any Program Support Agreement and the other Transaction
Documents (and all drafts thereof), and all information identified as
"confidential" or "secret" by the Seller and provided to the other parties by
the Seller under any Program Support Agreement, this Agreement or any other
Transaction Document, and no such Person nor any of their respective Affiliates
shall use any such information other than in connection with or in enforcement
of any Program Support Agreement, this Agreement and the other Transaction
Documents, except to the extent such information (i) was or becomes generally
available to the public other than as a result of disclosure by such Person, or
(ii) was or becomes available on a non-confidential basis from a source other
than such Person, provided that such source is not bound by a confidentiality
agreement with respect thereto; provided, however, that any Person may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Person is subject or in connection with an
examination of such Person by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable requirement of law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which
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such Person or its Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Transaction Document; (F) to such Person's independent auditors, legal
counsel and other professional advisors; (G) to any nationally recognized rating
agency; (H) to any assignee, Parallel Purchaser, or assignee or participant of a
Parallel Purchaser, actual or potential, provided that such Person agrees in
writing to keep such information confidential to the same extent required
hereunder; (I) to the extent reasonably required by commercial paper dealers in
connection with the sale of commercial paper related to the transaction
contemplated by the Transaction Documents; and (J) as expressly permitted under
the terms of any other document or agreement regarding confidentiality to which
such Person and any of the other parties hereto is party.
SECTION 6.11. GOVERNING LAW AND JURISDICTION. (a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAWS PRINCIPLES THEREOF), EXCEPT TO THE EXTENT THAT
THE PERFECTION (OR THE EFFECT OF PERFECTION OR NON-PERFECTION)
OF THE INTEREST OF THE ADMINISTRATIVE AGENT ON BEHALF OF EACH
PARALLEL PURCHASER IN THE POOL RECEIVABLES, RELATED SECURITY,
COLLECTIONS AND PROCEEDS THEREOF AND THE OTHER ITEMS DESCRIBED IN
SECTION 1.2(e), IS GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEW YORK.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY
BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE PARALLEL PURCHASERS, THE SELLER, THE SERVICER AND THE
ADMINISTRATIVE AGENT CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE PARALLEL PURCHASERS, THE
SELLER, THE SERVICER AND THE ADMINISTRATIVE AGENT IRREVOCABLY WAIVES, TO THE
MAXIMUM EXTENT PERMITTED BY LAW, ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. EACH
OF THE PARALLEL PURCHASERS, THE SELLER, THE SERVICER AND THE ADMINISTRATIVE
AGENT WAIVE PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH
MAY BE MADE BY ANY OTHER MEANS PERMITTED BY NEW YORK LAW.
SECTION 6.12. Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which when taken together shall constitute one and the
same agreement.
SECTION 6.13. Survival of Termination. The provisions of
Sections 1.6, 1.8, 1.9, Article III, Sections 6.7, 6.8, 6.9,
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6.10, and 6.12, and of this Section 6.13, shall survive any
termination of this Agreement.
SECTION 6.14. WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ITS
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR
OTHERWISE. EACH PARTY HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL
BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, EACH
OF THE PARTIES HERETO FURTHER AGREES THAT ITS RESPECTIVE RIGHT TO A TRIAL BY
JURY IS WAIVED BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR
OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR
ENFORCEABILITY OF THIS AGREEMENT OR ANY OTHER TRANSACTION DOCUMENT OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR ANY
OTHER TRANSACTION DOCUMENT.
SECTION 6.15. Entire Agreement. This Agreement together with the other
Transaction Documents embodies the entire agreement and understanding among the
Parallel Purchasers, the Seller, the Servicer and the Administrative Agent, and
supersedes all prior or contemporaneous agreements and understandings of such
Persons, verbal or written, relating to the subject matter hereof and thereof,
except for any prior arrangements made with respect to the payment by the
Parallel Purchasers of (or any indemnification for) any fees, costs or expenses
payable to or incurred (or to be incurred) by or on behalf of the Seller, the
Servicer and the Administrative Agent. The Exhibits and Annexes to this
Agreement shall be deemed incorporated by reference into this Agreement.
SECTION 6.16. Headings. The captions and headings of this
Agreement and in any Exhibit hereto are for convenience of
reference only and shall not affect the interpretation hereof or
thereof.
SECTION 6.17. Purposes. The Seller and each Parallel Purchaser hereby
agree to treat the Purchased Interest and any participating Interest therein as
a debt instrument for purposes of federal and state income tax, franchise tax,
and any other federal or state tax measured in whole or in part by income, to
the extent permitted by applicable law. Notwithstanding any other provision of
this Agreement, no Affected Person shall be entitled to any indemnification for
any Taxes, Other Taxes or other liabilities arising therefrom if and to the
extent that such Taxes, Other Taxes or other liabilities arise from such
Parallel Purchaser treating the Purchased Interest or such
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participating interest as other than a debt instrument for purposes of federal
and state income tax, and any other federal or state tax measured in whole or in
part by income when under applicable law such interest could be treated as a
debt instrument.
SECTION 6.18. Acknowledgment of Benefits Under Surety Bond. Each
Parallel Purchaser (other than Bank of America hereby confirms and acknowledges
that it understands that the Issuer has obtained a surety bond (as amended,
supplemented, replaced, or otherwise amended, the "Surety Bond") which provides
credit support for certain obligations of the Issuer. In addition, Bank of
America has made arrangements for all of Bank of America's (and, in certain
cases, certain of its affiliates') credit exposure in connection with the
Issuer's securitization program to be insured by the Surety Bond, subject to
Bank of America and/or such affiliates first suffering a substantial loss. Such
Bank of America loss serves as a deductible for the Surety Bond. The Percentage
Interests acquired by Bank of America (and, in certain cases, certain of its
affiliates) hereunder and under all other similar parallel asset purchase
agreements to which the Bank of America, Bank of America, (or its affiliates) is
or may become a party are insured obligations under the Surety Bond. Each
Parallel Purchaser understands and agrees that Bank of America has not made any
arrangements to insure the Percentage Interests acquired by any other Purchaser,
and that in no event will any Purchaser hereunder (other than Bank of America)
receive any proceeds of any drawing on the Surety Bond, whether from the issuer
of such Surety Bond, the Issuer, or Bank of America. Bank of America shall not
be required to share any payments made to it from proceeds of any drawing on the
Surety Bond.
SECTION 6.19. Purchase and Sale Agreement. In consideration of the
obligations of the Parallel Purchasers now or hereafter arising under this
Agreement, the Seller hereby sells and assigns to the Administrative Agent, for
the benefit of the Parallel Purchasers, without any formal or other instrument
of assignments all of the Seller's right, title and interest in, to and under
the Amended and Restated Purchase and Sale Agreement, except for all of Seller's
right, title and interest in, to and under any Originator Note, including all
amounts due and to become due to the Seller from any of the Originators
thereunder and all rights, remedies, powers, privileges and claims of the Seller
against any of the Originators under the Amended and Restated Purchase and Sale
Agreement (whether arising pursuant to the terms of the Amended and Restated
Purchase and Sale Agreement or otherwise available to the Seller at law or in
equity). Notwithstanding the foregoing the Seller shall nevertheless be
permitted to give all consents, requests, notices, directions, approvals,
extensions or waivers, if any, which are required by the specific terms of the
Amended and Restated Purchase and Sale Agreement to be given by it to any
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Originator, unless the Administrative Agent shall otherwise direct the Seller.
The assignment pursuant to the first sentence of this Section 5.15 shall not
relieve the Seller or any Originator from (or require any Parallel Purchaser or
the Administrative Agent to undertake) the performance of any term, covenant or
agreement on the part of the Seller or any Originator to be performed or
observed under or in connection with the Amended and Restated Purchase and Sale
Agreement, any Pool Receivable or any Related Security. The Administrative Agent
and the Parallel Purchasers acknowledge that the Seller shall contemporaneously
herewith grant an identical assignment as described in the first sentence of
this Section 6.19, to the Administrator, for its benefit and the benefit of the
Issuer, under the Amended and Restated Receivables Purchase Agreement and that
the respective rights of the Administrator, the Issuer, the Administrative Agent
and the Parallel Purchasers with respect thereto shall be governed by the
Amended and Restated Intercreditor Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
O&M FUNDING CORP., as Seller
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: V.P. & Treasurer
Address for Notices:
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
OWENS & MINOR MEDICAL, INC.,
as Servicer
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: V.P. & Treasurer
Address for Notices:
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
OWENS & MINOR, INC., as Parent
By: /s/Richard F. Bozard
Name: Richard F. Bozard
Title: V.P. & Treasurer
Address for Notices:
4800 Cox Road
Richmond, Virginia 23060
Attention: Michael W. Lowry
Telephone: 804/747-9794
Facsimile: 804/965-5403
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BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as
Administrative Agent
By: /s/Mark A. Wegener
Name: Mark A. Wegener
Title: Attorney-in-fact
Address:
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mark A. Wegener
Telephone: 312/828-2345
Facsimile: 312/828-7855
with a copy to:
Bank of America National Trust and
Savings Association
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mark A. Wegener
Telephone: 312/828-3343
Facsimile: 312/828-7855
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THE PARALLEL PURCHASERS
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/Mark A. Wegener
Name: Mark A. Wegener
Title: Attorney-in-fact
Address:
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mark A. Wegener
Telephone: 312/828-2345
Facsimile: 312/828-7855
with a copy to:
Bank of America National Trust and
Savings Association
Asset Securitization Group
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Mark A. Wegener
Telephone: 312/828-3343
Facsimile: 312/828-7855
Parallel Purchaser Percentage: 24.8670%
Maximum Parallel Purchase $37,300,571
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THE BANK OF NOVA SCOTIA
By: /s/James R. Trimble
Name: James R. Trimble
Title: Senior Relationship Manager
Address:
One Liberty Plaza
New York, NY 10006
Attention: James R. Trimble
Telephone: 212/225-5011
Facsimile: 212/225-5090
Parallel Purchaser Percentage: 19.5999%
Maximum Parallel Purchase: $29,399,851
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THE BANK OF TOKYO - MITSUBISHI,
LTD. NEW YORK BRANCH
By: /s/Michale C. Irwin
Name: Michael C. Irwin
Title: Vice President
Address:
1251 Avenue of the Americas
12th Floor
New York, NY 10020-1104
Attention: BTMT U.S. Corporate
Banking
Telephone: 212/782-4300
Facsimile: 212/782-6445
with a copy to:
The Bank of Tokyo - Mitsubishi
2000 K Street, N. W.
Suite 701
Washington, D. C. 20006
Attention: R. Frederick Kay, Jr.
Telephone: 202/463-0177
Facsimile: 202/293-3416
Parallel Purchaser Percentage: 13.0666%
Maximum Parallel Purchase: $19,599,901
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NBD BANK
By: /s/Richard C. Ellis
Name: Richard C. Ellis
Title: Vice President
Address:
611 Woodward Avenue
Detroit, MI 48225
Attention: Larry Schuster
Telephone: 313/225-1164
Facsimile: 313/225-2649
with a copy to:
NBD Bank
Law Department
611 Woodward Avenue
Detroit, MI 48226
Attention: Ted Johnson
Telephone: 313/225-1544
Facsimile: 313/225-4055
Parallel Purchaser Percentage: 13.0666%
Maximum Parallel Purchase: $19,599,901
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THE BANK OF NEW YORK
By: /s/Gregg P. Shefrin
Name: Gregg P. Shefrin
Title: Assistant Vice President
Address:
One Wall Street - 22nd Floor
New York, NY 10286
Attention: Gregory Shefrin
Telephone: 212/635-6899
Facsimile: 212/635-6434
Parallel Purchaser Percentage: 6.5333%
Maximum Parallel Purchase: 9.799,950
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FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By: /s/Stephen A. McKenna
Name: Stephen A. KcKenna
Title: Vice President
Address:
One First Union Center, TW-11
Charlotte, NC 28288-0661
Attention: Stephen A. McKenna
Telephone: 704/374-4818
Facsimile: 704/374-4881
with a copy to:
First Union National Bank of North
Carolina
Asset Securitization
One First Union Center, MC 0610
Charlotte, NC 28288-0610
Attention: Bo Weatherby
Telephone: 704/383-1391
Facsimile: 704/383-6036
Parallel Purchaser Percentage: 13.0666%
Maximum Parallel Purchase: $19,599,901
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WACHOVIA BANK OF NORTH CAROLINA, NA
By: /s/Diane H. Davis
Name: Diane H. Davis
Title: Assistant Vice President
Address:
100 Main Street
Winston-Salem, NC 27150
Attention: Haywood Edmundson
Telephone: 910/732-7614
Facsimile: 910/732-6935
with a copy to:
Wachovia Bank of North Carolina, NA
100 Main Street
Winston-Salem, NC 27150
Attention: Melissa C. Fox
Telephone: 910/732-5182
Facsimile: 910/732-6935
Parallel Purchaser Percentage: 9.8000%
Maximum Parallel Purchase: $14,699,926
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EXHIBIT I
CONDITIONS OF PURCHASES
1. Conditions Precedent to Initial Purchase. The initial
purchase under the Agreement shall not occur until on or after the Restatement
Effective Date and is subject to the conditions precedent that the
Administrative Agent shall have received on or before the date of such purchase
the following, each in form and substance (including the date thereof)
satisfactory to the Administrative Agent:
(a) A duly executed counterpart of this Amended and
Restated Parallel Asset Purchase Agreement.
(b) A duly executed counterpart of the Amended and
Restated Purchase and Sale Agreement.
(c) A duly executed counterpart copy of the Amended
and Restated Receivables Purchase Agreement.
(d) Certified copies of (i) the resolutions of the Board of
Directors of each of the Originators, the Seller, the Servicer and the Parent
authorizing the execution, delivery, and performance by such Originator the
Seller, the Servicer and the Parent, respectively, of the Agreement and the
other Transaction Documents, (ii) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to the
Agreement and the other Transaction Documents and (iii) the certificate of
incorporation and by-laws of each of the Originators, the Seller, the Servicer
and the Parent
(e) A certificate of the Secretary or Assistant Secretary of
each of the Originators, the Seller, the Servicer and the Parent certifying the
names and true signatures of the officers of the Seller, the Servicer and the
Parent, respectively, authorized to sign the Agreement and the other Transaction
Documents to which it is a party. Until the Administrative Agent receives a
subsequent incumbency certificate from an Originator, the Seller, the Servicer
or the Parent in form and substance satisfactory to the Administrative Agent,
the Administrative Agent shall be entitled to rely on the last such certificate
delivered to it.
(f) Signed copies of proper financing statements, in a form
suitable for filing under the UCC of all jurisdictions that the Administrative
Agent may deem necessary or desirable in order to perfect the interests of the
Parallel Purchasers contemplated by the Agreement.
(g) Signed copies of proper financing statements, if any, in a
form suitable for filing under the UCC of all jurisdictions that the
Administrative Agent may deem necessary to
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release all security interests and other rights of any Person in the
Receivables, Contracts or Related Security previously granted by any Originator.
(h) Completed UCC requests for information, dated on or before
the date of such initial purchase, listing the financing statements referred to
in subsection (d) above and all other effective financing statements filed in
the jurisdictions referred to in subsection (f) above that name any Originator
as debtor, together with copies of such other financing statements (none of
which shall cover any Receivables, Contracts or Related Security), and similar
search reports with respect to federal tax liens and liens of the Pension
Benefit Guaranty Corporation in such jurisdictions as the Administrative Agent
may request, showing no such liens on any of the Receivables, Contracts or
Related Security.
(i) A favorable opinion of Hunton & Williams, counsel for the
Seller, the Servicer and the Parent, substantially in the form of Annex C hereto
and as to such other matters as the Administrative Agent may reasonably request.
(j) A favorable opinion of in-house counsel for the Seller,
the Servicer and the Parent, substantially in the form of Annex D hereto and as
to such other matters as the Administrative Agent may reasonably request.
(k) Satisfactory results of a review and audit of the
Originators' collection, operating and reporting systems, Credit and Collection
Policy, historical receivables data and accounts, including satisfactory results
of a review of the Originators' operating location(s) and satisfactory review
and approval of the Eligible Receivables in existence on the date of the initial
purchase under this Amended and Restated Parallel Asset Purchase Agreement.
(l) Seller Report representing the performance of the
portfolio to be purchased through this Amended and Restated Parallel Asset
Purchase Agreement for the month prior to closing.
(m) Good standing certificates with respect to each of the
Originators, the Seller, the Servicer and the Parent issued by the Secretary of
the State Corporation Commission of Virginia.
(n) Executed counterparts of the Lock-Box Agreements with each
of the Lock-Box Banks identified in Schedule II to this Agreement.
(o) A certificate of the Treasurer or Assistant Treasurer of
the Parent certifying as to (1) the closing of the senior subordinate note
offering (x) substantially on the terms set forth in the draft Indenture dated
May 3, 1996 (previously received by the Administrative Agent), among the Parent,
the
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guarantors named therein and Crestar Bank, as Trustee and (y) generating net
cash proceeds to the Parent in an amount not less than $150,000,000 (less any
customary fees and expenses) and (ii) the closing of the O&M Credit Agreement
substantially on the terms set forth in the draft O&M Credit Agreement dated May
__, 1996 (previously received by the Administrative Agent).
(p) A certificate from an officer of O&M to the effect that
the Seller has a Tangible Net Worth of at least $15,000,000 (it being understood
that all Receivables transferred to the Seller as capital contributions shall be
valued at the lower of the book value thereof or the Outstanding Balance
thereof).
(q) Such other approvals, opinions or documents as the
Administrative Agent or the Parallel Purchasers may reasonably
request.
2. Conditions Precedent to All Purchases and
Reinvestments. Each purchase (including the initial purchase)
and each reinvestment shall be subject to the further conditions
precedent that:
(a) in the case of each purchase, the Servicer shall have
delivered to the Administrative Agent on or prior to such purchase, in form and
substance satisfactory to the Administrative Agent, a completed Seller Report
with respect to the immediately preceding calendar month, dated within three (3)
Business Days prior to the date of such purchase and such additional information
as may reasonably be requested by the Administrative Agent including, without
limitation, a listing of Obligors and their respective portions of the Pool
Receivables at any time;
(b) on the date of such purchase or reinvestment the following
statements shall be true (and acceptance of the proceeds of such purchase or
reinvestment shall be deemed a representation and warranty by the Seller, the
Servicer and the Parent that such statements are then true):
(i) the representations and warranties contained in
Exhibit II are true and correct on and as of the date of such purchase
or reinvestment as though made on and as of such date; and
(ii) in the case of each purchase, no event has
occurred and is continuing, or would result from such purchase, that
constitutes a Termination Event or that would constitute a Termination
Event but for the requirement that notice be given or time elapse or
both; and
(iii) in the case of each reinvestment, no event has
occurred and is continuing, or would result from such reinvestment,
that constitutes (x) any Termination Event, or
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(y) an Unmatured Termination Event under clause (g) or (j)
of Exhibit IV to this Agreement.
(c) the Administrative Agent shall have received such
other approvals, opinions or documents as it may reasonably
request.
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EXHIBIT II
REPRESENTATIONS AND WARRANTIES
OF
SELLER, THE SERVICER AND THE PARENT
The Seller, the Servicer and the Parent each jointly and
severally make the following representations and warranties:
(a) Organization and Good Standing. It is a corporation duly
incorporated, validly existing and in good standing under the laws of the
Commonwealth of Virginia, and is duly qualified to do business, and is in good
standing, as a foreign corporation in every jurisdiction where the nature of its
business requires it to be so qualified.
(b) Due Qualification; No Conflicts. The execution, delivery
and performance by it of the Agreement and the other Transaction Documents to
which it is a party, including, in the case of the Seller, the Seller's use of
the proceeds of purchases and reinvestments, (i) are within its corporate
powers, (ii) have been duly authorized by all necessary corporate action, (iii)
do not contravene or result in a default under or conflict with (1) its charter
or by-laws, (2) any law, rule or regulation applicable to it, (3) any
contractual restriction binding on or affecting it or its property or (4) any
order, writ, judgment, award, injunction or decree binding on or affecting it or
its property, and (iv) do not result in or require the creation of any Adverse
Claim upon or with respect to any of its properties. The Agreement and the other
Transaction Documents to which it is a party have been duly executed and
delivered by it.
(c) Consents. No authorization or approval or other action by,
and no notice to or filing with, any Governmental Authority or other Person is
required for the due execution, delivery and performance by it of the Agreement
or any other Transaction Document to which it is a party other than (a) the
filing of financing statements against O&M Medical and the Seller in the State
Corporation Commission of Virginia and (b) comparable filings with respect to
all other Originators in the jurisdiction provided in their respective
Supplement to perfect the Initial Purchaser's interest in the Pool Receivables
under the Amended and Restated Purchase and Sale Agreement.
(d) Binding Obligations. Each of the Agreement and the other
Transaction Documents to which it is a party (and which on its face purports to
create an obligation) constitutes the legal, valid and binding obligation of it
enforceable against it in accordance with its terms except as enforceability may
be limited by bankruptcy, insolvency, reorganization or other similar laws
affecting the enforcement of creditor's rights
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generally and by general principles of equity regardless of whether such
enforceability is considered in a proceeding in equity or at law.
(e) Financial Statements.
(i) (x) The consolidated balance sheet of the Parent
and its Subsidiaries as of December 31, 1995, and the related
consolidated statement of income and retained earnings of the
Parent and its Subsidiaries for the fiscal year then ended and
(y) the consolidated balance sheet of the Parent and its
Subsidiaries as of March 31, 1996, and the related
consolidated and consolidating statements of income and
retained earnings of the Parent and its Subsidiaries for the
fiscal quarter then ended, copies of which have been furnished
to the Administrator, fairly present the financial condition
of the Parent and its Subsidiaries as at such date and the
results of the operations of the Seller for the periods ended
on such dates, all in accordance with generally accepted
accounting principles consistently applied, and since December
31, 1995, there has been no material adverse change in the
business, operations, property or financial or other condition
or operations of the Seller or the Parent or any of its
Subsidiaries taken as a whole, the ability of the Seller or
the Parent to perform its obligations under the Agreement or
the other Transaction Documents or the collectibility of the
Pool Receivables, or which affects the legality, validity or
enforceability of the Amended and Restated Purchase and Sale
Agreement or the other Transaction Documents.
(ii) The unaudited condensed balance sheet of the
Originators as of March 31, 1996, and the related condensed
statements of income of the Originators for the fiscal quarter
ended March 31, 1996, heretofore furnished to the
Administrative Agent, are the financial statements of the
Originators routinely prepared for internal use.
(f) No Proceedings. There is no pending or threatened action
or proceeding affecting either (x) the Seller and its Subsidiaries taken as a
whole or (y) the Parent and its Subsidiaries taken as a whole, which is before
any Governmental Authority or arbitrator and which would reasonably be expected
to materially adversely affect the business, operations, property, financial or
other condition or operations of either (x) the Seller and its Subsidiaries
taken as a whole or (y) the Parent and its Subsidiaries taken as a whole, or
their ability to perform its obligations under the Agreement or the other
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Transaction Documents or the collectibility of the Receivables, or which affects
or purports to affect the legality, validity or enforceability of the Agreement
or the other Transaction Documents.
(g) Quality of Title; Valid Sale; Etc. The Seller is the legal
and beneficial owner of the Pool Receivables and Related Security free and clear
of any Adverse Claim; upon each purchase or reinvestment, each Parallel
Purchaser shall acquire a valid and enforceable perfected undivided percentage
ownership interest, to the extent of the Purchased Interest, in each Pool
Receivable then existing or thereafter arising and in the Related Security and
Collections and other proceeds, with respect thereto, free and clear of any
Adverse Claim; the Agreement creates a security interest in favor of the
Administrative Agent, on behalf of each Parallel Purchaser, in the items
described in Section 1.2(e), and the Administrative Agent, on behalf of each
Parallel Purchaser, has a first priority perfected security interest in such
items, free and clear of any Adverse Claims. No effective financing statement or
other instrument similar in effect covering any Contract or any Pool Receivable
or the Related Security or Collections with respect thereto or any LockBox
Account is on file in any recording office, except those filed in favor of each
Parallel Purchaser relating to the Agreement.
(h) Accuracy of Information. Each Seller Report (if prepared
by the Seller or one of its Affiliates, or to the extent that information
contained therein is supplied by the Seller or an Affiliate), information,
exhibit, financial statement, document, book, record or report furnished or to
be furnished at any time by or on behalf of the Seller to the Administrative
Agent in connection with the Agreement is or will be accurate in all material
respects as of its date or (except as otherwise disclosed to the Administrative
Agent at such time) as of the date so furnished, and no such item contains or
will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(i) Principal Place of Business. The principal place of
business and chief executive office (as such terms are used in the UCC) of the
Seller and the office where the Seller keeps its records concerning the
Receivables are located at the address referred to in Schedule I (or at such
other addresses designated in accordance with such paragraph (b) of Exhibit
III).
(j) Lock-Box Banks, Accounts. The names and addresses
of all the Lock-Box Banks, together with the account numbers of
the Lock-Box Accounts of the Seller at such Lock-Box Banks, are
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specified in Schedule II to the Agreement (or at such other Lock-Box Banks
and/or with such other Lock-Box Accounts as have been notified to the
Administrative Agent in accordance with the Agreement) and all Lock-Box Accounts
are subject to Lock-Box Agreements.
(k) No Violation. It is not in violation of any order of any
court, arbitrator or Governmental Authority which violation would reasonably be
expected to have a material adverse effect on its business, operations, property
or financial or other condition.
(l) Proceeds. No proceeds of any purchase or reinvestment will
be used for any purpose that violates any applicable law, rule or regulation,
including, without limitation, Regulations G or U of the Federal Reserve Board.
(m) Eligible Receivables. Each Pool Receivable
included as an Eligible Receivable in the calculation of the Net
Receivables Pool Balance, is an Eligible Receivable.
(n) No Purchase and Sale Termination Events. No event has
occurred and is continuing, or would result from a purchase in respect of, or
reinvestment in respect of the Purchased Interest or from the application of the
proceeds therefrom, which constitutes a Termination Event.
(o) Maintenance of Books and Records. The Seller has accounted
for each sale of undivided percentage ownership interests in Receivables in its
books and financial statements as a sale, consistent with Generally Accepted
Accounting Principles.
(p) Credit and Collection Policy. The Seller has
complied in all material respects with the Credit and Collection
Policy with regard to each Receivable.
(q) Compliance with Transaction Documents. It has
complied with all of the terms, covenants and agreements
contained in the Agreement and the other Transaction Documents
and applicable to it.
(r) Corporate Name. The Seller's complete corporate name is
set forth in the preamble to the Agreement, and the Seller does not use and has
not during the last six years used any other corporate name, trade name, doing
business name or fictitious name, except as set forth on Schedule I and except
for names first used after the date of the Agreement and set forth in a notice
delivered to the Administrative Agent pursuant to paragraph (l)(vi) of Exhibit
III.
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(s) No Labor Disputes. There are no strikes, lockouts or other
labor disputes against it or any of its subsidiaries, or, to the best of its
knowledge, threatened against or affecting it or any of its subsidiaries, and no
significant unfair labor practice complaint is pending against it or any of its
subsidiaries or, to the best knowledge of it, threatened against any of them by
or before any Governmental Authority that would have a material adverse effect
on its business, operations, property or financial or other condition.
(t) Pension Plans. During the preceding twelve months, no
steps have been taken to terminate any Pension Plan of the Seller, the Servicer
or the Parent which was not fully funded, unless adequate reserves have been set
aside for the funding thereof, and no contribution failure has occurred with
respect to any Pension Plan sufficient to give rise to a lien under section
302(f) of ERISA. No condition exists or event or transaction has occurred with
respect to any Pension Plan which could result in the incurrence by the Seller,
the Servicer or the Parent of any material liability, fine or penalty.
(u) Investment Company Act. It is not, and is not
controlled by, an "investment company" registered or required to
be registered under the Investment Company Act of 1940, as
amended.
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EXHIBIT III
COVENANTS
Covenants of the Seller and the Parent. Until the latest of the
Facility Termination Date, the date on which no Capital of or Discount in
respect of the Purchased Interest shall be outstanding or the date all other
amounts owed by the Seller under the Agreement to each Parallel Purchaser, the
Administrative Agent and any other Indemnified Party or Affected Person shall be
paid in full, each of the Seller and the Parent, jointly and severally, agree
that obligations set forth in this Exhibit III shall be performed and observed.
(a) Compliance with Laws, Etc. The Seller shall comply in all
material respects with all applicable laws, rules, regulations and orders, and
preserve and maintain its corporate existence, rights, franchises,
qualifications, and privileges except to the extent that the failure so to
comply with such laws, rules and regulations or the failure so to preserve and
maintain such existence, rights, franchises, qualifications, and privileges
would not materially adversely affect the collectibility of the Receivables or
the enforceability of any related Contract or the ability of the Seller to
perform its obligations under any related Contract or under the Agreement.
(b) Offices, Records and Books of Account; Etc. The
Seller (i) shall keep its principal place of business and chief
executive office (as such terms are used in the UCC) and the
office where it keeps its records concerning the Receivables at
the address of the Seller set forth on Schedule I attached hereto
or, upon at least 60 days' prior written notice of a proposed
change to the Administrative Agent, at any other locations in
jurisdictions where all actions reasonably requested by the
Administrative Agent to protect and perfect the interests of the
Administrative Agent and the Parallel Purchasers in the
Receivables and related items (including without limitation the
items described in Section 1.2(e)) have been taken and completed
and (ii) shall provide the Administrative Agent with at least 60
days' written notice prior to making any change in the Seller's
name or making any other change in the Seller's identity or
corporate structure (including a merger) which could render any
UCC financing statement filed in connection with this Agreement
"seriously misleading" as such term is used in the UCC; each
notice to the Administrative Agent pursuant to this sentence
shall set forth the applicable change and the effective date
thereof. The Seller also will maintain and implement
administrative and operating procedures (including, without
limitation, an ability to recreate records evidencing Receivables
and related Contracts in the event of the destruction of the
originals thereof), and keep and maintain all documents, books,
records, computer tapes and disks and other information
reasonably necessary or advisable for the collection of all
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Receivables (including, without limitation, records adequate to permit the daily
identification of each Receivable and all Collections of and adjustments to each
existing Receivable).
(c) Performance and Compliance with Contracts and Credit and
Collection Policy. The Seller shall, at its expense, timely and fully perform
and comply with all material provisions, covenants and other promises required
to be observed by it under the Contracts related to the Receivables, and timely
and fully comply in all material respects with the Credit and Collection Policy
with regard to each Receivable and the related Contract.
(d) Ownership Interest, Etc. The Seller shall, at its expense,
take all action necessary or desirable to establish and maintain a valid and
enforceable and perfected undivided ownership interest, to the extent of the
Purchased Interest, in the Pool Receivables and the Related Security and
Collections and other proceeds with respect thereto, and a first priority
perfected security interest in the items described in Section 1.2(e), free and
clear of any Adverse Claim, in favor of each Parallel Purchaser, including,
without limitation, taking such action to perfect, protect or more fully
evidence the interest of each Parallel Purchaser under the Agreement as each
Parallel Purchaser, through the Administrative Agent, may request.
(e) Sales, Liens, Etc. The Seller shall not sell, assign (by
operation of law or otherwise) or otherwise dispose of, or create or suffer to
exist any Adverse Claim upon or with respect to, any or all of its right, title
or interest in, to or under any item described in Section 1.2(e) or the Seller's
undivided interest in any Receivable, Related Security, or Collections, or upon
or with respect to any account to which any Collections of any Receivables are
sent, or assign any right to receive income in respect of any items contemplated
by this paragraph (e).
(f) Extension or Amendment of Receivables. Except as provided
in Section 4.2(a) the Agreement, the Seller shall not extend the maturity or
adjust the Outstanding Balance or otherwise modify the terms of any Pool
Receivable. The Seller will not amend, modify or waive any term or condition of
any related Contract in a way which would adversely affect the collectibility of
any Receivables.
(g) Change in Business or Credit and Collection Policy.
Without the written consent of the Administrative Agent, the Seller shall not
make (i) any material change in the character of its business or in the Credit
and Collection Policy, or (ii) any change at all in the Credit and Collection
Policy that would adversely affect the collectibility of the Receivables Pool or
the enforceability of any related Contract or the ability of the Seller to
perform its obligations under any related Contract or under the Agreement.
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(h) Audits. The Seller shall, from time to time during regular
business hours as requested by the Administrative Agent, permit the
Administrative Agent, or its agents or representatives, (i) to examine and make
copies of and make abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of the Seller relating to Receivables and the Related Security, provided
that copies of the related Contracts may only be made if the Servicer is not the
Seller or if a Termination Event has occurred and (ii) to visit the offices and
properties of the Seller for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to Receivables and the
Related Security or the Seller's performance hereunder or under the Contracts
with any of the officers, employees, agents or contractors of the Seller having
knowledge of such matters.
(i) Lock-Box Agreements; Change in Lock-Box Banks, Lock-Box
Accounts and Payment Instructions to Obligors. The Seller shall not add or
terminate any bank as a Lock-Box Bank or any account as a Lock-Box Account from
those listed in Schedule II to the Agreement, or make any change in its
instructions to Obligors regarding payments to be made to the Seller or payments
to be made to any Lock-Box Account (or related post office box), unless the
Administrative Agent shall have consented thereto in writing and the
Administrative Agent shall have received copies of all agreements and documents
(including without limitation Lock-Box Agreements) that it may request in
connection therewith.
(j) Deposits to Lock-Box. The Seller shall (i) instruct all
Obligors (other than Obligors which customarily make direct payment to the
Company for deposit in one of the Lock-Box Accounts designated on Schedule II as
a "Deposit Account", provided that the Company complies with Clause (ii) of this
subsection (j)) to make payments of all Receivables to one or more Lock-Box
Accounts or to post office boxes to which only Lock-Box Banks have access (and
shall instruct the Lock-Box Banks to cause all items and amounts relating to
such Receivables received in such post office boxes to be removed and deposited
into a Lock-Box Account on a daily basis), and (ii) deposit, or cause to be
deposited, any Collections of Pool Receivables received by it into Lock-Box
Accounts not later than one Business Day after receipt thereof. Each Lock-Box
Account shall at all times be subject to a Lock-Box Agreement. The Seller will
not deposit or otherwise credit, or cause or permit to be so deposited or
credited, to any Lock-Box Account cash or cash proceeds other than Collections
of Pool Receivables.
(k) Marking of Records. At its expense, the Seller shall mark
its master data processing records relating to Pool Receivables and related
Contracts, including with a legend evidencing that the undivided percentage
ownership interests with regard to the Purchased Interest related to such
Receivables and
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related Contracts have been sold in accordance with the
Agreement.
(l) Reporting Requirements. The Seller will provide
to the Administrative Agent (in multiple copies, if requested by
the Administrative Agent) the following:
(i) as soon as available and in any event within 45
days after the end of the first three quarters of each fiscal year of
the Parent, the consolidated and consolidating balance sheet of the
Parent and its Subsidiaries as of the end of such quarter and the
consolidated and consolidating statement of income and retained
earnings of the Parent and its Subsidiaries for the period commencing
at the end of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer or Treasurer of the
Parent;
(ii) as soon as available and in any event within 90
days after the end of each fiscal year of the Parent, a copy of the
annual report for such year for the Parent and its Subsidiaries,
containing financial statements for such year audited by KPMG Peat
Marwick or other independent certified public accountants acceptable to
the Administrative Agent;
(iii) as soon as available and in any event not later
than 10th Day of each Calendar Month, a Seller Report as of the
previous Month End Date; and within five Business Days of a request by
the Administrative Agent for a Seller Report as of a date other than a
Month End Date, such Seller Report;
(iv) as soon as possible and in any event within five
days after the occurrence of each Termination Event or event which,
with the giving of notice or lapse of time, or both, would constitute a
Termination Event, a statement of the chief financial officer or
Treasurer of the Parent setting forth details of such Termination Event
or event and the action that the Seller has taken and proposes to take
with respect thereto;
(v) promptly after the sending or filing thereof,
copies of all reports that the Seller or the Parent sends to any of its
security holders, and copies of all reports and registration statements
that the Seller or the Parent or any of their Subsidiaries files with
the Securities and Exchange Commission or any national securities
exchange;
(vi) promptly after the filing or receiving thereof,
copies of all reports and notices that the Seller, the Parent or any of
their Affiliates files under ERISA with the Internal Revenue Service or
the Pension Benefit Guaranty Corporation or the U.S. Department of
Labor or that the
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Seller, the Parent or any of their Affiliates receives from any of the
foregoing or from any multiemployer plan (within the meaning of Section
4001(a)(3) of ERISA) to which the Seller, the Parent or any of their
Affiliates is or was, within the preceding five years, a contributing
employer, in each case in respect of the assessment of withdrawal
liability or an event or condition which could, in the aggregate,
result in the imposition of liability on the Seller, the Parent and/or
any such Affiliate in excess of $500,000;
(vii) at least thirty days prior to any change in the
Seller's name or any other change requiring the amendment of UCC
financing statements, a notice setting forth such changes and the
effective date thereof;
(viii) such other information respecting the
Receivables or the condition or operations, financial or otherwise, of
the Seller, the Parent or any of their Affiliates as the Administrative
Agent may from time to time reasonably request;
(ix) promptly after the Seller or the Parent obtains
knowledge thereof, notice of any (a) litigation, investigation or
proceeding which may exist at any time between any O&M Party and any
Governmental Authority which, if not cured or if adversely determined,
as the case may be, would have a material adverse effect on the
business, operations, property or financial or other condition of the
Seller or the Parent; or (b) litigation or proceeding adversely
affecting any O&M Party in which the amount involved is $5,000,000 or
more and not covered by insurance or in which injunctive or similar
relief is sought or (c) litigation or proceeding relating to any
Transaction Document; and
(x) promptly after the occurrence thereof, notice of
a material adverse change in the business, operations, property or
financial or other condition of the Seller or the Parent affecting any
O&M Party.
(m) General Restriction.
(i) The Seller shall not (A) pay or declare any
Dividend, (B) lend or advance any funds, including in respect
of any Originator Note, or (C) repay any loans or advances to,
for or from any Originator or any other Affiliated Party
(including making any payment pursuant to any Initial
Purchaser Note) except in accordance with clause (o) of this
Exhibit III and this clause (m) and clauses (m) and (o) of
Exhibit V of the Amended and Restated Receivables Purchase
Agreement. Actions of the type described in the preceding
sentence are herein collectively called "Restricted Payments".
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(ii) Types of Permitted Payments. Subject to the
limitations set forth in clause (o) below, the Seller may make
Restricted Payments so long as such Restricted Payments are
made only to an Originator and only in one or more of the
following ways:
(A) the Seller may make cash payments on any
Initial Purchaser Note in accordance with its
terms; and
(B) if no amounts are then outstanding under
any Initial Purchaser Note, the Seller may
(1) make demand loans to O&M Medical,
so long as each such loan is evidenced by an
Originator Note; and
(2) declare and pay Dividends to any
shareholder (provided, that payment of such
Dividends must comply with Virginia law; and
provided, further, that Dividends may not be
paid more frequently than once every month).
(iii) Additional Specific Restrictions. The Seller
may make Restricted Payments only out of Collections paid or
released to the Seller pursuant to Sections 1.4(b)(ii) and
1.4(b)(iv) of this Agreement or the Amended and Restated
Receivables Purchase Agreement or from other net income of the
Seller. Furthermore, the Seller shall not pay, make or
declare:
(A) any Dividend if, after giving effect
thereto, the Seller's Tangible Net Worth would be
less than $15,000,000;
(B) any Restricted Payment if, after giving
effect thereto, a Termination Event or Unmatured
Termination Event shall have occurred and be
continuing; or
(C) any Restricted Payment if, after giving
effect thereto, the Seller would not be Solvent.
(n) ERISA Matters. Each of the Seller and the Parent shall
notify the Administrative Agent as soon as is practicable and in any event not
later than two Business Days after (i) the institution of any steps by the
Seller or the Parent or any other Person to terminate any Pension Plan which is
not fully funded, unless adequate reserves have been set aside for the funding
thereof, (ii) the failure to make a required contribution to any Pension Plan if
such failure is sufficient to give rise to a lien under section 302(f) of ERISA,
(iii) the taking of any action with respect to a Pension Plan which could result
in the requirement that the Seller or the Parent furnish a bond or other
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security to the PBGC or such Pension Plan or (iv) the occurrence of any other
event concerning any Pension Plan which is reasonably likely to result in a
material adverse effect.
(o) Separate Corporate Existence of the Seller. Each
of the Seller and the Parent hereby acknowledges that the Seller,
each Parallel Purchaser and the Administrative Agent are entering
into the transactions contemplated by this Agreement in reliance
upon the Seller's identity as a legal entity separate from its
Affiliates. Therefore, each of the Seller and the Parent shall
take all steps to continue the Seller's identity as such a
separate legal entity and to make it apparent to third Persons
that the Seller is an entity with assets and liabilities distinct
from those of its Affiliates and those of any other Person, and
not a division of any of its Affiliates or any other Person.
Without limiting the generality of the foregoing, each of the
Seller and the Parent will, and will cause its Affiliates to,
take such actions as shall be required in order that:
(i) The Seller will be a limited purpose corporation whose
primary activities are restricted in its articles of incorporation to
purchasing Pool Receivables from each Originator (or other Persons
approved in writing by the Administrative Agent), entering into
agreements for the servicing of such Pool Receivables, selling
undivided interests in the Pool Receivables to each Parallel Purchaser
and conducting such other activities as it deems necessary or
appropriate to carry out its primary activities;
(ii) At least one member of the Seller's Board of Directors
shall be an individual who is not a direct, indirect or beneficial
stockholder, officer, director, employee, affiliate, associate,
customer or supplier of any of its Affiliates;
(iii) No director or officer of the Seller shall at
any time serve as a trustee in bankruptcy for any of its
Affiliates;
(iv) Any employee, consultant or agent of the Seller will be
compensated from the Seller's own bank accounts for services provided
to the Seller except as provided in the Amended and Restated
Receivables Purchase Agreement in respect of the Servicing Fee. The
Seller will engage no agents other than a Servicer for the Pool
Receivables, which Servicer (if an Affiliate) will be fully compensated
for its services to the Seller by payment of the Servicing Fee;
(v) The Seller may incur indirect or overhead expenses for
items shared between the Seller and any of its Affiliates which are not
reflected in the Servicing Fee, such as legal, auditing and other
professional services, but such expenses will be allocated to the
extent practical on the basis of cost, it being understood that each of
the
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Originators and the Parent shall jointly and severally pay all expenses
relating to the preparation, negotiation, execution and delivery of the
Transaction Documents, including legal and other fees;
(vi) The Seller's operating expenses will not be paid
by any of its Affiliates;
(vii) The Seller will have its own separate telephone number,
stationery and bank checks signed by it and in its own name and, if it
uses premises leased, owned or occupied by any of its Affiliates, its
portion of such premises will be defined and separately identified and
it will pay such other Affiliates reasonable compensation for the use
of such premises;
(viii) The books and records of the Seller will be
maintained separately from those of its Affiliates;
(ix) The assets of the Seller will be maintained in a manner
that facilitates their identification and segregation from those of its
Affiliates; and the Seller will strictly observe corporate formalities
in its dealings with each of its Affiliates;
(x) The Seller shall not maintain joint bank accounts with any
of its Affiliates or other depository accounts to which any of its
Affiliates (other than O&M Medical (or any of its Affiliates) in its
capacity as the Servicer under this Agreement, the Amended and Restated
Purchase and Sale Agreement or under the Amended and Restated
Receivables Purchase Agreement) has independent access;
(xi) The Seller shall not, directly or indirectly, be named
and shall not enter into any agreement to be named as a direct or
contingent beneficiary or loss payee on any insurance policy covering
the property of any other Seller Party or any Affiliate of any other
Seller Party unless it pays a proportional share of the premium
relating to any such insurance policy;
(xii) The Seller will maintain arm's-length relationships with
each of its Affiliates. Any of its Affiliates that renders or otherwise
furnishes services or merchandise to the Seller will be compensated by
the Seller at market rates for such services or merchandise; and
(xiii) Neither the Seller, on the one hand, nor any of its
Affiliates, on the other hand, will be or will hold itself out to be
responsible for the debts of the other or the decisions or actions in
respect of the daily business and affairs of the other.
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(xiv) Every representation and warranty of the Seller and the
Parent contained in the Officer's Certificates delivered in connection
with the opinion of Hunton & Williams pursuant to Section 1(j) of
Exhibit II of the Amended and Restated Receivables Purchase Agreement
(the "Certificate"), a true copy of which Certificate is attached
hereto as Annex C, is true and correct in all material respects as of
the date hereof; and each of the Seller and the Parent shall comply
with all of its respective covenants and other obligations set forth in
the Certificate.
(p) Mergers, Acquisitions, Sales, Investments, etc.
The Seller shall not
(i) be a party to any merger or consolidation, or directly or
indirectly purchase or otherwise acquire all or substantially all of
the assets or any stock of any class of, or any partnership or joint
venture interest in, any other Person,
(ii) sell, transfer, convey or lease any of its assets other
than pursuant to this Agreement or the Amended and Restated Receivables
Purchase Agreement, or
(iii) make, incur or suffer to exist any investment in, equity
contribution to, loan or advance to, or payment obligation in respect
of the deferred purchase price of property from, any other Person,
except as expressly contemplated by this Agreement, the Amended and
Restated Purchase and Sale Agreement and the Amended and Restated
Receivables Purchase Agreement.
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EXHIBIT IV
TERMINATION EVENTS
Each of the following shall be a "Termination Event":
(a) (i) The Servicer (if O&M Medical or any of its Affiliates)
shall fail to perform or observe any term, covenant or agreement under any
Transaction Document to which it is a party and such failure shall continue for
two Business Days or (ii) any Person which is the Servicer shall fail to make
when due any payment or deposit to be made by it under any Transaction Document
to which it is a party and such failure shall continue for two Business Days; or
(b) The Servicer shall fail (i) to transfer to any successor
Servicer when required any rights, pursuant to the Agreement, which the Servicer
then has, or (ii) to make any payment required under the Agreement; or
(c) Any representation or warranty made or deemed made by the
Seller, the Servicer or the Parent (or any of their respective officers) under
or in connection with the Agreement or any information or report delivered by
the Seller, the Servicer or the Parent pursuant to the Agreement shall prove to
have been incorrect or untrue in any material respect when made or deemed made
or delivered; or
(d) The Seller, the Servicer or the Parent shall fail to
perform or observe any other term, covenant or agreement contained in the
Agreement on its part to be performed or observed and any such failure shall
remain unremedied for 10 days (or, with respect to a failure to deliver the
Seller Report pursuant to the Agreement, such failure shall remain unremedied
for five days); or
(e) Any O&M Party shall fail to pay any principal of or
premium or interest on any of its Debt (including Debt owing pursuant to the O&M
Credit Agreement) which is outstanding in a principal amount of at least
$10,000,000 in the aggregate when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise), and
such failure shall continue after the applicable grace period, if any, specified
in the agreement, mortgage, indenture or instrument relating to such Debt; or
any other event shall occur or condition shall exist under any agreement,
mortgage, indenture or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement,
mortgage, indenture or instrument, if the effect of such event or condition is
to accelerate, or to permit the acceleration of, the
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maturity of such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), redeemed, purchased or defeased, or an offer to repay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or
(f) The Agreement or any purchase or any reinvestment pursuant
to the Agreement shall for any reason (other than pursuant to the terms hereof)
(i) cease to create, or the Purchased Interest shall for any reason cease to be,
a valid and enforceable perfected undivided percentage ownership interest to the
extent of the Purchased Interest in each Pool Receivable and the Related
Security and Collections and other proceeds with respect thereto, free and clear
of any Adverse Claim or (ii) cease to create with respect to the items described
in Section 1.2(e), or the interest of the Administrative Agent, on behalf of
each Parallel Purchaser, with respect to such items shall cease to be, a valid
and enforceable first priority perfected security interest, free and clear of
any Adverse Claim; or
(g) Any O&M Party shall generally not pay its debts as such
debts become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors; or
any proceeding shall be instituted by or against any O&M Party seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition of
it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, custodian or other similar official
for it or for any substantial part of its property and, in the case of any such
proceeding instituted against it (but not instituted by it), either such
proceeding shall remain undismissed or unstayed for a period of 30 days, or any
of the actions sought in such proceeding (including, without limitation, the
entry of an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or for any substantial part of its
property) shall occur; or any O&M Party shall take any corporate action to
authorize any of the actions set forth above in this paragraph (g); or
(h) Any event occurs which materially adversely affects the
collectibility of the Eligible Receivables or there shall have occurred any
other event which materially adversely affects the ability of the Servicer to
collect Eligible Receivables; or
(i) As of the last day of any calendar month, either
(i) the Six Month Default Ratio shall exceed 4% or (ii) the Six
IV-2
<PAGE>
Month Dilution Ratio shall exceed 5% or (iii) the Six Month Lossto-Liquidation
Ratio shall exceed 1.0% or (iv) the average of the Delinquency Ratios for the
six consecutive Month End Dates ending with such last day shall exceed 30%; or
(j) The Purchased Interest shall exceed 100%; or
(k) Any O&M Party shall contract, create, incur, assume or permit to
exist any Lien with respect to any of its property of assets of any kind
(whether real or personal, tangible or intangible), whether now owned or after
acquired, except for Permitted Liens; or
(l) The Tangible Net Worth of Initial Purchaser shall at
any time be less than $10,000,000; or
(m) Any Change of Control shall occur; or
(n) A Termination Event of the type described in Exhibit IV to the
Amended and Restated Purchase and Sale Agreement shall have occurred.
IV-3
<PAGE>
Schedule I
TRADE NAMES AND LOCATIONS
IV-4
<PAGE>
Schedule II
LOCK-BOX BANKS AND LOCK-BOX ACCOUNTS
IV-5
<PAGE>
ANNEX A
Assignment of Parallel Asset Purchase Commitment
with respect to
O&M Funding Corp.
Amended and Restated Parallel Asset Purchase Agreement
Dated ___________, 199__
Section 1.
Purchaser Percentage assigned: ________%
Assignor's remaining Purchaser Percentage: ________%
Capital allocable to Percentage Interests
assigned: $_________
Capital allocable to Assignor's remaining
Percentage Interests: $_________
Discount (if any) allocable to Percentage
Interests assigned: $_________
Discount (if any) allocable to Assignor's
remaining Percentage Interests: $_________
Section 2.
Assignee's Maximum Liquidity Purchase: $_________
Assignor's remaining Maximum
Parallel Purchase: $_________
Section 3.
Effective Date of this Assignment: ________, 19__
Upon execution and delivery of this Assignment by Assignor and Assignee,
satisfaction of the other conditions to assignment specified in Section 6.3 of
the Amended and Restated Parallel Asset Purchase Agreement referred to below and
acceptance and recording of this Assignment by Bank of America National Trust
and Savings Association, as Administrative Agent, from and after the effective
date specified above, Assignee shall become a party to, and have the rights and
obligations of a Parallel Purchaser under, the Amended and Restated Parallel
Asset Purchase Agreement dated as of May __, 1996 among O&M Funding Corp., as
Seller, O&M Medical, as Servicer, Owens & Minor, Inc., as Parent and Guarantor,
the Parallel Purchasers referred to therein and Bank of America National Trust
and Savings Association, as Administrative Agent.
ASSIGNOR: [NAME OF ASSIGNOR]
By:
Title:
IV-6
<PAGE>
ASSIGNEE: [NAME OF ASSIGNEE]
By:
Name:
Title:
Address:
Attention:
Telephone:
Telecopy:
Accepted this _____ day of
__________________, 199___
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Administrative Agent
By:
Name:
Title:
IV-7
<PAGE>
ANNEX B
FORM OF O&M INTERCREDITOR AGREEMENT
IV-8
<PAGE>
ANNEX C
FORM OF OFFICER'S CERTIFICATE
IV-9
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000075252
<NAME> OWENS & MINOR INC/VA/
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 546
<SECURITIES> 0
<RECEIVABLES> 177,067
<ALLOWANCES> 6,372
<INVENTORY> 297,074
<CURRENT-ASSETS> 487,124
<PP&E> 64,378
<DEPRECIATION> 32,335
<TOTAL-ASSETS> 718,705
<CURRENT-LIABILITIES> 270,390
<BONDS> 200,529
0
115,000
<COMMON> 63,714
<OTHER-SE> 60,249
<TOTAL-LIABILITY-AND-EQUITY> 718,705
<SALES> 1,521,250
<TOTAL-REVENUES> 1,521,250
<CGS> 1,372,560
<TOTAL-COSTS> 1,499,552
<OTHER-EXPENSES> 2,595
<LOSS-PROVISION> 523
<INTEREST-EXPENSE> 10,774
<INCOME-PRETAX> 7,806
<INCOME-TAX> 3,356
<INCOME-CONTINUING> 4,450
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,450
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
